International Newsletter of HATVP – October 2017
The actions of the High Authority are carried out in an international context marked by current events and growing attention regarding issues of corruption, the promotion of transparency in public life, and the integrity of public officials. The 10th international newsletter reviews the efforts, reforms, and studies conducted to meet these challenges, both within international organizations and civil society and at the national level.
INTERNATIONAL & MULTILATERAL
International Monetary Fund
As the International Monetary Fund (IMF) met in Washington, Transparency International published, on 12 October, recommendations to strengthen the institution’s impact on the fight against corruption. The NGO advocates the inclusion of anti-corruption measures that can be measured and monitored in the IMF new set of governance guidance, which will be issued next year. It proposes the creation of a standardized questionnaire to ensure an equal evaluation across countries, and thus to help the IMF identify where a country needs further anti-corruption policy support. Moreover, Transparency International underlined that IMF country review reports should comprise an assessment of the anti-money laundering measures and that the transparency of Public Private Partnerships should be prioritized. A summary of these recommendations was handed to Christine Lagarde, managing director of the IMF.
Council of Europe
On 10 October, the Parliamentary Assembly of the Council of Europe (PACE) has unanimously adopted a heavily revised Code of Conduct for its members inspired by the recommendations of the Group of States against Corruption (GRECO) issued in June 2017. The PACE crafted this revision in response to allegations of corruption in its ranks, with the aim of restoring public confidence in its work and creating a sound and coherent integrity framework. A few days earlier, on 6 October, the president of the assembly, Pedro Agramunt, resigned following such allegations.
The new rules provide for swift investigations into alleged ethical breaches by members and sanctions when wrongdoing takes place. Members must now pledge not to “promise, give, request or accept” any fee, compensation or reward in the course of their duties, and must declare any interests at the opening of each session. To increase transparency, these declarations must now be posted online. The new code also foresees the creation of a “transparency register” for lobbyist, and steps to guarantee that former members who engage in paid consultancy do not benefit from any special privileges.
At its 77th Plenary Meeting, from 16 to 18 October, the GRECO has adopted a series of decisions pertaining to evaluation and compliance procedures. In particular, the group has adopted the Fourth Round Evaluation Report on the Russian Federation and invited Russian authorities to authorize its publication.
Besides, from 26 to 27 October, the Council of Europe organized a work seminar for MPs from Italy, Albania and Bosnia and Herzegovina. During this event, the High Authority for Transparency in Public Life presented the mechanisms for the prevention and management of conflicts of interest applicable to French MPs.
European Union
On 24 October, a report on the protection of whistleblowers, presented by French MEP Virginie Rozière (S&D), was adopted by the European Parliament. The vote was preceded by a minute of silence in tribute to Maltese journalist Daphne Caruana Galizia, who was murdered on 16 October. The report calls on the European Commission to propose a law protecting whistleblowers, and give a wide definition for the term. The goal is to protect the action of whistleblowers in domains such as tax evasion, the fight against corruption, public health and the environment. Currently, only six states of the Union protect whistleblowers: the fragmentation and heterogeneity of national jurisdictions exacerbate the importance of ensuring protection at the European level. According to the report, all EU countries should also introduce clearer reporting mechanisms, establish measures of protection against retaliation, and provide whistleblowers with support, such as legal and financial assistance.
On the same day, Giovanni Buttarelli, European Data Protection Supervisor, told the website EUobserver that despite the rules governing access, information about MEP expenses may be granted in some cases. Transparency and data protection are not contradictory. According to the website, Buttarelli’s statement weakens the position of the European Parliament that invokes data protection to prevent a consortium of journalists from MEP expense reports. A first hearing about this request was held at the European Court of Justice, but question is far from settled.
Furthermore, while the European Union negotiated the renewal of the glyphosate’s license, plaintiffs and their lawyers in an ongoing U.S. lawsuit against Monsanto came to Brussels on 4 October. They accuse EU food safety agencies of “cherry-picking evidence” in glyphosate assessment. The methods of lobbying employed by the American agrochemical giant, exposed by the “Monsanto Papers”, were scrutinized by several European newspapers, including le Monde and Der Spiegel.
Civil Society
The Financial Transparency Coalition (FTC), a global network of civil society, governments, and expert, released the report « Unequal Exchange ». Composed of numerous analyses, open data and infographics, the report explores in-depth the different facets of the global fight against banking secrecy.
GEOGRAPHICAL AREAS
Sub-Saharan Africa
NIGERIA
On 12 October, the United Nations Office on Drugs and Crime (UNODC) congratulated President Muhammadu Buhari on his efforts in the fight against corruption. In last July, the African Union (AU) unanimously endorsed the appointment of Mr. Buhari as its anti-corruption champion. The Nigerian President, who has introduced a zero tolerance policy on corruption in his own administration, is expected to lead the next AU anti-corruption summit.
SENEGAL
On 10 October, the National Office against Fraud and Corruption (OFNAC) announced that over fifty asset declarations have been registered since last May. At the same time, the institution launched its strategic plan for the fight against fraud and corruption for the period 2017-2021.
EQUATORIAL GUINEA
On 27 October in Paris, Vice President of Equatorial Guinea, Teodorin Obiang, son of the current president, was found guilty in the “ill-gotten gains” case. He was convicted in the first instance and has been given a three-year suspended jail term and a suspended fine of 30 million euros. The court demanded the confiscation of seized assets. It considered that Mr. Obiang has built significant wealth in France through fraudulent means. Nevertheless, the sentence handed down remains lower than requested by the National Financial Prosecutor’s Office. Indeed, the Office asked for three year of imprisonment and a fine of 30 million euros.
IVORY COAST
Corruption perception in Ivorian society has deteriorated. According to a report of the institute Afrobaromètre, released on 20 October, 47 percent of respondents bribed a police officer at least once in the twelve months preceding the survey, and 31 percent bribed a public official to obtain a document. The trend has worsened in recent years: in 2014, 13 percent of respondents bribed an agent of the water and electricity services, whereas in 2017 20 percent did it. In addition, 68 percent of Ivoirians fear negative consequences if they report corruption facts they witness. Moreover, the study shows that Ivoirians are increasingly disillusioned with their leaders’ ability to fight against this phenomenon. Among them, 59 percent believe that their government’s anti-corruption efforts are ineffective. For this report, 1,200 Ivoirians were interviewed between December 2016 and January 2017.
SOUTH AFRICA
On 13 October, South African justice confirmed that President Jacob Zuma could be prosecuted for corruption in a case involving arms sales, of which charges were dropped in 2009. In a judgment read at the hearing by Judge Eric Leach, the Supreme Court of Appeal (SCA) dismissed an appeal by the head of state against the decision of reinstating 783 tax fraud, racketeering and corruption charges against him. A week later, on 20 October, the National Prosecuting Authority (NPA) gave President Zuma until November 30 to argue his case against the reinstatement of corruption charges against him. An investigation team of the NPA also has until the end of November to assess the existence of witnesses and documentary evidence before the reopening of the case.
Middle East and North Africa
TUNISIA
On 7 October, the National Authority for the Fight against Corruption in Tunisia (INLUCC) announced its decision to grant protection and regularize the situation of 40 whistleblowers of corruption whose files concern the Ministry of Agriculture, Water Resources and Fisheries and the Ministry of Higher Education. On 24 October, the INLUCC also presented its annual activity report. The report was handed to the head of state, Béji Caïd Essebsi, and the head of government, Youssef Chahed. It comprises a set of recommendations pertaining to the fight against corruption.
Moreover, on 27 September, a draft law on combating illicit enrichment and conflicts of interest in the public sector was adopted by the Council of Ministers. It proposes to extend their asset declaration requirements to mid-ranking officials in charge of controlling public expenditure and procurement. On 8 October, the website Africa Manager detailed the provisions of this text.
On 15 October, the NGO I Watch won the Amalia Integrity Prize, awarded by Transparency International, for combatting corruption in Tunisia.
Americas
CANADA
On 19 October, Prime Minister Justin Trudeau defended his Finance Minister, Bill Morneau, in the Canadian Parliament against allegations of conflict of interest for failing to place his personal assets under a management mandate after being appointed to office almost two years ago. Mr. Trudeau had to answer to opposition attacks that questioned the fact that his minister still holds shares worth around 40 million dollars in Morneau Shepell, the pension and human resources management firm founded by his father. Mr. Morneau contends that he followed the rules and recommendations of the federal Conflict of Interest and Ethics Commissioner, Mary Dawson. He also announced that he intended to place the assets of his family business in a blind trust to eventually sell them.
UNITED STATES
On 5 October, the U.S. Secret Service attested that there is no system for tracking visitors to President Donald Trump’s Florida resort at Mar-a-Lago. The revelation came in response to a lawsuit filed by government watchdog groups who have sought visitor logs for the White House, Trump Tower in New York and Mar-a-Lago. The group Citizens for Responsibility and Ethics in Washington (CREW) stressed that the absence of visitor records at Mar-a-Lago threatens public integrity and transparency because representatives of interests, such as lobbyists and foreign agents, can have access to the president without accountability or control.
In parallel, a lawsuit against Mr. Trump began on 18 October. A federal judge heard preliminary arguments in a case that claims that the president is violating the Constitution’s ban on accepting foreign payments, the so-called “Emoluments Clause.” Lawyers representing the plaintiffs, who are individuals and organizations from civil society, put forward the incompatibility between the exercise of the presidential mandate and the commercial activities of a businessman. The risks of conflict of interest and undue influence of foreign investors were pointed out. On 21 October, Newsweek indicated that Ivanka Trump, the president’s daughter and advisor, omitted her past involvement with the Donald J. Trump Foundation from her financial disclosure report. As a senior White House officials, she was required to disclose their financial interests. However, in her report, Ivanka Trump did not mention her activities as former director of the foundation, which is currently being investigated for fraud. Finally, on 30 October, Paul Manafort, Mr. Trump’s former campaign chairman, and Rick Gates, fellow campaign official, were indicted on 12 counts including money laundering, operating as unregistered foreign agents of the government of Ukraine and making false statements to federal authorities. These accusations fall within the context of the ongoing investigation into Russian interference in the U.S. election.
On 12 October, the House Ethics Committee concluded in its report that there is substantial reason to believe that Rep. Chris Collins violated federal law and congressional rules by meeting with government researchers in his official capacity to benefit a biotech company he is invested in, and by sharing private information to drum up investments in that company. Rep. Collins dismissed the findings of this report and called the investigation a “witch hunt” prompted by the Democrats.
ARGENTINA
Partial legislative elections took place on 22 October. The coalition “Cambiemos”, President Mauricio Macri’s party, won by a broad margin in the vast majority of the country’s twenty-three provinces and in Buenos Aires. The newspaper la Nación remarked that one third of candidates did not abide by the law on ethics in exercise of public functions. Indeed, 35,8 percent of candidates did not submit their asset declaration within the deadline of ten working days from the formalization of their candidacy, as required by law. The Anticorruption Office (OA) published the list of candidates who did not comply with their declarative obligations. According to la Nación, all political forces and all regions of the country are implicated.
During these elections, Carlos Menem was reelected senator, assuring his immunity. The former president was sentenced to prison in 2013 for his involvement in illegal arms sales and in 2015 for siphoning funds from the state to bribe high-ranking officials. Shielded by his mandate, Mr. Menem remains free. Former President Cristina Kirchner was elected senator. Nonetheless, on 24 October, her former Minister, Julian De Vido, was arrested after having his parliamentary immunity revoked. Under the presidencies of Nestor and Cristina Kirchner, Mr. De Vido was in charge of all public contracts from March 2013 to December 2015. He stands accused of overbilling 7 billion dollars in the purchase of natural liquid gas and of defrauding 270 million dollars in the construction of a coal factory.
BRAZIL
On 25 October, President Michel Temer, accused for the second time of corruption, obstruction of justice and participation in a criminal organization, dodged prosecution and impeachment thanks to the vote of the majority of MPs who opposed his trial before the Supreme Court. The president is suspected of leading “a criminal organization” that allegedly diverted 587 million reais (nearly 160 million euros). Along with other members of his party, the PMDB, he is accused of favoring private companies in the allocation of public contracts.
Asia
REPUBLIC OF KOREA
On 16 October, lawyers representing former President Park Geun-Hye, who is currently facing trial for corruption, have collectively resigned to protest the continued detention of their client. Her provisional detention was extended to six months. The court claims that evidence risks destruction if she is released. Ms. Park was deposed and arrested in March, and then indicted in April on 18 counts in a corruption scandal, which implicated large South Korean conglomerates including Samsung.
On 24 October, the Korea Chamber of Commerce and Industry (KCCI) announced that the majority of South Korean firms considered that the anti-corruption law was effective. According to a recent survey conducted among 300 companies, 74 percent of respondents said that the business environment has improved in terms of profitability and transparency since the adoption of this law on 28 September 2016.
On 29 October, at the anniversary of the massive protests that deposed Ms. Park, the President Moon Jae-in reiterated his commitment in the fight against corruption.
PEOPLE’S REPUBLIC OF CHINA
At the opening of the 19th Congress of the Communist Party, on 18 October, President Xi Jinping asserted that the Party would continue to enforce a “zero tolerance” policy towards corrupted officials. Since the launch of the anti-corruption campaign in early 2013, approximately 1.34 million civil servants were sanctioned. As a matter fact, combatting corruption is one of the president’s main priorities. From the moment he took office, he pledged to track both high-ranking and subaltern officials. Following the last Congress of the Communist Party, the fight against corruption will be more institutionalized thanks to the creation of a new agency, the National Supervisory Commission. Its role will be to coordinate investigations at all echelons of power. Its investigations could also target
PAKISTAN
On 19 October, former Prime Minister Nawaz Sharif, who resigned in last July after the Supreme Court disqualified him from holding office, was indicted, along with his daughter and son-in-law, for corruption in a case opened thanks to Panama Papers. On 26 October, a Pakistani court issued an arrest warrant for Mr. Sharif, who is currently in London.
Europe
MALTA
On 16 October, Daphne Caruana Galizia, a Maltese anti-corruption blogger, was killed in a car bomb attack. She was a well-known investigative journalist who exposed, after the publication of the Panama Papers, the suspicious links between Azerbaijan and the Maltese Prime Minister. These revelations prompted early elections in last June. Her murder stirred indignation. The European Commission was “horrified” and condemned this brutal attack in the strongest terms possible. Le Monde pointed out that this crime is an alarming fact, unthinkable until now in the European Union. On 22 October, thousands of Maltese demonstrated in the streets of Valletta to pay tribute to the journalist and to demand justice. On 24 October, the President of the European Parliament, Antonio Tajani, called for an “international investigation” to solve this case. Furthermore, European Parliament leaders agreed that a delegation of MEPs would travel to Malta to evaluate the rule of law, corruption and money laundering in the country
MOLDAVIA
On 6 October, agents of the National Anti-Corruption Center (NAC) and anti-corruption prosecutors detained a deputy minister of Finance, as well as three businessmen, who are accused of falsifying several calls for tenders in the public sector. They are suspected of passive and active corruption. According to the investigation, the deputy minister requested bribes for allocating public funds to reform a hospital. In addition, the deputy minister allegedly asked hospital representatives to favor constructions companies of her choice in exchange of benefits. A criminal case was initiated after hospital representatives denounced the scheme. If found guilty, the suspects may be sentenced to up to 15 years imprisonment with a fine of up to 25.000 euro and deprivation of the right to hold certain public positions within a period of 10 to 15 years.
On 20 October, the Department for the Prevention and Control of Money Laundering and Terrorist Financing of the NAC (FIU) presented the First National Risk Assessment Report on money laundering and terrorism financing in partnership with the OSCE, the EU and the Council of Europe. The launch event was the first national conference of this kind. Authorities made the results of the evaluation process public and announced a new phase of streamlining the national system for preventing and combating money laundering. The conference brought together representatives of nearly 60 international organizations, similar foreign institutions, as well as representatives of the private sector.
UKRAINE
On 6 October, the National Anticorruption Bureau of Ukraine (NABU) and Central Anti-Corruption Bureau of Poland (CAB) signed a cooperation agreement to coordinate their efforts to fight cross-border corruption. This agreement is part of a memorandum of cooperation between the two agencies, adopted in May 2016.
On 17 October, nearly five thousand Ukrainians demonstrated in front of Parliament to demand reforms in the fight against corruption. They gather in response to the appeal of several reformist movements, including the Movement of New Forces led by Mikheil Saakashvili, former Georgian president and opponent of President Petro Poroshenko, who deposed him of his Ukrainian nationality. Protesters called for the creation of an anti-corruption court, the removal of parliamentary immunity and the reform of the electoral law to promote political renewal.
ITALY
A survey conducted by the Institute of Statisics (Istat) sought to measure the extent of corruption in Italy. According to the study, two million Italian families, nearly 8% of the population, admitted to having received money, gifts or favors for a variety services. These illegal exchanges are more common in the professional field. Trials are also conducive to bribery in order to secure the benevolence of a magistrate or to obtain favorable testimony. In addition, almost 2.1 percent of Italian households were asked to “make a gesture” to speed up diverse administrative procedures.
SPAIN
On 25 October, Concepción Sabadell, anti-corruption prosecutor general, formally accused the Partido Popular (PP) of Prime Minister Mariano Rajoy of collecting funds illegally. She detailed the list and relations between the 37 defendants in the so-called “Gürtel” case. The leader of this network, businessman Francisco Correa, had developed a mechanism to divert funds spent in public procurement by bribing public officials and leaders of the PP. According to the investigation, this first part of the Gürtel case involves tens of millions of euros.
PORTUGAL
On 11 October, former Prime Minister José Socrates was indicted for passive corruption, money laundering and tax evasion in a case involving former directors of the bank Espírito Santo and the company Portugal Telecom. The indictment was the result of four years of investigation. Mr. Socrates, in office from 2005 to 2011, is accused of receiving millions of euros in bribes as part of a corruption scheme. The date of his trial is not set yet.
CYPRUS
In a letter to Nicosia on 26 October, seventeen MEPs urged President Nicos Anastasiades to “correct” the mishandling of a case of Russia money laundering via Cypriot banks. According to them, Cyprus is neglecting its duties under the European directives to combat money laundering because proper investigations were not conducted. The Cypriot Justice Ministry denied wrongdoing and certified that its probe into the Russia money laundering case was ongoing.
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