Category Archives: Guest Commentary

Guest Post: New OECD Anti-Bribery Recommendation Introduces Standards on Non-Trial Resolutions

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Today’s guest post is from France Chain, Elisabeth Danon, and Sandrine Hannedouche-Leric, legal analysts at the OECD’s Anti-Corruption Division. The views expressed in this post do not necessarily represent those of the OECD member countries or States Parties to the OECD Anti-Bribery Convention.

The OECD Anti-Bribery Convention, which came into force in 1999 and currently has 44 member states, is intended to combat bribery of foreign public officials in international business transactions. Last month, the OECD Council adopted the 2021 Recommendation for Further Combating Bribery of Foreign Public Officials in International Business Transactions, which includes—among other measures to further enhance the fight against transnational bribery—a section on non-trial resolutions (NTRs). This section, which is based in part on the findings of a 2019 report on NTRs from the OECD’s Working Group on Bribery in International Business Transactions, represents the first time that a multilateral instrument included standards on the use of NTRs to resolve foreign bribery cases.

The Recommendation first calls for Convention member states that have not yet adopted an NTR instrument to consider doing so. (This call follows the Working Group’s finding, in its 2019 report, that in the 27 OECD Convention member states that have developed at least one form of NTR instrument, nearly 80% of foreign bribery cases that have been successfully resolved since the Convention entered into force were resolved via NTR.) The Recommendation also stresses, however, that member states should take measures to ensure that the use of NTRs follows the Convention’s principles of “due process, transparency, and accountability” The Recommendation fleshes this out by advancing eight principles. According to the Recommendation, Convention member states that make use of NTRs should: Continue reading →

Guest Post: Connecting the Two Worlds of Anticorruption and Human Rights Activism

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Today’s guest post is from Casey Kelso, a human rights and integrity consultant currently serving as Senior Advocacy Officer for Worldwide Initiatives for Grantmaker Support (WINGS), and Servaas Feieretag, an independent consultant on integrity and anticorruption who currently serves as the lead expert on the MATRA for enhancing the efficiency, accountability and transparency of the Judicial Council of North Macedonia .

The link between human rights and anticorruption has been much discussed over the past decade (see, for example, here and here), yet anticorruption activists often do not recognize themselves as human rights defenders, while human rights activists often fail to understand corruption as a human rights issue. In order to highlight the interconnections between the international anticorruption movement and the international human rights movement, the UN’s Special Rapporteur on Human Rights Defenders, Mary Lawlor, has decided that her next report to the Human Rights Council in March 2022 will focus on threats to human rights defenders working directly on anticorruption issues. As she put it to us in a recent interview, “This issue of corruption comes up again and again in my conversations with human rights defenders, whether anticorruption work is the main focus of what they do or not.”

Corruption can cause or facilitate human rights violations in a host of ways. To illustrate with just a few examples: Continue reading →

Guest Post: Lessons from Athenians’ Efforts to Define Corruption

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Gab readers have been treated to a lively and valuable debate in past weeks on precisely what we mean when we say that someone or some behavior is “corrupt.” Many readers have joined the discussion. Responding to my request for their views by offering comments and analyses of six real world cases where a court, ethics commission, or legislature has been asked to decide whether the conduct of a public official was corrupt.

I had promised to post “the right answers” to the six, or at least the answers the court, commission or legislature gave this week. I am putting it off to share the guest post below by classics scholar and American attorney Kellam Conover. Drawing on the dissertation that garnered him a PhD. in Classics from Princeton, he explains how citizens of ancient Athens decided when an official’s conduct was corrupt. What he takes from their method provides the only way I see for arriving at genuine right answers – not only to the six cases I presented but to the general issues of how to define corruption and how to measure our progress in overcoming it. Many thanks Kellam.

I have read with great interest the fascinating discussion that has unfolded recently among Bo Rothstein, Matthew Stephenson, Robert Barrington, Paul Heywood, and Michael Johnston.  The questions they raise about how to define corruption, how to link up theory with practice, and how to measure success are all ones I have grappled with since writing my dissertation on Bribery in Classical Athens. 

As a historian, I’ve spent far more time describing corruption than prescribing solutions.  But I hope a few observations from ancient Athens will be helpful to others.  First, in my view corruption defies definition because it is an inherently political claim that changes with different social and political contexts.  Second, and as a result, it may be fruitful to augment anti-corruption programs with institutions specifically designed for articulating, contesting, and legitimating evolving political norms.  Finally, I offer one potential metric of success:  i.e., whether patterns of corruption in a polity have grown less disruptive over time.

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Guest Post: Shifting Anticorruption Messaging from “Crime and Punishment” to “Guardrails for Good Government”

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Today’s guest post is from Joe Grady, a co-founder of the Topos Partnership, a firm that specializes in public opinion research:

Public backing is critical to the success of anticorruption reform efforts. Yet communications intended to mobilize the public against corruption often backfire, making audiences less engaged and less confident the problem can be solved. To better understand this problem, the Open Society Foundations recently sponsored an international research effort led by the Topos Partnership to better understand how residents of three countries—the United States, North Macedonia, and Brazil—think about corruption in the public sphere, and how best to engage them in efforts to combat the problem. In each country, ethnographers spoke at length with roughly 150 people, followed by internet surveys testing different kinds of messages.

Not surprisingly, findings across the countries are distinct in various interesting ways. Macedonians, for example, often have a sense that their country lags behind other European countries, and they may also look back nostalgically at the Yugoslav era when things seemed to run more predictably. Brazilians see themselves as being culturally averse to rigid rules and procedures, including those that keep government “honest.” The U.S. public has a strong sense that government is supposed to be by and for the people. But despite these important differences, there are also important similarities across the three countries. Continue reading →

Guest Post: Brazil’s Bill Restricting Cash Transactions Would Help Fight Corruption

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Today’s guest post is from Marcelo Costenaro Cavali, a Brazilian Federal Judge in the District Court of Sao Paolo and a Professor of Criminal Law at the FGV Sao Paolo law faculty.

Criminals like to use cash because it is widely accepted, anonymous, and virtually impossible to track. Paying bribes in cash, for example, may be less risky than using more easily traceable electronic transfers. For this reason, many countries have enacted, or are considering, legislation restricting the use or possession of cash in large quantities. For example, in Brazil, the Senate is currently considering a bill that would prohibit the use of cash for all real estate transactions and for all other transactions over 10,000 Brazilian reais (approximately 1,900 US$); the bill would further prohibit carrying over 100,000 reais (approximately 19,000 US$) and possessing over 300,000 reais (approximately 57,000 US$) in cash, except in specific situations. (The bill would leave the implementation and enforcement to the Brazilian Financial Intelligence Unit (COAF), which would also have the power to adjust the threshold amounts.) Such limits on holding and using cash can be an effective means for disrupting money laundering, corruption, and tax evasion, and this bill, if passed, could therefore be an important step forward in Brazil’s fight against corruption and other economic crimes. Continue reading →

Guest Post: Succeeding or Failing… at What?

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Today’s guest post is from Michael Johnston, Professor of Political Science Emeritus at Colgate University:

A bracing and long overdue debate has surfaced recently on this and other blogs, focusing primarily upon the issue of whether anticorruption efforts have failed but also raising important questions about definitions, theory, analytical methods and—not least—the norms of scholarly discourse. Entries by Bo Rothstein, Matthew Stephenson, Robert Barrington, and Paul Heywood offer searching critiques and a number of cautionary tales that I will certainly take to heart.

The discussions raise many more questions than I can analyze in this short discussion, but as for the issue that launched the exchange—whether many or most anticorruption efforts have failed—my answer is to raise another question: How would we know? To that I add a critical follow-up: If we were to see significant success, what might it look like? The first question, I suggest, has no single clear-cut answer, and never will. As for the second: In my view success would not revolve around levels of corruption, but about the prevalence of justice. Continue reading →

New Research on the Effect of Income and Asset Disclosures

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GAB readers have recently been treated to a vigorous back-and-forth on the efficacy of anticorruption laws. Gothenburg University Professor Rothstein sharply questions their value whereas GAB editor-in- chief Matthew Stephenson and Sussex Professor and anticorruption practitioner Robert Barrington take issue with such a sweeping claim, Professor Barrington pointing to the U.K. 2010 Bribery Act as an example of an effective legal reform.

In today’s Guest Post, George Washington University Assistant Professor David Szakonyi offers additional evidence that anticorruption laws make a difference — and in a surprising place: the Russian Federation. Exploiting a 2015 change in law that required those running for local office to disclose their income and assets (the kind of natural experiment the Nobel committee lauded when awarding this year’s prize in economics), he shows how disclosures affected different individuals’ willingness to seek office.

Professor Szakonyi is also a co-founder of the Anti-Corruption Data Collective. His academic research focuses on corruption and political economy in Russia, Western Europe, and the United States. He is a Research Fellow at the Higher School of Economics in Moscow.

There are few anti-corruption reforms as widespread as mandating officials submit income and asset disclosures. According to the World Bank, 161 out of 176 countries surveyed have some sort of disclosure system in place. Yet there still is deep skepticism that forcing public officials to disclose their personal wealth makes much of an impact. Officials have every incentive to lie on their forms, and many fail to submit them entirely. Others stash their assets in the names of relatives or cloak their ownership in offshore chains out of the reach of those tasked with oversight. In brief, verification is tough. Given all the opportunities for evasion, are disclosures anything more than an anti-corruption paper tiger?

My forthcoming paper at the American Journal of Political Science provides some encouraging evidence: requiring income and asset disclosures deters those prone to corruption from seeking office. The case studied is Russia, which perhaps surprisingly has one of the most comprehensive anti-corruption disclosure laws on the books anywhere in the world. Each year over 2 million public officials must submit detailed reports to oversight commissions about their income and assets, as well as those of their spouses and dependent children. A portion of every official’s disclosure is posted online for the general public to access.

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Guest Post: Contesting the Narrative of Anticorruption Failure

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Today’s guest post is from Robert Barrington, currently a professor of practice at the University of Sussex’s Centre for the Study of Corruption, who previously served as the executive director of Transparency International UK, where he worked for over a decade.

I have read with great interest the recent exchange of views between Professor Bo Rothstein and Professor Matthew Stephenson on the academic study of corruption and anticorruption. As an anticorruption practitioner who now works within an academic research center, I was particularly struck by how their exchange (Professor Rothstein’s initial post, Professor Stephenson’s critique, and Professor Rothstein’s reply) surfaced some extremely important issues for anticorruption scholarship, its purposes, and its relationship to anticorruption practice.

I find it hard to agree with Professor Rothstein’s analysis, but this is before even looking at his points of difference with Professor Stephenson. My main beef with Professor Rothstein’s analysis is with his starting assumption of widespread failure. Like so many prominent scholars who study corruption, he proceeds from the premise that pretty much all of the anticorruption reform activity over the last generation has failed. He asserts that “[d]espite huge efforts from international development organizations, we have seen precious little success combating corruption,” that anticorruption reform efforts have been a “huge policy failure,” and sets out to explain “[w]hy …  so many anti-corruption programs [have] not delivered[.]” Professor Rothstein then offers three main answers, which Professor Stephenson criticizes.

In taking this downbeat view, Professor Rothstein is not alone. The scholarship of failure on this subject lists among its adherents many of the most prominent academic voices in the field. Professor Alina Mungiu-Pippidi has framed as a central question in corruption scholarship, “[W]hy do so many anticorruption reform initiatives fail?” Professor Michael Johnston asserts that “the results of anticorruption reform initiatives, with very few exceptions, have been unimpressive, or even downright counter-productive.” Professor Paul Heywood, notable for the nuance he generally brings to anticorruption analysis, asserts that there has been a “broad failure of anticorruption policies” in developing and developed countries alike. And many scholars proceed to reason backwards from that starting point of failure: If anticorruption reform efforts have been an across-the-board failure, it must be because anticorruption practitioners are doing things in the wrong way, which is because they are proceeding from an entirely wrongheaded set of premises. The principal problems identified by these scholars, perhaps not coincidentally, are those where academics might have a comparative advantage over practitioners: use of the wrong definition of corruption, use of the wrong social science framework to understand corruption, and (as Professor Rothstein puts it) locating corruption in the “wrong social spaces.”

That so many distinguished scholars have advanced something like this assessment makes me wary, as a practitioner, of offering a different view. But I do see things differently. In my view, both the initial assessment (that anticorruption reform efforts have been an across-the-board failure) and the diagnosis (that this failure is due to practitioners not embracing the right definitions and theories) are incorrect; they are more than a little unfair, and potentially harmful. I want to emphasize that different take should not be considered as an attack on eminent scholars, but a genuine effort to tease out why, when presented with the same evidence, some academics see failure, while many practitioners see success. Here goes: Continue reading →

Beneficial Ownership Disclosure Mandates and the Legitimate Privacy Interest in Anonymously-Owned Real Estate

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In a forthcoming article in the Notre Dame Law Review, Professors Reid Weisbord of Rutgers Law School and Stewart Sterk of the Cardozo Law School examine the trade-offs posed by requiring the public disclosure of the beneficial owners of real estate. While promoting real estate ownership transparency and curbing criminals’ ability to use anonymously-owned real estate, there are clear disadvantages to making the home addresses of all citizens public, the recent murder of a federal judge’s son at the family home by a disgruntled litigant who found their address online the most patent.

As Professors Weisbord and Sterk explain, a common law trust is one way citizens can keep their home address private, but as they also say, the Pandora Papers shows how easy it is for corrupt officials and criminals of all kinds to use a trust to thwart law enforcement. As Congress considers legislation to end trust abuses, the two urge lawmakers not to lose sight of the downsides of requiring the unrestricted public disclosure of the home addresses of all citizens.  At GAB’s request, Professor Weisbord summarized the relevant portion of their article for GAB readers. The Notre Dame article and an earlier article by Professor Weisbord prompted by publication of the Panama Papers should be required reading for those struggling with how to ensure criminals cannot hide from law enforcement through the use of anonymous corporations, trusts, and other “offshore vehicles,” while protecting judges, victims of domestic or sexual abuse, or others with a legitimate need to keep their home address private.

On October 3, 2021, the International Consortium of Investigative Journalists (“ICIJ”) published the findings of a massive worldwide investigation that painstakingly reviewed nearly 12 million confidential financial documents, a collection now known as the Pandora Papers. In keeping with its prior bombshell investigations, including the Panama and Paradise Papers, the ICIJ has once again exposed a trove of secret financial transactions by a global cohort of world leaders, politicians, and billionaires who have offshored assets by covertly acquiring or storing property in foreign countries. There can be legitimate reasons for individuals to secretly acquire property abroad, but such transactions are also notoriously used to launder money and defraud creditors or tax collectors by evading the jurisdictional reach of the individual’s domestic legal system.

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Guest Post: Corporate Criminal Liability and Corruption in Italy — Early Findings from an Ongoing Research Project

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In Italy, as in many other countries, little data is available to evaluate the effect of the corporate liability regime — on deterring corporate crime and on the companies themselves. A research project supported by the Milan-based Fondazione Centro Nazionale di Prevenzione e Difesa Sociale (the National Center for Social Protection and Defense Foundation or CNPDS) has set out to fill the void. Coordinated by Professors Stefano Manacorda and Francesco Centonze, the project has enlisted Italian judicial institutions and the private sector in the collection of empirical data.

For the first time the Ministry of Justice, the Office of the General Public Prosecutor of the Supreme Court of Cassation, and two business associations, — Confindustria, which represents more than 150,000 Italian companies, and Assonime, representing the Italian companies listed on the Italian stock market, — are collaborating to gather information on the impact of a law.  Below Marco Colacurci of the Università della Campania and Pierpaolo Astorina of the Università di Bergamo, two assistant Professors involved in the project, explain the data they are gathering and summarize what they have learned so far about corporate liability for corruption.

Their findings will likely be of great interest not only to GAB readers but to the OECD, which will soon assess Italy’s compliance with the Anti-Bribery Convention. Thanks to Professors Colacurci and Astorina for sharing their work with GAB and to Professor Stefano Manacorda for facilitating it.

Twenty years have passed since Italy introduced liability for companies (the liability is formally administrative but modelled on the criminal features). Possible reforms to the legislation are now a matter of intense debate.. Anniversaries indeed represent valuable occasions to reflect on what works and what does not, and the same goes for Legislative Decree n. 231/2001. Conferences and seminars are underway in Italy both to celebrate the law that introduced the direct liability of corporations for crimes committed by individuals acting for them, and, at the same time, to highlight the critiques that have emerged over the years.

These latter have several aspects, such as the under-use of international standards in the creation and judicial evaluation of compliance programs, the intense discretionary powers of public prosecutors and criminal judges, the lack of recognition of pretrial diversion mechanisms apt to stimulate effective forms of corporate cooperation, the failure to consider the size and organizational complexity of companies, and the list could go on.

Most of all, and despite the growing attention which scholars (and law firms) have been directing towards liability over the last two decades, the praxis seems to show that prosecutions for corporate crimes are rare. Consequently, judgments too are rare, and decisions acknowledging the adequacy of the compliance programs adopted by indicted companies are scarce. This could reflect a degree of indifference in this area, on the part of the public prosecutors’ offices or, alternatively, could be interpreted as a sign of the preventive effects of the Decree 231.

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