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The politics of corruption - Squeezing the sleazy

2012-12-18 10:24:59

Global anti-corruption efforts are growing in scope and clout. This year is set

to be the best yet

Dec 15th 2012 | PRAGUE | from the print edition

IMPUNITY and euphemism used to be daunting obstacles for graft-busters. Not any

more. International efforts are bearing fruit. New laws have raised the cost of

wrongdoing. Financial markets are punishing corrupt companies. Most

encouraging, activists have growing clout not only in high-profile cases but at

grassroots level, where the internet helps to highlight instances of quiet

(low-level) corruption.

The big international bodies dealing with corruption are making progress. A

working group set up in 2010 by the G20 (the world s largest economies) has

done more than many observers expected, particularly in drawing up rules on

seizure of corrupt assets and denial of visas to corrupt officials. Unlike the

United Nations Convention Against Corruption, the G20 is not so far split

between keen sleazebusters and countries like Russia and China. Another body,

the Paris-based Financial Action Task Force, will start a fourth round of

monitoring member states next year, chiefly for effectiveness in implementing

anti-money-laundering laws.

Such efforts are steady, slow boring stuff , but still important, says Robert

Palmer of Global Witness, a campaigning group. He notes that international

discussions no longer tiptoe round the word corruption . A culture of denial

has given way to at least lip-service to the cause.

The anti-graft laws of national governments are making progress too. America s

Foreign Corrupt Practices Act and Britain s Bribery Act impose potentially

savage penalties on firms that do business by sleazy means. That includes

having weak in-house anti-corruption policies. The results are mixed. At a

conference earlier this month in Prague organised by the Brookings Institution,

an American think-tank, Thomas Firestone of the Moscow office of Baker &

McKenzie, a law firm, said foreign managers trying to penalise bribery with

dismissal face tough Russian laws that hamper such firings. Perversely, the

most corrupt employees can thus gain hefty severance payments. Such clashes

between local and international laws abound.

Market pressure is growing too. The International Corporate Governance Network

brings together institutional investors with $18 trillion under management. It

scrutinises companies for compliance with anti-corruption principles. So far 70

firms have signed up to the Extractive Industries Transparency Initiative,

which aims to make natural-resource companies publish what they pay to

governments. America s Securities and Exchange Commission has backed similar

rules. Campaigners say murk around such payments costs poor countries billions

of dollars.

Businesses say they like the way clean government creates a level

playing-field. In a corrupt country, you are only as good as your last bribe ,

said one executive at the Prague conference. For years, data were scanty:

campaigners relied heavily on the corruption-perceptions index published by

Transparency International, an anti-sleaze group. But the 58 countries that

support the American-backed Open Government Partnership are committed to

providing data about the way public money is spent. That helps to highlight

wasteful (and corrupt) government procurement.

Specific campaigns have worked too. Congress has just passed a law blocking the

visas and freezing the assets of 60 Russian officials implicated in the death

in prison of Sergei Magnitsky, a whistle-blowing lawyer who had uncovered a

$230m fraud. His client, Bill Browder, a financier who is campaigning to avenge

him, wants Europe to follow America s lead.

Lower-profile efforts are spreading too. Not In My Country, a web-based

campaign in Uganda, encourages students to report instances of corruption such

as teachers demanding sex for higher grades. Next year it will launch a mobile

app for people wanting to upload audio recordings of extortion attempts.

Janaagraha, a Bangalore-based group, runs ipaidabribe.com, which has recorded

thousands of bribes paid or sought; heat maps plot instances of corruption.

Similar websites operate in Pakistan, Kenya, Liberia and Indonesia. They help

even the humble to fight back.

Tricks of the trade

Given the scale of the problem, nobody is claiming victory. Laws are one thing,

enforcement quite another. Public pressure may not create political will among

decision-makers. Anti-corruption laws can be politicised and used for partisan

purposes. Some countries think that the whole cause is a disguise for Western

meddling and hypocrisy. But on December 9th campaigners celebrated

International Anti-Corruption Day with a spring in their step.

from the print edition | International