Requiring Public Contractors To Have Anticorruption Compliance Programs May Sound Like a Good Idea—But Not When Government Capacity Is Lacking

Five years ago, in a thought-provoking post, Rick Messick proposed that developing states should demand that firms doing business with them have an anticorruption compliance program. At the time Rick wrote his post, he wasn’t aware of any developing state that had imposed any such requirement. A couple of years later, some Brazilian subnational jurisdictions, such as the state of Rio de Janeiro and the Federal District, adopted legislation in this spirit, requiring that companies awarded a public contract, or participating in a public-private partnership, above a certain value must establish an anticorruption compliance program. These initiatives seem to be of a piece with a broader trend in Brazilian anticorruption law, which has sought in various ways to create stronger incentives for companies to adopt effective compliance programs. (For example, Brazil’s 2013 Clean Company Act holds companies strictly liable for corrupt conduct, but companies that have a so-called “integrity program” may get a penalty reduction.)

Nonetheless, despite the importance of corporate compliance policies as a component of any effective anticorruption strategy (see here and here), demanding that contractors to establish such programs as a condition of doing business with Brazilian government entities is unlikely to achieve the intended goals.

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Aggressive Criminal Law Enforcement Is Insufficient to Combat Systemic Corruption. But That Doesn’t Mean It’s Not Necessary.

This will be a super-short blog post that makes a super-short point. Here goes:

Let me start by stating the following proposition: Effective enforcement of anticorruption rules, including criminal law enforcement, against individual wrongdoers is necessary but not sufficient to combat systemic corruption.

Both parts of that proposition are important, and I believe correct:

  • Punishing individual wrongdoers is necessary to combat systemic corruption because without individual accountability, it’s not possible to deter those who might be tempted to abuse their entrusted power for private gain, and the absence of individual accountability will likely perpetuate the belief that powerful elites are above the law, feeding the sense of hopelessness or resignation or cynicism that contributes to the vicious cycle that perpetuates systemic corruption.
  • Punishing individual wrongdoers is not sufficient to combat systemic corruption because widespread corruption is generally the product of systems, institutions, and cultures that create the incentives and opportunities to behave corruptly, and without addressing these root causes of corruption, even the most aggressive anticorruption enforcement efforts will be ineffective.

I don’t think either of those claims should be controversial. But I’ve noticed that in debates over anticorruption efforts in various countries, people sometimes commit the logical fallacy—usually by implication rather than expressly—of treating the second claim (that criminal law enforcement is not sufficient to combat systemic corruption) as if it negated the first claim (that criminal law enforcement is necessary to combat systemic corruption). The argument is usually phrased something like this: “Country X is cracking down on corruption and aggressively enforcing its anticorruption laws and putting people in jail. But this is a mistake, because combating systemic corruption actually requires broad-based institutional reforms. The focus should therefore be on institutional reform, not on aggressive criminal law enforcement.”

I agree that criminal prosecutions alone can’t solve the corruption problem, and recent history is littered with examples of anticorruption “crackdowns” that failed to produce lasting change. And there’s certainly an important question as to where the emphasis should be—it’s entirely possible that in many countries there’s too much focus on criminal prosecutions and too little attention to other types of reform. But it’s not an either/or tradeoff, and it troubles me that the (correct) observation that criminal prosecutions are insufficient is so often deployed rhetorically to imply that aggressive criminal law enforcement is not necessary or appropriate. (I noted something like this argument in a previous exchange concerning Ukraine, and more recently encountered it in a discussion of the Car Wash Operation in Brazil, but I’ve heard basically the same line in conversations about many other countries.) Recognizing the importance of structural reform shouldn’t obscure the fact that effective enforcement of anticorruption laws, and the imposition of individual accountability, is also a vital part of the anticorruption agenda. After all, while there are plenty of punishment-focused anticorruption crackdowns that failed to produce systemic change, I can’t think of any successful efforts to get rampant corruption under control that didn’t involve a hefty dose of aggressive enforcement of the laws against corruption, including prosecution and punishment.

Amazonia Is Burning. Corruption Is One of the Reasons.

Amazonia is the largest tropical rainforest in the world, spread over nine South American countries (Brazil, Bolivia, Colombia, Ecuador, Guyana, French Guyana, Peru, Surinam, and Venezuela), with approximately 60% of the forest (over four million square kilometers) located in in the north of Brazil. Brazilian Amazonia is home to around 45,000 different plant and animal species. This rainforest is also crucial to the global environment, especially with respect to climate change. During the past several months, an increase in the number and extent of forest fires in Brazilian Amazonia has triggered great concern, much of it focused on whether the Bolsonaro Administration’s policies are partly to blame for the widespread fires. While that conversation is no doubt important, it is also crucial to recognize that environmental crimes in Amazonia—including those related to the fires—are in part the product of widespread corruption, and that addressing Amazonia’s environmental crisis will require addressing Brazil’s governance crisis as well.

To understand how and why corruption is contributing to the destruction of the Amazon rainforest, a bit of background is in order. The greatest environmental threats in this region are the illegal harvesting of timber and the illegal clearing of land (often through burning) to prepare the land for commercial use for agriculture and livestock. (Between 70% and 80% of the deforested area in Amazonia has been used to create pasture for breeding cattle to produce meat for domestic and international consumption.) To be sure, Brazil has laws in place to protect Amazonia from over-exploitation and other forms of environmental damage. About 80% of the land in Amazonia is publicly owned; on this public land, the forest may not be exploited or burned. The remaining 20% of Amazonia is private land owned by individuals or corporations; even for this privately owned land, Brazilian law requires that the owners keep between 50% and 80% of the area intact and unexploited. The Brazilian government is responsible for enforcing these rules and for regulating and overseeing the extraction, transportation, and commercialization of timber from Amazonia. The regulatory system involves government approval of forest management plans, the issuance of permits for timber harvesting and land clearing, and the tracking of timber to ensure that it was not illegally removed from public lands or from the protected areas of private lands.

That’s how it’s supposed to work. But in practice, private companies collude with corrupt public servants—forest wardens, police officers, and others—to evade these rules. As a result, substantial quantities of timber are illegally extracted from public lands and protected private areas, and agricultural and livestock interests illegally burn and clear irreplaceable forests. The corrupted public servants not only turn a blind eye to these environmental crimes, but they also warn the infringers about possible inspections by other agents.

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

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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International Scholars, Stay in Your Lane: The Risks of Uninformed Foreign Commentary on Corruption Cases

Last June, a group of international scholars and jurists published an article in the French newspaper Le Monde arguing that former Brazilian President Luiz Inácio Lula da Silva (known as Lula), who was convicted and imprisoned in a case related to the Lava Jato (Car Wash) anticorruption investigation, did not receive a fair trial, and was the victim of political persecution. A couple months later, a slightly revised version of the article, styled as an open letter to the Brazilian people and Supreme Court, appeared in the Brazilian media, where it made quite a splash. The letter, which was republished on GAB last month, was signed by prominent US scholars, including Susan Rose-Ackerman and Bruce Ackerman, as well as lawyers, professors, and former judges from numerous Latin American and European countries. Echoing accusations leveled by The Intercept and other media outlets, the letter claimed that presiding judge Sergio Moro (now Justice Minister) conducted the proceedings in a partial fashion and directed the prosecution “in contempt for fundamental rules of the Brazilian procedure.” Judge Moro, the letter asserts, “manipulated substantial assistance plea bargaining mechanisms, oriented the prosecution service works, required the substitution of a prosecutor, and directed the prosecution’s public communication strategy.” Furthermore, the letter states that the Judge “wiretapped Lula’s lawyers” and “disobeyed an order from an appeal judge to release Lula”. The letter also contended that there was no material evidence of Lula’s corruption, and that his arrest, prosecution, and conviction were all prompted by the illicit political motive of excluding him from the 2018 presidential elections. In light of all this, the letter asserted that the Brazilian Supreme Court has a duty to release Lula and nullify his conviction.

These accusations are largely baseless, or at least presented in an extremely one-sided fashion that parrots what have become the standard talking points of Lula’s supporters. The Car Wash prosecutors effectively debunked the texts’ main arguments in a rebuttal also published on this blog. (The blog also published a response from Lula’s lawyers that rehashed the same talking points and alluded to as-yet-undisclosed evidence, but that didn’t otherwise counter the prosecutors’ clear documentation of the open letter’s many errors.) What most troubled me about the original article and the open letter was less the fact that these arguments were being advanced—again, by now they’re familiar pro-Lula talking points—but the fact that the texts were signed not only by lawyers, but also by renowned law and political science professors. Lawyers are expected to act as advocates. But scholars are supposed to be more judicious, more scrupulous about evidence, and more circumspect about making bold, aggressive claims on subjects whose factual and legal particularities they don’t fully understand. Continue reading

Lula’s Lawyers Respond to the Lava Jato Prosecutors’ Letter

Last week, GAB published two letters presenting alternative perspectives on the so-called “Car Wash” (Lava Jato) anticorruption operation in Brazil, in particular the prosecution and conviction of former president Luiz Inácio Lula da Silva (Lula). The first letter was a re-publication of an open letter sent by a group of international jurists and scholars, who asserted that Lula did not receive a fair trial and that the prosecutors were politically biased. The second letter was a reply from the prosecutors, who defended their conduct, argued that the conviction of Lula was legitimate and not politically motivated, and contended that a number of factual and legal assertions in the international jurists’ letter were incorrect.

After publication of that post, I received a message from Lula’s lawyers (the law firm of Teixeira, Martins & Advogados), who asked me to publish their letter in response to the prosecutors. In the interest of furthering this important substantive debate, I am presenting their letter below: Continue reading

A Group of International Jurists and Scholars Condemns the Conviction of Former Brazilian President Lula as Unfair and Politically Motivated. A Group of Brazilian Prosecutors Defend Their Conduct, and the Conviction. Read Their Dueling Open Letters Here!

One of the biggest stories in the anticorruption community over the last few months—and one that we’ve featured extensively here on GAB—has been the controversy swirling around the so-called “Lava Jato” (Car Wash) anticorruption operation in Brazil, in light of private text messages among the Lava Jato prosecutors, and between prosecutors and then-Judge Sérgio Moro. These messages were stolen from hacked cell phones and provided to The Intercept, which published a series of stories based on them and also shared them with other media outlines. Critics, including the Intercept journalists, have argued that these messages show unethical conduct, political bias, and due process violations by the Lava Jato prosecutors and by Judge Moro, and that this alleged misconduct demonstrates that the convictions of many of the Lava Jato defendants—most importantly, former President Lula—ought to be thrown out. Others remain unconvinced by the most serious accusations of political bias, and find many of the allegations of misconduct questionable. (For my own, somewhat evolving take on these issues, see here and here, and for a useful debate among Brazilian legal experts, see here.)

Recently, a group of international jurists and scholars weighed in, writing an open letter in which they declared their view that, in light of the evidence revealed by the leaked text messages, Lula did not receive a fair trial and was the victim of political persecution. (An English translation of the letter is available here; the original Portuguese text can be found here.) In response, a group of 20 Brazilian Federal Prosecutors wrote a reply to the open letter’s signatories, arguing that the allegations in the open letter were based on an inaccurate, incomplete, or distorted representation of the facts. The prosecutors’ response letter has not previously been published, but the prosecutors have provided me with that letter and given me permission to post a slightly-revised version here.

I have my own views on the merits of the underlying dispute, which I may go into in a later post, but here I just want to present the two letters side by side, in the hope that this will be helpful to others who have been following this controversy and are trying to better understand the complicated questions at issue. I’ll present this in point-counterpoint format, starting with the English translation of the original open letter (with some corrections to apparent errors or ambiguities in the original translation linked above), and then presenting the prosecutors’ rebuttal: Continue reading