Does Immunity Mean Impunity?: Understanding Obstacles in the Prosecution of U.N. Corruption

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Corruption has yet again publicly surfaced as a significant problem at the United Nations. The current bribery scandal implicates John Ashe, the U.N. ambassador from Antigua and Barbuda and the former President of the General Assembly, along with several others. Ashe stands accused of accepting $1.3 million in bribes from Chinese developers in exchange for promoting real estate projects. Among the others who have come under scrutiny is Francis Lorenzo, the Dominican Republic’s deputy ambassador to the U.N., who allegedly accepted and paid bribes as a part of a scheme to influence decisions related to the development of a multi-billion dollar U.N. conference center in Macau.

As both Sarah and Matthew have previously discussed, the U.N. has not done an admirable job of policing itself. But now the organization may be getting help from the U.S. Attorney’s Office for the Southern District of New York. In October 2015, the FBI arrested Ashe and Lorenzo on charges of tax evasion and bribery, respectively. But the prosecution of officials of an international organization poses uncommon challenges. U.N. diplomats can claim certain immunity against suit in American courts, and both Ashe and Lorenzo plan to assert such immunity as a complete defense. U.S. Attorney Preet Bharara feels confident that he will be able to defeat these immunity claims, and he has further implied that he will be able to do so in future cases.

Is Bharara’s confidence well-founded? Any assessment of how American prosecutors (or other national prosecutions) may fight corruption at the U.N. requires delving into the complex legal doctrines on diplomatic immunities. This post aims to offer a brief primer on the key legal concepts and doctrines, and how they might apply in the Ashe and Lorenzo cases. Continue reading →

Countering Procurement Corruption with Integrity Pacts: The Indian Experience

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Corruption in government procurement is a massive problem worldwide, especially in developing countries. In an ideal world, measures to combat procurement corruption would include structural changes that would open up monopolies, break cartels, and enact rational, uniform, and effective procurement laws. Sadly, the potential effectiveness of these measures is matched only by the near impossibility of their implementation any time soon. We should continue to push for comprehensive structural solutions to the procurement mess, of course. But in the meantime, are there other measures that can be implemented in countries struggling with widespread procurement corruption, which can at least help alleviate the problem?

One possible solution, heavily promoted by Transparency International (TI), is the use of so-called “Integrity Pacts” (IPs). An integrity pact is a voluntary agreement between a government agency and the bidders entering into a procurement contract, where both sides agree to refrain from corrupt practices. Bidders violating the pact could be blacklisted, placed under investigation, or have their contracts cancelled. Civil society actors monitor and arbitrate disputes in enforcement of IPs. The first IP was implemented in Ecuador for a refinery project in 1994; since then, TI has collaborated with government agencies to implement IPs in public contracts of more than 30 countries including Germany, Hungary, South Korea, Malaysia, Mexico, Argentina, Pakistan, China and India.

No one expects IPs to be a panacea—deeper structural reforms are still essential. But do IPs at least help? Or are they a distraction from more meaningful reforms? While a general answer may not be possible, we can learn from the past three decades of experience with IPs in different countries. One useful test case for the effectiveness of IPs is India. And the evidence is, on the whole, encouraging. Continue reading →

How Asset Return Agreements Can Bolster Reform: The Kazakh Experience

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Guest contributor Robert Packer last week highlighted what can be the most contentious issue presented by the U.N. Convention Against Corruption – a request for the return of assets stolen as a result of corruption.  One reading of the convention seems to give countries victimized by corruption an absolute, unrestricted right to the return of the proceeds of corruption located in a second state.  But as Robert observed, states holding stolen assets can be reluctant to return them to a country where the chances the assets will again be lost to corruption are high and can find language in the convention arguably giving them the right, if not to keep the assets, to make return conditional on the requesting state taking steps to ensure the returned assets benefit citizens rather than again being stolen.  While there is always the danger that conflict over whether a return should be unrestricted or conditional will become acrimonious, a recent experience shows the result can also lead to a solution that benefits all parties. Continue reading →

Guest Post: High Level Reporting Mechanisms — A Promising New Tool To Fight Corruption

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GAB is delighted to welcome back Gönenç Gürkaynak (Managing Partner at ELIG Attorneys-at-Law in Istanbul and 2015 Co-Chair of the B20 Anti-Corruption Task Force), who, along with his colleagues Ç. Olgu Kama (ELIG partner and B20 Anti-Corruption Task Force Deputy Co-Chair) and Burcu Ergün (ELIG associate), contributes the following guest post:

One of the most promising new tools for eradicating public sector corruption, especially in public procurement, is the so-called High Level Reporting Mechanism (“HLRM”), a concept that began under the 2012 G20 process and that has been advocated by various international institutions (mainly by the Basel Institute and the B20). An HLRM provides a reporting channel that companies can use to report corrupt behavior they encounter during a public process, such as a tender. An HLRM presents an alternative mechanism to companies who need to deal with corruption allegations swiftly, rather than waiting for the outcome of a criminal investigation. An HLRM can also provide an enforceable independent mechanism to resolve commercial disputes in countries where criminal law enforcement is unduly influence by politics. To be clear, an HLRM does not aim to replace formal, judicial reporting channels. Rather, the HLRM is used for rapid response and is advantageous particularly in situations where a swift clarification is critical for business, as when allegations of corruption affect a tender process that is still open. By quickly resolving such claims, an HLRM can both deter potential perpetrators and will generate more public trust in the procurement process. Continue reading →

Dear International Anticorruption Court Advocates: It’s Time to Answer Your Critics

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Over the last year or so, proposals for an International Anti-Corruption Court (IACC), modeled on (but distinct from) the International Criminal Court (ICC), have attracted an increasing amount of attention in the anticorruption community and beyond. This attention is due in part to the understandable frustration with the continued impunity of many kleptocrats, and in part to the instinctive attraction (in some quarters) to international judicial solutions to political problems. It’s also the result of the dogged and determined advocacy of IACC proponents. As some readers of this blog probably know, I’m skeptical. But I nonetheless admire the IACC advocates for their willingness to think creatively and to spark an important debate.

That admiration, however, is waning, and the reason is simple: For all their talk about wanting to start a conversation, IACC advocates have shown surprisingly little interest in engaging, in any serious way, with substantive objections to the proposal. It’s now over 18 months since the campaign for an IACC began. Very early on, sympathetic but skeptical critics—including me, as well as several others (see here and here)—raised a number of serious questions and concerns. These concerns are not minor details about implementation—they go to the heart of the proposal, and if the criticisms are on the mark, then the whole enterprise is misguided. Now, maybe the criticisms are not well-founded; maybe there are good answers to all of them. Yet so far IACC advocates have not really provided those answers. (To be fair, the main pro-IACC webpage includes an FAQ section that purports to offer some preliminary responses, but to call those responses “thin” would be generous.) When pressed, IACC advocates have a tendency to respond with one or both of the following rejoinders: (1) “Corruption is really bad—don’t you want to stop it?”; (2) “The critics have raised a number of concerns that will need to be addressed when we work out the details of the proposal.” But nobody in this debate seriously disputes the harms of corruption, and the criticisms that have been raised are not about minor details. At this point, if IACC advocates are serious, they need to offer more than that, and what’s to be found on the brief FAQ page.

Just to recap the main objections: Continue reading →

You Can’t Go Home Again: A Surprising Concession from South Africa’s President

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“Nkandlagate” has been the gift that keeps on giving for South Africa’s satirists and social media quipsters. It started with the scandal itself: Jacob Zuma, the country’s president, spent at least 256 million rand (what was then more than US$30 million) in public funds to install a swimming pool, amphitheater, chicken run, and cattle corral at his private home, called Nkandla. When the expenditures were revealed, he claimed they were “security upgrades.” After all, the most natural way to ensure you have enough water on hand to put out a fire is to install a swimming pool, right? Political cartoonists and puppet-starring TV shows alike have weighed in on Zuma’s recalcitrance in the face of Public Protector Thuli Madonsela’s report demanding that Zuma pay back some of the misused funds.

The jokes are understandable: after years of living with the consequences of an infamous arms deal–the “original sin” that “infected [the country’s] politics” with corruption when the lack of consequences for its high-level participants fostered a sense of impunity–many South Africans have turned to dark comedy as a form of release.

The need for that type of gallows humor may have dipped slightly earlier this month.  President Zuma, after refusing for years to admit he’d done anything wrong and publicly mocking the outcry about Nkandla, finally conceded to the country’s highest court that he should have obeyed the findings of Madonsela’s report. Rather than insisting that President Zuma did nothing illegal, his defense team is now arguing that the president made a mere “mistake of law.”  What explains this stunning reversal? And what will the implications be?

Continue reading →

Judge Sullivan Calls Out the DOJ: What Corporate Settlements Reflect About The Broader Criminal Justice System

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After the DOJ released the Yates Memo last September, I suggested that the DOJ was probably very serious about focusing attention on prosecuting individuals involved in corporate misconduct (including FCPA violations). This would constitute a significant shift away from the DOJ’s recent practice of resolving most allegations of corporate wrongdoing through deferred or non-prosecution agreements (known as DPAs and NPAs). Some proponents of DPAs and NPAs claim that such settlements—which allow companies to avoid formal legal charges if they cooperate with a DOJ investigation, disclose desired information, improve compliance measures, and perhaps pay a fine—are actually a “a more powerful tool” than convictions in changing corporate behavior. But many critics—such as Judge Rakoff—have argued that settlements usually obscure who is actually responsible for the misconduct, and “ever more expensive” compliance programs may do little to prevent future misconduct. As Judge Rakoff suggested:

“[T]he impact of sending a few guilty executives to prison for orchestrating corporate crimes might have a far greater effect than any compliance program in discouraging misconduct, at far less expense and without the unwanted collateral consequences of punishing innocent employees and shareholders.”

Federal judges, including Judge Rakoff, are responsible for approving the DOJ’s settlements with corporations. The scope of their review is quite limited, and they are required to defer to the prosecution decisions of the DOJ. But even before the Yates Memo, judges had begun reviewing settlements more carefully when individuals were not charged. At least one federal judge is still dissatisfied with the DOJ’s enforcement strategy, and recently took the opportunity—in a corruption case—to urge the DOJ to adhere to the Yates Memo and deal directly with individual wrongdoers. Moreover, he suggested this could have broader significance for how we think about the rest of the criminal justice system.

Continue reading →

Guest Post: Is It Lawful Under UNCAC to Attach Conditions to Asset Returns?

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GAB is pleased to welcome back Robert Packer, from the University of Nanterre, who contributes the following guest post:

Article 57 of the United Nations Convention Against Corruption (UNCAC), which outlines provisions concerning the return of stolen assets, was the most contentious piece of the entire convention. A straightforward reading of Article 57 appears to require state parties to return assets “on the basis of a final judgement in the requesting State Party” (emphasis added). Often, however, a final judgement is not forthcoming. Article 57 addresses that contingency in its final paragraph, which provides for “agreements or mutually acceptable arrangements, on a case-by-case basis, for the final disposal of confiscated property.” That gives rise to another extremely contentious question, discussed previously on this blog (see here, here, and here): Is it legally permissible for states that confiscate the assets to attach conditions on their return? Continue reading →

Citizens Against Corruption: Report from the Front Line

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Pierre Landell Mills, a long-time and tireless advocate for putting governance at the center of development and a founder and board member of The Partnership for Transparency,  contributes the following guest post:

Everyone professes to hate corruption, but until recently few citizens believed they could stop it. Too often citizens accepted corruption, assuming it was a permanent societal disability to be borne with resignation. But people are increasingly intolerant of being squeezed for bribes and are ever more incensed at predatory officials growing fat on extortion and crooked deals. They want to do something about it.

And they are.  From the Philippines to Azerbaijan to Latvia to India to Mongolia and everywhere in between groups of courageous and dedicated citizens are taking direct action to root out corruption. Citizens Against Corruption: Report from the Front Line recounts the heroic struggle of local civil society organizations in more than 50 countries across four continents supported by The Partnership for Transparency Fund.  Among the examples the book details —   Continue reading →

Is the Kleptocracy Initiative Worth It?: A Tentative Yes

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The New York Times ran a very nice piece last week (with a GAB mention!) about the U.S. Department of Justice’s Kleptocracy Asset Recovery Initiative, and its ongoing efforts to seize foreign assets held by corrupt foreign leaders (and their cronies) in the United States. We’ve already had a lot of blog commentary on some of the issues associated with the Kleptocracy Initiative (see here, here, here, here, and here). But I wanted to pause for a moment to consider a question raised in the NYT piece: Is the effort worthwhile, given its resource costs and the relatively modest successes to date? The answer is not obvious; as Rick (quoted in the article) put it: “In terms of really helping the global anticorruption struggle, I wonder if this is the highest use of resources.” (Rick further suggests that the DOJ’s resources would be better spent on assisting countries pursuing their own anticorruption and asset recovery cases.)

Rick is right to raise these questions about the Kleptocracy Initiative—but my instincts are different from his. Even if it is the case, as the NYT reports, that the DOJ has so far only been able to recover around 8% of the assets it has gone after under the Kleptocracy Initiative, this still strikes me as a good use of DOJ resources. Here’s why: Continue reading →