Confronting Corruption

Fritz Heimann is one of the founders of Transparency International (TI), the global coalition against corruption. He served on TI's Board of Directors until 2003, and has been a member of the International Advisory Council since 2003. He organized TI's US Chapter (TI-USA) in 1993, served as its chair for twelve years, and continues as a director. He also serves as Vice-Chair of the Anti-Corruption Commission of the International Chamber of Commerce (ICC) in Paris. He is the co-editor of Fighting Corruption: International Corporate Integrity Handbook, (with Francois Vincke, 2008). Mr. Heimann has written extensively about anticorruption, including two articles published by Foreign Affairs in 1998 and 2006. Mark Pieth is Professor of Criminal Law and Criminology at the University of Basel, Switzerland. From 1989 to 1993, he was Head of Section--Economic and Organized Crime at the Swiss Federal Office of Justice (Ministry of Justice and Police). Between 1990 and 2013, he chaired the OECD Working Group on Bribery in International Business Transactions, also participating in the Wolfsberg AML Banking Initiative as a facilitator. In spring 2004, he was appointed by the UN Secretary General to the Independent Inquiry Committee into the Iraq Oil-for-Food Programme. In 2008, Professor Pieth was made a member of the Integrity Advisory Board of The World Bank Group (IAB), advising the President of Bank and the Audit Committee on integrity issues. From 2011 to 2013 he chaired the Independent Governance Committee of FIFA to consult corporations, international organizations, and foreign governments on issues related to governance and to publish extensively in the field of economic and organized crime, money la

Foreword

Acknowledgments

Abbreviations

Part I: Setting the Scene

CHAPTER 1: INTRODUCTION
1 FIFA, a criminal organization?
2 The Malaysian Wealth Fund '1MDB'
3 Panama Papers

CHAPTER 2: WHY THE GROWING CONCERN ABOUT CORRUPTION?
1 Present at the Creation
2 Putting Corruption on the International Agenda
3 Need for Action
4 Reasons for Continuing Resistance
5 Growth of Anti-corruption Capability
6 Expansion of Global Economy
7 Digital Communications

CHAPTER 3: THE POLITICS OF ANTI-CORRUPTION
1 Transparency International and Its Politics
2 International Organizations
a OECD
b UNODC
c G20
d World Bank
e International Chamber of Commerce
f FIFA
3 Governments
a United States
b UK
c Nordic Countries
d China
e Bangladesh
4 Role of Media
5 Growth of Anticorruption Movement
6 Government Departments
7 Private Industry
8 NGOs
9 Professional Organizations
10 Universities
11 Illicit Activities
12 Major Political Influences
a Tone at the Top
b Power of the Legal Establishment
c Role of Civil Society
d People Power
e Counter Actions

CHAPTER 4: WHAT IS CORRUPTION?
1 A 'cancer' to be rooted out?
2 Giving and taking
3 Legal definitions
4 Corruption comes in different forms
5 A systemic perspective
6 What is the common denominator?
7 Are we sure that corruption is harmful?
8 How big is the problem?
9 Why have we chosen to fight corruption now?
10 Are we making a difference?

Part II: Drivers of Change

CHAPTER 5: EVOLUTION OF TRANSPARENCY INTERNATIONAL
1 Peter Eigen and the World Bank
2 The Genesis of TI
3 Organizing TI
a Meeting with Amnesty International
b Organization Meeting at Dutch Foreign Ministry
c Berlin Launch Conference
d Ecuador Meeting
e Jeremy Pope becomes Managing Director
f Growth of National Chapter Network
g Publication of TI Index
4 Conventions Advocacy
a OECD Convention
b TI Progress Reports on Enforcement
c United Nations Convention against Corruption
d Evolution of TI Management
e The 2005 Election

CHAPTER 6: THE UNITED STATES: FOREIGN CORRUPT PRACTICES ACT AND CAMPAIGN FINANCING
1 Colonial Heritage
2 Constitutional Debates
3 Yazoo Controversy
4 Passage of 14th Amendment
5 Construction of Panama Canal
6 Watergate
7 Foreign Corrupt Practices Act
8 Citizens United Case

CHAPTER 7: BRIBING FOREIGN OFFICIALS: THE OECD ANTI-CORRUPTION INSTRUMENTS
1 Is bribery a necessary evil?
2 The US Foreign Corrupt Practices Act
3 The initiative and first steps in the OECD
4 The 1994 Recommendation and the Follow-up
5 Implementing the Convention
6 The crisis
7 Overcoming the crisis: the UK Bribery Act 2010
8 Uneven application
9 Further challenges
10 A new step forward: the 2009 Recommendation
11 A final positive experience
12 Conclusion

CHAPTER 8: THE UN CONVENTION AGAINST CORRUPTION
1 Global Significance
2 The Politics of UNCAC
3 The United Nations Convention against Corruption: anti-corruption's expanding frontier
a Overview of the United Nations Convention Against Corruption
b Provisions directly affecting international business
c Strengthening national integrity systems
d The implementation review mechanism

Part III: Pervasive Trouble Spots

CHAPTER 9: BANKING AND FINANCE
1 Grand corruption and money flows
2 A new topic altogether
3 Expansion
4 Current status of rules against corruption-money laundering
5 Asset Recovery
6 Is Asset Recovery working?
7 Conclusion

CHAPTER 10: EXTRACTIVE INDUSTRIES
1 The 'resource curse'
2 Publish what you pay
3 The Extractive Industries Transparency Initiative
4 The struggle for regulation
a United States: Section 1504 of the Dodd-Frank Act
b EU: revision of its Transparency and Bookkeeping Directives
5 Regulating trading?
6 Collective action as a way forward?

CHAPTER 11: INFRASTRUCTURE AND CONSTRUCTION
1 The risks
2 What needs to be done?

CHAPTER 12: AERONAUTICS AND DEFENSE
1 What are the particular risks in defense procurement?
2 The key role of defense offsets
3 Specific corruption risk related to offsets
4 How to prevent corruption in the defense industries?

CHAPTER 13: THE ART MARKET
1 Challenges
2 Self-regulation?
3 International law?

CHAPTER 14: THE PHARMACEUTICAL INDUSTRY
1 Challenges
2 What needs to be done?

CHAPTER 15: SPORTS GOVERNING BODIES: THE FIFA EXPERIENCE
1 Emotions and big business
2 Multinational enterprises and quasi-intergovernmental organizations
3 Old Boys suddenly becoming rich
4 FIFA a company in trouble or a criminal organization?
5 The responsibility of the host country
6 What's wrong with self-regulation?
7 Example FIFA
8 International regulation
9 What is on the current reform list?

CHAPTER 16: DEVELOPMENT ASSISTANCE
1 Its logic
2 Is development assistance effective?
3 Donor interest
4 Tolerating embezzlement?
5 Is there a way out of the dilemma?
6 Oil-for-Food
a The official Programme
b Planned Distribution of Oil Proceeds
c What went wrong?
d Oil Surcharges - Flow of Funds
e Humanitarian Contract Kickbacks - Flow of Funds
f Illicit Income Received by Iraq under the Programme
7 The Contribution of the IFIs

Part IV: Criminal Law and other Forms of Regulation

CHAPTER 17: STRENGTHS AND LIMITATIONS OF CRIMINAL LAW
1 Is criminal law really that essential to combating bribery?
2 Who is a 'foreign public official'?
3 What about the eternal 'facilitation payments'?
4 Individuals versus corporate liability
5 Watch your agents!
6 The proof is in the pudding
7 Are prosecutors and courts out of their depths?
8 Do we need a Supranational Criminal Court for large scale corruption?

CHAPTER 18: BEYOND CRIMINAL LAW: ADMINISTRATIVE SANCTIONS AND PREVENTIVE MEASURES
1 Regulatory sanctions
2 Debarment by MDBs
3 Automatic debarment?
4 Is debarment always the best solution?
5 Dealing with corruption in arbitration procedures
6 Prevention

Part V: Private Sector Responses

CHAPTER 19: PRIVATE SECTOR RESPONSE TO CORRUPTION
1 Major Trends
2 Evolution of Compliance
a Role of NGOs
b UN Global Compact
c Industry Sector Initiatives: Wolfsberg
d Other Industry Sector Initiatives
Extractive Industries Transparency Initiative (EITI)
Construction Sector Transparency (CoST)
Aerospace and Defense (IFBEC)
3 Common Problem Areas
a Gifts, Entertainment and Travel Expenses
b Lobbyists and Sales Representatives
c Political Contributions
d Avoiding Extortion
e Private-to-Private Bribery
f Facilitation Payments
g Foreign Subsidiaries and Joint Ventures
4 Psychology of Corrupt Conduct
a Type A
b Type B
c Type C
5 Factors Needed to Influence Corporate Culture
a Tone at the top is important
b Transparent Rules
c Leadership selection
6 Moving Anti-corruption to the Next Level

CHAPTER 20: COLLECTIVE ACTION
1 Why collective action?
2 From an academic think piece to a practical solution
3 What is collective action?
4 Is collective action really necessary?

Part VI: Moving Forward

CHAPTER 21: WHAT HAVE WE ACHIEVED?
1 Achievements and challenges
2 Accomplishments
3 Challenges

CHAPTER 22: GLOBALIZATION AND DIGITAL REVOLUTION
1 Globalization
a Globalization of Corruption
b Impact of Globalization on Law Enforcement
2 Digital Revolution
a Cyber Forensics
b Digital Initiatives
c The Political Impact
d Awareness Raising

CHAPTER 23: DIFFERENT STRATEGIES FOR DIFFERENT COUNTRIES
1 Countries with Strong Democratic Institutions
2 Countries with Weaker Democratic Institutions
3 Countries with Autocratic Governments
a Working with China
b Working with Russia
c The Arab Spring and its Implications for the Middle East and North Africa
4 Failed States
5 Long-Term Strategy Perspective

Bibliography

Index