Tag Archives: Romania

Castles of Corruption

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Owning a castle has never been easier. In 2017, Italy’s State Property Agency made international headlines by announcing that the country would be giving away over a hundred castles for free. The only catch? Takers must promise to restore the dilapidated structures and turn them into tourist sites. (The program builds on an existing initiative in which the Agency gives historical federally-owned properties to local authorities for restoration.) At first glance, this program looks like a win for everyone. The Italian federal government no longer has to deal with crumbling historic castles, the properties will be cleaned up and made available to tourists, and lucky entrepreneurs and local governments can reap the profits. Unfortunately, however, there are reasons to worry that this program, like so many other castle restoration initiatives, will end up sapped by corruption, money laundering, collusion, and nepotism.

 Corruption and related malfeasance is quite common in the context of castle ownership and restoration. This is not all that surprising, given that corruption is a perennial issue within the construction industry as a whole. All of the usual problems in that sector—including bribery in the bidding process, collusion to funnel work to friends and family, embezzlement, and the substitution of substandard materials—apply in the specific context of castle restoration. On top of that, real estate has long been a favorite of those involved in money laundering due to the lower scrutiny that real property transactions receive, at least in comparison to stock or other commodities. But in addition to these familiar risk factors, castle restoration projects have several additional distinctive features that make them even more vulnerable to corruption than comparable construction projects and real estate transactions:

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Brussels v. Bucharest: The Kövesi Case and the Future of EU Anticorruption Policy

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Last week Matthew suggested that the Romanian government’s fierce opposition to Ms. Laura Cordruta Kövesi’s candidacy to head the European Public Prosecutors’ Office is a good reason why she should be chosen.  Ms. Kövesi led Romania’s anticorruption agency, the Direcţia Naţională Anticorupţie (DNA), until fired last July for what many observers believe was her refusal to back-off prosecuting senior members of the ruling party.  That her own government, one of Europe’s more corrupt, so opposes her, Matthew argued, is a sign that it knows, and fears, how effective she would be as Europe’s chief prosecutor.

In today’s guest post, Alina Mungiu-Pippidi offers a different perspective  – on why Ms. Kövesi is a candidate for the position and her government’s opposition to her selection and goes on to explain how the controversy arises from the European Union’s ham-handed intervention into Romanian politics, an intervention that has set back the country’s fight against corruption.  Professor Mungiu-Pippidi spear-headed several widely-praised anticorruption movements in Romania before becoming director of the European Research Centre for Anticorruption and State-Building and Professor at Berlin’s Hertie School of Governance. She is the author most recently of The Quest for Good Governance: How Societies Build Control of Corruption. Cambridge University Press will soon release her Europe’s Burden: Promoting Good Governance across Borders.

The Western media obsessed over Laura Codruta’s Kövesi’s firing as chief of the Romanian anticorruption agency at the demand of the Romania’s Justice Minister. It is again obsessing about her now that she is the European Parliament’s candidate for the job of European Public Prosecutor (EPP). That institution was recently created at the instance of another Romanian, former Justice Minister Monica Macovei, currently an independent Member of European Parliament who, as Romanian Justice Minister, first appointed Ms. Kövesi. Having fired Ms. Kövesi, the Romanian government is now attacking her candidacy, publicizing allegations of misconduct while she ran the agency and calling for her to be questioned about them at precisely the time she is scheduled to appear before the European Parliament on her nomination.

Whether the European Union needs a new, union-wide public prosecution office is itself open to debate. Ms. Kövesi’s selection as one of three finalists to head the office is even more questionable.  It appears to be Europe’s way of taking revenge on the Romanian government for firing her.  Continue reading →

The Romanian Government Opposes the Appointment of Laura Codruta Kovesi as European Public Prosecutor. That’s Why She Should Get the Job.

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There’s so much bad news in the anticorruption world these days that it’s hard to keep up. But I’ve recently been reading up on the ongoing debates in Europe over the selection of the first European Public Prosecutor, and I think this issue deserves some discussion, and even more attention from the anticorruption community in Europe and around the world.

Here’s the quick background for those who aren’t familiar with this issue: Back in 2017, 20 EU Member States agreed to create a new institution called the European Public Prosecutor’s Office (EPPO), headed by a European Public Prosecutor, with authority to investigate and prosecute (in national courts) offenses connected to the EU’s financial interests, such as fraud or embezzlement involving EU funds. (22 EU countries have now agreed to participate in the EPPO system.) The EPPO is scheduled to begin operations in late 2020 or early 2021, and the EU is in the process of selecting the first EPPO head. The three finalists are a Jean-Francois Bohnert of France, Andres Ritter of Germany, and Laura Corduta Kovesi from Romania. Ms. Kovesi had been considered a frontrunner, and still might secure the post, but her candidacy is under attack from her own government. Indeed, it seems that intense lobbying against her by the Romanian government is what led the Committee of Permanent Representatives in the European Union to back Bohnert for the job, though the European Parliament’s Committee on Civil Liberties, Justice, and Home Affairs voted to support Kovesi. The selection process is still ongoing, and it’s not clear when a final decision will be made. For those getting cold feet about Kovesi, though, it seems that the opposition of her home government is a significant reason.

In my view that’s not only wrong, but backwards. The Romanian government’s no-holds-barred, all-out attack on Kovesi is one of the best arguments for appointing her. I don’t know enough about the candidates to have a considered view of which of them, all else equal, would do the best job heading the EPPO, but assuming that they are all basically well-qualified, the Romanian ruling party’s panic over the prospect that Kovesi might get the job is exactly why she should be appointed, for two reasons:

  • First, the fact that government of one of the most corrupt countries in the EU—one with the greatest theft and misappropriation of EU funds—is terrified that Kovesi might get the job, but apparently fine with either of the other two choices, is strong evidence that she’ll be more effective. After all, if we were selecting the city police chief, and we found out that the local mafia boss strongly objected to candidate A, but was fine with candidates B and C, that seems like a point in candidate A’s favor, not a strike against her. (And if you think it’s unfair to compare the government of an EU member state to an organized crime family, well, read on.)
  • Second, the Romanian government is conducting a fairly blatant attempt to misuse its justice system in order to interfere with an EU decision process, in the context of a corrupt and increasingly illiberal ruling party. The EU is already struggling to deal with backsliding in Hungary and Poland, and it needs to show that it won’t be bullied or manipulated, and that if Member States want to be treated as good EU citizens, they need to comport with basic norms.

Now, given that I just made those statements with what sounds like great confidence, and the rest of this post may adopt a similarly confident tone, I should immediately add the caveat that I am not an expert on Romania, I’ve never been there, I don’t speak the language, and all I know about the situation, as the old saying goes, is what I read in the papers. So if you want to say I don’t know what I’m talking about, fair enough, you have a point. But I’ve been reading a lot about this, and what I’ve read seems both sufficiently scary, and sufficiently clear, to merit comment. Moreover, I think the Romanian government’s strategy relies in part on non-experts feeling like they don’t really understand what’s going on, so that it starts to feel like that, in the face of conflicting narratives (a sort of he said/she said), it’s best just to avoid controversy by supporting a “safe” choice for EPPO head. We’ve got to resist that impulse. Appointing someone other than Kovesi may seem like the safe choice, but that’s exactly why Kovesi is the right choice. Continue reading →

Giuliani’s Inappropriate Letter to Romania’s President Will Harm Anticorruption Efforts

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Romania has long been considered one of the most corrupt countries in the European Union, but in recent years it has been making a concerted effort to bolster its fight against graft. Since 2013, Romania’s National Anticorruption Directorate (DNA), with the support of the ruling political parties, has been convicting roughly 1,000 people on corruption-related charges each year. However, once these anticorruption efforts began ensnaring high-level politicians—including Liviu Dragnea, the head of the biggest party in the Romanian Parliament—the government began to criticize the DNA’s work as biased, overzealous, and unfair. This conflict has been escalating, most dramatically in late 2017, when hundreds of thousands of Romanians took to the streets to protest an overnight decree that pardoned those serving sentences of five years or less for corruption-related crimes, and also decriminalized government officials’ corruption offenses involving less than $47,000 (raised to $240,000 in a later draft bill). The protests led to violent clashes with the police, who used tear gas and water cannons to disperse the crowds.

Adding to the turmoil, Rudolph Giuliani, former Mayor of New York City and current personal attorney of U.S. President Trump, recently wrote a letter to Romanian president Klaus Iohannis, condemning the overreach of the DNA and supporting the government’s efforts to curtail the DNA’s enforcement of anticorruption laws. Giuliani was paid to write the letter by the Freeh Group, a private American firm whose overseas clients include a Romanian businessman convicted for fraud last year, and another Romanian businessman currently under investigation by the DNA for bribery. Giuliani’s letter raises two distinct corruption-related problems. Continue reading →

Laura Kovesi’s Statement Upon Being Fired As Romania’s Chief Anticorruption Prosecutor

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Romanian President Klaus Iohannis yesterday fired the National Anticorruption Directorate’s chief prosecutor Laura Codruţa Kovesi under intense, unrelenting pressure from the parliamentary majority.  Although article 133 of the Romanian Constitution protects public prosecutors from parliamentary whims, in a head-scratching decision May 30 Romania’s Constitutional Court ruled that the president must heed a directive by the Justice Minister ordering him to fire Kovesi.  Iohanis had initially resisted, but the parliamentary majority demanded he obey the Justice Minister’s directive — even after citizens demonstrated in Kovesi’s favor and the European Union signaled its support for her.  Indeed, in recent days the majority made it clear that if Iohannis refused to obey the order, it would impeach him.  Iohanis relented early Monday morning, July 9, signing a decree terminating Codruţa Kovesi.

 Codruţa Kovesi issued a statement later in the day defending her agency’s record combating corruption, voicing the concerns of many that her dismissal will undermine the fight against corruption by subordinating prosecutors to parliament, and urging all Romanians not to give up the struggle against corruption.  The full text of her remarks (her own English version) are below.

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Dispatches from the UNCAC Conference of States Parties, Part 1: Revisiting the Jakarta Principles of Anti-Corruption Agencies

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Last month, the UN Convention Against Corruption (UNCAC) Conference of States Parties (COSP) was held in Vienna, Austria. In addition to the formal meetings of government representatives, the COSP also featured a number of panels, speeches, and other side events, at which leading experts discussed and debated a range of anticorruption topics. GAB is delighted that Northwestern Pritzker School of Law Professor Juliet Sorensen and her student Kobby Lartey, who attended the COSP, have offered to share highlights of some of the most interesting sessions in a series of guest posts. Today’s post is the first in that series.

Though specialized anticorruption agencies (ACAs) are dismissed by some as redundant or ineffective, last month’s COSP panel on “Revisiting the Jakarta Principles: Strengthening Anti-Corruption Agencies’ Independence and Effectiveness” made a strong case for ACA’s importance to the fight against corruption. (The Jakarta Principles are drawn from a 2012 statement drafted by anticorruption practitioners and experts from around the world; these broad, aspirational principles help anticorruption to protect themselves, and to offer inspiration for their work.) The panel, which included ACA commissioners from Indonesia, France, Romania, and Burkina Faso, as well as representatives from Transparency International, the UNODC, and UNDP, the panel highlighted the diverse struggles and successes of member states’ ACAs. Continue reading →

Guest Post: Anticorruption Enforcement Is the Key to Democratic Consolidation–Not the Other Way Around

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GAB is delighted to welcome Cristina Nicolescu-Waggonner, visiting professor of Political Science at Pomona College and Scripps College, Claremont, to contribute the following guest post, drawn from material in her new book, No Rule of Law, No Democracy:

It is fashionable to argue that the only way to root out systemic corruption is to establish a political system characterized by genuine democratic accountability and the rule of law. Unfortunately, corruption – specifically the conflicts of interest of political and judicial leaders – does not allow for this sort of development. True, there may be democracy, but in the presence of widespread corruption it will remain in a perpetual state of unconsolidated democracy, without true rule of law. And in such weak democracies, the electoral process stimulates rather than discourages corruption: Eager to win and short on cash, politicians make deals with businesses and misappropriate public funds to finance campaigns, a vicious cycle that starts political tenure with illicit means. Different from lobbying, this illegal activity puts the breaks on rule of law reform. Corrupt politicians, afraid of retribution, do not reform or establish enforcement mechanisms: supervisory commissions, integrity agencies, anticorruption institutions, genuinely independent courts, whistleblower protection, etc. This dilemma is exemplified by the Czech Republic, which does well on various international democracy and rule-of-law indexes, but in fact is a corruption hotbed, with politicians, members of the judiciary, and business people involved in a web of misappropriation of public funds—partly for personal enrichment, but more importantly for election and re-election. The same vicious cycle is prevalent in new democracies all over the world, from Brazil to Romania to South Korea to Mexico to Tunisia: Corruption negatively affects the process of democratization and stalls it before democracy can have a chance to fight corruption.

So, what can we do? Continue reading →

Guest Post: Is Sunlight Really the Best Disinfectant? Evidence on Procurement Transparency from Europe

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GAB is delighted to welcome back Mihály Fazekas, of the University of Cambridge and the Government Transparency Institute, who contributes the following guest post:

Public procurement, which accounts for roughly one-third of government spending in OECD countries and up to 50% in developing economies, is well-known as an area associated with high corruption risk. Hence, it is hardly a surprise that a range of policy recommendations from international organizations (such as the OECD), civil society networks (such as the Open Contracting Data Standard), and research projects (e.g. Digiwhist) have emerged to promote anticorruption in public procurement. And one of the most popular prescriptions for achieving this goal is increased transparency. Transparency, of course, can mean different things. For purposes of the discussion here, we will follow the OECD and World Bank in defining “public procurement transparency” as entailing the timely, free, and accurate publication of public procurement documents in a central e-procurement portal in a machine-readable format, with this publication requirement applying to every major step of the contracting process, and disclosing all key characteristics of the tender and contract. (For a comprehensive data template see here).

Research suggests that this sort of transparency does make a difference in terms of bidder numbers and composition. Yet it remains an open question whether public procurement transparency is necessary or sufficient for controlling corruption in public procurement. Indeed, if one looks at a sample of European countries’ public procurement transparency and their suspected corruption risks, one finds a surprising result: the best governed countries in Europe have the lowest levels of transparency in public procurement. Continue reading →

London Anticorruption Summit–Country Commitment Scorecard, Part 2

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This post is the second half of my attempt to summarize the commitments (or lack thereof) in the country statements of the 41 countries that attended last week’s London Anticorruption Summit, in four areas highlighted by the Summit’s final Communique:

  1. Increasing access to information on the true beneficial owners of companies, and possibly other legal entities, perhaps through central registers;
  2. Increasing transparency in public procurement;
  3. Strengthening the independence and capacity of national audit institutions, and publicizing audit results (and, more generally, increasing fiscal transparency in other ways); and
  4. Encouraging whistleblowers, strengthening their protection from various forms or retaliation, and developing systems to ensure that law enforcement takes prompt action in response to whistleblower complaints.

These are not the only subjects covered by the Communique and discussed in the country statements. (Other topics include improving asset recovery mechanisms, facilitating more international cooperation and information sharing, joining new initiatives to fight corruption in sports, improving transparency in the extractive sector through initiatives like the Extractive Industries Transparency Initiative, additional measures to fight tax evasion, and several others.) I chose these four partly because they seemed to me of particular importance, and partly because the Communique’s discussion of these four areas seemed particularly focused on prompting substantive legal changes, rather than general improvements in existing mechanisms.

Plenty of others have already provided useful comprehensive assessments of what the country commitments did and did not achieve. My hope is that presenting the results of the rather tedious exercise of going through each country statement one by one for the language on these four issues, and presenting the results in summary form, will be helpful to others out there who want to try to get a sense of how the individual country commitments do or don’t match up against the recommendations in the Communique. My last post covered Afghanistan–Malta; today’s post covers the remaining country statements, Mexico–United States: Continue reading →

Verdicts and Judicial Strength: Why Convictions Should Not Be the Focus of Anticorruption Efforts

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As I discussed in my last post, effective anticorruption enforcement requires a judicial system with the capacity and will to hold powerful defendants criminally liable for their malfeasance. Understandably, then, judicial institutions, especially in developing countries, are often written off as weak or corrupt if they are unable to convict and sentence high-profile corruption defendants. Acquittals can seem synonymous with impunity, regardless of the justifications put forth by the court. On this measure, many domestic judiciaries charged with high-profile cases fail. For example, almost all of the central figures ousted in the 2011 Arab Spring uprisings in Egypt were ultimately acquitted of all corruption-related charges. Additional examples of high-profile corruption acquittals or dismissals abound around the world (see here, here, here, here, and here).

To be sure, the inability of many judiciaries to hold high-profile corruption defendants criminally accountable is often indicative of underlying problems in the court system, and these problems must be addressed. At the same time, though, I worry that domestic and international constituencies sometimes put too much emphasis on individual verdicts, or overall conviction rates, as the measure of judicial effectiveness. While these indicators can provide important information, overemphasizing guilty verdicts in particular corruption cases, or overall conviction rates, could actually be counterproductive to anticorruption progress, for at least three reasons: Continue reading →