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Transparency International UK

When you open the door toward openness and transparency, a lot of people will follow you through

Any elected representative who has the idea that they're an 'employee' of the very organisation we elect them to hold to account is by definition unfit for office.
Far too many do view their role like this, partly because far too many come from public sector agencies and quangoes, and as a result they won't do anything that annoys their 'boss'.
It's a major reason why our councils are unfit for purpose.

4Prince William works with security agencies on attachment
6 April 2019
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The Duke of Cambridge has spent a "humbling" three weeks on work placements with three of Britain's security and intelligence agencies.
MI5, MI6 and GCHQ were "full of people from everyday backgrounds doing the most extraordinary work to keep us safe", Prince William said.
"Spending time inside our security and intelligence agencies, understanding more about the vital contribution they make to our national security, was a truly humbling experience," he said.
Staff at the security and intelligence agencies "work in secret, often not even able to tell their family and friends about the work they do or the stresses they face", he continued.
He added: "We all owe them deep gratitude for the difficult and dangerous work they do."
wfcwUK political groups spied on by undercover police
13 Feb 2019
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Database shows overwhelming scale of spying on leftwing and progressive groups
Undercover police officers have spied on more than 1,000 political groups since 1968. However, no official list of these groups has been published.
This database is an attempt to compile such a list. It is a work in progress and will be updated as more information is made public. The aim is to make more visible the nature and scope of a covert operation that has spanned more than four decades.
The information has been compiled following investigations by the Guardian and the Undercover Research Group, a network of activists that scrutinises the covert infiltration of political movements. The group is also publishing a similar database.
wfcwTurkish author Ece Temelkuran: Populist politicians ‘dismantling the entire political mechanism’
16 Feb 2019
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The journalist and author Ece Temelkuran is one of Turkey’s most respected political analysts. In her new book, she warns that it takes just seven steps for a country to turn from democracy to dictatorship. And after President Erdogan’s rise to power in her own country, she warns of the consequences of surging right-wing populism around the world.

wfcw Was my friend a spycop? 
A guideto investigating suspicions and providing emotional support
16 Feb 2019
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At Undercover Research Group we are regularly approached by individuals and groups who suspect someone in their group may be an undercover police ofcer. Tey usually hope we can confrm these suspicions, but unfortunately it is never that simple: there is no public database of undercover ofcers, and fnding proof is along process of research and elimination—even when the evidence against them is substantial
Transparency International UK
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Data is all we do
wfcwCambridge Analytica data-driven marketing
By knowing your electorate better, we achieve greater influence while lowering overall costs.
We are the global leader in data-driven campaigning with over 25 years of experience, supporting more than 100 campaigns across five continents. Within the United States alone, we have played a pivotal role in winning presidential races as well as congressional and state elections.
wfcwSCL Group
SCL Group provides data, analytics and strategy to governments and military organizations worldwide. For over 25 years, we have conducted behavioral change programs in over 60 countries & have been formally recognized for our work in defense & social change.
wfcw Cambridge Analytica bragged: We have vast data for Brexit vote
23 March 2018
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A 10-page document written by Cambridge Analytica, headed “Big Data Solutions for the EU Referendum”, claimed it could single out Brexiteers among voters, donors, politicians and even journalists.
The document was made for  Leave.EU, one of the two main Brexitcampaign groups, in a pitch for business. It bragged: “We use vast amounts of data, including consumer histories, lifestyle information... and “state-of-the-art psychological analysis.”
wfcwCambridge Analytica misled MPs over work for Leave.EU, says ex-director
23 March 2018
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Cambridge Analytica conducted data research for one of the leading Brexit campaign groups and then misled the public and MPs over the work the company had undertaken, according to a former employee who has spoken to the Guardian.
Brittany Kaiser, Cambridge Analytica’s business development director until two weeks ago, said the work with Leave.EU involved analysis of data provided by Ukip.
wfcwInternational Consortium of Investigative Journalists
The International Consortium of Investigative Journalists is a global network of more than 200 investigative journalists in 70 countries who collaborate on in-depth investigative stories.
wfcwParadise Papers: Tax haven secrets of ultra-rich exposed
BBC Panorama
5 November 2017
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A huge new leak of financial documents has revealed how the powerful and ultra-wealthy, including the Queen's private estate, secretly invest vast amounts of cash in offshore tax havens.
Donald Trump's commerce secretary is shown to have a stake in a firm dealing with Russians sanctioned by the US. The leak, dubbed the Paradise Papers, contains 13.4m documents, mostly from one leading firm in offshore finance.
BBC Panorama is part of nearly 100 media groups investigating the papers.
As with last year's Panama Papers leak, the documents were obtained by the German newspaper Süddeutsche Zeitung, which called in the International Consortium of Investigative Journalists (ICIJ) to oversee the investigation. The Guardian is among the nearly 100 media partners involved in investigating the documents.
wfcwWhat are the Panama Papers? A guide to history's biggest data leak
11 April 2016
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What is Mossack Fonseca, how big is it, and who uses offshore firms? Key questions about one of the biggest ever data leaks.
The Panama Papers are an unprecedented leak of 11.5m files from the database of the world’s fourth biggest offshore law firm, Mossack Fonseca. The records were obtained from an anonymous source by the German newspaper Süddeutsche Zeitung, which shared them with the International Consortium of Investigative Journalists (ICIJ). The ICIJ then shared them with a large network of international partners, including the Guardian and the BBC.
wfcwUK is most corrupt country in the world, says mafia expert Roberto Saviano
29 May 2016
It’s not the bureaucracy, it’s not the police, it’s not the politics but what is corrupt is the financial capital'  
Journalist Roberto Saviano spent more than a decade exposing the criminal dealings of the Italian Mafia Getty
Britain is the most corrupt country in the world, according to journalist Roberto Saviano, who spent more than a decade exposing the criminal dealings of the Italian Mafia.
Mr Saviano, who wrote the best-selling exposés Gomorrah and ZeroZeroZero, made the comments at the Hay Literary Festival. The 36-year-old has been living under police protection since publishing revelations about members of the Camorra, a powerful Neapolitan branch of the mafia, in 2006.
He told an audience at Hay-on-Wye: “If I asked you what is the most corrupt place on Earth you might tell me well it’s Afghanistan, maybe Greece, Nigeria, the South of Italy and I will tell you it’s the UK.
nutshell Corruption exposed
wfcwUK is most corrupt country in the world, says mafia expert Roberto Saviano
29 May 2016
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David Cameron's 'fantastically corrupt' gaffe mocked by Afghan delegation at Anti-Corruption Summit
Corrupt elites will fight hard to stop the dismantling of the looting machines from which they draw their vast wealth
World's 10 most corrupt countries have received £2.7bn in UK aid since David Cameron became Prime Minister
“It’s not the bureaucracy, it’s not the police, it’s not the politics but what is corrupt is the financial capital. 90 per cent of the owners of capital in London have their headquarters offshore.
“Jersey and the Cayman’s are the access gates to criminal capital in Europe and the UK is the country that allows it. That is why it is important why it is so crucial for me to be here today and to talk to you because I want to tell you , this is about you, this is about your life, this is about your government.”
Prime minister David Cameron faced growing calls for the UK to reform the offshore tax havens operating on its own Crown Dependencies and Overseas Territories, as Britain hosted an Anti-Corruption Summit earlier this month.
11 most corrupt countries in world The UK ranked 10th in Transparency International’s Corruption Perceptions Index 2015, which measures the perceived levels of public sector corruption worldwide.

 It’s a big leak, and it shows how vast is this industry of secrecy and hiding money.  It has been argued – not least by the tax havens themselves – that there is nothing wrong with providing secrecy, and it allows people privacy.  The scale of this leak has shifted the question away from whether there is a legitimate use of such structures, to whether the vast scale of abuse can still be tolerated.
nutshellThe Panama Papers
wfcwThe Panama Papers
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 It’s a big leak, and it shows how vast is this industry of secrecy and hiding money.  It has been argued – not least by the tax havens themselves – that there is nothing wrong with providing secrecy, and it allows people privacy.  The scale of this leak has shifted the question away from whether there is a legitimate use of such structures, to whether the vast scale of abuse can still be tolerated.
The names.  Political leaders all over the world, including those in Russia and China, are cited as having accounts and shell companies through which many billions have been laundered.  There is no hiding from the fact that much of the money is corrupt: diverted from public funds, the relentless accumulation of bribes, or one of the other standard schemes that corrupt politicians, public officials and business people have refined over the years.
The professional enablers.  It is striking that the law firm in question has a thick veneer of respectability, and even now is denying any wrongdoing.  Yet it is clear that the professional enablers – law firms, accountants, banks and trust & company service providers  – have their fingerprints all over these illicit transactions.  Those firms, and the authorities that license them, need to think long and hard about whether they have got the balance right between doing whatever a rich client might want, and the historical ethics of their profession.
The UK connection.  It’s an uncomfortable fact that more than fifty percent of the entities implicated are registered in the British Overseas Territories and Crown Dependencies, and that professional enablers from the UK were the second biggest users of Mossack Fonsecca’s services.

Why they matter - Three examples
It is worthwhile remembering what that abuse means – what is the impact of corrupt funds being laundered through Panama and the UK’s Overseas Territories and Crown Dependencies.
  1. Funds that should have been spent on life-saving HIV treatments in Africa being diverted through Panama to the British Virgin Islands by a health official who obtained their position due to political patronage and not through any qualifications in public health
  2. Bribes paid by a large European company to a senior politician, ensuring that the corrupt politician stays in power and continues to run a key ministry in their own private interests, raking off money and dispensing patronage to corrupt supporters
  3. Infrastructure that should be vital for the economic development for an Asian country being half-built, with a substantial proportion of the funds diverted by public officials to their own offshore bank accounts.

What can be done – eight recommendations
Transparency International has been highlighting the vulnerabilities in the global financial system for at least a decade, and that means some of the solutions to these problems are now well known.  The question is whether the UK and other countries have the political will to implement them.  The good news is that the government was already planning an anti-corruption Summit in May, which presents the perfect opportunity to act – if there is political will.
Here are eight things the UK and others could be doing to close down the loopholes highlighted in the Panama Papers, seize corrupt assets, and help to end the impunity enjoyed by the world’s corrupt elite.  It may look like a long list, but we believe the Summit can achieve UK action on all of these, and build a broader international consensus around the underlying principles for application in other countries that attend the Summit.


  1. Overhaul the supervisory regime for the UK’s Anti-Money Laundering (AML) rules, notably for professional enablers
    The UK Government should consolidate the patchwork of AML supervisors and consider introducing a single ‘super-supervisor’. It should also ensure supervisors meet the good practice standards of transparent enforcement, risk-based regulation, the separation of commercial and regulatory interests, and guaranteeing that the UK is effectively implementing the Financial Action Task Force (FATF) standard regarding professional enablers.
  2. Ensure adequate levels of enforcement against money laundering
    AML supervisors should have adequate resources and tools to provide a credible deterrent against money laundering, including punitive sanctions and personal liability for professional enablers with regard to AML failings.
  3. Prosecute and de-license professional enablers
    The UK Government should establish more effective administrative sanctions on professional enablers by encouraging professional bodies to withdraw professional licenses from those implicated in cases of money laundering, in addition to prosecuting those who are personally involved.
  4. Extend corporate beneficial ownership transparency
    The UK Government should introduce legislation that would require foreign companies wishing to purchase UK property or bid for public contracts to disclose their beneficial owners.
  5. Ensure the UK’s Overseas Territories and Crown Dependencies introduce centralised public registers of beneficial ownership
    The beneficial ownership standards in the UK’s Crown Dependencies and Overseas Territories should be brought in line with those in the UK: there should be central, public registers of beneficial ownership to allow investigations, public scrutiny and accountability. The UK Government should proactively assist with implementing these registers as a matter of priority.
  6. Act on unexplained wealth by increasing the capabilities of the UK’s asset recovery system to seize corrupt funds
    To recover more stolen assets, the UK Government should introduce legislation containing powers for issuing Unexplained Wealth Orders. This civil mechanism would allow for easier and quicker freezing of corrupt assets without relying on predicate offences in foreign jurisdictions or assistance from uncooperative origin states. Consideration should also be given to a new law on Illicit Enrichment.
  7. Develop accountable asset recovery agreements with cooperative jurisdictions
    The UK Government should work with countries to achieve ‘accountable’ and transparent asset recovery against corrupt fugitives in the UK. These should enshrine effective intelligence sharing, civil recovery, and accountable and transparent asset repatriation.
  8. Prevent corrupt individuals entering the UK and laundering their funds through the Tier 1 (Investor) visa system
    The Home Office should bring full transparency to the Tier 1 (Investor) visa system, with public disclosures of who is investing, how much they are investing, what they are investing in and their financial interests and assets. Upfront declarations should be required for Politically Exposed Persons and public officials who should expect to meet a high level of transparency, even after they have left office.  Retrospective checks should be undertaken on historical Tier 1 (Investor) visas that were granted in the ‘blind faith’ period and consideration given to publishing their details.

wfcwThis is the essay on corruption that David Cameron didn't want you to read
In September 2015, Clare Short was asked by David Cameron to contribute to a book on corruption ahead of his anti-corruption summit. After she submitted it, she was surprisingly told that it wouldn't be included - the book was taking " a more forward-looking focus". The essay is published below.
nutshellEssay on corruption
wfcwThis is the essay on corruption that David Cameron didn't want you to read
Clare Short
12 May 2016
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How can the international system do more to tackle corruption?
At least until the recent scandals in football and athletics, most people would I suspect judge that the worst corruption in the world is a problem of bad governments in developing countries. Indeed, Transparency International’s (TI) “Corruption Perception Index” finds countries of the south consistently at the bottom levels of the Index; though TI explicitly recognises that the north is partly responsible for the corruption of the south as a bribe payer.
There is no doubt that there are problems of corruption in some governments in developing countries. The question is what should be done about it? Some want to wag fingers and deny any aid to some of the poorest people in the world; wiser heads understand that lots of the corruption originates in OECD countries and that it is when systems are weak – anywhere in the world  – that some people will engage in corrupt behaviour. If we want to reduce corruption then we need to strengthen preventative systems in both OECD and developing countries.
It is important to remember that it was not until 1996, that the OECD – the club of rich countries based in Paris – recommended that bribes paid to public officials abroad should cease to be tax deductible. And it was not until 2002 that the UK implemented this recommendation. In fact the OECD treatyrequiring countries to legislate to make corrupt payments to a public official abroad, a criminal offence, was not agreed until 1997 – less than 20 years ago. The history of how this came about is very interesting.

Watergate revelations and UK monitoring
At Watergate in 1972, burglars were caught breaking into the Democrat committee headquarters and it was then discovered that this was authorised by president Nixon in order to bug the headquarters of his electoral opponents. Congress therefore set up enquiries, and during the hearings, it became clear that large amounts of cash were provided by CEOs to fund the Committee for the Re-election of the President. One thoughtful congressman asked where in the company accounts such funds were provided for. It was then discovered that 400 publicly traded major corporations had slush funds which existed to pay bribes to public officials abroad, in order to obtain contracts.
In the wake of the national shock revealed by the dirty dealings over Watergate, the US Congress passed the Foreign Corrupt Practices Act in 1977. This made the US the first country to outlaw bribing foreign public officials abroad. After a little time, US businesses started to complain that it was unfair that others could compete through bribery and they could not. This led to a massive US effort to achieve agreement through the OECD, that countries should pass legislation to make it a criminal offence to bribe public officials abroad. The Treaty was agreed in 1997 and took effect in 1999, just over 15 years ago.
Importantly, the OECD put in place monitoring machinery to expose countries that failed to implement the treaty requirements. The UK does not come well out of the monitoring. In 2008 the OECD Working Group said that it was “disappointed and seriously concerned” about the UK's continued failure to address deficiencies in its laws on bribery of foreign public officials and on corporate liability for foreign bribery, which it said had hindered investigations. This led to a new Bribery Act being passed into law as recently as 2010. The new Act was welcomed by the OECD Working Group, but the government was being intensively lobbied by business interests over the details of implementation.
In February 2011 the chair of the OECD Working Group expressed his disappointment over the delay in the promised entry into force of the Act, originally promised for April 2011. At last in March 2012 the Working Group found that the UK had significantly boosted its foreign bribery enforcement efforts but needed to be more transparent when resolving cases. It also asked for a roadmap to extend the Convention to UK Overseas Territories.
By October 2014 Transparency International found that of the 41 countries, accounting for two thirds of world exports, that had signed the OECD Anti Bribery Convention, only four countries were "actively investigating and prosecuting companies that cheat taxpayers when they bribe foreign officials to get or inflate contracts or obtain licenses and concessions". Happily the UK had by then arrived at a state of grace and was found to be engaged in active enforcement alongside the US, Germany and Switzerland. The countries with little or no enforcement included Japan, The Netherlands, South Korea, Russia, Spain, Mexico, Brazil, Ireland, Israel and 12 others.

The 1998 EU Code of Conduct on arms exports
My own experience in government included an effort in 2000/01 to halt the sale by BAE Systems of an obsolete military air traffic control system to Tanzania. This was such a bad project that it was obvious that it could only have been agreed through corruption. Tanzania had recently been granted debt relief and one of the conditions was that it should obtain no loans unless they were concessional. The air traffic control deal was funded by a loan from Barclays which obviously broke this condition.
Eventually, as part of an investigation by the Serious Fraud Office, it wasexposed that BAE Systems had paid £8.5 million ($12.4) -- one third of the contract’s value -- to a middleman in Tanzania called Shailesh Vithlani. In 2010, the company agreed to pay £30 million reparations to Tanzania and was given a further fine at the Crown Court in Southwark for concealing payments “from the auditors and ultimately the public”. BAE Systems and the Serious Fraud Office argued that Vithlani had been paid to lobby for the contract. The judge said he was “astonished” at claims BAE Systems had not acted corruptly, court records show.
“I accept...that it is not now possible to establish precisely what Mr Vithlani did with the money that was paid to him,” Mr Justice Bean said. “But on the basis of the documents shown to me it seems naïve in the extreme to think that Mr Vithlani was simply a well-paid lobbyist.” He added that BAE Systems made payments with the intention that Vithlani would have “free rein to make such payments to such people as he thought fit” adding that they “did not want to know the details”.
The UK had been a major player in negotiating the 1998 EU Code of Conduct on arms exports which said, in addition to normal provisions limiting arms sales, that all EU countries would block arms exports that would seriously hamper the sustainable development of countries. Despite this I couldn't get support from Number 10, the Foreign Office, the Ministry of Defence or Departments of Trade and Industry to use the government licensing system to block the contract. I said at the time if BAE Systems and all those government departments would go to such lengths to support such an indefensible but relatively small defence export, it made one fearful of what they would do for bigger things.

UK and Saudi Arabia
Sadly, arms sales to Saudi Arabia are an example of bigger things. There is a long history of corrupt behaviour sanctioned by successive governments. As recently as 2006, the UK terminated a major foreign bribery investigationconcerning the Al-Yamamah arms deal between the UK and Saudi Arabia, for which BAE Systems was the main contractor.
At the time, the Serious Fraud Office was investigating an alleged £20 million slush fund designed to bribe Saudi officials. In autumn 2006, the SFO planned to look at certain bank accounts in Switzerland -- with the cooperation of the Swiss authorities -- to find out whether payments had been made to a Saudi agent or public official, according to a 2008 House of Lords judgement. This provoked an “explicit threat” by the Saudi authorities, the judgement noted, that if the investigation continued “Saudi Arabia would withdraw from the existing bilateral counter-terrorism co-operation arrangements with the UK, withdraw cooperation from the UK in relation to its strategic objectives in the Middle East and end the negotiations then in train for the procurement of Typhoon aircraft.”
After consultations with then-Prime Minister Tony Blair and the Attorney General, the director of the Serious Fraud Office Robert Wardle halted the investigation. He said that continuing would risk “serious harm” to the UK’s national and international security. The SFO announced the end of the investigation in a press release, quoted in the judgement: “It has been necessary to balance the need to maintain the rule of law against the wider public interest. No weight has been given to commercial interests or to the national economic interest.” Tony Blair said he took “full responsibility” for the decision.
In 2010, to settle allegations of bribery made about the Al Yamamah deal, the arms giant pleaded guilty to charges of false accounting in a U.S. District Court in the District of Columbia. BAE Systems was sentenced to pay $400 million (£277 million) in what then-Attorney General Gary Grindler called “one of the largest criminal fines ever levied in the United States against a company for business related violations.”
The story of British arms sales to Saudi Arabia is so murky, it’s worth reminding ourselves of just how bad it was, and that it continued from the late ‘60s until 2006, implicating every successive government.
According to a briefing by The Guardian newspaper on BAE in Saudi Arabia – part of a lengthy, groundbreaking investigation – the US warned at the outset, “Saudi requests for arms were not based on considerations of national security as much as private pressure by those most likely to profit from arms sales…”. But successive governments took no notice.
The first deal was made in 1967 under Harold Wilson’s Labour government. It was, according to the Guardian report, for 42 Lightning fighters plus a radar contract. The value was £104 million (today’s value, £1.7 billion). The commission paid by BAE was at least £7.8 million (£128 million in today’s values). These payments were authorised by government officials and were declared to three UK agencies. The Inland Revenue, in documents obtained by the Guardian, minuted privately that the “hard fact is that bribery is essential”.
The UK government became more involved with the next deal in 1973. Worth £253 million (modern equivalent £2.8 billion), according to Guardian research, it was for Strikemaster fighter jets, training and maintenance for the Saudi’s existing Lightnings.  Made under Edward Heath’s Conservative government, the commission payment was over £30 million (£327 million today). This was the first time the UK government became directly involved in payments after the Saudis demanded a ‘government to government’ deal.
“The Ministry of Defence signed a contract with Saudi Arabia, and took the money from Riyadh. It then employed BAE as lead supplier with an officially controlled profit margin. But in fact the official ‘profit margin’ was a fiction,” theGuardian briefing said. “The prices were inflated and millions of pounds in ’commission’ were channeled by BAE into anonymous Swiss bank accounts…The government auditor concluded that the government was up to its neck in bribery.”
In taking the trouble to remind my readers of this sad history, I am not suggesting that the UK behaved any worse than other OECD countries. There are similar scandals in many comparable countries. What is important is that we face up to the fact that a massive responsibility for very large-scale bribery and corruption originates in countries like our own. We must also recognise that action to challenge such behaviour has been taken only very recently and is not properly enforced in most countries.

The Anti Bribery Convention
In December 2014 the OECD published an analysis of the cost of foreign bribery and corruption. The report analysed more than 400 cases worldwide involving companies or individuals from the 41 signatory countries to the OECD Anti-Bribery Convention, which were involved in bribing foreign public officials. The cases took place between February 1999, when the Convention came into force, and June 2014. Almost two thirds of cases occurred in just four sectors: extraction (19%); construction (15%); transportation and storage and information and communications (10%). Bribes were promised, offered or given most frequently to employees of state-owned enterprises (27%) followed by customs officials (11%), health officials (7%) and defence officials (6%). Heads of state and ministers were bribed in 5% of cases but received 11% of total bribes. In most cases bribes were paid to obtain public procurement contracts (57%), followed by clearance of customs procedures (12%). 6% of bribes were given to gain preferential tax treatment. In 41% of cases management-level employees paid or authorised the bribe.
If I may, I will digress for a moment. I would like to recall the advice I was given in 1977 when I left the Home Office and went to work as the director of a community organisation based in Handsworth in Birmingham. When I met with our auditor to discuss the financial systems and bookkeeping, I suggested we might keep a few pounds in a tin as petty cash to pay for milk and tea and other small items. He emphasised strongly something I have never forgotten, that I owed it to everyone who worked in the organisation to set up a system that could not be fiddled. It was impossible to know what pressures and temptations individuals might be subjected to. If systems were tight, no one could be tempted and it would be better for everyone. TI make this point clearly on its website: “people are as corrupt as the system allows them to be”.
When it comes to developing countries it is often the case that governments have over the years offered jobs in the public sector to more people than they can really afford. Over time, wages tend to decline to such a level that people cannot live on the income that they take home. We find that in such cases policemen start taking small payments from members of the public and minor officials make similar charges.
The question each of us should ask ourselves is, if we were unable to feed our children with the salary we were paid, and such practices were widespread, should we be joining in? Such examples show that petty corruption is usually a result of bad systems rather than morally defective people. The challenge for development is to help countries out of such a trap. There have been various programmes for public-sector reform in order to offer redundancy to older workers, slim down the size of the public service and provide better wages for those that remain. They tend not to be favoured by the commentariat.
Thus we must be clear that working for development, anti-corruption and good governance is not a question of hectoring from the moral high ground or denunciation and threats of the withdrawal of aid, but of helping to build systems that prevent such corruption. This is an important purpose of budgetary aid, so disliked by so many, where development funds are put into government budgets on condition of joint work to build well-organised public financial management and procurement systems. The prize from such work is that people in poor countries with weak institutions see aid well spent, help provided to build up the capacity of government systems, and their own tax revenues better protected and better spent.
In recent years, we have also engaged in Security Sector Reform, helping countries to organise their military, police and intelligence agencies effectively to deal with the real challenges they face, and to try to clean up defence procurement, which, as we have seen, has been a murky area for very many years.
The poorest and most fragile countries are often engaged in conflict or newly emerged from conflict, and they pose a real challenge for development.
The laudable aim of the government to work more in fragile states will impose greater risks that aid money may go astray. The task here is to help countries to build reliable government systems and this takes years of effort. Our experience in Afghanistan, and the terrible corruption that there is after more than 10 years of massive international aid, shows that we have many lessons to learn to get this right.

The Extractive Industries Transparency Initiative (EITI)
The 2014 OECD study of prosecutions for breaches of the Anti Bribery Convention found that Extractives was the biggest bribery sector. For the past five years (until February 2016) I have chaired the international Board of the Extractive Industries Transparency Initiative ( EITI ) which was established over 10 years ago to try to use transparency to improve accountability in this traditionally highly opaque and corrupt sector. A short description of this work helps to exemplify the challenge in working to reduce corruption in a major problematic sector.
Again, in this field, it is only in the last 10 years that concern has been expressed about resource wealth feeding corruption and conflict, and the failure of vast oil and mineral resources to lead to sustainable development and the reduction of poverty. In the Cold War years, western governments’ major concern was security of supply, and companies shared that concern together with an anxiety to secure their profits and avoid nationalisation. The World Bank, and other banks and investment institutions, cared only about the return on investment and not about the wider governance and social consequences of their investments in this sector.
Research evidence has been available since the founding of OPEC in the 1970s that, paradoxically, the discovery of oil and other natural resources, tended to undermine and not improve poverty reduction and economic development. For a long time explanation focused on currency appreciation and fluctuations in revenues. But as early as 1975 the Venezuelan oil minister, who was a co-founder of OPEC said, “I call petroleum the Devil’s excrement, it brings trouble... waste, corruption.... public services falling apart. And debt, debt we shall have for many years”. It was, again, only from the mid ‘90s onwards that the perverse outcome of oil extraction in developing countries came into the spotlight. This was because research identified bad governance as driver behind very dismal development in resource rich countries.
The research suggested that oil and mineral-rich states in the developing world were more likely to suffer from lack of provision of basic public goods, corruption, and civil war than comparable non-resource-rich countries, and also more likely to be poorer. These findings were generally referred to as “the resource curse” and this is a widespread reality. But countries like Norway and the UK in the case of oil, and Canada and Australia in mining, are not so cursed. It is clear that the problem is governance, not the nature of the resources themselves, although it is true that fluctuating prices, resource-depletion and the likelihood of currency appreciation do pose particular difficulties.
It is clear also that poor development outcomes were caused by the link between international and domestic factors, i.e. the interaction between multinational companies and their shareholders and investors, host governments and greedy elites. The work of TI and the OECD Convention on Combating Bribery were important influences on public debate as were Global Witness reports on egregious corruption in Angola. Global opinion turned against major companies, particularly oil companies, and denounced their behaviour. The old slogan that “the business of business is business” was no longer acceptable.
The Publish What You Pay coalition was formed initially from NGOs in the UK which has since spread to a worldwide movement. The idea behind the EITI is clear and simple: build a coalition of companies, governments and civil society at the international and national level, and require companies to report what they paid to governments and governments what they receive, and publish the figures so that the public can hold governments to account. It took a little time to recruit a board with representatives of each sector, to establish a secretariat, to draw up rules and procedures and a multi-donor trust fund in the World Bank to provide technical support. From 2006 on, the organisation grew quickly. There are now 51 countries implementing the EITI. Half are in Africa but it now includes a wide range of countries ranging from Peru, Mongolia, Iraq, Trinidad and Tobago and Norway, the US and UK.

Transparency and reporting requirements
There is no doubt that the EITI got off to a good start. The number of countries that volunteered to sign up to the reporting requirements grew steadily, as did the supporting companies and members of the NGO network. It is interesting to reflect on why all these different entities decided to join. They came together but each sector had slightly different motivation. The countries tended to want a reputation as a reformer so they could attract inward investment, the companies to prove that they did make payments to governments and the NGOs to try to ensure that the money was spent to help the poor. There have been declarations of support from the G8, the G20 and the United Nations General Assembly amongst others.
However a 2011 evaluation suggested that the simple pass/fail benchmark was inadequate as though reform was a simple matter of complying with basic EITI reporting rules and producing an EITI report. In addition academic commentators pointed out that a simple report of the amount of money paid by companies, and a reconciliation with government receipts, does not ensure that the original contract was fair, what was due to be paid was paid, that the money was properly spent, let alone that there are sensible plans to deal with price fluctuations and the economic consequences of exhaustion of resources.
This is the reason for the clause in the Dodd Franks legislation in the US, which plans to require listed companies to report their payments for oil, gas and mineral resources to governments in the developing world, country by country, project by project. The EU has introduced a similar Transparency Directive which is in the process of being implemented. We must conclude that a vague commitment to transparency is not enough to ensure good governance, and we cannot assume that multi-stakeholder groups on their own will have the capacity to build adequate systems of political accountability.
This is the reason also why EITI introduced more testing reporting requirements supported by all parts of the coalition at its conference in 2013 in Sydney. The new reporting standard requires transparency across the value chain including licensing system, state-owned enterprises and production levels. It also encourages openness on contracts and as full as possible reporting on beneficial ownership. There is a new requirement to provide an account of the overall context so that any concerned citizen could read the report and understand the importance of the sector and challenge of managing it to the benefit of future of their country. In addition, there is a new stress on making government systems more transparent and robust, rather than requiring more and more elaborate EITI reports. The aim of the EITI must surely be to encourage member countries to put in place transparent and robust government systems and to develop a more informed public debate in each country. Progress is being made but building strong and robust government systems and informed public debate takes time.
Multi-stakeholder governance is not for the fainthearted. Bringing together governments, companies and civil society in countries where they have rarely sat down together, can in very important ways help to build trust, dispel myths and focus on the real reforms needed to improve governance in the extractives sector. But on the International Board which has the same composition, campaigning northern NGOs tend to believe that the EITI should be used to discipline countries with imperfect systems, whereas those with development experience understand that reform takes place when local reformers want it and see the potential benefits.
This argument reflects that between those who see development assistance as a means to help countries build better systems and those want to withdraw aid to punish bad governance. No doubt these arguments will continue for a considerable time.

Illicit Financial Flows
In addition to the challenges posed by the OECD Convention on Bribery, and initiatives such as EITI that work to help countries with very weak institutions build governance systems that prevent corruption, the issue of Illicit Financial Flows has recently pushed itself to the forefront of the international agenda.
This has been triggered partly by an increased focus on the prevention of money-laundering to fund terrorist organisations and also by public anger over tax evasion. In recent years the G8 and the G20 have urged countries to strengthen their anti-money laundering regimes, enforce greater transparency on company ownership and to exchange information in order to tackle tax evasion. It remains the case that every year, huge sums of money are transferred out of developing countries illegally. While such practices occur in all countries – and are damaging everywhere – they are probably larger in scale in developing countries because the institutions are weaker. And the impact in poor countries is worse because there are less resources available for investment and to fund public services. Estimates of the scale of this problem vary greatly but the OECD concludes that "there is a general consensus that illicit financial flows likely exceed aid flows and investment in volume”.
According to the 2014 OECD report "Illicit Financial Flows from Developing Countries: Measuring OECD Responses”, illicit flows involve money laundering, bribery by international companies, tax evasion and trade mispricing. In practice such flows range from private individuals transferring funds into private funds abroad without paying taxes, to highly complex schemes involving criminal networks. Most of the public attention has focused on the behaviour of kleptocrats such as president Abacha of Nigeria, or president Marcos of the Philippines. They and others like them looted their countries and after death were found to have large fortunes invested overseas in a wide variety of assets. Deeply guilty as these rulers were, part of the guilt lies with western institutions; the problem would not reach such massive proportions if it were not possible to move such ill-gotten gains out of the originating country.
In 2011 at an important meeting in Busan aimed at improving Aid Effectiveness, agreement was reached to "accelerate… efforts to combat illicit financial flows by strengthening anti money-laundering measures, addressing tax evasion and strengthening national and international policies, legal frameworks and institutional arrangements for the tracing, freezing and recovery of illegal assets". The G20 and G8 have taken forward this agenda. The most recent summit of the G8 hosted by the UK government at Lough Erne stressed the need to improve the exchange of tax information and knowledge of the real persons owning companies. To achieve these aims will involve a massive effort to help countries strengthen their tax systems in the countries in which the wealth is earned. This agenda also requires a cleanup of tax havens which is a particular responsibility for the UK with its large number of tax havens in its overseas territories.

United Nations Convention Against Corruption (2003)
Another example of how recently the international system has moved to tackle corruption is the United Nations Convention against Corruption (UNCAC) which was adopted by the General Assembly in 2003 and has been adopted by 174 member states.
It is the first global legally binding international anti-corruption instrument. It is extremely ambitious. In its 71 Articles divided into 8 Chapters, UNCAC requires that countries implement anticorruption measures aimed at preventing corruption, including domestic and foreign bribery, embezzlement, trading in influence and money laundering. The Treaty is also intended to strengthen international law enforcement and judicial cooperation, provide effective legal mechanisms for asset recovery, technical assistance and information exchange, and mechanisms for implementation. TI, which has played a significant part in the negotiation of the Convention, said in its 2013 Progress Report on the reviews provided for under the Implementation Mechanism,
“It is important to recognise that the Implementation Review Mechanism must deal with daunting challenges that are orders of magnitudes greater than those of other anti-corruption treaties. These result from the UNCAC’s extremely comprehensive scope and its worldwide membership of countries with large differences in political and legal systems. What has been accomplished in three years is impressive, but the process is still evolving”.
The international efforts to reduce corruption that have developed over the past 20 years constitute a massive agenda which is being worked through in multilateral institutions, individual countries, companies and civil society campaigns. It will take years of reform to fulfil the commitments that have been made. But the prize is enormous.
If all these commitments are fully implemented,16 of the poorest countries in the world would retain their own wealth: their losses are estimated by the sober OECD as being worth as much as the total of international aid and inward investment to these countries. The result would be that institutions and government systems across the world would be cleaned up and we would have a safe, more equally developed world with more people having a fair chance in life. Corruption everywhere would be reduced because there would be fewer opportunities and great difficulties for the corrupt to move their money to safe hiding places. Tax evasion by companies and individuals would be massively reduced, so the public services will be more fairly funded across the world. This would surely be a morally preferable and safer world for all of us.

This essay was originally published on Open Democracy

tiukHistorically, the UK’s parliament has had a high international reputation, and the UK has been well placed on international corruption indices. However, politics in the UK has recently been plagued by corruption scandals and public trust in politicians is plunging. There have been too many scandals, often because of a lack of transparency and accountability.
These scandals have exposed serious fault lines in Britain’s political system.
nutshellIn a nutshell - recent corruption scandals include:
  • Cash for access: the resignation of the Conservative Party’s co-treasurer after it was revealed that he offered access to the Prime Minister and Chancellor (as well as the policy committee at No 10 Downing Street) for up to £250,000; he also indicated how laws against funding political parties from foreign sources could be circumvented.
  • News International: allegations in the wake of the phone hacking enquiry that the influence of Rupert Murdoch and his newspapers significantly distorted UK politicians’ political decision making.
  • Parliamentarians’ expenses: the abuse of expenses by various members of the House of Commons and the House of Lords.
  • Cash for honours: following the 2006 scandal, a simmering suspicion that party donors are rewarded with seats in the House of Lords; there have been many individual allegations.
  • Peers for sale: the secret recording of members of the House of Lords offering to influence legislation for a fee at the request of private clients.
  • Cabs for hire: the secret recording of former government ministers offering to sell access to government decision makers to private consultants.
  • Consultancy loophole: the allegation that former ministers are exploiting a loophole in rules governing the revolving door between government and business in order to conceal the names of private clients they are working for.
  • Self-interested legislation: the exposure by the Guardian of how a serving government minister potentially stood to profit personally from legislation he was piloting in the House of Commons – this forced the minister to declare interests that he had failed to disclose.
An interesting feature of these scandals is that in many cases, the behaviour falls within the existing rules, even though they are at times stretched to breaking point. This suggests that the imposition of more rules may work to an extent, but at heart is a greater issue and a greater concern. This is the willingness and ability of UK politicians to act in an unethical manner and put their private interests ahead of the public interest, showing scant regard for the Nolan Principles of Public Life (these are: Selflessness, Integrity, Objectivity, Accountability, Openness, Honesty and Leadership). If politicians are to have legitimacy as lawmakers, they need to be exemplars of personal integrity. Rules must be complied with, not merely because there are penalties for not doing so, but because MPs are expected to have a system of values in which integrity is required for all aspects of their conduct.

Common threads linking political scandals are ethical failures fuelled by money (often in the form of business, whether business means the City, the media, a factory in the constituency or private consultancies). There is also the related question of whether the bodies, which are charged with ensuring that the letter and spirit of the rules are upheld, are functioning effectively. This collective failure falls well within the Transparency International definition of corruption as ‘the abuse of entrusted power for private gain’.

Overall, there seem to be several things that are going wrong: weaknesses and ambiguities in rules are exploited; the rules are enforced too weakly; and at times there is a culture that leads politicians to make excuses to themselves that justify corrupt and unethical conduct.

Whatever the causes, it is not possible to ignore the fact that the steady stream of political corruption scandals in recent years has eroded public confidence not just in individual politicians, but also in political institutions. There is a danger that the public will cease to regard decisions made by government and parliament as legitimate and fair. This represents a serious threat to our democracy and, ultimately, to the rule of law.