December 30, 2009

Report by Troy C. Ware, Pol­icy Advi­sor (CBCF Fel­low)

With con­tri­bu­tions from Shelly Han, Pol­icy Advi­sor, and Helsinki Com­mis­sion staff

Hon. Ben­jamin L. Cardin, Chair­man
Vol­ume: 41, Num­ber: 13
Decem­ber 30, 2009

In July 2008, Mem­bers of the Com­mis­sion on Secu­rity and Coop­er­a­tion in Europe (U.S. Helsinki Com­mis­sion) and other Mem­bers of Con­gress trav­eled to Astana, Kaza­khstan for the sev­en­teenth Annual Ses­sion of the Orga­ni­za­tion for Secu­rity and Coop­er­a­tion in Europe Par­lia­men­tary Assem­bly (OSCE PA). The session’s theme was “Trans­parency in the OSCE.” At the out­set of the trip, Con­gress­man Alcee L. Hast­ings, then Chair­man of the Com­mis­sion, remarked that while he sup­ported the can­di­dacy of Kaza­khstan for the Chair­man­ship of the OSCE it was “imper­a­tive that the gov­ern­ment under­take con­crete reforms on human rights and democ­ra­ti­za­tion.”1 A num­ber of non­govern­men­tal orga­ni­za­tions have cited the high level of cor­rup­tion in Kaza­khstan as one imped­i­ment to demo­c­ra­tic reform.

Kaza­khstan is by no means alone. Rec­og­niz­ing the exis­tence of cor­rup­tion through­out the OSCE region, Helsinki Com­mis­sion­ers have con­sis­tently addressed the prob­lem by rais­ing it through hear­ings, leg­is­la­tion, and the OSCE Par­lia­men­tary Assem­bly. Hear­ings in 2006 iden­ti­fied cor­rup­tion as a hin­drance to ful­fill­ing human rights com­mit­ments and eco­nomic devel­op­ment in South-Central Europe (Helsinki Com­mis­sion June 2006 Hear­ing). The role of cor­rup­tion as a force in restrict­ing free­dom of the media in Azer­bai­jan was high­lighted in a 2007 hear­ing (Helsinki Com­mis­sion August 2007 Hear­ing). This report will draw atten­tion to recent ini­tia­tives under­taken by the Helsinki Com­mis­sion that have shown cor­rup­tion under­mines human rights, fun­da­men­tal free­doms and over­all security.

Wher­ever found, cor­rup­tion not only stunts demo­c­ra­tic reform, but also weak­ens the secu­rity and eco­nomic con­di­tion of states. Although cor­rup­tion man­i­fests itself in var­i­ous ways, this report can prac­ti­cally only dis­cuss a few. For exam­ple, promi­nent man­i­fes­ta­tions within the three OSCE dimen­sions dis­cussed include par­lia­men­tary cor­rup­tion, diver­sion of fund­ing from infra­struc­ture and human traf­fick­ing. Under­stand­ably, coun­tries will not solve a wide­spread and per­va­sive prob­lem with a sin­gu­lar approach. Addi­tion­ally, this report will dis­cuss the impor­tance of capac­ity build­ing ini­tia­tives that focus on pre­ven­tion as a crit­i­cal ele­ment in an anti-corruption cam­paign. This is an ele­ment that must be included along­side the high pro­file anti-corruption pros­e­cu­tions gov­ern­ments may be inclined to conduct.

A num­ber of inter­na­tional gov­ern­men­tal and non­govern­men­tal orga­ni­za­tions pro­duce reg­u­lar sur­veys or reports on cor­rup­tion. The 2008 sur­vey of cor­rup­tion by Trans­parency Inter­na­tional (TI), an inter­na­tional non­govern­men­tal orga­ni­za­tion that pro­motes anti-corruption poli­cies world­wide, ranked twelve OSCE par­tic­i­pat­ing States in the bot­tom half of 180 coun­tries sur­veyed. The least cor­rupt coun­tries were assigned the high­est rank­ing. Kaza­khstan ranked 145, which was still ahead of the OSCE coun­tries of Azer­bai­jan, Belarus, Kyr­gyzs­tan, Rus­sia, Tajik­istan, Turk­menistan and Uzbek­istan.2Experts point out that since TI uses a sur­vey, its find­ings may lag behind real­ity, reflect­ing only per­cep­tions based on increased report­ing result­ing from gov­ern­ment enforce­ment of anti-corruption laws. Oth­ers point out that sur­veys place too much empha­sis on bribery although forms of cor­rup­tion vary greatly from coun­try to coun­try.3 Nonethe­less, other barom­e­ters, such as eval­u­a­tions of the Group of States Against Cor­rup­tion (GRECO), which mea­sures anti-corruption pol­icy reform and capac­ity through a multi-year expert eval­u­a­tion process, sug­gest that some OSCE par­tic­i­pat­ing States are only par­tially imple­ment­ing stan­dards set by the group. Cor­rup­tion, which was explic­itly high­lighted in the Par­lia­men­tary Assembly’s con­clud­ing doc­u­ment, the Astana Dec­la­ra­tion,4 is a mul­ti­di­men­sional blight that under­mines human, eco­nomic, envi­ron­men­tal, and secu­rity dimen­sion pol­icy goals through­out the OSCE region.

Human Dimen­sion

Gen­uine democ­racy and rule of law can­not exist if the pas­sage, imple­men­ta­tion and judg­ment of the law favor the high­est bid­der. More­over, the rule of law requires more than elec­tions and a neu­tral and impar­tial judi­ciary; it requires that indi­vid­u­als receive the unbi­ased and dis­pas­sion­ate ben­e­fits of the law from all pub­lic ser­vants. Larry Dia­mond wrote in the March/April 2008 issue of For­eign Affairs that, “[f]or a coun­try to be a democ­racy, it must have more than reg­u­lar, mul­ti­party elec­tions under a civil­ian con­sti­tu­tional order.” He points out that when reg­u­lar elec­tions are accom­pa­nied by cor­rupt police and bureau­cra­cies, many peo­ple are “cit­i­zens only in name” and in their dis­il­lu­sion­ment grav­i­tate toward author­i­tar­ian lead­er­ship.5

Observers fre­quently focus atten­tion on remov­ing graft from courts and elec­tions. How­ever, cor­rup­tion in other spheres of soci­ety, such as among lower level pub­lic ser­vants, con­tributes to the notion of cor­rup­tion as an accept­able behav­ior often hav­ing the most imme­di­ate adverse effect on the aver­age per­son. Gov­ern­ment employ­ees of mod­est rank are capa­ble of deny­ing basic fun­da­men­tal free­doms such as equal pro­tec­tion of the law, enjoy­ment of prop­erty, the right of minori­ties to exer­cise human rights and free­doms, and the inde­pen­dence of legal prac­ti­tion­ers.6 Those who advo­cate for the vic­tims of cor­rup­tion, even within the judi­cial sys­tems, often can­not do so with­out reper­cus­sions. Fur­ther­more, when par­lia­ments become sanc­tu­ar­ies for per­sons engaged in cor­rup­tion the pro­tec­tion con­veys a mes­sage that cor­rup­tion will be tol­er­ated else­where in society.

Par­lia­men­tary Immunity

In a 2006 brief, the U.S. Agency for Inter­na­tional Devel­op­ment (USAID) defined par­lia­men­tary immu­nity as “a sys­tem in which mem­bers of a leg­is­la­ture are granted par­tial immu­nity from pros­e­cu­tion from civil and/or crim­i­nal offenses.” USAID fur­ther states that par­lia­men­tary immunity’s pur­pose is to “reduce the pos­si­bil­ity of pres­sur­ing a mem­ber to change his or her offi­cial behav­ior [with] the threat of pros­e­cu­tion.”7 Unre­strained par­lia­men­tary immu­nity impedes the inves­ti­ga­tion and pros­e­cu­tion of cor­rup­tion, makes par­lia­men­tary acqui­es­cence and per­pet­u­a­tion of cor­rup­tion pos­si­ble, fos­ters a cul­ture of cor­rup­tion among other gov­ern­ment offi­cials and secu­rity offi­cials, and dis­pro­por­tion­ately affects minor­ity pop­u­la­tions. Accord­ing to Devel­op­ment Alter­na­tive Incor­po­rated (DAI), a devel­op­ment con­sult­ing com­pany, devel­op­ing democ­ra­cies tend to favor the broad­est scope of immu­nity which allows cor­rupt activ­i­ties almost with impunity. Although rare, a par­lia­ment may vote to lift immu­nity from one of its mem­bers, as was the case in Arme­nia in 2006 when immu­nity was removed for a par­lia­ment mem­ber who allegedly failed to pay taxes and insti­gated a gun fight.8

While par­lia­men­tary immu­nity can pro­tect the inde­pen­dence of leg­is­la­tures, fre­quently it is a shield for illicit activ­ity. A 2007 USAID report, Cor­rup­tion Assess­ment: Ukraine, found that “leg­is­la­tors have amassed for­tunes through busi­ness inter­ests and other means … with lit­tle trans­parency or account­abil­ity.” More­over the report found that broad immu­nity cre­ated a pow­er­ful incen­tive to seek pub­lic office and intro­duced “illicit fund­ing” into the polit­i­cal process.9 Even if pros­e­cut­ing agen­cies inves­ti­gate the activ­i­ties of leg­is­la­tors, the indi­vid­u­als are rarely pros­e­cuted because the par­lia­ment will not lift immu­nity. Arme­ni­aNow, an NGO pub­li­ca­tion, found that in the first fif­teen years of Armen­ian inde­pen­dence, immu­nity was waived in only five instances.10 Although demo­c­ra­tic attrib­utes exist osten­si­bly in most OSCE par­tic­i­pat­ing States, fea­tures such as elec­tions may iron­i­cally serve to con­ceal the self-serving rule that results from corruption.

Par­lia­men­tary cor­rup­tion can lead to a cycle in which the par­lia­ment can­not effec­tively exer­cise an over­sight role because its mem­bers have a per­sonal stake in the illicit activ­ity. The Bul­gar­ian parliament’s resis­tance to clos­ing duty-free ven­dors along its bor­ders is an exam­ple of the con­trol­ling power of cor­rup­tion accord­ing to Bulgaria’s Cen­ter for the Study of Democ­racy. Since 1992, duty-free fuel, cig­a­rette and alco­hol ven­dors have oper­ated at Bulgaria’s bor­ders.11 These oper­a­tions, allegedly tied to orga­nized crime, deprived the state of sig­nif­i­cant tax rev­enue and could under­cut prices of com­peti­tors sub­ject to duties. As a con­di­tion of join­ing the Euro­pean Union, Bul­garia was required to raise excise duties up to a stan­dard set by the EU. Fur­ther­more, in 2003 the Min­is­ter of Finance signed a let­ter of intent with the Inter­na­tional Mon­e­tary Fund to close all duty-free shops.12 In response to the increased tax, the ille­gal trade in duty-free goods increased. In 2004, the Finance Min­is­ter extended a license for the shops to con­tinue until 2009 despite inter­na­tional com­mit­ments to the con­trary. In 2006, the Bul­gar­ian Par­lia­ment, instead of clos­ing the shops, passed a law that allowed the shops to shift to the non-EU bor­ders with Ser­bia, Turkey, and Mace­do­nia.13 Finally, in early 2008, the Par­lia­ment passed a law to close the duty-free shops.14 Pre­vi­ously, the Cen­ter for the Study of Democ­racy asserted that “national level ille­gal pro­ceeds from duty-free trade [had] been deployed to cap­ture the state” and the ven­dors had used “polit­i­cal cor­rup­tion to secure per­pet­ual monop­oly busi­ness posi­tions.”15

Helsinki Com­mis­sion Chair­man Sen­a­tor Ben­jamin L. Cardin has raised the issue of unbri­dled par­lia­men­tary immu­nity on many occa­sions. In a hear­ing in June 2006 on Human Rights, Democ­racy, and Inte­gra­tion in South Cen­tral Europe, Sen­a­tor Cardin made a com­mit­ment to push the Par­lia­men­tary Assem­bly to adopt ini­tia­tives call­ing for changes to par­lia­men­tary immu­nity laws. At the July 2006 OSCE Annual Ses­sion Cardin authored a res­o­lu­tion on par­lia­men­tary immu­nity, which passed, urg­ing the OSCE par­tic­i­pat­ing States to “[p]rovide clear, bal­anced, trans­par­ent, and enforce­able pro­ce­dures for waiv­ing par­lia­men­tary immu­ni­ties in cases of crim­i­nal acts or eth­i­cal vio­la­tions.” In 2007, Cardin raised the issue of how par­lia­men­tary immu­nity can serve as cover for cor­rup­tion in a Helsinki Com­mis­sion hear­ing on Energy and Democ­racy (Helsinki Com­mis­sion July 2007 Hear­ing). He has also urged nations such as Ukraine to con­sider chang­ing their par­lia­men­tary immu­nity laws.16

Petty Cor­rup­tion

Like water flow­ing down­hill, if cor­rup­tion exists at the higher lev­els of gov­ern­ment and soci­ety, it will per­me­ate the per­for­mance of pub­lic ser­vants at every level. Dur­ing a 2008 Helsinki Com­mis­sion hear­ing on Kazakhstan’s acces­sion to the OSCE Chair­man­ship, Martha Olcott of the Carnegie Endow­ment for Inter­na­tional Peace iden­ti­fied cor­rup­tion that is “ram­pant in daily life” in Kaza­khstan and present at all lev­els of gov­ern­ment (Helsinki Com­mis­sion July 2008 Hear­ing).17 Endemic cor­rup­tion within the gov­ern­ment bureau­cracy has an imme­di­ate effect in terms of con­fi­dence in gov­ern­ment and cost to the peo­ple of any coun­try. A 2009 report stated that among Euro­pean Union coun­tries, 17 per­cent of Greeks and thirty per­cent of Lithua­ni­ans had admit­ted to pay­ing a bribe to obtain ser­vice from a pub­lic admin­is­tra­tive body.18 In many coun­tries, wide­spread cor­rup­tion has led to a level of accep­tance. GfK Research, an inter­na­tional mar­ket­ing and research com­pany, con­ducted a study in 2006 which reported that 61 per­cent of Roma­ni­ans, 58 per­cent of Bosni­ans, and 56 per­cent of Czechs regarded bribes as a nor­mal part of life.19

Fre­quently, national health care ser­vice is pro­vided only to those will­ing to pay extra to med­ical per­son­nel. In Roma­nia, $225 paid by Alina Lungu to her doc­tor was appar­ently not enough to pre­vent him from leav­ing the preg­nant women alone for an hour dur­ing labor and her baby from being born blind, deaf, and with brain dam­age due to the umbil­i­cal cord being wrapped around him.20 Global Integrity, a non­profit orga­ni­za­tion that mon­i­tors gov­er­nance and cor­rup­tion world­wide, pro­vides an account of a Lat­vian girl expe­ri­enc­ing stom­ach pain who was allowed to sit in a hos­pi­tal for sev­eral days with­out pain-killers or treat­ment until her father paid money to the doc­tor.21 A sur­vey in Bul­garia showed that the amount of Bul­gar­i­ans iden­ti­fy­ing the health sec­tor as the most cor­rupt in com­par­i­son to oth­ers such as cus­toms, police, and judi­ciary increased from 20 per­cent in 2002 to 39 per­cent in 2007.22 Accord­ing to 2007 report­ing, Bul­gar­i­ans expe­ri­enced cor­rup­tion in almost every type of health ser­vice includ­ing refer­rals, surgery, birth deliv­ery, and emer­gency care. The prob­lem is very wide­spread in hos­pi­tal care.23 Some con­clude that health work­ers take extra pay­ments from patients for ser­vices already cov­ered by health insur­ance and admin­is­tra­tors over­state costs in hos­pi­tal care due to insuf­fi­cient hos­pi­tal financ­ing and financ­ing reg­u­la­tions that encour­age over­spend­ing.24

Offi­cials reg­u­larly abuse their author­ity in the enforce­ment of traf­fic laws and in the area of travel. Vladimir Voinovich, a promi­nent Russ­ian author, points out that to become a pub­lic offi­cial or police­man you must pay off your boss and that pay­ment is financed through tak­ing bribes.25 Even when offi­cials wish to behave hon­estly, pro­vid­ing “a stream of pay­ments to patrons” becomes a mat­ter of sur­vival.26 In Uzbek­istan, per­mis­sion from the local gov­ern­ment is required to move to another city and accord­ing to the 2008 Depart­ment of State Report on Human Rights Prac­tices in Uzbek­istan, local author­i­ties com­monly issue the required doc­u­ments only in return for a bribe. The report also states that police “arbi­trar­ily detained peo­ple to extort bribes” on a reg­u­lar basis.27 The 2008 report on Human Rights Prac­tices in Azer­bai­jan noted that police offi­cers reg­u­larly impose arbi­trary fines on cit­i­zens and seek pro­tec­tion money.28 The report on Poland rec­og­nized that cor­rup­tion among police was wide­spread.29 In many coun­tries, drink­ing and dri­ving has become com­mon­place because police can be bribed to look the other way.

The Effect of Cor­rup­tion on Minorities

More often than not, police cor­rup­tion dis­pro­por­tion­ally affects minor­ity groups. In a Helsinki Com­mis­sion brief­ing in 2004, Leonid Raih­man of the Open Soci­ety Insti­tute described the plight of Roma in Rus­sia who are trapped in a cycle of poverty exac­er­bated by bribes extracted by the Russ­ian police (Helsinki Com­mis­sion Sep­tem­ber 2004 Brief­ing). Often detained on charges of not pos­sess­ing proper per­sonal doc­u­ments or a false accu­sa­tion of com­mit­ting a crime, Roma will hire an attor­ney whose sole func­tion is to nego­ti­ate the price of the bribe for their release. Accord­ing to Raih­man, the sit­u­a­tion is anal­o­gous to that of a hostage whose free­dom is being nego­ti­ated. This can some­times lead to fam­i­lies sell­ing their car, life sav­ings or home. He noted that the worst case sce­nario results in home­less­ness.30

Reg­u­la­tions that require peo­ple to reg­is­ter their offi­cial place of res­i­dence or obtain an inter­nal pass­port pro­vide fer­tile soil for minor­ity exploita­tion through cor­rup­tion. Accord­ing to the 2007 Depart­ment of State Report on Human Rights Prac­tices in Rus­sia, “darker skinned per­sons from the Cau­ca­sus or Cen­tral Asia” were reg­u­larly sin­gled out to see if they pos­sessed an inter­nal pass­port and had reg­is­tered with local author­i­ties.31 Typ­i­cally, if allowed to reg­is­ter, a per­son must pay a bribe.

Retal­i­a­tion against Lawyers

The legal pro­fes­sion, in addi­tion to an inde­pen­dent judi­ciary, is an essen­tial part of a func­tion­ing democ­racy. Still, gov­ern­ment offi­cials have used retal­ia­tory crim­i­nal pros­e­cu­tion and coer­cive mea­sures to dis­cour­age lawyers from rep­re­sent­ing clients in cases that expose cor­rup­tion. An exam­ple from Rus­sia is that of the attor­neys rep­re­sent­ing Her­mitage Cap­i­tal and its exec­u­tives.32 Lawyers from four inde­pen­dent law firms rep­re­sent­ing Her­mitage have appar­ently been sub­ject to unlaw­ful office searches, ille­gal sum­monses demand­ing that they tes­tify as wit­nesses in the same cases where they are rep­re­sent­ing clients, and that they fal­sify tes­ti­mony against clients. Lawyers who failed to com­ply were sub­jected to crim­i­nal charges. Sev­eral of the lawyers have fled Rus­sia.33 Sergei Mag­nit­sky, a Russ­ian lawyer with Fire­stone Dun­can, a firm which rep­re­sented Her­mitage Cap­i­tal, was arrested in Novem­ber 2008 in con­nec­tion with his inves­ti­ga­tion of gov­ern­ment cor­rup­tion. Mag­nit­sky died in cus­tody this Novem­ber in a case that high­lighted the dif­fi­culty of stand­ing up to cor­rup­tion and poor Russ­ian prison con­di­tions (Helsinki Com­mis­sion Novem­ber 2009 Press Release). As the dis­missal of the head of the tax agency which Mag­nit­sky was inves­ti­gat­ing sug­gests, the death is still rever­ber­at­ing at the Krem­lin.34How­ever, it remains to be seen if long-term actions to pro­tect lawyers expos­ing cor­rup­tion will be under­taken. Per­sons famil­iar with the Russ­ian legal sys­tem say lit­tle impor­tance is placed on the attorney-client priv­i­lege.35 Allegedly, com­pa­nies like the 2X2 tele­vi­sion net­work, charged with com­mit­ting crimes against the state by broad­cast­ing con­tent includ­ing the Simp­sons and South Park encounter dif­fi­cul­ties find­ing legal rep­re­sen­ta­tion.36

Gov­ern­ment attacks on lawyers and their clients who expose cor­rup­tion rep­re­sent a seri­ous threat to the rule of law. When lawyers are intim­i­dated and afraid to rep­re­sent clients, cit­i­zens are defense­less against cor­rup­tion. A pri­mary rea­son for this is that courts present many com­plex­i­ties that non-attorneys may find dif­fi­cult to over­come. The U. S. Supreme Court in Pow­ell v. Alabama explained the chal­lenge faced by a non-attorney rep­re­sent­ing him­self in say­ing that the non-attorney often can­not rec­og­nize if the “indict­ment is good or bad,” is “unfa­mil­iar with the rules of evi­dence,” and “lacks the skill and knowl­edge ade­quately to pre­pare his defense.”37 It is imper­a­tive that lawyers are pro­tected from gov­ern­ment inter­fer­ence and polit­i­cal per­se­cu­tion so that they may effec­tively rep­re­sent and pro­tect their clients’ interests.

The Eco­nomic Dimen­sion

Stud­ies sug­gest cor­rup­tion retards eco­nomic devel­op­ment and gen­er­ally results in a lower stan­dard of liv­ing. The OSCE Best-Practice Guide for a Pos­i­tive Busi­ness and Invest­ment Cli­mate, asserts that “cor­rup­tion is clearly a major indi­ca­tor of the health of a busi­ness and invest­ment cli­mate” and that the “wealth­i­est OSCE coun­tries are gen­er­ally the coun­tries judged to be least cor­rupt by inter­na­tional observers.”38 Cor­rup­tion adversely affects eco­nomic growth by slow­ing infra­struc­ture devel­op­ment, increas­ing costs for busi­nesses, and pre­vent­ing com­pet­i­tive busi­ness out­comes. More­over, the respon­si­bil­ity of wealth­ier OSCE par­tic­i­pat­ing States can­not be dis­re­garded. Multi­na­tional cor­po­ra­tions from devel­oped nations, largely through acqui­es­cent behav­ior, may pro­mote cor­rup­tion in coun­tries where it is most prevalent.

Cost to Busi­ness and the Over­all Economy

Bribes pose a sig­nif­i­cant cost for busi­nesses in many OSCE coun­tries. The Best Prac­tice Guide notes that in for­mer Soviet coun­tries a higher per­cent­age of busi­ness rev­enue is ded­i­cated to pay­ing bribes than in West­ern Europe.39 The guide reported that in some coun­tries busi­nesses pay up to four per­cent of their total costs in bribes.40 Whether through cus­toms, licenses, or per­mits, the oppor­tu­nity for graft exists where there are exces­sive bureau­cra­cies or reg­u­la­tions. The CATO Institute’s report, The Rise of Pop­ulist Par­ties in Cen­tral Europe, iden­ti­fies build­ing per­mits as “an espe­cially attrac­tive source of extra income.”41 Accord­ing to a World Bank report, build­ing a gen­eral stor­age two-story ware­house in Moscow requires 54 pro­ce­dures and 704 days.42 This inter­ac­tion with numer­ous agen­cies and gov­ern­ment offi­cials increases the oppor­tu­nity for bribes.

Bribes ulti­mately dis­tort mar­ket out­comes because the most com­pet­i­tive com­pa­nies are not rewarded for their efforts and there­fore some com­pa­nies choose not to com­pete at all. For exam­ple, gov­ern­ment con­tract­ing is one area where bribes under­mine com­pe­ti­tion and the pub­lic good. J. Welby Lea­man, an advi­sor to the U.S. Trea­sury Depart­ment wrote in the Pacific McGe­orge Global Busi­ness and Devel­op­ment Law Jour­nal, “pub­lic offi­cials’ solic­i­ta­tion of their ‘cut’ impov­er­ish gov­ern­ment pro­grams.”43 The CATO Insti­tute report cites the case of Dell Cor­po­ra­tion los­ing a com­puter con­tract with the Czech par­lia­ment. Dell’s bid report­edly met all tech­ni­cal spec­i­fi­ca­tions, was the low­est cost and offered to pay a penalty fee for late deliv­ery. Nonethe­less, the con­tract was awarded to a Czech firm that asked for twice as much as Dell.44 Lea­man also notes that if a firm can­not pass on a bribe’s cost to the cus­tomer, that firm may choose not to com­pete, which robs the econ­omy of “addi­tional invest­ment and com­pe­ti­tion.”45

Diver­sion of Wealth from Nat­ural Resources

While a num­ber of OSCE par­tic­i­pat­ing States are for­tu­nate to pos­sess large reserves of oil and nat­ural gas, in many instances the wealth pro­duced by these resources does not ben­e­fit the cit­i­zens of the states, but only the few who con­trol the resources. The Helsinki Com­mis­sion held hear­ings in 2007 spot­light­ing this mis­ap­pro­pri­a­tion and betrayal of pub­lic trust. Simon Tay­lor of Global Wit­ness iden­ti­fied the problem’s crux in many coun­tries not­ing that in Turk­menistan, a coun­try of approx­i­mately five mil­lion peo­ple, “[60] per­cent of [the] pop­u­la­tion lives below the poverty line despite two bil­lion dol­lars in annual gas rev­enues.”46 Remark­ably, in Kaza­khstan, the econ­omy grew only 0.3 per­cent between 2000 and 2005 despite its expor­ta­tion of 1.2 mil­lion bar­rels of oil a day. Tay­lor also framed the diver­sion of prof­its for per­sonal use as a mat­ter of energy secu­rity result­ing in unre­li­able sup­ply and higher prices (Helsinki Com­mis­sion July 2007 Hear­ing).47

Fol­low­ing the hear­ings, then-Commission Chair­man Alcee L. Hast­ings intro­duced an amend­ment to the Energy Inde­pen­dence and Secu­rity Act of 2007 (H.R. 3221), which became law, mak­ing it U.S. pol­icy to sup­port the Extrac­tive Indus­tries Trans­parency Ini­tia­tive (EITI) and for the U.S. Sec­re­tary of State to report annu­ally on U.S. efforts to pro­mote trans­parency in extrac­tive indus­try pay­ments.48 The 2009 report notes United States con­tri­bu­tions to the EITI Multi-Donor Trust Fund, senior level State Depart­ment encour­age­ment to devel­op­ing economies to join EITI, embassy offi­cer engage­ment with gov­ern­ment offi­cials in devel­op­ing economies, and U.S. Trea­sury Depart­ment col­lab­o­ra­tion with devel­op­ment banks.49 In 2008, then-Co-Chairman Cardin spon­sored an amend­ment to the State­ment of the July 2008 OSCE Par­lia­men­tary Assem­bly Annual Ses­sion that among other things, “encour­ages gov­ern­ments from oil and gas pro­duc­ing coun­tries to intro­duce reg­u­la­tions that require all com­pa­nies oper­at­ing in their ter­ri­to­ries to make pub­lic infor­ma­tion rel­e­vant to rev­enue trans­parency.” The amend­ment was approved by the OSCE par­lia­men­tar­i­ans and adopted as part of the Astana Dec­la­ra­tion.50 If the economies of oil and nat­ural gas rich OSCE par­tic­i­pat­ing States are to reach their full poten­tial, trans­parency and account­abil­ity must exist between extrac­tive indus­tries and national government.


In addi­tion to the price of bribes, a busi­ness is dis­ad­van­taged to com­pete in a mar­ket with less infra­struc­ture due to cor­rup­tion. Ukraine exem­pli­fies an OSCE coun­try that stands to gain from eco­nomic growth if road projects are funded, effi­cient and trans­par­ent. The World Eco­nomic Forum’s Global Com­pet­i­tive­ness report on Ukraine notes that the poor state of Ukraine’s roads is hin­dered by road con­struc­tion processes that pro­vide many oppor­tu­ni­ties for cor­rup­tion.51 This sit­u­a­tion impedes not only new road con­struc­tion, but also repair of exist­ing roads and bridge con­struc­tion. The State Motor Road Ser­vice of Ukraine reported that Ukraine loses the equiv­a­lent of one bil­lion U.S. dol­lars annu­ally due to poor road con­di­tions.52 While new road projects are under­way, includ­ing a new ring road around Kyiv, cur­rent leg­is­la­tion does not allow for a com­pet­i­tive pri­vate bid­ding process, with­out which the road sys­tem will con­tinue to rank 120th out of 134 coun­tries ranked by the World Eco­nomic Forum in qual­ity of roads. Ukraine is not alone, Moldova ranked 133rd out of 134 coun­tries.53 Not sur­pris­ingly, busi­ness lead­ers in Moldova ranked cor­rup­tion as the sec­ond most prob­lem­atic busi­ness obsta­cle in that coun­try behind access to financ­ing.54

Fraud­u­lent Appro­pri­a­tion of Pri­vate Property

A pat­tern of takeovers of pri­vate com­pa­nies and the government-directed per­se­cu­tion of their exec­u­tives and lawyers is report­edly becom­ing the norm in Rus­sia. A prime exam­ple was the ille­gal takeover of com­pa­nies belong­ing to the Her­mitage Fund, a joint ven­ture between Her­mitage Cap­i­tal Man­age­ment and HSBC Bank. The takeover was allegedly achieved through brazen abuses of power by law enforce­ment author­i­ties and inter­fer­ence by gov­ern­ment offi­cials with Russ­ian courts. William Brow­der, the founder of Her­mitage, and Jami­son Fire­stone, his attor­ney, recently met with Helsinki Com­mis­sion staff to dis­cuss their case. Browder’s visa was revoked in 2005 for what he believes was his work in expos­ing cor­rup­tion in state con­trolled com­pa­nies with close links to the Krem­lin. He then appealed to high-level Russ­ian offi­cials, Brow­der said, includ­ing an impromptu con­ver­sa­tion with then-First Deputy Prime Min­is­ter Dmitry Medvedev at the Davos annual meet­ing of the World Eco­nomic Forum. After these appeals, Brow­der alleges he received a phone call from a senior law enforce­ment offi­cer appar­ently offer­ing to restore his visa for a price. When this offer was rejected, the Russ­ian Inte­rior Min­istry raided the offices of Her­mitage and Fire­stone (see Human Dimen­sion – Retal­i­a­tion against Lawyers). Cor­po­rate seals, char­ters, and cer­tifi­cates of reg­is­tra­tion for the Her­mitage Fund com­pa­nies as well as doc­u­ments belong­ing to numer­ous other clients were con­fis­cated dur­ing the raids.

Fol­low­ing the raids, the cor­po­rate doc­u­ments taken by the Inte­rior Min­istry in the office raids were used to wipe HSBC off the share reg­istry of the Her­mitage Fund com­pa­nies. The same doc­u­ments were used to forge back dated con­tracts and to file law­suits against the Her­mitage com­pa­nies alleg­ing sig­nif­i­cant lia­bil­i­ties. Although Her­mitage and HSBC were not aware of these cases, var­i­ous judges awarded $973 mil­lion in dam­ages in legal pro­ceed­ings that were con­cluded in a mat­ter of min­utes. These same fraud­u­lent lia­bil­i­ties were used by the per­pe­tra­tors to seek a retroac­tive tax refund of $230 mil­lion in profit taxes that Her­mitage had paid to the Russ­ian gov­ern­ment in 2006. At the time of the refund, HSBC and Her­mitage had already filed six crim­i­nal com­plaints with the heads of Russ­ian law enforce­ment author­i­ties doc­u­ment­ing the involve­ment of senior gov­ern­ment offi­cials in this fraud. Despite these detailed com­plaints, the fraud­u­lent tax refund was promptly approved and paid to the per­pe­tra­tors in a mat­ter of days in sharp con­trast to the lengthy process nor­mally asso­ci­ated with such a refund.

In response to the com­plaints Russ­ian author­i­ties cre­ated an inves­tiga­tive com­mit­tee staffed by the very offi­cials impli­cated in the com­plaints. More­over, a num­ber of spu­ri­ous retal­ia­tory crim­i­nal cases have been lodged against Brow­der, his col­leagues, and four lawyers from four sep­a­rate law firms. In the mean­time, Mr. Brow­der and a senior col­league, Ivan Cherkasov, have been placed on the Russ­ian Fed­eral Search List and face the pos­si­bil­ity of becom­ing the sub­jects of an Inter­pol Red Notice. Because of the coor­di­nated nature of actions taken by state offi­cials in this scheme together with the offi­cial reac­tion to the Her­mitage com­plaints, Brow­der sus­pects high level polit­i­cal inter­fer­ence.55 A coun­try where prop­erty can be seized with­out due process is one where invest­ment is likely to be depressed for fear of arbi­trary loss.

Reg­u­la­tion of Multinationals

While the OSCE par­tic­i­pat­ing States of Cen­tral and East­ern Europe and the for­mer Soviet Union often receive the most crit­i­cism for fail­ing to cur­tail cor­rup­tion, West Euro­pean coun­tries also face prob­lems with cor­rup­tion. One notable case is the recent inves­ti­ga­tion of defense con­trac­tor BAE Sys­tems, a British firm, for alleged bribery in arms sales to Saudi Ara­bia and sep­a­rate probes into wrong­do­ing in arms trans­ac­tions with Chile, the Czech Repub­lic, Roma­nia, South Africa, Tan­za­nia, and Qatar. The British news­pa­per, The Tele­graph, reported that an alleged six bil­lion pounds (approx­i­mately nine bil­lion dol­lars) were paid to var­i­ous Saudi offi­cials. Cit­ing a threat to cease intel­li­gence shar­ing by Saudi Ara­bia, the British gov­ern­ment ter­mi­nated the inves­ti­ga­tion.56

In response to the ter­mi­na­tion of the inves­ti­ga­tion, the Organ­i­sa­tion for Eco­nomic Co-operation and Devel­op­ment (OECD), issued a report crit­i­ciz­ing the British gov­ern­ment for not con­sid­er­ing alter­na­tives to dis­con­tin­u­ing the inves­ti­ga­tion. More­over, the report crit­i­cized the U.K. for not enact­ing leg­is­la­tion to meet the country’s oblig­a­tion under the OECD Anti-Bribery Con­ven­tion.57 While other com­pa­nies are under inves­ti­ga­tion, and some like Siemens A.G. have paid record-setting fines, the case of BAE sys­tems stands out because of the record of the U.K. in hold­ing its multi­na­tion­als to account for over­seas bribery. Writ­ing in For­eign Affairs in 2006, Ben Heine­mann and Fritz Heimann argue that an area of “empha­sis must be the imple­men­ta­tion of enforce­ment and pre­ven­tion mea­sures by devel­oped nations, where bribery of for­eign offi­cials can be more read­ily exposed and pros­e­cuted.” Unfor­tu­nately, their arti­cle points out that as of 2006, only France, South Korea, Spain and the United States have brought more than one pros­e­cu­tion.58 In July 2008, the House of Lords upheld the deci­sion of the British gov­ern­ment to end the inves­ti­ga­tion of BAE sys­tems and the gov­ern­ment of Prime Min­is­ter Gor­don Brown has taken no steps to reopen the case.

It should be noted that under the pio­neer For­eign Cor­rupt Prac­tices Act (FCPA), which pre­dates the OECD Con­ven­tion, the United States has steadily increased inves­ti­ga­tions and pros­e­cu­tions.59 The FCPA has three major pro­vi­sions. Its best known pro­vi­sion pro­hibits U.S. Cor­po­ra­tions and indi­vid­u­als from using an instru­men­tal­ity of inter­state com­merce to bribe a for­eign offi­cial, polit­i­cal party or can­di­date.60 The two other pri­mary pro­vi­sions require cor­po­ra­tions to main­tain records which accu­rately reflect trans­ac­tions and to main­tain “inter­nal account­ing con­trols” to pro­vide assur­ance trans­ac­tions61 are exe­cuted with management’s autho­riza­tion.62

Observers note that U.S. courts are lim­it­ing excep­tions to the law and extend­ing its scope while the Depart­ment of Jus­tice is join­ing FCPA charges with charges under other fed­eral laws.63 Report­edly, as of May 2009, the Depart­ment of Jus­tice was pur­su­ing 120 inves­ti­ga­tions of pos­si­ble FCPA vio­la­tions.64 Recent pros­e­cu­tions have resulted in favor­able court deci­sions for author­i­ties. In 2004, in a broad inter­pre­ta­tion of the law’s appli­ca­tion, a Fifth Cir­cuit Court rul­ing rejected the claim that Con­gress meant to limit the FCPA only to bribes relat­ing to con­tracts. The court held that the leg­isla­tive his­tory implies that the law applies broadly even to pay­ments that indi­rectly assist in obtain­ing or retain­ing busi­ness.65 A recent lower court nar­rowed an excep­tion for law­ful pay­ments under the laws of the for­eign coun­try. In a sit­u­a­tion where a per­son was relieved of lia­bil­ity after report­ing the bribe, the court wrote there “is no immu­nity from pros­e­cu­tion under the FCPA … because a pro­vi­sion in the for­eign law “relieves” a per­son of crim­i­nal respon­si­bil­ity.”66 The aggres­sive enforce­ment envi­ron­ment and the government’s will­ing­ness to con­sider company-implemented com­pli­ance pro­grams in decid­ing whether to pros­e­cute has a pos­i­tive con­se­quence of incen­tiviz­ing other com­pa­nies to estab­lish such programs.

What remains to be seen is to what extent nations with mature economies will hold multi­na­tional cor­po­ra­tions to account dur­ing times of eco­nomic hard­ship. Although only a hand­ful of coun­tries have brought pros­e­cu­tions, it should be noted that many inves­ti­ga­tions result in set­tle­ments which require fines. In the case of Siemens A.G., the com­pany set­tled to pay more than $1.6 bil­lion in fines to both Ger­man and U.S. author­i­ties.67 If mature economies do not hold multi­na­tional cor­po­ra­tions account­able, they are in effect pro­mot­ing cor­rupt behav­ior and being duplic­i­tous in crit­i­ciz­ing cor­rupt prac­tices elsewhere.

The Secu­rity Dimension

One account from the book The Natashas: Inside the New Global Sex Trade is the story of Stefa from Moldova who trav­eled to Roma­nia look­ing for work. Stefa met a man who intro­duced him­self as an agent mar­ket­ing posi­tions as maids. Regret­tably, noth­ing could have been fur­ther from the truth. This man placed Stefa and other girls in a crowded apart­ment where they were paraded naked and auc­tioned like cat­tle. Natasha was even­tu­ally sold and smug­gled to Italy where she was sex­u­ally assaulted and forced to work as a pros­ti­tute.68 Stefa’s story is a com­mon one that is usu­ally facil­i­tated by cor­rup­tion. Heine­mann and Heimann write “one ignores cor­rupt states that are failed or fail­ing at one’s peril, because they are incu­ba­tors of ter­ror­ism, the nar­cotics trade, money laun­der­ing, human traf­fick­ing, and other global crime.”69 In addi­tion to these illicit activ­i­ties, many recent reports tie cor­rup­tion to the pro­lif­er­a­tion of small arms traf­fick­ing and sales.


Many observers believe that ter­ror­ists appear to have taken advan­tage of cor­rup­tion to con­duct attacks. It was reported that one of two female sui­cide bombers from Chech­nya who brought down two Russ­ian pas­sen­ger air­crafts in August 2004 paid a $34 bribe to board a plane for which she did not have a ticket. Shortly after, flight 1047 and another flight boarded by the sec­ond sui­cide bomber, flight 1303, blew up in mid-air after depart­ing Moscow’s Domode­dovo Inter­na­tional Air­port. Promi­nent Russ­ian author Vladimir Voinovich, wrote on the Pak­istani online news­pa­per The Daily Times that the ter­ror­ists who took con­trol of the Dubrovka the­atre in Moscow in 2002 were report­edly stopped fifty times by author­i­ties while trav­el­ing to Moscow, but solely for the pur­pose of solic­it­ing a bribe.70 An arti­cle inCrime & Jus­tice Inter­na­tional alleged that offi­cials iden­ti­fied 100 Min­istry of Inter­nal Affairs (MVD) police per­son­nel who were com­plicit in the travel of the Chechen fight­ers to Moscow.71

Cor­rup­tion facil­i­tates ter­ror­ism by decreas­ing bor­der secu­rity and increas­ing money laun­der­ing. Kim­ber­ley Thachuk writes in the SAIS Review that “[c]riminal and ter­ror­ist groups depend on unim­peded cross-border move­ments, and so bor­der guards, cus­toms offi­cers, and immi­gra­tion per­son­nel are notable tar­gets of cor­rup­tion.”72 In the U.S. Depart­ment of State’s Coun­try Reports on Ter­ror­ism 2008, cor­rup­tion among bor­der guards was iden­ti­fied as a risk in the OSCE region, par­tic­u­larly Alba­nia, Arme­nia, Kosovo, and Moldova.73 The tar­get­ing of bor­der guards by crim­i­nal ele­ments extends even to the United States. Recently, the U.S. Depart­ment of Home­land Secu­rity reestab­lished its inter­nal affairs unit amid increased cor­rup­tion inves­ti­ga­tions. It had been dis­banded in 2003. In the spring of 2008, there were 200 open cases against U.S. law enforce­ment offi­cers on the bor­der. This cor­rup­tion has involved smug­gling of guns, drugs, and peo­ple.74 Cor­rup­tion ulti­mately under­mines the effec­tive­ness of secu­rity forces to fight ter­ror­ism. Kim­berly Thachuk notes that “such cor­rup­tion spreads, as does an atten­dant loss of morale and respect for the com­mand struc­ture.”75 This dete­ri­o­ra­tion in pro­fes­sion­al­ism and morale could not come at a worse time. A July 2008 arti­cle in Forbes mag­a­zine on Euro­pean crime claimed a 24 per­cent increase in ter­ror­ist attacks from 2006 to 2007.76

Arms Sales

As evi­denced by prior tes­ti­mony before the Helsinki Com­mis­sion, cor­rup­tion is a fac­tor in many illicit arms sales world­wide. In June 2003, Roman Kupchin­sky, then a Senior Ana­lyst with Crime and Cor­rup­tion Watch of Radio Free Europe/Radio Lib­erty, pointed out that sales from for­mer Soviet states fre­quently involve a mar­riage of secu­rity forces and orga­nized crime (Helsinki Com­mis­sion June 2003 Hear­ing).77 This means indi­vid­u­als, not the gov­ern­ment, are mak­ing the sales. More­over, although OSCE par­tic­i­pat­ing States have agreed through the Forum for Secu­rity Coop­er­a­tion to not issue export licenses for arms with­out an authen­ti­cated end-user cer­tifi­cate, these cer­tifi­cates are often forged. Accord­ingly, the buyer may not be the actual recip­i­ent of the weapons.

United Nations arms embar­goes notwith­stand­ing, indi­vid­u­als and com­pa­nies from numer­ous coun­tries are involved in the man­u­fac­ture, tran­sit, diver­sion from legal use, and fraud­u­lent com­pany reg­is­tra­tion for illicit arms traf­fick­ing to coun­tries or non-state actor groups under embargo accord­ing to Con­trol Arms, a group of con­cerned non-governmental orga­ni­za­tions. The list of coun­tries included Alba­nia, Bel­gium, Bul­garia, Moldova, Roma­nia, Rus­sia, Ser­bia, Ukraine and the United King­dom.78 These ille­gal sales, which fuel con­flict in the devel­op­ing world, are esti­mated to be worth one bil­lion dol­lars a year accord­ing to Rachel Stohl, an ana­lyst at the World Secu­rity Institute’s Cen­ter for Defense Infor­ma­tion. She noted in an arti­cle pub­lished for the SAIS Review that “[a]rms bro­kers are able to oper­ate because they can cir­cum­vent national arms con­trols and inter­na­tional embar­goes” fre­quently through cor­rupt prac­tices.79

Human Traf­fick­ing

The United Nations Pro­to­col to Pre­vent, Sup­press and Pun­ish Traf­fick­ing in Per­sons defines traf­fick­ing as “the recruit­ment, trans­porta­tion, trans­fer, har­bour­ing or receipt of per­sons, by [invol­un­tary means] for the pur­pose of exploita­tion.”80 Vic­tor Malarek, author of The Natashas: Inside the New Global Sex Trade, makes clear that cor­rup­tion is the lynch­pin of the trade in women and girls. Even when coun­tries enact laws and poli­cies to pre­vent traf­fick­ing, cor­rup­tion threat­ens to ren­der them inef­fec­tive. Mohamed Mat­tar writes in the Loy­ola and Los Ange­les Inter­na­tional and Com­par­a­tive Law Review that there are indi­ca­tions that exit require­ments such as exit visas for traf­ficked vic­tims are being obtained through bribes.81 Fur­ther­more, Malarek asserts that besides for­mer Soviet states cor­rup­tion also exists in des­ti­na­tion coun­tries in which offi­cials are com­plicit in allow­ing the illicit trade. Specif­i­cally, the book draws atten­tion to cor­rup­tion among bor­der guards and police in Greece that enables the traf­fick­ing.82

Human traf­fick­ing for sex­ual and labor exploita­tion has wreaked havoc on Moldova. Moldova is an extremely sus­cep­ti­ble source coun­try because of poverty and asso­ci­ated cor­rup­tion. The breadth of the prob­lem is detailed in an arti­cle by William Finnegan in the May 2008 issue of The New Yorker. In large mea­sure due to its eco­nomic plight, over 25 per­cent of Moldova’s work­force has migrated out of the coun­try. A third of all chil­dren are miss­ing a par­ent due to migra­tion. Much of the pop­u­la­tion views emi­gra­tion as the only hope to liv­ing a bet­ter life. Such con­di­tions cre­ate a set­ting abun­dant with poten­tial vic­tims for traf­fick­ers. Finnegan asserts local author­i­ties are gen­er­ally not help­ful unless you are a traf­ficker. He quotes a local pros­e­cu­tor as say­ing “[t]he most pow­er­ful pimps in Moldova are all for­mer cops.”83

In 2008 the U.S. Depart­ment of State ini­tially ranked Moldova as a Tier 3 coun­try mean­ing that it had failed to com­ply with min­i­mum stan­dards and failed to make sig­nif­i­cant efforts to elim­i­nate human traf­fick­ing as out­lined in U.S. law.84 In Octo­ber 2008, the Pres­i­dent upgraded Moldova to Tier 2 sta­tus because it had reopened inves­ti­ga­tions into offi­cial com­plic­ity and drafted a code of con­duct for pub­lic offi­cials.85 Although less report­ing occurs on the break­away repub­lic of Transnis­tria than Moldova, the sit­u­a­tion there appears alarm­ing. Finnegan dis­cov­ered that law enforce­ment offi­cials are unco­op­er­a­tive with NGOs work­ing on behalf of traf­ficked vic­tims and cor­rup­tion deters rel­a­tives of traf­ficked vic­tims from con­tact­ing the police.86

Finnegan’s arti­cle makes clear that des­ti­na­tion coun­tries share a sig­nif­i­cant respon­si­bil­ity for human traf­fick­ing.87 Whether through delib­er­ate cor­rup­tion or turn­ing a blind eye, doc­tors, police, bor­der guards, accoun­tants, lawyers, travel agen­cies or hotels in des­ti­na­tion coun­tries enable traf­fick­ing and exac­er­bate the prob­lem in source coun­tries. Every West­ern Euro­pean coun­try and the United States and Canada are des­ti­na­tions for traf­ficked per­sons. In its report, the Depart­ment of State claims that more than half of com­mer­cial sex work­ers in France were traf­fick­ing vic­tims. The Depart­ment also rec­og­nizes Turkey as a sig­nif­i­cant des­ti­na­tion coun­try. Traf­ficked women and girls from Azer­bai­jan, Belarus, Bul­garia, Geor­gia, Kyr­gyzs­tan, Moldova, Roma­nia, Rus­sia, Turk­menistan, Ukraine, and Uzbek­istan find them­selves in Turkey. The report notes that many police in Turkey are com­plicit in traf­fick­ing. The United States is not immune, the recent increase in cor­rup­tion inves­ti­ga­tions against Cus­toms and Bor­der Pro­tec­tion offi­cers are in part for tak­ing bribes to allow the pas­sage of human beings.88

OSCE Field Mis­sions and Pre­ven­tion Efforts89

While it is nec­es­sary to sound the alarm and call atten­tion to corruption’s pres­ence across the three OSCE dimen­sions, it is equally nec­es­sary to assess OSCE and non-OSCE efforts in the region to counter cor­rup­tion. The last two decades have seen a con­sen­sus at the inter­na­tional level con­cern­ing norms and nec­es­sary anti-corruption action at the national level. This con­sen­sus is man­i­fested in the United Nations Con­ven­tion against Cor­rup­tion (UNCAC). Despite inter­na­tional achieve­ments, some would say that national level progress in decreas­ing cor­rup­tion is at a stand­still or being rolled back in some OSCE par­tic­i­pat­ing States. Broadly con­ceived, imple­men­ta­tion is stalling. To under­stand why it is help­ful to think of imple­men­ta­tion occur­ring in two phases. The first phase con­sists of the pass­ing of national laws imple­ment­ing inter­na­tional com­mit­ments. The sec­ond phase, which is just as impor­tant, con­sists of insti­tu­tions with inde­pen­dent and trained per­sons com­ply­ing with and impar­tially exe­cut­ing the anti-corruption laws. This sec­ond phase has proven most prob­lem­atic for many coun­tries because the actions required to build capac­ity require a long term com­mit­ment and the ded­i­ca­tion of resources and do not often attract media atten­tion. Addi­tion­ally, the notion that the nature of cor­rup­tion dif­fers from coun­try to coun­try should be embraced.90

The Office of the Coor­di­na­tor of OSCE Eco­nomic and Envi­ron­men­tal Activ­i­ties (OCEEA) leads OSCE efforts in com­bat­ing cor­rup­tion. Through field mis­sions, hand­books, and coor­di­na­tion with other inter­na­tional orga­ni­za­tions, the OCEEA has pro­moted imple­men­ta­tion of inter­na­tional anti-corruption agree­ments, effi­cient man­age­ment of pub­lic resources and imple­men­ta­tion of the Arhus Con­ven­tion allow­ing greater access to infor­ma­tion on the envi­ron­ment. Work to imple­ment the UNCAC has paid off, with only thir­teen OSCE par­tic­i­pat­ing States not hav­ing rat­i­fied the con­ven­tion; and of those thir­teen, only six have not yet signed the con­ven­tion. How­ever, this under­scores the real­ity that rat­i­fi­ca­tion does not equate to true imple­men­ta­tion of and com­pli­ance with the con­ven­tion. This report cites cor­rupt activ­i­ties within many OSCE par­tic­i­pat­ing States that have rat­i­fied the con­ven­tion. With respect to this cor­rupt activ­ity, OSCE field mis­sions can be effec­tive insti­tu­tions for pro­mot­ing sub­stan­tive com­pli­ance with the convention.

An offi­cial with one inter­na­tional orga­ni­za­tion stressed that the hard part in decreas­ing cor­rup­tion is the tak­ing of pre­ven­ta­tive mea­sures. OSCE field mis­sions rou­tinely under­take and pro­mote some of these mea­sures which include iden­ti­fy­ing and resolv­ing con­flicts, train­ing gov­ern­ment offi­cials, and engag­ing civil soci­ety. OSCE field mis­sions com­monly pro­vide anti-corruption assis­tance to local gov­ern­ments. How­ever, in a man­ner befit­ting the nature of the prob­lem, field mis­sions con­duct dis­tinc­tive work appro­pri­ate to their assigned coun­try. For exam­ple, in Geor­gia the mis­sion assisted, before being closed down this year, in estab­lish­ing an Inspec­tor General’s office to review the finances of gov­ern­ment min­istries. Advo­cacy and legal advice cen­ters are oper­ated by the mis­sion in Azer­bai­jan to pro­vide legal advice on com­plaints and to edu­cate the pub­lic and gov­ern­ment author­i­ties. In 2008, the cen­ters in Azer­bai­jan pro­vided assis­tance in response to 2,500 com­plaints. Addi­tion­ally, mobile work­shops reached 2,360 peo­ple with aware­ness cam­paigns and fre­quently pro­vided on the spot legal advice.91Sim­i­lar cen­ters pro­vide aid in Arme­nia. The use of exist­ing advo­cacy and legal advice cen­ters is not high among peo­ple in Kaza­khstan. This lower use may exem­plify the ben­e­fit of an approach that care­fully addresses the needs of peo­ple and nature of cor­rup­tion in a given country.

Cen­ters that tar­get audi­ences other than the gen­eral pub­lic have been suc­cess­ful. In Tajik­istan, Resource Cen­ters for Small and Agribusi­ness and Cen­ters for Pro­mo­tion of Cross-Border Trade report­edly draw many patrons. It has also been reported that due to these cen­ters, busi­ness­peo­ple have resisted ille­gal gov­ern­ment inspec­tions. Good Gov­er­nance Cen­ters in Geor­gia that assisted munic­i­pal­i­ties received high marks, and in addi­tion to the gov­ern­ment, were some­times used by the gen­eral pub­lic. Pre­ven­tion efforts directed at gov­ern­ment employ­ees at all lev­els are essen­tial. Sec­ond round GRECO eval­u­a­tion reports released in 2007 and 2008 iden­ti­fied a num­ber of coun­tries — some with field mis­sions, such as Azer­bai­jan, and oth­ers with­out, such as Greece — that had not taken appro­pri­ate steps to pro­tect gov­ern­ment employ­ees who are whistle­blow­ers. In the case of Greece, suf­fi­cient pro­tec­tions for career advance­ment were not in place and employ­ees typ­i­cally could only report cor­rup­tion to their imme­di­ate super­vi­sor.92 Because the follow-on Adden­dum to the Com­pli­ance Reports are not pub­lic, it is unclear if ade­quate pro­tec­tions and mea­sures to assist report­ing has improved. Edu­ca­tion cou­pled with pre­ven­ta­tive pro­grams that build upon train­ing are ini­tia­tives that field mis­sions are well suited to pro­vide through the var­i­ous types of centers.

The OSCE mis­sion in Ukraine has ini­ti­ated a public-private dia­logue that addresses account­abil­ity in local gov­ern­ment. Fos­ter­ing a dia­logue between gov­ern­ment, pri­vate sec­tor, and civil soci­ety is impor­tant because in many coun­tries these groups mis­trust one another. In Geor­gia, the OSCE is sup­port­ing the efforts of Trans­parency Inter­na­tional to ensure that a broad range of voices from civil soci­ety and the busi­ness com­mu­nity are heard by the Task Force on Fight­ing Cor­rup­tion as it devel­ops a new Anti-Corruption Strat­egy and Action Plan. These ini­tia­tives rec­og­nize that not only will imple­men­ta­tion vary from coun­try to coun­try, but that imple­men­ta­tion mea­sures will dif­fer at dif­fer­ent lev­els of gov­ern­ment and require input from all facets of soci­ety. Field mis­sions are con­duct­ing vary­ing efforts to pro­mote a sim­i­lar dia­logue between gov­ern­ment and civil soci­ety in Tajik­istan, Kaza­khstan, and Azerbaijan.

Recent meet­ings between Helsinki Com­mis­sion staff and mem­bers of civil soci­ety and offi­cials from inter­na­tional orga­ni­za­tions sug­gest it may be mis­guided to keep a pri­mary focus on national level author­i­ties pros­e­cut­ing alleged cor­rupt acts. One NGO mem­ber recently remarked that there are enough national level laws and that what is needed is impar­tial enforce­ment and an unbi­ased judi­ciary. InCurb­ing Cor­rup­tion: Toward a Model for Build­ing National Integrity, Daniel Kauf­mann referred to this as the “Tackling-the-symptom bias” which “instead of iden­ti­fy­ing the root cause, involves think­ing that the solu­tion is to catch and jail a tar­get num­ber of crim­i­nals … or to pass another anti-corruption law in the coun­try.”93 Kauf­mann describes what may be the best case sce­nario. The worst case sce­nario expressed by both mem­bers of the NGO com­mu­nity and inter­na­tional orga­ni­za­tions to the Helsinki Com­mis­sion is that pros­e­cu­tion is used to tar­get polit­i­cal oppo­si­tion and journalists.

Ampli­fy­ing the prob­lem are enforce­ment agen­cies that may lack the capac­ity to con­duct an even-handed inves­ti­ga­tion. An offi­cial from Bosnia-Herzegovnia recently said that the coun­try “has adopted three strate­gic plans and rat­i­fied numer­ous inter­na­tional con­ven­tions on cor­rup­tion,” but there is no imple­men­ta­tion and the com­mit­ments go unmet.94 Pub­lic GRECO com­pli­ance reports from its sec­ond round of eval­u­a­tions con­clude that Alba­nia, Arme­nia, Azer­bai­jan, and Roma­nia have only par­tially imple­mented mea­sures to fully train inves­ti­ga­tors, pros­e­cu­tors and judges to han­dle cor­rup­tion cases.95Again, because the follow-on adden­dum to the reports are not pub­lic it is unclear if train­ing has improved in these par­tic­i­pat­ing States. In 2005, the Pres­i­dent of Kyr­gyzs­tan signed a decree estab­lish­ing the National Agency of the Kyr­gyz Repub­lic for Pre­vent­ing Cor­rup­tion. Report­edly, in that first year, the agency opted not to put into prac­tice a num­ber of rec­om­men­da­tions of an out­side expert spon­sored by an inter­na­tional orga­ni­za­tion to pro­vide sup­port. Later, the agency dis­agreed with inter­na­tional orga­ni­za­tions on the use of funds offered by those orga­ni­za­tions. Report­edly, $300,000 were made avail­able for capac­ity build­ing, but the lead­er­ship of the agency was adamant that the money be used to increase salaries. Today the agency has seven com­put­ers for 49 staff and no Inter­net access, Helsinki Com­mis­sion staff was told.

Con­cerns also exist that a strong par­lia­men­tary immu­nity is a neces­sity when many gov­ern­ments are focused on pros­e­cu­tion of polit­i­cal oppo­nents. The NGO mem­ber added that this pros­e­cu­tion is often tar­geted at politi­cians in a minor­ity party high­light­ing the con­tin­ued need for par­lia­men­tary immu­nity laws even if they allow some offend­ers and wrong­do­ers to evade pros­e­cu­tion. This view of tar­geted pros­e­cu­tions has been echoed by work­ers with inter­na­tional orga­ni­za­tions that have com­mu­ni­cated with the Helsinki Com­mis­sion on this sub­ject. With the above in mind, it should be noted that the res­o­lu­tion authored by Chair­man Cardin, and adopted by the Par­lia­men­tary Assem­bly in 2006, incor­po­rates pre­ven­ta­tive mea­sures by call­ing for the pub­lish­ing of “rig­or­ous stan­dards of ethics and offi­cial con­duct” and estab­lish­ing “effi­cient mech­a­nisms for pub­lic dis­clo­sure of finan­cial infor­ma­tion and poten­tial con­flicts of inter­est.”96 The goals set out in that res­o­lu­tion con­sti­tute a start­ing point that must be rein­forced with other mea­sures that over time build a com­mon ethos of pub­lic integrity and ser­vice through­out government.

It should also be noted that the OSCE has worked in tan­dem with the Global Orga­ni­za­tion of Par­lia­men­tar­i­ans Against Cor­rup­tion (GOPAC) in par­tic­i­pat­ing States such as Kyr­gyzs­tan to train par­lia­men­tar­i­ans in roles of over­sight and bud­get con­trol. Finally, Chair­man Cardin’s res­o­lu­tion rec­om­mend­ing that the Office of the Coor­di­na­tor of OSCE Eco­nomic and Envi­ron­men­tal Activ­i­ties (OCEEA) develop best prac­tices for par­lia­men­tar­i­ans to use echoed the 2005 OSCE PA’s Wash­ing­ton Dec­la­ra­tion. That doc­u­ment praised the work of GOPAC and rec­om­mended that the OSCE “with other par­lia­men­tary asso­ci­a­tions and [GOPAC develop] a pro­gramme of peer sup­port, edu­ca­tion and anti-corruption ini­tia­tives.”97 The OSCE has also worked with GOPAC in run­ning work­shops and sup­port­ing local GOPAC chap­ters par­tic­u­larly in South­east Europe. This is an effort that should receive con­tin­ued sup­port. The impor­tance of capac­ity build­ing within par­lia­ments can­not be for­got­ten when con­fronting corruption.

Con­clu­sion: The Related Nature of Cor­rup­tion Across the OSCE Dimensions

No account of cor­rup­tion in any dimen­sion can be viewed in iso­la­tion. If cor­rup­tion thwarts a com­pet­i­tive busi­ness envi­ron­ment or is endemic among pub­lic ser­vants then the con­di­tions are set for an under­world of crime to flour­ish. Once seedlings of graft take root, they grow rapidly. Soon the insti­tu­tions of democ­racy that require the nutri­ents of trans­parency and account­abil­ity are choked by what peo­ple may have once con­sid­ered the harm­less tak­ing of small amounts of money or prop­erty. In the aggre­gate, petty cor­rup­tion embold­ens grand cor­rup­tion and vice versa. Even­tu­ally, a gov­ern­ment can­not per­form the basic tasks expected of it. It can­not defend indi­vid­ual rights enshrined in national law, pro­tect the engage­ment of com­merce, or pro­vide for the secu­rity of its peo­ple. In many instances, elites restrict polit­i­cal access and limit eco­nomic com­pe­ti­tion. This is what Larry Dia­mond refers to as a “preda­tory state.” More­over, Dia­mond asserts when peo­ple no longer advance “through pro­duc­tive activ­ity and hon­est risk tak­ing” but only through oper­at­ing out­side the law, the preda­tory state becomes a “preda­tory soci­ety.”98 While observers may dis­agree whether some OSCE par­tic­i­pat­ing States have reached such an extreme point, all states are always some­where on the con­tin­uum between a func­tional elec­toral democ­racy and a preda­tory society.

To com­bat cor­rup­tion the OSCE, through exist­ing field mis­sion man­dates, should con­tinue to focus ade­quate atten­tion to build­ing capac­ity to iden­tify and address cor­rup­tion and pro­mo­tion of a cul­ture of integrity and anti-corruption among civil ser­vants and civil soci­ety. All par­tic­i­pat­ing States should imple­ment com­mit­ments under inter­na­tional treaties such as the UNCAC. How­ever, rat­i­fy­ing the UNCAC and pass­ing national laws tar­get­ing cor­rup­tion is not enough. While pros­e­cu­tions serve a deter­rence func­tion, they must be bal­anced by rel­a­tively low pro­file well-planned pre­ven­tion pro­grams that are sus­tained by suf­fi­cient resources. In order to iden­tify and address the cir­cum­stances that fos­ter cor­rup­tion, col­lab­o­ra­tion must increase between gov­ern­ments, NGOs, cor­po­ra­tions and small and medium size enter­prises to develop spe­cific strate­gies. OSCE coun­tries should con­sider sup­port­ing neigh­bors by build­ing upon the model of field mis­sions. Cor­rup­tion is a prob­lem not likely to end soon, but is an area where progress may be made if small suc­cesses are rein­forced with ade­quate resources.

Work is needed to live up to the ideals recorded in the Par­lia­men­tary Assembly’s Astana Dec­la­ra­tion and the ear­lier Istan­bul Dec­la­ra­tion of the 1999 OSCE Sum­mit, in which OSCE par­tic­i­pat­ing States rec­og­nized cor­rup­tion as a threat to “shared val­ues” and pledged “to strengthen their efforts to com­bat cor­rup­tion and the con­di­tions that fos­ter it.” The OSCE coun­tries need to muster the polit­i­cal will, indi­vid­u­ally and col­lec­tively, to con­duct a smarter fight against cor­rup­tion – a threat to secu­rity, prop­erty, and fun­da­men­tal free­doms through­out the expan­sive OSCE region.


1 Joanna Lil­lis, “Kaza­khstan: Nazarbayev Hints that Democ­ra­ti­za­tion will Take Back Seat on OSCE Agenda,” Eura­sia Insight, July 9, 2008, (accessed June 1, 2009)

2 2008 Cor­rup­tion Per­cep­tions Index: Per­sis­tently high cor­rup­tion in low-income coun­tries amounts to an “ongo­ing human­i­tar­ian dis­as­ter” (Berlin: Trans­parency Inter­na­tional, 2008).

3 Michael John­ston, Syn­dromes of Cor­rup­tion: Wealth, Power, and Democ­racy (New York: Cam­bridge, 2005), 19 – 21.

4 OSCE Par­lia­men­tary Assem­bly, Astana Dec­la­ra­tion of the OSCE Par­lia­men­tary Assem­bly and Res­o­lu­tions Adopted at the Sev­en­teenth Annual Ses­sion, 2008, 7, 28, and 45.

5 Larry Dia­mond, “The Demo­c­ra­tic Roll­back: The Resur­gence of the Preda­tory State,” For­eign Affairs87, no. 2 (2008): 39, and 42 – 44.

6 The par­tic­i­pat­ing States com­mit­ted to sup­port and advance these rights and free­doms, in addi­tion to oth­ers, in the 1990 Copen­hagen Doc­u­ment. “Doc­u­ment of the Copen­hagen Meet­ing of the Con­fer­ence on the Human Dimen­sion of the CSCE,” June 29, 1990.

7 United States Agency for Inter­na­tional Devel­op­ment, Par­lia­men­tary Immu­nity Brief: A Sum­mary of Case Stud­ies of Arme­nia, Ukraine and Guatemala, August 2006, 1 – 2.

8 Car­men Lane, Par­lia­men­tary Immu­nity and Democ­racy Devel­op­ment (Wash­ing­ton D.C.: DAI, 2007) 1 – 3.

9 United States Agency for Inter­na­tional Devel­op­ment, Cor­rup­tion Assess­ment Ukraine, Final Report Feb­ru­ary, 2006, 49

10 Gayane Mkrtchyan, “Not Above the Law?: Par­lia­ment Lifts Immu­nity, MP Hakobyan Must Face Pros­e­cu­tion,”, Octo­ber 13, 2006,

11 Cen­ter for the Study of Democ­racy, Effec­tive Poli­cies tar­get­ing the Cor­rup­tion – Orga­nized crime Nexus in Bul­garia: Clos­ing Down Duty-Free Out­lets, Brief, Decem­ber 2007, 3.

12 Ibid., 5.

13 Ibid., 3.

14 Elena Koinova, “Changes to Duty-Free Trade Act passed in Par­lia­ment,” The Sofia Echo, March 28, 2008,

15 Cen­ter for the Study of Democ­racy, Effec­tive Poli­cies tar­get­ing the Cor­rup­tion, 3.

16 Com­mis­sion on Secu­rity and Coop­er­a­tion in Europe, Energy and Democ­racy: Oil and Water?, 108th Cong., 2nd sess., 2007 (Pre­pared state­ment of Sen­a­tor Ben­jamin L. Cardin, not unof­fi­cial tran­script),,B&ContentRecordType=H&CFID=13299032&CFTOKEN=93551824(accessed June 22, 2009)

17 Com­mis­sion on Secu­rity and Coop­er­a­tion in Europe, Promises to Keep: Kazakhstan’s 2010 OSCE Chair­man­ship, 110th Cong., 2nd sess., 2008, (Pre­pared state­ment of Martha Olcott not unof­fi­cial tran­script),,B&ContentRecordType=H&CFID=13299032&CFTOKEN=93551824(accessed June 8, 2009).

18 Trans­parency Inter­na­tional, 2009 Global Cor­rup­tion Barom­e­ter Report, (Berlin: May, 2007) 32.

19 GfK Research, Cor­rup­tion Cli­mate in Europe, August 9, 2006, avail­able at (accessed June 17, 2009).

20 Dan Bilef­sky, “Med­ical Care in Roma­nia Comes at an Extra Cost,” The New York Times, March 9, 2009.

21 Global Integrity, Global Integrity Score­card: Latvia, 2007, 1 – 2.

22 Kon­stan­tin Pashev, Cen­ter for the Study of Democ­racy, Cor­rup­tion in the Health­care Sec­tor in Bul­garia (Sofia, Bul­garia: 2007) 17.

23 Ibid, 17.

24 Ibid, 35.

25 Vladimir Voinovich, “Drunk on Cor­rup­tion,” Daily Times, Jan­u­ary 3, 2003, (accessed June 18, 2009).

26 Michael John­ston, “Poverty and Cor­rup­tion,” Forbes, Jan­u­ary 22, 2009.

27 U.S. Depart­ment of State, 2008 Human Rights Report: Uzbek­istan, Feb­ru­ary 25, 2009,

28 U.S. Depart­ment of State, 2008 Human Rights Report: Azer­bai­jan, Feb­ru­ary 25, 2009,

29 U.S. Depart­ment of State, 2008 Human Rights Report: Poland, Feb­ru­ary 25, 2009,

30 Com­mis­sion on Secu­rity and Coop­er­a­tion in Europe, The Romani Minor­ity in Rus­sia, 108th Cong., 2nd sess., 2004, 8 (Pre­pared state­ment of Leonid Raih­man found in offi­cial transcript).

31 U.S. Depart­ment of State, 2007 Coun­try Reports on Human Rights Prac­tices: Rus­sia, March 11, 2008,

32 The account of how Her­mitage Cap­i­tal was seized cor­ruptly through a series of non-transparent pro­ceed­ings is told in the sec­tion address­ing the Eco­nomic Dimension.

33 Jami­son Fire­stone, con­ver­sa­tion with Helsinki Com­mis­sion staff, April 14, 2009.

34 Carl Mor­tished, “Krem­lin sack­ing linked to Sergei Mag­nit­sky case,” TimesOn­line, Decem­ber 16, 2009, (accessed Decem­ber 22, 2009).

35 Lynda Edwards, “Rus­sia Claws at the Rule of Law,” ABA Jour­nal 95 (2009): 41.

36 Ibid., 42.

37 Pow­ell v. Alabama, 287 U.S. 45, 69 (1932).

38 The Orga­ni­za­tion for Secu­rity and Coop­er­a­tion in Europe, Best-Practice Guide for a Pos­i­tive Busi­ness and Invest­ment Cli­mate, 2006, 30.

39 Ibid.

40 OSCEBest-Practice Guide 30 – 31.

41 Mar­ian L. Tupy, CATO Insti­tute, The Rise of Pop­ulist Par­ties in Cen­tral Europe: Big Gov­ern­ment, Cor­rup­tion, and the Threat to Lib­er­al­ism, Novem­ber 8, 2006, 14.

42 The World Bank, Doing Busi­ness 2009: Coun­try Pro­file for Russ­ian Fed­er­a­tion, 2008, 12.

43 J. Welby Lea­man, “It’s Not Always Nice to Play Nice: Col­lu­sion, Com­pe­ti­tion, and Devel­op­ment,”Pacific McGe­orge Global Busi­ness and Devel­op­ment Law Jour­nal 20, no. 2 (2007): 291.

44 Tupy, Rise of Pop­ulist Par­ties, 9.

45 Lea­man, “It’s Not Always Nice to Play Nice,” 291.

46 CSCEEnergy and Democ­racy, 108th Cong., 2nd sess., 2007 (Pre­pared state­ment of Simon Tay­lor not unof­fi­cial tran­script) (accessed June 12, 2009).

47 Ibid.

48 Energy Inde­pen­dence and Secu­rity Act of 2007, Pub­lic Law 110 – 140, 110th Cong., 1st sess. (Decem­ber 19, 2007).

49 .S. Depart­ment of State, Report on Progress Made in Pro­mot­ing Trans­parency in Extrac­tive Indus­tries Resource Pay­ments, June 24, 2009. On file with United States House of Rep­re­sen­ta­tives Com­mit­tee on For­eign Affairs,

50 Par­lia­men­tary Assem­bly, Astana Dec­la­ra­tion, 28.

51 Mar­gareta Drze­niek Hanouz and Thierry Geiger, eds., World Eco­nomic Forum, The Ukraine Com­pet­i­tive­ness Report: Towards Sus­tained Growth and Pros­per­ity, 2008, 56.

52 Hanouz and Geiger, eds., The Ukraine Com­pet­i­tive­ness Report, 56.

53 Michael Porter and Klaus Schwab eds., World Eco­nomic Forum, The Global Com­pet­i­tive­ness Report 2008 – 2009, 385.

54 Ibid., 242.

55 William Brow­der, con­ver­sa­tion with Helsinki Com­mis­sion staff, April 14, 2009. William Brow­der did tes­tify at a Helsinki Com­mis­sion hear­ing just as this report was being com­pleted in June 2009. Dur­ing his tes­ti­mony he pro­vided a web­site ( that pro­vided a price list for a range of activ­i­ties attack­ing a cor­po­rate entity in Rus­sia from eras­ing a company’s reg­is­tra­tion data to a com­plete takeover.

56 Jon Swaine, “BAE Sys­tems exec­u­tive ‘ques­tioned over alleged bribery,’” The Tele­graph, Octo­ber 23, 2008, (accessed June 15, 2009).

57 Orga­ni­za­tions for Eco­nomic Co-operating and Devel­op­ment, United King­dom: Report on the Appli­ca­tion of the Con­ven­tion on Com­bat­ing Bribery of For­eign Pub­lic Offi­cials in Inter­na­tional Busi­ness Trans­ac­tions and the 1997 Rec­om­men­da­tion on Com­bat­ing Bribery in Inter­na­tional busi­ness Trans­ac­tions, Octo­ber 17 2008, 4.

58 Ben W. Heine­man, Jr., and Fritz Heimann, “The Long War Against Cor­rup­tion,” For­eign Affairs 85, no. 3 (May/June 2006), 77, 82.

59 Con­trol Risks, Cor­rup­tion, Com­pli­ance and Change: Respond­ing to Greater Scrutiny in Chal­leng­ing Times (Lon­don: 2009) 3.

60 15 U.S.C. §§ 78dd-1.

61 15 U.S.C. § 78m(b)(2)(A).

62 15 U.S.C. § 78m(b)(2)(B).

63 Gail P. Gra­noff and Brian Mich, 2008 FCPA Review, Jan­u­ary 28, 2009 (Pre­sen­ta­tion at Inter­na­tional Qual­ity & Pro­duc­tiv­ity Cen­ter FCPA Conference).

64 Dionne Searcey, “U.S. Cracks Down on Cor­po­rate Bribes,” The Wall Street Jour­nal, May 26, 2009.

65 United States v. Kay, 359 F.3d 738, 755 (5th Cir. 2004).

66 United States v. Kozeny, 582 F. Supp 2d 535, 539 (S.D.N.Y 2008).

67 Cary O’Reilly and Karin Matussek, “Siemens to Pay $1.6 Bil­lion to Set­tle Bribery Cases,” The Wash­ing­ton Post, Decem­ber 16, 2008.

68 Vic­tor Malarek, The Natashas: Inside the New Global Sex Trade (New York: Arcade Pub­lish­ing, 2003), 112 – 113.

69 Heine­man and Heimann, “The Long War,” 79.

70 Voinovich, “Drunk on Corruption”.

71 Gra­ham H. Tur­biville, Jr., “Cor­rup­tion, Crime and Mur­der Under­mine Counter-terrorist Efforts,”Crime & Jus­tice Inter­na­tional 21, no. 87 (July/August 2005), 8.

72 Kim­berly Thachuk, “Cor­rup­tion and Inter­na­tional Secu­rity,” SAIS Review XXV, no. 1 (Winter-Spring 2005), 147.

73 U.S. Depart­ment of State Coun­try Reports on Ter­ror­ism 2008, Europe and Eura­sia Overview, April 2009.

74 Ran­dal Archi­bold and Andrew Becker, “Bor­der Agents, Lured by the Other Side,” The New York Times, May 27, 2008.

75 Thachuk, “Cor­rup­tion,” 147.

76 Parmy Olson, “Europe’s Crime Cap­i­tals,” Forbes, July 15, 2008,

77 Com­mis­sion on Secu­rity and Coop­er­a­tion in Europe, Arm­ing Rogue Regimes: The Role of OSCE Par­tic­i­pat­ing States, 108th Cong., 1st sess., 2003, 40 (Pre­pared state­ment of Roman Kupchin­sky found in offi­cial transcript).

78 Con­trol Arms, UN Arms Embar­goes: An Overview of the Last Ten Years, Brief­ing Note, March 16, 2006, 2.

79 Rachel Stohl, “Fight­ing the Illicit Traf­fick­ing of Small Arms,” SAIS Review (Winter-Spring 2005), 64.

80 “Pro­to­col to Pre­vent, Sup­press, and Pun­ish Traf­fick­ing in Per­sons, Espe­cially Women and Chil­dren, Sup­ple­ment­ing the United Nations Con­ven­tion Against Transna­tional Orga­nized Crime,” Arti­cle 3 (a), United Nations, (2000).

81 Mohamed Y. Mat­tar, “State Respon­si­bil­i­ties in Com­bat­ing Traf­fick­ing in Per­sons in Cen­tral Asia,”Loy­ola and Los Ange­les Inter­na­tional and Com­par­a­tive Law Review 27 (Spring 2005), 161 (see foot­note 76).

82 Malarek, The Natashas, 140 – 141.

83 William Finnegan, “The Counter Traf­fick­ers: Res­cu­ing Vic­tims of the Global Sex Trade,” The New Yorker, 2, 6, 7 – 8, (accessed June 8, 2009).

84 U.S. Depart­ment of State, Traf­fick­ing in Per­sons Report, June 2008, 184.

85 U.S. Depart­ment of State Senior Coor­di­na­tor for Pub­lic Out­reach, Office to Mon­i­tor and Com­bat Traf­fick­ing in Per­sons, email to author, Decem­ber 10, 2008; Embassy of the United States, Moldova, “Moldova Moved up to Tier 2 in Traf­fick­ing in Per­sons,” press release, Octo­ber 10, 2008,

86 Finnegan, “The Counter Traf­fick­ers,” 10.

87 Ibid., 9, 11.

88 Rick Jervis, “Arrests of Bor­der Agents on The Rise,” USA Today, April 23, 2009.

89 This sec­tion of report is based upon meet­ings and dis­cus­sions with a vari­ety of inter­na­tional gov­ern­men­tal orga­ni­za­tions and non­govern­men­tal orga­ni­za­tions who to the extent pos­si­ble are not iden­ti­fied. Any opin­ions expressed or con­clu­sions drawn do not nec­es­sar­ily reflect the offi­cial views of any of these organizations.

90 John­son, Syn­dromes of Cor­rup­tion, 186.

91 Office of the Co-ordinator of OSCE Eco­nomic and Envi­ron­men­tal Activ­i­ties, March 25, 2009, email to author pro­vid­ing num­bers of com­plaints and peo­ple contacted.

92 Group of States against Cor­rup­tion, Sec­ond Eval­u­a­tion Round: Com­pli­ance Report on Greece, Feb­ru­ary 15, 2008, 9.

93 Daniel Kauf­mann, “Anti­cor­rup­tion Strate­gies: Start­ing Afresh? Uncon­ven­tional Lessons from Com­par­a­tive Analy­sis,” in Curb­ing Cor­rup­tion: Towards a Model for Build­ing National Integrity, ed. Rick Stapen­hurst and Sahr J. Kpun­deh (Wash­ing­ton, D.C.: World Bank Pub­li­ca­tions, 1999), 37.

94 Miroslav Ajder, “Cor­rup­tion Claims Hold Back Bosnia: Alle­ga­tions of Fraud in Gov­ern­ment Con­tracts and Pri­va­ti­za­tion are Pit­ting the Gov­ern­ment Against Mon­i­tors and Scar­ing off For­eign Investors,” Busi­ness­Week, March 17, 2009.

95 These com­pli­ance reports may be found at the GRECO web page, (accessed June 15, 2009).

96 Res­o­lu­tion on Lim­it­ing Immu­nity for Par­lia­men­tar­i­ans in order to Strengthen Good Gov­er­nance, Pub­lic Integrity and Rule of Law in the OSCE Region, OSCE Par­lia­men­tary Assem­bly, 15th sess., Brus­sels Dec­la­ra­tion (July 7, 2006).

97 OSCE Par­lia­men­tary Assem­bly, Wash­ing­ton, DC Dec­la­ra­tion of the OSCE Par­lia­men­tary Assem­bly and Res­o­lu­tions Adopted at the Four­teenth Annual Ses­sion, 2005, 35.

98 Dia­mond, “The Demo­c­ra­tic Roll­back,” 43.


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