Uzbekistan’s Own Donald Trump

Donald Trump owes much of his success as a real estate developer to an easy relationship with the anti-money laundering laws, and he continues to profit from his investments while President thanks to an even easier relationship with conflict of interest norms.  Reports out of Uzbekistan suggest Jahongir Artykhodjaev, mayor of the capital city Tashkent, has followed a Trumpian-like path to wealth and power.  Like Trump, Artykhodjaev has looked past how investors in his real estate projects came into their money; like Trump, while in public office he has steered government contracts to companies he owns, and like Trump, when called on his dual role as businessman and government officials, he claims to have distanced himself from his business empire upon taking office.

The main difference (besides hair color) between Trump and Artykhodjaev is that independent prosecutors are examining whether Trump broke rather than simply bent anti-money laundering and conflict of interest laws. By contrast, after accounts in the international press (here and here) exposed Artykhodjaev’s Trumpian proclivities, senior Uzbek officials called a press conference where they leapt to his defense, going so far as to deny there is any Uzbekistan law that Artykhodjaev could have broken. Continue reading

Tracking Corruption and Conflicts of Interest in the Trump Administration–February 2019 Update

Since May 2017, GAB has been tracking credible allegations that President Trump, as well as his family members and close associates, are seeking to use the presidency to advance their personal financial interests, and providing monthly updates on media reports of such issues. The February 2019 update is now available here

As always, we note that while we try to include only those allegations that appear credible, we acknowledge that many of the allegations that we discuss are speculative and/or contested. We also do not attempt a full analysis of the laws and regulations that may or may not have been broken if the allegations are true. For an overview of some of the relevant federal laws and regulations that might apply to some of the alleged problematic conduct, see here.

Corruption in Tennis, Part 1: Why the Sport Is Especially Vulnerable to Corruption

Although wagers on tennis make up only a relatively small fraction of the global sports gambling market (estimated at around 12% of that market in 2015, compared to 65% for soccer), tennis seems to account for a disproportionate share of gambling-related match fixing and other forms of corruption. For example, ESSA (a non-profit dedicated to integrity in sports betting) reported that of the 496 cases of “suspicious betting” that it flagged across all sports in 2015, 2016, and 2017, 336 (68%) stemmed from bets on tennis matches. Of course, a suspicious betting alert does not necessarily indicate that match fixing or other corrupt activity actually occurred (see, for example, here and here), but still, that a sport comprising just 12% of the global sports betting market could generate over two-thirds of suspicious sports betting activity is striking, and consistent with expert assessments on the prevalence of corruption in tennis. Indeed, in 2005, Richard Ings, then the Executive Vice President for Rules and Competition for the Association of Tennis Professionals (ATP), wrote that “if a sport could have been invented with the possibility of corruption in mind, that sport would be tennis.”

Two factors in particular make tennis particularly susceptible to gambling-related corruption: Continue reading

Combating Corruption in Belize Requires Structural Modifications to the Ombudsman’s Office

In the small Caribbean nation of Belize—as in many small, relatively poor countries with scarce human capital—corruption is an entrenched part of government and society. The country’s small population—less than 400,000—exacerbates issues such as nepotism and conflicts of interest, and make it difficult to hold corrupt actors accountable. Citizens harmed by corruption are understandably reluctant to report these incidents when the people to whom they would have to report are the corrupt actors’ close friends and colleagues—or in some cases the corrupt actors themselves. In an attempt to address this problem, Belize (following suit with the rest of the Caribbean) adopted an Ombudsman Act in 1994 and, pursuant to that Act, established the Office of the Ombudsman in 1999.

There is considerable variation in the role that similarly-named “Ombudsman’s Offices” play in different countries; Belize employs the classical model of an Ombudsman, though the Belizean Ombudsman has a broader human rights and anticorruption mandate than the typical Ombudsman. The Ombudsman can receive complaints from any person who alleges injustice, injury, or abuse by an authority; complaints are handled anonymously, outside of what is perceived as a corrupt system. Additionally, the Ombudsman is responsible for investigating those complaints, and it has investigative powers comparable to a judicial tribunal, which is necessary to secure crucial information from the government. The Ombudsman, which acts independently of the Government of Belize, would ideally play a significant and constructive role in combating corruption.

For these reasons, one might think that Belize’s Ombudsman is well-positioned to take a lead role in anticorruption. Yet it doesn’t seem to be doing so. Citizen complaints to the Ombudsman are relatively infrequent (only 122 new complaints were received in 2017, down from 207 new complaints filed in 2016), and of those complaints, very few concern government corruption. And when it comes to larger anticorruption reform strategy, it’s perhaps telling that the UN’s Project Document on strengthening Belize’s national systems to support the implementation of the UN Convention Against Corruption doesn’t even mention the Office of the Ombudsman as a potential avenue for supporting UNCAC’s implementation.

What could be done to make the Belizean Ombudsman’s Office a more significant and effective player in this small country’s struggle against entrenched corruption? Three things:

Continue reading

Vietnam Enlists the Private Sector in the Fight Against Corruption

Last November Vietnam approved a new anticorruption law.  Initial reports in the English language press recounted the measures cracking down on public officials: the closing of loopholes in the conflict of interest rules, the increased information officials must provide about their personal finances, stiffer penalties for engaging in corruption, and so forth.  The recent publication of an English translation of the law reveals these early reports failed to mention a critical provision. As of July 1, all firms doing business in Vietnam, whether domestic or foreign, must:

  • determine if any employee or officer has engaged in corruption and if so promptly report him or her to the competent authority;
  • train employees on the anti-corruption laws; and
  • implement a code of business conduct that must include a rule barring conflicts of interest.

By my count (nations with anticorruption compliance laws january 2019), Vietnam is now the 25th nation to require some or all of the companies that do business in its territory to have some type of anticorruption compliance program.  Like every other anticorruption policy, requiring the private sector to join the fight against corruption is not a panacea.  But it surely is a part of the solution.

What are the rest of the world’s nations waiting for?  Do they think they can win the fight on their own?  Don’t they think the private sector has something to do with corruption?  Why aren’t they enlisting it in struggle?

A Reminder: Year-to-Year CPI Comparisons for Individual Countries are Meaningless, Misleading, and Should Be Avoided

Today, Transparency International released its new Corruption Perceptions Index (CPI) for 2018. At some point, hopefully soon, I’ll have time to look closely at the new data and accompanying materials, and if I have something to say about it, I’ll post it here. But that will probably take a while, and since the media coverage of the CPI is usually pretty intense in the first few days after the release, and dissipates in a week or two, I wanted to get out at least one post right now, on the day of the release, with a plea to everyone out there–especially journalists, but civil society activists and others as well:

DO NOT COMPARE ANY GIVEN COUNTRY’S CPI SCORE TO LAST YEAR’S SCORE TO MAKE CLAIMS ABOUT WHAT’S HAPPENING IN THE FIGHT AGAINST CORRUPTION.

Just don’t do it. Don’t. I know the temptation can seem overwhelming. Who’s up? Who’s down? Things are getting better! Things are getting worse! Nothing is changing! So many stories can be written based on these changes (or non-changes).

But these sorts of comparisons are virtually all completely useless, and probably counterproductive. Continue reading

Where Is the Behavioral Insights Revolution in Anticorruption?

Behavioral economics—the application of insights from behavioral psychology to economic analysis and regulatory policy-making—is all the rage. In addition to the contributions of this synthesis to academic economics, research in behavioral economics has suggested the possibility of innovative, simple, low-cost policy interventions that can shift behavior in dramatic and productive ways, without as much reliance on the heavy hand of regulators. These so-called “nudges” (named after Richard Thaler’s and Cass Sunstein’s book Nudge) include, for example, things like automatic enrollment in retirement plans, which appears to increase the amount of people saving for their retirement more than tax incentives do. The possibility of using nudges or other approaches inspired by behavioral economics has captured the imagination of politicians, international organizations, and others, and there are now approximately 200 so-called “nudge units” in governments around the world looking for ways to employ behavioral insights to solve public policy problems

This enthusiasm has spread to the field of anticorruption. (See here, here, and on this blog here and here). But, while there have been a handful of anecdotal reports of successful nudge-like interventions in this area (e.g. here), there has not yet been much elaboration of what sorts of concrete anticorruption innovations follow from a behavioral perspective, nor of the evidence base supporting these sorts of interventions. Indeed, there seems to be surprisingly little data about successful applications of behavioral insights in the fields of integrity and anticorruption. That’s why I was so excited when last year the Organization for Economic Co-Operation and Development (OECD) published Behavioural Insights for Public Integrity: Harnessing the Human Factor to Counter Corruption, a report that, according to the OECD, is the “first comprehensive review of different strands of behavioral sciences to identify practical lessons for integrity policies.”

Alas, rather than providing systematic evidence on how applying behavioral insights can make anticorruption efforts more effective and using that evidence to recommend new integrity tools, the OECD report largely rehashes the last couple of decades of behavioral economics more generally, and makes it seem—at least to me—that, at least so far, behavioral science does not really suggest anything revolutionary for integrity and anticorruption, and there is little or no data-backed guidance on how to apply nudging to solve problems of integrity. Continue reading