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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Just How Damning Are the Lava Jato Leaks? Some Preliminary Reflections on The Intercept’s Bombshell Story

[Note: My thinking on the issues discussed in this post has evolved somewhat. For the update, see here.]

Two days ago, The Intercept published a collection of dramatic reports (here, here, and here) regarding the long-running Brazilian investigation into high-level corruption. That investigation, known as the Lava Jato (Car Wash) operation, which began as in inquiry into money laundering and associated offenses at the Brazilian state-owned oil company Petrobras, has led to the prosecutions and convictions of scores of powerful business leaders and senior politicians—including, most notably, the conviction and imprisonment of former President Luiz Inacio Lula da Silva (known as Lula). That conviction prevented Lula from competing in the presidential election in 2018, an election that was one by far-right candidate Jair Bolsonaro. Anger on the Brazilian political left over Lula’s conviction, as well as the impeachment and removal of his successor Dilma Rouseff, has provoked accusations that the Lava Jato operation is really a right-wing conspiracy, and that the Lava Jato task force—the special team of prosecutors led by Deltan Dallagnol—and Sergio Moro, who presided over the most significant Lava Jato trials, including Lula’s, are politically biased enemies of the Left who are engineering a kind of coup d’etat through the judicial system. Many people, both in Brazil and internationally (me included), have pushed back against these accusations.

The Intercept’s recent reports assert that the critics were right all along. The evidence for this consists mainly of a huge quantity of data (texts, emails, and video and audio recordings) from a cell phone—almost certainly Mr. Dallagnol’s, based on the fact that all of the reported exchanges involve him. The Intercept has published a set of stories (some in English, some in Portuguese) based on a small portion of this material, mainly text message exchanges; the reporters emphasize that more is likely to emerge as they and other journalists review more of the leaked/hacked data. The big story here is that, according to the Intercept’s reporting, these text messages provide evidence of serious ethical breaches, particularly by then-Judge Moro, as well as evidence that the prosecutors knew their case against Lula was not strong, and, most damningly, that the task force prosecutors were motivated by partisan antipathy toward Lula and his party (the Worker’s Party, or PT), despite their claims to the contrary.

What to make of this? The news is clearly bad for the Lava Jato operation, the task force, and those of us who have supported the operation and defended it against various accusations and attacks. The question I want to address here is: Just how bad is it? My tentative answer is that, while the Intercept’s reports reveal some very upsetting, disappointing, and in some cases likely unethical conduct, the leaked text messages quoted in these first reports are not as damning as either the Intercept or other preliminary reports have made them appear. In this post (which will be longer than usual), I’ll try to work through the various allegations and associated texts and do my best to assess which revelations are most serious, which least so, and where we really need more evidence before making even a preliminary judgment. Continue reading

Presidential Power Grab: Corruption and Democratic Backsliding in Mongolia

Mongolian democracy is in trouble. On March 26, President Khaltmaa Battulga proposed emergency legislation that would grant the presidency unprecedented powers to dismiss members of the judiciary, the prosecutor general, and the head of the state anticorruption agency (the Independent Authority Against Corruption, or IAAC). One day later, parliament approved this legislation by a vote of 34-6 (with 36 members of parliament either absent or abstaining), despite the fact that President Battulga hails from the Democratic Party (DP) while the rival Mongolian People’s Party (MPP) controls parliament. Technically the law doesn’t grant the dismissal powers directly to the president, but rather to a three-member National Security Council (NSC) composed of the president, prime minister, and speaker of parliament, and an oversight body called the Judicial General Council. But President Battulga dominates the NSC and personally appoints the members of the Judicial General Council, giving him effective authority to remove Mongolia’s judges and chief law enforcement officials at will. Sure enough, promptly after the law was passed, Battulga dismissed the head of the IAAC, the Chief Justice of the Supreme Court, and the prosecutor general.

This new legislation, a crippling blow to Mongolian democracy, has its origins in corruption, and corruption is likely to be its effect. President Battulga induced parliament to grant him such extraordinary powers by claiming that he alone can really take on Mongolia’s severe corruption problem. In his statement to parliament introducing the new legislation, Battulga alleged that the country’s law enforcement leaders were “part of a conspiracy system” that “fabricat[ed] criminal cases with a political agenda” while covering up others. The president pointed to Mongolia’s numerous unresolved corruption scandals to argue that the institutions of justice were “serving the officials who nominated and appointed them” rather than the public, and he argued that reducing the independence of the judiciary, the prosecutorial apparatus, and the IAAC would make those institutions more responsive to the popular will to fight corruption.

President Battulga is correct when he asserts that Mongolia has a corruption problem of serious, perhaps epidemic, proportions. Mongolians regularly list corruption as one of the country’s biggest issues (second only to unemployment in a 2018 survey) and political institutions such as parliament and political parties as among the most corrupt entities. The past few years have been especially scandal-plagued. During the 2017 presidential campaign, all three candidates faced accusations of corruption; most egregiously, the MPP candidate—who, until January 2019, served as speaker of the Mongolian parliament—was caught on video discussing a plan to sell government offices in a $25 million bribery scheme. Further, late in 2018, journalists discovered that numerous politically-connected Mongolians, including somewhere from 23 to 49 of the 75 sitting members of parliament, had been treating a government program designed to provide funding for small- and medium-sized enterprises (SMEs) as a personal piggy bank, taking out over a million dollars in low-cost loans. Beyond these scandals, Mongolia’s poor enforcement record compounds its corruption problem. For example, in 2015, only 7% of cases investigated by the IAAC resulted in convictions, and in 2018 public approval of the IAAC reached an all-time low.

But is there any reason to believe that President Battulga is right that giving him greater personal control over law enforcement and the judiciary will lead to less corruption? All the evidence points to no:

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Brazil’s “Clean Slate” Law Keeps Lula Off Ballot — Now Let’s Smear His Prosecutors

Brazil’s top electoral court ruled Friday, August 5 (here), that former President Luiz Inacio Lula da Silva, now serving a 12-year sentence for accepting a bribe, cannot stand as a candidate in Brazil’s upcoming presidential elections.  “Lula,” as he is universally known, was to be the candidate of one of Brazil’s major parties, and if pre-election polls are to be believed, he stood a very good chance of winning, setting up the unusual (to say the least) situation of a head of state governing from a jail cell.  Absent a last-minute reversal by Brazil’s Supreme Court, Lula will now sit out the election in jail and the threat Brazil’s government will be run by a convict is over.

Lula’s supporters claim he is a political prisoner and is being unfairly denied the right to run for president.   In doing so, they have glossed over the extraordinary protections the Brazilian legal system has afforded him, both in his effort to overturn his conviction and to run for office.  Having failed in the courts of law, they are now trying to smear the prosecution in the court of public opinion.  A report from a well-placed source in Brazil — Continue reading

Guest Post: Should Corruption Prosecutors Tweet? The Brazilian Example

Today’s guest post is from Victor Rodrigues, a researcher at the FGV School of Law in Rio de Janeiro, Brazil:

How openly should prosecutors investigating corruption or other high-level wrongdoing be about their activities and their views on the larger public policy questions that their investigations implicate? As has been discussed on this blog before, there is a longstanding debate on this issue, and considerable variation across countries. The United States represents one approach, in which federal prosecutors are exceedingly discreet and tight-lipped. Consider the fact that Special Counsel Robert Mueller, leading the high-profile investigation into possible wrongdoing by the Trump campaign, barely speaks in public.

Brazil seems to be going in a different direction. Not only does the Brazilian Public Prosecutor’s Office have verified accounts on Facebook and Twitter, but many of the individual prosecutors are also active on social media. Perhaps the most prominent example in Brazil is Deltan Dallagnol, the federal prosecutor coordinating the Car Wash Investigation (Lava Jato). Mr. Dallagnol has used his verified account to tweet over seven thousand times, and many of his posts mention Lava Jato cases.

While we can’t know for sure what impact these tweets have had, it’s unlikely that an account with almost half a million followers would have no impact at all. I imagine that for many readers, for example, those from the United States or countries with similar traditions regarding prosecutorial (non-)communication with the public, Mr. Dallagnol’s Twitter presence might be disconcerting, perhaps troubling. But in the context of a country like Brazil, these tweets, and prosecutorial openness more generally, are likely to have a positive impact not only on specific corruption cases but also on the development of legal and democratic institutions. In particular, this widespread use of social media by Lava Jato prosecutors can have three beneficial effects:

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Guest Post: How District Attorneys Can Avoid Conflicts of Interest in Campaign Fundraising

Jennifer Rodgers, Executive Director of the Columbia University Law School’s Center for the Advancement of Public Integrity (CAPI), and Izaak Bruce, CAPI Research Fellow, contribute the following guest post:

Last fall, New York County District Attorney Cyrus Vance received quite a bit of negative press for his handling of potential cases involving some high-profile potential defendants. In one case, Vance declined to bring sexual assault charges in 2015 against Harvey Weinstein despite a detailed victim account. In another case, back in 2012, Vance ultimately decided not to criminally charge members of the Trump family for making false and misleading statements to promote one of their real estate ventures, again despite what on the surface appeared to be credible evidence of wrongdoing. Of course, prosecutors have to make difficult judgment calls all the time about what cases to bring, often based on information that outsiders do not have access to and/or are not in a good position to judge. But what made these cases so troublesome to many was the suggestion or insinuation of improper influence. The New York County DA is an elected position, and in both the Weinstein case and the Trump case, the attorneys who successfully convinced Vance not to bring charges also made hefty donations to Vance’s reelection campaign.

Vance and his supporters insist that there was no impropriety, let alone a quid pro quo, and rightly point out that DAs raise substantial campaign contributions from many attorneys. But the reports were nonetheless deeply troubling, not least because these incidents evince a more general problem. In a couple of cases, DAs have been convicted for accepting campaign contributions as bribes in exchange for favorable defendant outcomes; much more common, however, is the appearance of impropriety caused by campaign donations from individuals involved in cases before the district attorney’s office; these are problematic even if no underlying crime is proved. And of course there is always the possibility of unconscious bias when a DA makes decisions about criminal cases that involve a campaign donor, even if the DA believes his or her decision making is unaffected. Yet despite these obvious problems, there are very few legal limits on donations by individuals to district attorneys, either in New York or elsewhere. In New York, for example, campaign contributors can give a DA candidate up to the maximum amount (almost $50,000 in New York County) with no regard for whether those contributions might lead to a conflict of interest or an unconscious bias on the part of the district attorney. And there is virtually no guidance for DAs on how to handle these potential or apparent conflict-of interest issues.

To help address this problem, my organization, the Center for the Advancement of Public Integrity (CAPI) at Columbia Law School, recently released a report on DA fundraising practices. DA Vance, to his credit, specifically requested this review, which included an examination of his own campaign fundraising practices. In conducting its review, CAPI considered the donation acceptance policies of DA Vance’s campaign, and analyzed contributions to his campaigns over his three election cycles, paying particular attention to contributions from attorneys. CAPI conducted research into applicable laws, regulations, and guidance for DAs, and lawyers generally, in this area, and interviewed numerous stakeholders on the topic, including DAs, election regulators, good governance groups, and legal ethics experts, to learn from their experiences and solicit their views. After conducting this review, the report offered seven recommendations for DAs to follow to avoid actual and potential conflicts of interest and biases. While these recommendations are geared to DAs in New York, they are instructive for elected prosecutors all over the United States: Continue reading

How Transparent Should Prosecutors Be About Investigations Into High-Level Corruption?

Today’s post is going to be one of those ones where I raise a question that I’ve been puzzling over, without having much to offer in the way of good answers.

Here’s the question: How open and transparent with the public should the officials investigating serious allegations of high-level corruption be about the progress of their investigations?

To be sure, no competent investigator or prosecutor would or should be completely transparent, as doing so might well tip off the targets of the investigation to what the investigators know, their investigative and legal strategies, and so forth. But even with that constraint, there’s a fairly broad range of options. Investigators could be absolutely tight-lipped about everything. Or they could hold regular press conferences covering significant developments in the case (and perhaps even going further to comment on the larger issues that the investigation implicates). Or something in between.

I was prompted to think more about this question in part by an exchange I had with Jose Ugaz at last month’s Harvard conference on Populist Plutocrats. I was asking Mr. Ugaz about his experience serving as Peru’s Ad Hoc State Attorney investigating and prosecuting high-level corruption in the Fujimori regime, and in particular how he dealt with concerns that his investigation might be perceived as politicized. Those who are interested can watch the video of our exchange (which starts around 7:15:55), but the key part of Mr. Ugaz’s response (slightly edited for clarity) ran as follows: Continue reading