CORRUPTION: A PROBLEM THAT SPANS THE OSCE REGION AND DIMENSIONS

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
www.csce.gov

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.

Infra­struc­ture

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 120^th out of 134 coun­tries ranked by the World Eco­nom­ic Forum in qual­i­ty of roads. Ukraine is not alone, Moldo­va ranked 133^rd 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.

Ter­ror­ism

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.

Foot­notes

¹ Joan­na Lil­lis, “Kaza­khstan: Nazarbayev Hints that Democ­ra­ti­za­tion will Take Back Seat on OSCE Agen­da,” Eura­sia Insight, July 9, 2008,http://www.eurasianet.org/departments/insight/articles/eav070908.shtml (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,” ArmeniaNow.com, Octo­ber 13, 2006, http://www.armenianow.com/?action=viewArticle&AID=1768

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, http://sofiaecho.com/2008/03/21/659426_changes-to-duty-free-trade-act-passed-in-parliament

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?, 108^th Cong., 2^nd sess., 2007 (Pre­pared state­ment of Sen­a­tor Ben­jamin L. Cardin, not unof­fi­cial tran­script),http://csce.gov/index.cfm?FuseAction=ContentRecords.ViewDetail&ContentRecord_id=392&Region_id=0&Issue_id=0&ContentType=H,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, 110^th Cong., 2^nd sess., 2008, (Pre­pared state­ment of Martha Olcott not unof­fi­cial tran­script), http://csce.gov/index.cfm?FuseAction=ContentRecords.ViewDetail&ContentRecord_id=434&Region_id=0&Issue_id=0&ContentType=H,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 athttp://www.gfk.hr/press1_en/corruption2.htm (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,http://www.dailytimes.com.pk/default.asp?page=story_3‑1 – 2003_pg3_4 (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,http://www.state.gov/g/drl/rls/hrrpt/2008/sca/119143.htm.

²⁸ U.S. Depart­ment of State, 2008 Human Rights Report: Azer­bai­jan, Feb­ru­ary 25, 2009,http://www.state.gov/g/drl/rls/hrrpt/2008/eur/119068.htm.

²⁹ U.S. Depart­ment of State, 2008 Human Rights Report: Poland, Feb­ru­ary 25, 2009,http://www.state.gov/g/drl/rls/hrrpt/2008/eur/119098.htm.

³⁰ Com­mis­sion on Secu­ri­ty and Coop­er­a­tion in Europe, The Romani Minor­i­ty in Rus­sia, 108^th Cong., 2^nd 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, http://www.state.gov/g/drl/rls/hrrpt/2007/100581.htm.

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,http://business.timesonline.co.uk/tol/business/industry_sectors/banking_and_finance/article6957931.ece (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 OSCE, Best-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 CSCE, Ener­gy and Democ­ra­cy, 108^th Cong., 2^nd 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, 110^th Cong., 1^st 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 (http://www.compromat.ru/main/vragi/raderykak.htm) 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, http://www.telegraph.co.uk/finance/newsbysector/epic/badot/3245563/BAE-Systems-executive-questioned-over-alleged-European-bribery.html (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.3^d 738, 755 (5^th Cir. 2004).

⁶⁶ Unit­ed States v. Kozeny, 582 F. Supp 2^d 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,http://www.forbes.com/2008/07/15/europe-capitals-crime-forbeslife-cx_po_0715crime.html

⁷⁷ Com­mis­sion on Secu­ri­ty and Coop­er­a­tion in Europe, Arm­ing Rogue Regimes: The Role of OSCE Par­tic­i­pat­ing States, 108^th Cong., 1^st 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, http://www.newyorker.com/reporting/2008/05/05/080505fa_fact_finnegan (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,http://moldova.usembassy.gov/pr102908.html.

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,http://www.coe.int/t/dghl/monitoring/greco/evaluations/round2/reports(round2)_en.asp (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, 15^th 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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