Tag Archives: anticorruption reform

Who You Gonna Call? The Hunt for Ghost Employees in the Philippines

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In the Philippines, as in many other countries, ghost employee fraud is a perennial public corruption problem. Ghost employees are people who are listed on an organization’s payroll but who do not actually work there. (In some cases the ghost employees are entirely fictitious; in other cases, they are real people who do not work at the organization but are included on the payroll—sometimes with their knowledge, and sometimes without.) The corrupt managers of agencies or departments will falsify payroll records to authorize the issuance of paychecks to the ghost employees, while these managers and their accomplices pocket the money that is supposed to pay the ghost employees’ salaries. The scale of ghost employee fraud can be staggering. In the Philippines, senior government officials—particularly at the local level—have used such schemes to siphon millions of pesos from government institutions. Indeed, back in 2016, when current President Rodrigo Duterte was the mayor of Davao, he was credibly accused of pocketing around ₱708 million through the hiring of 11,000 ghost employees. This is just one out of many cases of ghost employee fraud haunting the country (see, for example, here, here, and here). Despite the scope and scale of the problem, the Philippine government has taken no proactive steps to address it. This must change. Though the problem is serious and widespread, there are a number of things the government could do:

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

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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 →

One Year After Bolsonaro’s Election, How Well Is His Administration Fighting Corruption in Brazil?

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Exactly one year ago, on October 28th, 2018, Jair Bolsonaro, a right-wing congressman and former army captain, was declared the winner of Brazil’s presidential election after receiving 55.13% of the valid votes. He defeated the center-left-wing Workers’ Party (PT) candidate Fernando Haddad, ending the PT’s streak of four consecutive presidential election victories that had begun in 2002.

Brazil’s corruption problem played a major role in the election and in Bolsonaro’s victory. The Car Wash Operation had not only uncovered widespread corruption scandals during the PT administrations, but that Operation also led to the prosecution and conviction of former President Luiz Inácio “Lula” da Silva, which rendered Lula ineligible to compete in the 2018 election. Moreover, Bolsonaro centered his campaign especially on a vigorous anticorruption discourse, promising to set a new standard of public integrity and to hold corrupt companies and politicians liable for their misconduct (see here and here). To be sure, Bolsonaro did not campaign exclusively on an anticorruption platform. He also positioned himself as the defender of more conservative social values and pledged to take a hardline approach to violent crime and drug trafficking. Yet his anticorruption rhetoric undoubtedly played a key role in his victory.

Even before the election, though, some commentators expressed skepticism that Bolsonaro would undertake genuine efforts to fight corruption and strengthen the institutions needed to promote integrity, and this skeptical view has been echoed by other commentators, both inside and outside of Brazil, during Bolsonaro’s first term (see, for example, here and here).

Now, one year since Bolsonaro’s electoral victory, is a suitable time to analyze the Bolsonaro Administration’s performance so far on anticorruption related issues. Have his substantive accomplishments in this area matched his tough rhetoric?

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To Advance its Anticorruption Agenda, Brazil Must Reform its Conflict of Interest Laws

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In the past five years, Brazil made significant advances in its anticorruption agenda, including both an aggressive effort to prosecute high-level politicians and business executives, and also a series of legislative reforms. But Brazil has not yet done enough to regulate conflicts of interest within the public administration.

One good example of the weakness of current regulation is the controversy involving the appointment of Leticia Catelani—a businesswoman who supported President Bolsonaro’s election campaign—to the Executive Board of Apex, the Brazilian Trade and Investment Promotion Agency. Apex is a state-owned entity in charge of promoting Brazilian exports. Ms. Catelani owns a company with a significant export business, raising concerns that she might use her Apex position to improperly favor her own business. (A group of Apex employees have filed a lawsuit challenging her nomination, and a formal complaint has also been filed with the Ethics Commission of the Presidential Office (CEP) asking for her removal.) Though this is but one recent illustration; the issue is much more general, and indeed it is likely that under the Bolsonaro administration concerns about conflicts of interest will increase.

Unfortunately, the existing mechanisms for controlling conflicts of interests in the federal administration—principally the 2013 Conflicts of Interest Act (COI Act) are inadequate and must be reformed. The COI Act applies to senior officials and ministers of state within the federal government. The Act lists a number of situations that trigger conflict-of-interest concerns, and it also requires public officials to file annual reports about their private assets and activities. The Act empowers the CEP to investigate cases, issue guidelines, clarify doubts, and grant waivers. But the current system is inadequate in several respects, and the overall system for dealing with conflicts of interest is in urgent need of reform. Three points in particular should receive special attention:

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Proposed Changes in Brazil’s Anticorruption Legislation: A Summary and Critique

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Early last month, Brazilian Minister of Justice Sergio Moro (a former judge best known for his role in the so-called Car Wash corruption cases) introduced an extensive anti-crime legislation package. The package includes many measures, including some related to things like violent crime, but it notably includes five measures that are especially relevant to Brazil’s fight against corruption. What are these proposed changes, and what would their implications be?

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Fighting Corruption in Brazil Requires More Than Tough Talk—Does the New President Have the Necessary Skills?

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Much has already been written, on this blog and elsewhere, about the what the election of Jair Bolsonaro as President of Brazil means for the future of the anticorruption agenda in that country. (See, for example, here and here.) Bolsonaro’s appeal rested in part on the Brazilian electorate’s disgust with the entrenched corruption of the Brazilian political elite in all the major parties. Bolsonaro promised a rejection of “old politics,” positioning himself both as a “disruptive” figure and as someone who would and could “get tough” on corruption—a new sheriff in town, as it were, who would put the bad guys behind bars.

Yet fighting corruption is not just about “toughness” or making fiery speeches or enforcing laws (though strong enforcement is certainly necessary). In a country like Brazil—a complicated multiparty democracy desperately in need of significant institutional reform—an effective anticorruption agenda requires the President and his senior ministers not only, or even primarily, to be the merciless watchdogs cracking down on wrongdoing, but rather the country’s political leaders need to take the lead in articulating a coherent vision, mobilizing and coordinating with multiple stakeholders both in and out of government, and negotiating with other power centers in order to ensure not only the independence and cohesion of law enforcement efforts, but also to promote the necessary legal and institutional reforms. Promoting public integrity requires a broader set of skills, ones that have unfortunately become associated with “old politics” in a negative way: building coalitions, negotiating with different interest groups, and coordinating multiple stakeholders.

There are at least three sorts of coordination, engagement, and negotiation that Brazil’s new president must undertake if his purported commitment to fighting corruption is to yield results:

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

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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 →

Congress Should Act to Make US Aid to Ukraine Contingent on Anticorruption Reform

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Since the Maidan Revolution removed former President Yanukovych from power in 2014, anticorruption progress in Ukraine has been uneven at best. Ukraine passed important anticorruption legislation in 2015, yet implementing it has been a challenge. Progress in some areas, including the judiciary and prosecutors’ offices, have met with significant and growing resistance. Many reformers within the government have resigned. For what it’s worth, Ukraine’s Corruption Perceptions Index score has only marginally improved. Still, there has been some progress. A significant portion of Ukraine’s budget is comprised of foreign aid, and donors—who have little patience for having their money stolen or wasted—have pressed the Ukrainian government to take the fight against corruption more seriously. The biggest anticorruption reforms have therefore been the ones on which large donors made their aid contingent.

The United States is one of the most important of these donors. The U.S. sends billions in loan guarantees, military aid, development aid, and State Department spending to Ukraine. During the Obama administration, anticorruption, and political reform more generally, was a high priority for the U.S. in its relationship with the post-Maidan Ukrainian government. Former Vice President Biden emphasized anticorruption during his five visits to Ukraine, and put personal pressure on President Poroshenko to follow through on his commitments in that area. Biden also played a role in delaying one billion dollars in loan guarantees to Ukraine due to corruption concerns—an approach the IMF has also embraced. But the anticorruption strings that the U.S. had attached to foreign aid in the past were imposed as a matter of executive discretion rather than legislative obligation.

Under the Trump administration, perhaps unsurprisingly, ensuring that Ukraine follows through on its anticorruption reforms has not been a foreign policy priority. No highly visible person in the current administration has taken on Biden’s conspicuous role in ensuring Kyiv follows through on its Minsk commitments. If President Trump isn’t willing to use U.S. leverage to continue to push for anticorruption efforts in Ukraine, the U.S. Congress can and should step in by putting anticorruption conditions on at least some American spending in Ukraine.  Continue reading →

Corruption Discussion on “The Scholars’ Circle”

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Last summer UCLA Professor Miriam Golden and I did a radio interview on political corruption for a program called The Scholars’ Circle, hosted by Maria Armoudian. I just learned that a recording of the program is available online, and I thought it might be of interest to some readers of this blog. The recording can be found here; the discussion about corruption begins at 17:16.

The relatively brief but wide-ranging discussion, skillfully moderated by Ms. Armoudian, touches on five major issues (issues that we’ve also covered on this blog):

  • How should we define corruption, and how can we try to measure it? (at 18:11-26:31 on the recording)
  • Possible factors that might contribute to the level of corruption, including economic development, governance systems (democracy v. autocracy), social norms, and culture (26:32-32:41)
  • Whether and how countries can make the transition from a state of endemic corruption to a state of manageable/limited corruption—as well as the risk of backsliding (32:52-47:32)
  • What will the impact of the Trump Administration be on corruption, and on norms of integrity and the rule of law, in the United States? (47:42-52:02)
  • What are some of the main remedies that can help make a system less corrupt? (52:03-56:34)

There’s obviously a limit to how deep one can go in a format like this, and the program is geared toward a non-specialist audience, but I hope some readers find the conversation useful in stimulating more thinking on the topics we covered. Thanks for listening!

Is China’s Anticorruption Crusade Reaching a Turning Point? Towards What?

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In April 2014, a post on this blog claimed that the People’s Republic of China’s anticorruption campaign was reaching a turning point, and suggested that the campaign might be “significantly curtailed” in light of troubling signs of economic slowdown and strong pushback from other senior Party leaders. This prediction seemed reasonable at the time, yet more than three years later, the campaign shows no signs of winding down: Reports on senior government officials’ downfalls or corrupt fugitives’ repatriation from overseas still hit headlines on an almost daily basis. A recent development, however, does suggest that China’s anticorruption campaign might be reaching a different sort of turning point—turning from a near-exclusive emphasis on aggressive enforcement to institutional reforms that address the root causes of corruption.

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