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Att: Dr. Juanita Olaya Garcia

What do you steal when you bribe a government official? Do you cause any harm when you negotiate a kickback? Is it any different if “everybody does it”? When does your conflict of interest turn into an improper advantage and harms others? The answer is short, but not easy: the public good.

Corruption is the imposition of a private interest at the expense of the public interest. Corruption would not be corruption if there was no harm to the public good. This is what makes corruption different from say, simple robbery. This is the difference between nepotism and family or clan loyalty. The problem is we think of corruption more often in terms of its forms (bribery, kickbacks, conflicts of interest, nepotism) and then forget what the issue is about, tending to forget the essence. In addition, we often fall prey of calling corruption anything that falls short of our expectations, and this makes the task of eradicating corruption even harder. So, in order to deal with it properly, we need to first take corruption for what it is to be able to effectively battle it and most importantly, to deal with its consequences.

Indeed, after years of working in the field of governance and anti-corruption I am convinced that it is essential to deal with and face the consequences of corruption. Fighting corruption should not be a goal in itself, and is of little help if this doesn’t translate in better services or better life conditions for the citizens (in other words, the public good). The damage to the public good coming out of corrupt activity is real and tangible, and should be repaired. This is not only a basic principle of law; it is also a way for societies to recognize the value of the public good and to act upon it. This realisation is of increased importance as countries prepare to scale up prosecution of grand corruption cases and as activists expect they do so.

I have undertaken new research on the approach and experience of seeking reparation and compensation for the damages caused by corruption reflected in this draft. From a legal policy and practice perspective, this paper takes on these questions and explores the issue of what is the damage caused by corruption, who are its victims, and how can we repair it. We also look at the issue of how do we come forward by taking this point of view. A final version of this draft will be included in an upcoming publication of Open Society Justice Initiative surveying the field of legal remedies for high-level corruption from the standpoint of the role of civil society. We would be happy and grateful for your input, reactions and comments.

Procurement Riddles (Part 1)

One field where the “fight” against corruption has been perhaps the least effective is procurement, rather referred generally as contracting. It is difficult to put it more bluntly. The technical director (now on leave) of the company in charge of building the Berlin Airport (BER) is currently being investigated for alleged bribery. In his former role as consultant to this same company, and apparently with powers to award contracts, he may have requested a bribe in the amount of 500 thousand Euros to award a contract[i]. In Colombia, 9 thousand km away and more frequently badmouthed than Germany, a few years ago two brothers and their cousin organized a simple and effective scheme of bribes, revolving doors and conflicts of interest to successfully secure visible infrastructure contracts[ii]. The good thing in both cases? Prosecutors are looking into the matter. The annoying commonalities? This is corruption 1.0: we are not talking about sophisticated, complex, high-tech schemes that would escape expert scrutiny. Read More

Shopping for Governance

I used to like Gerard Depardieu’s performances until he said he would become Russian -just to avoid paying taxes in France, and went on to praise Russia’s democratic character[1]. He could at least have saved the last bit.  There is however something revolutionary in his decision: the idea, that one could choose (as opposed to endure) the government one submits to. Read More

Corruption causes social damage: can it be repaired?

We know corruption is bad, we argue about its consequences but we have been obsessed with its causes and the perpetrators.  The main point of academic, activist and reformist attention view has been: whether it is the supply or the demand side of corruption; whether the offender is at home or abroad (or both); whether the method used was a bribe or a kickback; whether we are dealing with petty or grand corruption and how much is it and where does it happen; if and how we can ensure that not only individuals but also that legal entities be responsible for acts of corruption, and so on.  Partly this focus on causes, parallels our focus on the perpetrators, which has been the focus of  what is called the “anti-corruption movement” which includes civil society organizations, international institutions, donors, academics and professionals of different kinds among others. In fact this is the main focus of international legal instruments (United nations Convention Against Corruption and the OECD Anti-Bribery Convention) with some minor exceptions. And where are the victims? Fighting corruption is not an objective per se, and if corruption can’t be prevented or avoided, its consequences at least need to be repaired. Read More

Of fraud, corruption and self-pity: What are corruption sanctions for?

The logic of Judge Rakoff is clean, whether one likes the consequence or not, so does his math. In rendering his decision on the Consent Judgment in S.E.C v Bank of America he considered the proposed agreement unfair, unreasonable and inadequate. According to the facts in the case, in the proxy statement that the Bank of America made to its shareholders for their approval of the merger with Merrill Lynch, it represented “…that Merrill had agreed not to pay year-end performance bonuses or other discretionary compensation to its executives prior to the closing of the merger without Bank of America’s consent[1]…what turned out not to be true. The S.E.C discovers this little problem (thus too late), wields its regulatory sword on the agreement and threats to sanction Bank of America. Short of issuing the sanction, the SEC and the Bank strike an agreement to reduce it: the Bank pays a fine of US$33 Million dollars  and is not expected to accept or deny the charges. This is the agreement the Judge was asked to give his blessing on. Read More

La Transparencia Corporativa Paga*

Si usted es el Presidente Ejecutivo de una compañía y le ofrecen una estrategia para reducir riesgos de reputación, ampliar mercado, mitigar riesgos operacionales e incrementar la confianza de sus inversionistas, clientes y  grupos estratégicos (actuales o posibles), ¿La tomaría? Si su respuesta es si, y además le concierne que la estrategia sea enteramente legal y de bajo costo, entonces lo que estoy por describirle le interesa.

Se trata de una estrategia empresarial simple: se llama transparencia. Se basa en el principio de responder por lo que uno realmente es, hace y piensa, y consiste en poner a disponibilidad de a quien le interese (inversionistas, clientes, contratistas o el público en general) información relevante sobre las características, planes  y operaciones de la empresa. Klick here for the full text