Category Archives: Commentary

Stealing a City: Lessons from Bell, California

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In 2010, a corruption scandal rocked the city of Bell, California, as eight top city officials were arrested for what the Los Angeles Country District Attorney called “corruption on steroids.” The officials were charged with misappropriating funds from city government to the tune of $5.5 million, and garnering salaries as high $800,000, more than quadruple the California governor’s salary. In a series of trials that stretched on for more than three years, the mayor ultimately pled no contest to 69 felonies, and the trials of the various city officials have been riddled with allegations of voter fraud, extortion of local businesses, taking of illegal loans from the city, and manipulation of the pension system. Bell officials even used (and likely tampered with) a referendum to change the city’s legal structure to a chartered city which allowed them to raise their own salaries.

The United States generally experiences very low levels of corruption convictions, around 1,000 per year across the nation. One might expect that some level of state, federal, or citizen oversight would have prevented the Bell incident. Yet this massive scandal was only uncovered due to quality investigative journalism by the Los Angeles Times, and only after five full years of consistent wrongdoing by city officials. How did this happen, and how can similar misconduct be prevented in the future?

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The Trade-Off Between Inducing Corporate Self-Disclosure and Full Cooperation

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In discussions of appropriate sanctions for corporations that engage in bribery, much of the conversation focuses on the appropriate penalty reduction for firms that self-disclose violations, cooperate with authorities, or both. Self-disclosure and cooperation are often lumped together, but they’re not the same: Plenty of targets of bribery investigations, for example, did not voluntarily disclose the potential violation, but cooperated with the authorities once the investigation was underway.

This gives rise to a problem that is both serious and seemingly obvious, but that somewhat surprisingly is hardly ever discussed.

The problem goes like this: Enforcement authorities want to encourage self-disclosure, and they want to encourage full cooperation with the investigation; they would like to do so (1) by reducing the sanction for firms that voluntarily disclose relative to those that don’t, and (2) by reducing the sanction for firms that fully cooperate relative to those that don’t. But if the minimum and maximum penalties are fixed (say, by statute or department policy or other considerations), and the penalty reductions necessary to induce self-disclosure and full cooperation, respectively, are large enough (cumulatively greater than the difference between the maximum and minimum feasible sanction), then adjusting sanctions to encourage self-disclosure may discourage full cooperation, and vice versa.

It’s easiest to see this with a very simple numerical example: Continue reading →

Does the First Amendment Protect Payment for Access?

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 As many readers of this blog know, U.S. law on whether (or when) campaign donations can be proscribed by criminal anticorruption statutes is quite complicated, and to some degree unsettled. On the one hand, the Supreme Court has held that campaign contributions are constitutionally protected “speech” under the First Amendment of the U.S. Constitution. On the other hand, U.S. criminal law can and does prohibit campaign donations that are the “quid” in a classic quid pro quo bribery transaction. In other words, it would unconstitutional for the U.S. to prohibit campaign donations to politicians even if such a prohibition is motivated by the generalized worry that politicians might show special solicitude to the interests of their big donors. But it is perfectly constitutional for Congress to prohibit quid pro quo transactions in which a private interest offers a campaign donation as the “quid” in exchange for some “quo.”

It remains an open question, however, what can qualify as the “quo.” Certainly passing legislation, directing federal funding, and securing special regulatory benefits and exceptions would suffice. But what about mere access — an understanding between the donor and elected official that a campaign contribution will get the donor special access to the official? Two recent Supreme Court opinions — Citizens United v. FEC and McCutcheon v. FEC — contain language suggesting that it might be unconstitutional for U.S. law to prohibit an explicit quid pro quo agreement in which a politician offers access in exchange for campaign contributions. According to Citizens United, “[i]ngratiation and access . . . are not corruption,” while McCutcheon cautioned that “government regulation may not target the general gratitude a candidate may feel toward those who support him or his allies or the political access such support may afford” (emphasis added).

Despite this suggestive language, the Supreme Court has not yet had to confront head-on the question of whether the First Amendment protects quid pro quo payment-for-access. The closest it came was last year in United States v. McDonnell (discussed on the blog here, here, and here). In that case, Governor McDonnell helped to arrange meetings between businessman Jonnie Williams and government officials, and accepted personal gifts from Mr. Williams in exchange. By a vote of 7-0, the McDonnell Court reversed the governor’s conviction and construed the federal bribery statute at issue not to cover the governor’s conduct.

But this doesn’t resolve the constitutional question. McDonnell turned on the construction of the existing federal anti-bribery statute, which requires that the “quo” be an “official act,” which the Court construed narrowly as excluding provision of mere access. Moreover, McDonnell was not a First Amendment case, as the alleged bribes were not campaign contributions. Nonetheless, the Court did discuss the concept of corruption in a manner reminiscent of its opinions in Citizens United and McCutcheon. According to McDonnell: “[C]onscientious public officials arrange meetings for constituents, contact other officials on their behalf, and include them in events all the time. . . . The Government’s position [that McDonnell violated the law] could cast a pall of potential prosecution over these relationships if [a donor] had given a campaign contribution in the past . . . . Officials might wonder whether they could respond to even the most commonplace requests for assistance, and citizens with legitimate concerns might shrink from participating in democratic discourse.” Furthermore, McCutcheon — which was a First Amendment case — defined the sort of corruption that could justify restrictions on campaign donations as “a direct exchange of an official act for money” (emphasis added), which might imply that, at least in the campaign donation context, McDonnell’s reading of the anti-bribery statute is constitutionally required.

But is that right? Separate from the question of whether Congress should criminalize payment-for-access, and from the question of whether Congress has in fact done so in the existing federal anti-bribery statutes, is the question of whether Congress could criminally proscribe payment-for-access if it wanted to. In other words, is payment-for-access constitutionally protected? Though some of the Supreme Court’s recent language has suggested such a conclusion, I believe that proposition is wrong, for three reasons:

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Telling Corruption’s Story, or Why is Corruption So Boring? (Part 2)

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In my last post, I identified challenges inherent in creating campaigns that move laypeople to action against corruption, and I proposed solutions to these challenges. In this follow-up post, I will assess how two very different campaigns score on the factors previously proposed.

I’ll start with a less successful campaign: Transparency International’s call to “Unmask the Corrupt.” In late 2015, TI announced its Unmask the Corrupt campaign, which aimed, among other things, to “highlight the most symbolic cases of grand corruption.” The first phase of the campaign encouraged individuals to submit cases of grand corruption, from which TI would select semi-finalists to be voted on in the second phase. In the third phase TI would “look at the cases that have received the most votes and . . . openly discuss with all how the corrupt should be punished.” From 383 submissions, TI selected 15 semi-finalists, which included the “Myanmar jade trade,” “Lebanon’s political system,” and the “U.S. State of Delaware.”

In early 2016, TI announced that it had imposed “social sanctions” on the finalists (including Lebanon’s political system and Delaware). The toothiest of these sanctions were TI press releases which led to some negative coverage of the finalists in important media outlets. TI also launched #StopKadyrov, an Instagram-centered campaign against Chechen leader Akhmad Kadyrov, who had received all of 194 votes in the second phase of Unmask the Corrupt. An Instagram search for #StopKadyrov reveals that the hashtag has been used in a total of fifteen posts. When assessed against the factors I sketched in my previous post regarding the criteria for effective narratives—in particular, the importance of placing the audience in the role of potential heroes of the narrative, depicting a compelling (and repellant) antagonist against whom to struggle—these mediocre results are not surprising.

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The Swahili Word for Transparency, and the Fallacies of Linguistic Determinism

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I recently attended a workshop where participants were debating, among other things, why reform initiatives to promote government transparency and other anticorruption measures in places like sub-Saharan Africa had such a (seemingly) poor track record. In the course of the conversation, a well-known tenured professor declared – as evidence for the proposition that cultural incompatibility explains much of this apparent failure – that “there isn’t even a Swahili word for ‘transparency.’”

I was flummoxed and expressed some confused skepticism, but this professor (who, by the way, is a white Englishman whose CV does not indicate that he speaks Swahili or has ever done any research in a Swahili-speaking country) insisted that this was not only true, but was strong evidence that government transparency was an alien concept in Swahili-speaking societies.

It wasn’t a terribly important part of the discussion — more of an aside — and the conversation swiftly moved on. But the assertion that this linguistic lacuna demonstrates a significant cultural gap–one with important policy implications–has been bugging me ever since, not least because it reminded me of Ronald Reagan’s absurd claim that “in the Russian language there isn’t even a word for freedom.” (There is, by the way: svoboda.) So just in case this specific claim about Swahili, or linguistic arguments like this more generally, are an emerging meme in the anticorruption commentariat, I thought it would be worth a quick post to try to nip this nonsense in the bud.

So, what’s wrong with the claim that there’s no Swahili word for transparency? Three things: Continue reading →

Telling Corruption’s Story, or Why Is Corruption So Boring? (Part 1)

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In 2010, a group of talented young musicians from across the globe gathered in Nairobi, with the financial support of Transparency International and Jeunesses Musicales International. Their mission: to write and record a viral hit that would not only communicate the gravity of corruption to young people (a crucial demographic for anticorruption activists), but would also make them want to share the tune with their friends. The diverse band of artists left the studio with “Against Corruption,” a reggae jam complete with Lebanese Arabic hip-hop verses and flamenco-tinged guitar riffs. You can watch the music video here, or listen to the audio here.

Despite its all-star cast and catchy hook, however, the big budget music video has been viewed just over 600 times. This kind of failure to turn big anticorruption dollars into effective campaigns that generate excitement, activism, and action on the ground isn’t unique. The anticorruption community’s proposed revolution may well be broadcast, but its soundtrack will be probably be, dare I say, boring. And as a result, few will tune in.

Why is that? What makes it so much easier to capture an audience’s imagination when speaking about issues like the refugee crisis or modern-day slavery than to tell the story of corruption, whose effects are similarly destructive?

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Corruption and Federal Pensions: A Case for Rewriting the Hiss Act

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David Lee, an employee of the Department of Homeland Security, was tasked with investigating a foreign businessman accused of sex trafficking.  Instead of doing his job, however, he did something very different: He solicited and received $13,000 in bribes to report that that the foreign in question was not involved in criminal activity.  This case is not that unusual. In the last ten years, according to a report by the New York Times, immigration enforcement officials have taken over $5 million in bribes. They’ve sold green cards, ignored illegal activity, and even given information to the very drug cartels they are tasked with combating.

Shockingly, however, even after these officials are fired, they remain eligible for federal pensions. This is not unusual, but rather typical: most federal employees convicted of bribery remain eligible for their government pensions.  This was not always the case: The original 1954 version of a statute called the Hiss Act (named for Alger Hiss, a State Department employee who was convicted of passing state secrets to a communist agent) prohibited the payment of a federal pension to a former federal employee who had been convicted of federal law offenses related to bribery and graft, conflict of interest, disloyalty, national defense and national security, and more generally to the exercise of one’s “authority, influence, power, or privileges as an officer or employee of the Government.” In 1961, however, Congress amended the law to prohibit the payment of pensions only for convictions for serious national security-related offenses. The reason for the change was the view that the original version of the Hiss Act went too far, leaving former federal officials (who had already been punished with termination, fines, and imprisonment), as well as their innocent spouses and children, facing the possibility of destitution. The additional punishment supposedly did not fit the crime, unless the crime directly concerned the national security of the United States.

The impulse not to over-punish is commendable, but the 1961 amendment to the Hiss Act was an overcorrection. The law should be amended to find a middle ground between the 1954 and 1961 versions. The federal government should have the authority to at least limit, and occasionally bar, pensions to certain public officials who have been convicted of a corruption-related offenses such as bribery and extortion. The case for doing so is as follows:

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The Obiang Trial: Lessons from a Decade-long Legal Battle

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The trial of Equatorial Guinean Vice President Teodorin Nguema Obiang before a French court for what is in effect kleptocracy is by any measure a giant step forward in the fight against grand corruption.  Indeed, it is such a significant milestone that GAB has, thanks to the Open Society Justice Initiative’s Shirley Pouget and Ken Hurwitz, provided readers in-depth reports of how it is unfolding (here, here, here, here, here, here).

Criminal trials are the result of a long and complex process meant to protect a defendant’s rights, and frustratingly, these human rights safeguards provide wealthy defendants, no matter their guilt, with many opportunities to derail a case.  In Teodorin’s case, not only does he have apparently limitless resources to spend on lawyers to pursue every legal defense to the nth degree, but the government of Equatorial Guinea, a family enterprise run by his father, has gone to extraordinary lengths to keep Teodorin from facing justice: naming him an ambassador to try and create a defense of diplomatic immunity, claiming that property he bought is state-owned and thus immune from legal challenge, and even filing an action against the French government in the International Court of Justice.

As Shirley and Ken draft the next installment in their series, this is an opportune time to stand back and examine how these many obstacles were overcome.   How did it come to pass that a senior official of the government of Equatorial Guinea is being held accountable before a criminal court in Paris for the wholesale theft of his nation’s wealth?  And more importantly, what can be done to ensure the Obiang trial is no fluke?  That the hundreds, if not thousands, of public officials who have stolen massive amounts from the people of their countries also find themselves in court answering for their crimes.

Thankfully, a fine paper answering these questions is now available. Authored by French attorney Maude Perdriel-Vaissière, a critical actor in shepherding the Obiang case through the French legal system, it recounts how a small, dedicated band of civil society activists overcame the many legal and political obstacles to bring Obiang before the bar of justice.  Continue reading →

State-Level Anticorruption Commissions: What the U.S. Can Learn from Australia’s Model

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Australia does not currently have a dedicated national-level anticorruption agency (ACA), though the question of whether to create one has been on the table since 2014 (see here, here, and here). Yet Australia has plenty of experience with ACAs—at the state level. Australia’s first, and still most prominent, state-level ACA was the Independent Commission Against Corruption (ICAC) in New South Wales (the state including financial capital Sydney), which will mark its thirtieth anniversary next year. The ICAC, led by an independent commissioner, has independent investigatory powers over almost all state-level government officials and is charged with both exposing public sector corruption and educating the public about corruption. Queensland and Western Australia followed suit with their Corruption and Crime Commissions, established in their current forms in 2001 and 2003 respectively. The states of Victoria, South Australia, and tiny Tasmania all instituted independent agencies in recent years as well. Even the 250,000-strong Northern Territory resolved to start its own ACA after several high-profile scandals, and the Australian Capital Territory (the Canberra-sized equivalent of Washington, DC) has discussed creating its own anticorruption body. The permeation of Australia with state-level agencies is essentially complete.

Thus, in true laboratories-of-democracy fashion, Australian states have tried, solidified, and publicized the model of creating an independent investigatory group focused on the issue of corruption. Could U.S. states do the same? Easily. Should they? Yes, for at least three reasons:

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Improving Mutual Legal Assistance: Lessons from Asia

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Back in 2014, Rick called for further analysis of mutual legal assistance (MLA) processes and potential reforms that would promote responsiveness to MLA requests in anticorruption cases (and others). As a follow-up, I wanted to highlight the findings of a recent report from the Asian Development Bank (ADB)/Organization for Economic Cooperation and Development (OECD) Anti-Corruption Initiative for Asia and the Pacific. The report, entitled “Mutual Legal Assistance in Asia and the Pacific: Experiences in 31 Jurisdictions,” provides examples of various obstacles to effective MLA, which I have sorted into two general categories: legal and practical. Continue reading →