The End of Institutional Multiplicity: A Drawback in the New Administrative Improbity Law

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Brazil’s Administrative Improbity Law is one of the cornerstones of the country’s anticorruption framework. The law imposes administrative and civil liability on public officials and political agents for illicit enrichment, damage to the treasury, and acts against the principles of public administration. Before its enactment in 1992, these forms of misconduct were only punishable under criminal law, which imposes a much more demanding evidentiary standard. The enactment of the Administrative Improbity Law thus played a valuable role in enabling the government to hold corrupt actors liable in those situations where the evidence of corruption, though strong, was not enough to establish proof beyond a reasonable doubt.

This past October, the Brazilian government enacted significant amendments to the Administrative Improbity Law. Some of these changes were welcome, particularly those that clarified vague provisions and attempted to speed up the process. (Brazilian courts have taken on average six years to adjudicate administrative improbity claims.) But another change is much less welcome: The amendments to the law reduced the number of institutions that can file a suit for violations of the law. Under the original version of the law, a suit could be initiated either by the Public Prosecution Office (an autonomous body) or by the government entity that was harmed by the corrupt act (the federal Attorney General’s Office in the case of acts that harm the national government, and the state or municipal authorities in the case of acts that harmed subnational government entities). This arrangement is a form of what Brazilian scholars typically refer to as institutional multiplicity—an arrangement where multiple institutions have overlapping authority to enforce legal provisions. Institutional multiplicity is a key feature of Brazil’s anticorruption framework. The new version of the Administrative Improbity Law scraps this multiplicity, at least in this context, by giving the Public Prosecution Office the exclusive right to file administrative improbity suits.

This is a mistake.

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Guest Post: What Should Brazil’s Next President Do To Get the Anticorruption Agenda Back on Track?

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Today’s guest post is from Marcelo Malheiros Cerqueira, a Brazilian federal prosecutor and a member of the GAECO/MPF (Special Action Group for Combating Organized Crime) in the state of Minas Gerais, Brazil.

Since 2019, Brazil´s anticorruption efforts have been disrupted and derailed. Institutions in charge of fighting corruption are being constantly weakened or attacked. Tools that have been central to Brazilian prosecutors’ anticorruption investigations, such as plea bargains and leniency agreements, are being dismantled by new legislation, and the Congress has not moved forward on proposals that would enhance the fight against corruption (see here and here). The judiciary, mainly by its Supreme Court, has have nullified convictions, or sometimes entire investigations, in major corruption cases, and in so doing has weakened the anticorruption system (see some examples here, here and also here). And despite the fact that anticorruption was a central theme of the 2018 presidential campaign, the government has been questioned for lending its support to pushback against the anticorruption agenda and politicizing formerly non-partisan bodies like the Federal Police.

While the backlash against Brazil’s anticorruption efforts is a three-branch problem, Brazilian voters have an opportunity to address at least one aspect of the problem next year, when they go to the polls to select Brazil’s next president.

This brings us to the question: What should the next Brazilian president do, whoever he or she may be? To put this question another way, when voters and civil society organizations are assessing the future presidential candidates’ anticorruption platforms, what sorts of policies and proposals should they look for? While the issue is obviously quite complicated, here are four initial proposals, from the simplest to the most difficult to implement:

  • First, the president needs to demonstrate a commitment to integrity as a core values of the administration—and must do so not simply through rhetoric, but by taking practical action such as refusing to appoint individuals implicated in corruption cases to senior government positions and pushing for the adoption of integrity measures at lower levels of the bureaucratic hierarchy. Doing so will not only help ensure integrity in the Federal government, but will also set a positive example for state governors and mayors, and help foster a culture of integrity more broadly in the society.
  • Second, the president should respect and empower the institutions of the anticorruption system, avoiding any risk of their political capture. This requires that the appointment of directors for bodies such as the Financial Activity Control Council (COAF), the Federal Police, and the Comptroller General of the Union (CGU) be guided by non-partisan technical criteria, instead of making appointments on the basis of political alignment or personal relationships. Likewise, the next president should restore the longstanding tradition of choosing the Prosecutor General of the Republic (PGR) from the list of three candidates previously voted by the members of the Federal Prosecution Office. This model is ideal for guaranteeing the autonomy of the PGR, which, in turn, is essential for the criminal investigation and prosecution of higher-ranking political agents (including the president) for possible acts of corruption.
  • Third, the president must commit to working to enact legislative and constitutional reforms that decrease impunity for acts of corruption, such as the proposed constitutional amendments to allow incarceration of defendants after the first affirmation of a conviction in an appeal´s court (rather than allowing convicted defendants to remain at liberty until all possible appeals are exhausted) and end to the “privileged forum” rule that says high-level public officials can only be tried in higher courts. On the other hand, the president must also oppose—and if necessary veto—any attempt by the Congress to inhibit the action of anticorruption bodies or to weaken existing anticorruption tools (as unfortunately occurred recently with respect to amendments to Brazil’s Administrative Misconduct Act).
  • Fourth, the most difficult anticorruption challenge facing Brazil’s next president will be reforming the Brazilian electoral system, which is a root cause of the grand corruption that recent investigations have exposed. Any attempt to change the electoral system will face strong opposition by influential politicians, whose power relies in rules that ensure expensive campaigns and unequal distribution of the public electoral fund. Thus, the president must spearhead the attempt to reform the political system—but should probably only do so when he or she has sufficient high public approval, probably after the implementation of the other three proposals mentioned above.

This short list obviously does not encompass all the possible measures that can be taken by the next president against corruption. It would be helpful to know what GAB readers think about these suggestions, as well as what other proposals they might suggest.

One last word. Political leaders can do a lot to help the anticorruption agenda. But that does not mean that societies depend exclusively on them. Good education, transparency, popular control, high standards of morality and many other factors are crucial to the success of the fight against corruption. Therefore, although the central question posed here brings the opportunity to debate the role of the president, civil society also needs to take care of its role.

Eliminating Barriers to Compensating Corruption Victims  

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StAR yesterday held six panels on asset recovery issues as part of the meeting of the Conference of State Parties to UNCAC. I participated in the one on compensating corruption victims along with Costa Rican prosecutor Greysa Barrientos, Kate McMahon, Chair the International Bar Association’s Anticorruption Asset Recovery Subcommittee Kate McMahon, and Juanita Olaya Garcia of the UNCAC Coalition.

Panel moderators Yara Esquivel of StAR and Felipe Falconi from UNODC asked that I discuss what avenues of relief were available to corruption victims, the main challenges they face in recovering damages, and what reforms are needed to overcome those challenges. My remarks follow.   

Avenues of relief. Corruption victims generally have two options for obtaining compensation – as an adjunct to a criminal prosecution of the perpetrators by the state or by bringing a private civil suit against them.

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New Podcast Episode, Featuring Casey Michel

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A new episode of KickBack: The Global Anticorruption Podcast is now available. In this week’s episode, I interview the American journalist Casey Michel about his new book, American Kleptocracy: How the U.S. Created the Greatest Money Laundering Scheme in History. In our conversation, Casey and I touch on a variety of topics raised by his provocative book, including the dynamics that led to the U.S. and U.S. entities playing such a substantial role in facilitating illicit financial flows (including the nature of American federalism, the broad exceptions to the coverage of U.S. anti-money laundering laws, and the role of U.S.-based “enablers” of illicit finance), the challenges of regulating lawyers and law firms, the role and responsibilities of universities in light of concerns about “reputation laundering” by kleptocrats and others, the impact of the Trump and Biden Administrations in this area, and the challenges of generating and maintaining bipartisan/nonpartisan support for fighting kleptocracy. 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 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.

Lessons from the U.S. College Admissions Scandal: Why Universities Need to Embrace Anticorruption Measures

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In 2019, a college admissions corruption scandal made headlines in the United States and around the world. Richard Singer, who masterminded the scheme, promised wealthy parents that he could get their children coveted places at Stanford, Yale, USC, and other selective colleges through what he called the “side door.” Rather than donate $45 or $50 million to gain an edge in admissions, parents would pay Singer and his foundation to bribe college coaches to recruit the students as college athletes—even though many of the students had never competed in the sport for which they were allegedly being recruited. U.S. federal prosecutors, in the so-called “Varsity Blues” investigation, uncovered this scheme and indicted more than fifty people (parents, coaches, and others). Many of the defendants pled guilty. This past October, in the first Varsity Blues case to go to trial, a jury found hedge fund magnate John Wilson and former casino executive Gamal Abdelaziz guilty of conspiracy, wire fraud, and mail fraud. More trials are likely coming, and more convictions are likely.

Beyond the sensational headlines—which often focused on the wealthy parents, several of whom are celebrities—what broader lessons can we draw from the scandal? When it first broke, many commentators attacked the broader culture of entitlement and privilege in which wealthy parents secure unfair—but in most cases entirely legal—advantages for their children through legacy preferences and favoritism toward big donors. Other commentators drew attention to the hypercompetitive, win-at-all-cost culture fostered by the U.S. college admissions system. Critics pointed to a culture that leads not only to criminal bribery of the sort revealed in the Varsity Blues investigation, but also to less visible forms of dishonesty like college admissions “consultants” who draft essays for pay and students who cheat on college admissions tests, sometimes with the support or complicity of adults.

Those critiques of the U.S. college admissions culture are apt, but there’s another important lesson that emerges from the scandal, one that has received less attention: The scandal highlighted the extent to which universities have failed to address seemingly obvious corruption risks, and failed to implement effective controls for identifying applicants who were bribing their way onto campus. Compared to other large institutions, universities are behind when it comes to establishing effective anticorruption controls.

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Civil Society to the CoSP: Corruption Victims Are Entitled to Compensation

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The Council of State Parties to the United Nations Convention Against Corruption, the governments of the now 188 nations that have ratified the Convention, meets this week to review its implementation.  

When it comes to prosecuting bribery, embezzlement, and other corruption crimes, progress has been made. The UN Office of Drugs and Crime reports that “[i]n a considerable number of countries, legislative amendments and structural reforms have produced coherent and largely harmonized criminalization regimes, tangible results in terms of enforcement capabilities and action.”

But the Convention’s “enforcement capabilities and action” extend beyond criminal prosecution.  Article 35 requires state parties to ensure those injured “as a result of an act of corruption” can enforce a claim for damages against the perpetrators.

Here little progress has been made.  The UNODC, Transparency International, academics (here and here), and this writer have all found that few corruption victims have recovered damages. 

The UNCAC Coalition, a global network of over 350 civil society organizations in 100 plus countries, urges the CoSP to address this gap in implementation.  In a formal submission, the coalition offers a series of recommendations to see that victims, either individually or through a class or representative action, can recover full compensation for the harm caused by corruption. It’s timely and important submission is here.

Guest Post: Five Observations on the New US Strategy on Countering Corruption

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For today’s guest post, GAB is pleased to welcome back Robert Barrington, professor of practice at the University of Sussex’s Centre for the Study of Corruption.

Earlier this week, in the run-up to the Summit for Democracy, the US government launched its first-ever national anticorruption strategy, a move that was widely praised by advocacy groups such as Transparency International and the FACT Coalition. Indeed, the promulgation of this US “countering corruption” strategy document may turn out to be one of the most significant outcomes of the Summit, even though it preceded the Summit itself.

Only time will tell how much of an impact this new strategy document will make, but here are five initial observations: Continue reading →

Guest Post: New OECD Anti-Bribery Recommendation Introduces Standards on Non-Trial Resolutions

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Today’s guest post is from France Chain, Elisabeth Danon, and Sandrine Hannedouche-Leric, legal analysts at the OECD’s Anti-Corruption Division. The views expressed in this post do not necessarily represent those of the OECD member countries or States Parties to the OECD Anti-Bribery Convention.

The OECD Anti-Bribery Convention, which came into force in 1999 and currently has 44 member states, is intended to combat bribery of foreign public officials in international business transactions. Last month, the OECD Council adopted the 2021 Recommendation for Further Combating Bribery of Foreign Public Officials in International Business Transactions, which includes—among other measures to further enhance the fight against transnational bribery—a section on non-trial resolutions (NTRs). This section, which is based in part on the findings of a 2019 report on NTRs from the OECD’s Working Group on Bribery in International Business Transactions, represents the first time that a multilateral instrument included standards on the use of NTRs to resolve foreign bribery cases.

The Recommendation first calls for Convention member states that have not yet adopted an NTR instrument to consider doing so. (This call follows the Working Group’s finding, in its 2019 report, that in the 27 OECD Convention member states that have developed at least one form of NTR instrument, nearly 80% of foreign bribery cases that have been successfully resolved since the Convention entered into force were resolved via NTR.) The Recommendation also stresses, however, that member states should take measures to ensure that the use of NTRs follows the Convention’s principles of “due process, transparency, and accountability” The Recommendation fleshes this out by advancing eight principles. According to the Recommendation, Convention member states that make use of NTRs should: Continue reading →

Italy: Safe Haven for Bribe Payers?

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That a nation with the third-largest economy in the European Union and the eighth-largest in the world would be countenancing bribery in today’s world seems beyond the pale. Yet an analysis of recent case law and record of convictions shows just that.  Done by the Italian NGO ReCommon and submitted on a confidential basis to the OECD’s Working Group on Bribery, it concludes that it is “nigh on impossible to obtain a conviction in Italy for international corruption.”  

The group’s conclusion rests not only on Italy’s dismal record of convictions of Italian companies and nationals for bribing foreign public officials, but decisions in three recent cases. All raise a virtually insurmountable hurdle to a conviction for bribery. In any case. No matter whether the bribe-taker is an official of a foreign government or of the Italian government. In all three, courts have ruled that to prove bribery, the prosecution must show there was an express agreement to bribe.

In today’s world, just how many businesses send a letter to an official saying “I will pay you X in return for your providing the company Y”? As an American Supreme Court justice observed some 40 years ago, were the law to impose such a requirement, it could be easily frustrated “by knowing winks and nods.” Yet an express agreement to bribe is exactly what Italian judges now demand to convict bribe-takers and payors. Why has the Italian judiciary, historically one of the most renowned in the civil law world, decided to frustrate the prosecution of bribery cases?

Italy’s compliance with the OECD Antibribery Convention will shortly be reviewed by peer nations. It simply cannot be found in compliance so long as its courts require an express agreement to bribe to find defendants guilty. The OECD reviewers should follow ReCommon’s analysis, which in the public interest is revealed here, and condemn the recent turn in Italian law making the nation a safe haven for bribery.

Guest Post: Connecting the Two Worlds of Anticorruption and Human Rights Activism

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Today’s guest post is from Casey Kelso, a human rights and integrity consultant currently serving as Senior Advocacy Officer for Worldwide Initiatives for Grantmaker Support (WINGS), and Servaas Feieretag, an independent consultant on integrity and anticorruption who currently serves as the lead expert on the MATRA for enhancing the efficiency, accountability and transparency of the Judicial Council of North Macedonia .

The link between human rights and anticorruption has been much discussed over the past decade (see, for example, here and here), yet anticorruption activists often do not recognize themselves as human rights defenders, while human rights activists often fail to understand corruption as a human rights issue. In order to highlight the interconnections between the international anticorruption movement and the international human rights movement, the UN’s Special Rapporteur on Human Rights Defenders, Mary Lawlor, has decided that her next report to the Human Rights Council in March 2022 will focus on threats to human rights defenders working directly on anticorruption issues. As she put it to us in a recent interview, “This issue of corruption comes up again and again in my conversations with human rights defenders, whether anticorruption work is the main focus of what they do or not.”

Corruption can cause or facilitate human rights violations in a host of ways. To illustrate with just a few examples: Continue reading →