In the Philippines, as in many other countries, ghost employee fraud is a perennial public corruption problem. Ghost employees are people who are listed on an organization’s payroll but who do not actually work there. (In some cases the ghost employees are entirely fictitious; in other cases, they are real people who do not work at the organization but are included on the payroll—sometimes with their knowledge, and sometimes without.) The corrupt managers of agencies or departments will falsify payroll records to authorize the issuance of paychecks to the ghost employees, while these managers and their accomplices pocket the money that is supposed to pay the ghost employees’ salaries. The scale of ghost employee fraud can be staggering. In the Philippines, senior government officials—particularly at the local level—have used such schemes to siphon millions of pesos from government institutions. Indeed, back in 2016, when current President Rodrigo Duterte was the mayor of Davao, he was credibly accused of pocketing around ₱708 million through the hiring of 11,000 ghost employees. This is just one out of many cases of ghost employee fraud haunting the country (see, for example, here, here, and here). Despite the scope and scale of the problem, the Philippine government has taken no proactive steps to address it. This must change. Though the problem is serious and widespread, there are a number of things the government could do:
As numerous observers have noted, in far too many countries the response to the COVID-19 pandemic has been hampered by widespread corruption, particularly in government procurement of medical supplies and other equipment (see, for example, here and here). As the pandemic finally recedes, it is useful to take stock of lessons learned and to implement reforms to emergency procurement procedures that will help mitigate these problems in future emergency situations.
One country where it is particularly important to address emergency procurement deficiencies exposed by COVID is the Philippines, which was mired in corruption scandals from the earliest days of the pandemic. Perhaps the highest profile COVID-19 procurement scandal—though hardly the only one—is the so-called Pharmally scandal. Over 2020-2021, the government of the Philippines entered into a string of multi-billion peso contracts with a company called Pharmally Pharmaceuticals, despite the fact that Pharmally is a small firm that was incorporated only in 2019 and lacked the funds, experience, and credibility to handle major government contracts. It was later revealed that Pharmally has direct ties with Chinese businessman Michael Yang, a close friend and former advisor of President Rodrigo Duterte. While direct corruption in this case has not yet been proven, the circumstances are extremely suspicious. And this is just one high-profile example of questionable COVID-related procurement deals. Speaking more generally, it is quite likely that widespread corruption contributed to the Philippines’ abysmal COVID-19 response (see, for example, here and here). Before the next crisis hits, it is essential that the Philippines learn how to better insulate its emergency procurement system from corruption risks. This is not to say that the procurement rules that apply in ordinary situations—including the usual transparency and integrity safeguards—must apply with full force during emergencies. In states of emergency, acting quickly can make the difference between life and death, and so it is reasonable to alter or relax public procurement rules to some extent, even if this raises the risks of corruption and other problems. But it is possible to design procurement systems so as to limit the ability of corrupt actors to take advantage of emergency procurement rules to enrich themselves. In the Philippines, the experience with corruption during the COVID-19 pandemic suggests the following reforms—influenced by international best practices but tailored to the Philippines’ particular context—to clean up the country’s flawed emergency procurement system:
My post last week expressed some dismay at the political situation in Brazil, and the role that understandable disgust at widespread corruption in the left-wing Worker’s Party (PT), which controlled the presidency from 2003 to 2016, seems to be playing in contributing to the astonishing electoral success of far-right candidate Jair Bolsonaro. Bolsonaro—whose extremist views, history of bigotry, violent rhetoric, and admiration for autocrats has led some to label him, with justification, as a quasi-fascist—was the top vote-getter in the first round of Brazilian’s two-round presidential election system, and he is favored to win the run-off against PT candidate Fernando Haddad on October 28. Though I’m no expert on Brazil or its politics, this situation—voter revulsion at the corruption of the mainstream parties leading to the rise of a tough-talking extremist—is distressingly familiar. It’s a pattern we’ve seen play out in several countries now, usually with quite unfortunate consequences. So, much as I believe that corruption is a serious problem, and tend to support aggressive anticorruption efforts—including the so-called Car Wash (Lava Jato) investigations in Brazil—I used my last post to express my dismay that anticorruption sentiments might propel someone like Bolsonaro to victory. Some things, I argued, are more important than corruption.
The post seems to have touched a nerve—I’ve gotten far more feedback on that post (some in the public comments section, some in private communications) than anything else I’ve written in the four and half years I’ve been blogging about corruption. While some of the comments have been the sort of substance-free invective one gets used to on the internet, a lot of people have provided useful, thoughtful, constructive criticism and pushback of various kinds. So I thought that perhaps it would be worth doing another post on this general topic, and connecting my thoughts about the current Brazilian political situation to some more general themes or problems that those of us who work on anticorruption need to confront, whether or not we have any particular interest in Brazil. Continue reading
In December 2017, a civil society organization that aligns itself with Philippine President Rodrigo Duterte made good on its threat to submit an impeachment complaint against Conchita Carpio Morales, head of the Philippines’ independent anticorruption agency (ACA), known as the Office of the Ombudsman. This came after President Duterte himself called for the impeachment of Ombudsman Morales, publicly accusing her of engaging in “selective justice” and of being part of a “conspiracy” to oust him. Notably, President Duterte leveled these accusations at a time when the Office of the Ombudsman had opened an investigation into the Duterte family’s alleged hidden wealth, and into a multi-billion peso illegal drug trafficking case that implicates President Duterte’s son. This is hardly a unique case. In Nigeria, Nepal and Ukraine, among other places, conflicts between politicians and ACA heads have resulted in the latter’s actual or threatened removal.
Unfortunately, most countries place the decision whether to remove an ACA head in the hands of their politicians (see here and here). The Chief Executive often plays a key role in removals—sometimes on his or her sole authority (as in Afghanistan, Brazil, Botswana, South Korea, Mexico, Singapore, and Tanzania), or in conjunction with the legislature (as in Uganda and Lithuania) or a judicial body (as in Ghana and Kenya). In most other cases, the power of removal is exercised by parliament or any of its members or ministers, often through an “impeachment” process of some kind. Only Barbados, Bangladesh, and Yemen have removal procedures for ACA heads that are strictly and purely judicial in nature.
While there are, at present, no universally-accepted standards against which ACAs are measured, the non-binding 2012 Jakarta Statement on Principles for Anti-Corruption Agencies lays out principles for states to follow in establishing or maintaining effective ACAs. The Jakarta Statement’s position on appropriate procedures for removing an ACA head may be influential in shaping how at least some countries address this issue. And because the Jakarta Statement is currently being revisited (see here and here), now is an opportune time to consider revising its provision regarding the removal of ACA heads.
“Populism” has been defined in many different ways, but the context in which the term is most frequently used today aligns with the definition proposed by Cas Mudde in The Populist Zeitgeist: “an ideology that considers society to be ultimately separated into two homogeneous and antagonistic groups, ‘the pure people’ versus ‘the corrupt elite.’” This formulation certainly captures the political style of the leaders discussed at last month’s Harvard Law School conference on “Populist Plutocrats: Lessons from Around the World,” including Silvio Berlusconi in Italy, Thaksin Shinawatra in Thailand, Joseph Estrada in the Philippines, and (perhaps to a somewhat lesser extent) Alberto Fujimori in Peru and Jacob Zuma in South Africa. And it certainly captures the rhetoric of Donald Trump.
A couple of previous posts have provided an overview of the Populist Plutocrats conference agenda and information about the video recording (see here, here and here). In this post, I want to use the conference discussions as a jumping-off point for thinking more generally about how populism relates to systemic corruption—both as a consequence and as a cause.
Can corrupt leaders enact effective anticorruption reform? The brief answer seems to be yes: Leaders who are (perceived as) corrupt can initiate and support effective anticorruption reform efforts. For example, as this blog has previously discussed, President Peña-Nieto (who has repeatedly been accused of corruption and graft) supported constitutional anticorruption reforms in Mexico. Egypt’s current President, Abdel Fattah al-Sisi, has similarly launched various anticorruption campaigns, even while fending off numerous corruption allegations.
But why do corrupt leaders institute anticorruption reforms? While there’s no universal explanation, there appear to be at least three archetypes that might help anticorruption activists identify and push unlikely reformers: The Power Player, The Top-Down Director, and The Born-Again Reformer. Continue reading
OK, “best of times” and “worst of times” would be a gross exaggeration. But still, when I consider recent developments in the fight against corruption in Latin American and Southeast Asia, it seems that these two regions are moving in quite different directions. And the directions are a bit surprising, at least to me.
If you’d asked me two years ago (say, in the summer of 2014) which of these two regions provoked more optimism, I would have said Southeast Asia. After all, Southeast Asia was home to two jurisdictions with “model” anticorruption agencies (ACAs)—Singapore and Hong Kong—and other countries in the regions, including Malaysia and especially Indonesia, had established their own ACAs, which had developed good reputations for independence and effectiveness. Thailand and the Philippines were more of a mixed bag, with revelations of severe high-level corruption scandals (the rice pledging fiasco in Thailand and the pork barrel scam in the Philippines), but there were signs of progress in both of those countries too. More controversially, in Thailand the 2014 military coup was welcomed by many in the anticorruption community, who thought that the military would clean up the systemic corruption associated with the populist administrations of Thaksin Shinawatra and his successor (and sister) Yingluck Shinawatra—and then turn power back over to the civilian government, as the military had done in the past. And in the Philippines, public outrage at the brazenness of the pork barrel scam, stoked by social media, and public support for the Philippines’ increasingly aggressive ACA (the Office of the Ombudsman), was cause for hope that public opinion was finally turning more decisively against the pervasive mix of patronage and corruption that had long afflicted Philippine democracy. True, the region was still home to some of the countries were corruption remained pervasive and signs of progress were scant (such as Vietnam, Laos, Cambodia, and Myanmar), but overall, the region-wide story seemed fairly positive—especially compared to Latin America where, aside from the usual bright spots (Chile, Uruguay, and to a somewhat lesser extent Costa Rica), there seemed to be precious little for anticorruption advocates to celebrate.
But now, in the summer of 2016, things look quite a bit different. In Southeast Asia, the optimism I felt two years ago has turned to worry bordering on despair, while in Latin America, things are actually starting to look up, at least in some countries. I don’t want to over-generalize: Every country’s situation is unique, and too complicated to reduce to a simple better/worse assessment. I’m also well aware that “regional trends” are often artificial constructs with limited usefulness for serious analysis. But still, I thought it might be worthwhile to step back and compare these two regions, and explain why I’m so depressed about Southeast Asia and so cautiously optimistic about Latin America at the moment.
I’ll start with the sources of my Southeast Asian pessimism, highlighting the jurisdictions that have me most worried: Continue reading
Last week, the Philippines elected the highly controversial Davao City Mayor Rodrigo Duterte as President of the Philippines. Duterte, who has built up a reputation as a political outsider who will challenge the traditional elite, had been the front-runner for several months, and on May 9th swept his competition with nearly twice as many votes as his closest competitors. In a previous post, I described Duterte’s zero-tolerance approach toward fighting corruption. Unlike his predecessor, President Noynoy Aquino, who himself ran on an anticorruption platform, Duterte has advocated for policies based in discipline and violence. He has threatened to bring back the death penalty for the crime of plunder or even to kill violators himself. (Indeed, Duterte has already admitted to killing criminals in the past). Duterte and his supporters acknowledge that his approach disregards due process and rule of law, which they argue is necessary because of how widespread corruption has become in Philippine government.
Since my last post, Duterte’s notoriety has only grown. In mid-April, Duterte became the subject of international scrutiny when footage from a campaign rally was released that showed him joking about the gang rape of Australian missionary. The real tragedy, Duterte said, was that he had not gotten to the beautiful woman first. His remarks drew criticism from his opponents and the Australian ambassador, and some expressed concern that Duterte’s brazen attitude would threaten relationships with foreign nations. A recent sketch by John Oliver detailed these horrifying remarks, as well as Duterte’s homophobic and bizarre comments while officiating at a mass wedding, when he publicly offered himself as a gift to all of the brides present.
Remarkably, and to the shock of most other countries, Duterte succeeded despite scandal and protest, and in a couple months he will assume office as the next President of the Philippines. What does his victory reveal about the Philippines’ experience with corruption? In the wake of what I view as an extremely troubling electoral result, here are some initial thoughts:
The life of Rodrigo Duterte, mayor of Davao City in the southern Philippines, reads more like that of a mob boss than a mayor. The National Bureau of Investigation (NBI) has investigated Duterte for his alleged links to a vigilante group called the Davao Death Squad (ties he later admitted), as well as threats made to kill village chiefs who did not support his government programs. He has expressed his support for extrajudicial killings as a means to fight corruption and crime. And in case you don’t think he’s serious, suspects have turned up dead after Duterte issued an ultimatum to all drug dealers to either leave his city within 48 hours or be killed. The man is rumored to have pushed a drug dealer out of a moving helicopter, and has openly stated that he would like to kill all criminals himself and throw them into Manila Bay. The most terrifying thing about him? He’s running for President, and he’s winning.
Duterte’s success can be explained by a number of factors, but one of the most troubling reasons for his popularity is that Filipinos have become so disillusioned by corruption in politics that they’ve become attracted to dangerous, zero tolerance policies. Duterte has stated that he would like to bring back the death penalty for the crime of plunder, and while he back-pedaled on his support for extrajudicial killings in the last presidential debate, Duterte still admits to having killed in the past, with a new ominous and unclear caveat: “It’s always bloody, but I never said extrajudicial.”
The popularity of these extreme policies reflects how frustrated citizens are with corruption in the Philippines. Corruption is incredibly widespread, and plagues the country’s politics, courts, and police forces at the local and national levels. Many voters view Duterte’s approach as necessary to combat this immense problem, which persists despite years of promises from many so-called anticorruption candidates.
While I understand this frustration with Philippine corruption, Duterte’s zero-tolerance approach is short-sighted, misguided, and incredibly dangerous. As voters prepare for the election next month, they should consider the troubling implications of Duterte’s violent approach to the fight against corruption.