Podcast: Changing the Global Compliance Environment


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Photo Credit: SCCE “Compliance & Ethics Blog”

A new podcast from the Society of Corporate Compliance & Ethics (SCCE) features CIPE’s global anti-corruption work at a time when more and more countries are enacting legislation designed to restrict bribe-making and bribe-taking. In this edition of the weekly “Compliance Perspectives” podcast, host Adam Turteltaub, an SCCE vice president, and Frank Brown, Director of CIPE’s new Anti-Corruption and Governance Center, offer listeners an overview of CIPE’s mission in those emerging market countries where new laws make the business community increasingly sensitive to corruption risk.

In one such country, Indonesia, a recent Supreme Court ruling found that companies are subject to corporate criminal liability for corrupt practices. Overnight, this caught business leaders’ attention as they strove to understand the implications for their own operations and to discern which Indonesian law enforcement body would take the lead in the new environment. The development also illustrated the sort of opportunity that CIPE looks for in deciding where to deploy limited anti-corruption resources.  Read More...

Zuma Ousted as South Africa Aims to Move Ahead



Photo Credit: Wikimedia 

Since his election as President of South Africa in 2009, Jacob Zuma has been a controversial figure, mired in numerous corruption scandals. Even before Zuma took office, corruption plagued him. In 1999, an associate of his was arrested and convicted of bribing him in a $5 billion dollar arms deal. Zuma, the “people’s president,” got a pass for his role in the scandal. It took seventeen years for the Supreme Court to rule that the 18 counts of corruption pertaining to the arms deal would be reinstated.

Similarly, in 2016, the Court declared that Zuma had used government funds to renovate a private housing compound for himself, called Nkandla. The fact that Zuma used taxpayer money and was ordered to repay the government, which he did, should have been evidence enough that he was not fit to serve, but Zuma carried on as president for two more years.  Read More...

Fixing the System: Government/Business Relationship in South Korea



Photo Credit: Panarmenian 

On February 5, Samsung’s Jae-yong Lee, vice-chairman and the heir to Samsung, was released on probation by an appellate court, avoiding a five-year prison sentence handed down from a previous ruling. The court could not find any “evidence of typical government-business corruption”, but instead ruled that Samsung was a political victim of former President Park Geun-hye, who coerced Samsung to support horse-riding lessons for Yoo-ra Jung, the daughter of Park’s closest confidant, Soon-sil Choi.

The court has admitted that 3.6 billion was paid (US$3.3 million) in bribes – far short of the 43.3 billion (US$39.4 million) alleged in the indictment. It’s not hard to imagine that if any other company in Korea gave or received a bribe of similar size, someone would certainly be sent to prison. Unsurprisingly, the “free pass” given to Lee and Samsung demonstrates the cozy relationship the conglomerate has with the government and its ability to ride out a scandal that brought down a president.  Read More...

Turning Pledge into Action: Lessons in Collective Action

Photo Credit: Thailand’s Private Sector Collective Action Coalition against Corruption

Collective action is a common method adopted by the private sector for anti-corruption initiatives around the world. It behooves companies to join together as a group that refuses to pay bribes. Uniting companies in the same industry and gathering key players in the larger business community can make collective action campaigns even stronger.

It is not an easy task to convince the private sector to join forces to push back against public officials and drive change. Thailand’s Private Sector Collective Action Coalition against Corruption (CAC) has attracted as many as 881 companies to sign up for the initiative, including 416 listed companies that control over 80% of the Thai bourse’s market capitalization.

Founded with crucial CIPE financial support and expertise in 2010 by eight prominent business organizations, the CAC is set up to become a main platform for companies in Thailand to take part in tackling corruption through collective action.  Read More...

Zero Tolerance = Mission Impossible? Rethinking AB/C strategies in high risk economies


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Photo Credit: Wikimedia 

A recent Foreign Affairs article by Chris Miller highlighted how “the three-pronged strategy of Putinomics” has worked to keep the current resident of the Kremlin in power:

“First, it focused on macroeconomic stability—keeping debt levels and inflation low—above all else. Second, it prevented popular discontent by guaranteeing low unemployment and steady pensions, even at the expense of higher wages or economic growth. Third, it let the private sector improve efficiency, but only where it did not conflict with political goals.”

Those in the field of anti-corruption should pay close attention to this playbook, especially the third-prong, and consider how it could be used by other autocratic states to appease the population while resisting efforts to hold the corrupt accountable.

This disturbing trend of repressive statecraft should give pause to groups working to make their governments more transparent and accountable, particularly here in Asia, where governments are more and more leaning towards “guardianship” states or worse mimicking the heavy handed styles of Russia and China.  Read More...

Corruption Case Highlights Growing Political Divide in Bangladesh


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Photo Credit: Derek Blackadder via Flickr

On Thursday, February 8th, a Bangladeshi judge convicted Khaleda Zia, the head of the opposition Bangladesh Nationalist Party (BNP) of embezzlement and corruption, sentencing her to five years in prison. Zia has been charged in 37 different incidents over the course of the three decades she’s been in politics, including her two stints as Prime Minister of the country, from 1991-96 and 2001-06. This most recent case is very significant – a sentence of five years could potentially render her ineligible for running for office, as the Bangladeshi Constitution prohibits anyone sentenced to over two years of jail from participating in elections.

While the ruling Awami League Party has proclaimed this case as a victory for the justice system, Zia and other BNP representatives have suggested this trial is politically motivated. International human rights organizations and other political analysts have expressed concerns that this case may just be another move in the battle for political power between Zia and her opponent, current Prime Minister and head of the Awami League, Sheikh Hasina.  Read More...

Corruption in the Nigerian Judiciary – Should Umar’s Arrest Sow Optimism?



Photo Credit: Feather Project

The fight against corruption in Nigeria has hit a major roadblock as Danladi Umar, the chief judge in Nigeria’s Code of Conduct Tribunal, the counter-corruption court, has been charged with soliciting bribes in exchange for leniency in a ruling in 2012. Umar hurled himself into the media spotlight in June 2017 when he acquitted the Nigerian Senate President Bukola Saraki of 18 charges, 15 of which related to not declaring assets appropriately while state governor and three pertaining to the acquisition of two houses in Lagos. The Economic and Financial Crimes Commission (EFCC) later appealed the ruling and the Court of Appeal ordered a retrial.

High profile arrests like these do not help counter Nigeria’s reputation as a country that suffers from deep-rooted systemic corruption. Nigeria would be prudent to quickly determine the truth behind these allegations to signal to its citizens, its neighbors, and foreign investors that the government does not tolerate corruption.  Read More...

CG Fund: New Investment Tool to Boost Governance Standard


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Most people now accept that good governance is a basis for long-term business success and sustainability. When it comes to investing in stocks, firms with good governance should be seen as relatively safe bets. Wouldn’t it be great if there were funds that handpicked stocks with such desirable qualifications for you?

Thailand’s investment community took a proactive role by introducing mutual funds that limit its investment portfolio to stocks of companies with proven track records of high governance standards and established internal graft-prevention mechanisms.

Some 11 asset management companies, controlling over 90% of the domestic market share, made a joint announcement in August 2017 that they will separately introduce the so-called corporate governance or “CG funds.” So far, 10 funds have been set up, raising over THB 4 billion orUS$125 million from investors.

One unique element of the Thai CG funds is that all 11 asset management companies agreed to contribute 40% of their fund management fees to organizations that promote corporate governance and anti-corruption.  Read More...

Albanian Ponzi Schemes as an Extreme Case for Strong Corporate Governance


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Photo Credit: Robert Nagle, Vlore, Money Lenders,1997

At their height in November 1996, a series of Albanian “Ponzi” schemes held money equal to almost half of the country’s total GDP. The schemes were fronted by a series of companies and charitable foundations that sprung up in newly capitalist Albania and offered monthly interest rates on deposits. Over half of the population rushed to invest in the schemes, some of which promised to triple an investor’s money in three months. The government itself ran advertisements for the schemes on state-run television. According to one observer, the country smelled and sounded like a slaughterhouse because of all the farmers selling off their livestock to invest in the schemes. It seemed as if everybody could get rich quick.

The collapse was predictably swift. On November 19th, 1996, the first scheme collapsed when it could no longer bring in enough deposits to pay previous depositors.  Read More...

Can We Make Anti-Corruption Sustainable?

Photo Credit: CIPE

On December 8th, 2017, the Center for International Private Enterprise (CIPE) and the Partnership for Transparency co-hosted an event that asks, “Can We Make Anti-Corruption Sustainable?” Following a brief introduction by Frank Vogl, Co-Founder of the Partnership for Transparency and Transparency International, Dr. Delia Matilde Ferreira Rubio gave her first speech in the United States following her recent election to Chair of the International Board of Directors of Transparency International. Dr. Rubio discussed her vision and strategy regarding the challenges in the fight against corruption. Dr. Rubio’s speech was followed by a panel discussion moderated by CIPE’s Managing Director Andrew Wilson featuring Dr. Rubio, CIPE Senior Program Officer Frank Brown and Alina Mungiu-Pippidi, Professor of Democracy Studies at the Hertie School of Governance in Berlin.

The full video of the event is below:

The full CIPE Democracy that Delivers podcast featuring Dr. Delia Ferreira Rubio is below: