Recently, the Local Government Association published a ‘model’ Code of Conduct, which it advises the approximately 21,000 elected Council representatives in England and Wales to follow. Guest blogger and Independent Councillor Paul Millar argues that, rather than setting a ‘gold standard’ for conduct in local authorities, the Code is less strict than many councils’ existing codes and includes a significant loophole.
The Local Government Association, the representative body of Councils in England and Wales, in December 2020 published a ‘model’ Code of Conduct. It includes some really progressive changes such as promoting equalities and not discriminating unlawfully against any person. This is welcome: too many Councils still offer no maternity pay protection for Councillors in senior positions.
But the new advised codes regulating gifts and hospitality do not go nearly far enough.
The 2020 Corruption Perceptions Index was published on 28 January 2021. One score that was eagerly awaited was that of the USA. Perhaps predictably, the US performed worse than it did in 2019. Is Donald Trump’s departure likely to mark a turning point in the anti-corruption thinking in the USA? Highly likely. That shouldn’t distract from the fact that the USA’s corruption problems go deeper than making sense of the behaviour of one now former president. It’s going to take time (and no little effort) to genuinely turn the ship around.
On 28th January 2021 Transparency International (TI), one of the world’s most prominent anti-corruption NGOs, published its annual Corruption Perceptions Index (CPI). The USA continued its recent downward slide, coming in 25th (out of 180) with a score of 67 (out of 100). The drift has been gradual but pronounced; as recently as 2017 the USA was in 16th (with a score of 75).
The CPI ranks countries based on how much public sector corruption is believed to exist. The data comes from 13 expert surveys plus information gleaned from polls of business executives. The better a country is doing in terms of counteracting corruption, the closer its score will be to 100. The closer to 0 the worse the corruption. Denmark and New Zealand top the list (88 points), Syria (14), Somalia (12) and South Sudan (12) fill the bottom three places.
As I’ve noted elsewhere, the CPI is not a failsafe way of measuring corruption. For one thing, and as its name suggests, it’s an indicator of perceptions and not reality. Its focus is on public sector corruption rather than indiscretions that take place within the private sector. Coming up with a simple score that does justice to complex corruption networks is also a task fraught with difficulty. But, as an indicator of broader trends, the CPI still gives corruption-watchers a feel for how corruption patterns are developing.
COVID RESPONSES AS WEATHER VEINS
The rollercoaster presidency of Donald Trump has certainly played a role in the USA’s worsening performance. But, getting a grip of ideas of good and bad governance also helps us understand how and when patterns of corruption are likely to change. Good governance matters all the time. But it is particularly important in times of crisis. When the quality of governance slips, expect crises to highlight all of the weak points in political systems. The USA in 2020 is a perfect case in point.
Strong oversight mechanisms, for example, are important in preventing abuse of hastily put together relief packages. That’s true whether the relief concerns supporting victims of weather-related disasters such as Hurricane Katarina or indeed health crises such as Covid 19. In the case of the former claims have been made that over US$1bn was siphoned off by fraudsters. In the case of the latter, it’s been argued that close friends of Donald Trump received in excess of $10bn dollars of that relief spending to distribute whilst blanket exemptions from ethical reviews were seemingly granted. In the words of TI, this sort of approach to relief package management “raised serious concerns and marked a retreat from longstanding democratic norms promoting accountable government”.
MOVING FORWARD How does the USA begin to row back against this? The consensus in the anti-corruption would suggest looking at three specific things. Firstly, politicians will inevitably make mistakes. That goes with the territory. Being able to spot the difference before a genuine mistake and a potentially corrupt act is vital. The best way of doing that is to strengthen oversight institutions. Those institutions are briefed to look at and unpack potential acts of corruption (understood in its broadest sense). They need to have sufficient resources and sufficient independence to then be able to do their jobs properly. If a politician is scared of outside eyes looking in, then that in and of itself might be a telltale sign of something untoward happening.
Secondly, information on links between government and those who formally interact with it are often clouded in secrecy. Data on which firms win which public contracts, for example, need to be put into the public domain as a matter of course. How much are the contracts worth? What links do the bidders have to those inside government? At times there are good reasons to withhold information (i.e. national security concerns), but the norm has to be transparency first and secrecy second. Not the other way round.
Thirdly, facts matter. There are no ‘alternative facts’. The world is a complex place, but policy-making needs to done on a clear evidential base. That won’t make every policy the right policy, it won’t mean that there isn’t debate on the right course of action. It won’t prevent all mistakes. But it will at least help onlookers understand why decisions have been made. That is important in helping build and maintain legitimacy. Given the tumultuous end to Trump presidency, that’s something that all advocates of democracy to need actively embrace.
The everyday use of new technologies entangles with both corruption practices and anti-corruption efforts. One strand of research argues that new technologies help us curb corruption, for example by empowering citizens’ monitoring capacity and facilitating grassroots anti-corruption initiatives. Another strand of research shows that digital media can support corruption and related illegal activities by facilitating the expansion of fake news and propaganda, the misuse of personal data by tech giants or the use of cryptocurrencies for money laundering activities. CSC Lecturer in Corruption Analysis Dr Roxana Bratu explains how these issues will be explored in an upcoming ECPR joint session.
This workshop aims to develop a nuanced understanding of how digital media, machine learning, and other types of recent technological developments can simultaneously support anti-corruption efforts and corruption practices. We bring together two strands of research (one regarding how technology can support and the other regarding how technology can subvert anti-corruption policies and practices) and invite papers linked (but not limited) to one or more of the following questions:
Which are the methodological challenges of studying digital media, machine learning, and other types of recent technological developments in the framework of corruption and anti-corruption?
What are the challenges anti-corruption activists face when developing their own digital media platforms, machine learning algorithms, and other technological supports to counter corruption?
Which types of new challenges civil society actors, governmental agencies, and international organizations face due to the emergent forms of technologically mediated corruption?
Which are the technological imaginaries that anti-corruption activists, governmental agencies, and international organizations develop about digital media, machine learning, and other types of recent technological developments?
How do the most recent technological developments change their role according to the specific anti-corruption and/or corruption country context in which they are employed?
How the use of digital media, machine learning, and other types of recent technological developments can change patterns of corruption and/or anti-corruption efforts?
How can digital media employment, machine learning, and other types of recent technological developments in the framework of anti-corruption actions foster reactions in the world of corruption, bringing new developments in corruption practices?
We invite papers that employ qualitative, quantitative, or mixed-methods research designs. We welcome papers based on empirical research and are open to submissions based on solid theoretical and methodological reflections on the overall workshop’s topic as well as policy-based contributions.
The confiscation of criminal proceeds is a key global weapon against corruption, intended to ‘take the profit’ out of the crime – with the aim of returning that money to the public and, hopefully, deterring future corruption. The UK confiscation regime has been criticised, but in this blog post, Tristram Hicks argues that the criticism is misplaced and in fact the UK sets a global example of how to use this tool in the fight against corruption and other crime.
In December 2020, the Law Commission of England & Wales finished a consultation on the post-conviction confiscation regime. They described this as a “once in a generation”, “root and branch” review. The project started in November 2018, the consultation had over a hundred questions, arising from a report of over 700 pages. It is a detailed and thorough piece of work.
The background to their review is the ground-breaking Proceeds of Crime Act, 2002, which transformed the ability of the UK justice system to confiscate the proceeds of crime. By any sensible measure POCA has been a world-beating success. The average annual revenue reaped by virtue of the Act increased more than eight times, from £15m to £130m per year, in the two decades before and after 2002. It was a transformational change:
Total value of receipts in England & Wales and Northern Ireland
Average in the 10 years pre-POCA 1992-2002: £15m p.a.
Average in the 10 years post-POCA 2003-2012: £130m p.a.
Average in the 5 years 2013-2017: £206m p.a.
(Source: FOIA response from the Home Office)
In addition, the number of people who have been deprived of criminal assets under the Act was transformed from a few hundred each year to an annual average of somewhere between 5,000 and 10,000. (The Home Office does not publish this information regularly, so this is the author’s estimate, based on ten years’ service on the UK Criminal Justice Board).
In 2018, just as the Law Commission started its project, the Financial Action Task Force, the global standard setter for Anti-Money Laundering, reviewed the United Kingdom. It conferred on the UK the highest aggregate grading for any jurisdiction at the time. For the specific immediate outcome of “Confiscation” the UK was evaluated at a “Substantial level of operational effectiveness”, meaning that the “Immediate Outcome is achieved to a large extent.” Only 20% of jurisdictions achieve this level of success (out of just over 100 evaluated).
It is surprising, then, that the Law Commission found that the confiscation regime was perceived as ineffective. It explained that “The perception that the confiscation regime was ineffective took hold from various media reports and the NAO report of 2013 which drew attention to the high value of unpaid orders”.
Yet the conclusions of the NAO Report contrasted starkly with the record of ten consecutive record-breaking years of asset recovery since POCA was first enacted. The NAO concluded that “the process was not working well enough and did not provide value for money”, whilst simultaneously finding that the regime generated £133m, comfortably exceeding the £100m cost of administering the regime (in 2012/2013). In other words, unlike any other aspect of the criminal justice system, it not only generated a substantial amount of money but actually turned a tidy profit.
The key focus of criticism has been the supposedly high value of unpaid orders. This was first reported in the press around 2005 and has been almost the exclusive focus of media reports on the confiscation regime every year since. But the reality is that almost all these unpaid orders are uncollectable, they are an artefact of the system.
A significant part of the uncollected amount is the value of “hidden assets”. Hidden assets are typically criminal assets abroad that have been found by British financial investigators. Their recovery is not possible because the equivalent confiscation regimes do not exist in the relevant jurisdictions which host the assets. Some success over the years has been achieved through British technical assistance to these regimes, although this could be more strategically directed to benefit the UK and the international effort against corruption and crime.
The fact that these amounts are uncollectable is not disputed. This was confirmed by the National Audit Office itself in 2013, finding that 81% was uncollectable[1], and by the latest Law Commission Review, which found that this proportion had increased to 92%.
The nature of the uncollected backlog is fully explained in an excellent paper by Helena Wood of the Royal United Services Institute, who concludes: “In sum, to judge the success of the system on the uncollected total is to misrepresent the results”.
And yet, the obsession with these unpaid amounts continues to feed into other reports which use this as evidence that the system is failing. The NAO Report directly triggered a Public Accounts Committee review of the regime and a concurrent Home Office Committee review of the same topic. The current Law Commission review is itself driven by the perception of failure created by the NAO.
The Law Commission is aware of this problem. It quotes the NAO report at some length, making clear that its headlines have contributed to the adverse perception of the UK confiscation regime. The Commission states that the NAO Report “has influenced strongly the continuing debate about POCA’s effectiveness to the present day” and further find that it “included eye-catching data which appeared to demonstrate that the regime was not working” – strong words when set against a convention that UK government bodies do not criticise one another.
The Law Commission consultation has finally found a solution to this problem that had escaped the NAO, the Public Accounts Committee and the Home Affairs Committee. They are to be commended for proposing, in Question 77: “We provisionally propose that the court should be able to direct that enforcement be placed in abeyance where it is satisfied that an order cannot be enforced.”
In other words, the simplest solution would be to administratively write off these uncollectable amounts, to avoid misleading the public and undermining public confidence in the system.
If this simple solution is adopted, the undeserved and misleading publicity surrounding the UK’s confiscation regime might finally be laid to rest. The UK has an excellent system which is rightly applauded by the FATF and emulated by experts all over the world. It is high time it was recognised at home and actively promoted abroad.
The author is a former Detective Superintendent in the Metropolitan Police Service, who spent ten years on the UK Criminal Finance Board, responsible for implementing the Proceeds of Crime Act. He is now an independent international consultant on criminal asset recovery. A version of this post is also published on his blog.
[1] In 2012/13 the uncollected amount was £311m of £1.61bn, in 2018/19 it was £161m out of £2bn according to the relevant HMCTS Trust Statements.
Centre for the Study of Corruption 