A Cultural Defense to Bribery? The Solomon Islands’ Approach

Gift-giving usually has positive connotations as an expression of love, respect, friendship, gratitude, or celebration. However, when the recipient is a public official, there is always the concern that the “gift” is nothing but a thinly-veiled bribe. For this reason, countries around the world have placed restrictions on the character and value of gifts that public officials are allowed to accept. But in societies where giving gifts – including, perhaps especially, to powerful or influential figures – is an important part of the culture, treating all (sufficiently large) gifts as unlawful bribes is more than usually challenging. Indeed, a recurring question for anticorruption reformers is whether or how anti-bribery law should make allowances for local cultural norms and practices, especially those related to gift-giving. This question – often framed as one of “cultural relativism” – frequently comes up in the context of developing countries (such as Indonesia or various Pacific islands), though it is not exclusive to such countries (see, for example, discussion of this same issue in South Korea).

One country that has recently faced the challenge of regulating cultural gift-giving to and by public officials is the Solomon Islands – a small state in the Pacific Ocean consisting of over nine hundred islands, a population of about 600,000, and a rich and fascinating history. For years, the Solomon Islands has been dealing with pervasive corruption at all levels of government, most notably in natural resources management, which has had disastrous ramifications for the country’s economic development (see here, here, and here). Like other Pacific islands, the Solomon Islands is home to a practice of traditional gift-giving to and by public officials, which in many other jurisdictions could be viewed as legally problematic. According to a local custom (as explained in an official government document), public officials, as members of their community, are “expected to contribute to community events such as weddings, funerals, feasts or church gatherings” and are “obligated to reciprocate with gifts if and when they visit communities and are presented with gifts.”

In July 2018, as part of a comprehensive national anticorruption scheme, the Solomon Islands’ Parliament enacted the much anticipated Anti-Corruption Act (ACA). The ACA is especially notable, and unusual, in its approach towards customary gifts and bribery. Instead of capping the monetary value or limiting the type of gifts which public officials are allowed to accept, the ACA introduced a new cultural defense to the offence of bribery of public officials. According to this defense, a public official who accepts or solicits something of value, as well as the individual who offers or gives it, is not guilty of bribery if the defendants can prove that their respective acts were conducted: (1) “in accordance with custom,” (2) “openly, in the course of a traditional exchange of gifts,” and (3) “for the benefit of a community or group of people and not for an individual.” According to Prime Minister Rick Houenipwela, the ACA’s cultural defense is required as part of the government’s obligation “to respect our customs and traditional cultures” as “a multi-ethnic post conflict country.” However, the cultural defense has been criticized by many, including the Parliament’s Bills and Legislation Committee (see here and here) and Transparency Solomon Islands, which referred to this defense as “a good example of bad law.”

In this post, I do not attempt to answer the question whether the Solomon Islands’ customary gift giving should be criminalized. I do wish to argue, however, that even if we assume that local gift-giving customs are worth protecting, the ACA’s cultural defense to bribery in its current form is highly susceptible to misuse and may undermine the government’s anticorruption efforts. Both the Solomon Islands and other jurisdictions that might be considering a similar cultural defense should take heed of four significant problems with the defense as currently written: Continue reading

Israel Needs to Fight Official Corruption. That Doesn’t Mean It Should Deprive Elected Officials of Their Right to Silence.

On April 9, 2019, millions of Israeli citizens will vote in the national legislative elections for the party they wish to represent them in the parliament (the Knesset). Numerous ongoing investigations into corruption allegations against senior officials and various public figures (including Prime Minister Benjamin Netanyahu) ensure that anticorruption will feature prominently on the agendas of most major political parties. One can only hope that the next elected Knesset will manage to pass effective anticorruption legislation. However, one piece of anticorruption legislation that has been repeatedly proposed should not be adopted: a de facto limitation on senior elected officials’ right to silence in criminal interrogations in which the officials are suspects. (The proposed legislation would also de facto limit elected officials’ narrower right of refraining from answering specific questions when doing so may put them at risk of criminal prosecution; for the sake of brevity I will discuss only the broader and more comprehensive right to silence.) Currently, elected officials enjoy the right to silence just like any other suspect in a criminal case in Israel, yet proposals have been repeatedly floated that would require certain high-level elected officials (such as the prime minister, ministers, Knesset members, or mayors) who exercise this right to be removed from office. Most of the bills, which differ from each other in certain respects, would apply to criminal interrogations related to the officials’ duty, but some go even further, with a broader application to any kind of criminal interrogation in which the officials are suspects.

The explicit goals of these bills are strengthening the war on corruption and promoting public trust in the rule of law. So far, none of these bills have been enacted, but Knesset members from across the political spectrum have been flirting with this idea for the last few decades, almost always in response to occasions in which Israeli officials (whose political views typically diverge from those of the proposing Knesset members) chose not to cooperate with the interrogators in corruption investigations. It is very likely that something like this will be proposed again in the next elected Knesset, as some parties have already declared in their official platform that they intend to promote such legislation.

While I agree that an elected official’s refusal to answer interrogators’ questions inspires a great deal of unease, adoption of the aforementioned bills would be unjustified and even dangerous. Although the proposed bills do not technically eliminate elected officials’ right to silence, requiring a public official to give up his or her position as a condition for exercising this right is a sufficiently severe sanction that the bills unquestionably impose a severe practical limitation on this right. If Israel were to adopt such a rule, it would be a significant outlier among peer nations: Research conducted by the Knesset’s Research and Information Center in 2007 found no equivalent limitation on elected officials’ right to silence in numerous legal systems around the world. Taking such a step would therefore be unprecedented, but more importantly, it would be unwise, for several reasons: Continue reading

The UK Parliament Should Broaden and Sharpen the Legal Advice Privilege in Order to Encourage More Internal Investigations into Corruption

On September 5, 2018, the compliance departments and outside counsel of large corporations operating in the UK breathed a collective sigh of relief. In a much anticipated ruling, the Court of Appeal of England and Wales overturned a trial judge’s order that would have compelled a London-based international mining company, Eurasian Natural Resources Corporation Limited (ENRC), to hand over documents to UK prosecutors investigating the enterprise for bribery in Kazakhstan and Africa. Those documents were the product of an investigation that ENRC’s outside legal counsel had conducted following an internal whistleblower report that surfaced in late 2010. In conducting that internal investigation, lawyers from the law firm interviewed witnesses, reviewed financial records, and advised ENRC’s management on the company’s possible criminal exposure. Though the company tried to keep everything quiet, the UK’s Serious Fraud Office (SFO) came knocking in mid-2011. The SFO agreed to let ENRC and its lawyers continue to investigate on their own, periodically updating the SFO on their progress. In 2013, ENRC’s legal counsel submitted its findings to the SFO in a report arguing that, on the basis of the facts presented, the company should not be charged. The SFO disagreed and launched a formal criminal investigation. But the SFO then also demanded that ENRC turn over all of the files and documents underpinning its report—including presentations given by the lawyers to ENRC’s management and the lawyers’ notes from their interviews with 184 potential witnesses.

ENRC refused to comply, claiming that these documents were covered by two legal privileges under UK law: the “litigation privilege,” which guarantees the confidentiality of documents created by lawyers for the “dominant purpose” of adversarial litigation (including prosecution) that is “in reasonable contemplation,” and the “legal advice privilege,” which protects communications between lawyers and clients exchanged for legal advice. The trial court rejected ENRC’s privilege claims, a decision that sent shockwaves through the English defense bar and spurred much criticism on legal and policy grounds. But the Court of Appeal reversed, holding that ENRC’s lawyers didn’t have to share the documents. The Court’s ruling relied on the litigation privilege, holding, first, that documents created to help avoid criminal prosecution counted as those created for the “dominant purpose” of litigation, and, second, that criminal legal proceedings were in “reasonable contemplation” for ENRC once the SFO contacted the company in 2011.

Many commentators have hailed the Appeal Court’s decision (which the SFO declined to appeal) as a “landmark ruling” and a “decisive victory” for defense lawyers. The reality is a bit more nuanced. The Court of Appeal’s fact-specific ruling was very conservative in its legal conclusions, and it’s unlikely that its holding regarding the litigation privilege is sufficient to create the right incentives for companies and their lawyers. It’s also unlikely that further judicial tinkering with the scope of the litigation privilege will resolve the problem promptly or satisfactorily. The better solution would involve a different institutional actor and a different privilege: Parliament should step in and expand the scope of the legal advice privilege to cover all communications between a company’s lawyers and the company’s current and former employees. Continue reading

India’s Futile Attempt to Root Out Sextortion Through Anticorruption Legislation

A recent series of brutal rape cases in India, which attracted international media coverage and provoked domestic protests, seems to have finally prompted India’s government to take more seriously the problem of sexual violence. For instance, India’s Parliament has created a number of new sex-related crimes—stalking, disrobing, voyeurism—and is now considering an executive order introducing the death penalty for rapists of children under the age of 12. Strikingly, even India’s new anticorruption legislation—the Prevention of Corruption (Amendment) Act, 2018 (Amendment)—tries to address the sexual violence problem as well. The Amendment, passed in July 2018, introduced a number of changes to the country’s thirty-year-old anticorruption legislation (the PCA), which criminalizes bribery involving public officials. Among the changes is an expansion of what corruption and bribery can entail, to include not just money or material goods, but also sexual favors. Previously, the PCA had defined bribery as providing a “financial or other advantage” to public officials, but in response to criticism that this language was too narrow, the Amendment replaced this phrase with the term “undue advantage,” and further specified that “undue advantage” is not restricted to those advantages that are “pecuniary” or “estimable in money.” This means that the law, while not explicitly mentioning sex, now apparently covers the offer, request, or extortion of sexual favors as something covered by the criminal prohibition on bribery of or by a public official.

On its face, expanding the scope of the anticorruption legislation to include corrupt sexual extortion, or “sextortion,” seems to be a move in the right direction. And indeed there’s a good case to be made that recognizing the extortion of sexual favors not only as a crime of sexual assault, but also as a form of public corruption, is compelling. But in fact, by implicitly treating sextortion as essentially the same as the extortion of monetary bribes, the Amendment will do little to combat sextortion as a form of corruption, and in fact is likely to do more harm than good. There are three interrelated reasons for this: Continue reading

Sometimes Motives Don’t Matter: The Establishment’s Impulse to Protect (Allegedly) Corrupt Politicians Can Create Opportunities for Criminal Justice Reform

Since 2016, Israeli Prime Minister Benjamin Netanyahu has been investigated for a number of corruption allegations (see here and here). In apparent response, David Amsalem, a member of the Knesset (Israel’s parliament) from Netanyahu’s Likud Party, has proposed several bills which, if enacted, would help to protect the Prime Minister from these investigations (see here and here). Most recently, in June 2018 Amsalem presented a bill that would change Israel’s system of criminal appeals. Currently, the prosecution can appeal criminal verdicts, including acquittals; according to Amsalem’s so-called Appeal Bill, such appeals would require an appellate court’s permission, and this permission could only be given under special circumstances, and only for crimes punishable by ten or more years in prison. Amsalem, who denied that the Appeal Bill has anything to do with the investigations of Netanyahu, claimed that he proposed this bill because “[a] moral state doesn’t have to persecute a citizen who has received a sentence too light for its taste.” However, opposition Knesset members and commentators – many of whom usually support defendant-protective reforms to criminal procedure – have harshly attacked the Appeal Bill. The critics’ main (sometimes only) argument against the Appeal Bill has been that its purpose is to prevent the prosecution from appealing a possible acquittal of Netanyahu. As Tamar Zandberg, Chair of the opposition Meretz Party put it, “[t]his [government] coalition’s obsessive preoccupation with the legal authorities to protect a prime minister immersed in investigations is a mark of Cain for Israeli democracy.”

The hostility to bills that appear to be devised specifically to protect politicians from corruption prosecutions is definitely understandable, and the wide opposition in Israel to the Appeal Bill is therefore a natural reaction. Nevertheless, this impulse should be overcome when considering bills proposing criminal justice reforms with general application, and in particular bills strengthening individual rights in the criminal process. I do not claim that the Appeal Bill should be enacted into law, and I acknowledge that there may be some legitimate reasons to oppose limitations on prosecutorial appeals. However, generally speaking, we should not refrain from supporting criminal justice reforms just because their initiators may have had bad motives. Instead, every proposal of systemic reform should be considered on its merits, and, if found justified, be enthusiastically supported, despite its tainted origin. Continue reading

Congress Should Act to Make US Aid to Ukraine Contingent on Anticorruption Reform

Since the Maidan Revolution removed former President Yanukovych from power in 2014, anticorruption progress in Ukraine has been uneven at best. Ukraine passed important anticorruption legislation in 2015, yet implementing it has been a challenge. Progress in some areas, including the judiciary and prosecutors’ offices, have met with significant and growing resistance. Many reformers within the government have resigned. For what it’s worth, Ukraine’s Corruption Perceptions Index score has only marginally improved. Still, there has been some progress. A significant portion of Ukraine’s budget is comprised of foreign aid, and donors—who have little patience for having their money stolen or wasted—have pressed the Ukrainian government to take the fight against corruption more seriously. The biggest anticorruption reforms have therefore been the ones on which large donors made their aid contingent.

The United States is one of the most important of these donors. The U.S. sends billions in loan guarantees, military aid, development aid, and State Department spending to Ukraine. During the Obama administration, anticorruption, and political reform more generally, was a high priority for the U.S. in its relationship with the post-Maidan Ukrainian government. Former Vice President Biden emphasized anticorruption during his five visits to Ukraine, and put personal pressure on President Poroshenko to follow through on his commitments in that area. Biden also played a role in delaying one billion dollars in loan guarantees to Ukraine due to corruption concerns—an approach the IMF has also embraced. But the anticorruption strings that the U.S. had attached to foreign aid in the past were imposed as a matter of executive discretion rather than legislative obligation.

Under the Trump administration, perhaps unsurprisingly, ensuring that Ukraine follows through on its anticorruption reforms has not been a foreign policy priority. No highly visible person in the current administration has taken on Biden’s conspicuous role in ensuring Kyiv follows through on its Minsk commitments. If President Trump isn’t willing to use U.S. leverage to continue to push for anticorruption efforts in Ukraine, the U.S. Congress can and should step in by putting anticorruption conditions on at least some American spending in Ukraine.  Continue reading

The Role of Judicial Oversight in DPA Regimes: Rejecting a One-Size-Fits-All Approach

In late March 2018, the Canadian government released a backgrounder entitled Remediation Agreements and Orders to Address Corporate Crime that outlines the contours of a proposed Canadian deferred prosecution agreement (DPA) regime. DPAs—also appearing in slightly different forms such as non-prosecution agreements (NPAs) or leniency agreements—are pre-indictment diversionary settlements in which offenders (almost exclusively corporations) agree to make certain factual admissions, pay fines or other penalties, and in some cases assume other obligations (such as reforming internal compliance systems or retaining an external corporate monitor), and in return the government assures the corporation that it will drop the case after a period of time (ordinarily a few years) if the conditions specified in the agreement are met. Such agreements inhabit a middle ground between declinations (where the government declines to file any charges, but where companies still might forfeit money) and plea agreements (which require guilty pleas to criminal charges filed in court).

While Canada has been flirting with the idea of introducing DPAs for over ten years, several other countries have recently adopted, or are actively considering, deferred prosecution programs. France formally added DPAs (known in France as “public interest judicial agreements”) in December 2016, and entered into its first agreement, with HSBC Private Bank Suisse SA, in November 2017. In March 2018, Singapore’s Parliament installed a DPA framework by amending its Criminal Procedure Code. And debate is underway in the Australian parliament on a bill that would introduce a DPA regime for offenses committed by corporations.

The effect of DPAs in the fight against corruption, pro and con, has been previously debated on this blog. One critical design component of any DPA regime is the degree of judicial involvement. On one end of the spectrum is the United States, where courts merely serve as repositories for agreements at the end of negotiations and have no role in weighing the terms of any deal. On the other end of the spectrum is the United Kingdom, where a judge must agree that negotiations are “in the interests of justice” while they are underway, and a judge must declare that the final terms of any DPA are “fair, reasonable, and proportionate.” British courts also play an ongoing supervisory role post-approval, with the ability to approve amendments to settlement terms, terminate agreements upon a determined breach, and close the prosecution once the term of the DPA expires.

Under Canada’s proposed system of Remediation Agreements, each agreement would require final approval from a judge, who would certify that 1) the agreement is “in the public interest” and 2) the “terms of the agreement are fair, reasonable and proportionate.” While the test used by Canadian judges appears to parallel the U.K. model—including using some identical language—the up-or-down judicial approval would occur only once negotiations have been concluded. This stands in contrast to the U.K. model mandating direct judicial involvement over the course of the negotiation process.

The decision by the Canadian government to chart a middle course on judicial oversight is all the more notable given that an initial report released by the Canadian government following a several-month public consultation regarding the introduction of DPAs appeared to endorse the U.K. approach, noting that the majority of commenters who submitted views “favoured the U.K. model, which provides for strong judicial oversight throughout the DPA process.” Moreover, commentators have generally praised the U.K. model’s greater role for judicial oversight of settlements, especially judicial scrutiny of the parties charged (or not) in any given case, the evidence (or lack thereof), and the “fairness” (or not) of any proposed deal.

Despite these positions, one should not reflexively view the judicial oversight regime outlined in Canada’s latest report as a half-measure. Perhaps the U.K. model would be better for Canada, or for many of the other countries considering the adoption or reform of the DPA mechanism. But the superiority of the U.K. approach can’t be assumed, as more judicial involvement is not categorically better. Rather than a one-size-fits-all approach favoring heightened judicial oversight, there are several factors that countries might consider when deciding on the appropriate form and degree of judicial involvement in DPA regimes: Continue reading