I just love this quote, which I picked from DailyKos:

The trouble with the world is that the stupid are cocksure and the
intelligent are full of doubt.--Bertrand Russell

You can decide which of the two categories YOU fall into .....

New York state comptroller Alan Hevesi used state car services to chauffeur his wife around but "forgot" to reimburse the state for the costs. And only did so when it was clear that it would be exposed.

This so clearly shows a lack of good financial management of state funds. It reminds me of the pension scheme in the European Parliament. Bad financial management means you do not set up systems that hands out funds to public officials for personal use, without oversight of the use of those funds, and whether they are being reimbursed. Parliament money goes directly to the pension funds to pay into the parliament's private fund, but MEPs are supposed to reimburse the money. But so many never do, and there are no controls of this process.

TI came out with an analysis of how access to information laws can be used as an anti-corruption tool. One place where this argument needs to be used is in the European Parliament.

At the moment, the financial interest statements for Members of the European Parliament are woefully inadequate and do not ask enough questions about Members' affiliations, and does not acknowledge the possibility of trade in influence, not just money. Thus, unpaid positions and affiliations also count in deciding whether there is a case for conflict of interest. See for instance, this declaration of financial interest from Robert Evans. Only affiliations that are remunerated are considered relevant, and when they are listed, they are mostly illegible.

But the biggest problem is that some MEPs are able to refuse to publish their declarations on the website, leaving voters with the one option of visiting the parliament and going to a small room in the depths of the building to look at the declaration...which cannot be photocopied. Check out for instance MEP Lauk from Germany: no declaration there. And there is a whole list of similarly private MEPs that was published in the European Voice last year.

And the gist of what Commissioner Kallas said last year, mostly in relation to MEP Elmar Brok's role at Bertelsman AG, was that the conflict of interest can be dealt with (they cannot speak or vote on any thing related to the interest they are affiliated with) but that the most important thing is that people know about it. Now, whether there is good enforcement of keeping people from speaking, voting or using their position to get favorable regulation for their interest, that is another story. And I think that problem should be handled in conjunction with new rules about how the interests of legislators are made public, because it is just as important.

More on the corruption busting in China. The organization doing the investigation is called "the central commission for discipline inspection." You gotta hand it to the Chinese for thinking up awesome names for their ministries.

But see, one of those basic aspects of democratic society is missing here: independent bodies holding people and organizations accountable. It's also one of the ways to design a good financial controls system, and how to prevent corruption; make the watchdog as objective as possible. But really, I am still intrigued by where politics end and real purging and change begin in China these days.

And there is purging. In the last two and half years, 50,000 people have been arrested for corruption. And this article sums it up very nicely.

But even such vigilante anti-corruption measures won't give China a substitute for democratic society, as it wantonly chases after capitalism while remaining a closed society. Some people think this will be the reason for an imminent slowdown of the Chinese economy. China is just not yet open enough to create the efficient and fair regulatory environment that business needs, or for new ideas and innovation, which are the by-products of an open and pluralist society.

***

Flew from Amsterdam to JFK today. Word to the wise, AVOID HEATHROW AT ALL COSTS! In any case, it was nice that United held a plane full of seething passengers for me to board. How nice, throwing me into the lion's den.

Well, but I made it, and even saw a bit of Greenland on the way over (very blue lakes!). And little green monkeys too!

Shanghai's party leader sacked. Is everyone in the Party corrupt? And it is a political power play to get rid of this high ranking guy? Or is he really one of the gross violators?

Going to the US tomorrow morning early from Schiphol. Ay yay, was stupid and am going through Heathrow. But they relaxed the liquids rules on flights, so I can bring my contacts solution. Small victories.

I was talking with Reiner this weekend about philanthropy. Another article also reminded me of this, and describes the situation in Russia, where philanthropists are setting up charities to give back, but steering clear of promoting a more democratic society.

It seems that the new philanthropy is on a scale that we haven't seen since the Rockefellers or Carnegies. Gates and Buffett on health, and Branson on climate change set their own priorities of what they see as the major problems in the world, and design detailed ways of achieving those goals, ways that are probably more coordinated and less susceptible to bureaucracy than the work of governments and existing institutions. But the jury is definitely still out on the mega-contributions, and whether they really will be better at achieving results.

But what is the purpose of such mega-giving? They are part therapy for the billionaire who has everything, part corporate social responsibility and marketing, and part real honest to god do-gooding.

But in Russia, as the article in the Washington Post says, some corporations use charitable organizations to launder money and avoid taxes. And there have been others who have suspected that there need to be more controls on NGOs and where they get and use their money. Surely, this has increased since September 11th, because there has been a realization of how dangerous charities can be in getting funds to terrorists. Some Islamic charities have functioned very well as channels for money to flow from diaspora to their respective "freedom fighters" at home. This was true in the Balkans, in Afghanistan, and elsewhere. So there is room for suspicion.

Silvana Koch-Mehrin in the European Parliament has tried to raise awareness of how NGOs should be controlled, especially because they often receive funds from the European Commission, only to turn around and lobby the Commission for their policy goals. This was also one of the reasons for Commissioner Kallas to start his European Transparency Initiative. But focussing only on NGO governance seems misplaced when it's governance and lobbying in general that needs to be regulated, for any body who is representing an interest.

I'm going away for four days to Aachen and Tuebingen to visit good old Reiner.....so no posts until Monday.....but I am concerned about just how many professional sports have been implicated in corruption accusations recently... Is there any effect on ticket sales? I mean: cricket, football in the UK, football in Italy. Is this the downfall of professional sports? Will there be a rejuvenation of interest in local sports? My parents like going to see the AA Bridgeport baseball team more than going to any Mets or Yankees game. There's a neighborhood feel, you are closer to the actual players, no parking lot traffic jams. And my mom's not into the Mr. Universe, steroid look a la Barry Bonds anyway....

See one Russian reaction to the new centrality of corruption in World Bank support.

The author raises the old spector of the "Washington Concensus," and it makes me wonder just how much this is another case of U.S. neoliberalism forcing itself on the rest of the world. I tend to think that the ways to fight corruption and graft and promote better governance mean adding, not subtracting, from the capabilities and responsibilities of government. That means that oversight will have to be built into budgeting and spending systems, that new anti-corruption agencies will have to be set up, etc. The UN Convention against Corruption certainly calls on governments to do more, not less.

True, in the interest of transparency, there is a tendency towards less bureaucratic government, as bureaucratic procedures hide graft very well. Furthermore, transparency and simpler procedures act as corruption prevention, by allowing more citizens to watch what's happening and hold government accountable for any irregularities they find.

On the other hand, Ivan Krastev has described the rise of the anti-corruption movement as one of Western corporations complaining to their governments of yet another barrier to market access in the rest of the world, just like the drive towards more liberal economies that characterized all those World Bank crises in Russia and Southeast Asia. I'm sure it's true; I believe the OECD anti-bribery convention is the purest example of an international agreement that unabashedly favors corporations on the global marketplace.

And the kind of anti-corruption actions that such corporations would want are nothing akin to the changes that occurred in Russia in 1998-9, when competition laws were missing from the transition plans, when lots of governance-related laws were not there to protect investors and consumers.

But there have been so many studies showing how detrimental corruption really is for regular citizens. His is not a bad argument, if corruption weren't such an obstacle to well-functioning economies and the full potential of development projects.

I should probably read the rest of that new Krastev book to find out what his beef is. If I'm not mistaken, I believe his problem is the politicization of the fight against corruption. A subject for another day.........

That's my first and only time skiing.

Uhh duhh. The TI group already finished. So far I agree with everything they say.

Just seeing that TI has convened a group to make recommendations for the UNCAC monitoring and enforcement:

The Council of Euorpe's GRECO system seems like a good example to follow, but the UNCAC system has so many more countries included with so many different levels of corruption, that it would need to be tiered so that you didn't have very corrupt countries peer reviewing countries with very low rates of corruption. But how do you do that without stigmatizing countries in what would be the lowest tier? And how would you create a system to categorize those who are monitoring? Big headache.

I feel like it's the same problem as the human rights committee at the UN, where abusers sit at the same table as those who admirably protect human rights. But creating some big monitoring agency doesn't seem like a very good idea either; they become another actor in the whole process accused of being biased.

UK Minister of Development Hilary Benn is withholding funds until other aspects of conditionality are removed from the Bank's policy.

The World Bank also agreed to provide evidence within two months that it
had ceased to impose strict economic conditions to its grants and loans. Mr Benn
said he will withhold £50m of UK funds until he sees the evidence.

Here is the document from the World Bank's Development Committee.

Skimming it, the Bank will work with countries, unlike the MCC, by actually helping with governance issues and anti-corruption, but will suspend support if it gets really bad. If I had a little more stamina, I could find out what this threshold actually is.

And this is the first serious test for Wolfowitz as director of the Bank, whether this can work while still making a dent in poverty levels (the real goal of the Bank, remember?). Certainly he's gotten everyone on board, but there had been no adequate justification for suspending support to certain countries; now there is a reason. In a speech recently of Caio Koch-Weser, he said the the jury was still out on Wolfowitz; but I think opinions are being formed right about now and hinge on the next suspension of Bank support.

But if we think about this in a bigger picture, the Bank is creating greater restrictions for developing countries, even though this approach makes sense. And the UK had criticized the increase of greater requirements and more conditionality for World Bank client countries.

Remember when we couldn't stop talking about the evils of conditionality after that Stiglitz book...? Perhaps the critics have a point.

Is Wolfowitz trying to make the World Bank look exactly like the Millennium Challenge Corporation? If we have every development organization using corruption levels as a yardstick for who gets support and who doesn't, who will take care of those that are in dire straits, in the spiral which is so often characterized by commodity-based economies, corrupt dictators, and horribly poor citizens? I guess the point is, what is the purpose of the World Bank? Is it part of a cohesive structure of organizations that each have their own role in terms of who helps who? I don't see any kind of coherent division of responsibility, if you ask me....and someone has to muddle through with those countries that still have high rates of corruption, mostly because someone has to try to reach the citizens that suffer, but also because corruption can be combatted from so many different directions, including local economic development, the empowerment of those who are outside of the good old boys network of corrupt dictator X, and a growing number of taxpayers who will start demanding something (schools, policing, etc. ) in return for what they are paying the government. I think they call that bottom-up, huh.....

Even though a lot of my friends would say I'm a complainer, and that I criticize an awful lot, I still have this perhaps silly belief in progress, and that things will get better over time. Where does this come from? Well, I think I can say with relative assurance that it comes from my being American, ....think about it. Americans just think that we are moving forward, don't we? Like pilgrims and later, less protestant immigrants picking themselves up to achieve better lives for themselves and their ungrateful children.

Anyway, I am just prefacing what I found when I was looking at the indicators they use at the Millennium Challenge Corporation, and especially the one on measuring corruption. Now, I have some problems with the religious status that the TI instrument holds, at least in the media, so I'm interested in how this more complicated World Bank Institute instrument works. Not having succeeded yet with that, (due to my current short attention span on account of the fact that my toes are throbbing because my boyfriend stopped his bike right in front of mine on the bike path and my foot just slammed into him...so I am not really up to the task right now--maybe I broke a toe? ), I looked as we all do at the executive summary and was sad to learn that:

While we find that the quality of governance in a number of countries has changed significantly (in both directions), we also provide evidence suggesting that there are no trends, for better or worse, in global averages of governance.

This makes me wonder when they started measuring these things and if it's kind of like saying 'it's the hottest day in whatever city ..ever' because of course you haven't been measuring forever. For most places, we've only been recording temperature for the last hundred years or so, and much much less time for corruption and governance quality. And certainly, we only started measuring corruption and governance after it was understood how important these factors were and anti-corruption programs had already been launched all over the place. Is it a chicken egg question? And what are the forces that keep the level of corruption, on average, generally stable, despite all the efforts to fight it?

I found something on bizzyblog very interesting.

No Turning Back For Red Cross Relief Cards
The American Red Cross is brushing aside reports of casino gambling, liquor purchases and luxury shopping sprees using its emergency debit cards. The Red Cross is not going back to the old system of supplying emergency relief via handouts of checks and store vouchers.

Indeed, the relief group intends to make the use of prepaid debit cards the central way to get financial relief to people in times of disasters. However, private insurers, which are less likely to be providing emergency funds, are not necessarily going to follow suit.
Noting reports of Red Cross cards being used for what some considered nonessential purchases, Michael Brackney, manager of client services for the American Red Cross, says, “Occasionally, you hear about somebody who makes a bad decision.” The cards were distributed in the aftermath of Hurricanes Katrina and Rita last year.
Brackney told participants at the 2006 Prepaid Card Expo in Orlando, Fla., last week that the Red Cross intends to expand and make permanent the issuance of prepaid debit cards to disaster victims. Although placing restrictions on Red Cross debit card purchases is technically possible, Brackney vowed not to place such restrictions because the recipients, and not the Red Cross, should be making decisions about what they need. “Those make the news,” Brackney says of some criticized purchases. “But this is about the dignity of the victim. Doing something normal makes you feel normal.”

Brackney notes that such uses of emergency cards as liquor purchases have likely been made in the past using Red Cross checks. But purchases made using cashed checks are not traceable, as are electronic purchases using a debit card, he notes.
The Red Cross distributed 600,000 prepaid cards, issued by its contractor, JP Morgan Chase & Co., after Katrina and Rita. The cards were distributed in 47 states to evacuees who lost their homes.The Red Cross placed a total of $1.6 billion in assistance on the cards, each of which were worth from $360 to $1,565...

.........

We could compare this to the way foreigners want to send their blankets and old t-shirts to tsunami victims. No, that is not efficient, but neither is sending money with no one to control its use at the victim end. We need to realize that disasters can happen in the United States too, and that the same kinds of controls that we think are so necessary in the developing world are also needed in our own. This is due to psychology but also to the fact that there are areas of the United States that more closely resemble developing countries that any corresponding developed country with our level of per capita GDP.

The point of this blog is to share some thoughts on anti-corruption policy in the world. Having looked at this issue from a European perspective for a couple years, I'm now going to open my eyes to how things are in my own country too (the US), as well as in other places in the world. What about those political appointments in all those federal agencies? How widespread is that kind of thing in other countries? And campaign finance? Certainly, no where else in the world do campaigns cost or require as much as campaigns in the United States. But should we go back to the way campaigns are in other places? I remember the first time I saw campaign posters in a foreign country, which was Germany, and thinking how I wouldn't have put on that particular bow-tie for the poster, and that the candidate should have at least gotten a better haircut on campaign picture day. Of course, his political party didn't have the cash to hire a stylist for each and every candidate.

And another thing that I am wondering about is how the explosion of the corruption issue has made it the weapon of choice for political opponents, so that cries of corruption are as often unfounded as they are true. How do we tell the difference? And how can we really tell where it's happening and where it isn't? Is setting up preventive systems just giving way to other abuses, somewhere else?

And the other thing I'm interested in is how much corruption is a developing country problem versus a problem that affects every country, including developed ones, although in different ways. I am inclined to believe that developed countries ignore the political and private sector corruption that occurs, but I guess I can't argue with someone who says that Afghanistan is more corrupt than the Netherlands. We know that in developing countries, corruption is a barrier to development of the economy and a barrier to the successful formation of democratic structures, but what are the effects in developed countries?

And as a side note, I've heard many US Democrats try and push the slogan that the Republicans are all corrupt, and that this should be one of the main campaign messages for the congressional elections in November. But then you talk to the many who are disenchanted by politics who give the (well, downright logical) suggestion that perhaps they are ALL corrupt, Democrats and Republicans alike. I mean, we've seen the contract frenzies in Iraq, for Halliburton and others, and I just have to wonder how much of it is true. There is the suggestion that Halliburton is one of the only companies in the world who could do the things they do in Iraq. Is this true?

These are some of the things that will come up in the future, so I hope you will come back and visit.

Cheers,
Andrea