Addressing the Risk of Corruption in the Humanitarian and Global Development Sector: The Case of the Buhari Plan

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North East Nigeria is on the brink of a major humanitarian crisis. The region has historically been marked by poverty and underdevelopment, and more recently has been ravaged by Boko Haram. In an attempt to address both the current crisis and the longstanding poverty of North East Nigeria, on October 26, 2016, President Muhammadu Buhari inaugurated the Presidential Committee on the North East Initiative (PCNI) to “serve as the primary national strategy, coordination and advisory body for all humanitarian interventions, transformational and developmental efforts in the North East region of Nigeria.” PCNI is chiefly responsible for overseeing and ensuring the execution of the Buhari Plan, a four-volume, roughly 800 page, five-year blueprint for the comprehensive humanitarian relief and socioeconomic stabilization of the North East. Projects include unconditional cash transfers and the deployment of mobile health units and will be linked with the current UNOCHA Humanitarian Response Plan. The total budgetary requirement is 2.13 trillion Naira (approximately US$6.7 billion), of which the Nigerian Federal Government commits an estimated 634 billion Naira and the remaining 1.49 trillion Naira is anticipated to come from “many DFI’s, International Aid Agencies, NGO’s and the Private Sector Stakeholders.” (PCNI also replaced previous initiatives launched under former President Goodluck Jonathan: the Safe Schools Initiative (SSI), which focused on making schools safer for children, and the Presidential Initiative for the North East (PINE), whose aim was to kick start the economies in North East Nigeria and reposition the region for long-term prosperity.)

On the surface, the Buhari Plan sounds like a step in the right direction. But given the controversies over fraud and corruption surrounding PINE, PCNI’s predecessor, there are reasons to worry. Even putting those past issues aside, there is inevitably a high risk of corruption in a large government plans like the PCNI—especially in an environment as notoriously corrupt as Nigeria—and the current mechanisms for mitigating the risk of fraud and corruption are insufficient.

In order to reduce the corruption risks associated with a project like PCNI, the Nigerian government—and the international donors and other stakeholders providing financial support for the project—should focus on reducing the opportunities for corruption in three principal ways: (1) embedding a fraud prevention strategy; (2) employing external, independent auditors; and (3) maintaining transparency of activities and funding flows. To its credit, the Buhari Plan has already integrated aspects of these approaches. Nevertheless, there is still room for improvement: Continue reading →

Guest Post: A Critical Evaluation of National Anticorruption Strategies

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Mark Pyman, Senior Fellow at the London Institute for Statecraft, contributes the following guest post:

Many countries now have official “national anticorruption strategies” or similar plans; indeed some have had them for ten years. So surely there are insights to be had from reviewing the substantive content of a decent sample of them? Unfortunately, most of the existing analysis of national anticorruption strategies focuses not on substance, but only on process (things like stakeholder engagement, the drafting process, the need for realism, cost-benefit analysis, monitoring and evaluation, reporting, etc.) In fact, everything except substance. This is a shame.

In order to remedy this gap, I recently collaborated with the Norton Rose Fulbright law firm on a study of the substantive provisions of national anticorruption strategies in 41 countries that rank between 21 and 130 on Transparency International’s 2015 Corruption Perception Index (CPI). (We chose that range because we wanted to look at countries that have a significant corruption problem, but not those that are in the grip of deep, systemic corruption issues.) The report, published earlier this week, is available here. Our objective in conducting this review was to extract lessons that can help country leaders make better strategies in the future

So, what did we find? Continue reading →

Reporting Corruption Easily and Safely: Papua New Guinea’s Phones Against Corruption Initiative — UPDATE

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Nick Brown, head of Global Distribution for Mobimedia International, contributes the following Guest Post. [Ed. note: Data from UNDP on the project’s operation received June 2022 added at end of post.]

 Persuading corruption victims to complain remains one of the great challenges to combating corruption.  Policymakers can’t prioritize prevention efforts or know where to deploy enforcement resources if they don’t know who is demanding bribes where and from whom. But getting citizens to blow the whistle is no mean feat.  Citizens must be convinced it is worth the effort, that something will happen if they do speak up.  Citizens must also be assured they will be safe if they do, that the corrupters will not harm them or their loved ones, financially or physically.

With its “Phones Against Corruption” initiative, the Government of Papua New Guinea has hit upon a way that citizens can easily and safely report corruption complaints, and since its launch in 2014, with technical support from Mobimedia International and financial backing from UNDP and Australia, it has taken off.  Critical to its success is that it makes no technological or financial demands on PNG’s limited capacity.  It requires no more technological sophistication from citizens than the ability to send a text message, a form of communication widely used throughout the country. How does it work? Continue reading →

Is Going After Trump’s Businesses Under State Law Such a Good Idea?–Some Criticisms To Consider

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As regular readers of this blog are aware, although I share the concern that the Trump family’s extensive private business interests pose significant corruption risks, I’m skeptical that existing federal law supplies the tools needed to attack this problem. Some of the most important federal conflict-of-interest laws don’t apply to the President, and some of the creative attempts to sue the President in federal court for alleged violations of the Constitution’s Foreign Emoluments Clause face what I fear are insurmountable legal obstacles. Several commentators have proposed reforms to federal law that would deal with the presidential conflict-of-interest problems more effectively, and some Members of Congress have introduced such legislation. But as a practical matter, given Republican control of Congress, these proposals—whatever their symbolic value—are not going anywhere.

If federal law isn’t going to help, might state law be the answer? Shortly after Donald Trump tweeted critical comments about Nordstrom’s department store’s decision to drop his daughter Ivanka’s clothing line, ethics expert Norm Eisen suggested that this tweet might be a violation of California’s unfair competition law (UCL), which prohibits “any unlawful, unfair or fraudulent business act or practice.” Around the same time, Fordham Law Professor Jed Shugerman wrote a lengthy blog post, which got quite a bit of well-deserved attention, suggesting that state corporate law tools could be used to go after alleged violations of the Emoluments Clause by Trump’s businesses. Picking up on some of these suggestions, I argued in previous posts that the California UCL, or others with similarly broad phrasing, might be a viable basis for an Emoluments Clause suit, and further that states could amend their UCLs, consumer protection laws, business organization laws, and anticorruption laws in ways that would make it harder for businesses owned or controlled by the President of the United States (or his immediate family) to leverage political power for private commercial gain in ways that would adversely affect the interests of the states’ citizens.

The idea that state (or local) laws might be used in this way is not purely hypothetical or speculative. A couple of lawsuits are already invoking UCLs as a basis for going after allegedly unlawful overlap between the Trump family’s business interests and their political power. First, a Washington, D.C. restaurant brought a private suit alleging that Trump’s ownership interest in the Trump International Hotel in Washington, D.C., which occupies a building leased from the federal government’s General Services Administration (GSA), violates the terms of the lease, and that this in turn gives rise to a violation of D.C.’s UCL. (That suit, however, was dealt a major blow when the GSA ruled—implausibly—that Trump is not in violation of the lease.) Second, a San Francisco clothing retailer has sued Ivanka Trump under California’s UCL, alleging that various actions by Donald and Ivanka Trump, and others, to promote Ivanka’s brand have unlawfully hurt competitors such as the plaintiff. And in what many took as an encouraging sign, the New York State Attorney General Eric Schneiderman recently hired former Assistant United States Attorney Howard Master, who handled public corruption prosecutions under recently-fired U.S. Attorney Preet Bharara, and news reports indicate that Mr. Schneiderman is looking into the possibility that Trump’s alleged Emoluments Clause violations also put him in violation of state law.

I’m cautiously optimistic about this line of attack, particularly if state attorneys general and state legislators get involved, and I’m currently working on developing some more concrete proposals along these lines. (As the modern cliché goes, “Watch this space.”) At the same time, though, I’ve talked to a number of smart, thoughtful people who are skeptical that pushing for state-level responses—particularly by aggressive state attorneys general—is such a good idea. While these criticisms haven’t yet convinced me to change my mind, they’re important enough that those of us attracted to the state law approach ought to take them seriously and reflect carefully before we charge ahead. So, let me try to summarize what I take as the three most important arguments against trying to use state law tools to make it more difficult for the Trump family to profit from the presidency: Continue reading →

Do People Care More About Corruption Than They Used To? Evidence from the US and Germany

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Sometimes it feels like corruption has become the topic of the year: We’ve heard repeatedly that it is (the perception of) corrupt elites that has fueled the rise of populists, nationalists, and new socialist parties and politicians. The most prominently of these, though not the only one, is Donald Trump, who promised in his campaign to take back power from the corrupt elites (see here and here).

But has the topic of corruption actually become increasingly prominent in popular and media discourse over the last two years? To investigate this question, I did a simple search on the Factiva database within the eight most widely-circulated American newspapers (USA Today, the New York Times, the Wall Street Journal, the Los Angeles Times, the New York Post, the Chicago Tribune, the Washington Post, and Newsday) for the term “corruption.” I did a similar search for Germany, using the term “Korruption” and the eight most widely-circulated German newspapers (BILD, BILD am Sonntag, Süddeutsche Zeitung, Frankfurter Allgemeine Zeitung, Die Zeit, Westdeutsche Allgemeine Zeitung, Rheinische Post, Welt am Sonntag and Rheinische Post). Surprisingly (at least to me), over the last two years there was no growth in U.S. newspaper reporting on corruption. As the following graph shows, reporting on corruption in the U.S. has been rather stable over this period, with between 500 and 750 articles a month. A slightly different picture emerges for Germany, where newspaper reports on corruption, which were substantially less frequent than in the U.S. to begin with, have actually declined over the past two years. (A side note, though perhaps an interesting one: The most reported corruption topic in both countries, with about 2.5 times more stories than the next-most-mentioned topic, was FIFA.): Continue reading →

How to Combat Match Fixing, the International Corruption Problem in Sports

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The recent rise and prevalence of corruption in sport has drawn the attention of the international community. As Transparency International highlights in their 2016 report, professional sports not only engage billions of people worldwide, but also involve significant amounts of money. Such corruption thus creates tremendous societal and economic burdens. Match fixing is one form of corruption that has impacted a wide range of sports, including tennis, cricket, soccer, boxing, basketball, and baseball all within the last year. This problem not only permeates low-level games, but also impacts high-profile events such as World Cup qualifiers, European Championship qualifiers, and even Champions League Games.

On the surface, it may seem as though match fixing is a victimless crime, or at least one that’s not sufficiently serious to attract the attention of anticorruption advocates. Yet because match fixing scandals have implications that stretch far beyond the playing field, the anticorruption community should care about this problem for at least two reasons. First, as previously discussed on this blog, corruption scandals in sports are highly visible, and corruption in sports can attract public attention in ways that other corrupt activities cannot. Second, match fixing facilitates organized crime and other corrupt activities. Organized criminals engage in match fixing because it is a low-risk enterprise with the potential for large rewards from unregulated betting markets.

A recent report by the United Nation Office on Drugs and Crime investigated match fixing and tried to understand some of its underlying causes. The report cites a number of factors that have allowed this threat to grow, including “personal greed, weak governance structures of sport as a sector, easily accessible global betting markets that are open to exploitation, low prioritization of match fixing as a threat by law enforcement agencies and the use of sport by organized criminals to advance their own interests.” In attempting to address these causes, 28 countries have proposed, adopted, or enacted specific legislation criminalizing match fixing. Yet even in those jurisdictions where such sanctions exist, regulations have been ineffective. Unfortunately, the complicated transnational nature of sports betting makes it difficult for regulations to prevent match fixing in an effective way. Proving that match fixing occurred requires collection and analysis of a substantial amount of betting evidence, which is particularly difficult to obtain in unregulated betting markets. Furthermore, despite the presence of regulations, significant financial incentives continue to pressure athletes to participate in match fixing.

Therefore, given the inherent difficulties with controlling such behavior, there are two things that can be done to more effectively deter match fixing.

Continue reading →

Guest Post: Rolling Back Anticorruption

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Laurence Cockcroft, a founding board member of, and current advisor to, Transparency International, contributes today’s guest post:

The global campaign against corruption has become a cornerstone of Western foreign and development policy for the last 25 years. This campaign built on a number of earlier measures, most notably the 1977 enactment of the US Foreign Corrupt Practices Act (FCPA), which criminalized foreign bribery by companies under US jurisdiction, but the campaign really accelerated beginning in the late 1990s. For example, while European countries had resisted adopting legislation similar to the FCPA for 20 years, this changed with the adoption of the OECD Anti-Bribery Convention in 1997, which was followed a few years later by the 2002 UN Convention Against Corruption. International financial institutions like the World Bank have become more aggressive about debarment of contractors found to have behaved corruptly, and we have also seen the proliferation of corporate-level ethical codes, promoted by organizations like the World Economic Forum and UN Global Compact, designed to prevent corrupt behavior.

More recent initiatives have pushed for greater corporate transparency. For example, in the United States, the Dodd-Frank Act ended the aggregation of corporate income across countries; an EU Directive promulgated shortly afterwards imposed similar requirements. More recently, an initiative to disclose the true beneficial owners of corporations and other legal entities, pushed by former British Prime Minister David Cameron, has already taken legislative form in the United Kingdom; beneficial ownership transparency is also the subject of an EU Directive, and was being promoted by the Obama administration. And although the so-called “offshore centers” have yet to embrace similar transparency of beneficial ownership, regulatory systems in these centers have been significantly improved. There have also been a number of important sector-level initiatives, particularly in the resources sector. These include the Extractive Industries Transparency Initiative (EITI)—which requires participating governments of mineral and energy exporting countries, as well as companies in the extractive sector, to commit to a process of revenue transparency—as well as national-level laws, such as Section 1504 of the Dodd-Frank Act, which impose so-called “publish what you pay” obligations on extractive firms.

Even more encouragingly, this gradually improving regulatory environment has been accompanied by growing public opposition to corruption, as reflected in large-scale demonstrations around the world. Crowds on the streets, for example, have recently supported the proposed prosecutions of the current and past Presidents of Brazil, and opposed weakening of anticorruption laws in Romania.

But in spite of public opinion, the forces opposed to anticorruption initiatives have never gone away. The arrival of President Trump has let many of them loose both inside and outside the United States: Continue reading →

Course on Anticorruption in Local Government July 10 – 14, 2017

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The International Anticorruption Academy will offer a course this July 10 – 14 on combating corruption in local government.  Its purpose is to provide participants an in-depth understanding how corruption arises in local governments and what can be done to fight it.  The course is designed for local elected leaders, regional government administrators, anticorruption agencies’ professionals, experts from ombudsman offices and local anti-corruption organizations as well as governance specialists from development organizations

Former La Paz, Bolivia, Mayor Ronald MacLean-Abaroa will present his widely-praised work on cleaning up the city administration of La Paz. Ana Vasilache, founding President of Partners Foundation for Local Development, a Romanian NGO, will discuss the role of civil society in dealing with corruption in local government.  This writer will offer a series a modules on “Developing and Implementing an Anticorruption Strategy at the Local Level” drawing from the UNODC’s Anti-Corruption Strategies: A Practical Guide for Development and Implementation and case studies of successful anticorruption initiatives at the local level.

The Academy is located Laxenburg, Austria, a small town 12 miles south of Vienna. Details on the course and registration information is available here

The Bayesian Corruption Index: A New and Improved Method for Aggregating Corruption Perceptions

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As most readers of this blog are likely aware, two of the most widely used measures of corruption perceptions—Transparency International’s Corruption Perceptions Index (CPI) and the Worldwide Governance Indicators (WGI) corruption index—are composite indicators that combine perceived corruption ratings from a range of different sources (including private rating agencies, NGOs, international development banks, and surveys of firms and households). The CPI takes a simple average of the available sources for each country; the WGI uses a somewhat fancier “unobserved component model” (UCM) which assumes that each source’s score is a noisy signal of the “true” level of perceived corruption; the UCM differs from a simple average in a few ways, perhaps most notably by giving less weight to “outlier” sources, though in practice the WGI and CPI are highly correlated, and the WGI’s creators report that the results for the WGI turn out not to change very much if one takes a simple average rather than using the WGI.

These composite indicators have a number of well-known problems, which I won’t bother going into here. Rather, the main purpose of this post is to introduce readers to an alternative index, developed by Samuel Standaert at Ghent University, which he calls the “Bayesian Corruption Index” (BCI). Standaert introduced the BCI in a 2015 article, but so far as I can tell it has not attracted much attention. The BCI certainly doesn’t solve all the problems of the traditional aggregated corruption perceptions indicators (more on this below), but it’s definitely an improvement, and deserves wider use. Let me first say a bit about how the BCI differs from the WGI, why I think it’s an advance over the WGI and CPI, and what some of its limitations are. Continue reading →

Cracking Down on Corruption in Haitian Customs

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Billions of dollars in international aid to Haiti has been lost due to corruption, and this corruption epidemic has hindered many of the good-faith efforts to provide assistance in the wake of disasters. Of the many layers of bribery, fraud, and deceit that plague aid delivery, the one that interests me the most concerns the front-line Haitian Customs officers.

My interest stems in part from personal experience: In August 2016, I was part of a small project to engineer and build a clean water system in Haiti, which required importing equipment and supplies. As a matter of law, the items we were attempting to bring into Haiti were exempt from tax on account of their use in a non-commercial setting and our association with an NGO. Yet despite the fact that this was clearly stated on the Customs form, the Customs officials insisted that we had to pay tax on the goods, told us further that we had to pay in cash directly to the Customs officer, and reduced the tax payment we engaged in bargaining. It seemed like a bribery racket, especially with the insistence on cash payment without giving us an option to make a payment to a government agency officially. Our experience was, alas, typical: Over the past few years, there have been multiple reports of individuals being extorted for cash at Haitian Customs, with officials often unwilling to follow their own guidelines, a situation that seriously hinders the timely provision of non-profit aid.

The Haitian government is aware of the problem, and in 2013 launched a general crackdown. Yet despite a handful of successes—such as the arrest of a prominent Haitian businessman who was involved with multiple Customs officers in a corruption ring that involved contraband and trafficking—the crackdown doesn’t seem to have led to a meaningful reduction of inconsistent and corrupt Customs practices. While additional reforms to the anticorruption laws and improved internal auditing would help, there are a few other steps that the Haitian government could take that would help to combat the sort of corruption that many importers, including my own team, have encountered in Haitian Customs: Continue reading →