Corruption’s Queer History: Stonewall’s Seedy Underside

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A little after midnight on June 28, 1969, New York City police officers raided the Stonewall Inn, a seedy bar in Greenwich Village known for catering to a mostly LGBTQ crowd. Such raids were not uncommon—in fact, the Stonewall Inn had already been raided just four days prior to that now historic evening. But for some reason, that particular raid on that particular night had touched off violent clashes between police and Stonewall’s patrons, becoming a watershed moment for the LGBTQ civil rights movement in the United States. Indeed, the Stonewall Inn is now a national monument, and the anniversary of Stonewall is commemorated every year with Pride parades around the world.

In the days following the riots, however, the Stonewall Inn was in utter disarray: graffiti sprawled on its boarded-up windows read: “GAY PROHIBITION CORRUPT$ COP$ / FEED$ MAFIA.” That brief and blunt statement captures an important truth about Stonewall, one that is important for understanding both the historical context of the Stonewall uprising, as well as the intersection between anti-LGBTQ discrimination and corruption that persists today: The riots weren’t only about police discrimination—organized crime and corruption also played a fundamental role.

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U.S. States Have Failed to Address Charter School Corruption. It’s Time for Federal Intervention.

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In the United States, charter schools are publicly-funded, tuition-free institutions that operate largely independent from the traditional public school system. Charter schools are established through a contract, or charter, between the school and an “authorizer,” which is the school district, state education agency, or other entity that a state has sanctioned to approve these charters. Once approved, charter schools do not have to follow the same regulations as traditional public schools but instead are required to operate under the terms and academic standards set by their authorizing contract.

Proponents tout charter schools’ autonomy and flexibility: free from burdensome education laws and local regulations, these schools can be innovative in their curricula and management, and can compete with one another and with traditional public schools in the education “market.” Parents will then have the opportunity to “vote with their feet,” and they—along with the public funding designated for their children—will flow into better schools, leaving the poorly performing charter schools to shut down.

Or so the argument goes. In reality, thanks to rampant corruption that has come to plague the charter school industry, this public funding often flows not into the best schools but rather into the pockets of dubious school officials and their affiliates. There have been numerous charter school corruption scandals: self-dealing real estate leases, exorbitant salaries for school executives, and kickbacks from inflated purchases of school equipment and supplies, to name a few.

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Antibribery Policy: A Checklist

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That a law against bribery is the keystone of any serious fight against corruption goes without saying. What isn’t said is that an antibribery law is only the keystone. That just as an arch consists of more than its center stone, a robust, effective antibribery policy takes more than a law criminalizing bribery.  Below is my checklist of what else is required. Reader comments solicited.

My list starts with a careful review of the antibribery law itself. For as the United Nations Office on Drugs and Crimes reported in 2017, many nations’ law have gaps that make it easy for bribe takers and payers to maneuver around it unscathed; others contain ambiguities that leave it to the courts to say what is and isn’t a bribe.

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New Podcast Episode, Featuring Ray Fisman

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A new episode of KickBack: The Global Anticorruption Podcast is now available. In this episode, I had the opportunity to interview Boston University Professor Ray Fisman, one of the world’s foremost economists working on corruption and related topics. In our conversation, Professor Fisman and I cover a range of topics related to his research, including the impact of corruption on economic development, the distinctions among different kinds of corruption (and their different effects), the human costs of corruption, and the hidden influence of political connections. Professor Fisman also discusses the conversations that inspired and shaped his research agenda, and the advice that he would offer up-and-coming scholars interested in exploring this set of topics. You can also find both this episode and an archive of prior episodes at the following locations: KickBack is a collaborative effort between GAB and the Interdisciplinary Corruption Research Network (ICRN). If you like it, please subscribe/follow, and tell all your friends! And if you have suggestions for voices you’d like to hear on the podcast, just send me a message and let me know.

The Financial Weapon: Expanding Magnitsky Sanctions to Attack Corruption

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Economic sanctions targeted at individual wrongdoers can be a potent weapon in the fight against global corruption. The United States’ 2016 Global Magnitsky Human Rights Accountability Act (GMA) authorizes the President to impose targeted sanctions on corrupt foreign officials and their associates. And the GMA has had successes in deterring corruption: As earlier posts on this blog have highlighted, the GMA has prompted countries to strengthen their anticorruption laws and has prompted businesses to cut ties with corrupt individuals. Yet despite these successes, Magnitsky sanctions remain a relatively underused anticorruption tool. The U.S. Treasury Department’s Office of Foreign Asset Control (OFAC) has only sanctioned around 200 people as part of its Magnitsky programs, and most of these individuals have been sanctioned for human rights abuses rather than corruption per se.

GMA sanctions can and should be scaled up by an order of magnitude, with a greater focus on targeting corrupt actors. The U.S. should be imposing GMA sanctions on several thousand people, not just a couple hundred. As the Biden Administration has recognized, global corruption increasingly threatens national and international security. In light of this, the Administration should use the GMA to impose sanctions on not only the most egregious of kleptocrats but those who engage in more modest—but still significant—forms of corruption. Continue reading →

“Municipal Takeovers”: Failing to Address Corruption While Threatening Democratic Self-Government 

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The town of Mason is a small, majority-Black community in the State of Tennessee. For two decades, Mason’s municipal government has been afflicted with serious corruption and financial mismanagement, leading to the resignation a few years ago of almost all of Mason’s elected leadership following allegations of fraud and embezzlement. In the wake of these persistent problems, this past February the Tennessee State Comptroller, Jason Mumpower, sent a dramatic request to every property owner in Mason: vote to dissolve your town (in which case Mason would be absorbed into majority-White Tipton County, thus ending Mason’s 153 years of independent governance), or else the state government will exercise its legal authority to step in and take financial control of Mason’s town government—which would likely lead to drastic layoffs and cuts to municipal benefits. (Mumpower’s ultimatum may well have been influenced not only by Mason’s history of municipal corruption, but also by the fact that Ford Motors is set to open up a massive manufacturing plant nearby, which will bring in significant tax revenue that Mumpower claimed Mason’s town government can’t handle responsibly.)

The situation in Mason may seem extraordinary, but it is far from unique. Roughly twenty U.S. states have laws that permit the state government to take over municipal governments, although the specifics of the laws differ. (Municipal takeovers are often preceded, as in Mason, by presenting the municipality with the option to dissolve and be absorbed into the surrounding county.) Though municipal takeovers come in various forms, they generally entail the appointment of an “intervenor,” such as a state official, emergency manager, or financial control board. In some states, the intervenor’s powers are limited to financial oversight and technical assistance, but in other states (including Tennessee), the intervenor can take steps as radical as entirely dissolving a locality.

Municipal takeovers are, unsurprisingly, controversial. While pursuing a takeover is an extreme step, one can understand why some people might find it warranted, especially when corruption is so deeply embedded in a municipality that it seems inconceivable that the local government can clean itself up. But this view is misguided, at least in the U.S. context. (Municipal dissolution has been deployed and endorsed by some anticorruption advocates in other countries, such as Italy. While some of my arguments may apply in other contexts, this post focuses on the United States.) First, the costs of municipal takeovers are substantial and are often underestimated. Second, the purported benefits of municipal takeovers—at least with respect to addressing the underlying corruption and misgovernance problems in a given community—rarely materialize.

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President Biden’s “Fishy” Corruption Statistics Called Out

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Thanks to GAB Editor-in-Chief Matthew Stephenson, readers of this blog have known for years not to believe the many numbers thrown around about the global cost of corruption.  As he has shown in a series of posts, (here, here, here, and here) and in a 2021 paper for the U4 Anticorruption Resource Centre with Cecilie Wathne, these estimates are, not to put too fine a spin on it, baloney. Or what I have somewhat scatologically termed WAGs (Wild A** Guesses).

Unfortunately, White House staff apparently (and disappointingly) neither read GAB nor follow U4’s work. That is the only explanation for why they would have let President Biden say at the launch the other day of the Indo-Pacific Economic Framework for Prosperity that “corruption saps between 2 to 5 percent of global GDP.”

Fortunately, Washington Post crack fact checker Glenn Kessler didn’t let the President’s citation of what his paper termed a “fishy statistic” go unchallenged. Relying on Matthew’s and Cecile’s paper, backed up by a chat with U.S T.I. director Gary Kalman, Kessler termed the 2-5 percent statistic “so discredited” that it should have never been “uttered by the president of the United States.” The White House, he wrote, must in the future do a better job of vetting such “dubious” data.

While I trust White House staff will, I hope the error in no way hope cools theirs or the president’s commitment to upping America’s anticorruption game. After all, as the president also said at the Indo-Pacific launch, corruption “steals our public resources,. . . exacerbates inequality [and] hollows out a country’s ability to deliver for its citizens.”  All unequivocally true. No fishy data required. QED

Anticorruption Bibliography–May 2022 Update

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An updated version of my anticorruption bibliography is available from my faculty webpage. A direct link to the pdf of the full bibliography is here, and a list of the new sources added in this update is here. Additionally, the bibliography is available in more user-friendly, searchable form at Global Integrity’s Anti-Corruption Corpus website. As always, I welcome suggestions for other sources that are not yet included, including any papers GAB readers have written.

The Coal Industry Has No “Final Villain”

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“Manchin’s coal corruption is so much worse than you knew.” So proclaimed the headline of a Rolling Stone article this past January, referring to West Virginia Senator Joe Manchin. In March, the New York Times published a similar article. “At every step of his political career,” the Times reported, “Joe Manchin helped a West Virginia power plant that is the sole customer of his private coal business.” Salon, just a few days later, followed suit, describing Machin’s ties to the coal industry as a “stunning portrait of political corruption.” (See also here, here, here, and here). These stories, understandably, focus on Machin himself—the Rolling Stone article even calls him “the final villain” in the story of corruption it unfolds. And Manchin’s conduct is indeed outrageous: First as Governor and then as a Senator, Manchin lined his pockets off of personal stakes in the coal industry—an industry he used his political power to prop up at every turn—in spite of pollution, climate change, inefficiency, and high costs to his constituents.

Yet the journalistic outrage over Manchin’s unethical (albeit not illegal) behavior may be distracting from the real issue, if not outright misdiagnosing it. Corruption in the coal industry is not the result of individual unscrupulous politicians. The problem is coal itself.

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Civil Non-Prosecution Agreements: A Promising New Tool for Advancing Brazil’s Anticorruption Agenda

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In late 2019, the Brazilian Congress passed an “anti-crime package” which included, among other things, an amendment to the Administrative Improbity Act that authorized a new form of “civil non-prosecution agreement” (known by its Portuguese initials, ANPC). Under an ANPC, prosecutors can reach civil agreements with individuals who voluntarily disclose their corrupt acts, thus avoiding the usual judicial proceedings for determining penalties under the Improbity Law. (To be clear, ANPCs are used to resolve civil matters and impose administrative sanctions, rather than to resolve criminal cases.) More recent amendments to the Improbity Act have strengthened this mechanism by giving prosecutors greater discretion to reach settlements with individuals accused of improbity.

This reform is a major change to the traditional Brazilian approach to administrative sanctions, which historically bars the settlement of any case involving corruption or improbity. That said, Brazil has already expanded the use of settlement agreements in other contexts. For example, in the context of enforcing criminal laws against corporations, the 2014 Clean Company Act (CCA) authorized so-called “leniency agreements,” under which prosecutors may offer to lower penalties to companies that self-disclosure wrongdoing and cooperate with the investigation. The ANPC mechanism is similar but different in a couple of important respects. First, the ANPC applies to individuals rather than firms. Second, while the CCA authorizes leniency agreements only in cases where the company discloses information about other unlawful activities and thus helps the investigation, an ANPC may be issued as long as the individual agrees to reform her own conduct, even if she does not provide additional information that is useful in ongoing investigations. On the other hand, similarly to leniency agreements, the enforcement authorities need not seek judicial approval to resolve a case via ANPC, so long as the agreement is reached before the beginning of a judicial proceeding. (If a formal proceeding has already begun, then the judge would still need to sign off on the termination of that proceeding.)

Although ANPCs have yet to be used on large scale, this tool holds great promise for substantially improving Brazil’s effective enforcement of its anticorruption laws, for several reasons:

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