The United States and International Anticorruption Efforts

This article provides general background information on: (1) current U.S. government (“USG”) policy relating to the international fight against corruption; (2) ongoing USG diplomatic and assistance efforts relating to the international fight against corruption; and (3) a very brief history surrounding USG international anticorruption efforts.

The Monterrey Corruption Message

President Bush and his Administration have made considerable progress in the past year to raise global attention to the ill effects of corruption and the need to address it.  Corruption has been a topic of much media and USG attention following the President’s announcement of a new Millennium Challenge Account (“MCA”) and his appearance last March at the UN-sponsored Financing for Development (“FfD”) conference in Monterrey.  The MCA will provide billions of dollars of extra developmental assistance to countries that, among other things, are engaged in promoting good governance and the fight against corruption.  In November, the President specifically decided that progress in addressing corruption would be one of several grounds for qualifying as an MCA recipient country. 

The Monterrey corruption message - focused heavily on how corruption impedes development and donor assistance goals --- has become a priority for top Administration officials, and is becoming the impetus for new USG anticorruption activities.  This message is being further refined and articulated, and will surely be carried by top USG officials into the spotlight of upcoming international fora, including, among others, the Third Global Forum for Fighting Corruption in Seoul and the G-8 Summit in Evian.  In the meantime, the USG continues to contribute to the international fight against corruption on a number of varied fronts discussed below.

A Clear USG Commitment to the International Fight Against Corruption

Various top officials have since the early days of the Bush Administration revealed a clear USG commitment to assist the international fight against corruption.  President Bush first articulated the Administration’s commitment in a statement issued to representatives of 143 nations during the Second Global Forum hosted by the Government of the Netherlands in May 2001.  The President emphasized that support for international efforts against corruption is an important element of his Administration’s foreign policy.  Attorney General Ashcroft, the head of the USG delegation to the Second Global Forum, delivered a well-received presentation highlighting the crucial need for international cooperation in this area while cautioning governments not to let negotiations, declarations and conferences become a substitute for concrete actions at the national level.  Secretary Powell, through a State Department publication released at The Hague, described anticorruption initiatives as a “key” foreign policy element for the USG. 

Even following the events of September 11, 2001 and the consequent reshuffling of priorities, the issue of corruption has remained a topic of high-level attention and discussion.  In remarks to the World Affairs Council National Conference in January 2002, President Bush stated:  “Citizens and businesses must know that the City Hall…is free from bribery and cronyism and all forms of corruption... For freedom and prosperity to come, corruption must go…”  During the March 2002 speech that launched the MCA, the President remarked that governments and NGOs around the world “must encourage developing countries to make the right choices for their own people.”  Since “good government is an essential condition of development, [the MCA] will reward nations that root out corruption, respect human rights, and adhere to the rule of law.”

Top U.S. State Department officials are also noting the importance of USG attention to the international fight against corruption.  Secretary Powell discussed the issue extensively in his April 2002 report to Congress pursuant to the International Anticorruption and Good Governance Act (“IAGGA”).  Since Monterrey, State Department Undersecretary Alan Larson has emphasized on several occasions the importance of tackling corruption in the context of development and the “shared responsibility” of developed and developing nations to contribute to this effort.  In an address to a conference on sustainable development at the U.S. State Department in July, Secretary Powell flagged one of the Administration’s concerns about corruption overseas: “Private capital is a coward, a chicken.  It flees from corruption and bad policies.  It doesn't want to go where there's a conflict.  It doesn't want to go where there is corruption.”

Current USG Anticorruption Policy

Current USG anticorruption policy and related activities emanate from three cornerstone principles.

The first cornerstone principle is that the USG has clear foreign policy and national security interests in seeing corruption addressed on an international scale.  The USG is routinely affected by corruption outside its borders. Corrupt interests continually hamper global economic activity of American firms, which can lose contracts to competitors offering bribes.  Corruption can also interfere with the accomplishments of USG foreign assistance goals and programs.  Corruption facilitates the continuing growth of transnational crime and international criminal organizations, both of which threaten the security of the United States and its citizens.

The destabilizing effect that corruption has on political systems and democracy threatens vital American interests.  Corruption deters foreign investment in many countries, stifles economic growth and sustainable development, distorts prices and undermines legal and judicial systems.  By diverting or misallocating government resources, corruption prevents public benefits from reaching those most in need of them. 

Emerging democracies are particularly vulnerable to corruption.  Public perception of corruption in such countries de-legitimizes governments in the eyes of their publics, and, at its most extreme, can substantially impair the ability of a democratic government to maintain the rule of law.  The result can be fatal to well-intentioned democratic governments, and, in the most extreme cases, to the entire democratic system within these countries.

Following the events of September 11, our interest in the international fight against corruption assumed a new sense of urgency.  Poor governance and corruption help create the economic and social conditions that can breed disillusionment and nurture fanaticism.  Terrorists thrive on corruption, collaborating with transnational organized criminals and utilizing smuggling and trafficking networks to facilitate and finance their activities. Corrupt officials, knowingly and unknowingly, 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.

The second cornerstone principle surrounding recent USG anticorruption policy and efforts is that the true fight against corruption occurs primarily at the national and local level.  To be sure, transnational commercial bribery must be addressed by laws and authorities of both exporting and importing countries.  Most other acts of corruption, however, occur within a given country.  Governments, the private sector, and civil society within each country must be committed to tackling their corruption problems and taking concerted actions on a number of fronts to root out and prevent corruption.  

The third cornerstone principle surrounding recent USG anticorruption efforts is that, despite the importance of local actions to address corruption, the international community plays a key role in encouraging government action and assisting to make such actions as effective as possible.  The USG and a growing part of the international community believe they can advance the prospects that governments will act locally and effectively against corruption by raising the visibility and political profile of national and local actions.  There is also a growing belief within the international community that we can together help inform national political processes by clearly and objectively defining actions governments should expect of themselves, what they may properly expect of each other, and what ultimately their people should, through democratic processes, require of them.

USG Diplomatic and Assistance Efforts That Further USG Anticorruption Goals

Given these three cornerstone principles, the USG has in recent years pursued a mix of diplomatic and programmatic efforts to attain four primary anticorruption goals.  These goals, which Secretary Powell first began to articulate in his first two reports to Congress pursuant to the International Anticorruption and Good Governance Act (IAGGA) (see http://www.state.gov/p/inl/rls/rpt/c6696.htm), can be summarized as follows:

• Uniting Governments Under Common Anticorruption Commitments: By recognizing and helping to shape international norms to counter corruption, the USG opens the door to better bilateral and multilateral cooperation on traditionally local fronts.  This, in turn, encourages the sharing of best practices, builds trust and relationships between cooperating countries, and ultimately increases the effectiveness of USG government and other aid programs that assist these efforts. 
  
  
• Helping Governments Meet or Exceed Those Commitments: The fight against corruption begins at the national and local levels.  Where pockets of political will exist, the USG can assist governments to take effective action against corruption.  This can involve helping governments take a wide range of actions to address corruption, such as enforcing anticorruption laws and instituting preventive measures within the public administration.  The U.S. is also beginning through the MCA and other initiatives to reward those countries that are committed to effectively rooting out corruption.
  
  
• Mobilizing Popular Will and Private Sector Action: Popular will is the best expediter of political will against corruption.  The USG can help enhance popular will in other countries by helping encourage civil society and the private sector to be active in the fight against corruption, increase transparency in governments, and increase integrity in the private sector.
  
  
• Leading By Example: 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 examples in the United States, particularly regarding our efforts to prevent U.S. multinational business from bribing overseas, enforce corruption laws, promote good public/corporate governance, and build tools and institutions to prevent corruption.

During the past year, the Administration has been actively involved in a number of diplomatic and assistance activities to promote these four USG goals. Elaboration on some of these efforts can be found in Secretrary Powell’s second IAGGA report to Congress of April 2002. These activities include:

Uniting Governments Under Common Commitments

• developing new global norms and commitments through a United Nations global anticorruption convention;
• developing regional norms and commitments in Latin America (Inter-American Convention Against Corruption), Europe (Council of Europe conventions, Stability Pact Initiative), Asia (Asian Development Bank/Organization for Economic Cooperation and Development [“OECD”] Anticorruption Compact), Africa (Southern African Development Community Protocol, NEPAD, draft African Union convention), and on an issue-specific basis (e.g., bribery in international business transactions through Organization for Economic Cooperation and Development the OECD Anti-bribery convention and  procurement transparency through World Trade Organization);
• enhancing country-specific commitments through International Financial Institutions and USG bilateral diplomacy and targeting U.S. development assistance to countries making progress in this area (e.g., MCA);
• raising political attention through international summits and conferences (e.g., the Global Forum process, public diplomacy, and other highly visible opportunities).

Helping Governments Meet or Exceed Those Commitments

• USG financial and technical support for three active multilateral peer review mechanisms that extend to over fifty countries in Europe and Latin America (Council of Europe, Organization of American States, and the Stability Pact Anticorruption Initiative).
• USG technical assistance to build law enforcement capacity and activity.
• USG technical assistance for public sector preventive measures.

Mobilizing Popular Will and Private Sector Action

• USG technical assistance to build private sector integrity and engagement.
• USG technical assistance to increase transparency and promote civil society engagement.
• USG technical assistance to advance free voice and an independent media.

Leading By Example

• implementing the binding obligation of the OECD Anti-bribery convention signatory countries to prosecute their companies if they bribe foreign officials.
• monitoring  implementation of OECD anti-bribery commitments through multilateral peer review (via the OECD Working Group on Bribery) and bilateral actions.
• improving corporate governance practices and regulatory frameworks in the U.S. and within other countries.

A historical perspective of international anticorruption diplomacy is useful to understand how the USG arrived at its current policy and objectives and why it continues to undertake a number of the diplomatic and assistance activities mentioned above.

The USG’s Early Leadership in the International Fight Against Corruption

In 1977, when Congress enacted the Foreign Corrupt Practices Act (“FCPA”) --- making it a criminal offense for a United States citizen or firm to give, promise or offer bribes to officials of foreign governments in order to obtain or retain business --- the USG found itself far ahead of the international community in recognizing the need to address global corruption. The absence of similar legal prohibitions by other major exporting nations meant that U.S. businesses were placed at a competitive disadvantage relative to foreign competitors that continued to pay bribes.  The USG also recognized that transnational bribery distorted economic decision-making and public expenditure in emerging market and developing economies.  As a result, the USG undertook a long-term effort to convince other leading industrialized countries to adopt laws similar to the FCPA.

This long-term effort achieved only limited international support during the 1980’s. Even as recently as ten years ago, corruption was discussed loosely among governments, and usually within the context of law enforcement issues such as organized crime and narcotics trafficking. Discussion of corruption among nations occasionally included arguments by some developed countries as to whether a certain amount of corruption may be desirable in developing nations to facilitate business, foreign investment, and, thus, economic development.

The 1990’s:  An Anticorruption Awakening

Only in the mid-1990’s did many governments begin to accept the notion that fighting corruption on a global level was essential to their interests.  This rather dramatic awakening began around the time that the USG, after months of intensive diplomacy, persuaded OECD member countries to accept a 1994 OECD Recommendation to take steps to criminalize the bribery of foreign public officials.  Shortly following that event, the USG and other countries of the Western Hemisphere began negotiations on what would in 1996 become the first multilateral convention targeted specifically against corruption (the Inter-American Convention Against Corruption - see www.state.gov/p/inl/rls/rpt/c7574.htm for a recent report on implementation of this convention).

This awakening can be linked to a number of intervening factors, some of which are not yet fully understood.  The emergence of a civil society voice against corruption, led prominently by the Berlin-based Transparency International (“TI”), empowered the populace and NGO’s to confront governments on their corruption problems and efforts to address corruption.  The fall of the Soviet Union exposed corruption institutionalized within the state and the decay that it could cause.  The subsequent painful and slow process of reform for post-Communist countries exposed the ill effects of corruption even within democratic states. Investigative journalists and the media found corruption an easy target and were emboldened to expose it.  As the issue of corruption was pushed into the discourse of nations and citizens, the disdain for corruption began to be expressed - and continues to be expressed - through the ballot box (examples include Kenya and Mexico) and through the forceful ouster of public leaders (examples include Peru and the Philippines).  Governments began to realize that they could no longer ignore their corruption problems.

Creating a Science of Anticorruption

The international governmental community also began during the 1990’s to accept the notion that there existed internationally- accepted remedies for preventing and attacking corruption.  The long-term success against corruption in Hong Kong led to the development of the Hong Kong anticorruption model, which recognizes that a government’s fight against corruption goes beyond law enforcement.  Actions must be taken simultaneously on a number of levels, including instituting preventive measures to deter corruption from happening in the first place.  Hong Kong’s now-famous Anticorruption Commission, created in 1974, led an attack against pervasive corruption on three fronts: through investigating and prosecuting corrupt officials, through a sustained public education and awareness program, and through helping to institute preventive measures (i.e. -, audit functions, procurement transparency rules, etc.) in existing governmental structures.  The Hong Kong model encourages countries to try to understand their corruption problems prior to and while engaging in long-term strategies to deter it.  The Anticorruption Commission conducted extensive surveys over decades to identify problems and to also monitor results.  The monitoring of perceptions and attitudes in Hong Kong over time confirmed that the work of the Anticorruption Commission was an unqualified success.

The excitement generated by the Hong Kong example began to permeate the international community in the late 1980’s.  Anticorruption experts emerged in levels of government outside law enforcement.  Transparency International and other NGO’s engaged governments and encouraged intergovernmental cooperation to develop the fight against corruption into a literal science.

Governments eventually began to organize international fora related specifically to fighting corruption.  They used these fora to expand on the Hong Kong model by sharing their experiences in addressing corruption and working together to develop and perfect effective anticorruption tools.  The biennial NGO-led International Anticorruption Conferences, initiated in the late 1980’s, and the biennial USG-created intergovernmental Global Forum process, initiated in the late 1990’s, are the most prominent of these fora.

The World Bank Institute, the United Nations Global Program Against Corruption, and Transparency International developed diagnostic surveys in the late 1990’s to help governments pinpoint the types of corruption problems in their countries and develop targeted strategies for preventing it.  These surveys have been implemented in dozens of countries since the mid-1990’s.
  
Organizations such as the United Nations (“UN”) and Transparency International (TI) attempted to memorialize this continually developing body of knowledge through release and periodic update of their respective anticorruption toolkits (see www.odccp.org/odccp/corruption_toolkit.html and www.transparency.org/toolkits/index.html). The UN and TI anticorruption toolkits provide a decent overview of the current state of anticorruption science, including the actions that comprise what is considered a “holistic approach” to fighting corruption.

Under this holistic approach, governments must not only investigate and prosecute corrupt actors.  They should at the same time, institute preventive measures.  Examples of such measures include creating audit institutions; taking specific actions to maintain fiscal integrity and transparency in public procurement and budgeting; instituting codes of conduct, financial disclosure systems, and other initiatives to ensure integrity within the public service; actions to ensure judicial integrity; establishing internal controls such as integrity testing within the law enforcement community; and establishing effective and safe channels for whistleblowing and reporting of corruption.  Businesses must institute effective corporate governance regimes.  The media, NGO’s and the populace must demand action against corruption and help monitor government actions. Government and civil society should also formalize their cooperation through partnerships at all levels of government.  Public education is also important to foster a culture of lawfulness and encourage citizen outcry against public corruption.

Forcing Government Commitments to Address Corruption

The Hong Kong example suggests that government anticorruption efforts should be sustained in order to have long-term impact on corruption problems.  In 1996, the governments of the Americas initiated a then-unique method to encourage long-term commitments by governments to take necessary actions to address their internal corruption problems.  They created the Inter-American Convention Against Corruption --- the first internationally binding convention to focus specifically on anticorruption. 

Like traditional international conventions, the Inter-American Convention calls upon governments to criminalize certain behavior and to cooperate among parties on a law enforcement level.  But the most important contribution of the Inter-American Convention to the international fight against corruption involves its attempt to formally commit governments to take preventive measures. Article III contains a series of preventive measures that parties agreed to consider implementing.  Coupled with the Inter-American Convention’s criminalization measures, the goal of the Convention, unique at the time it was being prepared, was to encourage governments to formally commit to a holistic anticorruption regime.

The Inter-American Convention has since been followed by several multilateral and regional anticorruption instruments:

• the OECD Anti-bribery Convention (1998 - see www.oecd.org/daf/nocorruption);
• the Council of Europe Criminal and Civil Law Conventions on Corruption (1999 - see www.greco.coe.int);
• the Stability Pact Anticorruption Compact for Southeast Europe (2000 - see www.oecd.org/daf/SPAIcom/);
• the SADC Anticorruption Protocol (2000 - see www.sadc.int/); and
• the OECD/ADB Asia-Pacific Anticorruption Compact (2001 - see www.oecd.org/oecd/pages/home/displaygeneral/0,3380,EN-document-87-3-no-12-22599-0,FF.html).  

In addition, the Organization of African Unity has completed a draft regional anticorruption convention. Most of these instruments include commitments by governments to implement or consider implementing a holistic anticorruption regime involving various preventive measures.

A New Era of Intergovernmental Cooperation

Anticorruption is now a frequent topic of regional and other multilateral fora. Governments routinely meet to share experiences and mutual assistance. Governments have even established since 1998 several mutual evaluation mechanisms to assist each other with fulfilling anticorruption commitments. Four such mechanisms exist today, operated under the auspices of: (1) the OECD (monitoring implementation of the OECD Antibribery Convention among the 30 OECD members plus 5 non-member parties to that convention); (2) the Council of Europe (monitoring implementation of the COE Twenty Guiding Principles and the Criminal and Civil Law Conventions Against Corruption among 33 European nations and the United States); (3) the Stability Pact Anticorruption Initiative (monitoring implementation of the Stability Pact Anticorruption Compact among 8 participating Southeastern European nations); and (4) the Organization of American States (monitoring implementation of the Inter-American Convention Against Corruption among 27 parties within the Western Hemisphere).

Unthinkable ten years ago, the United Nations began in January 2002 negotiations to develop the first global anticorruption convention (see www.odccp.org/crime_cicp_convention_corruption_docs.html).  Initial discussions reveal that this instrument will most likely contain a section detailing governmental commitments in the area of preventive measures.  In addition, it will commit governments to criminalize certain corrupt actions, promote cooperation on a law enforcement and technical assistance level, and address the related issue of recovering illicitly acquired assets that have been stowed abroad by corrupt officials.

In May 2003, the biennial International Anticorruption Conference and the biennial Global Forum Against Corruption, easily the two most prominent international gatherings relating to corruption, will both be hosted by the Government of Korea.  These two events will be held back-to-back, setting the precedent for a monumental biennial gathering involving thousands of high-level governmental officials and non-governmental experts.  The USG is currently working closely with the Government of Korea to ensure back-to-back implementation of these two events that preserves the intergovernmental nature of the Global Forum process while allowing for combined sessions on best-practices and relevant anticorruption topics that will hopefully become a must-attend event for those involved in the fight against corruption.

Conclusion:  Moving Forward Against Corruption

The international community has recently begun to accept corruption as an issue of global concern with internationally accepted remedies for preventing and attacking it. Through diplomacy, the USG and other governments are establishing the basis for much-needed intergovernmental assistance and cooperation in areas once considered solely of local concern.  Public and intergovernmental conferences and similar events have been important to raising awareness regarding corruption. International anticorruption conventions and agreements are committing governments to institute holistic anticorruption regimes.

Still, as Attorney General Ashcroft emphasized during his speech at the Second Global Forum, the primary fight against corruption involves local actions to implement and sustain holistic anticorruption regimes. Such local actions include good governance measures such as promoting transparency in public finances and procurement, reforming a country's civil service, creating and operating intra-governmental auditing functions, or making decisions as to how scarce law enforcement resources might be used to target corrupt officials. We can lead by example and show that we are willing to take these actions at home when necessary.  We can also use USG technical assistance to help other governments take necessary actions to effectively address their corruption problems.

By acknowledging basic international norms regarding corruption and how to counter it, the international community is opening the doors for more and closer multilateral and bilateral cooperation on important but traditionally local fronts such as law enforcement, government transparency, election systems and more. This, in turn, encourages the sharing of best practices, builds trust and relationships between cooperating countries, and ultimately increases the effectiveness of USG and other assistance programs in these areas.