A Mandatory Reporting Requirement in Israel: Maybe Not a Lost Hope?

In my last post, I discussed and critiqued a proposal, advanced in a policy paper published by the Israel Democracy Institute (IDI), for a mandatory reporting requirement in Israel’s public sector. Under the IDI paper’s proposal, a public official who, acting in his or her official capacity, formed a “substantial suspicion” that corruption has taken place or will take place could face disciplinary sanctions for failing to report this suspected corruption “as soon as possible.” I criticized this proposal on the grounds that it would both discourage reporting in those cases where a potential whistleblower is reluctant to report right away and so delays for a period of time, and would also deter employees from cooperating with investigators by sharing relevant information that they had not previously disclosed. In both of these cases—the employee who didn’t report right away but might be willing to report later, and the employee who didn’t voluntarily report but might be willing to share information when questioned by investigators—the threat of disciplinary sanctions for failure to report immediately may actually induce employees to keep silent, especially since the chances they will be caught and punished if they never reveal what they suspected are generally quite low. Instead of imposing a mandatory reporting requirement, I argued, Israel (and similarly situated countries) should strengthen positive incentives for whistleblowers, offering them more generous rewards and more effective protections against retaliation.

While many readers broadly agreed with my critique of the IDI paper’s mandatory reporting proposal in its current form, several colleagues suggested that a modified version of the mandatory reporting requirement might be effective and appropriate. In this post, I consider what seem to me the most plausible and promising revisions to the original IDI proposal, and evaluate whether these modifications would overcome my principal critiques: Continue reading

Why Mandatory Corruption Reporting Requirements May Prove Counterproductive

Whistleblowers who report on and expose illegal acts in their workplaces are invaluable to fighting corruption. In Israel, as I stressed in a previous post, the recognition of the importance of whistleblowers has led to the adoption of several (unsatisfactory) legal instruments which are designed to encourage whistleblowers to step forward. These instruments are mainly about rewarding or protecting those employees who have dared to report on illegalities despite the personal and professional risks associated with their coming forward. An important example of such a positive instrument is Israel’s Protection of Workers (Exposure of Offenses and of Harm to Integrity or to Proper Administration) Law,  which establishes a whistleblower-friendly mechanism for seeking damages from employers who engage in unlawful retaliation .

But some argue that positive incentives are insufficient. In 2019, the Israel Democracy Institute (IDI), one of the country’s leading research institutes, published a policy paper in which the authors (Professor Mordechai Kremnitzer and Yazid Ershied) argued that negative incentives—that is, the threat of sanctions for those who fail to report corruption in their workplaces—should also be employed. More specifically, the authors propose that Israel’s disciplinary law include a provision that requires any public employee who, in his or her official capacity, has formed a “substantial suspicion” that an act of corruption has taken place to report on it “as soon as possible” to a newly established governmental unit which would address corruption in the public sector. The authors claim that adoption of such a mandatory reporting requirement, if backed by the credible threat of sanctions, would increase the number of reports by public officials who observe corruption. (The sanctions recommended by the authors would be disciplinary rather than criminal, as criminal sanctions in their view would be disproportionate and consequently ineffective.)

The IDI paper is the most thorough and impressive piece written on proposals to adopt a mandatory reporting requirement on corruption in Israel. But while the authors list some good reasons for adopting such a requirement, they fail to consider how their proposal would interact with the phenomenon of “delayed reporting.” Employees are often reluctant to report suspected corruption right away, but eventually become willing to report it. In other words, for entirely understandable reasons, it often takes whistleblowers some time and contemplation before they are finally ready to report on illegalities. When one takes this fact into account, it becomes apparent that the IDI paper’s proposed mandatory reporting requirement might prove counterproductive, for two reasons: Continue reading

Anticorruption Court Rulings as a Gentle Reminder to Voters: Candidates’ Integrity Is Important

One of the great paradoxes in the research on corruption in democracies—and one of the great sources of frustration for anticorruption activists—is that while large majorities of voters consistently claim that they detest corruption and would be less likely to support corrupt politicians, nonetheless politicians credibly accused of corruption regularly win elections. There are many possible explanations for this, including the possibilities that voters lack sufficient information about corruption allegations against candidates, or that voters ultimately prioritize other factors. Yet another possibility—similar to yet distinct from these familiar explanations—is that even if voters are generally aware of corruption allegations against certain politicians, when the time comes to vote, other issues are more salient in many citizens’ minds, and integrity concerns fade into the background.

That last explanation implies that if concerns about politicians’ integrity were made more salient shortly before the election—even if the focus was on political corruption generally, or on corruption in some other jurisdiction—then voters would be less inclined to support politicians suspected of corruption. In a recent article, titled Can Institutions Make Voters Care about Corruption?, Omer Yair, Raanan Sulitzeanu-Kenan, and Yoav Dotan find that this may indeed be the case, and further suggest that if high-profile institutions—such as courts—take actions that raise the salience of corruption and integrity issues shortly before an election, this can lead voters to place more weight on such considerations when casting their ballots. Continue reading

Two Legal Changes Which Would Bolster Israel’s Protection of Whistleblowers

Like many other jurisdictions around the world, Israel has long recognized the value of whistleblowers who report and expose illegal acts in their workplaces. Without such whistleblowers, it is almost certain that Israeli citizens and law enforcement would never have learned, for example, about alleged corruption in the Israel Tax Authority, municipalities, Israel Aerospace Industries, the Ministry of Transport and Road Safety, and others. In order to encourage more whistleblowers to come forward, Israel has developed several legal instruments, the strongest and most central being the Protection of Workers (Exposure of Offenses and of Harm to Integrity or to Proper Administration) Law (PoWL) (see here and here). The PoWL, originally enacted in 1997 and amended three times since then, civilly and criminally forbids employers from retaliating against employees for whistleblowing, and establishes an employee-friendly mechanism for the victims of such retaliation to seek damages. These cases are heard by Israel’s specialized Labor Courts. In addition to awarding compensatory damages, the courts are also authorized to order employers to pay exemplary (that is, punitive) damages, and may also invalidate the whistleblower-plaintiff’s dismissal, or order that the whistleblower be moved to “another appropriate position” in the workplace.

While at first glance the PoWL seems to offer strong protections for whistleblowers, the PoWL suffers from two major weaknesses that significantly compromise its effectiveness. These problems must be addressed if the PoWL is to provide whistleblowers with adequate protections against retaliation: Continue reading

The Bribery Trial of Sitting Israeli Prime Minister Netanyahu Poses Unprecedented Challenges

The criminal trial of Israeli Prime Minister Netanyahu, on multiple corruption charges, opened yesterday, only ten days after the formation of a new government, and after years of police investigations, indictment procedures, and three rounds of early general elections. The trial is an unprecedented event in Israel, and one of the few examples anywhere in the world where a sitting head of government has stood trial on criminal charges in his own country. This situation poses unique challenges. On the one hand, the court must ensure that Netanyahu’s rights, as a criminal defendant, are respected. That said, though, some adjustments will have to be made to secure both the fairness of the trial and the integrity of Israeli executive and judicial branches, given that as the trial unfolds, Netanyahu will continue to serve as Prime Minister.

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Adapting Anticorruption Enforcement to an Age of Populism and Polarization

Shortly after the U.S. Senate acquitted President Clinton in 1999, he apologized for triggering the impeachment process. President Trump, in contrast, declared that his acquittal called for “a day of celebration,” and immediately started firing White House employees who had testified before the House of Representatives. In 2008, then-Israeli Prime Minister Olmert resigned shortly after the police recommended that he should be indicted on corruption charges. In contrast, after Prime Minister Netanyahu was indicted on multiple bribery charges, he infamously said that Israeli citizens should “investigate the investigators,” and even with the trial approaching, Netanyahu shows no signs of considering resignation. Instead, he is currently fiercely promoting legislation to amend several of the Israeli Constitutional Basic Laws in ways that will allow him to remain in office for years to come. These troubling examples illustrate how the resurgence of populism, coupled with increasing polarization, are making it easier for corrupt politicians to evade accountability, even in countries with functional legal and judicial systems. Deep political divisions and strong partisan loyalty are not new, but in the past, it seems there was a degree of overlapping consensus on minimum standards of integrity and propriety, and enough citizens were willing to enforce these standards on a non-partisan basis that leaders would be restrained by political checks—enforced through things like elections and internal party discipline—that could complement judicial processes.

Moreover, leaders like Trump and Netanyahu have acted aggressively to undermine the institutions of justice in order to protect themselves. Both leaders have cavalierly attacked the professionalism and integrity of their country’s law enforcement agencies by suggesting that investigations targeting the leader or his associates are politically motivated “witch hunts.” And both have taken more concrete action to undermine the ordinary operation of the machinery of justice. In the U.S., after his Senate trial acquittal, President Trump intervened to help allies who had been found guilty in cases related to investigations of impropriety by Trump’s 2016 campaign. For example, Trump’s Attorney General ordered the Department of Justice to seek a more lenient sentence for Trump’s former consultant Roger Stone, and Trump pardoned or commuted the sentences of several others in a short and unorthodox process. Netanyahu has been even more aggressive in trying to weaken legal institutions in order to protect himself. After being indicted, Netanyahu fired the Minister of Justice and appointed in her place a low-ranking member of his party with no prior ministerial experience. The new Minister’s first action was to appoint a new Solicitor General—the immediate superior of the prosecution team in Netanyahu’s case–through an irregular process and against the recommendation of the non-partisan Attorney General. (Due to the political deadlock, the Minister is part of a caretaker government and could therefore appoint an interim Solicitor General without the approval of the public committee that the law would otherwise require.) On the eve of Israel’s third round of elections, the new Solicitor General decided—against the opinion of the Attorney General and many others—to launch a police investigation into a firm in which Netanyahu’s chief rival Benny Gantz served as a director (obscuring the fact that Gantz himself is not a suspect). More recently, the Minister of Justice gave the unprecedented order to freeze all non-urgent judicial procedures due to the Covid-19 outbreak—a move that indefinitely postpones Netanyahu’s trial. While the Covid-19 outbreak has disrupted or delayed judicial proceedings in many countries, there was no expert opinion supporting such drastic measures in Israel, especially given that Israel has more per capita testing and ventilators capacity than nearly any country on earth. Even now, when newly detected cases are close to zero, a new date for the trial has yet to be set. Moreover, to avoid a fourth round of elections, given the continued deadlock, Netanyahu is now fiercely and unprecedently promoting legislative amendments to Israel’s Constitutional Basic Laws that would allow him to hold onto office for years to come.

When professional, and traditionally non-partisan, law enforcement agencies find themselves under attack by corrupt populists, these agencies often do not respond, presumably due to the belief that the only way to maintain integrity, legitimacy, and professionalism in the face of such attacks is to refrain from commenting on unfounded claims meant to disparage state attorneys and police investigators. There is much to be said for that approach, but at the same time, the institutions of justice can and should do more to counter the attempts of corrupt populists to undermine those institutions in order to remain in power.

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New Podcast, Featuring Doron Navot

A new episode of KickBack: The Global Anticorruption Podcast is now available. In this episode, my collaborator Ina Kubbe, a post-doctoral researcher at the University of Tel Aviv, interviews Professor Doron Navot, of the University of Haifa political science department. Much of the interview focuses on corruption in Israel, especially the allegations against Prime Minister Benjamin Netanyahu and how these allegations have affected Israeli politics and society. The interview also covers broader themes related to corruption in Israel, including widespread “informal” practices that bleed over into illegal exchanges or favoritism. The interview concludes with a discussion about different forms of corruption their relative frequency in Israel, and what can be learned from Israeli anticorruption efforts.

You can find this episode, along with links to previous podcast 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.

The Alleged Police Misconduct in the Netanyahu Corruption Investigations Illustrates Why Police Should Err on the Side of Caution

In corruption investigations, witness testimony is often crucial. After all, corrupt acts usually take place in secret, and the parties involved rarely leave behind records documenting their illegal deeds. It should therefore come as no surprise that an essential part of the corruption investigations into Israeli Prime Minister Benjamin Netanyahu has been the law enforcement authorities’ attempt to obtain incriminating testimony from those with (allegedly) first-hand knowledge of the corrupt actions, and to turn some of them into “state’s witnesses” (defined by Israeli law as “an accomplice who testifies on behalf of the prosecution after a benefit has been given or promised [to] him [or her],” usually in the form of immunity from prosecution or other alleviations). These efforts have met with some success (see here, here, and here).

However, according to Israeli news outlets whose reporters have gotten access to leaked police transcripts, the Netanyahu investigators may have gone too far. These transcripts suggest that police investigators tried to convince two key witnesses, who themselves were suspected of involvement in the corrupt schemes, to replace their defense attorneys – apparently because these defense attorneys had been advising their clients not to sign a state’s witness agreement (see here and here). (In Israel, defense attorneys are not present in the interrogation room, as suspects do not have a right to have their lawyers present during an interrogation.) One of the witnesses did indeed hire a new attorney and signed a state’s witness agreement, though we can’t be sure if the police investigators’ “suggestion” that he do so was the reason. If the police did pressure these suspects to fire their lawyers, it would be illegal, as Israel’s Supreme Court has held that police may not attempt to interfere with a suspect’s relationship with, or trust in, her attorney. In addition, the transcripts suggest that the police may have illegitimately pressured one of the witnesses during his arrest, threatening that lack of cooperation might result in negative consequences to him and others, and employing highly controversial interrogation tactics (see herehere, and here). At this stage, we do not yet know for sure what actually transpired, and Israel’s Attorney General has ordered that the claims of police misconduct be investigated.

The leaked transcripts and the allegations of severe police misconduct have generally been greeted with wide public criticism that transcended political boundaries. Prime Minister Netanyahu’s supporters and party members, including the Minister of Justice, have (unsurprisingly) been most critical, arguing that the police’s actions offer more proof of Netanyahu’s “persecution” by law enforcement authorities, a claim that has been promoted by Netanyahu almost since the beginning of his investigations (see here and here). Putting that harsh (and unproven) last claim to one side, it’s definitely the case that police investigators have been zealous in their pursuit of Netanyahu and his alleged co-conspirators, and the police may have been, at the very least, pushing the boundaries of what the law allows. This, in my view, is a mistake. To be clear, I do not mean to argue simply that the police should not break the law. That is true, but not many people would claim that the police should disregard the law when fighting corruption. But there’s another view out there, espoused by a considerable number of “tough on corruption” proponents, that law enforcement authorities should “push the envelope” as much as possible, doing everything they can even if their actions are sometimes to be deemed illegal by courts. According to this view, there is no place for softness in the interrogation room, and the police sometimes need to be willing to operate right at the edge of what the law will permit. It is this attitude that I want to argue against.

And this is not only because we should care about the rights of suspects and the fairness of criminal investigations. Indeed, “tough on corruption” proponents ought to worry the most about forms of police aggressiveness that come close to, and may cross, the line into police misconduct. In the Netanyahu case, to stick with that example, the police investigators’ alleged overreach may also prove to be counterproductive to anticorruption efforts, not only putting the investigation in jeopardy but producing long-term adverse consequences for effective anticorruption law enforcement. From the perspective of anticorruption policy, there are a few practical reasons why the police, while investigating allegations of corruption, should fully respect the rights of witnesses, and err on the side of caution: Continue reading

Israeli Prime Minister Benjamin Netanyahu’s Flawed and Irrelevant Defense to Bribery Allegations

After three years of investigations, it’s likely that Benjamin Netanyahu will soon become Israel’s first sitting prime minister to be indicted. The indictment, which has already been published by the Attorney General though not yet submitted to the court, accuses Netanyahu of several crimes of corruption. One of the most serious allegations (commonly referred to as “Case 4000”) is that when Netanyahu served as both Prime Minister and the Minister of Communications, he took steps to promote a deregulation of the telecom sector that would greatly benefit Shaul Elovitch, the controlling shareholder of Bezeq, one of Israel’s largest telecom firms. In particular, Netanyahu is alleged to have pushed for a decision allowing Bezeq to merge with another Israeli telecom giant. In return, Netanyahu allegedly received favorable media coverage from a news company controlled by Mr. Elovitch during two general elections.

Netanyahu has yet to submit a formal statement of defense to the charges, but given his countless press releases and interviews, it’s easy to predict what he will say. In particular, Netanyahu and his spokespersons have repeatedly argued that “decisions Netanyahu made regarding the telecom giant when he was communications minister were reasonable, had the support of the ministry’s professionals and were approved by the legal gatekeepers” (emphasis added). It’s not clear at this stage whether it is in fact true that the professionals in the Ministry of Communications also supported the merger. But suppose it were true. Why would it matter? Why would this be a defense to the bribery charges? Netanyahu and his supporters have remained vague, perhaps intentionally so, on this point. But there seem to be three possible arguments that he might advance as to why the Ministry professional staff’s (alleged) agreement with his position supplies a defense to the bribery allegation. None of these arguments has merit, and the court should dismiss all of them.

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Even “Tough on Corruption” Proponents Should Worry about “Zero Tolerance” Rules

“Zero tolerance for corruption,” as Professor Stephenson suggested in a 2014 post, is an expression that can be construed in several different ways: from a general attitude that corruption should be considered “a high priority,” to an uncompromising policy mandating that “all feasible measures to minimize corruption must always be used.” In this post I will discuss another common, narrower understanding of “zero tolerance for corruption,” according to which corruption – at least in certain contexts – must always be addressed with a mandatory predetermined harsh sanction. A clear example of such a “zero tolerance” rule is the Colombian and Peruvian law demanding the instant termination of “any public contract tainted by corruption.” Another illustrative example is the EU’s directive mandating debarment from public contracting of any company convicted of offenses of corruption, fraud, or money laundering.

Granted, the potential deterrent value of mandatory harsh sanctions for corruption is substantial. A company aware that any conviction for corruption will inevitably incur severe penalties is more likely to be dissuaded from violating the law. Nevertheless, the costs of this “take no prisoners” approach to anticorruption may be much higher than the actual benefit. Thus, as Rick Messick recently showed, the law mandating termination of corruption-tainted public contracts has proven to have disastrous ramifications for the infrastructure in Peru and Colombia. As it turns out, not only has the nondiscretionary cancellation of corruption-tainted public contracts halted the advancement of existing infrastructure projects, but it has also deterred investors and developers from taking any part in such projects, for fear that they will be cancelled due to “the tiniest of infractions by anyone associated with the project.” Similarly, debarment is nothing less than “a death-sentence” for companies whose main business involves public contracts, and its mandatory imposition for even a relatively minor offense may be so draconian as to be counterproductive.

This kind of cost-benefit reasoning, though compelling to some, would not convince many proponents of an unequivocally “tough on corruption” stance. Many anticorruption hardliners believe in maximizing deterrence notwithstanding any associated costs. From this point of view, the end of deterring corruption justifies all necessary means. Yet even for those who take this view, it turns out that “zero tolerance” may not be the ideal approach. Supporters of “zero tolerance” rules assume that adoption of mandatory sanctions for corruption would guarantee that actors in the anticorruption system – judges, prosecutors, and legislators – will adhere to the “zero tolerance” ideal, and that such rules would be sustainable. But these decisionmakers in the anticorruption system may evade the application of “zero tolerance” rules where doing so would lead to sanctions perceived (rightly or wrongly) as patently absurd or unjust. In other words, a “zero tolerance” rule on the books does not guarantee that a “zero tolerance” policy would actually be implemented. Consider the various ways that actors in the anticorruption system may avoid triggering the mandatory sanctions for corruption:

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