David Ondráčka, Blog: „Corruption from a global perspective and what is happening in the world?“

Publikováno: 27. února 2018

Sometimes it makes sense to step back and look at what’s really happening in the world of corruption. In this blog, I use my international experience to offer some insights on the trends of today.

David Ondráčka, director of TI Czech Republic and board member of TI | source: TI

State capture at its perfection

A never-ending wave of major political corruption cases is rolling around the world – just recently South Africa, Brazil, Israel, the Philippines, Guatemala, Romania or Azerbaijan. Presidents are dismissed, prime ministers are investigated, political parties collapse and there are widespread sophisticated ties between business, politics, interest groups, or even organized crime.

The phenomenon of state capture and the mutual cover has reached state of perfection in many countries. Civil engagement is being marginalized, political opposition compromised, media misled. Economic and political elites no longer pretend to be interested in the rest of the society, openly benefit from public budgets and seek the rent as long as possible.

 

CEO immunity

Every week, a new even more shocking corporate scandal breaks out, or documents leak from the world of large corporations and private businesses (such as Paradise Leaks, Novartis, HSBC, Gazprom, Bank of China …), whether it’s bribes, fraud, black funds, money laundering, cartels, or massive tax evasion. The astonished public is usually watching these scams in power-less disbelief, and rich elite sends us their warm greetings from anonymous tax havens. Their lobbyists and spin doctors make sure there will be no systemic changes soon, or if must be, then highly ineffective. And if corporations get in trouble or even go bust, they immediately ask for bail-out from the public coffers because they are “strategic” and „too big to fail“.

In the case of investigations, they are going to reach settlement agreements with oversight supervisors; corporation usually pays large fines to drop charges. But it is taken as a normal cost of doing their business as usual. CEOs and senior management even receive bonuses if the fine is lower than the shareholders expected.

I have never heard of any CEO of a large corporation who would be investigated or even punished for these cases of mismanagement and wrongdoings and be held personally accountable. A careful net of contracts and disclosures will get them out of it. Outwardly, penal responsibility is often referred to as a serious risk, but it is simply not being applied; de facto that’s how real immunity of CEOs works.

 

Digitization and technology – maniacal disclosure

We are experiencing an era of unprecedented transparency, there are plenty of databases, registers, on-line platforms; information, contracts, judgments, and asset disclosures are now online and publicly available, and this trend is progressing. However we are overwhelmed by all this data, we get drowned in it. Perhaps it’s even an intention and definitely an effective excuse – when it’s all on the web, why complain?

Few people are able to use smartly that ocean of information out there for a reasonable analysis and effective control. There is a desperate lack of applications that highlight meaningful information, filter out those irrelevant and select relevant ones – making sense of it is critical. There are numerous very respectful initiatives that are doing so and hats off to hackathons, startups, innovators, open data. But maniacal churning out of more and more data online simply does not bring better governance, more effective public control or even greater confidence.

 

The media crisis – agenda-setting

There is much in-depth analysis about loss of confidence and relevance of traditional media. The issue remains how the agenda of public debate is being set, who is agenda-setter today? Conventional media apparently lost their dominant position. Changing of ownership and investments of oligarchs into the media lead to the fact that over each article or piece we ask cui bono, why this topic, why now, to whom it helps, who it will hurt.

The media are losing its revenue and logically save up costs on investigative teams that are usually expensive and with uncertain outcomes. Hence there are social networks, where everyone can be an amateur journalist without any editorial limits. So that the cacophony of voices and the debilitation of the public space are complete. The media have long been an ally in the fight against corruption (and many still are and essential ones) but today they are also part of the problem, and that is a substantial change.

 

Empty control and rules

There is usually a single recipe for the complexity of times and problems – new rules and their proper enforcement. An army of advisors, consultants and lawyers produce controls for control, stacks of rules that no one reads, hours of useless training, impractical consultations. No difference if it is government agency or private company, same empty machinery, costly and, in most cases, ineffective, if not entirely useless.

The system creates an impression of vigorous preventive action and compliance activities but it brings empty results. Employees of companies, offices, and justice system are affected, who grit their teeth and, with varying degrees of reluctance, reject or circumvent it. And on the other hand, we meet daily with incredible ignorance, misunderstanding of the context, and underestimation of risks, which often has serious consequences.

Transparency International and any other civil society organization needs to read these (and many others) trends very thoroughly in order to find right and smart recipes and solutions, and stay relevant and useful.

David is director of TI Czech Republic and board member of TI.

The phenomenon of state capture and the mutual cover has reached state of perfection in many countries. Civil engagement is being marginalized, political opposition compromised, media misled. Economic and political elites no longer pretend to be interested in the rest of the society, openly benefit from public budgets and seek the rent as long as possible.