Category Archives: Guest Commentary

Guest Post: Settlements in Asset Recovery Cases—Neither Ethical Nor Effective

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Robert Packer, a Masters student at of the University of Nanterre, Paris, contributes the following guest post:

When governments attempt to freeze, seize, and repatriate the assets stolen by corrupt government officials and others, they often confront what is sometimes presented as a conflict between pragmatism and principles. Given that kleptocrats can often hire the best lawyers and take advantage of every legal protection available, attempting to secure convictions and/or confiscation of all ill-gotten assets may be an expensive, time-consuming, and uncertain prospect. As such, across multiple jurisdictions, cases like the Giffen Affair (Kazakhstan) and the Abacha Affair (Nigeria) have ended up with kleptocrats forfeiting a part of their assets and accepting a slap on the wrist—what Mohammed Moussa, in his post last April , referred to as a “golden handshake.” Proponents of such settlements argue that it’s preferable to secure the restitution of a part of the stolen assets rather than risk a long and expensive process resulting in nothing. Those taking this view assert that settlements are better for the victims, and point to the failed case against the Moi regime in Kenya as an example of the risks of pursuing an uncompromising approach. And there’s a certain logic to that view. Asset recovery practitioners and proponents might well ask ourselves, who are we to push for a conviction or for forfeiture of all illicit assets for the sake of some high vaunted principles (if not our own egos!) if this means that the poor (almost always the victims of corruption) are left with nothing?

That pro-settlement view may sound plausible, high-minded, and sophisticated. But it’s wrong. And no case better illustrates this than the Obiang affair, which is currently at various stages of development in France, the US, and Spain. That case nicely illustrates the serious problems with negotiating “golden handshake” settlements with kleptocrats and their cronies, rather than pushing to do full justice. Continue reading →

Guest Post–Reflections on the “Guatemalan Spring”

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Mathieu Tromme, Senior Research Fellow at the Bingham Centre for the Rule of Law, contributes the following guest post:

Guatemala is in the midst of its worst political crisis in the two decades since the end of the country’s civil war in 1996. Weekly marches, sit-ins and demonstrations keep drawing tens of thousands to the streets, denouncing corruption and demanding the President’s resignation, as well as a purge of politics and the judiciary (among other things). The scope and size of the demonstrations has been something of a surprise, given that the Guatemalan public often seems uninterested in political affairs or reluctant to express dissent. Although the protests originated in the capital, they have now spread to the whole country, and brought lower and middle classes together. The main cause of this discontent? Public anger over a string of corruption scandals.

The demonstrations—which some believe are the start of a “Guatemalan Spring”— began this past April, when the Office of the Public Prosecutor against Impunity, together with the UN-backed International Commission against Impunity in Guatemala (CICIG in Spanish) published an investigative report linking fraud in the Customs Department to the Vice President’s Office. Specifically, Vice President Baldetti’s private secretary, Mr. Monzón Rojas, stands accused of being at the helm of a wide tax and customs fraud scheme known as La Linea (“the line”), which has defrauded the state of about US$120 million. Although Vice President Baldetti, tried to distance herself from her Secretary (who’s still on the run), mounting public and political pressure forced her to resign on May 8. In addition, there were further revelations that lawyers representing detainees in connection with La Linea attempted to bribe Chief Justices of the Supreme Court. And there were other scandals as well: the head of the Ministry of Energy and Mining lost his post over corruption charges, the Ministers of the Interior, Environment, and Energy resigned, and the President of the Central Bank and the head of the Guatemalan Institute of Social Security (who was formerly the President’s personal secretary) have been forced to resign after being accused of fraud and influence peddling.

Although there are many interesting aspects of these anticorruption protests, let me highlight what seem to me especially important features of both the protests and the underlying problems that triggered them—features which, though specific to Guatemala, may have broader implications for the fight against entrenched political corruption. Continue reading →

Guest Post: The Role of Compensation Systems in Promoting Anti-Bribery (Non-)Compliance

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GAB is pleased to welcome back anti-bribery consultant Richard Bistrong, who contributes the following guest post:

These days, most sophisticated multinational firms, at least those that might be subject to liability under the Foreign Corrupt Practices Act or similar laws, have official anti-bribery compliance programs. But as many observers have rightly noted, while formal control systems are important, they have their limits: the formal rules in place, or what top-level management asserts when setting the “tone from the top,” may often differ from what actually happens on the ground. As I’ve emphasized my earlier posts on this blog, understanding what actually happens out in the field requires careful attention to the actual incentives of the people on the front lines: the regional managers, salespeople, and the like. And with respect to these individuals, many corporations that have seemingly robust anti-bribery programs, and whose C-Suite executives say all the right things about ethics and integrity and zero tolerance, are actually creating incentives that foster corruption. Here I want to focus on incentive plans for international sales, marketing, and business development teams. I have identifies three common features of the compensation system for salespeople may contribute substantially to bribery risk. Continue reading →

Guest Post: “Global Cities–Joining Forces Against Corruption” Conference Recap, Part 2

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Jennifer Rodgers and Gabriel Kuris, the Executive Director and Deputy Director, respectively, of the Columbia University Center for the Advancement of Public Integrity (CAPI), have provided a two-part series of guest posts summarizing CAPI’s conference on “Global Cities–Joining Forces Against Corruption”, which we previously advertised on GAB. This is the second of the two posts. (Part 1 can be found here.)

The CAPI “Global Cities” conference featured two speakers who discussed their own experience working to promote strong municipal anticorruption enforcement, though there could hardly be a wider gulf in the circumstances they currently face. Commissioner Mark Peters of the New York City Department of Investigation (DOI) talked about about his office’s strong history of combating not only corruption but waste and mismanagement in NYC government, and Lev Pidlisetskyy of Ukraine’s Parliament gave an inside account of the incredible challenges his brand-new political party faces in fighting the massive and entrenched corruption left over from the Yanukovich era by instituting reforms in the judiciary, decentralizing authority, and engaging the public through new transparency tools

The panel discussion on “Engaging the Public: Mobilizing Citizens, Civil Society, and the Media” looked at the how cities can effectively partner with outside entities to better fight corruption. Athanasios Tsiouras of the Athens Mayor’s Office described Athens’ sophisticated and award-winning online platform for disbursing important information and collecting citizen complaints. Jose Ramon Amieva of the Mexico City Mayor’s Office spoke about major efforts to streamline local government processes like obtaining permits and licenses. And Fuad Khoury, the Comptroller General of Peru, discussed his office’s unique Young Auditors Program, which enlists students and teachers nationwide to help root out corruption, waste, and inefficiency. Dick Dadey, of Citizens Union of the City of New York, provided a civil society perspective, encouraging city governments to utilize networks of good government groups to make change. And Jeri Powell of New York City’s DOI took a historical view, emphasizing the importance of gaining the public’s trust in fighting corruption.

The next panel, “Game Changing Cases: An Inside Look at Breakthrough Investigations” featured prosecutors from all over the world discussing some major law enforcement successes, as well as the challenges they confront. A leading prosecutor from Venice explained a highly successful case in which 50 defendants, including a sitting mayor, were arrested for corruption offenses. New York federal prosecutors generated a lively discussion by describing a bribery case against a sitting state legislator, charged after another legislator agreed to cooperate with authorities and wear a recording device during his interactions with his colleague. A leader from the Catalan antifraud office described working on a variety of cases that help local officials build their own integrity systems. And a Malaysian prosecutor explained how a major case, built up during an extensive and lengthy investigation, was derailed by a defendant’s suicide while in custody.

Finally, “Ensuring a Clean Clean-Up: Fighting Fraud in the Wake of Disaster” provided an illuminating and instructive look at corruption risks related to major events that city governments should plan for to avoid making a bad situation worse. A member of the U.S. Attorney’s Office for the Eastern District of Louisiana spoke about how his office got up and running in the wake of Hurricane Katrina and what they would do differently today. Steve Lee, the Acting Director of the Department of Consumer Affairs of New Jersey, drew practical lessons from what kinds of consumer frauds his office has handled since Hurricane Sandy. And Alan Brill from Kroll provided a fascinating look at how easily criminals can steal unwitting citizens’ identities by setting up bogus free wifi sites, and how we can better protect ourselves against this kind of fraud.

From Perth to Barcelona, from Lima to Toronto, cities have become crucial battlefields in the fight against corruption. The citizens of the world’s growing urban majority are demanding fair and honest services from local governments, putting cities on the vanguard of public integrity enforcement and innovation. CAPI’s inaugural Global Cities conference made a compelling case that the international anticorruption community can learn from the voices of the local practitioners, policymakers, and public citizens working to clean up city halls worldwide. Interested readers can learn more about the conference from the online  videos, presentation slideshows, and other conference materials. And don’t forget to register now for CAPI’s upcoming online discussion forum on which we’ll soon be dissecting what we learned at Global Cities in greater detail with the participants!

Guest Post: “Global Cities–Joining Forces Against Corruption” Conference Recap, Part 1

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Jennifer Rodgers and Gabriel Kuris, the Executive Director and Deputy Director, respectively, of the Columbia University Center for the Advancement of Public Integrity (CAPI), have provided a two-part series of guest posts summarizing CAPI’s recent conference on “Global Cities–Joining Forces Against Corruption”, which we previously advertised on GAB. This is the first of the two posts.

CAPI’s “Global Cities” conference brought together delegations from 14 cities across six continents to discuss the corruption challenges in urban settings and new ideas for reform. Videos of each speech and panel, presentation slideshows, and other conference materials are now available online. The discussion will continue on an online forum launching soon on the CAPI website, and those interested in participating in these online exchanges should feel welcome to register now. CAPI plans to periodically reprise the conference, with a shifting roster of cities, to build a coalition of cities on the vanguard of fighting urban corruption.

The conference commenced with keynotes addresses by the mayors of two historic cities working to boost transparency and public trust: Miguel Ángel Mancera of Mexico City and Giorgos Kaminis of Athens. Both mayors emphasized the empowerment of everyday citizens through new oversight mechanisms, cooperation with civil society, and emerging technologies—like Athens’s online budget monitoring tool. Both cities are also working to streamline legal regulations and public procedures, whether through Athens’s one-stop shops for citizen services or Mexico City’s legal reforms in public procurement and property registration.

The first panel, “The Shifting Landscape of Urban Corruption: New Challenges, New Approaches” examined the corruption issues cities currently face worldwide. Leaders of Western Australia’s Corruption and Crime Commission discussed their development of a “Misconduct Intelligence Assessment” tool to track the dynamic corruption risks of the modern boomtown of Perth. Chicago’s Inspector General spoke about emerging challenges such as the increasing prominence of quasi-governmental entities, the changing role of money in politics, and the grey areas of “legalized corruption.” Leaders from the anticorruption agencies of Catalonia and Kenya discussed the intersection between corruption, civic ethics, and public procurement.

The second panel, “Comeback Cities: Restoring Integrity after a Corruption Scandal”, covered the efforts of Toronto, Philadelphia, and New Orleans to break out of ceaseless cycles of scandal and clean-up to build resilient structures of oversight and civic cultures of lawfulness. Toronto’s Accountability Framework pioneered a new integrity model in a city reeling from a procurement scandal. Philadelphia’s Inspector General helped the city recover from high-level corruption so rampant the FBI wire-tapped the mayor’s office. Federal oversight is helping New Orleans to finally overhaul its notoriously corrupt police department. At the end of the panel, Frank Anechiarico of Hamilton College brought in comparative experience from Amsterdam, Hong Kong, and New York City from the volume he co-edited about city-level anti-corruption structures, Local Integrity Systems.

The third panel, “Bridging Political Boundaries: Partnering with National and State Government”, provoked some of the conference’s most engaged discussions. An aide to the mayor of Lviv, Ukraine, discussed how local activists whose reforms were frustrated by corruption at the national level helped upend national politics. Delegates from Nairobi and Chicago discussed collaboration between federal, regional, and local levels of law enforcement. Finally, GAB Senior Contributor Rick Messick brought an international-level perspective, emphasizing the counter-intuitive benefits of competition, rather than cooperation, among overlapping levels of government.

In our next post, we will summaraize the conference’s other speeches and panels, on topics ranging from the fight against corruption in post-Maidan Ukraine to the risks posed by cybercrime rings when cities host major events.

Guest Post: Using Big Data to Detect Collusive Bidding in Public Procurement

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Bence Tóth and Mihály Fazekas of the Corruption Research Center Budapest (CRCB) contribute the following guest post:

As several earlier posts on this blog have discussed (see, for example, here, here, and here), collusion and corruption in public procurement is a significant problem, one that is extremely difficult to detect and combat. The nature of public procurement markets makes collusion easier to sustain, as pay-offs are higher (demand is often inelastic due to the auction mechanisms used), administrative costs increase entry barriers, and the transparency of procurement contract awards–often intended as an anticorruption device–can actually make it easier for cartel members to monitor one another and punish cheating. Law enforcement agencies have tried various techniques for breaking these cartels, for example by offering leniency to the first company that “defects” on the other cartel members by exposing the collusive arrangement. However, although leniency policies have sometimes proven to be an effective tool to fight coordinated company behavior, the efficacy of this approach is limited given the relative unlikelihood that the government will ever acquire convincing evidence of collusion absent such a defection by an insider. Hence, there is great need for alternative methods to identify collusive rings and guide tradition investigation.

In many markets, using quantitative indicators to detect collusion has not been feasible, as gathering meaningful tender-level data (or even market-level data) is too costly, or simply impossible. However, in the case of public procurement markets, there is a huge amount of publicly available data, which makes the use of “Big Data” techniques to pinpoint collusion-related irregularities more feasible. Indeed, in collaboration with our colleagues at CRCB, we have developed a simple, yet novel approach for detecting collusive behavior. Continue reading →

Guest Post: Typologies of (Anti-) Corruption — How Much More Boring Can It Get? Or Maybe Not…

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Dieter Zinnbauer, Senior Program Manager for Emerging Policy Issues at Transparency International, contributes the following guest post:

Remember that childhood game, you say a word over and over and it seems to lose its meaning and just dissolves into a melodic sound? I feel similarly about trying to slice up the umbrella concept of corruption and sort it into practical, reasonably comprehensive, and distinctive subcategories – an endeavor that usually gets out of hand, consumes disproportionate amounts of scarce thinking-time and energy, and eventually leaves the participants more confused and in disagreement than at the outset. Yet quite recently I have begun to change my mind a bit about the unproductiveness of typologizing (anti)corruption. In fact, I have begun to derive some surprising enjoyment and inspiration from playing around with different ways to look at and classify different types of (anti)corruption. Here three examples: Continue reading →

Guest Post: Monitoring as a Democratic Imperative

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Professor Paul Lagunes of the Columbia University School of International and Public Affairs contributes the following guest post:

The fact the bureaucrats who populate the ranks of the public administration do not run for office poses a significant challenge to electoral democracy—a challenge that is accentuated by citizens’ inability to properly monitor their own government. Citizens, after all, dedicate a majority of their time to private affairs and are often confused, if not repelled, by the complexities of public administration. Given this principal-agent problem, what can be done to improve monitoring, fight corruption, and hold governments accountable?

I recently had the opportunity to evaluate the efficacy of anticorruption monitoring in Mexico. This research indicates that independent audits over sensitive governmental processes can boost the levels of discipline, stringency, and honesty among civil servants. Indeed, even when communities find it difficult to overhaul their governing institutions and renew and professionalize their bureaucracies, they can rely on independent experts to raise bureaucrats’ level of accountability. But the improved monitoring associated with independent audits is only when accompanied by robust oversight and accountability. Continue reading →

Guest Post: The Aims and Accomplishments of the OECD Report on Corruption at the Sector Level

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Tina Søreide, Senior Researcher at the Christian Michelsen Institute and post-doctoral fellow at the University of Bergen Faculty of Law, contributes the following guest post:

Yesterday Rick posted a critique of the OECD’s recent Report, “Consequences of Corruption at the Sector Level and Implications for Economic Growth and Development.” He did not find much value in that report (and as anyone who read his post knows, that’s an understatement). I was heavily involved in the research and preparation of this report, and although criticism is always welcome, I think that many of his criticisms are unfair, and are based on a misapprehension of the report’s purposes. This rebuttal is an attempt to clarify the aims of the report and explain why, notwithstanding Rick’s criticisms, the report makes substantial progress toward achieving those aims. Continue reading →

Guest Post: Evaluations Can Reduce Corruption Costs–If You Let Them!

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Jesper Johnsøn, a Senior Adviser at the the U4 Anti-Corruption Resource Centre who leads the Centre’s “evaluation and measurement” theme, contributes the following guest post:

In development policy jargon, a “program evaluation” is a systematic and objective assessment of an ongoing or completed project or policy, including its design, implementation, and results. Very few aid agencies have incorporated corruption considerations into their standard program evaluations–despite the fact that these same agencies have focused heavily on corruption measurement (as a separate endeavor) since the mid-1990s. This is a mistake: A good evaluation should include consideration of corruption, given that program success can be threatened by waste, leakage, and outright theft of resources, and also that evaluations can be useful tools for corruption risk management, accountability, and learning about how to build better anticorruption mechanisms. Part of the explanation for the failure to integrate corruption considerations into program evaluation may be the difficulty of rigorously measuring corruption levels and impact, yet as I have argued elsewhere, this difficulty should not be used as an excuse for not evaluating anticorruption efforts systematically.

Aid organizations can and should incorporate corruption issues into their standard evaluation policies. But not all program evaluators are anticorruption experts, and so the anticorruption community needs to provide more guidance on how to integrate anticorruption analysis into program evaluation. This is one of the things we are trying to do at U4. Based on our work, and helpful discussions with other experts, here are some suggestions for how this can be achieved: Continue reading →