Ameresekere on curbing and combating corruption and contemporary realities

The following issues were highlighted by Nihal Sri Ameresekere, F.C.A., F.C.M.A., C.M.A., C.G.M.A., C.F.E., in his presentation at the Annual Conference of the International Association of Anti-Corruption Authorities on Corruption and Integrity; Codes of Conduct and Enforcement held at the Kuala Lumpur Convention Center in Malaysia last week. Ameresekere is an Associate Member of the American Bar Association, Individual Member, IAACA, public interest activist, litigator, and author of a series of books on fraud and corruption.

Nihal Sri Ameresekere making his presentation

On adoption of UN Convention Against Corruption

The following inscription carved on the base of the Statue of Dr. K. Nkrumah outside the Law Courts in Accra, Ghana succinctly brings out the nexus between politics and corruption: “Seek ye first the kingdom of politics and all else shall be added unto you!”

On the occasion of the adoption of the UN Convention Against Corruption in October 2003, Secretary General, Kofi Annan stated: “Corruption is an insidious plague that has a wide range of corrosive effects on societies. It undermines democracy and the rule of law, leads to violations of human rights, distorts markets, erodes the quality of life and allows organised crime, terrorism and other threats to human security to.

“This evil phenomenon is found in all countries — big and small, rich and poor — but it is in the developing world that its effects are most destructive. Corruption hurts the poor disproportionately by diverting funds intended for development, undermining a Government’s ability to provide basic services, feeding inequality and injustice and discouraging foreign aid and investment. Corruption is a key element in economic underperformance and a major obstacle to poverty alleviation and development.

“I am therefore very happy that we now have a new instrument to address this scourge at the global level. The adoption of the United Nations Convention against Corruption will send a clear message that the international community is determined to prevent and control corruption. It will warn the corrupt that betrayal of the public trust will no longer be tolerated. And it will reaffirm the importance of core values such as honesty, respect for the rule of law, accountability and transparency in promoting development and making the world a better place for all.”

Rule of law means that all mankind are governed by the law. The Ruler is the law, and not monarchs, dictators, collective governments, democracies, invariably with financial stakeholders. They are all ruled by the law, as much as the common man. Thus no one is above the law.

Condemning corruption – an historical phenomenon  

The following citation from the Mahawamsa – ‘The Great Chronicle’ written in Pali recording the history and heritage of Sri Lanka from 543 BC brings out the concept that the resources of a country belong to its people, and that the ruler/s is/are only a trustee/s:

“…The ruler’s trusteeship of the resources of the State which belong to the people is a part of the legal heritage of Sri Lanka dating back at least to the third century BC as pointed out by Justice Weeramantry in his separate opinion in the International Court of Justice in the Danube Case, by quoting the sermon of Arahath Mahinda to King Devanampiyatissa as recorded in the Great Chronicle” – Supreme Court of Sri Lanka June 2009

‘Cicero and the fall of the Roman Republic,’ by J.L. Strachan-Davidson, M.A., Fellow of Balliol College, Oxford, recorded the following prognosis on Society, in an Address made by Cicero, as far back as 80 B.C.:

“Men of wisdom, men endowed with the place and the power which you occupy, are bound to apply the appropriate remedies to the disease of which the State is sickening. There is no one of you but knows well, that the Roman people, which formerly had the reputation of being most placable towards its enemies, labours to-day under the curse of cruelty to its own children.

“Remove this cruelty from the State, gentlemen of the jury; suffer it no longer to work its pleasure in this Commonwealth. It is a vice which is mischievous, not only in that it has swept off so many of our fellow-citizens under every circumstance of horror, but likewise because by the daily spectacle of painful sights it has made the tenderest hearts callous to the sense of pity. For when each hour we see or hear of some fresh atrocity, even though nature has made us mild of mood, familiarity with dreadful deeds plucks all feelings of humanity from our minds.

“Was it for this that the nobility aroused itself and won back the State at the point of the sword? Was it in order that the menials and lackeys of the great should be able to harry the goods and the honour of us and you alike?”

Robert Klitgard in his book ‘Controlling Corruption,’ dealing with corruption through history, opined thus:

“After all, corruption is as old as government itself. Writing some 2300 years ago, the Brahman Prime Minister of Chandragupta listed ‘at least forty ways’ of embezzling money from the government. In ancient China, officials were given an extra allowance called Yang-lien, meaning, ‘nourish incorruptness’.

“Apparently such nourishment often failed to achieve that purpose. Writing in the fourteenth century, Abdul Rahman Ibn Khaldun said that ‘the root cause of corruption’ was ‘the passion for luxurious living within the ruling group. It was to meet the expenditure on luxury that the ruling group resorted to corrupt dealing.’ Plato talked about bribery in The Laws: ‘The servants of the nation are to render their services without any taking of presents... To form your judgment and then abide by it, is no easy task, and ‘tis a man’s surest course to give loyal obedience to the law which commands, ‘do not service for a present’. Like illness, corruption will always be with us. But as this sad fact does not keep us from attempting to reduce disease, neither should it paralyse efforts to reduce corruption. Corruption involves questions of degree. Countries and agencies have more and less corruption, and various kinds of illicit behaviour are more and less harmful. We can do better in controlling corruption.

“The literature on corruption contains several useful definitions. A widely cited definition of ‘corruption’ is: ‘behaviour which deviates from the formal duties of a public role because of private-regarding (personal, close family, private clique) pecuniary or status -gains; or violates rules against the exercise of certain types of private-regarding behaviour.’”

The World Bank Staff Working Paper No. 580, on the Effects of Corruption on Administrative Performance, David J Gould and Jose A Amaro-Reyes reported as follows:

“The government monopoly of economic activities in developing countries, when combined with conditions of political “softness” widespread poverty and socioeconomic inequalities, ambivalence towards the legitimacy of government and its organisations and systematic maladministration, provides fertile grounds for corruption, which ... has a deleterious, often devastating effect on administrative performance and economic and political development, for example corroding public confidence, perverting institutions’ processes and even goals, favouring the privileged and powerful few, and stimulating illegal capital export or use of non-rational criteria in public decisions.”

In such background, The World Bank President, James D. Wolfensohn addressing a Meeting of the IMF and The World Bank, focusing upon corruption and transparency, emphatically asserted that if there was corruption, The World Bank would ‘black ball’ any project, emphasising, that eliminating corruption has to commence at the highest levels, stressing - “it needs to be cured at the top or that it will not be cured at all”. Given the rampant corruption prevalent, the cogent question arises as to how many projects The World Bank has in fact ‘black balled’, thereby giving meaning and life to such rhetoric?

Addressing a Conference in February 1999 on “A Global Forum on Fighting Corruption”, the US Secretary of the Treasury, Robert Rubin made the following incisive assertions – (vide Wireless File – USIA):

“Corruption is very much a social and political issue. An accountable, responsive and honest government is central to a government’s legitimacy and, ultimately, to political and social stability… In order to succeed in the global economy, nations must be able to attract private capital to foster growth. There are many dimensions to an environment conducive to attracting private capital… Among these dimensions I would include here is good governance, in particular, effectively combating corruption… It (Corruption) discourages small business, entrepreneurs, and consumers who simply cannot afford the cost of bribery. It discourages foreign investment. And it damages the respect for law and public and financial institutions, undermines the credibility and effectiveness of both elected and appointed government officials, and creates an environment conducive to crime in the private sector, including organised crime…

“Corruption exists everywhere. But corruption is especially troubling in developing countries… It seems to me there are at least five elements critical to effectively combating corruption; – First, nations must have good, clear laws and regulations that can be easily and reliably enforced. This, in turn, requires courts that are adequately funded and independent of political pressure, as well as honest, well trained and adequately compensated regulators, judges, prosecutors and law enforcement officers; .... – Second is to eliminate unnecessary controls on the economy and reduce state involvement in the economy. Reducing both the scope and the administrative discretion of government reduce the potential for corruption…

“Third is to create a well supervised, soundly regulated, and competitive financial system that operates on a commercial basis and is not subject to decisions based on personal or political connections; – Fourth is to increase the transparency and accountability of government operations and decision-making. Shining light on the activities of government by publishing information about its operations and decision making and by including public participation in those decisions is a powerful deterrent to corruption. Let me also add that a free and vibrant press can make an enormous contribution here; – Fifth and finally is to create a sound civil service system with strict conflict of interest rules, appropriate sanctions for malfeasance, and adequate compensation for employees...

“Developed countries must deal directly with their own involvement in developing country corruption. Corruption is a too way street and for every bribe taker, there is a bribe giver. In 1977, the United States passed the Foreign Corrupt Practices Act, which outlaws bribery by our businesses and investors in other countries... The OECD Bribery Convention, which was signed in December 1997, and went into effect just a few days ago, was a critical step in recognising the responsibility of industrial countries to discourage the giving of bribes. While most of the OECD have ended the tax deductibility of bribes, there are still several OECD countries that have not, and they should do so forthwith....”

Codes of Conduct

Notwithstanding the following Codes of Conduct in the Lord Nolan Report to the British Parliament, as far back as 1995, defining the following Seven Principles of public life, very recently a perverse controversy was exposed in the British media, that British Parliamentarians were misusing public funds for personal benefit, which resulted in action having been taken by the British Parliament, against some of its own Members, due to the pressure of public condemnation thereof.

The Seven Principles of Public Life

Selflessness: Holders of public office should take decisions solely in terms of the public interest. They should not do so in order to gain financial or other material benefits for themselves, their family, or their friends.

Integrity: Holders of public office should not place themselves under any financial or other obligation to outside individuals or organisations that might influence them in the performance of their official duties.

Objectivity: In carrying out public business, including making public appointments, awarding contracts, or recommending individuals for rewards and benefits, holders of public office should make choices on merit.

Accountability: Holders of public office are accountable for their decision and actions to the public and must submit themselves to whatever scrutiny is appropriate to their office.

Openness: Holders of public office should be as open as possible about all the decisions and actions that they take. They should give reasons for their decisions and restrict information only when the wider public interest clearly demands.

Honesty: Holders of public office have a duty to declare any private interests relating to their public duties and to take steps to resolve any conflicts arising in a way that protects the public interest.

Leadership: Holders of public office should promise and support these principles by leadership and example.

Given the contemporary realities, as borne out by the fraudulent scams in the private corporate sectors in global financial centres, warranting stimulus or bailout packages from State funds, as a result of gross mismanagement of the finances of the public, including cheating them, the word ‘holders of the public office’ would encompass those in the private sector as well, who are custodians of public funds, as provided for in the UN Convention Against Corruption, which came into force in December 2005:

Lord Nolan Report of 1995 also set out the following Code of Conduct for Members of Parliament, which fall well within the scope and ambit of the UN Convention Against Corruption:

Code of Conduct for Members of Parliament

General Principles

It is the personal responsibility of every Member of Parliament to maintain those standards of conduct which the House and the electorate are entitled to expect, to protect the good name of Parliament and to advance the public interest.

Members should observe those general principles of conduct which apply to all people in public life.

The primary duty of Members is to their country and their constituents. They should undertake no actions in Parliament which conflict with that duty.

Because Members of Parliament enjoy certain privileges in law, which exist to enable them to fulfil their responsibilities to the citizens they represent, each Member has a particular personal responsibility to comply fully with all resolutions and conventions of the House relating to matters of conduct, and when in doubt to seek advice.

Financial interests

A Member must not promote any matter in Parliament in return for payment.

A Member who has a financial interest, direct or indirect, must declare that interest in the currently approved manner when speaking in the House or in Committee, or otherwise taking part in Parliamentary proceedings, or approaching Ministers, civil servants or public bodies on a matter connected with that interest.

Where, in the pursuit of a Member’s Parliamentary duties, the existence of a personal financial interest is likely to give rise to a conflict with the public interest, the Member has a personal responsibility to resolve that conflict either by disposing of the interest or by standing aside from the public business in question.

In any dealings with or on behalf of an organisation with whom a financial relationship exists, a Member must always bear in mind the overriding responsibility which exists to constituents and to the national interest. This is particularly important in respect of activities which may not be a matter of public record, such as informal meetings and functions.

In fulfilling the requirements on declaration and resignation of interests and remuneration, and depositing of contracts, a Member must have regard to the purpose of those requirements and must comply fully with them, both in letter and spirit.

Curbing and combating corruption – public scrutiny

The UK Audit Commission in its written evidence before the Lord Nolan Committee succinctly stated thus: “Public scrutiny of what people do is probably the most powerful pressure towards probity of conduct.”

The Articles of the UN Convention Against Corruption clearly uses the word ‘shall’, thereby making several obligations and duties to be duly performed and fulfilled by the 140 countries, which have ratified the UN Convention. The Review Mechanism recently commenced to gauge, as to what extent the different countries have performed and fulfilled their such duties and obligations under the UN Convention is the most effective strategy to combat fraud and corruption, which today is not confined to one nation, but globalisation has made transactions multinational.

As Kofi Annan, UN Secretary General said, the betrayal of public trust would no longer be tolerated – very prophetic indeed given the recent Arab Spring, emulating certain other countries, where the people so revolted in the past. Endeavours are consequently made to recover stolen monies of impoverished people, which had been stashed away in foreign domains, who have thereby gained profits from such proceeds of crime against humanity. Ought not such nations be penalised on such ill-gotten gains?

Contemporary realities to be pondered upon

In the foregoing background, it necessitates that the following contemporary realities be pondered upon:

nWith the cancerous menace of rampant fraud and corruption, does not the unbridled pillage and plunder of the resources of the already impoverished vast majority of poor people, by few persons socio-politically powerful, influential and affluent, further impoverish them?

nIs it not a curious paradox that schemes and designs to replace such pillaged and plundered property of the poor people through ‘poverty alleviation programs’ ironically are financed from the very funds of the poor people or by debts to be re-paid by them or their future generations?

nDespite the adoption in December 2005 of the United Nations Convention Against Corruption, specifically identifying as culprits, ‘politically exposed persons’, do not such persons unabashedly continue to peddle fraud and corruption, and are shielded through socio-political influences, and publicly sanctified by religious leaders seeking the ‘limelight’ ?

nShould not the pillage and plunder of the property of the poor people, referred to as ‘economic terrorism’, perpetrated by ‘economic terrorists’, condemned internationally in contemporary times, be first dealt with, as the root cause for the germination of terrorism ?

nDenying the impoverished helpless vast majority of poor people equitable social justice, does it not ultimately lead to disillusionment, alienation, frustration, social unrest, insurrection and justifiable rebellion?

nDoes not therefore, the pillage and plunder of the resources of the poor people, consequently result in armed struggles and armed terrorism, with brutal counter offensives by the international community, to destroy such terrorism?

nIronically, do not such brutal counter-offensives, with the utilisation of further resources of the poor people, which consequently give rise to despicable violations of human rights, with concerns of humanity righteously transcending parochial interests of nationality, justifiably raise international concerns, however, at a very belated stage?