Corruption: Corroding Democracy, Stifling Economies

December 18, 2008

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To judge by public perceptions, the United States is far from the most corrupt country in the world. Of 180 nations rated by Transparency International's Corruption Perceptions Index for 2008, the U.S. ranks as the 18th least corrupt. The few countries seen as cleaner than the US look like a choir of angels: the Scandinavians, the Swiss, Singapore and other such squeaky-clean contestants.

But now, thanks to the one-two punch of Illinois Governor Rod Blagojevich and New York Ponzi schemer Bernard Madoff, the U.S. may finally move up in the corruption rankings. Plaudits must go to any politician creative enough to sell the Senate seat vacated by an incoming president. And few financiers deserve to play in the same suites as the self-proclaimed mastermind of a $50 billion fraud. As these coups illustrate, corruption corrodes democracy and endangers economies, even in one of the world's oldest democracies and wealthiest nations.

Blago the Brazen has distracted media attention from the important public agenda of our incoming President and nearly inflicted far worse damage. Bernie Madoff has embarrassed banks, stunned wealthy investors and wiped out charitable foundations. Among his victims is New York's JEHT fund, one of the leading funders of human rights advocacy. JEHT will now close its doors next month.

If corruption can wreak havoc even here, imagine what it can do in small and developing countries. Consider the so-called Democratic Republic of Congo, one of the world's poorest and, not coincidentally, most corrupt countries. Its former dictator, Mobutu Sese Seko, skimmed billions of dollars – much of it from American aid – stashing it in Swiss bank accounts and Portuguese real estate. The Congolese people have never recovered those funds.

Corruption can also thwart U.S. foreign policy. Three countries where we are most heavily invested, in military commitments and foreign aid, are Iraq, Afghanistan and Pakistan. On Transparency International's Corruption Perceptions Index, they rank, respectively, as the world's 3rd, 5th and 43rd most corrupt countries. Any hope of building durable democracies and viable economies – no easy task in such places – is made doubly difficult because their basic decisions are made or shaded by pols and hustlers whose ethics are akin to those of Blagojevich and Madoff.

Another lesson of our recent experience is that corruption can be tough to catch. If Rod Blagojevich had not already been under federal wiretaps based on unrelated accusations, would we know, even today, about his effort to sell the senate seat? Bernie Madoff not only fooled sophisticated investors, he also dodged effective scrutiny by the Securities and Exchange Commission, even after it received credible allegations against him nearly a decade ago. Yet no one questions the integrity of U.S. Attorney Patrick Fitzgerald or SEC Chair Christopher Cox.

Imagine, again, the much greater challenges of combating corruption in countries where prosecutors, regulators and even the courts are systematically bought and paid for. Corruption generates its own impunity. None of these lessons is newly discovered. Spurred by the U.S. among others, the United Nations in 2003 adopted the UN Convention Against Corruption. Some 129 nations are now parties, including the U.S. Eleven more have signed but not yet completed their constitutional processes to join the treaty.

The treaty is comprehensive. Its stated purposes are both to prevent corruption and to combat it when it occurs. States parties are required, among other measures, to establish independent anti-corruption bodies, to use merit selection for non-elected public officials, to enhance transparency in campaign financing and in government contracts, to criminalize and prosecute corruption in both the public and the private sectors, and to ensure international cooperation in all these areas, as well as in recovering assets stolen through corruption.

Governor Blagojevich might want to read Article 15 of the Convention with particular care. It requires countries to criminalize the “solicitation … by a public official, directly or indirectly, of an undue advantage, for the official himself or for another person …, in order that the official act … in the exercise of his or her official duties.” In case the Governor has any thoughts of evading American justice by fleeing abroad, forget it. The convention establishes universal jurisdiction: Any country where an alleged offender is found must either prosecute or extradite him. In the view of the non-governmental watchdog group Transparency International, the U.N. Convention, if properly implemented, “will result in major reductions in corruption.”

The question is whether it will be properly implemented. So far only one country – the US – has published its responses to a U.N. corruption checklist online. In meetings to establish an international oversight mechanism, the consensus of countries to date demands that any mechanism be “non-adversarial and non-punitive,” with no rankings of countries. In other words, international oversight promises to be a pussycat, focused mainly on providing financial and technical assistance for countries to write anti-corruption laws.

Still, that is a start. If the UN treaty can help set in motion a cultural change away from corruption, while helping nations to strengthen their capacity to combat corruption, it may mean less easy money for the global counterparts of Blagojevich and Madoff.

The views expressed by this commentary do not necessarily reflect the views of Notre Dame Law School, the Center for Civil and Human Rights, Chicago Public Radio or Worldview.