Anticorruption Bibliography–February 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.

“Elect a Government That Works”: A Case Study in Populism and Corruption from India 

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As the United States was reeling from President Richard Nixon’s resignation following the Watergate scandal, another imperiled leader—Indian Prime Minister Indira Gandhi—was fighting for her political life thousands of miles away. Although Gandhi and Nixon never got along, their stories overlap. Both barely squeaked into power after close elections in the late 1960s, but then won resounding reelection victories in the early 1970s. Gandhi’s political fortunes, like Nixon’s, took a turn for the worse shortly after reelection, in light of substantiated accusations of illegal campaign activity. But at this point, Nixon and Gandhi’s stories diverge. Unlike Nixon, Gandhi stayed the course and refused to resign. And in the end she prevailed: Gandhi was popularly elected three times with some of the largest governing majorities in Indian history.

How did Gandhi convince the public to reelect her, despite her known, widespread abuses of authority? How did a leader ensnared in scandal and corruption hold onto power to become one of the most beloved leaders in the world’s largest democracy? The answer to these questions may lie in Gandhi’s concentrated emphasis on left-wing populism. She argued to voters that she alone was most capable of effectuating change for India and its most needy citizens by enacting social programs and redistributing wealth. Additionally, Gandhi spent much of her time as Prime Minister consolidating her power within the party and the central government. This enabled much of the corruption that marked her rule but was also what allowed her to argue to the public that she was uniquely capable of fixing the nation’s problems.

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Will the Nigerian Judiciary Stand Up for the Rule of Law and Dismiss the Suraju Case?

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The Nigerian judiciary’s commitment to upholding the rule of law faces a decisive test this Monday, February 7. Nigerian prosecutors will present evidence to Federal High Court Justice Binta Nyakothat that anticorruption activist Olanrewaju Suraju should stand trial for violating section 24 of the Cybercrime Act 2015, the cyberstalking provision.

As explained below, the evidence in support of the charges is extraordinarily flimsy. More importantly, section 24 is no longer enforceable in Nigeria. The Community Court of Justice for the Economic Community of West African States, whose decisions bind all Nigerian courts, ruled in 2020 that the cyberstalking section was so vague and open-ended that it violated the freedom of expression provisions of the African Peoples and Human Rights Charter and hence was invalid (here). Justice Nyakothat should therefore immediately dismiss the charges against Suraju.

The only conceivable reason she might not is if she is under “extra-legal” pressure from those who stand to gain from the case being continued.

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Corruption and Trade Misinvoicing: A Closer Look at Colombia

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Trade misinvoicing—the misrepresentation of the price, quantity, origin, or quality of traded goods—is a serious problem. Misinvoicing deprives the government of revenue by enabling importers and exporters to evade taxes and duties, or to claim undeserved tax incentives. Consider the case of Colombia: According to estimates, in 2016 the country lost approximately US$2.8 billion in revenue due to trade misinvoicing (equivalent to roughly 5.2% of total Colombian tax revenues collected that year)—revenues that could have paid for Colombia’s 2018-2022 National Development Plan more than eight times over. Trade misinvoicing also plays a key role in so-called trade-based money laundering (TBML), as the under- or over-statement of value of traded goods is one way to move value across borders and disguise the origin of illicit wealth. This form of money laundering is especially attractive to criminals, in part because roughly 80% of global trade transactions do not involve bank financing and as a result are not subject to the anti-money laundering (AML) controls that apply to the financial sector. Myriad TBML cases can be found in countries where corruption is systemic and impunity reigns (see here, here, and here).

Corruption of customs officials is the lubricant that makes trade misinvoicing possible. As one illustrative example of the extent and impact of such corruption, consider the case of Humberto Angulo Montero, the former head of the Cartagena Office of Colombia’s National Directorate of Taxes and Customs (Dirección de Impuestos y Aduanas Nacionales, or DIAN). In 2015, following a nine-year investigation, Angulo was arrested for taking kickbacks from smuggling networks importing alcohol, cigarettes, textiles, and shoes. The investigation revealed that Angulo facilitated the under-reporting of goods by up to 50%, allowing the importers to make colossal profits. In return, the importers gave Angulo a share of those profits—a hefty enough share that his personal wealth increased an astounding 580% between 2003 and 2009. Angulo’s case may be extreme, but it is hardly unique.

Governments in countries like Colombia can and should do more to prevent this sort of corruption. While Colombia took an important step forward in 2015 by passing its Customs Law No. 1762, there is still much room for improvement. Here are four recommendations for making progress on this issue, which are tailored to Colombia but that may apply more broadly:

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All Nations Should Outlaw Tumbling or Mixing Cryptocurrencies

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The prosecutions of currency exchanges Helix (here) and Bitcoin Fog (here) show the dark side of virtual currency. As providers of what the Financial Action Task Force terms money or value transfer services, the two accepted a customer’s funds and returned a corresponding sum or product to the customer or third party for a fee.

Helix and Bitcoin both specialized in bitcoin transactions. A customer would buy something on the web and rather than sending the merchant bitcoins directly, the customer sent them through Helix or Bitcoin Fog. That way, the customer did not have to worry about contacting the seller directly, and moreover, if the seller did not accept bitcoins, Helix or Bitcoin Fog would convert the bitcoins into whatever currency the seller accepted.

What caught the U.S. Department of Justice’s eye is that the two exchanges “tumbled” or “mixed” the customer’s bitcoins as part of their service.

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New Podcast, Featuring Torplus Yomnak

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A new episode of KickBack: The Global Anticorruption Podcast is now available. In this week’s episode, I interview Torplus Yomnak (who uses the English name Nick), an assistant professor of economics at the Chulalongkorn University Faculty of Economics in Bangkok, Thailand, as well as the co-founder and chief advisor of the HAND Social Enterprise, a Thai civil society organization focused on anticorruption and good governance issues. He is also one of the recipients of the U.S. State Department’s 2021 “International Anti-Corruption Champions” awards. In our conversation, Nick and I discuss his efforts to combine academic anticorruption research with practical real-world projects, as well as the main corruption challenges and opportunities facing Thailand today. 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.

SLAPPing Back at Corruption: Protecting Journalists from Frivolous Lawsuits

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Investigative journalism plays a crucial role in exposing corruption. Journalistic exposés often prompt not only prosecutions, resignations, and other forms of individual accountability, but can also serve as the catalyst for broader legal and institutional reforms. Yet investigative journalism—especially into the misdeeds of the wealthy and powerful—is risky. Journalists can sometimes face physical threats, and occasionally deadly violence. Even when their safety is not in jeopardy, journalists investigating corruption encounter legal trouble. In some jurisdictions, governments take legal action against reporters, seeking to impose large fines or even incarceration. In other cases, the targets of investigative reporting seek to derail such reporting through defamation lawsuits, even when the defamation claims lack legal merit. These sorts of suits are commonly referred to as SLAPPs—Strategic Lawsuits Against Public Participation. In many cases, the costs of defending against even a meritless defamation suit can drain the journalist or news organization’s funds, and such suits can also take a psychological toll on their targets. The litigious and deep-pocketed figures who bring SLAPPs seek to take advantage of these facts in order to intimidate journalists into silence.

Not all SLAPPs target journalists who expose corruption—the issue is much broader. But SLAPPs have frequently been used against journalists who write about corruption, and the anticorruption community therefore has a clear interest in legal reforms that would counter the threat that SLAPPs pose . So what can be done about this problem? Broadly speaking, there two primary legislative responses to the prevalence of SLAPPS: “Anti-SLAPP” laws and “SLAPPback” laws:

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Civil Society Organizations Can Help Fight Corruption in the COVID-19 Response. But Only if Governments Let Them

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Corruption in the health sector—a longstanding problem that may cost $500 billion per year globally—has become an even more salient concern in light of the COVID-19 pandemic. As the virus swept the globe, many governments responded by sidestepping traditional procurement safeguards in the interest of speeding up emergency responses. While it was important to provide relief as quickly as possible, the relaxed regulations allowed corruption to thrive, leading to numerous scandals. To illustrate with just a few of the many, many possible examples: Bolivia’s Minister of Health was detained for allegedly purchasing 179 unusable ventilators at twice their original price; Indonesia’s Minister for Social Affairs was suspected of having pocketed US$1.1 million in funds relating to COVID-19 aid; and senior leaders and wealthy individuals in numerous countries, including Canada, Peru, Argentina, Spain, and Poland, jumped the queue to get access to vaccines. Much of this health sector corruption arises due to a lack of transparency and accountability in the governing systems. Especially in the midst of what seems like a never-ending pandemic, working towards combatting this type of corruption is especially salient as citizens are relying on the government for more health-related needs.

Anticorruption advocates have long argued that civil society organizations (CSOs) can and should play an important role in monitoring government activities and promoting accountability in the health context and elsewhere. A particularly encouraging example of the constructive role that CSOs can play, in the specific context of the COVID-19 response, comes from Argentina. Last year, the Argentine chapter of Transparency International, known as Poder Ciudadano, launched a COVID-19 Public Procurement Observatory, which uses open-source information to make procurement deals available to the public. Using this monitoring tool, Poder Ciudadano carried out an exhaustive survey of public purchases and contracting that took place within the COVID-19 emergency procurement framework. By December 2020, Poder Ciudadano had tracked more than seven hundred procurement activities valued at US$200 million. In addition to its work in monitoring COVID-related procurement, Poder Ciudadano worked with other CSOs to ensure transparency and equity in vaccine distribution. Using information provided by the Ministry of Health, these CSOs ensured daily publication of information about the numbers of vaccine shipments, their distribution, and who had been vaccinated. These transparency measures help prevent improper favoritism and other departures from the official vaccine distribution plan.

This example is both encouraging and instructive. The Poder Ciudadano case highlights how CSOs can be effective in promoting accountability and transparency in procurement and distribution. But this example also underscores that in order to play this role, CSOs in developing countries need outside funding, partnerships, and resources, as well as the support and cooperation of their governments. CSOs can play a vital role, but only if they have the right kind of help.

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Making Release of the CPI into Something Useful in the Fight Against Corruption

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Yesterday’s release of the Corruption Perceptions Index prompted the annual, dreary, unproductive pattern of overblown press releases and gnashing of teeth. Critics cite their government’s failure to sharply increase its CPI score as an excuse for issuing press releases bashing it for failings of every kind. The teeth gnashing comes from those in governments doing their best to fight corruption and frustrated that their efforts have had no discernable impact on the score.

No part of my work helping countries curb corruption has been more frustrating than trying to explain to the media, dedicated government corruption fighters, and civil society that they should stop making such a fuss about yearly changes in CPI scores. As Matthew reiterated in yesterday’s post (for the umpteenth time), short-term comparisons are “a pointless, misleading, intellectually bankrupt exercise.” But my explanations, GAB posts, and the academic literature explaining in excruciating detail why it takes years if not decades for anticorruption reforms to affect a nation’s CPI score have all fallen on deaf ears.

Thankfully, government corruption fighters and their supporters in Nigeria have found a way to use release of the CPI to advance the fight against corruption.  As explained here, last year its Minister of Information and Culture responded to the release of the CPI with a statement describing what the government had done over the past year to prevent corruption. This year the Nigerian Civil Society Legislative Advocacy Centre, TI’s national chapter, issued a statement putting the CPI in context and highlighting reforms underway and where more needs to be done.

Most importantly, rather than using the release of the CPI to criticize the many Nigerian public servants who spend their days fighting corruption, it went out of its way to applaud them, saying:

“It is important to stress that [the CPI score] is not an assessment of Nigeria’s anti-graft agencies who are making commendable efforts in reducing (in the fight against) corruption in Nigeria despite the political interference they face.

The full text of the Advocacy Centre’s statement follows. It merits close study by all those looking for ways to transform the annual, dreary, unproductive ritual around release of the CPI into something that can help produce results in the fight against corruption.

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Re-Upping Last Year’s Post on How (Not) to Cover the About-To-Be-Released CPI

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Later this week (tomorrow, I believe) Transparency International (TI) will release the newest version of its annual Corruption Perceptions Index (CPI). I was going to do a post on this, but I realized as I started writing it that what I had to say was virtually identical to what I wrote at this time list year. So I’m just going to paste below the text of last year’s post, while noting my sincere hope that by next year, or at least within a few years, this will no longer be relevant: Continue reading →