1. WHAT IS CORRUPTION? WHO IS CORRUPT
Geography Department
Dr Jon Cloke
Loughborough

3. World's Ten Most Corrupt Leaders
(Source: Transparency International, 2004
World's Ten Most Corrupt Leaders
Name
Position
Funds embezzled
 1. Mohamed Suharto
President of Indonesia (1967–1998)
$15–35 billion
 2. Ferdinand Marcos
President of the Philippines (1972–1986)
5–10 billion
 3. Mobutu Sese Seko
President of Zaire (1965–1997)
5 billion
 4. Sani Abacha
President of Nigeria (1993–1998)
2–5 billion
 5. Slobodan Milosevic
President of Serbia/Yugoslavia (1989–2000)
1 billion
 6. Jean-Claude Duvalier
President of Haiti (1971–1986)
300–800 million
 7. Alberto Fujimori
President of Peru (1990–2000)
600 million
 8. Pavlo Lazarenko
Prime Minister of Ukraine (1996–1997)
114–200 million
 9. Arnoldo Alemán
President of Nicaragua (1997–2002)
100 million
10. Joseph Estrada
President of the Philippines (1998–2001)
78–80 million

6. How the rich countries discovered corruption

7. Number of articles published on corruption 1990 – 2010 (Source: Paul Heywood, 2013; ISI Web of Knowledge)

8. Before 1989 there was no corruption…. But after:
The end of the Cold War and rapidly increasing complexity of globalization processes meant corruption could no longer be ignored.
But the growth of Neoliberalism meant that once ‘discovered’, it was officially developed in a certain way…. And the countries of the Global North were re-invented as anti-corruption experts!
For instance, since corruption was a problem of the Global South, aid donor conditionality regularly insists on the enhancement of transparency/accountability measures and the control of corruption.

9. ANTI-CORRUPTION SINCE WE WERE ALLOWED TO TALK ABOUT IT IN THE 1990S:
Freedom of Information Legislation
Judicial reform
Creation or Strengthening of Financial Oversight (e.g. National Ombudsman, Inspector general etc.)
Civil Service Reform
Public procurement Reform
Electoral Reform
Involvement of Civil Society
Economic Reform Process (Deregulation, privatization, liberalization)

10. Markets - ‘Good’ States - ‘Bad’!
“Economic policy reform should be a main pillar of an anticorruption strategy….(and) deregulation and the expansion of markets are powerful tools for controlling corruption” (World Bank, 1997:35)
“The more activities public officials control or regulate, the more opportunities exist for corruption” (USAID Handbook on Fighting Corruption 1999:13)

11. (Los Angeles Times, July 09, 2013 (Using TI maps)
“Global Corruption: Where bribery flourishes (and where it doesn't)”!
(Los Angeles Times, July 09, 2013 (Using TI maps)

12. “This index is the most objective and accurate measure of economic freedom published by any organization. It was developed by a research team led by Nobel Laureate Milton Friedman…”
( freedom.aspx)

13. GREAT. SO ALL THIS ANTI-CORRUPTION MUST HAVE HAD SOME EFFECT
GREAT! SO ALL THIS ANTI-CORRUPTION MUST HAVE HAD SOME EFFECT? Umm, well….
1) “Striking lack of scholarly agreement even over the most basic elements of corruption (Heywood, 2013).”
- definition
- causes
- extent
- how to combat it
2) Even if indicators accepted as accurate and representative, despite “international anti-corruption efforts since the mid-1990s” – no change! (Heywood, 2013)
3) Nonetheless, there has been the growth of a massive, multi-billion dollar ANTI-CORRUPTION INDUSTRY globally – so ‘anti-corruption’ has been very good for some people!

14. (Source: Paul Heywood, Nottingham University)

15. O Crap! So what do we do…?

16. Well, in 2007 the EU was nearly destroyed by an economic crisis which (we suggested) has changed how we understand corruption…
The grey/black economy in Europe is not a system glitch but a design feature, a motor for the European financial system fuelled by the insistence on de-regulation and privatization
The flows of finance that make up the grey/black economy constitute a source of generalized economic instability throughout Europe.
De-regulation of finance is a not a legitimate process leading to greater economic efficiency; it guarantees that increasing quantities of illegitimate, ‘hot’ money will accumulate in that system.
Encouraging deregulation and legislation tending to obscure financial transactions are actively involved in destabilizing national, regional and EU economic stability.
(ED BROWN AND JON CLOKE, Shadow Europe: Alternative European Financial Geographies,
Growth and Change Vol. 38 No. 2 (June 2007), pp. 304–327

17. Our approach involves an entirely different focus; we pointed out some embarrassing facts… for instance
“’Jurisdictions of Primary Concern’ category are identified for purposes of INCSR statutory reporting requirements. Identification as a major money laundering countryis based on whether the country or jurisdiction‘s financial institutions engage in transactions involving significant amounts of proceeds from serious crime.”
As of 2012 these JPCs included:
Cyprus, France, Germany, Greece, Isle of Man, Italy, Jersey, Latvia, Lichtenstein, Luxembourg, Netherlands, Switzerland, UK and US
(US Department of State International Narcotics Control Strategy Report, Volume II, Money Laundering and Financial Crimes, March 2012

18. To reinforce the point, drug money to the rescue in the economic crisis!
UNODC - money made in drug trade used to keep banks afloat in the global financial crisis.
Antonio Maria Costa: “Inter-bank loans were funded by money that originated from drug trade and other illegal activities…signs that some banks were rescued in that way.“ (Reuters, 25/1/09)

19. AND SOME EMBARRASSING GEOGRAPHY…

20. We asked some pertinent (and impertinent) questions
We asked some pertinent (and impertinent) questions. If, for instance, the EC is really interested in tackling corruption…
What about the complex global socio-cultural environments in which ‘corruption’ is set?
What about the power structures (particularly in financial services) where private sector and political actors are inseparable?
What are the transnational financial services networks involved, the complicated flows of power?
How do hybrid politico-financial actors (e.g. ‘technocrats’) possess and deploy decision-making powers?

21. And with special reference to the UK, anti-corruption begins at home!
“The (OECD Convention on Combating Bribery) entered into force on
5th February, 1999…. it is significant that there has not been a
prosecution, let alone conviction... (Johnstone P. and Brown G. (2004)
‘International Controls of Corruption: Recent Responses from the USA and UK’, Journal of Financial Crime 11(3):
226)” - By 2012 there had been one prosecution
“London is now considered to be the “money-laundering capital of the
world”” (Max Hastings, BBC1, 23/3/12)

22. For instance, DfID’s Five Strands of Anti-Corruption - 2011
Work collectively with donors and UN to establish UNCAC as operating framework for all anti-corruption action at country level.
Make UK a hostile environment for kleptocrats: deterring, disrupting and detecting laundering of stolen assets through UK financial systems
Trace, freeze, seize and return stolen assets located in UK; help developing countries to initiate cases; ensure returned funds used productively.
Help to maintain robust approach to investigation and prosecution of corruption by British companies and citizens overseas; and contribute to preventative work with UK business
Ensure DFID systems provide credible control mechanism for deterring and detecting misuse of funds; guide offices on tackling corruption risks and provide a robust approach to dialogue with governments
UNCAC
PEPs
Asset Recovery
Bribery Laws
Internal Controls

23. We suggest that the UK practices do as we say, not as we do
Tanzania, Formula 1, cash for honours, BAE.
PPI, Libor, G4S, SERCO
HSBC, Mexican drug cartels
Leveson, MP’s expenses

24. As another example, in the EU - GRECO
“The Group of States against Corruption (GRECO) was established in 1999 by the Council of Europe to monitor States’ compliance with the organisation’s anti-corruption standards….. to identify deficiencies in national anti-corruption policies, prompting the necessary legislative, institutional and practical reforms. GRECO also provides a platform for the sharing of best practice in the prevention and detection of corruption. ”

25. GRECO processes…
First evaluation round (2000–2002) - independence, specialisation and means of national bodies engaged in the prevention and fight against corruption;
Second evaluation round (2003–2006) - identification, seizure and confiscation of corruption proceeds, prevention and detection of corruption in public administration and the prevention of legal persons (corporations, etc.) from being used as shields for corruption;
Third evaluation round (launched in January 2007) - addresses (a) the incriminations provided for in the Criminal Law Convention on Corruption and (b) the transparency of party funding

26. That sounds quite pro-active – what’s wrong with that, then?
WELL, for a start
According to C(2011) 3673 final COMMISSION DECISION of , which establishes an EU Anti-corruption reporting mechanism for periodic assessment:
“To date there is no mechanism in place at EU level to measure in a coherent manner the enforcement of anti- corruption policies.”

27. IF YOU WANT TO LOOK AT EXISTING CORRUPTION IN EUROPE:
How large are illicit/informal flows in Europe and what is their geography? These flows play an increasingly significant role within the circuits of global capital - how can we ignore that the EU is key to this through its onshore and offshore networks? National and international legal systems are lagging behind in designing effective ways of dealing with these circuits – effective research is being HINDERED by existing anti- corruption rhetoric….

28. Conclusions
If we want to understand corruption, there is an urgent need for:
A more systemic and open-minded approach towards corruption.
A focus on public, state, private and cultural interfaces, particularly those which erode the legitimacy of socio-political processes.
A perception of corruption as a mirror that, if we have the courage to hold it up and look into it, will give us a more accurate picture of ourselves.