Tag Archives: bribery

Statutory Leniency for Bribe-Givers in Egypt: Revolutionary or Reprehensible?

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Bribery and other forms of collusive corruption are notoriously difficult to detect. In many cases, the only people who even know that a crime has been committed are the perpetrators. To address the inherent difficulty of proving bribery, many countries use so-called leniency agreements, in which the government offers some form of sanction reduction or exemption to parties who voluntarily self-report and provide evidence against co-conspirators. Most of these leniency programs are designed and implemented by prosecutors’ offices (though they may be authorized by statute). Prosecutors exercise discretion in deciding whether and to what degree to offer sanction reductions to cooperating parties. Under the typical anticorruption leniency program, a self-reporting bribe-giver cannot claim, as a matter of law, an entitlement to any sort of sanction exemption.

Egypt is different. Unusually, and perhaps uniquely, Egypt’s anti–bribery law (Article 107bis of the Penal Code No. 58 of 1937) offers a full and absolute exemption from sanctions for any bribe-giver who self-reports and gives evidence against the culpable bribe-taker.

This approach is misguided, for several reasons: Continue reading →

Corrupt State Officials and Companies Are Razing Malaysia’s Ancient Forests. Here’s How to Stop Them.

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Malaysia is home to two of the world’s oldest rainforests. Dating back 130 million years, the Taman Negara and Borneo Lowland forests are older than even the Amazon and the Congo Basin. As of 2016, Malaysia had 19.3 mega-hectares of forested land, which is close to 60% of the country’s total land area. But these forests are under the constant threat of their destruction by private commercial exploiters that engage in logging and development. Already in various parts of Peninsular Malaysia and Borneo Island, forests have been transferred to private ownership and used to develop palm oil and rubber plantations, durian farms, and mines. Once-serene forests are now plagued by mudslides and logjams, their biodiversity has suffered, and the indigenous communities that used to cultivate the forests have been displaced.

The reckless exploitation of Malaysia’s forests has many causes, including poorly-designed conservation regulations. But corruption is one of the most important root causes of unchecked and unsustainable deforestation. Such corruption comes in two main forms:

  • The first is the corrupt award of land titles and logging concessions to cronies, or in exchange for bribes. This sort of corruption is epitomized by the sale of the Sarawak State’s land and forests bordering the Mulu UNESCO World Heritage site.  by to cronies and family. In 2013, several NGOs reported that the powerful Chief Minister Abdul Taib Mahmud had arranged for the state to sell these lands to his cronies and family members at cut-rate prices, after a non-transparent process with no formal tendering. The new (crony) owners planned to raze the forests to develop palm oil plantations. To the frustration of anticorruption activists and lawyers, the Malaysian Anti-Corruption Commission (MACC) found no grounds to charge Taib Mahmud for abuse of power, due to insufficient evidence of his specific personal involvement in the sale decision.
  • Second, when commercial exploiters want to log in areas where they do not have a concession, they have been known to bribe local officials to overlook these illegal logging activities. To take just one example, in 2017 the authorities prosecuted corrupt forestry officials for taking kickbacks of RM340,000 (about US$76,800) from a logging company over several months. The only thing unusual about this case is that it was uncovered and prosecuted. Bribery of local government officials and law enforcement officers is widespread in Malaysia, and typically goes undetected. In the forestry context, the costs of such corruption are massive: The Deputy Natural Resources and Environment Minister reported in 2017 that the losses from illegal logging in Peninsular Malaysia amounted to RM15.2 million (about US$3.5 million).

To curtail the rampant destruction of Malaysia’s vital and irreplaceable forest resources, the government needs to do more to combat both these forms of corruption.

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Corruption’s Queer History: Stonewall’s Seedy Underside

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A little after midnight on June 28, 1969, New York City police officers raided the Stonewall Inn, a seedy bar in Greenwich Village known for catering to a mostly LGBTQ crowd. Such raids were not uncommon—in fact, the Stonewall Inn had already been raided just four days prior to that now historic evening. But for some reason, that particular raid on that particular night had touched off violent clashes between police and Stonewall’s patrons, becoming a watershed moment for the LGBTQ civil rights movement in the United States. Indeed, the Stonewall Inn is now a national monument, and the anniversary of Stonewall is commemorated every year with Pride parades around the world.

In the days following the riots, however, the Stonewall Inn was in utter disarray: graffiti sprawled on its boarded-up windows read: “GAY PROHIBITION CORRUPT$ COP$ / FEED$ MAFIA.” That brief and blunt statement captures an important truth about Stonewall, one that is important for understanding both the historical context of the Stonewall uprising, as well as the intersection between anti-LGBTQ discrimination and corruption that persists today: The riots weren’t only about police discrimination—organized crime and corruption also played a fundamental role.

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Antibribery Policy: A Checklist

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That a law against bribery is the keystone of any serious fight against corruption goes without saying. What isn’t said is that an antibribery law is only the keystone. That just as an arch consists of more than its center stone, a robust, effective antibribery policy takes more than a law criminalizing bribery.  Below is my checklist of what else is required. Reader comments solicited.

My list starts with a careful review of the antibribery law itself. For as the United Nations Office on Drugs and Crimes reported in 2017, many nations’ law have gaps that make it easy for bribe takers and payers to maneuver around it unscathed; others contain ambiguities that leave it to the courts to say what is and isn’t a bribe.

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

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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.

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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: Lessons from Athenians’ Efforts to Define Corruption

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Gab readers have been treated to a lively and valuable debate in past weeks on precisely what we mean when we say that someone or some behavior is “corrupt.” Many readers have joined the discussion. Responding to my request for their views by offering comments and analyses of six real world cases where a court, ethics commission, or legislature has been asked to decide whether the conduct of a public official was corrupt.

I had promised to post “the right answers” to the six, or at least the answers the court, commission or legislature gave this week. I am putting it off to share the guest post below by classics scholar and American attorney Kellam Conover. Drawing on the dissertation that garnered him a PhD. in Classics from Princeton, he explains how citizens of ancient Athens decided when an official’s conduct was corrupt. What he takes from their method provides the only way I see for arriving at genuine right answers – not only to the six cases I presented but to the general issues of how to define corruption and how to measure our progress in overcoming it. Many thanks Kellam.

I have read with great interest the fascinating discussion that has unfolded recently among Bo Rothstein, Matthew Stephenson, Robert Barrington, Paul Heywood, and Michael Johnston.  The questions they raise about how to define corruption, how to link up theory with practice, and how to measure success are all ones I have grappled with since writing my dissertation on Bribery in Classical Athens. 

As a historian, I’ve spent far more time describing corruption than prescribing solutions.  But I hope a few observations from ancient Athens will be helpful to others.  First, in my view corruption defies definition because it is an inherently political claim that changes with different social and political contexts.  Second, and as a result, it may be fruitful to augment anti-corruption programs with institutions specifically designed for articulating, contesting, and legitimating evolving political norms.  Finally, I offer one potential metric of success:  i.e., whether patterns of corruption in a polity have grown less disruptive over time.

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Defining Corruption: What Do Readers Say?

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Recent posts have treated readers to a discussion of what corruption means.  Professor Rothstein suggested coming at it from its opposite and offered “impartiality” so corruption would mean the absence of impartiality or bias. [Note: I had flubbed Prof. Rothstein’s view in the original text as per his comment below.] Professor Johnson argued that at its core corruption is about an imbalance of power and suggested tying the definition to notions of “justice.” Transparency International’s “abuse of entrusted power for private gain” was also examined.

I think it time for GAB readers to be heard. Rather than asking which one of these definitions they prefer, or whether they have another candidate, however, I thought it more interesting to see how a definition of corruption helps them judge actual conduct in the real world. 

Below are six cases where at least some have alleged corruption was afoot. What say, GAB readers? Do any of the cases described below involve corruption as you define it?

A yea or nay on each in a comment to this post will suffice. Extra credit for explaining how one of the definitions proffered helped you decide. Lifetime subscription to GAB at the current rate to the best entry or entries. How each played out in court and in the court of public opinion will be revealed in a future post.

Case 1. To defeat a motion of no confidence, Vanuatu’s Unity of Change government offered two MPs parliamentary appointments in return for withdrawing their support for the motion.  Another MP was offered the position of Minister of Health, and a fourth Parliamentary Secretary to the Minister of Fisheries. All four accepted the offers, and the government defeated the motion. Bribery?

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Implicit Corruption in the Chinese Consumer Debt Industry? A Close Look at Recent Evidence

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While many country’s bribery laws require an express quid pro quo—an agreement to exchange a specific benefit for a specific exercise of government power—in practice many corrupt relationships involve implicit quid pro quos, in which the private party provides something of value to government officials, and the government officials use their power to help their private benefactors, but there is never any express agreement, or even any direct connection between any individual official act and a particular benefit conferred by the private party. The context in which such implicit quid pro quos are most widely suspected and discussed is perhaps campaign finance in democracies, but such implicit quid pro quos can occur in many other contexts as well. It is often very difficult—not only for law enforcement agencies, but also for empirical researchers—to find sufficiently clear evidence of an implicit corrupt deal. Yet quantitative empirical researchers have been making important strides in using available data to detect evidence of hidden or implicit wrongdoing—an approach sometimes dubbed “forensic economics.”

A fascinating recent paper by Sumit Agarwal, Wenlan Qian, Amit Seru, and Jian Zhang (forthcoming in the Journal of Financial Economics) illustrates both the potential and limitations of this approach. The paper, entitled “Disguised Corruption: Evidence from Consumer Credit in China,” presents quantitative evidence of an implicit quid pro quo between a large Chinese bank and government officials who wield regulatory authority over the bank. The paper finds that the bank offers unusually favorable lending terms to government employees (the “quid”) and that in those provinces where this practice is more widespread, the bank receives more favorable treatment from governments (the “quo”). While this evidence alone cannot establish that there was an implicit exchange (the “pro”), the authors suggest that this is the most plausible explanation of the data.

The data is certainly susceptible to that interpretation, but there are other, more benign possibilities. I’ll first say a bit more about the main evidence the paper offers for an implicit quid pro quo, and then suggest (though not necessarily urge) a possible alternative explanation.

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Where the Real Blame for Letting Bridgegate Defendants Off Lies: Part II — the Congress

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Anticorruption advocates roundly condemned the Supreme Court for its May 7 Bridgegate decision overturning two New Jersey officials’ corruption convictions for conduct even their lawyer admits was wrong (examples here, here, and here).  But as explained in a previous post on Bridgegate, so named because the case involved closing bridge entry ramps to create traffic jams, the Court is not to blame for the result.  The immediate cause was Bridgegate prosecutors pushing beyond the limits the Court has ruled current law sets on their power to police state and local corruption.

It is Congress, though, that bears the lion’s share of the blame for the outcome. Congress needs to clarify when state and local officials can be prosecuted under federal law for corruption.  Until it does, more Bridgegates, cases where the Court rebuffs federal prosecutors’ expansive view of their power to prosecute state and local corruption, are in store.  As with Bridgegate, the result will be that corrupt officials get off scot free while the American public is left to question their government’s commitment to fighting corruption. Continue reading →