Tag Archives: rule of law

The Vatican’s Anticorruption Crackdown and the Rule of Law

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One of Pope Francis’s top priorities, after his election in 2013, was cracking down on the Vatican’s financial corruption. In his first months as pope, Francis closed thousands of unauthorized accounts of the Vatican Bank, and in 2014, he created the Office of the Auditor General to monitor Vatican finances and spearhead anticorruption efforts. Perhaps the most high-profile consequence of the Pope’s crackdown was the two-and-a-half year investigation and trial of Cardinal Giovanni Angelo Becciu—the Pope’s former chief of staff—and nine others for financial corruption. While this so-called “Vatican trial of the century” included a range of alleged crimes, its locus involved the Holy See’s $380 million investment in a London real estate deal, which Vatican prosecutors alleged defrauded the Vatican to the tune of tens of millions. In December 2023, Cardinal Becciu was convicted of three counts of embezzlement and sentenced to five and a half years in prison. All but one of the other defendants were convicted on charges including embezzlement, corruption, and fraud, and several of them also received prison terms.

Although viewed by some as a triumph for the Pope’s efforts to clean up the Vatican, the investigation and prosecution of Becciu and his codefendants generated a firestorm of criticism. One legal expert affiliated with the defense described certain actions by Vatican authorities as “unacceptable abuses;” a Vatican canon lawyer likened the process to that of a “banana republic.” The most serious complaint—raised by the defense team, some legal commentators, and at least one cardinal—was that Pope Francis improperly used his power to “secretly” change the law four times via papal “rescripts” (roughly equivalent to executive orders) throughout the course of the investigation to give prosecutors “essentially, and a bit surreally, ‘carte blanche.’” These rescripts, which were never formally published (and were not produced to the defendants until the trial was underway), did four things:

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How Grand Corruption Threatens Liberal Democratic Institutions

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As regular readers may have noticed, GAB has been inactive for the past week (that is, until Rick’s post yesterday). Apologies for the lack of content – as I’m sure you can imagine, the U.S. presidential election has been consuming my attention and that of most of our regular contributors. But now that the election outcome is clear (notwithstanding President Trump’s baseless claims of election fraud and the craven complicity of his Republican Party enablers), it’s time to get back to blogging. I suspect that much (though not all) of our content over the next couple of weeks will be related to the outcome of the U.S. elections—both backward-looking evaluation of the impact of the Trump Presidency on corruption in the US and beyond, and forward-looking considerations about the anticorruption agenda under the incoming Biden Administration.

Today’s post isn’t about Trump per se, but it’s loosely inspired by both certain aspects of his presidency and his current refusal to acknowledge and accept the outcome of the election. I want to say a few words about the ways in which corruption, particularly grand corruption at the highest levels of the government, can threaten to undermine the institutions of liberal democracy (free and fair elections, formal and informal checks and balances, the rule of law, etc.). To be clear, I don’t have in mind principally the ways in which politicians might engage in corrupt conduct to help win elections (for example, vote-buying, acceptance of illegal campaign donations in exchange for favors, diverting public funds for partisan purposes, etc.), though these are of course serious and important problems. Nor do I have in mind the broader and more diffuse “institutional corruption” associated with the excessive influence of concentrated wealth, though this too is a grave concern. Rather, I want to consider how grand corruption in the highest levels of government may threaten to erode or subvert (explicitly or de facto) the basic institutional structures of liberal constitutional democracy.

Nothing of what I have to say on this topic is original; it’s all drawn from existing literature, and the arguments are likely familiar to many readers. Still, I thought it might be helpful to highlight three ways in which unchecked grand corruption may contribute to democratic backsliding: Continue reading →

China’s Anticorruption System 2.0: A Harbinger of Rule of Law?

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In his three-and-a-half-hour speech at China’s 19th Party Congress last month, President Xi Jinping demonstrated his determination to maintain his vigorous anticorruption campaign. But he also proposed a number of significant changes, including (1) the creation of a new National Supervision Commission (NSC), along with supervision commissions (SCs) at the provincial, municipal, and county levels, to spearhead China’s anticorruption efforts, (2) the adoption of new national legislation, the Supervision Law, that includes improved procedural protections for the accused, and (3) the integration of China’s obligations under international anticorruption treaties into domestic law.

For the most part, Western commentators were unimpressed (for example, see Tom’s previous post). The establishment of the NSC was characterized as “essentially another power expansion of the Central Commission for Discipline Inspection (CCDI),” while the reforms related to protections for the accused were seen as little more than the “replace[ment of] one abusive detention system with another.” I beg to differ. This reform plan, while incomplete and inadequate in some respects, is a big step forward from where China stands now. While it would be a mistake to be overly optimistic before any positive change actually takes place, it would also be a mistake to dismiss these new reforms out of hand as insignificant or cosmetic. Any movement toward greater judicialization and respect for the rule of law in China is likely to be incremental and face pushback. Understood in that context, the three announced reforms noted above seem quite significant, and mark a notable break with China’s previous approach to anticorruption enforcement.

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Violence Is Not the Answer: The Case Against Rodrigo Duterte

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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.

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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 →

Guest Post: Brazil Must Fight Corruption, But Preserve the Rule of Law

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GAB is delighted to welcome back Mat Tromme, Project Lead & Senior Research Fellow at the Bingham Centre for the Rule of Law, who (along with research assistant Domenico Vallario) contributes the following guest post:

Across Latin America, the past year has provided reasons for hope that the struggle against grand corruption and impunity is finally making progress. Prosecutors have gone after corrupt elites in Guatemala and Honduras, while political leaders in Mexico and Chile have also been under pressure for their links to corruption scandals. And in Brazil, the investigations into the corruption scandal at the state-owned oil giant Petrobras have led to charges against around 80 people, including high-ranking political figures like the speaker of the Lower Chamber and former President Collor de Mello, and a former treasurer of the ruling Worker’s Party.

The investigation into the Petrobras scandal is being led by Brazil’s Federal Police and by Public Ministry Prosecutor Deltan Dallagnol, under the watchful eye of Judge Sergio Moro. And Judge Moro’s tenacious attitude to pursuing graft stands in sharp contrast to a judicial system that has traditionally been slow and ineffective, especially in corruption cases: out of ten salient scandals between 1990 and 2010, 841 people were implicated, but only 55 were convicted. Yet Judge Moro’s approach may actually be emblematic of a broader shift in the Brazilian judiciary, as corruption cases that are tried in courts have been on the increase over the past few years.

On the face of it, these convictions should be welcomed as a sign that justice is meted out against the corrupt and that the judiciary is playing its part in tackling grand corruption. Yet some critics have raised legitimate concerns about the arguably overzealous approach the authorities (not only the legislature and the executive, but also the judiciary) have taken in tackling corruption, in light of rule of law and human rights commitments. Continue reading →

JP Morgan, Sons & Daughters, and the Rule of Law

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One of the more interesting ongoing Foreign Corrupt Practices Act investigations involves allegations that the investment banking giant JP Morgan’s “sons and daughters” program in China. According to media reports, JP Morgan’s China and Hong Kong offices offered jobs, and in some cases consulting contracts, to the children of well-connected officials in China (including the heads of state-owned enterprises and senior party officials) in return for lucrative business opportunities in the Chinese market (see, for example, here and here). The case is still under investigation, the facts are still in dispute, and the government enforcement agencies have not yet accused JP Morgan of any of its executives of any wrongdoing. Yet there have been hints that if the facts turn out to be as bad as they look, the U.S. government will consider JP Morgan’s so-called “sons & daughters” hiring program to have violated the FCPA’s anti-bribery provisions. That conclusion would depend crucially on the premise that providing a job to the (adult, non-dependent) child of a foreign official counts as providing “anything of value” to the official. (Things would be different if there were evidence that the officials’ children funneled some of the money back to their parents, but at the moment no such evidence has come to light.)

About six months ago, Professor Andrew Spalding (who has also contributed a number of insightful posts to this blog – see here, here, and here) published a provocative four-part series at the FCPA Blog (see here, here, here, and here) raising serious concerns about this legal theory, and suggests that applying it in JP Morgan’s case would be not only inappropriate, but a serious affront to fundamental legal principles. Somewhat unusually, I find myself in disagreement with Professor Spalding. Indeed, if the facts turn out to be as bad as early media reports suggest, I think that this is an easy case. To my mind, it’s straightforward that offering a benefit to a third party can count as offering “anything of value” to a foreign official under the FCPA, and nothing in the DOJ’s prior opinion releases would constrain the U.S. government from applying that principle in this case. Continue reading →