Dos Santos files: what’s new?

Robert Barrington, Professor of Anti-Corruption Practice at the Centre for the Study of Corruption, asks whether the Luanda Leaks are just another leak – or tell us something more about the world of global corruption.

In the age of the transparency revolution, we are growing used to leaks.  Wikileaks, the Panama Papers, the Paradise Papers, Luxleaks, Swissleaks, and so on.  It would be unsurprising if leak fatigue were to set in.  The media will become tired of the same old stories; the public will not want to read about them because the scandals all sound the same, and there is a lot of innuendo and few smoking guns.  Before we switch off about leaks, here are three things that strike me about why the dos Santos case could have longer legs:
1. Corruption (allegations of) lies at the heart of this case.  In many of the previous leaks, one can see a series of shell companies leading back to something like a privatised State-Owned Enterprise in a post-Soviet country in the nineties.  The origin of the money looks suspect, but it is hard to pin a charge of corruption on the acquisition of the funds.  In this case, the allegations are that corruption was firmly at play – as well as fraud and theft.  Allegations, I emphasise, but clearly about corruption.
2. The heat is mounting on professional enablers.  Much of the Luanda Leaks coverage has not been about Ms dos Santos, but about how firms of professional advisers (accountants, lawyers etc, variously called professional enablers or gatekeepers, depending on what level of empathy you are seeking) have facilitated the acquisition and (alleged) laundering of her wealth.  Were there not sufficient red flags that they should have approached client take-on with particuar care – or were the rewards so lucrative that the red flags magically became more orangey? The global law enforcement community has been getting steadily more worked up about the ‘enablers’ in recent years – respectable professionals who seem to make a mint and get off scot free by distancing themselves from the illegality.  But lawyers and acountants are now firmly in the cross-hairs of regulators, law enforcement agencies and the media.
3. Leaks work.  We know a great deal more about global networks of corruption than we did even five years ago, in large part thanks to leaks.  As well as shining a light on individual cases, they have other functions – for example, acting as a proxy public register of beneficial ownership, demonstrating the value and public interest of having information that is not solely available to regulators or law enforcement agencies.  Like them or not (and some people don’t, because they disclose confidential information) leaks have become easier in the tech age and are part of the transparency revolution.  But – it has not been so good for the whistlblowers (leakers).  All sorts of laws exist that protect the criminals and criminalise the leakers.  Rui Pinto, who was responsible for this round, is currently awaiting trial in Portugal.
By the by, Ms dos Santos has hired the fearsome law firm Schillings to sue the International Consortium of Investigative Journalists, which published and analysed the leaked documents.  A multi-billionaire taking legal action against a small NGO is normally a one-sided affair, irrespective of the merits of the arguments, illustrating the complex debate about whether the ultra-wealthy can buy better access to justice when defending themselves and their assets against corruption charges.
We discussed the case in our weekly ‘bring your own scandal’ discussion group this week, part of our MA on Corruption & Governance.  Three other excellent points we talked through were:
– The gender dimension.  Is this case getting more attention because the protagonist is not just rich but the ‘richest woman’ in Africa?  And if Ms Dos Santos were guilty, does this validate the corruption theory that women are less likely to be perpetrators of corruption and more likely to be victims, until they reach a comparable level of wealth and power, at which point things even out?
– Witch hunts.  Ms Dos Santos has claimed that not only is she innocent, but the cause of all this is a political witch hunt initiated by her political enemies in Angola rather than kleptocracy.  It is worth remembering that both can be true: someone can be both guilty of kleptocracy and the subject of a witch hunt by their political successors keen to ensure that there is no political comeback.
– People get hurt.  An associated banker in Portugal has taken his own life.  In the real world of corruption cases, that kind of thing happens.  But violence against suspects and witnesses pales into insignificance compared to the victims in countries from which the wealth has been looted – the loss of budgets for schools, hospitals, infrastructure, the incentives in the public services to be corrupt in turn, the deterrent to investors.
At first glance, this may look like just another leak.  But delving deeper, there is so much in the case that – whether the allegations are true or false – it is likely to be emblematic for years to come.

Strengthening electoral accountability is crucial in tackling corruption in the Western Balkans

In another take on flawed electoral accountability, Albana Shehaj (Postdoctoral Researcher at the Center for European Studies at Harvard University) argues that corrupt politicians are too easily able to use state resources to buy off voters. We should focus our efforts on constraining their ability to strategically allocate the spoils of corrupt office.

Tirana, Albania’s capital. Credits: Vladimir Tkalčić (CC BY-NC-ND 2.0)

Corruption has been a tenacious staple in the post-communist transition of the Balkan states and remains a grave threat to the region’s democratic consolidation. Corruption is substantial, frequent, and pervasive across the Western Balkan states of Albania, Bosnia and Herzegovina, Kosovo, Montenegro, North Macedonia, and Serbia, with Transparency International Corruption Perceptions Index 2018 (CPI) scores ranging from 36 in Albania and North Macedonia (out of 100, where 0 is most corrupt and 100 least) to Serbia’s 39. That is considerably lower than Western Europe’s average CPI score of 66 and below the world’s average score of 43.

Whether presenting itself in the form of bribery, clientelism, embezzlement, or organized crime, corruption has consistently maintained its presence in the Western Balkans and increasingly permeated the very institutions established to control it, including law enforcement, the judiciary, legislature, and the presidency (Transparency International). In the case of Albania, the involvement of former Interior Minister Saimir Tahiri in a drug-trafficking network operating on both sides of the Albanian-Italian border points to the extent to which corruption permeates the country’s highest political and administrative structures. Albania’s current President, Ilir Meta also shares a political past marked by several allegations of official misconduct.

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The chronic vulnerability of the Western Balkans makes the region a key target for human trafficking

Human trafficking by local and international criminal syndicates came to the Balkans during the wars in Bosnia and Herzegovina, Croatia and Kosovo during the 1990s. Tanya Domi (Adjunct Professor of International and Public Affairs at Columbia University) argues that an integrated approach is necessary to curb criminal activity and mitigate harm to migrants as they find their way to a new life.

One of the most notorious human trafficking cases in the Balkans involved a sex trafficking ring in Bosnia and Herzegovina (BiH) that was covered up by the leadership of the UN Mission. In 2001, an American police monitor serving in the UN Mission blew the whistle on a group of Americans serving in the International Practices Task Force (IPTF) Mission: she was summarily terminated for reporting the crime.

I broke this story and approached Bosnian newspaper Oslobođenje, the longest operating daily newspaper in BiH, which agreed to publish it. The horrible irony of these crimes was underlined by the fact that they occurred in Bosnia, where women bore the brunt of a brutal war that known for the mass rape of Bosniak women as a tool of ‘ethnic cleansing.’

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North Macedonia’s experience in trying to dismantle state capture: policy must be backed by research

Writing about North Macedonia’s experience in addressing pervasive grand corruption as exposed by leaked tapes in 2015, Misha Popovikj (Institute for Democracy Societas Civilis, Skopje) argues that efforts to dismantle state capture should be preceded by a thorough diagnosis of the problems.

Protesters in Skopje, April 2016. The demonstrations over widespread corruption eventually led to the fall of VMRO-DPMNE’s decade-long rule. Credits: Vanco Dzambaski (CC BY-NC-SA 2.0)

Back in 2015, European Commission adviser Reinhard Priebe and his team of rule of law experts arrived in North Macedonia amidst a political crisis. That same year, the Macedonian political opposition had revealed audio recordings carried out illegally by the secret police, and uncovered mass corruption and abuse of office. Priebe’s task was to provide the European Union with a quick assessment and recommendations on urgent reform priorities in relevant areas – corruption in the judiciary, politicised administration, media clientelism, and the uneven playing field in electoral competition.

In June 2015, he delivered a document that set future benchmarks for assessing the readiness of the country to start the EU accession process. Shortly afterwards, a group of NGOs begun transforming these recommendations into specific reforms. The idea was to set a ‘Blueprint‘ – a guide of sequenced changes achievable within 12 months. The Social Democrats, then in opposition, vowed to include these recommendations in their reforms should they win a majority in the 2016 elections.

Widespread aspirations to join the EU provided leverage to these proposals. Priebe’s recommendations were, in essence, new conditions set by the European Commission for accession. The Blueprint reforms were backed by foreign embassies in the country.

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In Kosovo, journalists and civil society beat organised crime by getting more organised

Recent elections in Kosovo saw the opposition defeat long-standing incumbents, electing a new generation with fresh talent and integrity. Jeta Xharra (Balkan Investigative Reporting Network) explains the role that civil society played in making it happen.

Vetëvendosje (LV), winners of the biggest share of votes at Kosovo’s October 2019 election (balkaneu.com).

It is a rare moment in the recent history of Kosovo that I can report that the narrative of civil society, investigative journalists and anti-corruption activists has won, against the narrative of those who we exposed.

Usually we tell our story, we probe, reveal, prove, document, publish, broadcast, file complaints, and we get read, seen, talked about, commented on. But there it ends. It is rare that our anti-corruption narrative becomes mainstream and brings about change.

This is because the opposing narrative, that of the state, has a bigger budget, more power, more police, more prosecutors, more judges, more spin-doctors on their side and more paid ‘journalists’ who toe their line. And the state usually plays the nationalist card to further capture the public imagination.

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Can the European Union tackle corruption and state capture?

While the EU is far from a silver bullet, Dimitar Bechev argues that it is still a badly-needed ally in strengthening the rule of law in the Balkans. But for enlargement to make good on its original promise, the EU should take a robust stance and call out egregious cases of corruption. 

European Union Balloons, by Jonatan Svensson Glad (CC BY-SA 2.0)

When it set to enlarge in the 1990s, the EU brought forward three promises to Eastern Europe. First, delivering prosperity which would narrow the gap with the advanced countries in the West. Second, cementing peace and stability in a historically volatile part of the Old Continent at a time when Yugoslavia went down in flames. Third, Europe was all about good governance and the rule of law. Post-communist societies needed external help and encouragement to consolidate independent judiciaries, establish robust anti-corruption agencies, depoliticize and upgrade the civil service, foster a vibrant NGO scene and media capable of holding the powers to be to account.

When the EU enlarged in 2004, the prevailing sentiment was that this third goal had been fulfilled. Central Europe (Slovenia included) and the Baltics met all the benchmarks. Romania and Bulgaria, on the other hand, were an entirely different kettle of fish. While they did make it into the Union in 2007, the accession treaties empowered the European Commission to monitor judicial reforms and issue regular reports, as during the pre-accession period. The so-called Cooperation and Verification Mechanism (CVM) meant to give the EU leverage to take care of “unfinished business”.

In parallel, lessons learned from the Romanian and Bulgarian case fed into the design of accession negotiations with the Western Balkans: Croatia and, later on, Montenegro and Serbia. The much-discussed Chapters 23 and 24 (addressing the judiciary and the rule of law) offered a means to maximize pressure on governments to meet EU-set benchmarks in rooting out corruption in high places, not a trivial goal given the difficult legacy bearing on former Yugoslav republics as well as on Albania.

What has happened in the 15-odd years since? The record is at best chequered. The former star pupils have turned into the EU’s worst headache. Back in the day, one could simply write off Bulgaria or Romania as the outliers. But when Hungary and Poland have become textbook examples of state capture through dismantling the very checks and balances that make democracy worthy of its name and ensure transparency and accountability of decision making, it is painfully clear that the vision of Europeanization is in dire straits.

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Caught in a vicious circle: how corrosive capital perpetuates state capture in the Balkans

In discussing the mutually reinforcing role of authoritarianism and ‘corrosive capital’, Tena Prelec argues that it is not enough to attract foreign investments to stimulate economic growth that will benefit the whole population; it is essential to guarantee the right environment for them to create real value.

For people studying, investigating and living corruption in the Western Balkans, the most frustrating aspect is its resilience. In spite of the great work done by investigative journalists and civil society in the region – and much of it is of top-notch quality, as the numerous international awards testify – it seems that nothing ever really changes at the top.

Look at Montenegro: its most recognisable political figure has been the very same for the past thirty years. The situation is not much different in neighbouring Serbia, whose president (before that, prime minister) forged his career as Slobodan Milošević’s Information Minister in the 1990s and then warmonger Vojislav Šešelj’s right-hand man – before rebranding his former mentor, and his own ex-party, as political opponents. North Macedonia has experienced some change in recent years (name included), but the EU’s recent failure to reward its efforts by opening EU accession talks puts a question mark against its future prospects.

Political elites in the Balkans have perfected a system of patronage and clientelism that facilitates their survival and perpetuation from one electoral cycle to the other. This is a composite picture that includes a well-oiled game to ensure dominance at elections, the abuse of state resources through politicised public procurement, a nepotistic hiring process, and several other angles. Path dependency plays a role: in the Balkans, the pitfalls of post-communist transition have been amplified by armed conflict and international sanctions, as brilliantly illustrated by Slobodan Georgijev’s account in this blog series. But the methodologies of state capture have also become more subtle and sophisticated than in the 1990s. Conflict is no longer raging on the streets, brazen embezzlement of customs money is no longer allowed – and yet, most of the region is experiencing a democratic involution towards autocratic practices.

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