Category Archives: Guest Commentary

Guest Post: Indonesian Anticorruption Institutions at Risk, Part 1: The Significance of the KPK’s First Acquittal

Posted on by
5

GAB is pleased to welcome Simon Butt, Professor of Indonesian Law and Director of the Centre for Asian and Pacific Law, the University of Sydney, to contribute a two-part series on recent developments in Indonesia. Today’s post, the first of the two, is a revised and expanded version of an article that Professor Butt originally published on the East Asia Forum.)

Over the past decade or so, Indonesia’s anticorruption commission (the Komisi Pemberantasan Korupsi, or KPK) had managed to deflect numerous efforts of powerful politicians and senior law enforcement figures to reduce its independence and effectiveness. However, last month Indonesia’s national parliament appears to have successfully hobbled the Commission, with the support of President Joko Widodo. The effort to weaken the Commission began with the appointment of a new batch of commissioners, widely condemned as being sympathetic to the regime or likely to be ineffective. This was followed by amendments to the Commission’s founding statute that are clearly designed to render the Commission ineffective in investigating and prosecuting corruption.

An important precursor to these events was the KPK’s first loss in court. Until this past July, the KPK had not, since its establishment in 2003, lost any of the hundreds of cases it had brought to full trial. This was a remarkable achievement in a country renowned for deeply entrenched and widespread corruption at the highest levels, particularly in government institutions and the courts.

But on July 11, 2019, the KPK’s perfect record was broken when a divided three-judge Supreme Court panel voted to acquit Syafruddin Arsyad Temenggung, the former chair of the Indonesian Bank Restructuring Agency. Temenggung had been convicted at trial (in one of Indonesia’s specialized anticorruption courts) for a scheme in which a businessman, Sjamsul Nursalim, overstated the value of assets used to repay government assistance funds he had received after the 1997 Asian Economic Crisis. According to the prosecution, by improperly approving the discharge of Nursalim’s debt, Temenggung caused the Indonesian state to lose 4.5 trillion rupiah (well over USD 300 million). Temenggung’s lawyers argued, among other things, that there was no proof that their client had obtained any benefit from Nursalim in exchange for discharging the debt, and that their client was simply doing his job and had not committed any crime. The trial court rejected these defences, convicted Temenggung, and sentenced him to 12 years’ imprisonment. On the first appeal, the Jakarta High Provincial Court affirmed the conviction and increased the prison sentence to 15 years. But Temenggung then appealed to the Supreme Court, and there he prevailed. At time of writing, the Supreme Court judgment acquitting Temenggung has not yet been made publicly available. Nevertheless, according to media reports, two of the three judges on the panel voted to acquit Temenggung, though for somewhat different reasons, while the third judge would have affirmed the conviction.

Given that the KPK probably lacks a legal basis for asking the Supreme Court to reconsider its decision, the KPK appears to have now suffered its first defeat in its 15-year history. The loss of this case is a major blow on its own terms, because it was the KPK’s largest-ever case in monetary terms, involving over twice the alleged state loss than its previous largest case. But the significance of this acquittal may be much broader, and raises a number of questions about the future of corruption eradication efforts in Indonesia. Continue reading →

Guest Post: Toward a Meaningful “Common African Position on Asset Recovery”

Posted on by
7

GAB is delighted to welcome back Mat Tromme, Director of the Sustainable Development & Rule of Law Programme at the Bingham Centre for the Rule of Law, who contributes the following guest post:

It’s no secret that kleptocratic rulers in Africa have robbed their countries of substantial assets that could have  otherwise been used to promote development and social welfare. Indeed, the amounts are often staggering: $16 billion reportedly stolen by former Libyan President Gaddafi; $1 billion by Gambia’s ex-President Jammeh; billions by former Congolese President Kabila; and the list goes on. Recently, Nigeria’s Economic and Financial Crime Commission suggested that up to $50 billion has been looted from Africa, and whether or not particular estimate is accurate, there’s little doubt the problem is serious. More troubling is the fact that only a small proportion of these stolen assets have been recovered and repatriated to the country of origin.

As part of the effort to address the challenges of asset recovery—and to give African states more clout in negotiating the terms and conditions of asset return with the states that initially seize the stolen loot—African countries are currently undertaking an effort to develop a “Common African Position on Asset Recovery” (CAPAR). Incidentally, a common african position was the chosen theme of this year’s African Union Anti-corruption day. At this early stage, it seems likely that this effort will result only in a political proclamation (perhaps within the framework of this month’s UN General Assembly), one that will re-emphasize the importance of the speedy and unconditional return of assets, and call for better collaboration across countries. That’s a good start, but not enough! Developing a pan-African position on asset recovery—perhaps similar to the multilateral framework adopted by the Mercosur countries and by the EU—is a worthwhile endeavor, one that will likely produce tangible benefits only if it goes beyond mere statements of intent or general principles, and lays out some concrete steps to translate the vision into reality.

Ideally, CAPAR should seek to streamline policies and resources devoted to recovering assets and developing better investigative and prosecutorial capacity across African states, for example by implementing cross-border investigations and fostering collaboration, experience and information-sharing between countries. There are various ways to achieve this broad objective: Continue reading →

Lula’s Lawyers Respond to the Lava Jato Prosecutors’ Letter

Posted on by
10

Last week, GAB published two letters presenting alternative perspectives on the so-called “Car Wash” (Lava Jato) anticorruption operation in Brazil, in particular the prosecution and conviction of former president Luiz Inácio Lula da Silva (Lula). The first letter was a re-publication of an open letter sent by a group of international jurists and scholars, who asserted that Lula did not receive a fair trial and that the prosecutors were politically biased. The second letter was a reply from the prosecutors, who defended their conduct, argued that the conviction of Lula was legitimate and not politically motivated, and contended that a number of factual and legal assertions in the international jurists’ letter were incorrect.

After publication of that post, I received a message from Lula’s lawyers (the law firm of Teixeira, Martins & Advogados), who asked me to publish their letter in response to the prosecutors. In the interest of furthering this important substantive debate, I am presenting their letter below: Continue reading →

Guest Post: U.S. State Ethics Agencies Must Improve Both Enforcement and Transparency

Posted on by
5

Today’s guest post is from Shruti Shah, President and CEO of the Coalition for Integrity (C4I), and Alex Amico, a C4I legal fellow.

Recently, the Coalition for Integrity released a report on Enforcement of Ethics Rules by State Agencies (along with an associated index and map) which examined the performance of state-level ethics agencies across the United States. In addition to providing basic enforcement statistics, the report emphasized two aspects of these agencies’ performance. First, the report looked at how these agencies enforced the ethics laws they were charged with enforcing, to see how aggressively agencies stand up for ethical government within their legal authority. Second, the report examined how transparent the agencies were in that enforcement, and hence how accountable these agencies make themselves to the public. (The report also ranked each state and agency based on their transparency of enforcement). Both of these aspects of agency performance are crucial to creating a culture of honest government and a robust ethics enforcement regime. Some our headline findings with respect to each of these dimensions of performance were as follows: Continue reading →

The European Union Elections and the Future of European Anticorruption Policy

Posted on by
Reply

GAB is pleased to welcome back Professor Alina Mungiu-Pippidi, chair of the European Research Centre for Anticorruption and State-Building at the Hertie School of Governance in Berlin. Her many publications include the Cambridge University Press volume A Quest for Good Governance: How Societies Build Control of Corruption and most recently “Romania’s Italian-Style Anticorruption Populism,” in the July 2018 issue of the Journal of Democracy.

Do Europeans care about corruption?  If the results of the May election to the European Parliament are any guide, they do.  Turnout to fill its 751 seats was the highest since the first election in 1979, and polling data shows corruption was a top concern of many voters. A YouGov poll found corruption and migration were what troubled voters the most, and earlier research had shown that respondents’ perceptions of how member governments handled corruption to be a good predictor of their trust of both national-level and European-wide institutions. Party leaders apparently believed these polls. The heads of the major ones all issued pre-election statements denouncing corruption and backing open government (a surprise given their foot-dragging on a parliamentary ethics code and reluctance to commit to greater transparency in the operation of the parliament itself).

Can Brussels solve what voters believe is the problem of corruption in Europe? This very large question can be unpacked into three more manageable ones:

Is Europe in fact as corrupt as Europeans think it is?  Are their perceptions of corruption matched by reality?

Do the results of the May elections indeed reflect a demand for stronger anticorruption policies and better governance?

If Europeans are indeed demanding better governed, less corrupt polities, can the EU’s limited anticorruption instruments satisfy the voters demand? Continue reading →

Guest Post: Mercosur’s New Framework Agreement Is an Asset Recovery Landmark, But Significant Flaws Remain

Posted on by
Reply

GAB is delighted to welcome back Mat Tromme, Director of the Sustainable Development & Rule of Law Programme at the Bingham Centre for the Rule of Law, who contributes the following guest post:

In asset recovery, international collaboration is key. In December 2018, four Mercosur countries—Argentina, Brazil, Paraguay, and Uruguay—adopted a new kind of landmark framework agreement to collaborate in investigations and sharing of forfeited assets resulting from transnational organized crime, corruption, and illicit drug trafficking. The agreement’s provisions on law enforcement collaboration are important but not groundbreaking, as many countries collaborate in investigations, including through Mutual Legal Assistance (MLA) agreements. This framework agreement can be seen as a direct application of Article 57(5) of the UN Convention Against Corruption, which calls on state parties to “give consideration to concluding agreements or mutually acceptable arrangements, on a case-by-case basis, for the final disposal of confiscated property.”

Where the new framework agreement is particularly novel and innovative is in its provisions on asset return. While there are a number of technical details, the big picture is that any of the four countries may lay claim to a portion of the assets, so long as that country played a role in its forfeiture, irrespective of where the assets are located. The framework agreement provides (in Articles 7 and 8 in particular), that the asset shares will be negotiated on a case-by-case basis, with each country’s share to be based principally on that country’s role in the investigation, prosecution, and forfeiture of the assets. Other factors that may be considered include the nature of the forfeited assets, the complexity and significance of international cooperation, and the extent to which cooperation led to the forfeiture.

To the best of my knowledge, this sort of framework agreement is rare, the only other recent example is the “Framework for Return of Assets from Corruption and Crime in Kenya (FRACCK)”, a multilateral non-binding initiative for the return of assets between the Governments of Kenya, Jersey, Switzerland and the UK. There had been calls to establish a similar initiative in Latin America going back several years (see here and here). The framework agreement has the potential to set a precedent by institutionalizing the return of assets across borders, not only improving the asset recovery and return process in Latin America, but also serving as an example for other regional collaboration agreements in Africa, Latin America, or Asia. Indeed, the 3rd African Anti-Corruption Day (held last week, on July 11th) was organized on the theme of finding a “Common African Position on Asset Recovery.” According to the African Union, the purpose of this is to advocate for Africa’s unity in demanding the recovery and return of stolen assets, and making the return process transparent and accountable.

While the approach and ambition of the agreement is laudable, the framework agreement has three important shortcomings: Continue reading →

Do the Lava Jato Leaks Show Illegal or Unethical Behavior? A Debate Between Brazilian Legal Experts

Posted on by
68

As readers of this blog are likely well aware, last month The Intercept published a series of articles, in both Portuguese and English, that called into question the fairness, legitimacy, and motivations of the Lava Jato (or “Car Wash”) anticorruption operation in Brazil. These articles were based on private text messages between prosecutors and then-Judge Sergio Moro (and among members of the prosecution team) that The Intercept obtained from an anonymous source (widely suspected to be an outside party who hacked prosecutors’ cell phones). The revelations raise a number of questions about the Lava Jato operation, including whether the leaked text messages demonstrate that Judge Moro violated Brazilian law and/or ethical codes, and if so whether these breaches would invalidate the convictions of at least some of the Lava Jato defendants, most notably former President Luiz Inácio Lula da Silva (known as Lula).

Shortly after the first set of Intercept stories came out, I offered my own perspective on the implication of the leaked text messages (see here and here). But on the specific question of whether these text messages were unlawful or unethical, I was and remain uncertain, not least because evaluating this particular question requires expertise in Brazilian law. To help shed further light on this topic, and to assist others in understanding the complex legal and ethical questions at stake, today’s blog post features a point-counterpoint debate between two Brazilian legal experts with opposing perspectives on this question:

  • First, Ademar Borges de Sousa Filho (a Professor of Law at IDB-Brasilia and a practicing defense attorney) makes the case that the text messages disclosed by The Intercept demonstrate that Judge Moro behaved unethically and unlawfully, and that his lack of impartiality requires the nullification of the conviction of Lula (and possibly other Lava Jato defendants, though any such decisions would need to be made on a case-by-case basis).
  • Next, Luciano Benetti Timm (the National Consumer Protection Secretary at the Brazilian Ministry of Justice and Professor of Law at FGV São Paulo) presents a rebuttal, arguing, first, that the unauthenticated text messages obtained by The Intercept are not legally admissible, and that even if they were, they do not demonstrate any illegal partiality, or unethical behavior, by Judge Moro, and therefore do not provide grounds for questioning the convictions of Lula (or any other Lava Jato defendant).

Before proceeding, I should note that there are a number of other legal and political issues that are being hotly debated inside and outside of Brazil related to the Lava Jato case, Lula’s conviction, and related matters. The pieces below do not address these other issues, because I specifically requested Professor Borges and Professor Timm to focus narrowly on the question of the legality/ethics of the communications between Judge Moro and the Lava Jato prosecutors. I hope that readers find the debate below useful and enlightening on this issue. Continue reading →

Guest Post: How a Social Movement Changed Spanish Attitudes Toward Corruption

Posted on by
3

Today’s guest post is from Elisa Elliott Alonso, who works at the OECD Water Governance Program:

The graph below chronicles the percentage of Spanish Citizens who named the economy (grey line) and fraud/corruption (blue line) as one of the three most important problems facing the country, during the period leading up to and following the economic downturn of 2008. Unsurprisingly, after the Spanish economy crashed, some 50% of the citizens of Spain noted that the economy was one of the most important issue affecting them, and this concern remained predominant for the next three years, though it started to decline a bit after 2011. As for corruption and fraud, prior to the crash concerns about these issues hardly registered, except for a brief spike in 1993, an uptick came in the immediate aftermath of a slew of highly publicized corruption scandals, and dissipated quickly) Even after the 2008 crash, concern about corruption rose only slightly increased from 2008 to 2012. That big change came in 2013, when the news broke that important members of the conservative PP party were allegedly involved in the Gürtel case, one of the most serious recent corruption scandals to rock Spain. More interesting is the fact that Corruption has remained a top concern of Spanish citizens ever since. There’s been a bit of tapering off since concern over corruption reached its peak in late 2014, but more than 20% of Spanish citizens still list corruption as one of the country’s most serious problems, roughly the same number of name the economy.

Why is this? Or, to put the question more generally, what kind of changes need to take place within a collective society’s ethos in order to bring about engaged citizen awareness and opposition to corrupt activities? Continue reading →

Guest Post: Expert Interviews on Corruption Control in Latin America

Posted on by
Reply

Today’s guest post is from Columbia University Professor Paul Lagunes, who this year is also a Visiting Fellow at Rice University’s Baker Institute for Public Policy:

Elections in Latin America are freer and fairer than they used to be, and, with rare exceptions, political power in the region is no longer monopolized by a single individual, junta, or party. From Chile to Mexico, legal reforms have promoted higher levels of government transparency and citizen participation. But in spite of these improvements, the region continues to grapple with systemic corruption. Not only are individuals asked to pay bribes by lower-level government officials, but scandals such as Lava Jato (“Car Wash”) in Brazil, La Estafa Maestra (“The Master Fraud”) in Mexico, and La Línea (“The Line”) in Guatemala have revealed grand corruption at the most senior levels, making the fight against corruption a top priority for the region.

Prompted by these concerns, I contributed to organizing a conference at Rice University’s Baker Institute for Public Policy on corruption control in Latin America, which has already been featured (with links to the conference videos) on this blog. Some of the conference panelists stayed long enough that we were able to interview them about their important work. Tony Payan, my colleague at the Baker Institute and an expert on U.S.-Mexico border issues, agreed to conduct the interviews.

The videos of these interviews are now publicly available, and are well worth viewing for those interested in hearing a diverse range of perspectives on the corruption challenges currently facing Latin America. In this post I will provide links to the interviews as well as a brief summary of their content. (There’s also an online website, where you can find all the interviews, here.) Continue reading →

Guest Post: An Austrian Political Corruption Scheme was Caught on Video–But Most Probably Aren’t

Posted on by
1

Today’s guest post is from Jennifer Kartner, an anticorruption researcher who recently received her Ph.D. in political science from Arizona State University:

On Friday, May 17, 2019, the German newspapers Der Spiegel and the Die Sueddeutsche Zeitung released an explosive video showing two key politicians of the far-right Austrian Freedom Party (FPÖ), Heinz-Christian Strache and Johann Gudenus, scheming with a woman who claimed to be a wealthy Russian citizen. Their meeting took place in July 2017, a few months before the October 2017 Austrian parliamentary elections. In the video, Strache and Gudenus discuss how, with the help of the woman, they could ensure that the FPÖ wins the upcoming elections. The plan was that the Russian would buy 50% of the Austrian newspaper Die Kronen Zeitung—a newspaper reaching a third of all Austrian news consumers—before the elections, and then she would ensure that the already-populist newspaper would drum up more support for the FPÖ. (Mr. Strache estimates in the video that the newspaper takeover would help push the FPÖ’s expected vote share from 27 to 34 percent.) Once the FPÖ won the election, FPÖ elected officials would return the favor by helping the oligarch win contracts for public construction projects; all she had to do was to establish a construction company that could plausibly compete with the Austrian firm Strabag. The three meeting participants also talked about the possibility of privatizing the Austrian public broadcast station ORF, and Mr. Strache spoke of wanting to build a media landscape “just like Viktor Orbán built in Hungary.” But the deal never actually came together. Die Kronen Zeitung didn’t change owners, the FPÖ came in third in the parliamentary elections and ended up entering into a coalition government with the center-right ÖVP, and Strabag continues to win the majority of public construction contracts in Austria.

The political backlash in response to the publication of the video was swift and severe. An estimated 5,000 people came out to protest on the streets. A day after the publication, Mr. Strache resigned from his Vice-Chancellorship, as well as his other political and party positions, and issued a public apology, and a couple of days after that, all remaining FPÖ ministers in the government were fired or resigned in protest. While Austrian authorities are still debating whether they can charge Mr. Strache for any criminal activities, the public’s response shows that, regardless of the legal ramifications, ordinary citizens view this behavior as corrupt.

But perhaps one of the most disturbing things about this affair is that if the parties had gone through with their plan, and the secret video had never been leaked, neither the authorities nor the public would likely have ever had any reason to suspect a complex corruption scheme behind it. To see this, suppose for the moment that the scheme went ahead as planned. Would anyone have caught on? The answer is likely no: Continue reading →