Tag Archives: cross-border investigations

Good News about the Fight Against Corruption: International Collaboration in Malawi

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Malawi’s Platform for Investigative Journalism reports that “the man widely accused of orchestrating one of the most brazen corruption schemes in Malawi’s history is now officially in the dock” (here).

As the Continent recounts (here), British-Malawian businessman Zuneth Sattar was indicted June 2 in the United Kingdom on 18 counts of bribery. The charging documents claim that in return for a raft of state contracts he bribed numerous high-ranking Malawian officials. Named in the documents are: a previous Vice President, the late Saulos Chilima; President Lazarus Chakwera’s chief of staff, Prince Kapondamgaga; former Malawi Police Inspector General George Kainja; former Anti-Corruption Bureau (ACB) Director General and Solicitor General Reyneck Matemba; and Brigadier Dan Kuwali, a law professor and commandant at the Malawi Defence Force College.

The charges show how critical transnational cooperation can be when it comes to nailing “big fish.”  They are the result of a several year collaboration between the UK’s National Crime Agency and Malawi’s Anti-Corruption Bureau (ACB).

The case also shows that cross-border cooperation is critical not only when it comes to rooting out the facts.

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Brazil: A Model for International Cooperation in Foreign Bribery Prosecutions

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Much ink has been spilled celebrating the extraordinary crackdown on corruption in Brazil over the past few years (including on this blog). Headlined by the massive Operation Car Wash (Portuguese: Lava Jato)—in which officials received nearly $3 billion in bribes to overcharge Petrobras, Brazil’s state-controlled oil company, for construction and service work—high-profile corruption investigations have swept through Brazil, threatening to upend its reputation as a bastion for unchecked graft. Although corruption in Brazil remains a serious problem, the extensive investigations have worked to elevate the nation as an inspiration for countries looking to address their own corrupt political systems and hoping to become “the next Brazil.”

In addition to the headline-grabbing investigations targeting the upper echelons of the Brazilian government, Brazilian authorities have also worked closely with U.S. authorities investigating bribery activity in Brazil, leading to significant penalties both under Brazilian law and under the U.S. Foreign Corrupt Practices Act (FCPA). This is a significant development, because it demonstrates the possibility for close collaboration on cross-border bribery cases between a developed country (usually on the “supply side” of transnational bribery cases) and a developing country (on the “demand side”). Commentators have complained that too often supply-side enforcers like the United States take an outsized role in transnational bribery cases, with the countries where the bribery takes place doing too little. Other commentators have cautioned that an increase in prosecutions by other countries, in the absence of some sort of global coordination mechanism, may lead to races to prosecution or to over-enforcement. China’s nearly $500 million fine of British pharmaceutical giant GlaxoSmithKline in 2014 for bribing Chinese doctors and hospitals was emblematic of these fears, providing an example of an aggressive, unilateral approach to demand-side enforcement – while putting DOJ in the unfamiliar position of pursuing FCPA violations as a cop late to the scene.

Through its recent enforcement actions, Brazil has provided a different model. While there have been successful joint enforcement actions in the past—such as the Siemens case—the recent series of coordinated U.S.-Brazil actions exhibit how developed and developing countries can work together in anti-bribery enforcement, sharing in the investigative responsibilities, negotiations with companies, and even the financial returns.

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Should Anticorruption Agencies Have the Power to Prosecute?

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One of the main reasons policymakers cite for establishing a standalone, independent anticorruption agency is the need to strengthen the enforcement of their nation’s laws against bribery, conflict of interest, and other corruption crimes.  In the past 25 year some 150 countries have created a specialized, independent agency to fight corruption (De Jaegere 2011), and virtually all have been given the lead responsibility for investigating criminal violations of the anticorruption laws.  But while a broad international consensus exists on the value of creating a new agency with investigative powers, opinion remains sharply divided on whether these agencies should also have the power to prosecute the crimes it uncovers.  As this is written, Indonesian lawmakers are considering legislation to strip its Corruption Eradication Commission (KPK) of the power to prosecute while a bill before the Kenyan parliament would grant its Ethics and Anticorruption Commission (EACC) the power to prosecute the cases it investigates.

No matter the country, debate about whether a single agency should have the power to both investigate and prosecute corruption cases inevitably comes down to a small set of conflicting claims.  Those who oppose giving a single agency both powers raise an argument at the center of the older debate about the relative responsibilities of police and prosecutors — investigator bias.  In the words of a British Royal Commission that studied the relationship between English police and prosecutors, an investigator “without any improper motive . . . may be inclined to shut his mind to other evidence telling against the guilt of the suspect or to overestimate the strength of the evidence he has assembled.” That is, once an investigator hones in on a suspect, confirmation bias sets in, and he or she will interpret all evidence as supporting the suspect’s guilt.  Putting the decision about whether to prosecute a case in an agency wholly separate from the one that investigates provides a strong check against such bias, reducing the chances that the innocent will be put to a trial or weak cases brought to court.

The investigator bias argument has a long and distinguished pedigree, and a 2011 survey of the powers of 50 anticorruption agencies by World Bank economist Francesca Recanatini found that it often carries the day.  Only half of the 50 agencies she surveyed have both investigative and prosecutions powers.  But as the contemporary debates in Indonesia and Kenya suggest, proponents of combing investigation and prosecution in a single agency have a very powerful counter argument in their corner.  Continue reading →

America’s Broken System for Helping Friendly Nations Prosecute Corruption Cases

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Gaborone, Botswana, is not the place one would expect to find a group advocating that the United States government get tough on crime, but then the advocates were not the typical Washington cabal of interest group representatives, activists, lawmakers, and media.  Rather, they were investigators and prosecutors from 14 African anticorruption agencies attending a workshop on corruption investigations sponsored by the Association of Anticorruption Agencies in Commonwealth Africa.  Why the advocacy?  What is the complaint with the U.S.?

Especially in the smaller African countries, any significant corruption case almost inevitably requires a cross-border investigation.  The alleged corrupter is in one jurisdiction, the alleged corruptee in a second, and what may be the proceeds of the crime in a third.  Although the U.S. would seem to be a long way from Lesotho, Namibia, Malawi, and other Sub-Saharan nations, workshop participants explained that not only are corrupters sometimes located in the U.S., but many African elites favor parking assets acquired corruptly in American banks, real estate, and financial assets.  Hence the anticorruption authorities of Sub-Saharan states frequently seek help from the U.S. to locate stolen assets, obtain business records, and depose witnesses.  In a session devoted to the mechanics of investigating cross-border cases, however, not one of the 30 participants identified a single instance where the U.S. had timely responded to their request to provide evidence they needed to help convict corrupt public officials or freeze or seize his or her assets.  Indeed, several said they had been forced to dismiss charges or allow freezing orders to lapse because the U.S. had failed to reply to their requests. Continue reading →