Lessons from the Trump Administration’s Conflicts of Interest

In May 2017, this blog began tracking corruption and conflicts of interest in the Trump Administration, in order to identify and document the myriad ways that the President, his family, and his closest advisors may “use the presidency to advance their personal financial interests.” This includes payments directly from the U.S. government to the Trump Organization (e.g. the Secret Service renting out space in the Trump Tower); use of the presidency to promote Trump brands (e.g. numerous Republican re-election campaigns held in Trump owned businesses); regulatory and policy decisions that benefit the Trump family and close advisors (e.g. the General Services Administration approving a lease for the Trump International Hotel); and private and foreign interests dealing with Trump businesses (e.g. Trump hotel, resort, and other development projects around the world). Keeping track of all these various conflict and corruption risks is important at a time when the news of yesterday gets drowned out and forgotten amid the drama of today.

After working for over a year as one of several contributors to this tracking project, I think that there are also some broader lessons and themes that have emerged from these efforts, which are worth highlighting:

Continue reading

Guest Post: Is an International Anti-Corruption Court a Dream or a Distraction?

My Harvard Law School colleague Professor Alex Whiting, who previously served in the Office of the Prosecutor at the International Criminal Court, as a Senior Trial Attorney at the International Criminal Tribunal for the Former Yugoslavia, and as a US federal prosecutor, contributes today’s guest post:

Since 2014, US Judge Mark Wolf has been vigorously advocating the creation of an International Anti-Corruption Court (IACC), modeled on the International Criminal Court (ICC), to combat grand corruption around the world. Some, including writers on this blog, have expressed skepticism, and have criticized Judge Wolf and other IACC supporters for not offering sufficient detail on how an IACC would work or how, as a political matter, it could be created. This past summer, in an article published in Daedalus, Judge Wolf laid out a more detailed case for the IACC. He again invoked the ICC as the model—both for how such a court could be created and how it would operate.

It is an enticing vision, to be sure: international prosecutors swooping in to collar high-level corrupt actors, further spurring on national leaders to clean up their own houses. It’s all the more enticing given that, as Judge Wolf persuasively argues, national governments have failed to adequately address grand corruption in their own jurisdictions, with significant adverse consequences for international security and prosperity. But the ICC experience suggests the limits rather than the promise of an IACC. Indeed, the ICC’s history demonstrates why it is so hard to see a feasible political path forward to creating an IACC. More fundamentally, an IACC would require a radical re-conceptualization of the ICC model, one that states have never shown a willingness to embrace. Continue reading

Kleptocracy and Neoliberal Shock Therapy – Talented Researchers Wanted

Professor Kristian Lasslett of the University of Ulster in Belfast, Northern Ireland, posts this announcement about funding opportunities for doctoral candidates.

A kleptocracy is a state where government institutions have been captured and then employed to rig the national political-economy. Rigging the national economy allows the benefits from the revenues generated by the state’s many estuaries of activity to be politically choreographed, leading to a centralisation of wealth and an increase in inequality. It also allows revenues to be channelled from one sector of the economy to another through various rackets. It could be that public revenues are systematically pilfered, or profits from those sectors in the economy not controlled by members of the kleptocratic regime are squeezed so that those sectors under the command of kleptocrats can earn artificially inflated revenues. Kleptocratic regimes also see public and private assets alienated through means that allow kleptocrats to obtain fixed and circulating capital at a discounted price or permit the kleptocrats to offload the assets at an artificial premium.

What happens to a kleptocratic regime when it is subjected to neoliberal shock therapy? Does it allow state-organised criminal rackets to become legitimate?  Does it lead to a steady erosion of kleptocracy? Does it produce a new elite that sits alongside an old kleptocratic guard? Or does it intensify the kleptocratic dynamic thus creating a worst of all possible situations scenario?

Ulster University is currently advertising a generously funded doctoral research post to test a series of hypotheses emerging from regions where kleptocracy and shock therapy overlap.  Continue reading

The Lula Opinions (Trial Court Verdict and Summary of Appeals Court Affirmance), Now Available in English Translation

The conviction and imprisonment of former Brazilian President (and current would-be presidential candidate) Luiz Inácio Lula da Silva (known as Lula) is among of the most consequential and polarizing outcomes of a corruption investigation in recent memory. The case that led to Lula’s conviction (one of several that were pending against him) did not necessarily involve the biggest or most important allegations, but it was the one that was brought first, presumably because this was the case where the prosecutors felt they had all the evidence they needed to proceed, though critics insist that the case was rushed through on skimpy evidence in order to disable Lula from seeking the presidency in this month’s election.

I only know a bit about the specifics of the case, which involved a beachfront apartment than a construction company had allegedly promised to Lula in return for helping the company secure contracts with Brazil’s state-owned oil company. (Lula, for his part, claims that he was never promised the apartment and the only evidence otherwise is unreliable testimony from one of the company’s executives, who offered the testimony in exchange for a reduced sentence as part of a plea bargain.) But I’ve been repeatedly told by passionate, seemingly well-informed Brazilians on both sides of this debate that the judicial opinions in this case—the original trial court verdict and the appellate court affirmance—demonstrate that their side of the argument is clearly correct:

  • On the one hand, I’ve been told by several of Lula’s strong supporters that the charges against him are bogus and the conviction is improper. “Just read the judicial opinions from the trial court and the appeals court,” one of them told me last spring, “and it will be obvious that they make no sense, and that there was no real legal or factual basis for the conviction.” (I’m paraphrasing, but only slightly.)
  • On the other hand, I’ve been told by supporters of the prosecution in this case that Lula’s conviction was the right legal result, and that the attacks on the verdict (and the associated attacks on the prosecutors and judges) are politically-motivated obfuscation. “Just read the judicial opinions from the trial court and the appeals court,” several people with this view have emphasized, “and it will be obvious that the law and the evidence amply supported the verdict.”

Since smart, well-informed advocates on both sides have told me I should read the opinions, that seemed like a sensible thing to do. Until recently, though, this would not have been possible, as the opinions were (to my knowledge) only available in Portuguese, which I do not read. But I was recently informed that the trial court opinion, as well as an official summary of the appeals court opinion, are now available online in English translation! I haven’t had a chance to read them yet (the trial court opinion is 185 pages long; the summary of the appellate court ruling is a more succinct six pages); I may post again after I’ve done so if I feel like I’ve got anything useful to say. For now, it occurs to me that there might be other non-Portuguese speakers out there who are following developments in Brazil and would like to read these opinions for themselves, so I’m posting the links:

  • The trial court verdict is here.
  • A summary of the appellate court ruling is here. (I’m still hoping to find and post an English translation of the full appeals court ruling.)

Hopefully this will be helpful to others who are trying to work through what they think about the accusations and counter-accusations swirling around this high-profile case. Again, there’s only so much an outsider can learn from the text of court opinions, especially without knowing more about the surrounding context and the details of Brazilian law, but I figure this will at least be helpful.

[NOTE: The original version of this post erroneously characterized the appeals court document linked to above as the full appeals court ruling. That was incorrect; the online document is an English translation of the summary of the appeals court ruling. The text of the post–as well as its title–have been changed to correct this mistake.]

Tracking Corruption and Conflicts of Interest in the Trump Administration–October 2018 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. After a lapse of a few months during this past summer, we’re again updating the tracker on a monthly basis. The October 2018 update is now available here. Notable additions since the previous update include:

  • Reports that Trump’s Bedminster Golf Club offered discounts to President Trump’s White House staff on branded golf club merchandise, apparently to encourage White House staff to wear Bedminster apparel as a way of promoting the resort and the brand.
  • Reports that President Trump has been personally involved in plans regarding the construction of a new FBI headquarters, including suspicions that President Trump may have interceded to ensure that the new headquarters would be built at the same location as the current headquarters, across the street from the Trump International Hotel, rather than at a larger and more secure location in the suburbs, because the Trump hotel benefits financially from its proximity to FBI headquarters.
  • Reports that administration officials with financial or processional ties to the steel industry have been exercising their influence to deny tariff exclusions to companies applying for such exclusions under Trump’s new steel tariffs.

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.

Guest Post: The Result in US v. Hoskins is Required by the OECD Anti-Bribery Convention

GAB is pleased to welcome back Frederick Davis, a lawyer in the Paris and New York offices of Debevoise & Plimpton and a Lecturer at Columbia Law School, who contributes the following guest post:

Much has been written about the long-awaited decision in US v. Hoskins, on this blog (see here and here) and elsewhere. In Hoskins, a US federal appeals court held that the U.S. cannot charge a foreign national acting abroad (and who therefore couldn’t be charged directly with violating the anti-bribery provisions of the Foreign Corrupt Practices Act (FCPA)) by alleging vicarious liability under either the aiding and abetting statute, 18 U.S.C § 2, or the conspiracy statute, 18 U.S.C. § 371. Judge Pooler’s opinion for the court relied on two justifications: First, under the principle established by a Supreme Court cased called Gebardi v. United States and its progeny, Congress clearly indicated an affirmative legislative policy to exclude from complicity or conspiracy liability parties like Mr. Hoskins (foreign nationals acting abroad). Second, the FCPA lacks the requisite affirmative indication of congressional intent, demanded in cases like Morrison v. National Australia Bank, that Congress intended the FCPA to apply extraterritorially to the kind of conduct in question. (Analytically, these two tests are very similar, as they both ask, “What did Congress intend?” The principal difference is the burden of persuasion: The Gebardi  line of cases, while not always entirely consistent, seem to indicate that prosecutors can generally invoke complicity or conspiracy liability even of someone who could not be prosecuted as a principal unless there’s a strong showing that this is contrary to congressional intent, while the extraterritoriality analysis, on the other hand, typically puts the burden on the prosecutor to show that a statute was intended to apply extraterritorially in the circumstances raised by a specific indictment.) The court dismissed the conspiracy and complicity charges against Hopkins, but remanded the case on the assumption that Mr. Hoskins might still be directly liable under the FCPA if the government could prove that he was acting as an agent of Alstom’s US subsidiary.

In my view, the court’s decision was clearly correct. But the court could have gone further to address another issue that, while not formally before the court, will need to be addressed on remand: The implications of the OECD Anti-Bribery Convention. The OECD Convention is far more important to the appropriate interpretation of the FCPA than the court acknowledged, provides compelling support for the Hoskins outcome, and should also control the resolution of the issue the appeals court left open for consideration on remand. Continue reading

Guest Post: The Nigerian Foreign Minister’s Vilification of Switzerland and the Diplomacy of Asset Recovery

Today’s guest post is from Dr. Matthew Ayibakuro,director of research and policy at the Africa Network for Environment & Economic Justice (ANEEJ).

On Tuesday, 11 September 2018, Nigeria’s Foreign Minister, Geoffrey Onyeama in a speech delivered at the opening of the 2nd International Conference on Combatting Illicit Financial Flows organized by the Presidential Advisory Committee Against Corruption (PACAC), called out Switzerland for being an accessory to the looting of the country by the former Head of State, Sani Abacha.

He further decried the difficulties faced by Nigeria in repatriating the infamous Abacha loot from Swiss authorities, referring to the process as “daylight robbery”.  For stakeholders working on issues of asset recovery from Nigeria and in foreign jurisdictions, these comments give room for some concern.  The potential impact of statements like this in the short and long-term can impede the progress made by the asset recovery regime in Nigeria over the last couple of decades.  There are obvious reasons for this. Continue reading