The World of International Organizations Explained

Corruption and the impact on democracy

"Rest in peace, democracy!" Bucharest anti-corruption protest (ARÊTE/Cristian Iohan Ştefănescu)

Corruption erodes governance but the fight against it can bring some unintended consequences. Shine too bright a light on the shortcomings of democracies and international organizations, and populist leaders could capitalize on polarizing forces such as extremism, racism and injustice.

While the anticorruption movement focuses on exposing and prosecuting crimes, it spends less time considering the after effects of major corruption scandals. Such were some of the dark themes and undercurrents being explored this week at an anti-corruption conference in Copenhagen, Denmark.

At least 45 governments, businesses and organizations endorsed the International Anti-Corruption Conference’s 26-point pledge for preventing corruption that covers the return of ill-gotten proceeds, ending secrecy over company ownerships and clamping down on money laundering and tax evasion.

It also calls for more integrity in state-run enterprises and the improved use of treaties. Non-democratic regimes can use anti-corruption as a pretext to crack down on opponents and consolidate power as China has done recently, experts say. The hardest part, as ever, is living up to the pledges.

“These commitments are welcome and much needed,” said Delia Ferreira Rubio, chair of Transparency International, in a statement. “However, over the years we’ve seen plenty of commitments to tackle corruption. What is needed is action, and we will track these new commitments to ensure they are not more empty promises.”

Experts said a common assumption — that chipping away at corruption such as bribery and misuse of public funds is key to protecting democracy — overlooks an unsettling corollary: times of great political instability can follow the unveiling of illegal activities by governments and political parties.

Activists and institutions should consider such “negative consequences” when designing strategies against corruption, the global anti-corruption forum, which is usually held every two years, advised. Chief among these consequences, it said, can be a loss of confidence among disenfranchised voters towards institutions and organizations. That can boost politicians with hateful, divisive messages.

A powerful force

Corruption — and the fight against it — is a powerful force across Latin America, where prosecutors have been pressing charges against politicians in the scandal over Brazilian construction giant Odebrecht, which has admitted to spending $800 million on bribes.

Odebrecht and petrochemical subsidiary Braskem reached agreement with American, Brazilian and Swiss officials in 2016 to pay $3.5 billion in penalties. The U.S. Justice Department called it “the largest foreign bribery case in history.”

The far-right Brazilian candidate Jair Bolsonaro, a former Army captain who has praised the country’s past military dictatorship and insulted women, gay people, black and indigenous populations, has been leading in the polls. Known as the “Tropical Trump,” he promised to crack down on crime in the wake of one of the largest corruption scandals in Latin American history.

Tens of thousands of Romanians living abroad converged on Bucharest in August for one of the biggest rallies against the ruling Social Democrat Party since it won power in 2016. They joined forces to protest the nation’s rampant corruption, low wages and the party’s effort to weaken courts.

The protesters, who hailed from countries such as Britain, Italy and Switzerland, called for the resignation of the government led by Prime Minister Viorica Dancila, which is seen as pushing to relax the fight against corruption. Others outside Romanian embassies across Europe and inside Romania, consistently ranked among the European Union’s most corrupt nations.

Since taking power in early 2017, Social Democrats pushed through changes to the criminal code that decriminalize some corruption offenses and effectively dismantle the anti-corruption measures that Romania is required to implement as a condition of joining the European Union in 2007.

The European Commission and U.S. State Department raised concerns about the changes, which still face court challenges. Brussels has kept Romania’s justice system under special monitoring.

Some legally binding anti-corruption agreements apply to specific regions: the 1997 Inter-American Convention Against Corruption; Organization for Economic Cooperation and Development’s 1999 Convention on Combating Bribery of Foreign Public Officials in International Business Transactions; and 2006 African Union Convention on Preventing and Combating Corruption.

But there is only one legally binding, universal anti-corruption treaty: the United Nations Convention against Corruption that took effect in 2005. It requires prevention, law enforcement and international cooperation, plus asset recovery, technical assistance and information exchanges. Bribery, influence trading and many other different forms of corruption are covered by it.

Fighting endemic corruption that deters Africa’s development is a major focus for some international organizations in 2018 that want to improve governance and business with support from youth. The A.U.’s theme this year is “Winning the Fight Against Corruption: A Sustainable Path to Africa’s Transformation.” African leaders also observe July 11 as African Anti-Corruption Day each year.

Moussa Faki Mahamat, chair of the A.U. Commission and a former prime minister of Chad, said efforts at tackling corruption must go hand in hand with greater investment in youth. The A.U. has estimated Africa’s losses from corruption and illicit financial flows at about $50 billion a year.

“Corruption destroys the lives of ordinary people and undermines their trust in their leaders and public institutions,” he said in a speech in May at Addis Ababa, Ethiopia, home to A.U. headquarters. “Resources that are needed for development and the delivery of services — such as electricity, education, healthcare, sanitation and clean water — are diverted by a few, thus depriving the majority of the people from access to these critical services.”

Denmark’s reputation tested

There is a reason why the anti-corruption conference, which draws more than 1,200 delegates from around the world, was being held for the first time in a Scandinavian country. Denmark has a need to prop up or restore its clean image. Danish Prime Minister Lars Løkke Rasmussen’s participation in the opening ceremony underscored the importance of the conference.

World Justice Project, based in the U.S. and Singapore, ranks Denmark number one for rule of law. Denmark ranks second, behind only New Zealand, in Transparency International’s index for highest resistance to corruption. Yet Transparency International has also said that Denmark is one of 22 nations failing to adequately enforce a global agreement against bribery.

Recent high-profile scandals, such as an alleged money laundering case in Danske Bank, the nation’s largest, and an alleged bribery case involving IT procurement, raise troubling questions, according to Transparency International. “Recurring problem areas include private sector corruption, political financing, and Danish overseas territories present particular corruption risks,” it said.

In September, Council of Europe experts said Denmark was “non-compliant” with several anti-corruption measures geared towards its parliament and judiciary. The council’s anti-corruption monitor also said that Denmark has failed to enact five of six important recommendations.

“Despite the perception of Denmark as one of the least corrupted countries in Europe, it needs concrete action in preventing and combating corruption,” the council’s Group of States against Corruption, or GRECO, said in a statement.

A problem in many forms

In September, the U.N. Security Council held its first-ever meeting devoted to corruption, peace, and security, with a special focus on Venezuela’s dangerous instability and humanitarian crisis. The meeting was convened by the United States, which held the monthly rotating presidency of the U.N.’s most powerful body and was weighing options on Venezuela’s political and economic crisis.

The goal of the U.S.-led session was to examine how President Nicolas Maduro’s widespread theft of state resources and establishment of kleptocratic networks have been at the root of Venezuela’s challenges, according to a U.N. description of the event.

“Corruption is present in all countries, rich and poor, North and South, developed and developing. Numbers show the startling scope of the challenge,” U.N. Secretary-General António Guterres told the 15-nation council.

“Corruption robs schools, hospitals and others of vitally needed funds,” he said. “It rots institutions, as public officials enrich themselves or turn a blind eye to criminality. It deprives people of their rights, drives away foreign investment and despoils the environment.”

There are many forms. Police bribes for routine services or contracts awarded to friends and relatives of government officials are some examples. Payments for “protection” or for looking the other way are another.

Corruption disproportionately affects the poorest and most vulnerable people by driving up costs and making it hard for them to get basic services at health clinics, schools and courts. Counterfeit drugs, malarial bed nets with inert ingredients or bogus vaccinations all threaten children’s lives.

The World Bank Group said the poor paid the highest percentage of their income to cover bribes. In Paraguay, for example, the poor paid 12.6 percent, while high-income households paid 6.4 percent. In Sierra Leone, the poor paid 13 percent while high-income households paid 3.8 percent.

“This is cause for concern across the globe but particularly in contexts of fragility and violence, as corruption fuels and perpetuates the inequalities and discontent that lead to fragility, violent extremism, and conflict,” the World Bank said in a statement.

The world of international organizations explained.

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