International Newsletter of HATVP – December 2017
As the year 2018 begins, the international newsletter of December 2017 is an opportunity to review the past year. Cooperation in preventing and fighting corruption remains more necessary than ever. Indeed, on the eve of the International Anti-Corruption Day, celebrated on 9 December, the Chair of the Group of States against Corruption of the Council of Europe described 2017 as a “dark year on the anti-corruption front”.
Throughout 2017, Latin America has experienced upheavals and the discovery of new ramifications of the operation “Car Wash”. Civil society organizations and anti-corruption agencies had their work and investigations challenged and were faced with numerous intimidation attempts. Some of these attempts even lead to violent attacks, such as the murder of the Maltese anti-corruption journalist, Daphne Caruana Galizia. After the 2016 Panama Papers leak, the 2017 Paradise Papers revelations exposed the tax optimization schemes used by high-ranking public officials, multinational corporations and the world’s wealthiest people. Reform projects have threatened and still threaten the rule of law and the fight against corruption in certain countries, like Romania.
However, in 2017, new tools and devices have emerged around the world to promote the integrity of public officials and also to prevent and combat corruption, such as the adoption of the OECD Recommendation on Public Integrity in January, the publication of the decree on the establishment of the National Commission against corruption in Morocco in November, the implementation throughout the year of the Anti-corruption Commission of Seychelles and the French Anti-corruption Agency (both created in 2016), and the launch of a platform to protect whistleblowers in Africa, in March.
All these evolutions remind us that many actors are engaged in addressing one of today’s major challenges, which is to strengthen the confidence of citizens in institutions and public officials. This is a difficult endeavor. It requires a permanent commitment from the institutions and organizations working to prevent and fight corruption. Let us hope that 2018 will continue to reinforce their role and credibility.
INTERNATIONAL & MULTILATERAL
Council of Europe
On 8 December, during its plenary meeting, the Group of States against Corruption (GRECO), the Council of Europe’s anti-corruption monitoring body, adopted the Fifth Round Evaluation reports on the United Kingdom and Slovenia. This new round examines corruption prevention and integrity promotion in central governments and law enforcement agencies.
Besides, GRECO decided to carry out ad hoc urgent evaluations of draft legislative amendments concerning the judiciary in Romania, and on two draft laws on the reorganization of the Supreme Court and of the National Council of the Judiciary in Poland. It is the first time GRECO is using Rule 34 of its Rules of Procedure, recently introduced to allow ad hoc procedures in exceptional circumstances. This rule can be applied when an institutional reform, legislative initiative or procedural change may result in a member’s serious violation of a Council of Europe anti-corruption standard which has been the subject of any GRECO evaluation round. The ad hoc reports of Romania and Poland should be adopted in March 2018.
On the eve of the International Anti-Corruption Day, celebrated on 9 December, the Chair of GRECO, Marin Mrčela, stated that 2017 has been “a dark year on the anti-corruption front.” He noted that many allegations of corruption in public and private organizations eroded people’s trust in them. Mr. Mrčela underlined that to eradicate corruption in our societies, robust legislation and independent institutions are crucial, but insufficient. According to him, it is fundamental that honest people show leadership and lead by example with integrity.
The compliance reports of the Fourth Evaluation Round on Iceland and Armenia were published on 13 and 21 December.
On 22 December, the Council of Europe’s Secretary General, Thorbjørn Jagland, sent a letter to the President of Romania, in which he asked him to rethink the reforms of the judiciary. In particular, he urged Romanian authorities to seek the expertise of the Venice Commission regarding these reforms in order to provide clarity on their compatibility with rule of law standards. The Commission is the Council’s advisory body on constitutional matters. Its mission is to advance democracy through law. Mr. Jagland specified that the Commission’s opinion would be complementary to the urgent assessment of these texts, which is being prepared by GRECO.
In December 2017, the European Ombudsman presented a report that analyzed how EU institutions responded to its decisions made in 2016. There was an 85% compliance rate, up two points from 2015. The institutions reacted positively to 77 out of the 91 proposals put forward by the Ombudsman to correct or improve their behavior. Nevertheless, the Ombudsman emphasized that any refusal to comply with one of its proposals should be seen as a missed opportunity to address administrative shortcomings.
Moreover, the European Commission released a Special Eurobarometer on corruption perceptions and experiences in the EU. This public opinion survey shows that over two thirds (68%) of Europeans think that corruption is widespread in their country, and a large majority (79%) consider that the links between business and politics favor it. Just under three-quarters (73%) of respondents believe that there is corruption in national public institutions and that current measures against corruption are inadequate.
Furthermore, on 5 December, the Council of the European Union published a list of non-cooperative jurisdictions for tax purposes. It also agreed on applying “defensive” measures with regard to the 17 listed jurisdictions. The aim is to promote good governance worldwide, in order to maximize efforts to prevent tax fraud and tax evasion. The Council’s work on the list has been conducted in parallel with the OECD and in the context of the G20. The NGO Transparency International criticized the lack of transparency in the process of producing the list.
Organisation for Economic Co-operation and Development
On 12 December, a statement by Drago Kos, Chair of the Organisation for Economic Co-operation and Development (OECD) working group on bribery, was issued to mark the twentieth anniversary of the Anti-Bribery Convention. Signed in 1997, this OECD convention, which has 43 states parties, establishes standards to criminalize bribery of foreign public officials in international business transactions. Mr. Kos assessed the results of this convention. He praised the progress made while also identifying a number of shortcomings. In this context, he announced the release of a report on the detection of foreign bribery that outlines areas where improvements are needed.
On 5 December, the NGO Transparency International and 18 organizations launched a Eurozone watchdog network. Open to any individual or organization, the goal of this network is to ensure that ongoing negotiations on the reform of the Eurozone make the governance of the common currency more transparent and more democratic.
On 8 December, the Digital Award for Transparency honored six initiatives from developing countries that strengthen the accountability of institutions and fight corruption through digital tools. These initiatives were developed by civil society actors in Tunisia, Senegal, Madagascar and Burkina Faso. The award was given by the French Ministry for Europe and Foreign Affairs in partnership with Transparency International, the French Operator in Media Cooperation and the civic technology incubator Liberté Living-Lab.
During the conference of the African National Congress (ANC), which took place from 16 to 20 December, the successor of President Jacob Zuma at the head of the party was chosen. The new ANC president and future candidate in the 2019 presidential election, Cyril Ramaphosa, concluded the conference by promising to eliminate corruption. His speech came at a moment when support for the party declines as internal divisions, scandals and bribery allegations undermine its credibility.
As a matter of fact, corruption cases involving President Zuma tarnished the ANC’s image and exacerbated the crisis of confidence. Recently, 783 corruption charges were reinstated against the head of state. In addition, three days before the conference, on 13 December, the Pretoria High Court authorized the publication of a report, which uncovers how the Guptas, a family of Indian businessmen, wield undue influence over the Zuma government, and ordered the establishment of an inquiry commission.
On 3 December, the President of the National Anti-Corruption Authority (ANLC) called on ministers, MPs and prefects who had not yet submitted their asset declaration, required by law, to fulfill their obligations.
On 7 December, as part of the International Anti-Corruption Day celebrations, the National Anti-Corruption Agency (ANLC) presented to the press the anti-corruption law adopted by the Parliament in July. According to Ibrahima Mohidinn Diané, head of the agency’s complaints department, the dissemination of this law will enable Guinean citizens to understand that they now have a tool to report corruption in public administration.
On 10 December, Jean-Louis Andriamifidy, Director-General of the Independent Anti-Corruption Office (Bianco), attested that the anti-corruption division (PAC) would be operational by the end of the month. Once the PAC is implemented, sanctions should be decided and applied to the six parliamentarians who breached the law by not filing their asset declaration.
On 4 December, the Minister of Justice, Abubakar Malami, and Swiss authorities signed a memorandum of understanding for the return to Nigeria of 321 million dollars siphoned off by former dictator Sani Abacha. In power from 1993 to 1998, he is accused of diverting up to 5 billion dollars of public money. The bilateral agreement sets out that the funds will be repatriated via a project overseen by the World Bank. The project intends to strengthen social security for the poorest sections of the Nigerian population.
On 11 December, Cheikh Tidiane Mara, vice president of the National Office against Fraud and Corruption (OFNAC), announced that the institution will target the private sector, as an actor and partner, in its 2017-2021 strategic plan.
Besides, on 20 December, the OFNAC in collaboration with the United Nations Development Program (UNDP) organized a workshop on corruption perceptions and costs in Senegal. Based on a survey conducted by Synchronix, the OFNAC estimated the cost of corruption in the country at 118 billion CFA francs (about 180 million euros). The report also revealed that the police and the gendarmerie are perceived as the most corrupt institutions.
Middle East and North Africa
On 12 December, Algeria’s anti-corruption mechanisms and devices were discussed by students of the Algerian National School of Administration (ENA) and senior officials of the National Body for Preventing and Combating Corruption (ONPLC), the Central Office for the Repression of Corruption (OCRC) and the Financial Intelligence Unit (CTRF). This meeting was organized to celebrate the International Anti-Corruption Day.
On this occasion, the president of the ONPLC, Mohamed Sebaibi, mentioned the ongoing development of a new electronic platform for asset declarations of high-ranking public officials at the beginning and at the end of tenure. However, Mr. Sebaibi pointed that the implementation of the platform needed the adoption of new legislation, in particular with regard to data protection for public officials. Currently, the ONPLC is receiving the asset declarations of 54 000 local elected officials.
Moreover, in an interview published on 14 December, the Algerian writer Yasmina Khadra remarked that in his native country “corruption is beyond comprehension”, and affirmed that it must be fought.
The second National Anti-Corruption Congress, organized by the National Authority for the Fight against Corruption (INLUCC), was held in Tunis, on 8 and 9 December. The congress evaluated the results of the first year of the national strategy for good governance and fighting corruption, and distinguished the next steps in the implementation of its operational action plan. On the sidelines of the event, Chawki Tabib, president of the INLUCC, stressed that the number of corruption cases referred to justice has doubled since the signature of agreements with ministries.
On 21 December, Mr. Tabib unveiled alleged corruption cases involving officials of the Ministry of Finance. These cases would have caused considerable losses to the Tunisian state. Consequently, on 22 December, a cooperation agreement was signed between the INLUCC and the Ministry of Finance to reinforce the mechanisms of prevention and fight against corruption in this government department. In total, thirteen agreements were signed between the INLUCC and different ministries.
In an article published on 27 December, the newspaper Les Échos focused on the anti-corruption campaign of Crown Prince Mohammad bin Salman. Since early November, about 200 businessmen, ministers and princes are detained at the Ritz-Carlton hotel. Saudi authorities proposed to those accused of corruption to release them in exchange for shares in their companies or cash. Thanks to these financial settlements, the Treasury could recover around 100 billion dollars.
On 2 December, tens of thousands of protesters gathered in downtown Tel Aviv to demonstrate against the government’s corruption and the alleged slowness of investigations against Prime Minister Benjamin Netanyahu. Mr. Netanyahu is implicated in two ongoing investigations, one concerning the gifts he allegedly received from businessmen, and the other pertaining to a deal he allegedly tried to break with the owner of a newspaper, in order to obtain a favorable coverage of his action. A week later, on 9 December, protesters organized a second march against the government.
On 28 December, the Parliament voted a controversial law that curtails police powers to repress corruption. It notably prohibits investigators from revealing whether they have collected enough evidence to allow prosecutors to charge a suspect. The opposition contends that this law is a maneuver aimed at preserving the image of the Prime Minister. The latter accuses the police of being biased.
On 11 December, the government announced the nomination of Mario Dion as the next conflict of interest and ethics commissioner. Before the House of Commons, on 12 December, the new commissioner did not commit to complete the investigations initiated by his predecessor, Mary Dawson. Nonetheless, he assured that he would scrutinize the files started by Ms. Dawson, including the ongoing investigation on the Minister of Finance, Bill Morneau. Conservative and New Democratic MPs expressed frustration with how the selection of the new commissioner was handled, saying they were not consulted by the government.
On 3 December, Newsweek magazine indicated that Jared Kushner, son-in-law and advisor of President Donald Trump, failed to disclose his role as a co-director of the Charles and Seryl Kushner Foundation on financial records he filed with the Office of Government Ethics (OGE). The foundation donated tens of thousands of dollars to Israel settlements. This omission fuels suspicions of conflict of interests because Mr. Kushner was tasked by his father-in-law with negotiating peace in the Middle East. Indeed, he allegedly tried to block a UN Security Council resolution condemning Israeli settlements in occupied Palestinian territories.
On 7 December, Walter Shaub, former OGE director, filed a second complaint against White House counselor Kellyanne Conway for her alleged violation of ethical rules.
On 12 December, Transparency International released a survey on corruption perceptions in the United States. The survey showed that Americans believed that society has become more corrupt under Trump administration. Nearly six in ten respondents now say that the level of corruption has risen in the past twelve months, up from around a third who said the same in January 2016. The White House is perceived as the most corrupt institution. Almost 70% of respondents think that the government is failing to fight corruption, up from half in 2016. In its recommendations, the NGO suggested, inter alia, to increase transparency in public spending, to prevent revolving doors and to reinforce the independence of the OGE.
On 16 December, Ivanka Trump, daughter and advisor of the head of state, was accused of conflict of interest for opening a new shop in her father’s skyscraper, the Trump Tower. Several former public officials and watchdog groups argue that the President’s daughter is using her White House ties to advance her fortune. She would have repeatedly broken ethical laws applicable to government officials.
On 21 December, sanctions were imposed on 52 people and entities for alleged human rights violations and corruption. These sections, set out by the Magnitsky Act, freeze any assets the individuals or entities hold in the U.S. and also prevent them from using any American financial institution.
On 21 December, President Pedro Pablo Kuczynski avoided impeachment after a vote in Congress. The opposition failed to gather the necessary votes to declare his “permanent moral incapacity” and remove him from office. Still, the president’s impeachment seemed certain, given that 93 MPs out of 130 voted to open a procedure against him on 15 December. Mr. Kuczynski is suspected of bribery because of his ties with the Brazilian construction conglomerate Odebrecht. The latter acknowledged to have made payments to consulting firms directly linked with the head of state when he was a minister. The Odebrecht scandal, which affects many Latin American countries, is part of operation “Car Wash”, a vast anti-corruption investigation under way in Brazil.
Three days later, on 24 December, Mr. Kuczynski granted a humanitarian pardon to former President Alberto Fujimori, sentenced to 25 years in prison for corruption and crimes against humanity. This decision triggered a political crisis. Thousands of Peruvians demonstrated in Lima on 25 and 29 December. They denounce impunity and blame Mr. Kuczynski for negotiating his stay in office at the expense of justice. The pardon is viewed as a favor done to MPs loyal to Fujimori in exchange for their votes. In addition, the Minister of Culture, along with other high-ranking public officials, resigned in protest against the presidential pardon.
On 12 December, Venezuelan authorities announced that Rafael Ramirez, former ambassador to the UN and ex-president of the state oil company PDVSA, would be investigated for corruption. The investigation is part of an anti-corruption campaign targeting a government-owned corporation that provides 95% of the country’s exports. In this context, on 30 November, Eulogio del Pino, former oil minister and Nelson Martinez, former head of PDVSA, along with several executives of the company, were arrested. Reuters news agency reported that the Venezuelan oil industry is paralyzed due to this purge, which is decried by critics of President Nicolás Maduro. According to them, Mr. Maduro’s crackdown on graft is a stratagem to consolidate his power before the 2018 presidential election.
On 6 December, the Corruption Eradication Commission (KPK) claimed that it had collected numerous testimonies and sufficient evidence to indict Setya Novanto, the speaker of the Parliament who was arrested in November for his alleged implication in a fraud case. The case was referred to justice. On 11 December, Mr. Novanto resigned. As his first hearing was held on 13 December, the defendant was replaced at the head of the Golkar party, the country’s second political force. Besides, on 19 December, the Financial Transaction Reports and Analysis Center (PPATK) signaled that Mr. Novanto could also face money laundering charges.
REPUBLIC OF KOREA
On 22 December, Shin Kyuk-Ho, founder of the Lotte Group, the fifth largest conglomerate in South Korea, was sentenced to four years in prison for embezzlement. However, the court allowed him to remain free on health grounds pending an appeal, as the 95-year-old businessmen suffers from dementia. Mr. Shin was convicted of misappropriating Lotte’s funds for the benefit of his relatives. The trial involved his three children and his mistress. Shin Dong-Bin, his son and chairman of the family-controlled conglomerate, received a suspended prison sentence. He is also implicated in the corruption case that lead to the impeachment of President Park Geun-Hye.
On 26 December, as a protest against her prolonged detention, the former head of state refused to be questioned by prosecutors. She is detained since March. On October, she decided to no longer attend the hearings of her trial.
On 5 December, the government presented an action program aimed at implementing measures to prevent and fight corruption until 2020. The program plans, inter alia, to strengthen mechanisms for investigating, controlling and sanctioning acts of corruption. Furthermore, the government proposes to promote transparency in public service and to extend the scope of the law on the prevention and fight against corruption to the private sector.
On 12 December, Karl-Heinz Grasser, former Finance Minister, appeared in court to answer charges of corruption and embezzlement. Mr. Grasser, along with 15 high-ranking public officials, managers and bankers, is being judged for acts that allegedly occurred during the privatization process of the real estate company Buwog in 2004. The ex-minister is accused of diverting commissions from the sale of 60 000 apartments.
On 23 December, RFI radio analyzed the political tensions surrounding the new anti-corruption law. This law provides for the establishment of a Commission for the fight against corruption and the seizure of criminal assets. Debates on the structure and functioning of this new body have divided the Bulgarian political class, widening the gap between the majority and the opposition. The President could still veto the law.
On 1 December, Europe 1 radio reported that the conservative party (PP), chaired by Prime Minister Mariano Rajoy, will be judged as a legal person for spoliation of evidence in a corruption case. The PP is accused of erasing the hard disks of its former treasurers’ computers. This will be the first time that a political party will be judged as a legal person in Spain.
On 8 December, the Hungarian branch of Transparency International (TI) denounced corruption in the allocation of EU funds. The NGO argues that the decline of the rule of law in the country has led to overpriced projects and biased decisions. József Péter Martin, TI Hungary’s executive director, highlighted that considerable amounts of public money were wasted on unjustified objectives.
On 20 December, an Italian judge ruled that two of the world’s largest oil companies, Shell and Eni, must go on trial on charges of corruption over a 1.3 billion dollars oil deal in Nigeria. The judge set a 5 March trial date in Milan for the companies as well as a group of current and former executives, including Eni’s chief executive, and a former Nigerian oil minister. The case stems from a long-running investigation by Italian prosecutors into the corporation’ purchase in 2011 of an offshore tract. Shell and Eni are accused of bribing Nigerian public officials.
On 4 December, Prime Minister Joseph Muscat announced that ten people were arrested in connection with the investigation into the assassination of anti-corruption journalist Daphne Caruana Galizia. The suspects were taken into custody. The next day, on 5 December, three men were charged with murder. They pleaded not guilty.
On 10 December, thousands of Romanians protested in the streets of Bucharest and other major cities against a series of legislative reforms, which they consider would threaten the independence of the judiciary and hinder the fight against corruption. Despite criticism, the bills were adopted by the Chamber of Deputies on the following day. On 17 December, other protests took place and were endorsed by Romanian judges. Forbidden to demonstrate by the Constitution, they gathered in silence. Indeed, the Council of the Judiciary had issued a negative opinion on the reforms.
The Senate approved the reforms on 19 December. The texts were voted by the senators of the Social Democratic Party in power. All the elected representatives of the opposition boycotted the vote. The reforms now need to be ratified by President Klaus Iohannis, who has expressed reservations. On 21 December, France, Germany, the Netherlands, Belgium, Denmark, Finland and Sweden affirmed, in a joint statement from their embassies in Bucharest, that the bills would undermine the progress made in the fight against corruption. The seven states urged Romanian authorities to rethink the reforms of the judiciary.
Finally, on 27 December, Prime Minister Mihai Tudose received representatives of civil society organizations that challenged the bills. They exhorted Mr. Tudose to seek the opinion of the Venice Commission and to delay the entry into force of the laws in the meantime. They confirmed that the demonstrations would continue as long as the reforms are in place.
The UK government anti-corruption strategy was published on 11 December. It provides a framework to guide efforts to tackle corruption for the period to 2022. In particular, the document sets out six priorities for the present Parliament. These include reducing the insider threat in high-risk domestic sectors such as borders and ports; strengthening the integrity of the UK as an international financial center; promoting integrity across the public and private sectors; reducing corruption in public procurement and grants; improving the business environment globally and working with other countries to combat corruption.
On 15 December, Alexey Ulyukayev, former economy minister under President Vladimir Putin, was convicted of corruption. In office between 2013 and 2016, he was arrested in October 2016, and sentenced to eight years in a high-security prison. Mr. Ulyukayev was also ordered to pay a 2.2 million dollar fine as part of the punishment for soliciting bribes.
On 4 December, the U.S. Department of State underlined that recent events, including the arrest of officials from the National Anti-Corruption Bureau (NABU) and the seizure of sensitive NABU files, raise concerns about Ukraine’s commitment to fighting corruption. These actions undermine public trust and risk eroding international support for the country. Likewise, on 6 December, the UK Foreign and Commonwealth Office expressed its concern over the latest attacks against NABU’s independence. The International Monetary Fund (IMF) and the European Union have issued similar statements.
On 5 December, Mikheil Saakashvili, former Georgian president and vocal opponent of the Ukrainian government, was briefly arrested. After altercations with the police, his supporters managed to free him. Mr. Saakashvili, who was accused of fomenting a coup, was arrested again and placed in pre-trial detention on 8 December. He denounced President Petro Poroshenko’s corruption and called for his removal from office. On 11 December, a judge rejected Kiev prosecutor’s request to confine the political opponent to house arrest. Mr. Saakashvili was eventually released. President Poroshenko remains under growing criticism.
On 21 December, Foreign Policy magazine reported that NABU detected cases of corruption and fraud in arms industry, following an investigation into a state-run defense enterprise closely linked to the president. These allegations come amid a decision by U.S. President Donald Trump’s administration to allow the export of lethal equipment to Ukraine.