Dealing with the Consequences: Repairing the Social Damage caused by corruption

October 26, 2015

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.

Shopping for Governance

November 19, 2013

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 the rest of this entry »

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

October 3, 2009

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 the rest of this entry »

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