This post is the second in a two-part series on the report and recommendations of the UN’s High-Level Panel on International Financial Accountability, Transparency and Integrity for Achieving the 2030 Agenda (the FACTI Panel). In its report, published this past February, the Panel issued 35 recommendations (grouped into 14 categories) for addressing the problem of illicit financial flows. Of those 35 recommendations, 8 principally concerned tax matters, but the other 27 are directly relevant to corruption—especially though not exclusively grand corruption, which often involves cross-border flows of illicit money. I decided that it might helpfully contribute to the conversation about these topics to respond directly with a bit of commentary on each of those 27 recommendations. My last post covered the first 13, and this post will cover the remaining 14. With that prologue out of the way, let’s dive in. Continue reading
This past February, delegates from the UN-led Libyan Political Dialogue Forum (LPDF) seemed to do what a slate of other diplomatic tracks had yet to achieve: give Libyans hope for peace. On February 5, under the auspices of the UN Mission to Libya (UNSMIL), the 74 Libyan delegates making up the LPDF elected businessman Abdulhamid Debeibah to lead a transitional Parliament as its Prime Minister, vesting him with the responsibility of ferrying Libya to free and fair elections this coming December. With all the main warring parties appearing to come to the table in good faith, it seemed UNSMIL had engineered a transformational breakthrough in a conflict that has torn Libya apart at the seams for the past decade. As the process unfolded, the international community watched with baited breath. A joint statement by the United States, United Kingdom, France, Germany, and Italy blessed the process, giving the LPDF its “full support.” The UN Security Council called the election an “important milestone.” The stage was set, at long last, for a successful consolidation of power into one transitional government.
The only problem? The vote electing Debeibah was rigged.
On March 2, a leaked UN report written by the Panel of Experts, an investigatory UN body, revealed that Debeibah had bribed several LPDF delegates to elect him Prime Minister. According to the report, two participants “offered bribes of between $150,000 to $200,000 to at least three LPDF participants if they committed to vote for Debeibah.” One delegate reportedly exploded in anger in the lobby of the Four Seasons hotel hosting the LPDF when he heard that some delegates received $500,000 for their bribes. Apparently, he only received $200,000.
Just hours after the news dropped, UNSMIL issued a strong response. It threw its full support behind Debeibah, distanced itself from the UN Panel of Experts, and urged the newly elected Parliament to confirm Debeibah’s election at its first scheduled session on March 8. And while outside observers can only speculate as to UNSMIL’s motives, this see-no-evil response to the Panel’s bombshell revelations may well reflect a frantic attempt to salvage a peace process the entire international community has rallied behind. Indeed, proponents of UNSMIL’s position have argued that the long-term stability of moving ahead with Debeibah at the helm and keeping December’s election schedule on track is worth any short-term scandal, as further disruption of the process could lead to its unraveling. This position—which has been endorsed by experts and fellows from the Brookings Institution, the European Council on Foreign Relations, and others—may seem like hard-headed realism. But in fact, UNSMIL’s refusal to hold Debeibah and his co-conspirators accountable through an open and transparent process is a mistake. UNSMIL has chosen, as one Libyan lawyer and LPDF delegate put it, to “priorit[ize] expediency above all else and at the expense of due process,” and by doing so, UNSMIL risks undermining both the LPDF’s legitimacy and Libya’s long-term peace prospects.
A new episode of KickBack: The Global Anticorruption Podcast is now available. In this week’s episode, I interview James Wasserstrom. Mr. Wasserstrom, currently a private consultant on corruption and transparency issues, began his career with the United Nations, and was posted to the UN Mission in Kosovo (UNMIK) in 2007. His UN career took an unexpected turn when he uncovered corruption by high-level UNMIK officials. He reported his findings to the UN, but this was leaked to the perpetrators, and he was subjected to an extensive campaign of retaliation. After extensive legal proceedings, it was eventually determined that he had been mistreated, but the UN denied him compensation on dubious procedural grounds. During and after his dispute with the UN, Mr. Wasserstrom has been a leading advocate for institutional reform at the UN and integrity reforms more generally, and from 2009-2014 served as a special advisor on anticorruption at the U.S. Embassy in Afghanistan. In our interview, Mr. Wasserstrom and I discuss his experience as a UN whistleblower, the flaws in the UN’s whistleblower protection system, and what if anything can be done. We also discuss Mr. Wasserstrom’s ideas for providing more international support for whistleblowers in hostile environment, including his new proposal for an “integrity sanctuary” program.
You can find this episode here. You can also find both this episode and an archive of prior episodes at the following locations:
- The Interdisciplinary Corruption Research Network (ICRN) website
- Google Podcasts
- Apple Podcasts
- Pocket Cases
- Radio Public
KickBack is a collaborative effort between GAB and the ICRN. If you like it, please subscribe/follow, and tell all your friends! And if you have suggestions for voices you’d like to hear on the podcast, just send me a message and let me know.
Back when Donald Trump was first elected, a lot of people—me included—worried about the implications of his presidency for US leadership in the global fight against corruption. Some of the dire predictions have not (yet) come to pass; for example, so far US enforcement of the Foreign Corrupt Practices Act (FCPA) does not seem to have abated despite Trump’s well-documented and ill-informed hostility to that statute. But even if US enforcement of the FCPA has proceeded without much discernible effect (so far), there are other, less easily measurable respects in which the Trump Administration’s foreign policy, and its own cavalier disregard for ethics, may be undermining US leadership on anticorruption issues, and consequently undermining anticorruption efforts and bolstering those who would seek to undermine such efforts.
As just noted, much of this effect is diffuse and hard to observe directly, but there are a few examples where the Trump Administration and its allies are undermining the global fight against corruption is more evident. Perhaps the most striking and disheartening is the situation unfolding in Guatemala, ably documented in a compelling piece by Colum Lynch on Foreign Policy’s FP Blog earlier this month. Long story short: The Trump Administration and its allies in Congress appear to be supporting, or at least tacitly accepting, the efforts of Guatemalan President Jimmy Morales to shut down Guatemala’s UN-sponsored anti-impunity commission, known by its Spanish acronym CICIG, which has proved instrumental in fighting high-level corruption in Guatemala, and forced the resignation of President Morales’s predecessor, Otto Perez Molina. President Morales campaigned on an anticorruption platform, but he now wants to shut CICIG down, apparently because it’s investigating his own family members and associates. And the US, which had supported CICIG in the past and pressured President Molina to renew its mandate when he was inclined to terminate it to protect himself, seems to be backing Morales rather than CICIG.
I won’t go into all the details here, as the story is ably laid out in Mr. Lynch’s excellent piece. I’ll just highlight some themes that emerge from the reporting that Mr. Lynch and others have done, which illustrate connections—some direct, some indirect—between the Trump Administration’s approach to government and the dissipation of US leadership on anticorruption issues, as illustrated by the CICIG debacle. Continue reading
Early last month, UN Secretary General António Guterres delivered some brief opening remarks to the Security Council at a meeting on the relationship between corruption and conflict. In these remarks, Secretary General Guterres cited a couple of statistics about the economic costs of corruption: an estimate, attributed to the World Economic Forum (WEF), that the global cost of corruption is $2.6 trillion (or 5% of global GDP), as well as another estimate, attributed to the World Bank, that individuals and businesses cumulatively pay over $1 trillion in bribes each year. And last week, in her opening remarks at the International Anti-Corruption Conference, former Transparency International chair Huguette Labelle repeated these same figures.
Those statistics, as I’ve explained in prior posts (see here and here) are bogus. I realize that Secretary General Guterres’ invocation of those numbers shouldn’t bother me so much, since these figures had no substantive importance in his speech, and the speech itself was just the usual collection of platitudes and bromides about how corruption is bad, how the international community needs to do more to fight it, that the UN is a key player in the global effort against corruption, blah blah blah. Ditto for Ms. Labelle–her speech used these numbers kind of like a rhetorical garnish, to underscore the point that corruption is widespread and harmful, a point with which I very much agree. But just on principle, I feel like it’s important to set the right tone for evidence-based policymaking by eschewing impressive-sounding numbers that do not stand up to even mild scrutiny. Just to recap: Continue reading
The recent rise and prevalence of corruption in sport has drawn the attention of the international community. As Transparency International highlights in their 2016 report, professional sports not only engage billions of people worldwide, but also involve significant amounts of money. Such corruption thus creates tremendous societal and economic burdens. Match fixing is one form of corruption that has impacted a wide range of sports, including tennis, cricket, soccer, boxing, basketball, and baseball all within the last year. This problem not only permeates low-level games, but also impacts high-profile events such as World Cup qualifiers, European Championship qualifiers, and even Champions League Games.
On the surface, it may seem as though match fixing is a victimless crime, or at least one that’s not sufficiently serious to attract the attention of anticorruption advocates. Yet because match fixing scandals have implications that stretch far beyond the playing field, the anticorruption community should care about this problem for at least two reasons. First, as previously discussed on this blog, corruption scandals in sports are highly visible, and corruption in sports can attract public attention in ways that other corrupt activities cannot. Second, match fixing facilitates organized crime and other corrupt activities. Organized criminals engage in match fixing because it is a low-risk enterprise with the potential for large rewards from unregulated betting markets.
A recent report by the United Nation Office on Drugs and Crime investigated match fixing and tried to understand some of its underlying causes. The report cites a number of factors that have allowed this threat to grow, including “personal greed, weak governance structures of sport as a sector, easily accessible global betting markets that are open to exploitation, low prioritization of match fixing as a threat by law enforcement agencies and the use of sport by organized criminals to advance their own interests.” In attempting to address these causes, 28 countries have proposed, adopted, or enacted specific legislation criminalizing match fixing. Yet even in those jurisdictions where such sanctions exist, regulations have been ineffective. Unfortunately, the complicated transnational nature of sports betting makes it difficult for regulations to prevent match fixing in an effective way. Proving that match fixing occurred requires collection and analysis of a substantial amount of betting evidence, which is particularly difficult to obtain in unregulated betting markets. Furthermore, despite the presence of regulations, significant financial incentives continue to pressure athletes to participate in match fixing.
Therefore, given the inherent difficulties with controlling such behavior, there are two things that can be done to more effectively deter match fixing.
The Green Climate Fund (GCF), which the UN created in 2010, seeks to marshal pledges of $100 billion per year by 2020 from wealthy nations (which have been disproportionately and primarily responsible for the world’s carbon emissions), as well as other private and public sources, to finance climate change mitigation and adaptation projects in developing nations, which bear the greater share of adverse effects from those emissions. Last March, the United States delivered $500 million to the GCF, the first installment of the $3 billion pledge the United States made as part of the COP 21 UN Climate Summit last December. Climate and development advocates hope that the GCF will support development that is both “low-emission” and “climate-resilient,” helping countries limit greenhouse gas emissions and adapt to impacts of climate change. The GCF operates principally through so-called “accredited entities”—private and public sector subnational, national, regional, and international entities, which will implement climate change programs using GCF funds. These entities are selected through an accreditation process (hence the name), which assesses their ability to manage resources against the GCF’s fiduciary principles, environmental and social safeguards, and gender policy. Specific projects are assessed against investment criteria, including impact potential, sustainable development potential, responsiveness to recipients’ needs, promotion of country ownership, and efficiency.
As with many humanitarian or development aid efforts, the GCF is not without corruption risks. Recognizing this, the GCF Board approved an Initial Monitoring & Accountability Framework for the accredited entities that manage and implement GCF projects. Yet the GCF should do more to ensure that its basic accreditation mechanisms themselves rigorously evaluate entities for their capacities not only to disburse climate funds but also to monitor and address corruption. This up front assessment would complement efforts to ensure that entities, once accredited, remain faithful to the Fund’s fiduciary principles. The following aspects of the GCF accreditation process raise potential corruption risks, and the GCF should take steps to address them: Continue reading
Corruption has yet again publicly surfaced as a significant problem at the United Nations. The current bribery scandal implicates John Ashe, the U.N. ambassador from Antigua and Barbuda and the former President of the General Assembly, along with several others. Ashe stands accused of accepting $1.3 million in bribes from Chinese developers in exchange for promoting real estate projects. Among the others who have come under scrutiny is Francis Lorenzo, the Dominican Republic’s deputy ambassador to the U.N., who allegedly accepted and paid bribes as a part of a scheme to influence decisions related to the development of a multi-billion dollar U.N. conference center in Macau.
As both Sarah and Matthew have previously discussed, the U.N. has not done an admirable job of policing itself. But now the organization may be getting help from the U.S. Attorney’s Office for the Southern District of New York. In October 2015, the FBI arrested Ashe and Lorenzo on charges of tax evasion and bribery, respectively. But the prosecution of officials of an international organization poses uncommon challenges. U.N. diplomats can claim certain immunity against suit in American courts, and both Ashe and Lorenzo plan to assert such immunity as a complete defense. U.S. Attorney Preet Bharara feels confident that he will be able to defeat these immunity claims, and he has further implied that he will be able to do so in future cases.
Is Bharara’s confidence well-founded? Any assessment of how American prosecutors (or other national prosecutions) may fight corruption at the U.N. requires delving into the complex legal doctrines on diplomatic immunities. This post aims to offer a brief primer on the key legal concepts and doctrines, and how they might apply in the Ashe and Lorenzo cases. Continue reading
“Is bribery business as usual at the UN?”
So asked U.S. Attorney Preet Bharara, and with good reason. Notwithstanding the UN’s protestations to the contrary, recent years have seen a succession of UN corruption scandals. Among the most infamous is the Iraqi Oil-for-Food case, in which Saddam Hussein, in collaboration with UN staff members, earned billions of dollars through kickbacks and illegal oil smuggling. Corruption in some UN peacekeeping operations is high, with new corruption cases coming to light on a regular basis. And last October, new charges of corruption were brought against (among others) a former UN General Assembly President and another UN diplomat who allegedly were engaged in an important bribery scheme.
Each time a new corruption case is exposed, the UN’s public reaction is the same: the Secretary-General states that the organization is treating the matter with the utmost seriousness and initiates an internal investigation or audit, while at the same time the organization attempts to “sweep the matter under the rug” by claiming that senior UN officials were unaware of the problem, and that this was an isolated incident involving a few bad apples, not the UN system itself. Yet given the frequency of UN corruption scandals, it is about time that the organization stops pretending that this is just a “few bad apples” problem, and try to understand why it faces these situations with such frequency.
The natural place to start is with the UN’s system for investigating and sanctioning corrupt practices, in particular the Office of Internal Oversight Services (OIOS). OIOS performs internal audits and investigations into reported violations of UN regulations, rules, and administrative issuances, and is also authorized to initiate proactive investigations to assess potential fraud risks in “high-risk areas.” OIOS’s mandate is strictly limited to administrative fact-finding; it does not conduct criminal investigations, and indeed the UN has no criminal jurisdiction over its personnel. But as an employer, the UN can impose disciplinary sanctions in response to wrongdoing or take other administrative measures. In the UN context, these administrative sanctions are particularly important because UN staff members, officials, and diplomats are granted immunity from local prosecutions, and therefore domestic prosecutions in the countries where the corruption took place can be difficult unless these immunities are waived. In such circumstances, a strong internal anticorruption system within the UN itself is even more essential to avoid impunity.
Yet although the OIOS looks good on paper, critics both outside the organization (see, for example, here and here) and inside as well, have said that the OIOS is not doing an adequate job investigating corruption and fraud. There are at least three reasons for this: Continue reading
Ambassador Ugljesa Ugi Zvekic, Former Permanent Representative of the Republic of Serbia to the United Nations Senior Adviser and currently Adjunct Professor at LUISS School of Government in Rome, contributes the following guest post, which is based on research conducted by Ambassador Zvekic’s students Giorgio Sirtori, Alessandro Sabbini, and Alessandro Dowling:
Post-conflict countries are breeding grounds for corruption, due to the combination of weak (or non-existent) institutions, the chaos generated by both the previous conflict, the willingness of international interveners (and donors) to tolerate corruption as the price of stability. Indeed, of the sixteen ongoing international peacekeeping operations across the globe, almost all of these operations take place in some of the most corrupt areas of the world. While it is tempting to say that tackling corruption can and should be left to a later time, after basic needs have been met and basic rights have been guaranteed. But in fact our research, including case studies on international peacekeeping operations in the Democratic Republic of Congo, South Sudan, and Kosovo, reveals that corruption jeopardizes peacekeeping and state-building operations per se, and, consequently, it is vital to incorporate anticorruption efforts at the earliest stages of these kinds of operations.
Given the importance of anticorruption measures in state-building and peacekeeping operations, one issue that should be high up in the agenda of the United Nations is that of whistleblower protection. However, the UN’s own policy on internal whistleblowers has been disappointing, and jeopardizes the UN’s efforts to fight corruption and to promote accountability in post-conflict settings. Continue reading