Tag Archives: prosecution

Jailing Peru’s Presidents: Why Peru’s Recent Crackdown Isn’t Curbing Corruption

Posted on by
Reply

Peru’s specially made prison for housing disgraced former presidents is full. With an official capacity of two, last year’s extradition of ex-President Pedro Castillo from the United States forced the Barbadillo prison to expand to include three former presidents. The number dropped back down to two following a presidential pardon for ex-President Alberto Fujimori, who passed away shortly after his release. The current prison population is not an anomaly: seven of the eight Peruvian presidents since 1990 are either in jail, have been in jail, or have faced a detention order. Each of them faced corruption charges for graft during their tenure as a public official.

The fact that so many ex-presidents have been incarcerated might be taken as a sign of progress. As Rosa María Palacios, a Peruvian lawyer and political commentator, wryly observed, “In Latin America, people envy us. Many people abroad say: ‘At least you get them in jail.’” Yet despite the fact that Peru has engaged in a crackdown on presidential corruption that is unparalleled among Latin American countries, Peru’s current president is under investigation for “illicit enrichment,” Peru’s ranking on the Corruption Perceptions Index (CPI) remains low, and 81% of Peruvian citizens believing that corruption has increased in the past five years. 

Of course, nobody expects that prosecuting high-level government officials, even presidents, will solve the corruption problem. But one might expect that demonstrating a willingness to do what so many other systems will not do—go after the most powerful political figures in the country—would at least create a sense of optimism and momentum in the anticorruption fight. Yet this does not seem to have happened in Peru. Why not?

Continue reading →

The More You Know About Chief Prosecutors, the Less You Trust Their Office?

Posted on by
Reply

Prosecuting elected officials for corruption is often an uphill battle. The power and resources of the defendants, combined with the general difficulty of proving corrupt deeds (which usually happen behind closed doors), make it difficult to secure convictions. Moreover, prosecutors who bring charges against elected officials frequently face accusations that the decision to prosecute was politically motivated or biased. Such accusations, which are often fueled by the politicians themselves, have potential grave consequences. Not only can they result in public distrust in particular criminal proceedings against politicians, but also—and perhaps more importantly—these accusations can undermine the legitimacy of the legal system more broadly.

Some public criticism—fair or unfair—of prosecutors is inevitable. However, prosecutors can (and should) try to minimize the harmful effects such criticism might have on the overall legitimacy of the institutions of justice. How can they do so? In a recent and highly recommended article, Ori Aronson, Julia Elad-Strenger, Thomas Kessler, and Yuval Feldman suggest that one way prosecutors can increase the perception that their offices and investigations are objective and unbiased is by refraining from highlighting the personal traits or biographical details of the individuals who lead those offices. To use the jargon of the authors, “non-personalization” of prosecutors’ offices is superior to their “personalization,” at least in terms of offices’ perceived objectivity. The authors base this conclusion on a series of experiments involving reactions to decisions made by Israel’s head of prosecution—former Attorney General Avichai Mandelblit—concerning the corruption allegations against Prime Minister Benjamin Netanyahu (a topic that was featured on the blog numerous times; see, for example, here, here, and here).

Continue reading →

Can Argentina Prosecute its Leaders Without Dragging Down its Democracy?

Posted on by
5

Prosecuting a former leader for corruption is no easy task, but it is one that a lot of countries have had to undertake. In fact, since 1980, roughly half of the world’s nations have seen their former leaders jailed or prosecuted. The vast majority of those cases involved corruption charges.

Argentina has been in this situation quite a few times. Most recently, Cristina Fernández de Kirchner—the country’s ex-president and current vice-president—has been standing trial for having allegedly diverted state funds to a friend through fraudulent public works contracts. This seems like a victory for rule of law. But with the divisiveness and instability that the process has caused, it’s not clear whether the prosecution of Kirchner has done more good than harm. Because this is probably not the last corruption case that Argentinian authorities will bring against a former leader, enforcers should learn from the problems that have arisen from the Kirchner investigation.

Continue reading →

Cleaning up Corruption in Lebanon’s Central Bank

Posted on by
Reply

Riad Salameh, the governor of Lebanon’s Central Bank (the Banque du Liban, or BdL), was once hailed as a “financial wizard” for his stewardship of the Lebanese banking system. But a flurry of recent investigations, led mainly by French and Swiss prosecutors, have implicated Salameh in a variety of corruption schemes. These investigations found, among other things, that Salameh illicitly moved over $300 million of public funds from the BdL into his brother’s company, Forry Associates, between 2002 and 2015 and that Salameh laundered millions in Europe through luxury real-estate purchases. And in March 2022, after Swiss prosecutors asked Lebanese authorities to carry out a separate investigation into embezzlement and money laundering by Salameh and his associates, a Lebanese district court judge charged Salameh and his brother with illegal enrichment and money laundering.

Though Salameh denies all allegations, many Lebanese citizens consider the accusations against him unsurprising. Indeed, if anything is surprising about the case against Salameh, it’s that he is being prosecuted in Lebanese courts. Government elites in Lebanon—including the BdL’s leaders—have long benefited from a culture of impunity. It is encouraging to see Lebanese prosecutors and courts taking steps to hold corrupt actors at the BdL accountable. But cleaning up the BdL, and ensuring that in the future cases like Salameh’s are detected early or prevented altogether, will also require more structural reforms to address the institutional and regulatory problems at the BdL that have enabled such corrupt practices. Three reforms to the BdL are especially important:

Continue reading →

Guest Post: Sierra Leone’s Tenuous and Incomplete Anticorruption Campaign

Posted on by
2

Felix Marco Conteh, an independent research consultant based in Sierra Leone, contributes the following guest post:

Sierra Leone has a serious corruption problem. And while the importance of fighting corruption unites Sierra Leoneans—who tend to blame corruption for all the country’s socio-economic and political challenges—the citizens of this intensely polarized country remain divided on how to do so. The country seems to have fallen into a pattern in which each new administration pledges to tackle corruption, but adopts strategies that are aimed more at appealing to domestic and international constituencies in the short-term, rather than lay a foundation for longer-term success. The new administrations’ short-term strategies too often involve criminalizing politics in a way that appears to target the political opposition, contributing to deeper polarization and instability. Continue reading →

New Working Paper on Anticorruption Reform in U.S. History

Posted on by
2

Endemic public corruption in developing and transition countries often seems intractable. Yet most countries that are currently perceived as having relatively high levels of public integrity–places like Sweden, Denmark, the United Kingdom, and the United States–were, at an earlier point in their history, afflicted with pervasive corruption similar to what one finds throughout the developing world today. Considering the history these countries may therefore make a valuable contribution to modern debates about anticorruption reform—not so much by providing simple lessons about what policies to adopt, but by offering a broader sense of how the complex process of anticorruption reform unfolds over time, and by calling into question certain widely-held beliefs about this process.

A couple years back, after attending a fascinating presentation by Mariano-Florentino Cuellar (a Justice of the California Supreme Court who somehow manages to continue to hold down his former day job as a professor at Stanford Law School), I became particularly interested in the history of my own country, the United States, in the late nineteenth and early twentieth century. The challenges facing anticorruption reformers in the United States during this period bear a striking resemblance to the challenges facing reformers in modern-day democracies in the developing world. Indeed, the United States is a particularly interesting case study because, in contrast to most of the other Western democracies that are currently perceived as having low corruption, the United States established political democracy well before it embarked on significant “good government” reforms.

Justice Cuellar graciously agreed to collaborate with me, and we finally have a draft paper entitled “Taming Systemic Corruption: The American Experience and its Implications for Contemporary Debates.” The draft now available on SSRN here, and is also available as part of the University of Gothenburg Quality of Government (QoG) Institute’s working paper series. Our article, which focuses principally on the period between 1865 and 1941, does not purport to reach firm conclusions about the reasons that the U.S. struggle against systemic corruption ultimately succeeded—let alone to draw facile “lessons” about “what works.” But we do find that the U.S. experience calls into question a number of commonly-held views about the struggle against corruption in modern developing countries: Continue reading →

Canada’s SNC-Lavalin Scandal: Why Prime Minister Trudeau Was Wrong To Interfere, Even Though He Was Right on the Merits

Posted on by
3

This past year, Canadian Prime Minister Justin Trudeau has been embroiled in allegations that he improperly intervened in one of Canada’s biggest-ever foreign bribery prosecutions. That prosecution, of the Canadian construction firm SNC-Lavalin, began back in 2015, when the Royal Canadian Mounted Police (RCMP) and the Public Prosecution Service of Canada (PPSC) announced they would be bringing charges against the firm for paying approximately CA$48 million in bribes to Libyan government officials to win contracts, and for related misconduct including the defrauding of Libyan companies. This past February, the Globe and Mail reported that Prime Minister Trudeau and his closest advisors had inappropriately attempted to influence the SNC-Lavalin prosecution, and a subsequent inquiry by the Ethics Commissioner found that Trudeau had indeed acted unethically in attempting to influence key prosecutorial decisions that are supposed to be made by the Attorney General. The scandal had political consequences: although Prime Minister Trudeau and his Liberal Party managed to hang on to a minority government in October’s elections, the Liberal Party lost 27 seats and the popular vote.

The specific prosecutorial decision that Prime Minister Trudeau attempted to influence concerned whether the government should negotiate a deferred prosecution agreement (DPA) with SNC-Lavalin. A DPA is a settlement in which the defendant agrees to penalties or other remedial measures, and in return the government agrees to suspend the prosecution, and eventually drop the charges if after an agreed period of time the defendant has complied with the terms of the agreement. A DPA is similar to a plea bargain, but it does not require the defendant to plead guilty, and so avoids imposing on the defendant the stigma and collateral consequences of a criminal conviction. The prosecutor who brought the charges denied SNC-Lavalin’s request for a DPA in late 2018, and the acting Attorney General, Jody Wilson-Raybould, declined to overrule that decision. The Attorney General’s decision is supposed to be final on such matters. Nonetheless, Ms. Wilson-Raybould claims she fielded ten phone calls from the Prime Minister’s office, and was invited in for ten in-person meetings with the Prime Minister and his advisors, regarding this decision—and that the Prime Minister was pushing her to pursue a DPA with SNC-Lavalin. Ms. Wilson-Raybould refused to reconsider her stance on the matter, and shortly afterwards she was removed from her position as Attorney General and named instead Head of Veteran Affairs. In the end, the interference was exposed, the pressure failed, and, unless there’s some other unexpected turn of events, SNC-Lavalin will be going to trial.

This affair raises two questions: First, was Prime Minister Trudeau correct that the prosecutors should negotiate a DPA in this case? Second, if the answer to the first question is yes, was it appropriate for the Prime Minister to press his Attorney General to pursue that approach? My answer is yes to the first question, but no to the second. On the one hand, Prime Minister Trudeau was correct, and Acting Attorney General Wilson-Raybould was incorrect, about the appropriateness of a DPA in this case. However, the principle of prosecutorial independence from political influence—especially in corruption cases—is far more important, and the Prime Minister should never have compromised this core value even if he was right on the merits of this individual decision. Continue reading →

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

Posted on by
1

“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:

Continue reading →

Where Should U.S. State Governments Put Their Anticorruption Agencies?

Posted on by
Reply

As other contributors on this blog have argued, U.S. states should assume a greater role in investigating and prosecuting corruption crimes, rather than leaving anticorruption enforcement efforts entirely to the federal government. But the call for a greater state role in anticorruption naturally invites a follow-up question: which office or unit within the state government should have principal responsibility for anticorruption? For starters, should the state have a specialized unit dedicated to investigating or prosecuting corruption crimes? And if so, where within the state government should that unit be located?

There are a range of potential answers to these questions. A 50-state survey from the Center for the Advancement of Public Integrity (CAPI) finds that although the vast majority of states have some kind of anticorruption commission, roughly half have no specialized anticorruption unit dedicated to investigating or prosecuting corruption crimes. States that do have such units house them in one of three places: (1) the state attorney general’s office, (2) local prosecutors’ offices, or (3) the state police.

State Unit Dedicated to Prosecuting Corruption?

Source: Center for the Advancement of Public Integrity at Columbia Law School

Having a specialized unit to prosecute corruption promotes the development of the expertise critical to successfully prosecuting corruption cases. Maintaining specialized anticorruption units also ensures resources are dedicated specifically to combating corruption, fosters norms of (and a reputation for) impartiality, and enhances deterrence by increasing officials’ perception that they’ll get caught if they do something wrong. But where a specialized anticorruption unit is located within state government affects the degree to which these benefits will be realized. In this respect, the three models of current state practice, as discussed in the CAPI survey and illustrated in the above map, differ along two dimensions: (1) the level of government (state or local); and (2) the nature of the law enforcement agency (prosecutors or police). An examination of both dimensions indicates that state-level prosecutors—state attorneys general—are best-equipped to house specialized anticorruption units.

Continue reading →

AMLO Cannot Put a “Final Period” in Mexico’s History of Corruption Without Addressing the Past

Posted on by
8

The trial and conviction of the notorious drug lord “El Chapo” has shed new light on the rampant corruption that exists at even the highest levels of the Mexican government. To take just a couple of the most startling examples: During the trial, a witness testified that Mexico’s former president Enrique Peña Nieto accepted a $100 million bribe from El Chapo, while another cartel member testified that he paid at least $3 million dollars to the Public Security Secretary of former president Felipe Calderon and at least $6 million dollars to President Calderon’s head of police. In other countries these accusations would have shaken citizens to their very core. But in Mexico, long perceived as one of the world’s most corrupt countries, citizens have sadly grown accustomed to allegations of this nature, and the revelations from the El Chapo trial were met with little more than a shrug.

That doesn’t mean that Mexicans don’t care about corruption. Quite the opposite. Indeed, frustration at this flagrant culture of corruption was one of the key factors that helped Mexico’s new president, Andrés Manuel López Obrador (AMLO), to capture his constituents’ faith and votes. AMLO has promised to eradicate corruption through a “Fourth Transformation” of Mexico (the previous three were Mexico’s independence from Spain, the liberal reforms of the 1850s, and the 1910-1917 revolution). Yet despite these sweeping promises, AMLO has decided not to investigate the allegations against his predecessors that have emerged in the El Chapo trial. In fact, AMLO’s stance has been not to prosecute any officials for corruption that took place in the past, before he took office. (AMLO has wavered on this position—though only slightly—after receiving backlash during his campaign; he has since stated he would prosecute past corruption offenses only if the administration has no choice due to “internal pressure” from citizens.) AMLO has justified his opposition to investigations and prosecutions of past corruption crimes by using the language suggesting the need for a fresh start. He speaks of a need to put a “final period” on Mexico’s history of corruption, and to “start over” by not focusing the past.

But how can one eradicate corruption by granting numerous “Get Out of Jail Free” cards? AMLO’s support of a de facto amnesty for corrupt ex-Mexican officials’ casts doubt on the seriousness of his pledge to eradicate corruption. Rather than simply saying that it’s time to turn over a new leaf, AMLO should demand accountability for grand corruption, and he should start by ordering a full independent investigation into the veracity of the corruption allegations that came to light during the El Chapo trial. Continue reading →