Top-Notch Advice from the Inter-American Development Bank on Combatting Corruption

To say I opened a copy of Report of the Expert Advisory Group on Anticorruption, Transparency and Integrity in Latin America, the Inter-American Development Bank’s latestadvice to Latin American and Caribbean governments on fighting corruption, with low expectations would be an overstatement. What specific, detailed, actionable and therefore useful measures could a report directed at 45 governments contain? Particularly given the diversity of the region’s governments, which range from prosperous, thriving middle-income democracies to desperately poor, repressive authoritarian regimes.  I thus assumed the report would follow the tiresome formula of so many previous attempts to spur developing nations to take meaningful steps to curb corruptions: a hodgepodge of obvious but vague generalizations wrapped around pleas for greater political will.

My subterranean expectations were only lowered given its institutional sponsor. Like the other regional development banks and the World Bank, the IDB exists to loan money and therefore strives to stay on the good side of the region’s governments to ensure they will continue to borrow.  In reports past from other development banks that consideration has often ruled out even the hint of politically controversial measures or criticism levelled at any government’s faltering anticorruption efforts.

The third strike against the report is its authors.  A distinguished collection of mostly Latin American “names” in the anticorruption field, all are busy experts whose main job is delivering high-profile lectures, authoring academic papers, and advising private sector entities and governments.  Devoting time and effort to an IDB publication that neither burnishes one’s academic credentials nor services clients was probably not high on their list of priorities. Most likely, I thought, they were asked to bless a precooked series of bromides assembled by interns and junior staff.

Boy, were my expectations off base.  Rather than a strike out, the report is a home run.  Or at least a stand-up triple. Continue reading

Video: “The Global Fight Against Corruption: What We’ve Learned and Where We’re Going”

One year ago (in December 2017) I was invited to give a talk at the University of Indonesia on “The Global Fight Against Corruption: What We’ve Learned and Where We’re Going.” I recently learned that the video of the lecture and the Q&A that followed it is up on YouTube here. Because this lecture was a variant on a “stump speech” that I’ve given to various audiences—a talk that tries to hit on some big-picture themes about the fight against corruption that I think are important—I thought that perhaps some of our readers out there might find some or all of the video useful. (I hope this doesn’t come off too much as shameless self-promotion!) For what it’s worth, here are a few of the topics/themes that came up in the talk, with associated time markers for the video: Continue reading

Sometimes Motives Don’t Matter: The Establishment’s Impulse to Protect (Allegedly) Corrupt Politicians Can Create Opportunities for Criminal Justice Reform

Since 2016, Israeli Prime Minister Benjamin Netanyahu has been investigated for a number of corruption allegations (see here and here). In apparent response, David Amsalem, a member of the Knesset (Israel’s parliament) from Netanyahu’s Likud Party, has proposed several bills which, if enacted, would help to protect the Prime Minister from these investigations (see here and here). Most recently, in June 2018 Amsalem presented a bill that would change Israel’s system of criminal appeals. Currently, the prosecution can appeal criminal verdicts, including acquittals; according to Amsalem’s so-called Appeal Bill, such appeals would require an appellate court’s permission, and this permission could only be given under special circumstances, and only for crimes punishable by ten or more years in prison. Amsalem, who denied that the Appeal Bill has anything to do with the investigations of Netanyahu, claimed that he proposed this bill because “[a] moral state doesn’t have to persecute a citizen who has received a sentence too light for its taste.” However, opposition Knesset members and commentators – many of whom usually support defendant-protective reforms to criminal procedure – have harshly attacked the Appeal Bill. The critics’ main (sometimes only) argument against the Appeal Bill has been that its purpose is to prevent the prosecution from appealing a possible acquittal of Netanyahu. As Tamar Zandberg, Chair of the opposition Meretz Party put it, “[t]his [government] coalition’s obsessive preoccupation with the legal authorities to protect a prime minister immersed in investigations is a mark of Cain for Israeli democracy.”

The hostility to bills that appear to be devised specifically to protect politicians from corruption prosecutions is definitely understandable, and the wide opposition in Israel to the Appeal Bill is therefore a natural reaction. Nevertheless, this impulse should be overcome when considering bills proposing criminal justice reforms with general application, and in particular bills strengthening individual rights in the criminal process. I do not claim that the Appeal Bill should be enacted into law, and I acknowledge that there may be some legitimate reasons to oppose limitations on prosecutorial appeals. However, generally speaking, we should not refrain from supporting criminal justice reforms just because their initiators may have had bad motives. Instead, every proposal of systemic reform should be considered on its merits, and, if found justified, be enthusiastically supported, despite its tainted origin. Continue reading

Senator Warren’s Proposed Anticorruption Agency Should Be Headed By a Multi-Member Commission, Not a Single Director

Last August, Senator Elizabeth Warren introduced a sweeping bill that, if enacted, would substantially reform the current ethics systems in place in the U.S. government. The bill includes a broad range of substantive reforms, including stricter conflict of interest rules, much stronger lobbying restrictions (such as a lifetime ban on lobbying by former members of Congress, Presidents, and agency heads), and new judicial ethics rules. But in addition to these and other changes to substantive law, the bill is striking in its call for a quite drastic institutional change: the creation and empowerment of a single anticorruption agency called the U.S. Office of Public Integrity. The proposed Office would not only consolidate the functions of the U.S. Office of Government Ethics (OGE) and the agency Inspectors General under one roof, but would also have broad investigative authority (including subpoena power), as well as the ability to impose civil and administrative penalties, and to refer criminal violations to the Department of Justice. Moreover, the Office of Public Integrity would have the responsibilities to ensure agency compliance with the Freedom of Information Act (FOIA), create and maintain a central FOIA database, and maintain a separate online database containing financial disclosures, lobbyist registrations, lobbyist disclosures of meetings and materials, and all ethics records (including recusals and waivers). A division within the Office of Public Integrity, known as the Office of the Public Advocate, would represent the “public interest” in executive branch rulemaking.

In addition to its broad powers, the proposed Office of Public Integrity is notable for its distinctive leadership structure. The bill proposes that the office be headed by a single Director, appointed for a renewable five-year term. The Director would have “for-cause” removal protection, meaning that the President could only remove the Director for good cause, defined as “inefficiency, neglect of duty, or malfeasance in office.” The Office would therefore be an “independent agency,” which is a term typically (at least in the U.S.) referring to an agency whose leaders have this sort of for-cause removal protection. But most U.S. independent agencies are headed by a multi-member commission, rather than a single director. (This is true, for example, for the National Labor Relations Board and the Federal Communications Commission.) The commissioners at such agencies typically serve staggered terms and make decisions by majority vote. It’s rare for an independent agency in the U.S. federal government to be headed by a single director rather than by a commission. (The most notable exception is the Consumer Financial Protection Bureau—perhaps not coincidentally an agency based on a proposal by Senator Warren.)

While there is much to be said in favor of Senator Warren’s proposed Office of Public Integrity, this leadership structure is a mistake. While it makes sense for an agency devoted to enforcing ethics rules and fighting corruption to be independent from the President, it would be better for such an agency to be governed by a multi-member commission rather than a single director.

There are three reasons for this:

Continue reading

Guest Post: The Importance of Integrating Anticorruption into Military Capacity-Building Programs

Today’s guest post is from Associate Professor Åse Gilje Østensen of the Royal Norwegian Naval Academy, and Sheelagh Brady, Senior Analyst at SAR Consultancy:

In developing countries faced with security challenges—such as armed conflict, insurgencies, or widespread violence—foreign donors often offer capacity-building programs to strengthen local security institutions. However, many of these capacity-building programs do not consider corruption or incorporate anticorruption measures within their design. And when donors do consider corruption in military capacity-building programs, they typically focus narrowly, and short-sightedly, on safeguarding program funding, with little apparent concern beyond that. The view seems to be that one can build military or police capacity first, and then (perhaps) deal with corruption later, or even leave anticorruption efforts entirely to organizations and agencies dedicated to this purpose.

This approach is likely mistaken. As documented in a recent case study from the U4 Anti-Corruption Resource Centre, Capacity Building for the Nigerian Navy: Eyes Wide Shut on Corruption?, capacity-building efforts in weak states with pervasive corruption can stimulate corrupt or even criminal activity, which may result in more of the insecurity that these efforts are supposed to reduce. As the U4 report notes, “capacity building can strengthen the abilities of corrupt actors to devise corrupt schemes, as the skills and equipment provided may be used to ‘professionalise’ corrupt practices.” Donors and policymakers therefore need to see corruption as a critical concern at the top level of foreign and security policy across countries, and make anticorruption a key component of the design, implementation, and follow-up of military and police training.

In contrast to more ambitious and comprehensive security sector reform programs, capacity building programs seek to achieve modest improvements in capabilities, usually by providing training, mentoring, and/or equipment. Yet while modesty in terms of goals may be useful, donors may be tempted to think that the limited scope of capacity-building interventions implies limited risk. Yet a host of problems can arise when anticorruption measures are not incorporated into capacity building. Most obviously, when adding particular skill sets or strengthening the operational capacity of corrupt security institutions, security personnel may improve their ability to divert resources from their intended purposes. Worse still, building selected capacity without addressing corruption could mean bolstering the segments of the security apparatus involved in facilitating or carrying out criminal activity. It is hard to know just how big of a problem this is, but there are indications that capacity building very often is provided to corrupt security sectors. For example, several studies have found the Nigerian Navy to be heavily involved in facilitating illegal bunkering, oil theft at sea, and piracy in the Gulf of Guinea (see here, here, here, and here). At the same time, the Navy is a partner to two capacity building programs sponsored by the U.S. military’s Africa Command (AFRICOM): the Africa Maritime Law Enforcement Partnership (AMLEP) and the Africa Partnership Station (APS). Neither of these programs implements measures to prevent corrupt actors in the Navy from using their newfound skills and better technology to fuel insecurity and crime. More generally, according to the Security Assistance Monitor, in 2016 alone the United States provided over $8 billion in arms and training to 50 of the 63 countries that Transparency International (TI) has rated as a having a high or critical risk of corruption in their defense sectors.

How can anticorruption efforts be made part of capacity-building programs? The first step is to recognize that corruption can undermine the results of security assistance programs, and to avoid compartmentalizing “security” and “corruption” as two unrelated issues. After recognizing this fundamental point, one can design and implement sensible anticorruption measures, tailored to the particular circumstances, in particular the informal power distributions and incentive structures that determine who gains from corruption and how. And before implementing capacity building programs in the first place, donors should carefully consider whether those programs will translate into institutional improvements or will instead create “capital” that may be attractive to corrupt actors, subversive forces, or disloyal individuals.

Holding Relatives Hostage: China’s Newest Way of Pressuring Fugitives to Return to Face Corruption Charges

China’s latest tactic in Operation Fox Hunt, its campaign to force those who have fled abroad to return to face corruption charges, has had the extraordinary, if unintended, consequence of uniting America’s bitterly divided political elite.  Last June, the American wife and children of accused fraudster Liu Changming were detained in China after a brief visit; his wife held in a “black site” and his children barred from leaving.  The ostensible the reason for holding them is because they are being investigated for “economic crimes,” but almost surely, as the family claims, the real reason is to pressure paterfamilias Liu to return to China to stand trial for corruption offenses.  Trump National Security Advisor John Bolton, avowed Trump opponents Senator Elizabeth Warren and Congressman Joseph P. Kennedy III, and leaders of Harvard and Georgetown universities are all demanding the Americans be permitted to leave China at once (accounts here and here).

Holding family members hostage to force a relative to surrender to authorities is a species of collective punishment, a patent human rights’ violation universally condemned by the world community. No wonder the Boltons, Warrens, Kennedys, Harvards and Georgetowns find themselves on the same side of the issue.

Reporting by the New York Times, however, suggests that there could be more to the case than appears at first glance.  That there may be reason for both the Chinese government and the strange bedfellows its policy has created in opposition to examine their actions in view of the global fight against corruption. Continue reading

Tracking Corruption and Conflicts of Interest in the Trump Administration–December 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. The December 2018 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.