Category Archives: Guest Commentary

Guest Post: Fishing for the Right ACA Heads, and Keeping Them Safe

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Sofie Arjon Schütte, Senior Advisor at the U4 Anti-Corruption Resource Centre, contributes the following guest post, adapted from her recent U4 research paper, “The fish’s head: appointment and removal procedures for anti-corruption agency leadership”:

There has been much discussion on this blog (see here, here, and here) about the requirements for an effective, independent anticorruption agency (ACA). A number of factors are important, including (as emphasized in the Jakarta Statement) the ACA’s mandate, permanence, budget security, autonomy over financial and human resources, and internal and external accountability mechanisms, to name a few. But among the many important factors, the procedures for appointment and removal are particularly critical. As the saying goes, “a fish rots from the head down”: when the leadership of an organization is unethical or ineffective, these failings infect the entire organization. Undue external interference with an ACA is likely to target the head, and a co-opted or corrupted ACA head can do serious damage to the effectiveness and reputation of the ACA.

My research on the appointment and removal procedures for heads of 46 ACAs around the world has highlighted some of the important factors that can promote or undermine effective, ethical, and independent ACA leadership. Given different contexts, no specific set of procedures for appointments and removals can be considered ideal for all environments. Nevertheless, some general guidelines are possible: Continue reading →

Guest Post: The UK Should Fight Corruption Using “Unexplained Wealth Orders”

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Nick Maxwell, Head of Advocacy and Research at Transparency International-United Kingdom, contributes the following guest post:

UK Prime Minister David Cameron has made the fight against global corruption a high priority for his government, declaring that corruption is the cancer that is at the root of many of the world’s problems. But as much as we should applaud the UK’s efforts to support anticorruption measures and good governance abroad, it is equally important that the UK ensure that it is not a safe haven for the proceeds of corruption stolen throughout the world. Yet here the UK has fallen short: We have only seen limited asset restraint and recovery against the proceeds of corruption, especially against those currently associated to power. While estimates of total extent of the problem vary, it is generally agreed that large amounts of unexplained suspicious wealth enter the UK each year and are invested in the British financial system, in property, in luxury goods or in other areas of the economy. And despite the fact that UK law enforcement has the necessary expertise on this issue, the rate of asset recovery by UK agencies of the proceeds of grand corruption is undeniably very low compared to the scale of the problem.

Given the scale of the problem and the inadequacy of the government’s response to date, Transparency International’s UK chapter (TI-UK) established a taskforce of experts to review the legislation in place to deter grand corruption and recover stolen assets that have made their way into or through the UK. The results of the taskforce’s deliberations were published last month as a discussion paper entitled Empowering the UK to recover corrupt assets: New approaches to illicit enrichment and asset recovery; the paper sets out a new proposal for UK law enforcement: the use of an Unexplained Wealth Order (UWO), which would allow UK law enforcement to start proactively questioning suspicious unexplained wealth associated with foreign public officials, and to start civil recovery proceedings against the relevant assets.

Continue reading →

Guest Post: A “Guatemalan Spring”? — Not Yet.

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Alicia Robinson, a student at Harvard Law School, contributes the following guest post:

Guatemala has long been beset by persistent poverty, corruption, and a culture of impunity – an Unholy Trinity that has afflicted much of Central and South America. Moreover, Guatemala has the misfortune of being geographically located at the center of major drug trafficking routes to the North American and European markets, where the unrelenting demand has allowed organized crime to strengthen its hold over the country’s institutions of governance. Yet as Mathieu Tromme’s recent post on this blog highlighted, there are some encouraging signs of change. Most notably, the recent uncovering of a massive tax fraud orechestrated at the highest levels of the executive branch triggered protests that forced the resignation of the vice president – a major victory against impunity in the country.

However, despite this success, and the broad popular support for more action against corruption and impunity, Mr. Tromme may be overly optimistic when he characterizes this this event and the surrounding protests as the inception of a “Guatemalan Spring” that will bring an end to the era of impunity in Guatemala. Corruption still very much riddles every corner of Guatemalan society and the toughest part of the battle lies ahead. Continue reading →

Guest Post: Development Aid–A Blind Spot for EU Anticorruption Efforts

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GAB is pleased to welcome back Jesper Johnsøn, Senior Advisor at the U4 Anti-Corruption Resource Centre, who, along with his colleagues Nils Taxell and Thor Olav Iversen, contributes the following guest post:

A new study from the European Parliament entitled Cost of Corruption in Developing Countries – How Effectively is Aid Being Spent? shows that, despite an impressive track record of ambitious anticorruption reforms in countries working toward European Union membership, the EU’s overall anticorruption strategy marginalizes efforts to address corruption through development aid. The EU could spend aid more effectively, the report concludes, if it prioritized corruption control in developing countries. The analysis in the report suggests several measures that the EU should adopt to reduce corruption in its development aid programs:

Continue reading →

Guest Post: The United Nations, Post-Conflict Societies, and Whistleblower Protection — Understanding the Connections

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Ambassador Ugljesa Ugi Zvekic, Former Permanent Representative of the Republic of Serbia to the United Nations Senior Adviser and currently Adjunct Professor at LUISS School of Government in Rome, contributes the following guest post, which is based on research conducted by Ambassador Zvekic’s students Giorgio Sirtori, Alessandro Sabbini, and Alessandro Dowling:

Post-conflict countries are breeding grounds for corruption, due to the combination of weak (or non-existent) institutions, the chaos generated by both the previous conflict, the willingness of international interveners (and donors) to tolerate corruption as the price of stability. Indeed, of the sixteen ongoing international peacekeeping operations across the globe, almost all of these operations take place in some of the most corrupt areas of the world. While it is tempting to say that tackling corruption can and should be left to a later time, after basic needs have been met and basic rights have been guaranteed. But in fact our research, including case studies on international peacekeeping operations in the Democratic Republic of Congo, South Sudan, and Kosovo, reveals that corruption jeopardizes peacekeeping and state-building operations per se, and, consequently, it is vital to incorporate anticorruption efforts at the earliest stages of these kinds of operations.

Given the importance of anticorruption measures in state-building and peacekeeping operations, one issue that should be high up in the agenda of the United Nations is that of whistleblower protection. However, the UN’s own policy on internal whistleblowers has been disappointing, and jeopardizes the UN’s efforts to fight corruption and to promote accountability in post-conflict settings. Continue reading →

Reducing Corruption Risks in Public Works Construction: The Critical Role of Project Preparation

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Jill Wells, Senior Policy and Research Advisor, Engineers Against Poverty, contributes the following guest post:

With the creation of the Asia Infrastructure Investment Bank and the Global Infrastructure Facility, as much as an additional $1 trillion a year is likely to be invested in the construction of roads, power plants and other public works in the developing world over the next decade.  While this new investment could provide a welcome boost to economic growth and poverty alleviation, it could also be a curse.  Public works construction is regularly rated the most corrupt industry in Transparency International surveys, and if even a small percentage of this money is lost to corruption, the harm could be enormous.  The development community thus needs to step up efforts to help developing nations prevent corruption in the construction of public works.

To date, most prevention efforts have focused on the award of the contract to build the facility, but that decision is only one of many that must be taken in the process of selecting, preparing, and building new infrastructure.  A new report from the U4 Anti-Corruption Resource Centre identifies the corruption risks at the pre-tender stage and explores how additional opportunities for corruption may arise at later stages of the project cycle when the initial selection and preparation process is compromised.   Continue reading →

Guest Post: The Characteristics of Corrupt Corporate Cultures

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Alison Taylor, the Director of Advisory Services for BSR (a global non-profit organization focused on sustainability) contributes the following guest post:

Despite all the investment in corporate anti-bribery compliance programs, supported by a lucrative consulting industry dominated by investigation companies and accounting and law firms, violations of anti-bribery laws, and firms’ own compliance policies, remains widespread. Why? The usual explanations focus on the external environment (“That’s just the way they do business over there”) or on “rogue employees,” but tend to neglect issues of “organizational culture”—how groups and teams behave when they might have a corruption problem. Yet organizational culture, structures, and incentives have been powerful factors in causing professionals to indulge in systemic corrupt practices.

But what, exactly, are the cultural drivers of corruption? What do a “culture of compliance” and its converse, a “culture of corruption,” actually look like? To find out I conducted in-depth, qualitative interviews with 23 experts on anti-corruption and corporate ethics. My questions were simple: What is the culture like in a corrupt organization? Can we generalize about leadership, decision-making, incentives, values, and behavior in corrupt organizations? Can we use these findings to understand the characteristics of an ethical culture?

The answers were revealing, and strikingly consistent in identifying the characteristics of organizational cultures prone to corruption. These traits, which I will summarize below, don’t guarantee that an organization will be corrupt — but the more of these characteristics are present, the more vulnerable an organization is. Continue reading →

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 →