Fighting Corruption in the Water Sector: Comments Please

Posted on by
2

A mark of progress in the fight against corruption is the growing attention corruption fighters are paying to its nuts and bolts.  A bribe is a bribe: whether paid to rig a bid on a public works contract or duck sanctions for polluting a stream. And laws against bribery and appeals to those in both sectors to refrain from taking a bribe have their place.

But a strategy for preventing bribery in public works contracts, the water sector, or indeed any sector of the economy demands more. Where in the sector is bribery most common? Why do some public servants take them while others refuse? What are the economic incentives public servants and their private sector counterparts face? What social norms operate in the background? What’s the legal regime governing sector operations? In short, what makes the sector tick? 

Only when corruption fighters understand a sector can they devise means for preventing corruption in it and identify indicators (“red flags”) for when it may be present. Teaming an expert corruption fighter with an authority on the sector is the obvious approach, and that is exactly what the U.K.’s CurbingCorruption has done on producing 15 sector-level studies of corruption — from agriculture to education to health to local government to shipping and telecommunications.

A 16th, on corruption in water, is now in progress. The project team comprises Mark Pyman, co-founder of CurbingCorruption, and Laura Jean Palmer Moloney, a hydro-geographer, expert in coastal resources management now with Visual Teaching Technologies. Mark and Laura Jean are soliciting comments on a briefing paper listing what they believe are the key corruption issues across the range of issues in the water sector. Readers can leave a comment below or to write them directly: jean@visualteachingtechnologies.com and mark.pyman@curbingcorruption.com

New Podcast, Featuring Anastasia Kirilenko

Posted on by
Reply
A new episode of KickBack: The Global Anticorruption Podcast is now available. During the ongoing emergency in Ukraine, as Russia’s unprovoked military aggression throws the region and the world into crisis, my colleagues at the Interdisciplinary Corruption Research Network (ICRN) and I featuring on KickBack experts who can shed greater light on how issues related to corruption relate to the ongoing crisis. And rather than keeping to our usual schedule of releasing new episodes every two weeks, we will release new episodes as soon as they are available. In the new episode, my ICRN colleague Christopher Starke interviews Anastasia Kirilenko, an investigative journalist and the co-producer of Putin and the Mafia, a documentary about Vladimir Putin’s connections with organized crime. In their conversation, Christopher and Anastasia discuss the themes of this documentary, and also discuss the role of media and civil society in Russia, the role of oligarchs in Russian politics, and what the international anticorruption community could do to more effectively promote change within Russia. 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 Assad Family’s (Anti)Corruption Playbook: Patronage and Pruning

Posted on by
6

The Syrian civil war is an unfathomable and ongoing tragedy. In addition to the direct destruction and loss of life, the war has plunged Syria’s already troubled economy into an even  deeper crisis. A shocking 90% of the Syrian population lives in extreme poverty, and roughly 60% of the country does not have adequate food. Since 2010, the economy has contracted by 60%, while inflation has increased by over 300% and the value of the Syrian lira has depreciated by over 700%. Yet President Bashar al-Assad and his loyal networks of regime insiders and elite businessmen continues to profit, thanks in large part to rampant corruption. Assad and his friends have diverted tens of millions in humanitarian aid, forced families of detainees to pay bribes to visit them or win their release, and pocketed and re-sold rationed wheat on black markets. Most recently, the Syrian regime and its business partners have turned the country into a narcostate. In a damning investigation released at the end of 2021, the New York Times found that the Fourth Armored Division of the Syrian Army—commanded by Assad’s younger brother, Maher al-Assad—is behind the production and distribution of the amphetamine captagon.

This story sounds depressingly familiar: In all too many countries, a tiny elite of privileged insiders gets rich from corrupt practices, while ordinary people suffer extreme deprivation. But in Syria there is a twist: In the last two years, the Assad regime has also been carrying out a ruthless anticorruption campaign, one that has targeted some of his own loyalists. For example, in 2020 Assad went after his cousin and close friend Rami Makhlouf, a once-untouchable business tycoon who at one point was estimated to control 60% of the Syrian economy. More recently, Assad detained and seized the assets of five loyal executives at Syria’s second-largest cellphone company.

This seems like a paradox: Assad’s anticorruption campaign is unfolding alongside his circle’s ongoing abuses of power. But in fact this is true to form. Starting during the reign of Bashar al-Assad’s father, Hafez Al-Assad (henceforth Hafez), the Assad regime has followed a pattern of “patronage and pruning” to manage the inherent tension between, on the one hand, cultivating elite support by allowing loyal elites to exploit public power for private gain, and, on the other hand, preventing public discontent with corruption from getting so out of hand that it threatens the regime’s stability and authority. Continue reading →

The Corruption of Italian Democracy: Russian Influence Over Italy’s League

Posted on by
2

Italy’s largest far-right policy, La Lega (“the League”), has long had close ties with Putin’s regime in Russia. The League’s leader, Matteo Salvini, has been a vocal supporter of Putin for years (see also here, here, and here), and in 2017 the League signed a formal cooperation agreement with Putin’s United Russia party. Even before then, the League (then known as Lega Nord, the “Northern League”) often advocated within Italy and the EU for Russian interests. Notably, while the EU imposed sanctions on Russia after Russia’s illegal annexation of Crimea in 2014, the League opposed sanctions and tried (unsuccessfully) to upend the solidarity necessary to keep EU sanction in place. That opposition to sanctions only intensified after the 2017 cooperation agreement: At a 2018 conference in Moscow, Salvini—then Italy’s Interior Minister–insisted that Italy would work “day and night” to repeal the 2014 sanctions. Salvini’s efforts proved unsuccessful, as he was unable to convince his coalition partners to change Italy’s stance. But the Kremlin still benefitted from the League’s vocal opposition to sanctions, as it showed that Russia wasn’t isolated diplomatically and that the West is internally divided.

The League’s long history of cooperation with Moscow could be chalked up to shared ideology and policy goals. But it appears that corruption, not policy, might explain why the party is so close with Putin.

Continue reading →

Guest Post: The Millennium Challenge Corporation’s Approach to Curbing Corruption in Development Projects

Posted on by
2

Today’s Guest Post is by Chris Williams, Senior Director for Anti-Fraud and Corruption at the Millennium Challenge Corporation, a U.S. development agency. Chris explains the measures MCC takes to prevent corruption from infecting the projects it supports and reviews some lessons it has learned about preventing corruption in large infrastructure projects.  (Full disclosure. I consult with the MCC on corruption prevention although its prevention policies long pre-date my consultancy. I have hounded Chris for some time to write this post, for whatever bias I may have, I think MCC’s corruption prevention efforts provide a model for others in the development community.)

The Millennium Challenge Corporation is an independent U.S. government development agency working to reduce global poverty through economic growth. Created in 2004, MCC provides time-limited grants that pair investments in infrastructure with policy and institutional reforms to countries that meet rigorous standards for good governance, fighting corruption and respecting democratic rights. MCC provides an example of “smart” development assistance, using competitive selection of grant recipients, country-led solutions, country led implementation, and a focus on results to prioritize the use of U.S. taxpayer funds.

A central feature of MCC’s approach, country ownership, is that each partner government receiving a grant from MCC must identify a legal entity to which the government will delegate the responsibility for the projects funded by the MCC. A sign of the importance MCC places on fighting fraud and corruption is that this entity is formally designated the “accountable entity” (generally referred to as an “MCA,” as many are named Millennium Challenge Account Moldova, Millennium Challenge Account Senegal, etc.). This underlines the MCA’s responsibility for ensuring MCC funds are used only for the purposes intended.

MCC doesn’t just assign responsibility for managing fraud and corruption risks to the MCAs, however. Upon establishment of the MCA, MCC immediately begins working with it to put in place financial controls and other standard safeguards to prevent funds from being lost through fraud or corruption.

Continue reading →

Anticorruption Bibliography–April 2022 Update

Posted on by
Reply
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.

New Podcast Episode, Featuring Svitlana Musiiaka

Posted on by
Reply
A new episode of KickBack: The Global Anticorruption Podcast is now available. During the ongoing emergency in Ukraine, as Russia’s unprovoked military aggression throws the region and the world into crisis, my colleagues at the Interdisciplinary Corruption Research Network (ICRN) and I running a special series on KickBack, featuring experts who can shed greater light on how issues related to corruption relate to the ongoing crisis. And rather than keeping to our usual schedule of releasing new episodes every two weeks, we will release new episodes as soon as they are available. In the new episode, ICRN Member and guest host Oksana Huss speaks with Svitlana Musiaaka, a Ukrainian lawyer and anticorruption specialist who currently serves as the Head of Research and Policy at NAKO, an independent Ukrainian civil society organization that focuses on combating corruption in the defense and security sector. The conversation opens with a discussion of Ms. Musiaaka’s professional background and the work of NAKO, and then proceeds to how Ukraine has worked on reforming its defense sector to promote transparency and effectiveness. She also emphasizes how reforms in Ukraine have helped the Ukrainian military’s performance against the Russian army, and concludes by discussing what the international community can do to support Ukraine now. 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.

Populism and Pragmatism: How the New Honduran President Can Advance Her Anticorruption Agenda

Posted on by
8

Like its Central American neighbors, Honduras is a country with a long history of endemic corruption and enduring institutional decay. This past January, Xiomara Castro—the leader of the leftist LIBRE party and the wife of former President Juan Manuel Zelaya, who was ousted in a 2009 military coup—won a landslide victory, becoming the country’s first female President and ending the right-wing National Party’s twelve-year rule. Castro’s presidential campaign combined progressive and anti-elite discourse with strong anticorruption messages. Indeed, she asserted that rampant government corruption is one of the main reasons 70% of Hondurans live in poverty. Her message resonated with an electorate that was increasingly outraged at the seemingly endless parade of egregious corruption scandals that characterized the previous administration (see, for example, here, here and here). Castro’s victory seems to be part of wider global trend of populist leaders capitalizing on a wave of anticorruption sentiment and a generalized feeling of distrust towards the political elite.

The challenge that President Castro and her administration now face concerns how to deliver on her ambitious promise to dismantle the corruption that is so deeply embedded in Honduran government operations. Encouragingly—and in contrast to far too many politicians who campaign on vague “anticorruption” rhetoric—Castro has articulated a clear and ambitious legislative agenda that includes nine concrete actions specifically focused on anticorruption. These include reforming the Criminal Code and related laws, seeking support from the United Nations to establish an international body comprised of foreign experts tasked with investigating high level corruption crimes (modeled on Guatemala’s International Commission Against Impunity (CICIG)), and pursuing an overhaul of the civil service. But achieving these goals will not be easy, especially in light of the current composition of the legislature and the entrenched opposition of numerous private and public sector stakeholders. Accordingly, to advance her anticorruption agenda, Castro will have to find the right blend of pragmatism and populism. Continue reading →

Reforming the Indian Judiciary from the Bottom Up

Posted on by
8

“Corruption is as old as society. Corruption has become a way of life, [an] acceptable way of life. And judges don’t drop from heaven.” 

This was former Chief Justice Ranjan Gogoi’s reply when a journalist asked him about corruption in India’s courts. Such a statement may seem extraordinary coming from a former Chief Justice, but he is not alone in holding this belief. Two other former Chief Justices have acknowledged the pervasive corruption problem facing India’s judiciary, particularly in the lower courts where most Indians interact with the judicial system. And this perception is backed up by quantitative evidence: according to Transparency International, 32% of Indians who used the courts in 2020 had paid a bribe that year, while 38% resorted to personal connections to navigate the system. 

Much of the public outrage over India’s judicial corruption has understandably been directed toward individual corrupt judges (see here, here, and here), but the problem reflects deeper systemic issues—perhaps most importantly, the massive case backlog. There are currently forty million pending court cases in the country’s District Courts and Subordinate Courts, and every year that number grows by millions more. By some estimates, it would take 400 years for the judiciary to clear the backlog at its current rate (and that’s assuming no new cases are filed in the meantime). It takes an average of 35 months to resolve a legal issue in India, the longest in the world according to one report. And many cases take much longer: over half a million cases have been pending for over twenty years.

This case backlog, and the glacial pace of Indian justice, is not only a crisis for the administration of justice but also a breeding ground for corruption. Given the extraordinary delays, those litigants who can afford to do so have strong incentives to pay bribes or use connections to get a faster verdict. (Most bribes are paid to court officials or middlemen, including lawyers, rather than directly to judges.) And, without excusing those judges who violate their oaths of office, it’s not that surprising that overworked, underpaid judges dealing with crushing caseloads would be tempted to accept these under-the-table payments. In essence, then, the extreme case backlog in the lower courts has created something of a two-track system, one for those that can pay the price to skip the line, and one for everyone else.

As the number of pending cases continues to balloon, this problem is only going to get worse. While punishing those judges (and their staff) who are caught requesting or receiving bribes—and those litigants and facilitators who offer those bribes—may be morally and legally justified, cracking down on individual wrongdoers is not enough to address the structural roots of India’s judicial corruption problem. 

What can be done? Though there are no easy solutions, India needs to adopt reforms to increase both the quantity and the quality of its lower court judges:

Continue reading →

NGOs Call Italian Judiciary to Account for Not Enforcing the Antibribery Law

Posted on by
2

The Italian judiciary is threatening to upset the global norm against bribing officials of another nation.  As party to both the OECD Antibribery Convention and the UN Convention Against Corruption, Italy is obliged to sanction Italian companies and nationals that bribe the public servants of other nations.  Yet despite overwhelming evidence that oil and gas giant Eni S.p.A, the country’s largest company, bribed Nigerian officials to secure a lucrative oil block, a Milan trial court recently acquitted Eni and codefendant Royal Dutch (decision here.)

Acknowledging the prosecution had presented strong circumstantial evidence of bribery — what it termed “conduct implementing the agreement” to pay Nigerian officials in return for “the unlawful act of the public official” — the court nonetheless held this was not enough. Following earlier appeals court decisions in foreign bribery cases, it ruled the prosecution must also show an actual “agreement between clearly identified parties” Hence, it concluded, “even the proof of the bribe or the unlawfulness of the act committed by the official” is not enough to warrant conviction.

Officials from the U.S. Department of Justice and Germany’s Ministry of Justice will shortly review Italy’s compliance with its obligations under the OECD Antibribery Convention. The Italian NGO ReCommon, Nigeria’s Human and Environmental Agenda, and Corner House from the United Kingdom have prepared this thorough and damning critique of the decision in the ENI case and earlier ones where Italian courts have held that absent an express agreement to pay a bribe to a foreign official, defendants must be acquitted.

As the three NGOs explain in their analysis, those negotiating the OECD Convention recognized that requiring the prosecution to show an express agreement to bribe set an impossibly high hurdle. They settled instead on allowing courts to infer an agreement from the surrounding circumstances, circumstances such as those the prosecution presented in the ENI-Shell case. Indeed, American courts long ago recognized that requiring the prosecution to produce an express, written agreement to pay a bribe rendered the antibribery law a nullity.

Continue reading →