New Podcast Episode, Featuring Richard Nephew

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A new episode of KickBack: The Global Anticorruption Podcast is now available. In this episode, host Liz Dávid-Barrett speaks to Richard Nephew, the US Department of State’s Coordinator on Global Anti-Corruption. The conversation focuses principally on the US strategy on countering corruption, including the practicalities involved in implementing different pillars of the strategy, such as attempts to strengthen the multilateral anti-corruption architecture. The conversation also touches on the key outcomes to emerge from the recent UN Conference of the States Parties to the United Nations Convention against Corruption (UNCAC). You can also find both this episode and an archive of prior episodes at the following locations: KickBack was originally founded as a collaborative effort between GAB and the Interdisciplinary Corruption Research Network (ICRN). It is now hosted and managed by the University of Sussex’s Centre for the Study of Corruption. If you like it, please subscribe/follow, and tell all your friends!

Anti-Defamation Laws: Politicians Abuse Them, But Can Anticorruption Activists Use Them?

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Defamation is a scary word for the anticorruption community. After all, anti-defamation laws are frequently abused to harass, deter, and discredit people who accuse politicians of misconduct. But defamation suits can also be an important tool for anticorruption activists to defend against false and misleading attacks designed to undermine their work. As smear campaigns deter and diminish anticorruption advocacy, we must be cautious in our attempts to weaken or repeal anti-defamation laws, for they may prove to be a necessary line of defense.

To understand why anti-defamation laws can be so important to activists, take the case of Peruvian journalist Gustavo Gorriti. Gorriti has spent much of his life trying to investigate and expose corruption. When the Lava Jato scandal rocked Latin America, his publication, IDL-Reporteros, helped uncover millions in bribe payments to public officials. Gorriti played an important role in what shaped up to be one of the most consequential anticorruption investigations in the continent’s history.

Unsurprisingly, Gorriti came under fire for his investigative work. Among other lines of attack, stories started to pop up in some media outlets falsely accusing Gorriti of having ties to directors of the bribe-paying construction company that he had investigated; these stories were clearly part of a campaign to undermine his credibility by spreading false or misleading information. This is no isolated case. Corrupt politicians and their supporters routinely make use of disinformation campaigns to discredit accusers. The problem is only getting worse, and the consequences are serious. Such campaigns often spark violence and harassment against anticorruption activists, and they can even lead to the opening of criminal investigations purporting to act on the (fabricated) allegations. Other times, disinformation undermines public support for important reforms. These consequences make life harder for the people who, like Gorriti, want to expose corruption.

What did Gorriti do about this problem? Trying to persuade the public through counterspeech wasn’t very helpful. But Gorriti had another idea: sue for defamation. If persuasion couldn’t overcome the lies thrown at him, then perhaps he could use the legal system to hit his attackers where it hurts—their pocketbooks. Claiming to have borrowed the idea from a Finnish journalist who tried the same, he did his research on who was spreading lies and brought them to court. His strategy was successful, and Gorriti scored some important victories, including getting his opponents to retract their false statements and apologize.

Although anticorruption activists and journalists rarely file suits against their attackers, more might (and for that matter, should) start to follow Gorriti’s example. Recent defamation suits against media companies and politicians show that they have a real impact. They correct the record and deter people from initiating smear campaigns in the first place. Continue reading →

Gretta Fenner 1975–2024: Addenda Memorial Service Information

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GAB sadly reports passing of Gretta Fenner, Managing Director of the Basel Institute on Governance and Director of its International Centre for Asset Recovery. A close friend of this writer and a true champion of the global fight against corruption, she died Saturday evening in an automobile accident in Nairobi. A message from Basel Institute’s President is here.

Dear friends and followers of the Basel Institute,

You will doubtless by now be aware of the tragic passing of our Managing Director Gretta Fenner last weekend.

Even as we grieve, we have appreciated the countless messages of condolence and tributes that have been flooding in from all corners of the world. Their depth and breadth are testimony to the extraordinary woman that Gretta was and the passion that she inspired in the anti-corruption community and beyond.

Many have shared their sympathy and memories on LinkedIn, X and Facebook.

For those close to Gretta who wish to transmit a message to the Institute’s team or her family and partner, please fill in this form. 

A selection will also be displayed on a public tribute web page that is under development.

Many thanks from all of us at the Basel Institute on Governance

Memorial Service

The Memorial Service for Gretta will be held on Wednesday, 8 May at 14:00 Swiss time at the Grossmünster in Zurich. Live streaming will be available at this link. 

In lieu of flowers, donations can be made to support the tennis club in Nairobi, which Gretta helped to set up and where her son Lukas had a wonderful time earlier this year. View details.

IMF Staff: British Virgin Islands A Haven for Fraudsters, Tax Cheats, Corrupt Officials, Other Assorted Financial Crooks

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The IMF staff doesn’t put the conclusion to their report on the British Virgin Islands’ antimoney laundering controls as starkly as the headline to this post does. But its February 27, 330-page assessment of the island nation’s efforts to curb money laundering leaves no doubt the headline is accurate.

The report finds regulatory oversight of the financial sector is sparing at best, and in the rare instance when a violation is detected, the penalty is laughably weak. What seals the deal for those needing a safe place to stash money from corruption, drug dealing, and other financial crimes is the “who cares about others” attitude of the authorities for crimes committed elsewhere.

“The relevant authorities and key reporting institutions broadly view the illicit activities of the foreign beneficial owners as having an insufficient nexus with the territory and do not consider that VI entities are directly involved in such activities.”

IMF Country Report No. 24/55. British Virgin Islands: Detailed Assessment Report on Anti-Money Laundering And Combatting The Financing Of Terrorism

In other words, if you want to put money you stole from the citizens of your country in our banks or take advantage of our lax approach to verifying who really owns a BVI corporation to keep your country from finding your assets, fine by us. Not our problem.

Continue reading →

The Price of Rhetoric: Anticorruption Narratives and Violence Against Doctors in China

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In China, violence against doctors and other healthcare professionals has become a worrisome trend. Much as Americans have gotten depressingly used to the expression “school shooting,” Chinese citizens are now familiar with “hospital stabbings.” While still quite rare events relative to China’s enormous population, these incidents are both troubling in themselves and indicative of larger problems, including distrust and anger toward medical professionals and the healthcare establishment.

Could this distrust and anger have something to do with the rhetoric that has accompanied some of China’s high-profile anticorruption campaigns? It is hard, perhaps impossible, to prove a direct link, but consider the following suggestive evidence: Continue reading →

African Countries and the Corruption Perceptions Index: Don’t Blame the Messenger

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Transparency International (TI) released its annual Corruption Perception Index earlier this year. As many readers of this blog are likely aware, the CPI is quite controversial, particularly in developing countries that typically fare poorly on the index. When I was a Board Member of the African Union Advisory Board on Corruption (AUABC) and President of the Network of Anti-Corruption Institutions in West Africa (NACIWA), it seemed that every time the CPI came up in our meetings, the typical reaction ranged from disapproval to outrage, with many challenging the legitimacy and authenticity of the index. More broadly, many African government officials and business people see the CPI, as well as TI’s accompanying commentaries, as part of a Western-driven smear campaign against African countries.

I do not share this view. I agree that the CPI has significant flaws and limitations, which are familiar enough that they need not be rehearsed at length: the CPI relies on subjective and potentially unreliable perceptions, the underlying sources are not always being sufficiently transparent as to the qualifications of the “experts” who assign scores, and the CPI does not cover some of the crucial issues that antigraft fighters focus on, such as tax fraud, money laundering, and illicit financial flows. I share concerns about the way the CPI is sometimes used by TI and other parties to paint an inaccurate and sometimes unfair picture of how well anticorruption fighters are doing their job. Yet despite these shortcomings, the CPI helps put pressure on governments worldwide to do more about corruption, and the index can be helpful in guiding efforts to combat graft in Africa and elsewhere. Indeed, while many African government officials and business elites criticize the CPI, most African civil society actors appreciate it and find it a credible reflection of the situation in their countries, and it gives them a powerful rhetorical tool to call on their governments to do more on this issue.

Therefore, while it is, of course, reasonable to point out the CPI’s flaws and limitations, African government officials—particularly those who work in anticorruption agencies (ACAs)—would do better to focus their energies not on denouncing the CPI but rather on reforms that can present a better picture of their respective countries. Continue reading →

U.S. Justice Department Does What Mongolia’s Government Wouldn’t

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GAB readers will remember posts in late 2020 and early 2021 recounting damning evidence implicating Mongolian political kingpin S. Batbold in a massive corruption scheme (here, here, and here). Although Batbold fiercely and forcefully denied the allegations to GAB (here), the evidence that corruption during his tenure as Prime Minister netted him tens if not hundreds of millions of dollars seemed overwhelming.

So overwhelming that it prompted the Mongolian government to open a corruption investigation in Mongolia and initiate litigation in the United States to recover New York real estate press reports showed he had bought with corruption proceeds. Nothing came of either, however. Batbold runs the country’s dominant political party, the Mongolian People’s Party, and after a protégé won the June 9, 2021, presidential election, both the Mongolian and New York cases were shut down.

But the evidence did not go away. Yesterday, the U.S. Department of Justice took up what Mongolia had dropped, filing suit to seize the two New York apartments Batbold owns. As the head of the Department’s Criminal Division explained in disclosing the suit:

“Sukhbataar Batbold used his position as prime minister to award lucrative contracts to sell copper concentrates from a Mongolian state controlled mine to entities that were owned and controlled by his known associates or his son. These intermediaries, who had little to no experience in the copper trade, played no part in providing financing for the purchase of the copper concentrates or in arranging the sale or shipment of the commodities. They simply concealed the fact that Batbold and his family were violating Mongolian anti-corruption laws by benefiting from the sale of millions of dollars’ worth of Mongolian natural resources.

“The former prime minister of Mongolia abused his position as prime minister to profit from the sale of his country’s natural resources.  He and his family used the proceeds of their corrupt scheme to buy $14 million in high-end real estate in the United States.”

The Department’s Kleptocracy unit is responsible for the case, and consistent with its kleptocracy policy, the Department said it would work to see that the proceeds of whatever property of Batbold is recovered would go to the people of Mongolia, “the people harmed by these acts of corruption and abuse of office.”

Mongolians elect a new parliament June 9.  Suppose they might want to ask why it was left to the Department of Justice to do what their government should have done long ago?

Gibraltar Government on Trial for Corruption

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Today’s Guest Post is by Robert Barrington, Professor of Anti-Corruption Practice at the Centre for the Study of Corruption, University of Sussex (UK); and formerly the Chair of Transparency International’s International Council.

With a population of a mere 34,000 and a parliament of 17 elected members, Gibraltar seldom attracts the world’s attention, except in the periodic spats between Britain and Spain as to its territorial status.  One of Britain’s Overseas Territories, like the Cayman Islands and British Virgin Islands, it’s part of the remnants of the Empire which never became independent.  Like those other territories, Gibraltar has become a financial centre – particularly known for online gambling – and is officially ruled by a hands-off Governor on behalf of the British crown.

Small states have a very mixed record when it comes to corruption.  Some, like Singapore and Hong Kong (prior to the recent ‘Chinafication’), have in the past successfully led crackdowns on corruption, backed up by powerful and effective anti-corruption agencies.  But small states can all too easily be captured by vested interests and go in the opposite direction – see, for example, Wouter Veenendaal’s article on ‘How smallness fosters clientelism; a case study of Malta.’

The picture in Britain’s Overseas Territories is relatively obscure.  They are so small that they do not generally feature  on global indices of corruption. There is usually a non-existent, or at best government-friendly local media and civil society; independence – in the judiciary, police, or other pillars of the state – is hard to achieve when everyone knows everyone.  Ideal conditions for state capture.

Many of the Overseas Territories dance on the edges of the FATF greylist, periodically creeping on and off. Gibraltar was added to the list in June 2022 and removed in February 2024.  The British Virgin Islands, Turks & Caicos and Cayman Islands have all had corruption scandals at the heart of government, often related to dirty money.  In fact, it is thanks to those scandals and the subsequent attention they garner (via the international media, public enquiries, and occasionally prosecutions) that we have at least a partial picture of what is going on.

So what is happening in Gibraltar? 

Continue reading →

Australia Adopts a U.K.-style “Failure to Prevent Bribery” Offence, But Hits Pause on Deferred Prosecution Agreements

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Australia’s current government has achieved greater anticorruption reform than its predecessor by a considerable margin. In July 2023, it delivered on a key election promise to establish a National Anti-Corruption Commission, an independent agency charged with investigating public corruption. In March 2024, it passed the Crimes Legislation Amendment (Combatting Foreign Bribery) Act 2023, the most significant reform to the Australian foreign bribery regime since its introduction in 1999. The amendment makes significant changes that broaden and strengthen Australia’s anti-foreign-bribery law. Perhaps the most significant change of these changes is the introduction of a new corporate offence of failing to prevent foreign bribery, closely modeled on a similar offense contained in the UK Bribery Act (UKBA). Once Australia’s new law comes into force later this year, a corporation can be held criminally liable if it fails to prevent an “associate” from paying a bribe to benefit the corporation. This offence is predicated on an underlying violation of the federal foreign bribery offence, which means that the prosecution must still establish that the associate acted with the intent to influence a foreign official. If the prosecution makes this showing, the burden shifts to the corporate defendant to show that it had in place adequate procedures to prevent bribery. (Unlike the UKBA, however, Australia’s new failure-to-prevent-bribery offense applies only to failure to prevent bribery of foreign officials or candidates for foreign public office; the UKBA offense applies to failure to prevent any sort of bribery, including domestic and private bribery.) Looking more closely at the details of the new offense demonstrates that the scope of potential liability is indeed quite broad: Continue reading →

New Podcast Episode, Featuring Gretta Fenner and Daniel Eriksson

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A new episode of KickBack: The Global Anticorruption Podcast is now available. In this episode, host Liz Dávid-Barrett speaks with Gretta Fenner, the Managing Director of the Basel Institute on Governance, and Daniel Eriksson, the CEO of of Transparency International. The episode was recorded shortly after Gretta and Daniel attended the Munich Security Conference, where they raised the issue of corruption as a key national security concern, and the podcast conversation focuses on that issue as well. The discussion touches on the new global context of heightened insecurity and the implications this has for those working to counter corruption. They also discuss the phenomenon of “strategic corruption,” defined in the U.S. Strategy on Countering Corruption as “when a government weaponizes corrupt practices as a tenet of its foreign policy,” and how addressing this sort of corruption, though essential, may raise challenging questions for anticorruption campaigners about the problem of “picking sides” in global political conflicts. You can also find both this episode and an archive of prior episodes at the following locations: KickBack was originally founded as a collaborative effort between GAB and the Interdisciplinary Corruption Research Network (ICRN). It is now hosted and managed by the University of Sussex’s Centre for the Study of Corruption. If you like it, please subscribe/follow, and tell all your friends!