Bosnia, corruption and state capture

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Professor Robert Barrington and Berina Glusac from the Centre for the Study of Corruption’s MA in Corruption & Governance examine the political situation in Bosnia Herzegovina and look at the role that corruption has played in the crisis.

Unless you are a dedicated Balkans-watcher, you may well have missed the fact that Bosnia and Herzegovina (BiH) is amidst its biggest political crisis since the signing of the Dayton Peace Agreement in 1995.

Milorad Dodik, the Serb member of Bosnia’s complex tripartite presidential structure, declared in late 2021 that the Serb-run part of BiH, Republika Srpska (RS), would withdraw cooperation and involvement with key state-wide institutions, in violation of the 1995 peace agreements. He announced that the Bosnian judiciary, security, and intelligence organisations would no longer be allowed to operate in the RS, which would instead operate its own alternative structures.

Dodik makes no secret of the fact that this is a precursor to secession, although he claims it would be achieved by peaceful means. This naturally leads to a reflection on the heavy price that was paid during the war of the 1990s. In Europe’s bloodiest conflict since World War II, 100,000 people were killed and two million displaced. Over 8,000 Bosniak (Bosnian Muslim) men and boys were killed in the Srebrenica massacre alone in 1995. Thousands of bodies have still not been recovered three decades later; new mass graves are discovered each year, and most of the countryside remains covered with active land mines. The Genocide is relevant to the situation today; Dodik denies that such events took place and uses his control of the media to support his message. This plays strongly to his nationalist support base.

What has this do to with corruption? Quite a lot. Shortly after Dodik’s declaration, he was placed on a sanctions list by the US Treasury for ‘Destabilizing and corrupt activity.’ Like so many US announcements, this has produced a document that gives a useful read-out – presumably based on the US’s exceptional intelligence capabilities – of what Dodik has been up to. The main charges are the cronyistic allocation of public contracts and monopolies from whose proceeds Dodek dispensed bribes and patronage. The relevant wording of the US Treasury announcement is:

“Dodik is… responsible for or complicit in, or having directly or indirectly engaged in, corruption related to the Western Balkans. Specifically, he has established a patronage network in BiH from which he and his associates benefit. As one example of his corrupt actions, Dodik has provided government contracts and monopolies in the RS directly to close business associates. With his corrupt proceeds, Dodik has engaged in bribery and additional corrupt activities to further his personal interests at the expense of citizens in the RS.”

These mentions of other ‘corrupt activities’ hint that the US government has more information, but there is no fuller detail. More may emerge in due course, but for now it is enough to know that we must consider corruption to be part of this complex picture.

BiH’s circumstances are unique, and it would be unwise to extrapolate general lessons. However, this situation does illustrate some of the common elements of de-democratisation and state capture – albeit in this case, it is a geographical segment of the state that has been captured.

What we can see here is a politician using corruption both to strengthen his political position, and for personal financial benefit. In terms of state capture, there are some classic ingredients: First of all, a democratically-elected populist politician using nationalist messages and distorted truths to gain and maintain power; a deliberate attempt to dismantle or subvert key state institutions, including the judiciary; political power allocating control over state assets and resources; control over the media (the main television company is also placed on the US sanctions list), which is used to pump out fake news; and finally, a foreign policy that supports strongmen and oppressive regimes (in this case Serbia and Russia). To enrich himself and consolidate his power, Dodik uses patronage, cronyism and bribery.

In such a small country, this might pass unnoticed by the outside world were it not for two significant factors. First, there is a very real possibility of armed conflict and renewed genocide at the heart of Europe. Secondly, Russia’s invasion of Ukraine has made central European countries, and whether they support Russia, more strategically important to the EU and NATO.

Unfortunately, although the world has learned a great deal in the past thirty years about what does and does not work in tackling corruption, there is no established exit strategy from one of the biggest problems: state capture by populist nationalists. It is a gloomy picture, but sometimes internal or external pressures can help generate a rapid turnaround. In such circumstances, having a good problem analysis will be fundamental to finding solutions. One of the important aspects of such a problem analysis will be recognising, amidst the many other complexities, the role that corruption has been playing in the unfolding situation in Bosnia Herzegovina.

Sri Lanka: sliding into state capture

Originally used to describe late 1990s Russia, where a few oligarchs gained excessive control over the institutions of the state, ‘state capture’ is now used to describe the way that political elites in some countries systematically expand their control and consolidate their power. In this post, CSC Director Liz David-Barrett describes how one family in Sri Lanka is following the state capture playbook.

As a club that claims to stand up for democratic values, the European Union is getting some harsh and deserved criticism for failing to arrest democratic backsliding among its own members, Hungary and Poland, as well as being a bystander while neighbouring Turkey and Serbia also succumb to state capture.

But the European Parliament (EP) is now urging the Commission to take a stand on these issues further afield. Most recently in Sri Lanka but also, in the past year, in the Philippines and Pakistan, the EP is seeking to use the leverage that flows from the Union’s trade policy to call out assaults on the rule of law and human rights. In all three cases, EP resolutions have invited the European Commission to consider withdrawing the countries’ access to the Generalised Scheme of Preferences Plus (GSP+).

Events in Sri Lanka are following the pattern of ‘state capture’ seen elsewhere fairly closely. The playbook has three parts. First, change the rules of the game, by influencing the formation of laws, policies and institutions, for example through constitutional reform. Second, stuff state-owned enterprises and the bureaucracy with loyal appointees, to facilitate day-to-day stealing through public procurement or privatisations. Third, disable and undermine any checks and balances on power, including by intimidating and abusing the human rights of journalists and civil society groups.

In today’s Sri Lanka, a fairly fragile state that emerged from a 26-year civil war only in 2009, this concerted power grab is driven by one family, the Rajapaksas, who are now seeking to leverage their role in ending the war to capture the state for themselves.

Sri Lanka has a presidential system, with the prime minister serving as the president’s deputy as long as they are from the same party. Hence when Gotabaya Rajapaksa was elected president in late 2019, former Prime Minister Ranil Wickremesinghe resigned. The new president promptly appointed his own brother, Mahinda, as premier, and made him Finance Minister for good measure. More recently he relieved Mahinda of the latter role, but replaced him with another brother. A fourth brother meanwhile is Minister of Irrigation, state minister for Disaster Management and state minister for Home Affairs. Mahinda’s son runs another two ministries.

All in all, one family controls not only the allocation of funds across government, but most of the big-spending ministries through which most state funds flow. As of March, it was estimated that the family controlled 24% of the state budget. In addition to the President, six Members of Parliament are from the Rajapaksa family.  

Nepotism of this kind is not new for the Rajapaksas, although it has become more extreme since they were last in power in 2005-15. At that time Gotabaya served as defence secretary, while Mahinda was president, and the family also scooped up the roles of Finance Minister, Minister of Economic Development and Speaker of Parliament.  

Now back in office after a spell in opposition, the Rajapaksas seem desperate to make sure that they don’t lose power again. The three-part playbook is very evident.

Step one: Change the rules of the game

For any group that wishes to entrench its control over the state, a key early move is to change the constitution. The constitution sets out the rules of the game, so if the captor changes the rules, it can make sure that it always wins.

Hence it was no big surprise that the Rajapaksas’ dynastical government used its two-thirds parliamentary majority to push through a 20^th amendment to the constitution in October 2020. The amendment weakened Sri Lanka’s anti-corruption agency, the Bribery Commission, removing the status that comes from being recognised in the constitution, as well as taking away its power to initiate investigations. The amendment also abolished the national procurement commission and the audit service commission.

The government also uses its majority in parliament to minimise parliamentary scrutiny of new laws. In April, the government introduced a bill on the Colombo Port Economic Commission, a controversial economic development project which has seen a Chinese state-owned company invest USD1.4 billion. Bills normally receive six days of scrutiny by the elected chamber. But, in an extreme version of the “taking out the trash” tactic for burying bad news while nobody is paying attention, the government announced this bill on Friday 9^th April, in the knowledge that the following week held four days of state holidays. The government suddenly declared the intervening Monday a holiday too.

In this instance, the citizens fought back, taking 19 petitions to the Supreme Court. The Court – still fairly independent, despite a recent stuffing following the 20^th amendment – ruled that several provisions should be subject to a two-thirds majority and a referendum. In doing so, it forced the government to water down the bill. Following the Determination of the Supreme Court, the Bill was still only debated for two days in Parliament before being rushed through, leaving no space for proper parliamentary scrutiny.

Step two: Use patronage power to expand control over state resources

In another textbook state capture move, the Rajapaksas have extended their reach over the implementation of policy by appointing a number of allies to leadership roles in state-owned enterprises, including more distant family connections, such as the in-laws of two of Mahinda’s sons. State-owned enterprises give out a large share of government contracts and do so with barely any transparency.

President Rajapaksa is a military man, and he has given out some other high-ranking government jobs to former military personnel, including the head of the Covid taskforce and the Minister of Public Security. Criminal justice reform is rumoured to have been entrusted to a former army commander. And former military officers have been appointed to the disciplinary task force for the public service, potentially changing the culture and autonomy of the bureaucracy.

Step three: Undermine checks on power

Civil society is a residual bastion of scrutiny, but it is under huge pressure. One lawyer who was a critic of the Prevention of Terrorism Act and an advocate for constitutional governance has been in custody since April 2020. Another activist, Asela Sampath, was abducted from his house, allegedly assaulted, and released on bail. Others who have merely written critical comments on Facebook have been arrested and detained for months on end.

Meanwhile civil society organisations receive unannounced visits from military intelligence, or are told that they need to inform the administration before applying for grants. Those working in the sector know that surveillance is widely used, and are having conversations with their families about how to respond if they go missing.

The state is intimidating journalists too, and the freedom of the press is threatened by the way that media industry owners are becoming cosy with the Rajapaksas. The president recently pardoned convicted murderer Duminda Silva, for example, and there are rumours that this may have been a quid pro quo in exchange for favourable coverage from the extensive television and radio empire owned by Silva’s brother. The owner of a large media group is believed to have played a key role in the successful campaign of President Rajapaksa. This media group which includes TV stations, a PR arm and an advertising arm is believed to have played an important role in moulding the psyche of the people towards supporting Gotabaya Rajapaksa. Sri Lanka has no rules on party finance, hence there is nothing to stop machine politics.

Sri Lanka is sliding into illiberal authoritarianism before our eyes and at an alarming pace. Yet another democracy is being dismantled, creating openings for superpowers in the region to expand their influence and raising the risk of a return to conflict in this fragile state. The EP move is a laudable effort to stand up for democratic values, but in a world where so many authoritarian leaders are working from the state capture playbook, democracy needs many more defenders.

A shorter version of this piece was published on the Global Anticorruption Blog here.

ACA series: Reflections on the value, functions, and conditions for success of anti-corruption agencies (ACAs)

Luís de Sousa, Research Fellow, Instituto de Ciências Sociais, Universidade de Lisboa (ICS-ULisboa), e-mail: luis.sousa@ics.ulisboa.pt

The growth of ACAs

Over the past three decades, and especially after the signing of the United Nations Convention of Corruption (UNCAC), international standards have converged regarding the need to increase specialization and coordination in the field of corruption control in terms of both prevention and containment. One proposed option for doing this was to set up a body, bodies, or persons specialised in overseeing and coordinating the implementation of anti-corruption policies, producing and disseminating knowledge about corruption prevention (article 6, UNCAC), and/or combating corruption through law enforcement (article 36, UNCAC).

ACA series: AFA, The French Anti-Corruption Agency

François Valérian, member of the International Board of Transparency International, writes about the development, design, remit, and record to-date of France’s nascent anti-corruption agency.

The Agence Française Anti-corruption (French Anti-Corruption Agency, AFA) was created by a 2016 law voted under the then French Finance Minister’s initiative and known as “Sapin II Law”, the major law passed a few years after the Cahuzac scandal which saw a finance minister’s resignation for tax evasion. The AFA is headed by a magistrate appointed by the President of the Republic for a non-renewable six-year term.

The AFA’s missions are of advice and assistance, and of control. The overall goal is to promote a culture and practices of anti-corruption prevention in the economic world, as provided for by the Sapin II law.

Can the law tackle contested appointments in the House of Lords?

Joseph Sinclair, a lawyer, research associate at Spotlight on Corruption, and recent alumnus of Sussex’s Corruption and Governance MA, writes about the recent controversy over Peter Cruddas’ appointment to the Lords and the shortcomings in the criminal laws that govern the purchasing of honours.

Image source: David Jakab/Pexels

Peter Cruddas: Appointment to the Lords & Controversy

In December 2020, the Prime Minister appointed Peter Cruddas to be a Conservative peer in the House of Lords. He is described on the Lords’ website as “a businessperson, philanthropist, and Conservative Party donor and former co-treasurer [of the Conservative Party]”. As a donor, he had given £50,000 to Boris Johnson for his 2019 leadership campaign and in total over £3m to the Conservative Party since 2007 (£1.2m since Boris Johnson became PM) as well as £1.5m to the Vote Leave campaign. Cruddas’ appointment was especially controversial because, after undertaking a vetting process, the House of Lords Appointment Commission had told the PM that they could not support the nominee.

With a Masters in Corruption and Governance, what are my employment prospects?

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Professor Robert Barrington, a faculty member at the Centre for the Study of Corruption who teaches both the campus-based and online Masters in Corruption & Governance, reflects on the employment prospects for those who follow this course.  The course brochure can be found here.

Corruption in Romania and beyond: lessons from Colectiv

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Jerry Beere, who is currently taking the online Masters in Corruption & Governance course, looks at the film Colectiv, and what it can tell us about corruption in Romania and beyond – as well as the roles that film and art can play in communicating the complex causes and consequences of corruption.

Boris Johnson’s Downing Street refurbishment: might a law have been broken?

With the Prime Minister under investigation by the Electoral Commission over the so-called ‘cash for curtains’ affairs, Dr Sam Power, Lecturer in Corruption Analysis at the Centre for the Study of Corruption, breaks down the questions that Boris Johnson and the Conservative party are facing, the legal implications of the accusations, and what the potential political fallout might look at. This piece was first published in The Conversation on April 29th 2021 and the original can be found here.

Corruption, Sport and what we can learn from the Super League debacle

European Super League, we hardly knew ye!

On Sunday 19^th April 2021 12 of Europe’s ‘biggest’ football clubs announced their plans to break away from established European competition to form their own ‘Super League’. Little more than 48 hours later over half of them had backed down in the face of overwhelming opposition and the Super League idea (in this form at least) was all but dead.

Why are there so few domestic cases of corruption in the UK?

Domestic corruption in the UK is increasingly at the forefront of national discussion yet simultaneously, investigation and criminal prosecution of corruption cases seems scant. In his forthcoming working paper, Former New Scotland Yard Detective Superintendent Tristram Hicks examines the UK’s investigative and prosecutorial framework and argues that at present we are largely in the dark about the scale of the problem of domestic corruption.