Guest Post: Curbing Political Finance Abuse in Moldova

GAB is pleased to welcome this post on political finance in Moldova by the Independent Anti-Corruption Advisory Committee. Established by reformist President Maia Sandu in 2021, the committee reports regularly on Moldova’s progress in curbing corruption and what more needs to be done. Thanks to its members expertise and their independence, its work carries great weight — both within Moldova and the international community.

The most recent report addresses perhaps the most challenging issue any democracy faces: enforcement of the rules governing contributions to and expenditures by political candidates and political parties. A challenge all the greater in Moldova as post-Soviet oligarchs have yet to be fully tamed and Russia continues to pour black money into campaigns to strengthen anti-Ukraine, pro-Russian candidates.

The report is here, the committee’s summary below.

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Ukraine’s Fight Against Corruption: Whistleblowing

Last Friday, July 7, some 50 civil society representatives, media personnel, and government policymakers spent the day discussing the law and practice of whistleblowing in Ukraine. They heard from among others National Anticorruption Prevention Committee (NAPC) officials explain how whistleblowing fit into the government’s anticorruption efforts, Anticorruption court Judge Oleksiy Kravchuk on measures for fostering respect for whistleblowers, and how the law protected Oleh Polishchuk after he blew the whistle on his employer’s corruption.

I spoke at the closing panel with TI Ukraine head Andrii Borovyk and Serhiy Derkach, Deputy Minister for Community, Territories and Infrastructure Development of Ukraine. The English version of the program is here and the slides I spoke from here. Minister Derkach’s closing remarks are below —

“Whistleblowing during the recovery process in Ukraine is even more important. It is not only about corruption but also about the security and efficiency of how funds and resources are used.

“There are three key conditions for whistleblowers to report wrongdoing:

✔️ Official channel for reporting
✔️ Confidence that the reports will be reviewed and the perpetrators brought to justice
✔️ Protection from retaliation by management

“At the Ministry of Renovation, we support a zero-tolerance culture towards corruption and are actively working to implement an effective compliance system.

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Mitigating Corruption Risks in Ukrainian Reconstruction: Princeton University/Kyiv Anticorruption Research and Education Centre’s Joint Program

Princeton University’s Innovations for Successful Societies program and Kyiv’s Anticorruption Research and Education Centre are together helping the Ukrainian government fight corruption during reconstruction. Their first output is a four-day program that began today to share experiences elsewhere in curbing corruption in construction projects. Attending are frontline staff from the Ministry for Communities, Territories and Infrastructure Development, the State Agency for Reconstruction and Development, and other agencies and departments responsible for reconstruction.

Funded by the International Renaissance Foundation and USAID, Deputy Infrastructure Minister Serhiy Derkach opened the program. Princeton Professor Jenifer Widner, head of the Princeton program, Oskana Nesterenko, ACREC Executive Director, and representatives of AID and the Renaissance Foundation also spoke. Hamish Goldie-Scot, CoST Technical Director, and I will lead the discussions. The agenda is here, my opening remarks below.

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How Open Data Will Prevent Corruption in Ukraine Reconstruction

Ukraine is creating the world’s most transparent system for the procurement of public works. To assure citizens and donors that the billions needed to reconstruct the nation’s infrastructure will be wisely and honestly spent, it has developed DREAM, the Digital Restoration EcoSystem for Accountable Management. DREAM will provide citizens, investors, and donors access to microlevel data on every single reconstruction project — from the initial feasibility study through the procurement process to the completion of construction.

Analysis of DREAM data will show when bills of quantity are unbalanced, when bids were likely collusively prepared, and suggest if not reveal other signs of project-level corruption.  Analysis of DREAM data across all procurements will disclose if cost estimates vary too much from the bid price and the final price, suspicious patterns in initial versus actual completion date, variation orders, or subcontracting, and similar indicators of possible weaknesses in the procurement and oversight of projects.

In a talk next week I will recommend the Ukrainian government use DREAM data to conduct the analyses listed below. Surely there are more I am missing. Comments/additions welcome.

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Public Funding of Political Parties Is Unlikely To Reduce Corruption

Today’s guest post is from Dr. Sergiu Lipcean of the University of Bergen and Professor Iain McMenamin of Dublin City University.

Does public funding of political parties reduce corruption? Intuitively, there are good reasons to believe that it does. After all, when parties receive a substantial portion of their funding from public sources, they are less dependent on private contributions—both legal and illegal. That straightforward logic has led many scholars and prestigious organizations to recommend higher levels of public funding for parties and candidates. The Council of Europe’s Committee of Ministers, for example, recommends public funding of political parties and electoral candidates as an anticorruption measure, and the OECD, while not explicitly using the language of corruption, recommends public funding as part of a holistic system of political finance regulation to limit policy capture.

But the empirical evidence on the anticorruption impact of public funding for parties is surprisingly thin, and results that initially seem to show the sort of effect described above often turn out to be quite fragile and unreliable. We recently published our own study, which examines how the level of public funding for political parties affects enterprise managers’ perceptions of the impact of payments to government officials, using World Bank survey data from 27 post-communist countries. Although we find an association between higher public funding and lower corruption, this result is extremely sensitive to minor changes in method, and the results are too uncertain to recommend public funding as a policy intervention to reduce corruption.

We suspect that one of the reasons that empirical research has failed to find robust anticorruption effects of public funding is that many of the unlawful payments to politicians are used for their personal consumption, rather than for political purposes. As noted above, the economic logic of the view that public funding reduces corruption is that if parties can rely more on public funding for election campaigns and other legitimate political expenses, they will be less tempted to accept bribes, because they will have less need to fill their campaign coffers with dirty money. But if much of the illegal money given to politicians is used for their personal gratification, rather than for political purposes, than public funding of campaigns will not have much of an effect.

This is not to say that countries should not significantly increase public funding of political parties. Corruption is enormously damaging, and even very high levels of public funding for parties are unlikely to have much impact on most national budgets, so even the possibility that significant public funding might reduce corruption, at least in some contexts, may make this investment of resources worthwhile, even if we lack strong direct evidence of effectiveness. And of course there are many other reasons, besides anticorruption, to favor public funding of political campaigns. That said, an honest appraisal of the existing research compels the conclusion that, to date, the evidence that public funding will substantially reduce corruption is weak and speculative, and we should therefore not get too excited about its potential as a general anticorruption measure.

New Podcast Episode, Featuring John Githongo

A new episode of KickBack: The Global Anticorruption Podcast is now available. In this episode, host Liz David-Barrett interviews John Githongo, the legendary Kenyan anticorruption activist John Githongo about his extraordinary career, including his background in journalism, his government service as Kenya’s Permanent Secretary for Governance and Ethics in the early 2000s, and his role as a civil society activist, including his work with Transparency International. The conversation also covers recent developments in Kenya, and what lessons can be learned from Kenya’s anticorruption efforts, particularly the the role of anticorruption institutions. 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!

New Podcast Episode, Featuring Magnus Öhman

A new episode of KickBack: The Global Anticorruption Podcast is now available. (This one actually came out a couple weeks ago, so it’s not so new–apologies for the tardiness in posting this announcement.) In this episode, hosts Nils Kobis and Christopher Starke, interview Magnus Öhman, senior political finance adviser at the International Foundation for Electoral Systems, about challenges associated with the problem of illicit political finance, as well as broader issues concerning declining political trust and democratic backsliding. The interview also touches on the potential of artificial intelligence to improve political transparency. 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!

Trump Indictment’s Lesson for Prosecutors Charging Senior Political Figures

At long last federal prosecutors have filed charges against former President Donald Trump for crimes arising from his unlawful possession of classified documents. The charges are contained in what is called an indictment in the United States.

One aspect of the indictment merits the attention of prosecutors everywhere. Or at least for those considering charging senior government officials or ex-officials who, like Trump, can be expected to try to sway public or elite opinion by any means to escape convictions.

The Trump indictment is what American prosecutors call a “speaking indictment.”

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Supreme Court to Congress: Your Fault Corrupt Officials Getting Off

Two recent unanimous Supreme Court decisions overturning federal convictions for blatantly corrupt conduct again emphasize the need for Congressional action. The one case arose from bid rigging on a New York state contract, the second from the acceptance of a $35,000 “fee” by the manager of then Governor Andrew Cuomo’s reelection campaign to “fix” a problem the payor had with a state agency.

In both prosecutors charged defendants under the statute making it a federal crime to use the mail or telephones or other means for communicating across state lines to cheat an individual of money or property.* For, by my count, the fifth time in recent years (here), the Court rejected prosecutors’ efforts to stretch a law originating in claims “eastern city slickers” were using the mail system to swindle naïve Midwesterners to cover state and local corruption.

The Court also again put the blame for allowing corruption to go unpunished on Congress, reiterating that if it wants federal prosecutors to police the conduct of state and local officials, it must write a law that says so in clear and uncertain terms. Congress took a stab at doing so once, making it an offense to deprive citizens of the “honest services” of a public official.  But as the Court held in acquitting the Cuomo aide, legislators forgot the term “clear” in the Court’s injunction, failing to provide any definition of what conduct was honest and what dishonest. The law was thus unconstitutionally vague, for it did not, as all criminal statutes must, give defendants fair notice of the conduct that was unlawful.

Justice Gorsuch summed up the current situation in a concurring opinion in the Cuomo aide case.  Because Congress won’t say with the precision required of all criminal statutes what conduct by state and local officials violates federal law, it: 

“leaves prosecutors and lower courts in a bind. They must continue guessing what kind of fiduciary relationships this Court will find sufficient to give rise to a duty of honest services.” 

Every time a prosecutor and a court guess wrong, as they did in the New York cases, we get a highly publicized acquittal, leaving citizens to wonder why, if their government is serious about curbing corruption, it is letting crooked pols and their pals off the hook. For reasons to obvious to state, this is no time to be undermining citizen confidence in the government’s commitment to fighting corruption. Isn’t it time Congress seriously considered the metes and bounds of federal power to prosecute state and local corruption?

  • *The law is found in title 18 of the United States Code, sections 1343 and 1346. The operative language: “Whoever … devise[s] any scheme… to defraud… for obtaining money or property … causes to be transmitted by means of wire, radio, or television communication …any writings… for the purpose of executing such scheme… shall be … imprisoned not more than 20 years….” In 1988 Congress added “The term ‘scheme or artifice to defraud’ includes a scheme or artifice to deprive another of the intangible right of honest services.”

Guest Post: Behavioral Psychology, Transnational Bribery, and “Conditional Corruption”

GAB is delighted to welcome Nils Köbis, a researcher at the Max Planck Institute for Human Development, to contribute today’s guest post:

Suppose that you need some sort of official license, such as a fishing permit. Would you consider obtaining that license—or obtaining it more quickly—by paying a bribe? Now suppose that you are traveling in a foreign country and you need a similar sort of license. Would you consider paying a bribe to get that license in that foreign setting—if we assume that the probability of getting caught and the possible penalties are the same as in your home country, but that bribery is much more common by citizens of that country?

Are your answers to the two questions the same? Do you think other people’s answers to those questions—or, more importantly, their actual behavior—will be the same or different, depending on whether they are at home or abroad?

This question implicates a more general issue in moral and behavioral psychology. Some believe that the moral constraints on our behavior are relatively stable: In the example above, some people believe paying bribes is wrong and won’t do it, no matter where they are, while others are willing to pay bribes, at least if they the advantage of doing so is big enough and they think they will probably be able to get away with it—again, without reference to other aspects of the surrounding context. But some research has suggested that the (perceived) behavior of others can exert a strong pull on our moral compass (see, for example, here, here, and here).

To further explore this question, my collaborators and I conducted a study that involved online experiments with 6,472 participants from 18 nations, in which the participants played a bribery game based on the our opening example. Our findings were both surprising and intriguing, and suggest that our inclination to engage in corrupt behavior is influenced by our stereotypes (not always accurate) of people from diifferent countries. Continue reading