Category Archives: Guest Commentary

Guest Post: Reaching Bribery’s Victims (Part 2)

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This month GAB is delighted to feature a series of guest posts from Andy Spalding, Assistant Professor at the University of Richmond School of Law and Senior Editor of the FCPA Blog.  This is the second in the series of three posts on how to compensate the victims of transnational bribery:

In my last post, I weighed in on the discussion concerning whether the UN Convention Against Corruption (UNCAC) Article 53(b) (or any other provision), establishes a duty to allocate anti-bribery penalty money to the overseas victims. I’d like to suggest now that regardless of how one answers that question, using enforcement monies to benefit those victims is a good idea. We could engage any number of ethical, economic, foreign policy, or other arguments on this point; I’ll save those for another day. For the remainder of my post, I’ll assume that: 1) the citizens of corrupted governments are the principal victims of transnational bribery; and 2) enforcement should somehow benefit them. The next question, which is no less difficult, is how.

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Guest Post: Reaching Bribery’s Victims (Part 1)

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This month GAB is delighted to feature a series of guest posts from Andy Spalding, Assistant Professor at the University of Richmond School of Law and Senior Editor of the FCPA Blog.  This is the first in the series of three posts on how to compensate the victims of transnational bribery:

Who are the victims of transnational corporate bribery? Do existing anti-bribery laws help them? And should they? The answers may not be as intellectually crisp as our gut feelings are strong. But the questions are now unmistakably central to anti-bribery debates, as illustrated by the lively exchange concerning the StAR Initiative’s Left Out of the Bargain report.  (On this debate, see Matthew’s original critique, the rejoinder by two of the report’s authors, and Matthew’s subsequent reply.) In this three-part series of posts, I’ll consider who the victims of bribery are, briefly weigh in on the StAR report debate, and then see if I can’t broaden this discussion a bit.

Most of us would agree that overseas corporate bribery is not a victimless crime. Though there are many possible victims–the bribed governments, the shareholders in the defendant companies, even the companies themselves (which often pay bribes in response to near-extortionate demands)–the principal victims of overseas bribery are the citizens of those countries – almost always developing countries – whose governments have been corrupted. Yet the profound irony of modern anti-bribery enforcement: those substantial monetary penalties are deposited in the public fisc of the perpetrator. They hardly touch the victims at all. And this isn’t by design. It’s a sort of accident of extraterritorial white-collar crime. Continue reading →

Guest Post: India’s Whistleblower Protection Act — An Important Step, But Not Enough

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Christine Liu, an associate at Cravath, Swaine & Moore’s New York Office, contributes the following guest post:

As Raj noted in his last post, the recent election of Narendra Modi as prime minister of India demonstrates that the Indian population wants change and supports actions against corruption (as do recent polls, such as the Lowy Institute study, which found that 96 percent of Indians believe corruption is holding the country back, and 92 percent believe that reducing corruption should be one of the government’s top priorities). One of the most important obstacles to fighting corruption in India has been the lack of adequate whistleblower protections. Individuals reporting incidents of bribery or corruption faced numerous hurdles, including verbal threats, physical violence, and ostracism. Others encountered workplace retaliation. Confronted with these risks, many potential whistleblowers chose to remain silent.

But there are encouraging signs that this may change. On May 14, 2014, Indian President Pranab Mukherjee cleared the way for the Whistleblowers Protection Act. This action represents a much-needed change from the history of delay surrounding the original bill, which was first introduced in August 2010 and then took years to pass the two Houses of Parliament—it passed in Lok Sabha on December 11, 2011 and in Rajya Sabha on February 21, 2014. The new whistleblower law is a significant achievement. Nonetheless, the law has some important limitations, and there are outstanding concerns about whether the law will be enforced effectively and foster public confidence. Continue reading →

Guest Post: The Alibaba IPO–Open Sesame Time for Anticorruption?

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

The anticipated listing of Alibaba, China’s rising corporate tech star, on a U.S. stock exchange is likely to be the IPO of the year. The business press is awash in speculations about the financial and economic impact of this much hyped IPO. Will this listing also create a big splash in the fight against corruption? What will be the impact on business integrity when this fast-growing Chinese tech company lists in the US and, as a result, directly subjects itself to the Foreign Corrupt Practices Act (FCPA) and other corporate governance rules?

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Guest Post: Using FOIA to Get Evidence on Bribe Takers

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Ignacio A. Boulin Victoria, Professor of Public Law at Universidad Nacional de Cuyo (Argentina) and co-founder of the human rights group CLADH, contributes the following guest post, proposing a new legal strategy for acquiring information about bribe-taking public officials:

In a recent post, Richard Messick observed–correctly–that although in the last 10-15 years we have seen greater enforcement by so-called “supply-side” countries against bribe-paying firms, “demand-side” governments have not been willing—or able—to go after the bribe-taking public officials. Rick further observes that once a bribe-paying firm has reached a settlement with a supply-side enforcer (say, the U.S. Department of Justice), it should be much easier for the demand-side government to prosecute the corrupt officials on the other side of the transaction. But we see very little of this. Rick attributes the failure to go after the bribe takers to a combination of factors: lack of capacity on the part of demand-side governments, lack of political will, and lack of information about the settlements with supply-side governments.

Those factors are all important, but Rick overlooks one salient fact about these settlements between bribe-paying firms and supply-side governments: often the public settlement documents do not reveal nearly enough information about the bribe transactions to enable the demand-side governments to take action (unless they undertake substantial and costly additional investigation). In the US, for example, the press release announcing the resolution of a Foreign Corrupt Practices Act matter often looks like this: no names regarding who received the money, no precise time concerning when, no specific department within the agency that received the money. Even if the U.S. government has provided more detailed information about the transactions to demand-side governments, the lack of public disclosure means that if the demand-side government takes no action, local activists lack the ability to use “naming and shaming” techniques effectively.

To go after the bribe-takers effectively–and to put pressure on demand-side governments to do so–we need the names, the dates, and the details of the corrupt transactions.  How do we get them?  I propose a novel (and admittedly aggressive) use of freedom of information laws, like the U.S. Freedom of Information Act (FOIA). Here’s how it would work:

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Guest Post: Good Governance as a Standalone Development Goal

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Daniel Dudis, Senior Policy Director for Government Accountability at Transparency International USA contributes the following guest post:

The United Nations is currently working towards developing a set of sustainable development goals (SDGs) that will provide the framework for whatever new global commitments are agreed upon as a replacement to the Millennium Development Goals (MDGs), which expire in 2015.  Many development priorities have been identified for potential inclusion among the SDGs–indeed, the most recent document from the U.N. SDG working group lists no fewer than 19 “focus areas” for potential inclusion. As is now widely recognized, the achievement of many of the traditional development goals (poverty eradication, nutrition, education, etc.) requires honest and effective governments. But it is important to go beyond that recognition and make good government–government that is both effective and free of corruption–a development goal in and of itself. In considering which development priorities to enshrine for inclusion among the future SDGs, UN member states should insist on the inclusion of “good governance” as a specific, standalone governance goal.

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Guest Post: Gender Equality in Parliaments and Political Corruption

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Priya Sood, Program Advisor at the Global Organization of Parliamentarians Against Corruption (GOPAC) contributes this guest post, in honor of International Women’s Day (March 8):

Does the extra X chromosome make political leaders less likely to bribe, pilfer, and lie? Are women across the board less corrupt?  According to recent research by GOPAC’s Women in Parliament Network, the reality is far more nuanced.

GOPAC conducted research based on a ten-year analysis of trends in the proportion of women elected to national parliaments as correlated to trends in national corruption levels. Surprisingly, the findings showed no general worldwide correlation between changes in parliamentary gender balance and changes in political corruption.  However, when GOPAC examined countries which have traditionally been strongholds of parliamentary democracy, the picture changed. In countries with reasonably robust democratic systems that enforce their anticorruption laws–but only in those countries–an increase in the number of women in parliament will tend to reduce corruption.

In addition to that general finding, GOPAC’s research on legislative gender equality and corruption also suggests a number of potential reforms that would help further both gender equality and anticorruption:

  • Legislation to mandate parliamentary oversight of government use and management of state financial instruments
  • Rules within political parties that commit a party to fielding a minimum number of candidates of each gender in general elections
  • Increasing female political leaders’ capacity and understanding of financial oversight mechanisms

For a more evidence that the women’s political participation tends to reduce corruption in strong democracies, but not elsewhere, see recent research by Justin Esarey and Gina Chirillo.