Tag Archives: United States

Guest Post: Important New Developments in U.S. Anticorruption Efforts

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Today’s Guest Post is from Craig R. Arndt, a Yale-trained American lawyer living in Bangkok. During a lengthy career, he advised multinational clients on a range of corruption-related matters and has represented those injured by corruption in actions to recover damages.

Buried in year-end legislation arming America’s military, Congress created two new weapons to advance the global fight against corruption. Section 5101 of the 2024 National Defense Authorization Act makes it a federal crime for a foreign public official “to corruptly demand [or] receive” a bribe from any person or entity subject to the Foreign Corrupt Practices Act. Sections 5403 and 5404 require the Secretary of State to publish an annual report ranking countries in a “three-tiered system with respect to levels of corruption in their governments.”

Both are important, if perhaps controversial, developments in the global fight against corruption.

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Guest Post: Despite Serious Flaws, U.S. Safeguards Against Political Corruption Can Serve as Model for the World

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Today’s guest post is from Scott Greytak, the Director of Advocacy at Transparency International US.

As much of the world converges on Atlanta for the 10th Session of the United Nations Convention Against Corruption (UNCAC) Conference of the States Parties (CoSP), the urgent need for a renewed, reinforced, and relevant global anticorruption framework takes center stage. Among the most important issues to address concerns political finance transparency, an issue that the current version of the UNCAC does not directly cover. The United States is well-positioned to provide leadership on this issue. While U.S. laws on money in politics have failed to keep pace with America’s evolving political dynamics, aspects of these laws nevertheless can and should serve as inspirations for much of the world as it struggles with political corruption. The CoSP presents a chance for the U.S. to share its experiences and lessons learned with other countries, and to support resolutions and amendments to include commitments on political finance transparency in the UNCAC itself.

Suggesting that the U.S. can be a leader or a model on the issue of regulating money in politics may sound surprising. My colleagues and I at Transparency International US are all too aware of the many failings of American democracy, including the American approach to political finance regulation. More than in any other major developed country in the world, for example, people in the United States believe that rich people buy elections, and U.S. political finance laws are in urgent need of updating, to address persistent problems like the influence of “dark money” in elections, and the need for adequately funded public financing programs for political campaigns. But comparatively speaking, some pieces of the U.S. legal framework can serve as a useful benchmark. For instance, a survey by the Global Data Barometer Political Integrity Module and the International IDEA’s Political Finance Database revealed that of 181 countries surveyed, 100 do not have any limits whatsoever on how much money can be given to a candidate for office. In contrast, the United States has comprehensive contribution limits for candidates, political parties, and traditional political action committees (even though such limits are infamously absent when it comes to “independent” expenditure committees, or Super PACs). Emphasizing this best practice, among others, on the global stage in Atlanta could help jumpstart a much-needed exchange and collaborative approach that could raise the bar for all democratic and emerging-democratic countries.

To this end, the United States should support resolutions and amendments that require countries to enact and enforce laws that disclose campaign contributions to candidates and political parties, as well as expenditures made by those candidates and parties, in a timely and publicly accessible fashion. The U.S. can also support requirements that countries to establish and appropriately fund independent oversight bodies that monitor political spending and enforce political finance laws. The U.S. delegation can support protections for whistleblowers who call out political finance violations and can urge countries to expressly commit to sharing information, best practices, and resources in fulfillment of these commitments, and to engage with civil society closely and consistently when developing and implementing these measures.

Amidst yet another year of increasing global political unrest and accompanying anxieties, successful examples of U.S. laws can and must serve as inspirations to others. In an era of seemingly limitless challenges to democracy in all regions of the world, it is this collaboration and commitment that can fortify its foundations. A first step can and must be taken by the U.S. in Atlanta.

Shifting Goalposts: How FIFA Has Failed In Its Transparency Reforms

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FIFA, the body that oversees world football (soccer), has a long history of corruption well-documented on this blog, particularly during the tenure of former president Sepp Blatter (see, for example, here, here, here, here, here, here, here, here, and here). A series of groundbreaking indictments of numerous FIFA officials for wire fraud, racketeering, and money laundering by United States prosecutors, starting from 2015, led to multiple convictions, and revealed the widespread bribery involved in the awarding of 2010 World Cup hosting rights to South Africa. This scandal led to Blatter’s resignation in June 2015. (Blatter was later fined millions of dollars and banned from any involvement in FIFA activities for more than ten years by the organization’s Ethics Committee.) There have also been frequent allegations that Russian and Qatari officials allegedly bribed some FIFA executives and voters to win hosting rights to the 2018 and 2022 FIFA World Cups, though United States Attorneys probing FIFA have not elected to bring charges in relation to those allegations.

After Blatter’s resignation, FIFA pledged to clean up its act. In early 2016, Gianni Infantino was elected FIFA President. Infantino had campaigned on promises to crack down on corruption in the organization, and he pledged greater transparency in his first post-victory remarks. Shortly after assuming office, Infantino took steps to hire a chief compliance officer, publicly disclose the compensation of executive management, and bring FIFA’s accounting and auditing in line with industry best practices. But how has Infantino fared in increasing transparency when it comes to picking the host of the World Cup? 

Not very well. True, FIFA and Infantino widely touted the rigor of the process used to pick the United States, Canada, and Mexico as joint hosts for the 2026 Cup: an extensive consultation process introduced new standards for bidders, bids were subject to a years-long review window, new “technical requirements” for sustainable event management and environmental protection were created, and voting rights were expanded to FIFA’s entire 211-member body in place of being vested solely in FIFA’s executive committee. But the rather bizarre series of events this past October—culminating in FIFA picking the hosts of the 2030 and 2034 World Cups in a span of less than a month, with the winning bidder uncontested in both cases—demonstrates that the organization’s leadership has engineered rather ingenious methods of subverting nearly all of these reforms. Continue reading →

A New Page in the Populist Playbook: Imran Khan Frames Anticorruption as Foreign Manipulation

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In Pakistan, former Prime Minister Imran Khan—who, if declared eligible, would be seeking a return to office in the 2024 elections—faces numerous allegations of corruption and other financial impropriety. More than 200 cases have been filed against him in Pakistan’s courts, and he continues to sit behind bars in Adiala Jail. Yet these legal troubles have had little effect on Khan’s popularity in pre-election polls. Part of the reason, as I discussed in my last post, is that Pakistan’s long history of politicized anticorruption enforcement has left Pakistanis deeply apathetic about corruption allegations and weary of their frequently cynical use. But Khan has also been unusually successful in convincing the public that the charges against him are politically motivated. What accounts for his ability to rally the public to his side when similarly situated Pakistani politicians have failed before him? The answer may lie in Khan’s concerted focus on what he claims is evidence of American meddling. Continue reading →

Guest Post: Corporate Transparency Is Easy

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Today’s guest post is from Gary Kalman and Annalise Burkhart, who are, respectively, Executive Director and Program & Research Associate for Transparency International U.S.

Readers of this blog know well that anonymously owned companies are the go-to vehicle for laundering illicit funds. From the revelations of hidden assets exposed in the Panama Papers to the search for sanctioned assets of Russian oligarchs, anonymous corporate structures enable corrupt and criminal actors to steal, hide, launder and benefit from illicit proceeds with impunity. The anticorruption community therefore cheered when the U.S. Congress passed the Corporate Transparency Act (CTA), requiring the U.S. Treasury Department’s Financial Crimes Enforcement Network (FinCEN) to collect beneficial ownership information for U.S. companies and align with international standards.

As the Treasury Department is finalizing its rules for implementing the CTA, the law’s opponents have been engaged in a campaign of scaremongering aimed particularly at small businesses, with various memos, articles, and notices warning of a burdensome reporting process, uncertain or unclear disclosure requirements, and the risks of hefty fines and possible jail time for business owners who might inadvertently fail to file the appropriate information.

These claims are exaggerated, inaccurate, and misleading. Instead of providing helpful guidance to small businesses, these alarmists are stoking fear among business owners, likely to mobilize political opposition to the effective implementation of the CTA. Here are the facts: Continue reading →

The U.S. Approach to Corruption in Ukraine: Change or Continuity?

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[A quick note: I drafted the post below last week, before the horrific events in Israel over the weekend. I have nothing useful to say about that tragedy–I have no expertise in military or security policy, Middle Eastern politics, terrorism, or anything along those lines. But I wanted to express my deepest sympathy to those who have been affected by Hamas’s horrific and inexcusable attack on innocent civilians. I will continue to write posts on assorted corruption-related issues, like the one below, because that’s what I know and that’s what I do. But this is one of those moments when other things seem so much more important. Am Yisrael Chai.]

Last week, a piece in Politico discussed the contents of a confidential (but not classified) U.S. State Department’s “integrated country strategy” for Ukraine; a shorter public version of that strategy document was released last August, but the version Politico obtained was longer and more detailed. The big headlines coming out of the Politco story (both literally and figuratively) concern corruption. The U.S. strategy document, Politico notes, “sees corruption as the real threat,” and “warns Western support may hinge on cutting corruption.” The Politco story made a bit of a splash among some of the people who follow these issues closely, but I don’t think it tells us much that we didn’t already know, and the new material from the confidential version of the report, so far as I can tell from Politico’s reporting, mainly concern political calculations that are basically common knowledge, though perhaps a bit sensitive for the U.S. government to declare formally in a public document.

Let me start out by noting one thing that I think the Politico piece gets exactly right, and that poses a general, and by now familiar, challenge to those who both support Ukraine’s resistance to Russian aggression and believe anticorruption reforms are vital for the country’s future success. As the Politico story puts it:

The [Biden] administration wants to press Ukraine to cut graft … [b]ut being too loud about the issue could embolden opponents of U.S. aid to Ukraine, many of them Republican lawmakers who are trying to block such assistance. Any perception of weakened American support for Kyiv also could cause more European countries to think twice about their role.

This is indeed a real issue, and a rhetorical and political challenge. Having said that, I think the Politico story, perhaps inadvertently, may simultaneously (1) understate the extent to which the U.S. government has already been willing to publicly raise the need for serious anticorruption reforms in Ukraine, and (2) overstate the extent to which the U.S. is relying on a coercive approach (mainly express or implied aid conditionality) to press for such reforms. A few thoughts on each: Continue reading →

When Do Partisans Turn on One of Their Own? Reflections on the New Menendez Case

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The biggest corruption-related political news in the United States over the past couple of weeks is the decision by the Department of Justice (DOJ) to indict Senator Bob Menendez (Democrat of New Jersey) for allegedly taking bribes (including cash, gold bars, and a luxury car) from several businessmen, in exchange for using his influence to help these businessmen in various ways. If you’re having a sense of déjà vu, it’s because we’ve seen this movie (at least the beginning) before: Back in 2015, the DOJ indicted Senator Menendez for accepting lavish gifts from a wealthy friend and campaign donor, allegedly in exchange for using his influence to help advance that donor’s personal and business interests. That prosecution was unsuccessful: The DOJ pursued the case, but although the prosecutors prevailed on some important issues of law, the trial, which took place in 2017, ended in a hung jury—presumably because some of the jurors did not think that prosecutors had proved, beyond a reasonable doubt, that the luxury trips and gifts bestowed on Senator Menendez were bribes, rather than personal hospitality offered by a close friend.

It remains to be seen whether the legal outcome will be different in this case (and of course, it should go without saying, Senator Menendez is entitled to the presumption of innocence in a court of law, though he is entitled to no such presumption in the court of public opinion). But there is already one notable difference between the current case and the 2015 case: the reaction of Senator Menendez’s colleagues in the Democratic party. As I write this (several days before the post will likely be published, so forgive me if this is a bit out of date), a number of prominent Democrats, including New Jersey Governor Phil Murphy, several Democratic Senators, and numerous Democratic House Members, including former Speaker Nancy Pelosi, have called on Menendez to resign. To be sure, as a critics have noted, several leading Democrats—including President Joe Biden and Senate Majority Leader Chuck Schumer—have not called on Senator Menendez to resign. But this is still a marked contrast from 2015, when to the best of my recollection (and readers should feel free to correct me if I’m wrong) no prominent Democrats called on Senator Menendez to resign. Why the difference? Continue reading →

Judicial Integrity and Judicial Independence: A Clash of Values?

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This past spring, the investigative journalism site ProPublica broke a major story about ethically questionable—and previously undisclosed—relationships between ultra-wealthy (and politically active) individuals and Supreme Court justices. The reports focused in particular on Justice Thomas and Justice Alito, two of the Court’s most conservative members. According to ProPublica’s reports, in 2008 Justice Alito accepted a luxury fishing trip—which involved flights on a private jet and a stay at a lodge that charges more than $1,000 a day—from billionaire Paul Singer, whose hedge fund often had cases before the Court, including a 2014 case in which Justice Alito did not recuse himself and voted in the hedge fund’s favor. With respect to Justice Thomas, ProPublica revealed that for years—starting shortly after he joined the Court—Justice Thomas has received substantial benefits from billionaire “friends,” including private plane flights, luxury vacations, VIP passes to sporting events, and private school tuition for his nephew (whom Justice Thomas has raised like a son). Most of these gifts came from right-wing billionaire Harlan Crow, who also purchased from Justice Thomas (in a previously undisclosed deal) the house where Justice Thomas’s mother and other members of his family lived, but Justice Thomas received substantial benefits from other billionaires as well.

Many critics denounced these gifts and other transactions as evidence of blatant corruption (see here, here, here, and here). Some even drew a connection  between the Court’s jurisprudence in corruption cases—which has embraced an ever-more-restrictive definition of corruption, often limiting it to quid pro quo deals—and the Justices’ own proclivity for accepting gifts, perks, and other benefits from people with a strong ideological (and sometimes personal) stake in the Court’s decisions (see here and here). Justice Thomas and Justice Alito vigorously defended their conduct (see here and here), though they did ultimately update their financial disclosure forms for 2022 (though not earlier years) to show additional benefits they had received, and to proffer some explanations. And the Justices’ supporters have accused the accusers of using these alleged ethical issues as a pretext for attacking Supreme Court Justices whom they dislike on ideological grounds (and overlooking similar ethical lapses by Justices whose ideology they prefer).

I have my own fairly strong views about this specific controversy, but I don’t want to go into that right now. I’m not sure I have anything to add—and I’m acutely aware that, whether or not one buys the charges of pretext and selective outrage—it is very difficult to talk about this issue without being influenced by (or perceived as influenced by) one’s views on Justice Thomas’s and Justice Alito’s jurisprudence and ideology. But even putting the specifics mostly to one side, I do think the fallout from ProPublica’s reporting implicates a more general issue—one that is very difficult, and that is relevant not only in the United States but in many other countries as well: To what extent can or should the other branches of government (the executive, the legislature, or—in the countries where such entities exist—an independent anticorruption commission) impose and enforce ethical rules on the highest court (the Supreme and/or Constitutional Court)? Continue reading →

Would the Foreign Extortion Prevention Act Help the U.S. Counter China?

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The U.S. Foreign Corrupt Practices Act (FCPA) makes it a criminal offense for U.S. domestic concerns, firms that issue U.S. and any anyone acting in U.S. territory from offering or paying bribes to foreign government officials. The FCPA does not, however, apply to the foreign officials who receive those bribes. (On occasion some prosecutors have advanced the theory that a foreign government official who takes a bribe can be convicted for aiding and abetting, or conspiring in, an FCPA violation, but courts have generally rejected these theories.) Additionally, while U.S. criminal law prohibits domestic government officials from soliciting or accepting bribes, the relevant statutory provisions do not apply to foreign officials who engage in comparable conduct.

Many U.S. anticorruption activists believe that U.S. law ought to target the demand side of foreign bribery transactions (that is, the bribe-takers), not just the supply side, and have therefore advocated for the adoption of the so-called Foreign Extortion Prevention Act (FEPA). These advocacy efforts appear to be paying off: In late July, the Senate adopted FEPA as an amendment to the Senate’s version of the National Defense Authorization Act. This does not guarantee that FEPA will become law, as the House of Representatives has yet to vote on a comparable bill, and there is no guarantee that the FEPA language will remain in the bill after final negotiations conclude. But the odds have gone up significantly.

Would FEPA be a good idea? I think the answer is probably yes, though the impact is likely to be modest, and probably somewhat less than FEPA’s proponents hope. I may post again later about my own assessment of FEPA’s likely impact, should it pass in something like its current form. But for now, I want to focus on a striking argument in favor of FEPA that appeared in an op-ed a couple of weeks ago. That op-ed, coauthored by Elaine Dezenski (Senior Director at the Foundation for Defense of Democracies) and Scott Greytak,(Director of Advocacy at Transparency International’s US office), argued that FEPA would “blunt China’s malign economic influence” by countering the practice of Chinese government or government-affiliated entities using bribes to secure access to valuable resources and to expand China’s political sway over developing countries.

There are many good arguments in favor of FEPA, but I’m not sure that this is one of them. I don’t want to dismiss it outright, as it’s entirely possible that I’ve missed something. But it seems to me that FEPA would have little to no impact on corrupt overseas bribery by Chinese entities, and at least in the short term might make that problem (slightly) worse. So let me lay out the source of my confusion: Continue reading →

Trump Indictment’s Lesson for Prosecutors Charging Senior Political Figures

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At long last federal prosecutors have filed charges against former President Donald Trump for crimes arising from his unlawful possession of classified documents. The charges are contained in what is called an indictment in the United States.

One aspect of the indictment merits the attention of prosecutors everywhere. Or at least for those considering charging senior government officials or ex-officials who, like Trump, can be expected to try to sway public or elite opinion by any means to escape convictions.

The Trump indictment is what American prosecutors call a “speaking indictment.”

Continue reading →