Category Archives: Guest Commentary

Guest Post: Whistleblower Protection in Kosovo–An Unlikely Success Story of Civil Society Collective Action and International Support

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Today’s guest post is from Nedim Hogic, a PhD candidate at the Sant’Anna School of Advanced Studies in Pisa, Italy, and Arolda Elbasani, Visiting Scholar at New York University. The research on which this post is based was sponsored by Kosovo Open Society Foundation.

In Kosovo, as in the rest of the Balkans region more generally, anticorruption initiatives and institutional solutions have typically been top-down efforts based on templates recommended by international actors and hastily approved by a circle of local political allies. Few of those international initiatives have proved successful, often because the new laws provided enough discretion for political interests to thwart effective implementation. Hence, Kosovo, like much of the rest of the Balkans, seems trapped in a continuous yet futile cycle of international-sponsored institutional- and capacity-building measures, which have not delivered.

The 2018 amendments to Kosovo’s law on the protection of whistleblowers suggests a more promising model of legislative drafting. The amended law stands out for its collaborative and open mode of drafting, involving various international, governmental, and civil society actors, a welcome contrast to the more prevalent pattern of top-down, and largely futile, approach to legal and institutional reform. Continue reading →

Guest Post: Evaluating the Personal Privacy Objections to Public Beneficial Ownership Registries

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Today’s guest post is from Adriana Edmeades-Jones and Tom Walker of The Engine Room:

The abuse of anonymous companies to facilitate corruption, tax evasion, and other sorts of criminal activity has prompted reformers to call for corporations and other legal entities to provide governments with accurate information on the true (or “beneficial”) human owners of these companies. Transparency advocates have argued that governments should not only compile such beneficial ownership registries, but should make them public.Public beneficial ownership registries, according to their proponents, would increase the efficiency of financial investigations, ease the due diligence burden on companies investigating supply chains and corporate counterparties, and enable media civil society to scrutinize more effectively who owns and controls what among the global corporate elite. Opponents have advanced multiple objections to creating public beneficial ownership registries, including questions about their accuracy and effectiveness, as well as concerns about the effect on individual privacy, and the associated risks that such public registries could facilitate “identity theft, cybercrime, and blackmail.”

How seriously should we take the “personal privacy” objection to public beneficial ownership registries? In a new report, OpenOwnership, The Engine Room, and the B Team propose a framework to evaluate this issue, borrowing from the structured analysis of international human rights law. Crucially, under international human rights law not every interference with personal privacy qualifies as a violation of an individual’s privacy rights. A violation only arises if the interference with privacy lacks a legitimate justification. Determining whether an interference with privacy is justified, in turn, entails addressing three questions: (1) Is the interference lawful (that is, consistent with generally-accepted standards governing personal information)? (2) Is the interference necessary to advance some legitimate aim? (3) Is the degree of interference proportionate to the legitimate end sought?

Application of these three criteria in turn suggests that an appropriately-designed public beneficial ownership registry would not violate individual privacy rights: Continue reading →

Brussels v. Bucharest: The Kövesi Case and the Future of EU Anticorruption Policy

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Last week Matthew suggested that the Romanian government’s fierce opposition to Ms. Laura Cordruta Kövesi’s candidacy to head the European Public Prosecutors’ Office is a good reason why she should be chosen.  Ms. Kövesi led Romania’s anticorruption agency, the Direcţia Naţională Anticorupţie (DNA), until fired last July for what many observers believe was her refusal to back-off prosecuting senior members of the ruling party.  That her own government, one of Europe’s more corrupt, so opposes her, Matthew argued, is a sign that it knows, and fears, how effective she would be as Europe’s chief prosecutor.

In today’s guest post, Alina Mungiu-Pippidi offers a different perspective  – on why Ms. Kövesi is a candidate for the position and her government’s opposition to her selection and goes on to explain how the controversy arises from the European Union’s ham-handed intervention into Romanian politics, an intervention that has set back the country’s fight against corruption.  Professor Mungiu-Pippidi spear-headed several widely-praised anticorruption movements in Romania before becoming director of the European Research Centre for Anticorruption and State-Building and Professor at Berlin’s Hertie School of Governance. She is the author most recently of The Quest for Good Governance: How Societies Build Control of Corruption. Cambridge University Press will soon release her Europe’s Burden: Promoting Good Governance across Borders.

The Western media obsessed over Laura Codruta’s Kövesi’s firing as chief of the Romanian anticorruption agency at the demand of the Romania’s Justice Minister. It is again obsessing about her now that she is the European Parliament’s candidate for the job of European Public Prosecutor (EPP). That institution was recently created at the instance of another Romanian, former Justice Minister Monica Macovei, currently an independent Member of European Parliament who, as Romanian Justice Minister, first appointed Ms. Kövesi. Having fired Ms. Kövesi, the Romanian government is now attacking her candidacy, publicizing allegations of misconduct while she ran the agency and calling for her to be questioned about them at precisely the time she is scheduled to appear before the European Parliament on her nomination.

Whether the European Union needs a new, union-wide public prosecution office is itself open to debate. Ms. Kövesi’s selection as one of three finalists to head the office is even more questionable.  It appears to be Europe’s way of taking revenge on the Romanian government for firing her.  Continue reading →

Guest Post: The European Commission’s Response to “Golden Passport” and “Golden Visa” Programs

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Today’s guest post is from Anton Moiseienko, a research analyst at the London-based Centre for Financial Crime and Security Studies of the Royal United Services Institute.

 Investor citizenship and investor residence programs, known colloquially as “golden passport” and “golden visa” schemes, have a less than sterling reputation. Much of the disapproval comes from anticorruption organizations like Transparency International and Global Witness. Those two organizations published a joint report last year that criticized these programs for offering a “safe haven” to figures associated with corruption.

The European Union has also expressed concern about these programs in several of its Member States. For example, back in 2014 the European Parliament adopted a resolution that accused some Member States, in particular Malta, of an “outright sale of EU citizenship [that] undermines the very concept of European citizenship.” And this past January the European Commission published a report on golden visa and golden passport schemes that will do little to improve their battered reputation. The Commission report raises a number of worries about these programs, and expresses particular concern about golden passport programs, since citizenship in an EU Member State automatically confers EU citizenship with its attendant rights, including free movement.

There are at least three ways in which golden passport and golden visa programs threaten to undermine the fight against corruption. Continue reading →

Guest Post: To Combat Corruption, Argentina Must Insist on Meritocratic Hiring in the Civil Service

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Today’s guest post is from Professor Ignacio A. Boulin Victoria of the Universidad Austral School of Law (Buenos Aires, Argentina) and Fulbright Scholar Eliana Kanefield.

Currently, over 3.9 million people work for the public sector in Argentina, constituting nearly 27% of Argentina’s workforce—the third-highest proportion in Latin America and the Caribbean (after only Barbados and Trinidad & Tobago), and well above the regional average of 18%. Working in the public sector in Argentina has substantial advantages, including strong employment security (it is extremely difficult to be fired from public sector positions in Argentina) and substantially higher salaries than comparable jobs in the private sector. It’s thus unsurprising that the competition for public sector jobs is fierce. To take just one example, when the Province of Mendoza created 114 new public sector positions, there were more than 30.000 applicants.

While there is nothing inherently wrong with the multitude of advantages public sector workers enjoy, this system gives rise to a structural problem: the system largely serves politicians’ friends and family. Officially, entry into the public sector is governed by a set of robust requirements and competitive examinations. But this is a façade. In reality, most people who get a job in the public sector do so because they have the right connections. They are usually friends, relatives, or members of the same political party of the person doing the hiring. An example of the clear disregard for the standards and systems in place is that, as of 2017, only 2% of senior management public sector employees had passed the “demanding” entry examinations and requirements designated by the government, and only 6% of these positions were filled through an open and fair recruitment procedure (compared to 90% in Chile). From 2015 to 2017, the proportion of senior public sector management positions filled by people who met the official professional requirements mandated by the job description decreased from 32% to 18%, while the proportion of these professionals who had education beyond a high school degree decreased from 72% to 66%. Admittedly, some of the public servants hired outside of the regular process do have the right qualifications, but even in those cases there’s still the inherent unfairness that potential applicants without connections don’t have the opportunity to compete for these jobs.

This failure of meritocracy worsens Argentina’s corruption problem, in three ways: Continue reading →

Who Will Get to Prosecute Mozambique’s Former Finance Minister for Corruption?

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Manuel Chang must surely feel special these days. He is the first former Minister of Finance in history (or at least that history recorded on the internet) whose is being sought for corruption by two countries. As explained here, Chang was arrested in South Africa December 30 at the request of American authorities who are seeking to extradite him to the United States. Two weeks later, Mozambique filed its own extradition request.  Both countries want to bring him to trial for offenses arising from his alleged corrupt approval of government guarantees for loans taken out by state-owned firms while minster.  The companies have defaulted on the loans, costing the impoverished nation (GNI per capita $1200) as much as $2 billion and throttling the economy.

Which country will get to prosecute Chang will turn on how South African authorities construe recondite provisions in South Africa’s extradition agreements with the United States and Mozambique.  As obscure as the provisions in the two are, how South African authorities choose to interpret them will remain anything but.  For their interpretation will have significant consequences for the global fight against corruption. Continue reading →

Guest Post: Do Anticorruption Advocates Practice What They Preach?

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GAB welcomes back Alan Doig, Visiting Professor at Newcastle Business School, Northumbria University, who contributes the following guest post:

About a year ago (in January 2018) I saw an advertisement from the NGO Publish What You Pay (PWYP) seeking applications for a consultant to draft a “mandatory disclosures charter” for PWYP India members and other allies working to advance natural resource governance in India. It’s not unusual to see an advertisement encouraging publicly-available standards for others, and this led me to question how good the anitcorruption advocacy industry is in practicing and publishing what it preaches for others. For governments and public bodies, after all, there are a whole host of documents, agreements, and declarations (such as the UN Convention against Corruption, the Kuala Lumpur Statement on Anti-Corruption Strategies, and the G20 High-Level Principles on Fighting Corruption to Promote Strong, Sustainable And Balanced Growth) that point to what are invariably thought to be the necessary requirements for transparency, accountability, and integrity—often in the form of lists that include items on things like financial transparency, institutional control and oversight arrangements, conflict-of-interest procedures, codes of conduct, whistleblowing arrangements, and so on.

PWYP is a UK-registered charity and thus subject to a government regulator which provides guidance on what is required, but many other advocacy bodies–as organizations–are left to their own devices. To look into what this may mean in practice, I selected five NGOs, chosen unscientifically for their engagement in different aspects of anticorruption advocacy; an international advocacy organization, a national advocacy organization, an investigative body, an educational body, and the secretariat of an NGO coalition. I looked for evidence specifically published on their websites of what may be considered a basic anticorruption prevention framework, including: board oversight, a statement of values, a code of conduct for staff, a whistleblowing policy (including external reporting), an anticorruption and fraud policy, conflict of interest procedures, a declaration of annual income by source and amount, identification of expenditure by category (including highest-paid staff), and whether or not the organization is subject to any evaluation as an organization. This is what I found: Continue reading →

Guest Post: The Importance of Integrating Anticorruption into Military Capacity-Building Programs

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Today’s guest post is from Associate Professor Åse Gilje Østensen of the Royal Norwegian Naval Academy, and Sheelagh Brady, Senior Analyst at SAR Consultancy:

In developing countries faced with security challenges—such as armed conflict, insurgencies, or widespread violence—foreign donors often offer capacity-building programs to strengthen local security institutions. However, many of these capacity-building programs do not consider corruption or incorporate anticorruption measures within their design. And when donors do consider corruption in military capacity-building programs, they typically focus narrowly, and short-sightedly, on safeguarding program funding, with little apparent concern beyond that. The view seems to be that one can build military or police capacity first, and then (perhaps) deal with corruption later, or even leave anticorruption efforts entirely to organizations and agencies dedicated to this purpose.

This approach is likely mistaken. As documented in a recent case study from the U4 Anti-Corruption Resource Centre, Capacity Building for the Nigerian Navy: Eyes Wide Shut on Corruption?, capacity-building efforts in weak states with pervasive corruption can stimulate corrupt or even criminal activity, which may result in more of the insecurity that these efforts are supposed to reduce. As the U4 report notes, “capacity building can strengthen the abilities of corrupt actors to devise corrupt schemes, as the skills and equipment provided may be used to ‘professionalise’ corrupt practices.” Donors and policymakers therefore need to see corruption as a critical concern at the top level of foreign and security policy across countries, and make anticorruption a key component of the design, implementation, and follow-up of military and police training.

In contrast to more ambitious and comprehensive security sector reform programs, capacity building programs seek to achieve modest improvements in capabilities, usually by providing training, mentoring, and/or equipment. Yet while modesty in terms of goals may be useful, donors may be tempted to think that the limited scope of capacity-building interventions implies limited risk. Yet a host of problems can arise when anticorruption measures are not incorporated into capacity building. Most obviously, when adding particular skill sets or strengthening the operational capacity of corrupt security institutions, security personnel may improve their ability to divert resources from their intended purposes. Worse still, building selected capacity without addressing corruption could mean bolstering the segments of the security apparatus involved in facilitating or carrying out criminal activity. It is hard to know just how big of a problem this is, but there are indications that capacity building very often is provided to corrupt security sectors. For example, several studies have found the Nigerian Navy to be heavily involved in facilitating illegal bunkering, oil theft at sea, and piracy in the Gulf of Guinea (see here, here, here, and here). At the same time, the Navy is a partner to two capacity building programs sponsored by the U.S. military’s Africa Command (AFRICOM): the Africa Maritime Law Enforcement Partnership (AMLEP) and the Africa Partnership Station (APS). Neither of these programs implements measures to prevent corrupt actors in the Navy from using their newfound skills and better technology to fuel insecurity and crime. More generally, according to the Security Assistance Monitor, in 2016 alone the United States provided over $8 billion in arms and training to 50 of the 63 countries that Transparency International (TI) has rated as a having a high or critical risk of corruption in their defense sectors.

How can anticorruption efforts be made part of capacity-building programs? The first step is to recognize that corruption can undermine the results of security assistance programs, and to avoid compartmentalizing “security” and “corruption” as two unrelated issues. After recognizing this fundamental point, one can design and implement sensible anticorruption measures, tailored to the particular circumstances, in particular the informal power distributions and incentive structures that determine who gains from corruption and how. And before implementing capacity building programs in the first place, donors should carefully consider whether those programs will translate into institutional improvements or will instead create “capital” that may be attractive to corrupt actors, subversive forces, or disloyal individuals.

OECD Nations Should Criminalize the Unexplained Wealth of Politically Exposed Persons

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Today’s guest post is from Hamid Sharif, Managing Director, Compliance, Effectiveness and Integrity, for the Asian Infrastructure Investment Bank.  Writing in his personal capacity, he urges OECD countries to enact laws like that giving the British government the power to demand public officials from another nation explain how they acquired assets held in Britain.  If the official cannot show the assets were purchased with honestly-obtained monies, they are confiscated.  The laws Mr. Sharif advocates would provide that if the official were from a developing country, the seized assets would go to development projects in the victim state.  The views expressed in no way reflect or represent those of AIIB, its Board, or Management.

Since 1996, when then World Bank President James Wolfensohn condemned corruption as a “cancer” which stood “as a major barrier to sound and equitable development,” combating corruption has figured prominently on the international development agenda. In 1997, the OECD nations agreed to make it a crime to bribe a foreign public official, and in the early 2000s the World Bank, the African Development Bank, and the other multilateral development banks (MDBs) introduced corruption prevention policies into their procurement rules, adopted anti-corruption policies, established procedures for investigating corruption in their operations, and instituted systems for sanctioning firms and individuals found to have engaged corruption. Beyond ring-fencing their own projects against corruption, both the MDBs and bilateral development agencies have worked to strengthen institutions to prevent corruption in developing countries. Civil society in both developing and developed states has also stepped up its efforts to fight corruption.

Both the MDBs and bilateral donors have urged developing nations to operate with greater transparency and accountability and funded projects to strengthen anticorruption agencies, judiciaries, and other domestic institutions responsible for combatting corruption. Today there is far more information on corruption and how to fight it available to citizens of the developing world than 20 years ago. The result has been a multitude of reforms aimed at preventing or deterring corruption, from the spread of right to information laws to more effective anticorruption laws and agencies.

Despite this progress, in most developing countries institutions are not yet strong enough to investigate and successfully prosecute the corrupt acts of senior government officials whether elected or appointed, individuals who in antimoney laundering parlance are, along with their relatives and close associates termed “politically exposed persons” or “PEPs.”  In many countries, investigating and prosecution agencies as well as courts lack the independence, security, and institutional capacity to instill public confidence in their ability to deal with high-level political corruption perpetrated by PEPs. Continue reading →

Guest Post: The World’s Biggest Anticorruption Legislative Package You Haven’t Heard About Is in Brazil

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Today’s guest post is from Professor Michael Freitas Mohallem (head of the Center for Justice and Society at Fundação Getulio Vargas (FGV) in Rio de Janeiro, Brazil), Bruno Brandão (Director of Transparency International, Brazil), and Guilherme France (a researcher at FGV).

Transparency International’s Brazilian chapter, together with scholars at FGV’s Rio and Sao Paolo law schools, are leading a wide-ranging effort, with input from multiple sectors of Brazilian society, to develop a package of legislative, institutional, and administrative reforms—the “New Measures Against Corruption”—that will address the systemic causes of corruption and offer long-term solutions. The project, which was developed over approximately 18 months in 2017 and 2018, was prompted by two related developments. First, so-called Car Wash (Lava Jato) operation has uncovered one of the biggest corruption scandals in modern times, implicating hundreds of politicians, civil servants, and business leaders. Second, although the Lava Jato operation led to a proposal, spearheaded by some of the Lava Jato prosecutors themselves, for “Ten Measures Against Corruption,” which was endorsed by over 2 million people, that effort was stymied by the National Congress. So, despite the success of Lava Jato in exposing and punishing corruption, Brazil has not yet developed the necessary long-term reforms to address the underlying sources of the problem.

The New Measures Against Corruption are intended to provide a path forward for Brazil, setting out a bold reform agenda that addresses issues relating to prevention, detection, and prosecution of corruption. The New Measures consist of a package composed of 70 anticorruption measures—ranging from draft federal bills, proposed constitutional amendments, and administrative resolutions—in 12 categories:

  1. Systems, councils and anticorruption Guidelines;
  2. Social accountability and participation;
  3. Prevention of corruption;
  4. Anticorruption measures for elections and political parties;
  5. Public servant accountability;
  6. Public servant investiture and independence;
  7. Improvements in internal and external control;
  8. Anticorruption measures for the private sector;
  9. Investigation;
  10. Improvements in criminal persecution;
  11. Improvements in the fight against administrative improbity;
  12. Tools for asset recovery.

The complete report on all 70 proposals (which runs 626 pages, and so far is only available in Portuguese) is here. Further discussion of the specific proposals would be welcome, both from domestic and international commentators, and we hope that at some point soon we will be able to provide summaries and translations of all of the measures. But in the remainder of this post, we want to offer some more background on the process that we used to develop the New Measures, as well as the prospects going forward for pushing the government to adopt these reforms. Continue reading →