TABLE OF CONTENTS
Seven and a half years after the adoption of the International Anticorruption and Good Governance Act of 2000 (IAGGA), the global fight against corruption remains a foreign policy priority for the United States Government (USG). Corruption threatens many of our national interests including ensuring security and stability, upholding the rule of law and core democratic values, advancing prosperity, and creating a level playing field for lawful business activity. Corrupt practices facilitate and contribute to the spread of organized crime and terrorism, undermine public trust in government, and destabilize entire communities and economies.
President George W. Bush, Secretary of State Condoleezza Rice, and U.S. Agency for International Development (USAID) Administrator Henrietta Fore have each forcefully articulated these points. In unveiling the U.S. National Strategy to Internationalize Efforts against Kleptocracy in August 2006, President Bush observed:
“High-level corruption by senior government officials, or kleptocracy, is a grave and corrosive abuse of power and represents the most invidious type of public corruption… It impedes our efforts to promote freedom and democracy, end poverty, and combat international crime and terrorism. Kleptocracy is an obstacle to democratic progress, undermines faith in government institutions, and steals prosperity from the people. Promoting transparent, accountable governance is a critical component of our freedom agenda.”
Further to this foreign policy interest, the USG continues to robustly advance bilateral and multilateral efforts with other governments, intergovernmental bodies, and non-governmental organizations (NGOs) to reduce corruption, promote transparency, and improve governance. The USG is active in numerous fora on the issue and in fiscal year 2007 dedicated $335 million toward good governance and anticorruption assistance on the global level.
Congress passed the IAGGA on October 5, 2000, and it was signed into law as part of Public Law 106-309 on October 17, 2000. IAGGA’s purpose is “to ensure that United States assistance programs promote good governance by assisting other countries to combat corruption throughout society and to improve transparency and accountability at all levels of government and throughout the private sector,” (IAGGA, §202(b)).
The IAGGA reflects the U.S. Congress’s leadership and determination to ensure that strong anticorruption measures are integrated in U.S. national security and foreign policy. The IAGGA defines anticorruption programs broadly, involving action to: support responsible independent media to promote oversight of public and private institutions; implement financial disclosure among public officials, political parties, and candidates for public office; transparent budget and financial management systems; support the establishment of audit offices, inspector general offices, third party monitoring of government procurement processes, and anticorruption agencies; promote responsive, transparent, and accountable legislatures and local governments that ensure legislative and local oversight and whistle-blower protection; promote legal and judicial reforms that criminalize corruption; develop law enforcement reforms that encourage prosecution of corruption; assist in developing legal frameworks for commercial transactions that foster business practices that promote transparent, ethical, and competitive behavior in the economic sector; promote free and fair national, state, and local elections; foster public participation in the legislative process and public access to government information; and engage civil society in the fight against corruption (IAGGA, §205).
The IAGGA amended the Foreign Assistance Act of 1961, adding to the list of major goals for United States foreign development policy “the promotion of good governance through combating corruption and improving transparency and accountability” (IAGGA, §203). The law also authorizes the President to establish programs “that combat corruption, improve transparency and accountability, and promote other forms of good governance” in countries where the United States has either a significant economic interest or provides significant foreign assistance, and where problems of corruption are most persistent (IAGGA, §205).
The IAGGA further requires that the Secretary of State, in consultation with the Secretary of Commerce and the USAID Administrator, prepare a report to Congress that surveys USG diplomatic and programmatic anticorruption efforts, as well as host government efforts, in priority countries. The first report, submitted to Congress in April 2001, provided a detailed history of the international fight against corruption and the USG role in drawing attention to the issue.
This fifth biennial report focuses on notable USG activities in 2006-2007.
The USG has clear foreign policy and national security interests in seeing corruption addressed on an international scale. Corruption deters foreign investment in many countries, stifles economic growth and sustainable development, distorts prices, and undermines legal and judicial systems. Corruption serves to hamper global economic activity of American firms, which can lose contracts to competitors that offer bribes or can be harmed by the decisions of corrupt judges. Corruption can also interfere with accomplishing USG foreign assistance goals, such as poverty reduction, and implementing successful development assistance programs. By diverting or misallocating government resources, corruption prevents public benefits from reaching those who most need them, and takes money directly out of economies for unproductive uses.
Further, corruption helps fuel transnational crime and enables international criminal syndicates and terrorist organizations to thrive and destabilize entire communities. Poor governance and corruption also help create economic and social conditions that can breed disillusionment and nurture extreme radicalism. In the nexus of the crime-terror continuum, there is often an underlying criminal infrastructure and corrupt nodes that help facilitate and bankroll their illicit objectives. Terrorists thrive on corruption, collaborating with transnational organized criminals and utilizing smuggling and trafficking networks to facilitate and finance their activities. Corrupt officials, knowingly or not, aid terrorists by facilitating the illicit laundering of funds and illicit trade of weapons, passports, drugs, and persons. Terrorists also use bribes to obtain sensitive information from government sources. Corruption can help terrorists move across borders and find safe havens.
International organized criminals seek to corrupt public officials in the United States and abroad. International organized criminals corrupt public officials to operate and protect their illegal operations (create safe havens), and increase their sphere of influence. They have been successful in systematically corrupting public officials around the world, including countries of vital strategic importance to the United States.
An equally critical threat to American interests is the destabilizing effect of corruption on democratic governments. Emerging democracies are particularly vulnerable to kleptocratic activities of corrupt public officials. Corruption in such countries erodes public confidence in government institutions, and can substantially impair the ability of a democratic government to maintain political stability. The result can be fatal to well-intentioned democratic governments and, in the most extreme cases, erodes confidence in democracy as a political system within these countries.
In advancing the objectives of the IAGGA, the USG continues to engage on many fronts, employing a mix of diplomatic, policy, and programmatic tools. These efforts include: promoting adoption of international standards and shared approaches; promoting implementation of such agreed standards; providing assistance to enhance transparency, accountability, and good governance; forging partnerships and promoting knowledge dissemination; and leading by example through enforcement at home. This anticorruption framework recognizes the importance of both standards and their application; of assistance and sharing of knowledge; and of partnerships with others and the international value of efforts at home.
Promote adoption of international standards and shared approaches: Through diplomatic efforts and active participation in a variety of multilateral fora, the United States continues to promote the development and adoption of common standards to address corruption. Since the mid-1990s, the United States promoted the conclusion of a series of regional and subject matter-specific treaties, such as the Inter-American Convention against Corruption (IACAC) and the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions, whose provisions are closely modeled on the Foreign Corrupt Practices Act (FCPA). Each represented a significant advance in the development of multilateral standards on corruption, and the USG continues to participate and promote their implementation.
The entry into force of the United Nations Convention Against Corruption (UNCAC) on December 14, 2005 greatly furthered the goal of establishing truly global shared anti-corruption standards. The USG actively supported the negotiation of the UNCAC, which entered into force for the United States on November 29, 2006. As of April 21, 2008, there are 114 parties to the UNCAC and 140 signatories. The USG supported the UNCAC as the first truly globally negotiated anticorruption treaty and the most comprehensive anticorruption instrument, with chapters on criminalization, prevention, recovery of stolen assets, international legal cooperation, and technical assistance.
While the UNCAC remains the overarching global framework against corruption, the USG encourages governments to establish shared approaches through regional instruments and multilateral fora. The USG has promoted joint approaches to deny financial and physical safe haven within the G8 and many other fora, promote transparency and codes of conduct within the Asia-Pacific Economic Cooperation (APEC) Forum, and foster integrity and justice sector reform through the Good Governance for Development in Arab States (GfD) regional partnership. The United States is also a sponsoring country in the Extractive Industries Transparency Initiative (EITI), which supports greater transparency in financial management in natural resource-rich developing countries.
Promote implementation of agreed standards and provide assistance to enhance transparency, accountability, and good governance: Once standards are defined, the challenge becomes to build capacity, knowledge, and will to promote their application in practice. An important tool is USG participation in review processes adopted for many of the conventions and multilateral initiatives mentioned above. The USG has promoted a similar approach for the UNCAC and secured agreement for countries to design the mechanism’s terms of reference. These mutual review mechanisms often identify key areas where assistance is needed, which then become a focus of USG bilateral assistance programs. Development and other technical assistance programs focus on building transparent and fair procurement systems, transparent national budgeting processes, open public policy and public administration mechanisms, access to information, and mechanisms for citizen participation in and oversight of government. By developing and funding innovative assistance programs that foster the role of civil society, including the private sector, in participatory democracy, the USG helps build the popular will against corruption and promotes integrity within the public and private sectors. In addition, U.S. assistance helps governments build their capacity to investigate and prosecute corruption crimes, and to build independent and ethical judicial systems.
To further stimulate reform, the Millennium Challenge Corporation (MCC) – which funds the President’s innovative global development assistance initiative – requires that a country demonstrate solid performance in 17 policy areas that promote economic growth and poverty reduction, including the control of corruption and rule of law, in order to be selected as eligible for MCC compact assistance. The MCC Threshold Program is another MCC program that provides assistance to help partners improve their performance on these policy indicators to help them become eligible for a larger MCC compact. A country’s performance on the Control of Corruption indicator is the only MCC “hard hurdle” for compact eligibility, and is in fact the indicator most countries address in their Threshold Programs.
Forge partnerships and promote knowledge dissemination: The global anticorruption panorama now includes a multiplicity of actors and a proliferation of lessons learned. The USG works closely with other institutions and initiatives to take advantage of new lessons and move shared objectives forward. We monitor and contribute to the relevant initiatives of leading global and regional public international and non-governmental organizations. For example, the USG supports the efforts of the International Financial Institutions (IFIs), as they work to strengthen their internal investigative functions to combat corruption; help recipient countries improve governance and transparency in their public institutions; and combat corruption in development project financing. The USG is also engaging the IFIs on kleptocracy and related anticorruption issues, including the return of illicitly acquired assets.
The USG promotes anticorruption learning and analytical approaches. In addition to adopting analytical frameworks such as the 2005 USAID Anticorruption Strategy, the USG works closely with other nations to consider how to address corruption in the context of closely related transnational crime issues such as money laundering, organized crime, trafficking in persons, and corruption in natural resource extraction.
The biennial ministerial Global Forum process is the highest-level intergovernmental forum for sharing lessons learned in the fight against corruption. To promote coordination, the USG continues its high-level participation in this effort, including sending a senior delegation to South Africa in 2007, and is planning a similar effort for the next Global Forum in Qatar in 2009. Likewise, the USG employs public diplomacy tools to highlight the importance of fighting corruption, call attention to effective approaches, and share the experience drawn from our own domestic frameworks.
Lead by example through enforcement at home: The USG has been a leader in the fight against corruption by promoting integrity within our own country and making our actions an example for the world. The international community can benefit from our experience, particularly regarding efforts to prevent U.S. persons and multinational businesses from bribing foreign officials and to prosecute those that do; trace, freeze, seize, and return stolen assets; deny safe haven to kleptocrats; apply anti-bribery due diligence to those applying for official export credits; promote good public and corporate governance; and develop tools, strengthen and enforce laws, and build institutions to address corruption and respond to evolving challenges.
The first important new USG initiative during the reporting period was designed to focus international attention on confronting large-scale corruption by high-level public officials. The President unveiled the National Strategy to Internationalize Efforts against Kleptocracy in August 2006.
This strategy builds upon and reinforces our work in the G-8 and other multilateral fora and combines the policy and law enforcement tools of several federal agencies, including the Departments of State, Treasury, Homeland Security, and Justice. In addition to building and improving inter-agency mechanisms to deny corrupt actors access to our financial system and physical safe haven within our borders, the USG provides expertise and assistance to help countries develop effective governmental approaches to preventing, detecting, and prosecuting corruption. The strategy’s components include:
As discussed above, the other major USG initiative is support for the ratification and implementation of the UNCAC. The USG continues to promote the UNCAC as the cornerstone for regional action against corruption. Within the UNCAC’s Conference of States Parties (COSP), the Departments of State and Justice have promoted movement toward adoption of an effective multilateral implementation review mechanism, technical assistance, and capacity building to spur implementation of the asset recovery chapter. USAID and the Department of State are working within the broader UN context to assist countries to implement their UNCAC commitments. A prominent theme for the 2009 UNCAC COSP will be implementation of the provisions on prevention.
The reporting period also saw important new progress toward coordinating donor approaches to anticorruption reform. USAID played an active role with the Anticorruption Task Team of the OECD Development Assistance Coordination Committee (DAC) to develop a policy statement that encourages more active coordination of donor programs to improve effectiveness and articulates principles for donor action.
The IAGGA recognizes that a holistic approach to USG foreign anticorruption assistance, targeting a wide range of areas, is the key to combating corruption. Numerous USG agencies – including USAID, the Department of State (USDOS), the Department of Justice (USDOJ), the Department of Commerce (USDOC), the Department of the Treasury (Treasury), the Millennium Challenge Corporation (MCC), and the Office of Government Ethics (OGE) provide assistance to foreign governments and counterparts within the anticorruption assistance categories mentioned in the IAGGA. USG assistance programs are designed to strengthen legal and regulatory frameworks, build institutions, and enhance capacities through regulations and enforcement. USG assistance programs also help to cultivate a viable civil society, creating a partnership between the public and private sectors to fight corruption. These programs promote transparency and accountability to ensure that the rule of law and market-based economics take root, thereby supporting democratic institutions and a sound private sector. This chapter describes recent USG programs and corresponding host government efforts in 12 countries that meet the parameters of priority countries as outlined in §205 of the IAGGA.
While the government efforts described in the following sections show forward movement, the passage of laws or issuance of regulations alone does not necessarily always lead to a decrease in corruption. Only active implementation of laws, effective enforcement, sound policies, and strong rule-of-law programs, combined with political and popular will to demand accountability, will bring enduring change. The countries discussed in this report face significant corruption challenges and often uneven political and popular will; a real commitment to fight corruption and improve transparency must be continually sustained over time before the effects of forward momentum in this area can be felt.
Government Efforts: Following the declaration of a state of emergency in January 2007, the Caretaker Government took several steps to address government corruption, including appointing a retired army chief as the new chairman of the Anti-Corruption Commission (ACC), forming a National Coordination Committee to help coordinate government and security forces’ efforts to investigate graft, and establishing several task forces to support the committee’s work.
In 2007, security forces detained several hundred high-profile graft suspects, including former Prime Ministers Sheikh Hasina and Khaleda Zia, both charged in bribery cases dating to their government tenures. The majority were tried under existing anticorruption legislation. In February 2008, local media reported that at least 240 people had been sentenced to jail in the anticorruption drive. Several Bangladeshi business and political leaders have said that investment has dried up because entrepreneurs do not want to draw attention lest they be rounded up during the anticorruption drive, and the USG has underlined the need for ensuring due process so that graft suspects are afforded fair judicial treatment. Bangladesh acceded to the UNCAC in February 2007. Bangladesh has also volunteered to participate in the World Bank/UN Stolen Asset Recovery (StAR) initiative.
Transparent Governance: In October 2007, USAID began implementing a four-year, $18 million anticorruption program for Bangladesh. It will provide technical assistance to strengthen parliamentary oversight committees, the Office of the Comptroller, and the Auditor General.
Law Enforcement and Legal Systems: USDOJ has provided training on financial investigations to the national corruption task forces. This training involved instructors from the Internal Revenue Service and the U.S. financial intelligence unit (FIU), who have taught simple forensic accounting, investigative methods, and interviewing techniques to 90 members from the five-agency national anticorruption task forces. USDOJ also has worked with Bangladesh to establish an operational FIU in the central bank.
Civil Society: USAID’s anticorruption program will also support citizen advocacy and watchdog initiatives, legal reforms that promote greater access to reliable information, investigative journalism, and citizen participation in understanding and developing program-based budgets. This, combined with the efforts to make government institutions more transparent, will help increase the public sector’s credible and effective stewardship of public resources by assisting in a more transparent development, review, and implementation of the national budget.
Government Efforts: The Government of Colombia (GOC) continues to make progress in its anticorruption efforts. In 2007, the GOC completed its multi-year conversion of the criminal justice system from a cumbersome written inquisitorial system to an oral accusatorial system. The new system ensures greater transparency of public court proceedings and trials, as well as greater accountability of justice sector officials. The new system is also more efficient, producing a 75 percent reduction in time to resolve criminal cases and a 60 percent conviction rate, up from three percent under the old system.
In 2007, the GOC launched a “Visible Audits Program” aimed at involving beneficiaries and local governments in reviewing public investments in health, potable water, education, and housing. More than 150 public meetings were held throughout the country last year and a similar number is planned for 2008. This initiative has already proven successful in improving the transparency and efficiency of GOC investments and in identifying specific cases of corruption. For example, local government and civil society engagement prompted the completion of a housing project in the Department of Cordoba, where homes were finally delivered to vulnerable groups after a construction delay of three years.
The GOC modernized the public procurement process, eliminating exemptions to open and full competitions and incorporating public audiences in the award process. Today, the Unified Contracting Portal (Portal Unico de Contratación) website (www.contratos.gov.co) contains detailed information on all scheduled government bids.
The GOC assumed responsibility for an internal control program for public entities after USG funding ended in 2006. The program is operating in 80 national entities and 22 sub-national entities. In addition to these measures, the central government supported efforts to increase accountability at the departmental and municipal levels where a significant portion of revenues is transferred under a constitutional mandate to implement government programs. The GOC annually publishes online the approved national budget and amendments made during the fiscal year. The published data include regular detailed updates of revenues and expenditures.
The GOC continues to move forward with other measures that promote transparency, including joining the Extractive Industries Transparency Initiative (EITI) in March 2007 and partially privatizing the state-owned hydrocarbons company Ecopetrol. Colombia is a party to the IACAC and the UNCAC.
Law Enforcement and Legal Systems: The USG provided training, technical assistance, equipment, and operating funds to the Colombian justice sector to facilitate the implementation of the new oral accusatorial system. Over the past three years, the USG has trained over 6,000 prosecutors, 20,000 investigators, 2,000 judges, 1,000 forensic experts, and 1,300 public defenders. Additionally, the USG constructed or refurbished four public defender offices, helped establish a public defender training school, and installed six virtual courtrooms in isolated rural areas.
In FY2007, the USG conducted 24 anticorruption seminars for 621 Colombian law enforcement personnel throughout the country. Each seminar included participants from the Colombian National Police, Department of Administrative Security, and Prosecutor General’s Office.
Transparent Governance: USG assistance supported 11 seminars on transparency and anticorruption topics, including how to develop and implement anticorruption strategies. Seven seminars taught leadership skills and initiatives to institute internal supervisory controls to reduce corrupt tendencies and behavior by subordinates. Six seminars focused on conflict negotiation and resolution and were designed to arm supervisors with the skills to communicate effectively with subordinates and the public.
Civil Society: The USG provided micro-grants to 500 citizen oversight groups. Approximately 70 percent of the groups continued performing citizen oversight initiatives with either their own resources or private sector funding after USG assistance for this program was suspended in 2006.
Government Efforts: Over the past two years, the Government of Guatemala (GOG) has launched initiatives to combat corruption and improve transparency. In 2006, the GOG enacted an organized crime law that criminalized conspiracy to commit a crime, enabled the government to use wire taps, undercover operations, and controlled deliveries, and specifically targeted judicial corruption. The law provided law enforcement officials with critical tools needed to successfully prosecute organized crime.
President Berger issued an Executive Decree on Access to Public Information requiring all executive branch ministries to publicize their budget and spending for the previous year. This effort was followed with training for over 200 public officials to institutionalize implementation of the Decree. In 2007, the Decree on Access to Public Information was extended to require reporting by departmental (i.e., provincial) governors and obligated government agencies to disseminate project information through billboards. President Berger also expanded the use of the web-based procurement system, Guatecompras, to include social projects, which account for a significant share of public investment, trust funds, and non-governmental organizations receiving public funds. Over 700 officials received training and manuals to help them comply with the law.
Guatemala has also implemented the World Bank’s Integrated Financial Administrative System (SIAF) at both the national and municipal levels. SIAF improves fiscal transparency by helping government entities keep accurate electronic records accounting for revenues and expenditures. This project has improved the credibility of municipal institutions; a Latin American Public Opinion Project Survey found that Guatemalans have more confidence in their municipalities than all other public institutions.
In 2006, Guatemala hosted the 12th International Anti-Corruption Conference (IACC), ratified the UNCAC, and developed a Central American Anticorruption Plan, signed by all Central American Presidents. In implementing the IACAC, Guatemala has widely disseminated the recommendations of the convention’s Follow-up Mechanism and is collaborating with civil society to develop a map of indicators that measure progress in implementation.
Law Enforcement and Legal Systems: USDOS is providing funding to assist the Special Anti-Narcotics Prosecutors Units to improve case management procedures to promote accountability between the police and prosecutors. This program funds training and much needed equipment, such as computers, to successfully implement modern case management procedures.
Transparent Governance: USAID is providing $4.5 million over five years to support direct assistance to the GOG to improve access to information and fulfill its commitments under the IACAC. With UNDP, USAID’s program assists the Guatemalan Vice President in establishing a coordinating body to oversee national anticorruption programs. With other donors, the USG is also supporting the Council for Modernization of the State in conducting an inventory of personnel and positions for the GOG. The inventory seeks to improve control over human resources (e.g., reducing “ghost” employees). USAID is also providing $4.9 million over five years to help 29 municipalities improve transparency in financial management and procurement, including improving internal auditing and citizen participation and oversight. It also supported the 2006 IACC.
Civil Society: USAID has provided grants to anticorruption NGOs such as Participación Ciudadana, Coalición para la Transparencia, and others, to support activities such as monitoring disbursement of Hurricane Stan relief funds to guard against corruption, working with the government to ensure full implementation of the IACAC, and working with the new administration of President Colum to launch the GOG’s anticorruption agenda.
Government Efforts: The Government of the Republic of Indonesia (GRI) has launched a significant anticorruption campaign, further institutionalizing its commitment to reform. The GRI has replaced or sidelined corrupt officials, energized anticorruption agencies, and publicly supported reformers. The Corruption Eradication Commission (KPK) has established itself as the premier body for anticorruption reform since its founding in 2003. The Chief of Police and Minister of Finance, as well as the new Attorney General and Minister for State-Owned Enterprises, are considered to be “reformers” who are able to lead further governance and anticorruption reform in Indonesia.
The GRI is implementing the MCC’s largest threshold program, administered by USAID; the anticorruption component of this program focuses on improving anticorruption efforts within the judiciary, the KPK, the anti-money laundering bureau, and within the sphere of government procurement. Government institutions are taking pro-active measures and establishing strategic plans to combat corruption. However, limited institutional capacity remains a constant challenge throughout the government.
Indonesia hosted the 2nd UNCAC Conference of States Parties in January 2008. A party to the UNCAC, Indonesia is working to revise its criminal law to comply with UNCAC provisions. The GRI has also volunteered to participate in the World Bank/UN Stolen Asset Recovery (StAR) initiative.
Law Enforcement and Legal Systems: The MCC threshold program is helping improve institutional capacity at the Supreme Court through budget and human resource systems reform. The program provides technical assistance on judicial ethics and provides systems to publish Supreme Court decisions so they are accessible to the public.
The MCC threshold program supports the KPK by providing funding for equipment and training to improve technical, communications, and investigative capacities. The KPK investigates and prosecutes high-profile corruption cases and coordinates government-wide corruption initiatives. During its first four years (2003-2007), the KPK won 100% of its 39 cases, including the prosecution of former ministers, governors, and other senior officials.
A USDOJ Resident Legal Advisor (RLA) based in Jakarta is working with the Attorney General’s (AG) Office and Ministry of Law and Human Rights on critical legislation, including revisions to the criminal procedure code and developing an asset forfeiture law. New leadership is transforming the Indonesian National Police by fostering improved internal discipline. USDOJ’s International Criminal Investigative Training Assistance Program (ICITAP) is providing assistance to the police to clarify professional standards, reform financial management, and build investigative capacity.
The GRI’s Financial Transaction Reports and Analysis Center (PPATK) is a strong proponent of combating money-laundering in Indonesia. USAID support to PPATK has also led to the formulation of a National Anti-Money Laundering Strategy. PPATK has increased the number of suspicious transaction reports being filed by bank and non-bank financial institutions and has been instrumental in the increased number of prosecutions of money laundering cases. The MCC threshold program supports the PPATK’s effort to improve its technology and to reach out to non-bank financial institutions.
Transparent Governance: Both USAID and the MCC threshold program are helping to implement the 2007 Supreme Court Transparency Decree, an initiative that requires all court decisions to be published. The USG and other donors support the work of the “Group of Five” – the Ministry of Finance (MOF), KPK, Supreme Audit Board (BPK), Supreme Court, and the Ministry for State Apparatus Reform – which is leading a pilot civil service reform effort. Reforms include revisions to pay structures as well as efficiency and performance improvements. The MOF is improving transparency in Indonesia’s tax administration. The MCC threshold program is also supporting five municipalities to develop electronic procurement systems.
The GRI is also working to consolidate and improve management at more than 150 state-owned enterprises, but many remain non-transparent and subject to political interference. The BPK continues to receive technical assistance through USAID to help it build capacity and implement reforms.
USAID is partnering with local governments, local legislatures, and civil society organizations in 57 districts to establish more transparent, performance-based budgeting, financial management and procurement practices, and to strengthen civil society efforts to monitor and prevent public sector corruption. In 2006, USAID supported a highly successful public information campaign on procurement integrity and produced and disseminated practical tools for monitoring local government procurements. In 2007, USAID trained staff of 50 local governments on new government accounting and financial management standards for accountability. At the national level, USAID is assisting the AG to implement its anticorruption agenda.
Civil Society: Several USAID programs partner with Indonesian NGOs on anticorruption and governance reform programs. For example, the MCC threshold program is working with Transparency International (TI) Indonesia to conduct further survey-based research related to TI’s Corruption Perception Index for Indonesia. The U.S. Embassy is also working with the Center for Strategic and International Studies (CSIS) Hills Program on Governance to establish a university institute to promote research on governance issues.
Government Efforts: On May 3, 2007, the Government of Iraq (GOI) committed itself to a collection of anticorruption measures with its formal adoption of the International Compact with Iraq. These commitments include: developing merit-based practices for public sector employment; launching an anticorruption public education campaign; establishing a unit to recover stolen assets; and developing comprehensive internal and external controls within the government.
The GOI’s anticorruption efforts are led by Iraq’s three primary anticorruption institutions: the Inspectors General (IGs), Board of Supreme Audit (BSA), and Commission on Integrity (COI). While the still-challenging security situation impinges on their ability to function, all three have improved certain aspects of their operations over the past two years. All GOI ministries now have an IG Office. This accomplishment is worthy of note, as the concept of independent IGs was only introduced into Iraq’s political culture in 2003. BSA continues to increase its audit capacity and has increased its presence in the provinces. BSA also works closely with the COI and the IGs, providing audit training for new IG staffers. In 2006, the COI rolled out a financial disclosure program, which requires all mid- and high-level GOI officials to report income and assets. The COI’s recently appointed Commissioner has also broadened the institution’s focus; rather than concentrate solely on enforcement, he has repeatedly stressed his intention to reinvigorate the COI’s public education and transparency departments. All three agencies currently are working with UNDP to design comprehensive, long-term training programs for their employees. Iraq acceded to the UNCAC in March 2008. Further, the Trade and Investment Framework Agreement which the United States signed with Iraq in 2005 includes language on anticorruption and transparency efforts that would allow either Party to raise related concerns in a bilateral setting.
Law Enforcement and Legal Systems: The USG supports Iraq’s struggle against corruption through assistance programs that: train auditors, inspectors, and investigators in Iraq’s anticorruption agencies to recognize and investigate fraud, waste, and abuse; mentor Iraqi criminal investigators on the Major Crimes Task Force who are assigned to high-profile corruption cases; mentor prosecutors and judges who manage corruption-related cases in the judicial system; build technical capacity and procedural safeguards in ministries and provincial and local governments to defend public resources against the threat of corruption; support hotlines, which allow Iraqi citizens to report instances of public corruption without fear of reprisal; and facilitate local partnerships on a neighborhood level to promote and monitor delivery of essential services.
Transparent Governance: In 2007, the USG worked with GOI partners to facilitate the creation of the Joint Anti-Corruption Committee (JACC). Under the JACC, the GOI’s main anticorruption agencies are formally coordinating their efforts for the first time, both with each other and with representatives from the Council of Representatives and the Prime Minister’s Office. USAID’s programs continue to focus on capacity building in the area of transparent governance. The anticorruption component of USAID’s Tatweer project concentrates on professional training for the IGs. The Embassy’s Political Section also oversees other USDOS DRL-funded programs which provide institutional training to the GOI, political parties, and civil society organizations, all of which promote good governance by strengthening the linkage between government and political party officials and staff with the Iraqi population, with an emphasis on transparency and accountability.
Civil Society: On the civil society front, USAID’s Local Governance Program works closely with provincial governments and the provincial reconstruction teams in order to promote good government and transparency. Additionally, the Embassy’s Public Affairs and Political Sections, through DRL-funded programs, have conducted an array of programs geared toward exposing Iraqi journalists, editors, government officials, and journalist syndicates and unions to the practices and norms of a free press.
Government Efforts: The performance of the Government ofKenya (GOK) in 2006 and 2007 was mixed, with progress on the institutional and legal fronts juxtaposed with a lack of high-level political commitment to combat corruption. While President Kibaki vowed to wipe out corruption at all levels when he was elected in 2002, the GOK has failed to charge anyone associated with the Goldenberg Affair (a large 1990s financial scandal) or the subsequent Anglo-Leasing scandal in which some senior officials were implicated. Kenya’s relatively lax conflict-of-interest regulations are rarely enforced. The Kenya Revenue Authority (KRA) announced in March 2008 that Kenya loses about Sh85 billion (US$1.3 billion) yearly through corruption. In December 2007, the Kenya Anti-Corruption Commission (KACC) sued firms and individuals in Mombasa over the alleged illegal acquisition of public land worth Sh346 million (US$5.3 million). Kenya signed and ratified the UNCAC in 2003.
In response to business community appeals to improve Kenya’s business climate, the GOK made significant reforms in the approval and licensing system that is subject to corrupt practices. Parliament passed the Licensing Act of 2007, which eliminated 205 licenses, simplified eight, and planned to eliminate, consolidate, or simplify at least 900 of the country’s 1,300 business licenses. The GOK also launched an Electronic Regulatory Registry to speed up the registration of new companies, cut regulation costs, and enhance transparency.
Kenya enacted the Public Procurement and Disposal Act (PPDA), which came into force on January 1, 2007. The Act requires procurement agencies to annually update pre-qualified firms, especially when dealing with restricted tenders. The PPDA sets penalties for violations, including steep fines for both individuals and companies and jail time for individuals. The GOK made bidding more transparent by removing from its tenders a clause allowing the GOK to accept or reject any bid without explanation. The Central Tender Board now publishes decisions and provides reasons for rejecting certain bids upon a bidder’s request. To strengthen the enforcement of the PPDA, Kenya enacted in 2007 the Supplies Practitioners Management Act to regulate the training, certification, and conduct of public procurement officers. The Act is intended to curb the loss of public funds by establishing strict operational measures.
The December 2007 presidential and Parliamentary elections exposed corruption in democratic processes that was more about retaining political power than acquiring illicit wealth. Shocked by the ensuing violence and motivated by domestic and international pressure and intensive mediation efforts, rival political camps signed a landmark power sharing agreement in late February 2008. The new government’s commitment to correct the institutional weaknesses that led to the flawed reporting of election results is yet to be determined.
Law Enforcement and Legal Systems: In 2006 and 2007, the USG continued support to the Department of Public Prosecutions (DPP), both through USAID programs and through a USDOJ RLA who provides hands-on technical assistance to Kenyan prosecutors. As a participating institution in the GOK’s Governance, Justice, Law, and Order Sector reform program, the DPP contributes to the key goal of reducing corruption. The USG also helped the DPP produce a training manual for its officers on investigating corruption.
Transparent Governance: USAID supports a “Parliamentary Strengthening Program” that focuses on making the committee system and the budget process more transparent and accountable. Through this program, local partners annually provide training to Parliamentarians on analyzing the budget and other pieces of key legislation and making amendments to GOK fiscal policies to enhance economic growth. USAID assistance was vital in developing the legislation to create the Budget Committee, and USAID is supporting the new office of Fiscal Analysis to improve Parliament’s ability to review and influence the budget. USAID also sponsors other public fora that have spurred organizations to prepare budget proposals for presentation to Kenya’s Treasury and created useful interactions between the private and social sectors and the Ministry of Finance.
USAID administers the MCC threshold program in Kenya, which is designed to strengthen the newly-established Public Procurement Oversight Authority by helping it to launch an e-procurement system and to apply the new procurement regulations in key sectors, particularly in health care services. The USG and other donors support Kenya’s comprehensive “Public Finance Management Reform Program,” a key pillar of which is procurement reform. The donor community hopes that the revised public procurement laws will improve GOK’s public procurement performance, which has been frequently marred by flawed contracts and awards to noncompetitive firms and to firms in which GOK officials have a significant interest.
Civil Society: With grant support from USAID, local NGOs promote constitutional, legal, and administrative reforms to ensure a positive enabling environment for improved fiscal transparency and accountability. Local partners have supported the efforts of key Parliamentarians to establish a Parliamentary Budget Office and to enact the Supplies Practitioners Management Act of 2007. Other USAID-supported Kenyan NGOs monitor decentralized fund management to ensure that these public resources are used appropriately and effectively. USAID provides training to these NGO partners to increase their capacity to serve as watchdogs and to oversee the GOK’s progress in fulfilling its fiscal transparency pledges. The MCC threshold program also supports grants to civil society to evaluate the government’s performance in making anticorruption reforms.
Government Efforts: Former President Olusegun Obasanjo initiated a broad agenda to tackle corruption, including enforcement of existing anticorruption legislation, passage of fiscal transparency and public procurement legislation and the Nigeria Extractive Industries Transparency Initiative (NEITI) bill, and civil service reform. These initiatives led to the arrest, prosecution, and/or conviction of several high ranking public officials including State Governors, an Inspector General of Police, and a Senate President who was eventually impeached. President Umaru Musa Yar’Adua, who assumed office in May 2007, vowed to build on the reform legacy of the previous administration. Yar’Adua set the tone for his administration by voluntarily declaring his assets and by consistent public reference to the importance of the rule of law.
Some have called into question the Yar’Adua administration’s commitment to fighting corruption after the reassignment of Nuhu Ribadu, the effective Chairman of the Economic and Financial Crimes Commission (EFCC), and given government speculation of merging the EFCC with the less effective Independent Corrupt Practices Commission (ICPC). In 2007, the Government of Nigeria (GON) established a Technical Unit on Governance and Anticorruption (headed by a former recipient of USG anticorruption and good governance training) to coordinate all GON anticorruption efforts in order to ensure effective partnership and coalition building among governmental watchdog agencies. Commitment to and progress in anticorruption reform is generally much less evident at state and local levels and varies significantly from state to state. Some states have recently begun to improve budget processes and public expenditure management, but progress in other key areas is less apparent. Nigeria has signed and ratified the UNCAC.
Law Enforcement and Legal Systems: Training assistance has helped EFCC and ICPC prosecutors and investigators develop their capacity to combat corruption, money laundering, and terrorist financing. Since 2004, the USG has also facilitated the training of EFCC personnel in cybercrime and criminal investigations. Despite the EFCC’s successes, there are allegations that it has been used in the past to intimidate political opponents, but many believe that its effectiveness in reducing corruption by targeting politicians and businessmen caused this outcry. Since May 2005, the USG has provided an Intermittent Legal Advisor (ILA) to the ICPC.
During the reporting period, the USG continued to implement several projects as part of the G-8 transparency and anticorruption compact with Nigeria. Work with the Office of the Accountant General to institutionalize the Transaction Recording and Reporting System continues as the system is deployed to the zonal level to strengthen budget and payroll oversight and audit capabilities. In addition to assisting the EFCC, the USG also assists the Nigerian Financial Intelligence Unit (NFIU) and the Special Control Unit against Money Laundering (SCUML) as both continue to provide the EFCC with data necessary to pursue corruption cases. Officers from ICPC, EFCC, and SCUML attended USG-funded criminal investigative and financial forensics courses at the U.S.-funded International Law Enforcement Academy (ILEA) in Gaborone, Botswana.
Transparent Governance: The USG worked closely with civil society during the reporting period to promote accountability and transparency in key institutions, most importantly, the national legislature. Over the past three years, USAID support through the National Democratic Institute (NDI) helped to establish an independent, bicameral, non-partisan, and highly professional National Assembly Budget and Research Office (NABRO), enabling it to carry out its oversight responsibilities and enhance citizens’ input in the budget process. In FY 2007, almost 500 government officials, including both elected members and permanent staff of the National Assembly, received USG-funded training on budget best practices and broader anticorruption agendas.
Civil Society: In FY 2007, USG support focused on increasing effective advocacy for key policy reforms, strengthening civil society - government partnerships to fight corruption, and building program and financial management capacity of 21 civil society organizations (CSOs), focusing on national membership organizations, coalitions, and professional groups. Particular efforts were made to engage historically marginalized groups, including people living with disabilities, women, and Muslim faith-based organizations. The CSOs successfully conducted 152 anticorruption advocacy campaigns, increased civil society oversight capacity in monitoring oil and mineral revenues, and broadened civic participation in the democratic process. Jointly organized National Budget forums provided opportunities for CSOs to demand accountability from government, with government demonstrating increased willingness to respond to these demands. USAID extended budget advocacy support to CSOs in four Nigerian states for engagement with sub-national governments on budgetary issues in specific sectors.
Government Efforts: The Government of Pakistan (GPK) adopted an Anti-Money Laundering law in August 2007. This law created a Financial Management Unit (FMU) that will be housed in the State Bank of Pakistan. Pakistan ratified the UNCAC in August 2007.
Pakistan’s National Accountability Bureau (NAB) is responsible for investigating and prosecuting corruption/fraud matters in special NAB courts. The NAB was created by a presidential ordinance and reports annually to the President of Pakistan. The GPK appointed the first civilian head of the NAB in late 2007. Corruption charges have been filed against opposition political figures. Then-President Musharraf directed that cases against Pakistan People’s Party leaders be dismissed in late 2007 through the National Reconciliation Ordinance (NRO) of 2007. There are serious concerns about this body’s independence from political pressure.
Law Enforcement and Legal Systems: Embassy Islamabad’s FBI Legal Attaché (LEGAT) has established a very good working relationship with the NAB. Joint efforts in 2006-2007 involved extradition of fugitives and mutual legal assistance in criminal matters.
The GPK adopted an Anti-Money Laundering (AML) law in September of 2007. It established a Financial Management Unit (FMU) to be housed in the State Bank of Pakistan. International assistance will be required to train the FMU to make it operational. USDOJ and its Resident Legal Advisor, Treasury, and APEC made substantial efforts to encourage the passage of the money laundering bill. Work continues with the GPK to amend the AML law so that it will meet international standards. U.S. Embassy Islamabad provides law enforcement training to investigators through the USDOJ-ICITAP and the FBI LEGAT on investigation techniques, including for financial crimes.
Transparent Governance: USAID-funded projects have focused heavily on strengthening the legislature at the national level in Pakistan. Nearly 1,000 legislators and secretariat staff received training in parliamentary procedures and rules, bill drafting, constituent services and outreach, field hearings, legislative research, and budget development in FY2006 and FY 2007. Additionally, USAID implementing partners work with national and provincial parliaments and local government officials on budget development and consultation exercises. USAID helped start the local chapter of Transparency International, which facilitated provincial level reforms in procurement procedures that saved Rs.1.5 billion (USD $25 million) in Sindh Province on a single procurement transaction.
During the 2007 election cycle, which extended into 2008, USAID-funded democracy and governance programs and implementing partners purchased 215,000 transparent ballot boxes and seals, mobilized and trained nearly 20,000 domestic election monitors, funded a highly respected international election observation mission, and trained approximately 70,000 Pakistani election officials.
Civil Society: Pakistan has seen the development of organizations that seek to improve the transparency of government and improve the functioning of the legislative process. Transparency International Pakistan has received USAID support and has issued public reports on corruption. Its most recent report stated that bribery increased 100 percent between 2006 and 2007. Also, only 20 percent of the general public believed that the government’s efforts to combat corruption were somewhat effective. The Pakistan Institute of Legislative Development and Transparency (PILDAT) sponsored conferences and published pamphlets on election, legal, and legislative issues. PILDAT has pushed for open meeting laws and freedom of information regulations so citizens can seek information from the government. Also, PILDAT has been very active in the debate about an independent judiciary. PILDAT plans to start hosting conferences on legal reform, covering topics such as Modernization of the Penal Code and the Criminal Procedure Act. These conferences will lead to reports that will be presented to the National Assembly. The RLA regularly met with PILDAT to encourage the effort to modernize the legal system in Pakistan.
Government Efforts:The Government of Peru (GOP), aware that corruption is undermining citizen trust and eroding the country’s competitiveness, is strengthening its commitment to combat it. A 2007 Presidential Decree established 12 national policies that govern all ministries and public offices. These policies specify the need to eliminate illegal and excessive payments; guarantee transparency and accountability; promote ethical behavior in public administration; and foster citizen participation, oversight, and control of government actions.
In October 2007, the GOP launched the National Anticorruption Office (ONA), which aims to promote public ethics, increase transparency, and fight corruption in order to strengthen Peru’s democracy. ONA is a functionally independent, cabinet-level institution headed by a former corruption court magistrate known for her diligence and integrity. The ONA, when fully operational, is expected to have approximately 15 staff members. ONA’s responsibilities include: developing prevention activities, such as public information access, transparency promotion, and citizen oversight; promoting ethics in the public sector; initiating investigations and channeling them to the appropriate authorities; developing a national anticorruption plan; monitoring compliance with national anticorruption policies; coordinating with civil society to strengthen its functions; creating an integrated inter-agency National Anticorruption System; and, intervening in money laundering cases as necessary. Peru has signed and ratified the IACAC and the UNCAC.
Law Enforcement and Legal Systems: Through 2007, the USG has funded training for over 500 prosecutors, police, criminal investigators, and judges in the areas of investigating money laundering crimes and preparing cases for trial under the new accusatory trial process. The USG has also assisted the GOP in drafting an asset forfeiture law, which went into effect in November 2007. The law gives the Peruvian government authority to identify, trace, and recover illicit assets through the country’s new Code of Criminal Procedure. The USG is funding projects to help the GOP implement the law.
Transparent Governance: USAID worked in conjunction with the state public procurement agency, CONSUCODE, to provide training to local government contracting officers, civil society, and local businesses to ensure a clear understanding of government contracting rules. At the same time, CONSUCODE trained local citizen oversight organizations, composed of representatives from stakeholder groups, such as local chambers of commerce, business associations, and watchdog groups, to supervise local bidding processes. The program, which ended in December 2006, trained more than 7,177 government officials and 6,700 private sector representatives on government procurement practices. CONSUCODE also led efforts, with the support of the G-8 Anticorruption Initiative, to create a hemisphere-wide state procurement organization – the Inter-American Organization of Government Procurement Institutions. Approximately 19 representatives from state procurement institutions from Western Hemisphere countries participated in the inaugural November 2006 meeting in Lima.
Also as part of the G-8 Anticorruption Initiative, the USG provided financing to launch a plan for “rural connectivity,” to bring internet connectivity to rural municipalities most affected by past political violence. The project will enable the selected municipalities to access national government systems such as the Integrated System for Public Financial Administration (SIAF), the National System for Public Investment (SNIP), and the Electronic System of State Procurement and Contracting. The activity, which is scheduled to begin in April 2008, will also allow citizens greater access to information in order to increase government transparency and accountability.
The USG’s Pro-Decentralization program is providing technical assistance to six regional governments and 500 municipal governments in such areas as participatory budgeting and planning, accountability procedures, and the use of the SIAF and the SNIP. Efforts undertaken through the decentralization program have improved the efficiency of local governments and increased the transparency of their business practices.
In 2007 the GOP worked to develop a cohesive national plan – a “blueprint” to systematically attack corruption. The blueprint established a framework that aims to foster awareness, enhance enforcement, and reduce opportunities for corruption. With this blueprint, the GOP selected four priority public offices to participate in the MCC threshold program: the Judiciary, the Ministry of Internal Affairs, the Office of the Comptroller General, and the Ombudsman’s Office. Significantly, the GOP also included a component in its threshold program to improve the capacity of civil society to monitor government anticorruption efforts and promote greater transparency and accountability. The comprehensive approach Peru has taken in its threshold program, when paired with ongoing government efforts, should measurably reduce levels of public sector corruption in Peru. The program was approved in late 2007 and is expected to begin in spring 2008.
Peru is also a participating country in the Extractive Industries Transparency Initiative (EITI). This program will promote greater transparency in the use of public resources generated from the extractive industries by supporting the technical leadership role of the government-led EITI Committee while strengthening civil society involvement in the EITI process. The USG will partner with the IFC and three other donors to work in mining regions to reduce conflict and ensure greater transparency in the use of mining royalties.
Civil Society: A USAID program which ended in March 2007 strengthened civil society’s role in the decentralization process by providing technical input on six key decentralization laws and promoting greater citizen participation, improved access to information, and more effective oversight of government performance. The program was extremely successful in promoting citizen oversight of 15 regional governments using common indicators compiled on a quarterly basis. Indicators included public budget use, access to information, and citizen participation, among others. Citizens discussed results with the rated government officials and disseminated them publicly to increase citizen awareness of the performance of their elected authorities. The program significantly increased operational transparency in 80 percent of the targeted regional governments.
Government Efforts: While corruption remains a central challenge to good governance, the Government of the Republic of the Philippines (GRP) has made significant efforts to improve transparency and combat corruption at all levels. Central to the GRP’s anticorruption efforts is the Office of the Ombudsman, the independent agency that investigates and prosecutes corruption cases in the public sector. Starting from a low six percent conviction rate in 2002, the Ombudsman succeeded in raising the conviction rate in public corruption cases to 19 percent in 2006 (35 convictions out of 188 cases) and 55 percent in 2007 (94 convictions out of 171 cases). The Ombudsman’s prosecution of former president Joseph Estrada for plunder and Estrada’s unprecedented conviction and 40-year sentence in October 2007 was the most significant of these cases, highlighting that the Ombudsman’s reach extends to the highest levels. While Estrada was pardoned, he was required to forfeit bank accounts and property amassed illegally during his two-year tenure. The MCC threshold program is providing institution building assistance, including training, case management systems, and introduction of a new mediation system, to the Office of the Ombudsman to improve its effectiveness.
Notwithstanding this progress, the efforts of the Ombudsman and the Anti-Graft Court (AGC) are hampered by many institutional challenges. Philippine banking secrecy laws limit access to certain crucial financial information, and there is poor protection for would-be whistleblowers. The high caseload and the general practice in Philippine courts to try cases on a piecemeal basis combine to make trials at the AGC last an average of six to seven years. The AGC has established a mediation process to trim its caseload, and it successfully mediated 256 cases in 2007 as part of a larger effort to address this issue.
The Department of Finance, Bureau of Internal Revenue (BIR), and the Bureau of Customs (BOC) have also taken significant steps to strengthen their anticorruption mechanisms. The Revenue Integrity Protection Service (RIPS) detects, investigates, and prevents corruption in the revenue generating agencies of government under the Department of Finance. Its recent successes include the filing of 27 graft cases in 2006 and 37 in 2007, compared to 18 cases in 2005. To date, 25 officials from BIR and BOC have been suspended by the Ombudsman under the program. Six BOC officials were suspended for allegedly smuggling 16 luxury vehicles, and cases were filed against two BOC officials for illegally releasing 14 high-end luxury vehicles at the Subic Bay Freeport Economic Zone. MCC threshold assistance is provided to BIR to computerize its district offices, making the system more transparent, as well as to improve its human resources system. MCC assistance also supports capacity building to RIPS.
In 2006, the BOC launched the Run After the Smugglers (RATS) Program, to detect and prosecute smugglers and other customs and tariff law violators. Through December 2007, 60 cases have been filed with the Philippine Department of Justice. Some 11 high-value cases were filed with the Court of Tax Appeals. To further help prevent smuggling, the BOC also took the initial steps to shift all operations to “paperless” transactions. MCC threshold program assistance has been helping RATS develop its investigation and prosecution capacity, in order to support GRP’s ongoing efforts at curbing smuggling.
Other notable accomplishments include the November 2006 ratification of the UNCAC and the June 2007 signing of the Anti-Red Tape Act, a law designed to significantly reduce transaction times for government procedures and to provide stiffer penalties to those employees who engage in corrupt practices. In November 2007, President Gloria Macapagal Arroyo established the Procurement Transparency Board to increase civil society oversight of government procurement activities.
Law Enforcement and Legal Systems: The Chief of Mission and senior U.S. officials used every appropriate opportunity, publicly and privately, to highlight the negative effects of corruption on economic growth and political stability, while development assistance supported both Philippine government and civil society partners to develop the policies and tools necessary for a transparent democratic system. In July 2006, the MCC threshold program provided a $21 million grant to the Philippine government to strengthen and institutionalize its anticorruption programs. The Philippines contributed counterpart funding of P1 billion ($25 million) to fight corruption.
In 2006 and 2007, the USG provided training to approximately 2,000 government officials on anticorruption procedures and mechanisms. U.S. assistance helped the AGC develop a computerized case management information system, making it easier to track cases and identify those that are overdue. U.S. efforts also enabled the AGC to conduct continuous trials, permitting judges to more effectively gauge the reliability of witnesses and rule in a timely manner. With the prospect of dilatory tactics eliminated, the accused in almost half of over 50 pilot cases selected for continuous trial opted to enter plea agreements. U.S. assistance helped improve the abilities of staff of the Office of the Ombudsman to investigate and prosecute corruption cases through training in substantive law, investigation and prosecution skills, legal writing and research, and case preparation. The USG also supported assessments of selected government agencies for vulnerability to corruption and provided direct training and support to improve the capacities of the Office of the Ombudsman, the BIR, and the BOC. The U.S. also provided advisory assistance to the Philippine Anti-Money Laundering Council, which is investigating seven corruption cases involving P1.4 billion ($35 million).
Transparent Governance: The USG provided technical assistance to improve efficiency and transparency in government procedures at both the local and national levels, including business registration and permit issuance, tax collection, and budget and procurement procedures. USG programs continued to strengthen procedures and internal controls among the revenue-generating agencies of the Philippine government. The USG continued to support the automation of the personnel and management systems for the 11,000 employees of the BIR. In addition, USG programs helped the Office of the Ombudsman and the Supreme Court to detect vulnerabilities to corruption and to design and implement systems and safeguards to prevent corruption in public sector agencies.
Civil Society: The USG also engaged civil society in the fight against corruption by supporting the Multi-Sectoral Anti-Corruption Council and various focus groups that act as watchdogs to prevent corruption in government. The USG provided assistance to the Transparency and Accountability Network, a coalition of 25 civil society organizations concerned with anticorruption and good governance. The USG also funded a broad coalition of civil society organizations to monitor the formulation and use of the national budget. With assistance from the MCC threshold program, the Office of the Ombudsman distributed teaching guides on graft and corruption prevention to all the elementary and secondary teachers in 44,000 public schools nationwide to instill civic awareness, ethics, and integrity among public school students and teachers.
Government Efforts: During the 2006-2007 reporting period, President Vladimir Putin and senior Government of Russia (GOR) officials frequently spoke publicly of the problem of corruption. Anticorruption campaigns in Russia tended to be limited in scope, of short duration, and focused mainly on lower level officials. The Ministry of Interior reports that there were 11,616 corruption investigations involving government authorities in 2007 (a 5 percent increase over 2006); with 9,625 leading to prosecution (a 6.2 percent increase over 2006); and 5,666 resulting in conviction (a 9.1 percent increase over 2006).
High-profile investigations and prosecutions of present and former federal officials included the prosecution of former Minister of Atomic Energy (1998-2001), Yevgeny Adamov, for embezzlement of state funds and abuse of office; and the arrest of Vice Minister of Finance Sergei Storchak in November 2007 on suspicion of embezzlement. Vladimir Nikolayev, the mayor of Vladivostok, the largest city in the Russian Far East, was convicted of abuse of official position relating to his personal use of official resources and was sentenced to 4.5 years probation. Prosecutors are attempting to seize 13 million rubles of property to compensate for the damages they claim he caused to the municipality. Russia has signed and ratified the UNCAC.
Law Enforcement and Legal Systems: The USG worked with the GOR to address some weaknesses in Russia’s criminal code and legal system. For instance, one program for some 90 Russian prosecutors focused on the prosecution of corruption cases. The program featured lectures and presentations by experienced American and Russian prosecutors and interactive skills training focused on (1) preparing victims and witnesses in corruption cases to testify at trial; (2) opening and closing statements in corruption trials; (3) use of demonstrative exhibits in corruption cases; and (4) developing a trial strategy in corruption cases. The program concluded with a mock trial of two Customs inspectors charged with extorting a bribe from a businessman.
Transparent Governance: The USG is working with regional (oblast) and local governments to develop more effective policies, laws, and enforcement capacity to fight corruption through support to the George Mason University Terrorism, Transnational Crime and Corruption Centers (TraCCC) in Vladivostok, Saratov, and Chelyabinsk. TraCCC’s Vladivostok Center worked with the Primosky Krai government to develop a regional anticorruption program, advised on draft anticorruption legislation, and worked to establish a Russia Far East regional anticorruption working group comprised of oblast Dumas, oblast procuracies, the Federal Security Service, and law enforcement agencies. Likewise, the TraCCC Saratov Center provided technical assistance to regional and local initiatives to combat corruption in Saratov Oblast, Lipetsk Oblast, and the Volga Federal District. TraCCC also developed course curricula on corruption that have been introduced into institutes of higher education.
Civil Society: USG assistance to civil society seeks to help Russia address weaknesses in governance. Given Russia’s backsliding on democratic reform, this area continues to be a U.S. policy priority. This year saw an increase in government pressure on civil society in the run up to parliamentary and presidential elections, with non-governmental organizations (NGOs) facing increased reporting requirements, targeted prosecutions, and suspicion generated by foreign financing. U.S. assistance includes reinforcing NGOs’ ability to partner with regional and municipal authorities and the Public Chamber to address critical local issues and responsibilities; strengthening judicial independence and increasing lawyers’ and NGOs’ protection of the rights of disadvantaged citizens; promoting the independence of public debate and media coverage of social and political issues; supporting efforts to monitor elections; and improving local audiences’ awareness and understanding of human rights, civil society, and representative government.
USAID’s program with Transparency International (TI) serves to monitor the parliamentary and presidential electoral campaigns. TI-Russia established a monitoring team of 22 experts covering election campaign activities in 16 Russian regions, provided training for regional monitoring groups to introduce direct monitoring methods, and developed instruments for collection and analysis of information. During the monitoring period, TI posted the results of its monitoring, research, and analytical efforts on a number of websites, including http://www.transparency.org.ru and http://community.livejournal.com/vibory_light.
Government Efforts: The February 12, 2007 National Security Strategy of Ukraine concluded that the pervasive presence of corruption throughout all levels of society and government and in all spheres of economic activity was a threat to the national security, economical development, and rule of law in the country. The corrosive impact of corruption on reform efforts is also an obstacle to Ukraine’s Euro-Atlantic aspirations. Although government action is still limited, fundamental changes have taken place in the GOU’s attitude toward corruption. In their contacts with the USG, press, and the public at large, Government and Parliament officials acknowledge the problem of corruption and the need to combat it.
In March 2005, Ukraine ratified the Council of Europe (COE) Civil Law Convention on Corruption and became a member of the COE’s Group of States Against Corruption (GRECO). The Ukrainian Parliament has ratified the COE Criminal Law Convention on Corruption, signed in January 1999. Ukraine has not yet ratified the UNCAC.
In September 2006 the President issued a decree on the Concept for Eradication of Corruption in Ukraine followed by an August 2007 Cabinet of Ministers’ resolution to approve the Action Plan to implement the Concept. In August 2007, the President announced a list of several anticorruption initiatives that included setting up a single anticorruption agency that would develop a comprehensive anticorruption policy and implement various anticorruption measures. Ukraine is also in the process of adopting new legislation that will bring national anticorruption legislation in line with European and international standards in order to criminalize acts as corruption, strengthen the procedures for investigating and prosecuting corruption, and remove the blanket immunity of senior officials and judges from prosecution.
In 2006, the GOU signed an MCC threshold program aimed at preventing corruption. This two-year program provides about $45 million in assistance to reform the judiciary, reduce regulatory problems, institute internal assets declaration and inspectors general, enhance civil society monitoring of corruption, and reduce corruption in higher education admissions through standardized testing.
Law Enforcement and Legal Systems: USG assistance programs support Ukraine’s efforts to reform the Soviet-era criminal justice sector by supporting comprehensive reform to harmonize Ukraine’s criminal justice system and its institutions with European and international standards, including the adoption of a Council of Europe-compliant Criminal Procedure Code. The USG is helping the Ukrainian government develop legislation and establish new law enforcement agencies/departments, as appropriate, which would be responsible for investigating and prosecuting corruption using UN, European, and international standards. The MCC threshold program is helping Ukraine establish a system for internal inspection within government agencies so they can better detect and develop processes to deter corruption. The State Border Control Service is the agency chosen to pilot this effort. This program is also providing assistance to the commercial courts and to the notary system, in an effort to make these systems more transparent and effective. Other USG rule of law initiatives work alongside this MCC assistance to advance anticorruption objectives, such as revised judicial framework legislation aligned with European norms, codes of ethics for judges and court staff, and judicial self-regulation.
Transparency: Ongoing USG assistance to the Ukrainian parliament increases legislative transparency, builds accountability through citizen and media access, and expands public information about the legislature’s work. At the local level, USG programs enhance transparency by increasing public participation in strategic planning, budgeting, and other decision-making processes. The MCC threshold program supports higher education testing, making this process less susceptible to corruption.
Civil Society: USG programs contribute expertise and input to the development of laws and regulations to improve the enabling environment for civil society organizations (CSOs) and media; monitor the work of national and local governments, parliament, and the courts; support journalistic investigations of key corrupt practices and cases, and build public awareness at all levels of corruption’s social, political, and economic costs. In addition to a robust MCC civil society component, USG programs directly support Ukrainian civil society efforts to combat corruption.
USG agencies – including USAID, USDOS, USDOJ, USDOC, the U.S. Treasury, MCC, and the OGE – will continue to work closely with Congress, cooperating governments, multilateral institutions, and the NGO community, to ensure a strategic and effective correlation between these USG diplomatic and programmatic activities. Good governance and accountability creates conditions that lift people out of poverty, raise education and health levels, improve the security of borders, expand the realms of personal freedoms, nurture sound economic and sustainable development strategies, and create healthier democracies.
With the leadership of the United States and other dedicated parties, the international fight against corruption will continue to move forward. The United States is committed to working to ensure that, fifteen years from now, taking effective actions against corruption becomes second nature for most governments in the world.
ACC Anticorruption Commission (Bangladesh)
AG Attorney General
AGC Anti-Graft Court (Philippines)
AML Anti-Money Laundering
APEC Asia-Pacific Economic Council
BIR Bureau of Internal Revenue (Philippines)
BOC Bureau of Customs (Philippines)
BPK Supreme Audit Board (Indonesia)
BSA Board of Supreme Audit (Iraq)
COE Council of Europe
COI Commission on Integrity (Iraq)
CONSUCODE Peruvian government contracting agency
COSP Conference of States Parties (under the UNCAC)
CSIS Center for Strategic and International Studies
CSO Civil Society Organization
DAC OECD Development Assistance Coordination Committee
DPP Department of Public Prosecutions (Kenya)
DRL U.S. Department of State Bureau for Democracy and Human Rights
EFCC Economic and Financial Crime Commission (Nigeria)
EITI Extractive Industries Transparency Initiative
FIU Financial Investigation Unit
FMU Financial Management Unit (Pakistan)
GƒD Good Governance for Development in Arab States initiative
GOC Government of Colombia
GOG Government of Guatemala
GOI Government of Iraq
GOK Government of Kenya
GON Government of Nigeria
GOP Government of Peru
GOR Government of Russia
GOU Government of Ukraine
GPK Government of Pakistan
GRECO Council of Europe’s Group of States Against Corruption
GRI Government of the Republic of Indonesia
GRP Government of the Republic of the Philippines
IACAC Inter-American Convention Against Corruption
IACC International Anti-Corruption Conference
IAGGA International Anticorruption and Good Governance Act
ICPC Independent Corrupt Practices Commission (Nigeria)
IFI International Financial Institution
IG Inspector General (Iraq)
ILA USDOJ Intermittent Legal Advisor
ILEA U.S.-sponsored International Law Enforcement Academy
IP Intellectual Property
JACC Joint Anti-Corruption Commission (Iraq)
KACC Kenya Anticorruption Commission
KPK Anticorruption Commission (Indonesia)
KRA Kenya Revenue Authority
MCC Millennium Challenge Corporation
MOF Ministry of Finance (Indonesia)
MOU Memorandum of Understanding
NAB National Accountability Bureau (Pakistan)
NABRO National Assembly Budget and Research Office (Nigeria)
NDI National Democratic Institute
NEITI Nigerian Extractive Industries Transparency Initiative
NFIU Nigerian Financial Intelligence Unit
NGO Non-Governmental Organization
OECD Organization for Economic Cooperation and Development
OGE United States Office of Government Ethics
ONA National Anticorruption Office (Peru)
PILDAT Pakistan Institute of Legislative Development and Transparency
PPATK Financial Transaction Reports and Analysis Center (Indonesia)
PPDA Public Procurement and Disposal Act (Kenya)
RIPS Revenue Integrity Protection Service (Philippines)
RLA Resident Legal Advisor from the U.S. Department of Justice
SCUML Special Control Unit against Money Laundering (Nigeria)
SIAF Financial Integrity Administration System
SNIP Peru’s Public Investment System
StAR World Bank/UN Stolen Assets Recovery Initiative
TI Transparency International
TraCCC George Mason University Terrorism, Transnational Crime and Corruption Centers
UNDP United Nations Development Program
UNCAC United Nations Convention against Corruption
USAID United States Agency for International Development
USDOC United States Department of Commerce
USDOJ United States Department of Justice
USDOS United States Department of State
USG United States Government