Tag Archives: Italy

OECD Denounces Italy’s Failure to Enforce the Antibribery Convention

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GAB readers know that Italy has repeatedly failed to meet its obligations under the OECD Antibribery Convention (here. here, and here). That in recent high-profile cases where evidence Italian companies bribed officials of foreign governments was overwhelming, the companies, their executives, and accomplices were all acquitted.  And that civil society organizations in Italy, Nigeria, and the United Kingdom have urged the OECD in no uncertain terms to condemn the Italian government’s blatant violation of its obligation to levy “effective, proportionate, and dissuasive criminal penalties” on those who bribe foreign public officials (here).  

Last Friday, the OECD did exactly that. In a comprehensive, well-reasoned report, a model for future compliance reviews, its Working Group on Bribery in International Business Transactions fingered both the legislature and the judiciary for Italy’s noncompliance. The legislature because the sanctions for foreign bribery are too low to deter anyone or any company from paying a bribe, the judiciary for interpreting the rules of evidence in ways that almost invariably end in acquitting defendants.

Indeed, it is hard to read the Working Group’s analysis of the decisions in recent cases without concluding as I have that underneath the strained reasoning in the recent acquittals is some mix of bribery, favoritism, or threats.

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Will the OECD Whitewash Italy’s Flagrant Violations of the OECD Antibribery Convention?

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Italy’s compliance with the OECD Antibribery Convention will reportedly be reviewed this week by the OECD’s Working Group on Bribery in International Business Transactions.  The Convention’s review mechanism has been called “the gold standard” for evaluating compliance with an international agreement (here). Whether it deserves that billing will depend on what the Working Group says about Italy’s compliance.

As with all compliance reviews, the Working Group has before it a report prepared by experts from two other Convention parties documenting whether Italy has lived up to its promise to investigate foreign bribery by its nationals. From the public record alone, on which the experts were well informed (here, here, here, here, and here), it is impossible to believe their report is anything but strongly critical.

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That Corruption Infects the Italian Judiciary Is Now Undeniable

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In March 2021, a Milan trial court acquitted Italian oil giant ENI, its partner Royal Dutch Shell, and numerous individuals of bribing Nigerian President Goodluck Jonathan and pals to secure the rights to the lucrative offshore oil field denominated OPL-245. The evidence of bribery was overwhelming, including internal Shell e-mails describing the scheme and the testimony of an ENI official confirming his bosses were fully aware of it. Suspicions that someone had “gotten” to the judges immediately arose stoked by revelations of close ties between the presiding judge and ENI’s senior counsel.

Any doubt that the verdict was tainted was put to rest when the court published its opinion justifying it. As the attached analysis by the British, Italian, and Nigerian NGOs that have pushed the case shows, the court’s “reasoning” was laughable. Two examples of many. The court wrote off the then oil minister’s sale of OPL-245 rights to a company he secretly owned as a trifle because neither he nor the government officials bribed to approve the sale objected. Equally ridiculous, the court found that a Shell briefing note reporting that part of the bribe would be in the form of political contributions simply recounted a rumor then circulating.

Between the strength of the evidence the prosecution presented and the court’s flimsy if not bizarre reasoning dismissing it, the expectation was that the acquittal would easily and quickly be overturned on appeal. That hope is not to be however.  Last week the Italian prosecutors assigned to handle the appeal announced they were withdrawing it. 

Thus ENI, Shell, and the 13 individuals named as accomplices in the payment of a $1.1 billion bribe stand exonerated. And it now clear that the rot in the Italian judiciary reaches into its once revered prosecution service.

Nor is the damage from the rot limited to Italy. Thanks to the doctrine of ne bis in idem (double jeopardy in American law), a Dutch investigation of Shell’s role had to be dropped (here).  

The last hope for justice now lies with the Nigerian judiciary. Ne bid in idem only bars EU countries from pursuing a case. A Nigerian investigation of the companies and their accomplices is underway. It is critical it continue and that the international anticorruption community do all it can to support it given what has happened in Italy.

Moreover, as this blog has urged, it is critical too that the OECD hold Italy to account for its failure to live up to its obligations to sanction Italian companies that bribe foreign officials. The ENI-Shell case must be an outlier not a precedent.

The Corruption of Italian Democracy: Russian Influence Over Italy’s League

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Italy’s largest far-right policy, La Lega (“the League”), has long had close ties with Putin’s regime in Russia. The League’s leader, Matteo Salvini, has been a vocal supporter of Putin for years (see also here, here, and here), and in 2017 the League signed a formal cooperation agreement with Putin’s United Russia party. Even before then, the League (then known as Lega Nord, the “Northern League”) often advocated within Italy and the EU for Russian interests. Notably, while the EU imposed sanctions on Russia after Russia’s illegal annexation of Crimea in 2014, the League opposed sanctions and tried (unsuccessfully) to upend the solidarity necessary to keep EU sanction in place. That opposition to sanctions only intensified after the 2017 cooperation agreement: At a 2018 conference in Moscow, Salvini—then Italy’s Interior Minister–insisted that Italy would work “day and night” to repeal the 2014 sanctions. Salvini’s efforts proved unsuccessful, as he was unable to convince his coalition partners to change Italy’s stance. But the Kremlin still benefitted from the League’s vocal opposition to sanctions, as it showed that Russia wasn’t isolated diplomatically and that the West is internally divided.

The League’s long history of cooperation with Moscow could be chalked up to shared ideology and policy goals. But it appears that corruption, not policy, might explain why the party is so close with Putin.

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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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South African Court Slaps Down Attack on Corruption Prosecutor

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Early Wednesday a South African judge ruled that former President Jacob Zuma’s attacks on the prosecutor leading the case him were baseless and that Zuma’s trial on corruption charges proceed forthwith. Zuma had claimed prosecutor William Downer’s conduct in pursuing the case was so egregious — running the gamut from the commission of serious crimes, to breaches of ethics, to intimations of racial animus — that the charges against him must be dismissed. Or, at the least, Downer be removed from the case and trial therefore delayed indefinitely while a new prosecutor was found.  

In seeing through Zuma’s desperate attempt to derail the case, and standing up to the still powerful former president, Judge Piet Koen provided a model judges everywhere should follow.  When Zuma raised the unfounded, scurrilous attacks on the prosecutor, Koen ordered they be aired without delay.  Upon sifting through the evidence, he promptly issued a scholarly 109-page opinion finding that not one of the allegations withstood scrutiny and that there was therefore no basis to find Downer was not a fair-minded, independent prosecutor and hence no reason Zuma would not receive a fair trial if Downer remained on the case.

Today’s 61-page decision came in response to that earlier decision. Zuma had requested that the trial be halted while he appealed it.  In again a scholarly and carefully written decision, Koen knocked down the legal arguments offered in support of an appeal while reiterating the absence of any facts showing Downer guilty of misconduct or bias.

Zuma has done his best to pressure the judge into throwing out or delaying the case, with hundreds of supporters crowding into the courthouse and surrounding grounds at his every appearance to let their views be known and with some issuing not so veiled threats against the judge. Koen could have easily caved, finding merit to the claims or a way to put off the trial for months if not years.

That he did not and that he instead set the trial for this April stands in marked contrast to the way attacks on Nigerian, Zambian, and Italian prosecutors have been handled (here, here, and here). Rather than standing up for them, judges, justice ministry officials, and even fellow prosecutors stood aside after the attacks were launched with some collaborating with the attackers. If corrupt officials and their accomplices are to face justice, Judge Koen’s response must become the standard when those prosecuting them come under attack.  

Highway Robbery: Preventing Corruption in U.S. Infrastructure Investment

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Last November, President Biden signed into law the Infrastructure Investment and Jobs Act (IIJA), a $1.2 trillion package that earmarks $110 billion for repairing and rebuilding roads and bridges. This is the single largest investment in U.S. roads and bridges since the construction of the interstate highway system in the mid twentieth century. And though it is a federal project, much of the money will be distributed to state governments, which will determine how best to use the money to address their infrastructure needs. As state governments receive the IIJA money, we can expect the states to launch a public tender frenzy.

In all the extensive discussion and debate over the IIJA, there has been relatively little focus on the corruption risks inherent in this sort of spending program—even in an affluent, reasonably well-governed country like the United States. After all, corruption in large construction projects, and infrastructure projects like roadbuilding in particular, is all too common. Unfortunately, the IIJA’s design exacerbates rather than reduces these corruption risks. While it is too late to address those flaws in the statute, there are some measures that the federal government can and should adopt now to mitigate the inherent corruption risks. Continue reading →

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.

The Weaponization of Anticorruption Law: Why Italy’s Legge Severino Must Be Reformed

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Back in 2012, the Italian legislature passed an anticorruption statute known as the Legge Severino. This law institutes a six year prohibition on holding elected office for politicians with felony convictions carrying sentences over two years. If convicted on an “abuse of power” charge, the prohibition on officeholding is extended to eight years. The law, which was enacted in part to effectuate Article Six of the United Nation’s Convention Against Corruption, was hailed at the time as a positive step on the road to a less corrupt Italy. (Famously, this provision initially barred Silvio Berlusconi from office after he was sentenced to four years in prison for tax evasion.) The logic behind passing laws of this sort (which also exist elsewhere) is fairly clear, especially in a country like Italy which has struggled with endemic political corruption: intuitively, those who have abused the public trust by committing serious criminal offenses should not be allowed to hold elected office.

But a recent case in Calabria, involving Domenico “Mimmo” Lucano, the former mayor of the town of Riace, highlights problems with the law—in particular, how the law can be weaponized to take down politicians who are fighting corruption and organized crime. Continue reading →

Corruption’s War on the Law

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“Corruption’s War on the Law” is the headline on an article Project Syndicate just published. There former French magistrate and corruption fighter Eva Joly recounts the fate of those who have dared to confront powerful networks of corrupt officials and those who corrupt them.  Maltese investigative journalist Daphne Caruana Galizia was murdered by accomplices of those she was investigating. So was Rwandan anti-corruption lawyer Gustave Makonene. So too was Brazilian anticorruption activist Marcelo Miguel D’Elia.

After a second attempt on his life, Nuhu Ribadu, first chair of Nigeria’s Economic and Financial Crimes Commission, the country’s premier anticorruption agency, famously remarked:

“When you fight corruption, it fights back.”

In her article, Mme. Joly, who received numerous threats for investigating and ultimately convicting senior French officials for corruption, explains that violence is just one way corruption “fights back.”  The most recent head of Nigeria’s EFCC was arrested and detained on trumped up charges of corruption. Ibrahim Magu has been suspended from office pending further proceedings, proceedings unlikely to be held this century.

At the same, Nigerian anticorruption activist Lanre Suraju is, as this blog reported last week, being charged with “cyberstalking” for circulating documents from a court case that implicate associates of the current Attorney General in a the massive OPL-245 corruption scandal. This form of intimidation, which Nigerians have dubbed “lawfare,” has now been exported to Europe. Italian prosecutors are being subjected to both criminal charges and administrative action for having the nerve to prosecute one of Italy’s largest companies for foreign bribery (here).

President Biden has declared the global fight against corruption to be a national priority, and he will shortly host a democracy summit where Brazil, Italy, Malta, Nigeria, and Rwanda will be represented at the highest level. Might he remind them which side of the fight they should be on?