Revolving Doors and Chinese Walls

When business headhunts former ministers and civil servants, one has to ask whether its their skills that the companies seek, or rather access to power and insider information.  In the UK, we have always asked civil servants and ministers to regulate themselves.  But a few recent examples reported in BBC Radio's File on Four programme on the topic suggest that not everyone is good at maintaining Chinese walls when they pass through the revolving door.

As I argue in my recent report for Transparency International UK and a guest post on the blog of Democratic Audit, the regulatory system in the UK urgently needs reform.

Who guards the guardians?

Lord Justice Leveson does.  For it is he who has been appointed to head the judicial inquiry into phone hacking and press standards.  

Some have complained that he is, again, too much of an insider to do a good job, on the grounds that he has attended two parties in the last 12 months given by Matthew Freud, who is married to Elisabeth Murdoch, daughter of Rupert.  But I think excluding anyone who has ever socialised with a Murdoch relative might be narrowing the field a tad too much.

His initial comments are encouraging.  He asked for the help of the press to "weed out corruption".  I very much like the fact that his first words acknowledge that the outrageous behaviour of the few should not tar the reputation of the whole media.  Much of the media is performing a very valuable scrutiny role.  We should be lauding them as much as we seek to regulate the rest.

Niger sets up Anti-Corruption Agency

Niger is the latest country to set up an anti-corruption agency (ACA).  It's quite the fashion in developing and transition countries.  A good way to demonstrate to donors or the EU that you are devoting real energy and resources to fighting graft, or indeed to meet commitments under Article 6 of the UN Convention Against Corruption (UNCAC).

But do they work?

Hong Kong's Independent Commission Against Corruption (ICAC), set up in 1974, is often held up as a key success story of the anti-corruption movement.  It did indeed achieve great things from a difficult starting point, giving hope to other countries where corruption seems entrenched.  But many other ACAs, in Argentina and Tanzania, for example, were frustrated by a lack of cooperation from parts of the government and judiciary.  

ACAs only work if they have real power [1] - power to investigate, power to make other agencies cooperate with them, power to freeze assets, call witnesses and protect informants.  They also need a clear mandate, and enough budget and autonomy to recruit specialised staff who are not vulnerable to corruption themselves.

The paradox then, is that ACAs rely on there being at least some acceptance of the rule of law, some functioning state institutions, and real political commitment to fight corruption.  They are least likely to work in the countries that need them most.


References:
[1] Heilbrunn, J. (2004), "Anti-Corruption Commissions -- Panacea or Real Medicine to Fight Corruption?". World Bank Institute

Advice to Companies: How to Say No

There are plenty of wannabe-ethical corporates out there.  They don't want to be corrupt, but they keep getting asked to pay bribes.  And they don't know how to say No.

Here are my tips for trying:

1.  Ask for a receipt.  This forces the bribe-requester to admit that it's a bribe.

2.  Ask to be referred to the law or rule which would 'justify' the bribe.  

3.  Ask to see the supervisor.

4.  Blame your boss, the law in your home country, or your nationality (being Scots apparently works a treat...)

In other words, push back a little.  But give up if you feel you are in danger.  In some situations, and some countries, challenging will be enough to get a result.