1. Denmark – a society with high social capital – what can be learned ?

2. Knut Gotfredsen Now: chairman of the board TI Denmark Previously: IT auditor, 25 years as partner in Deloitte, assisted in defining IT audit standards, responsible for internal QA EMEA i 8 år.

3. Brief overview * Excl. Greenland 2.166.000 sq-km WhatDenmarkRepublic of Korea Source Area km244.000 *100.000Wikipedia CultureOldOlderMe Population5,5 M50,2MWikipedia Life expectancy79  / 83  79  / 86  Worldlifeexpec- tancy.com CPI score (of 100)/place91 / # 156 / # 37TI CPI 2015 RTI score (of 150)/place64 / #8187 / # 56Rti-rating.org Happiness score/place7.526 / # 15.835 / # 58Unsdsn.org Human development index 0.900 / #100.891 / #15Undp.org Freedom of the Press12 / #633 / # 67Freedomhouse

4. About Transparency International Global NGO based in Berlin Started 1993 by people from World Bank Objective: to crerate awareness about ”korruption” (until then taboo) Today TI is recognized as a credible global partner We make respected publications on corruption, incl.: Corruption Perception Index – CPI Global Corruption Barometer – GCB Bribe Payers Index – BPI Anti-corruption methodologies: National Integrity System Study About 100 national chapters, e..g. TI Danmark Quote from Kofi Annan: If corruption is a disease, then Transparency International is a part of the treatment.

5. Briefly about TI Denmark National ”chapter” of global NGO TI Created in 1995 Run by a board of unpaid volunteers A small secretariat with salaried staff, currently ½ FTE App. 100 personal members App. 20 corporate members Develop own projects, e.g. Transparency in Corporate Reporting and promote global research New focus areas: Local government and sports

6. What is corruption? The brief definition is: The abuse of trust, power or position for improper gain.

7. Types of corruption Several types Bribery Conflict of interest Extortion Fraud Nepotism Excessive gifts Matchfixing Facilitation payments Political abuse of power

8. The unholy trinity: Corruption – organized crime - terrorism Corruption often works with (other) organized crime to cement a corrupt regime. We call this a Vertically Integrated Criminal Network. When you are corrupt, you are also willing to assist terrorists, possibly for a higher fee than normal. When you are a criminal, you are willing to use terrorists to assist in your crimes, e.g. drug smuggling Basically, terrorists are simply a different type of criminals. But they all use the same type of structure to obscure funds and sources of funds.

9. Corruption Perception Index Meta-index for assessments from various external think tanks etc., incl. World Bank, World Economic forum Index 1-100 (100 is perfect) country by country Expression of the perception of public sector corruption as seen from outsiders Denmark has consistently been in top-5 Denmark currently #1 (91 points) Worst EU country is Bulgaria #69 (41 points) Worst countries globally are North Korea and Somalia #167 (8 points) Good visual presentation with color

10. Corruption Perception Index -components Rank CPI2015 Country World Bank CPIA World Economic Forum EOS Bertelsmann Foundation TI IMD World Competitiveness Yearbook Bertelsmann Foundation SGI World Justice Project ROL PRS International Country Risk Guide Economist Intelligence Unit IHS Global Insight PERC Asia Risk Guide Number of Sources Minimum Maximum 191Denmark899697889888837 98 3756South Korea5258517370505452469 73

11. Corruption Perception Index yellow: less corrupt red: more corrupt grey/white: no data

12. Global Corruption Barometer 2013 – Bi-annual TI survey 1.000 person/country interview in more than 100 countries, among them Denmark. 1% of Danes admit to paying a bribe in last 12 months. They see 4 ”pillars of society” as especially corruption-prone (>30% of those interviewed find them corrupt or very corrupt): Religious societies, private sector, political parties and media. They see very little corruption in judiciary, police and education (<10%) How do Danes see corrup- tion in their own country ?

13. Assesses the strenghts and weaknesses of the institutions supporting integrity. What Denmark is good at:  Mutual trust  Democracy  Freedom of the press  Strong and independent oversight institutions How we e.g. can improve:  Higher degree of formalisation  More transparen Party financing  Better Government transparency National Integrity Systems Study EU financed in all 27 EU countries

14. Evaluation of specific pillars in our respective “Temples of Integrity” Pillar (Sector/Institution/Agency) Score (out of 100) Legislature71 Executive76 Judiciary93 Public sector86 Law enforcement90 Electoral management body89 Ombudsman94 Supreme audit institution93 Anti-corruption agencyN/A Political parties63 Media79 Civil society75 Private sector74

15. Public servants convicted of fraud 1741 to 1930 Why is there so little corruption in public sector in Denmark ? 1840-1860:  Penal code reform  Civil service pay reform  Pensions introduced  New constitution 1849  Freedom of the press  Government audits introduced  Multi component BIG BANG Mette Frisk Jensen: ’ Korruption og Embedsetik - danske embedsmænds korruption i perioden 1800 - 1866’, PhD dissertation, Aarhus University, 2008 Frederik VI 1768-1839 Christian VIII 1839-1848

16. Today a complex but powerful anti-corruption culture A strong culture of mutual trust on the interpersonal level A relatively highly developed sense of justice (equality for the law) A fairly efficient enforcement of a reasonable and generally accepted anticorruption legislation A general high level of salaries (and - alas also taxes) A relatively open information society A significant risk of detection and prosecution Still there are singular - but probably not systemic – problems. Greed is cross-cultural. Transparency International Denmark

17. These factors strengthen transparency and curb corruption: Ease of doing business (less “red tape”) Low barrier to trade (ease of import) E-government Quality audit of public sector Reasonable salaries for public servants Free media Internet users Voluntary work How did we end up here ?

18. Study by Hertie School of Governance from 2013 (The Good, The Bad and The Ugly) show that there is a scientific correllation between a good control of corruption and: High Gender Equality Advanced Administrative Processes Low Brain Drain High Government Health Spending Better Tax Collection Balanced Government Budget Source: www.againstcorruption.eu What tends to be effects of good control over reduce corruption in a country ?

19. Interesting links www.transparency.org www.transparency.org.ukwww.transparency.org.uk (download Paradise Lost) www.gfintegrity.orgwww.gfintegrity.org (Illicit Financial Flows) www.icij.orgwww.icij.org (search #panamapapers) www.taxjustice.net www.treasureislands.orgwww.treasureislands.org (Nicolas Shaxson) www.fatf-gafi.orgwww.fatf-gafi.org (Financial Action Task Force) My favorite book on subjects: * Treasure Islands by Nicolas Shaxson (not to be confused with Tresure Island by Robert L Stevenson 1883) I’m about to read * The Hidden Wealth of Nations by Gabriel Zucman (not to be confused with The Wealth of Nations by Adam Smith 1776)