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Corruption: More than a cancer

Written by Guest on Wednesday, 13 December 2017

The following speech was delivered by David Cameron at the Transparency International UK Annual Lecture 2017.

Check Against Delivery. 

Imagine a country where every citizen is forced to spend 14 per cent of their income each year on bribes.

Or one where the biggest company – which ought to be a source of national pride – is actually a symbol of criminality, immorality and shame.

Or think of living in a place where the head of government has stolen something like a 20th of his country’s annual GDP.

What sounds imaginary to us is a reality for millions of people.

Mexicans pay bribes everywhere – from schools to courtrooms to hospitals.

The Brazilian president was brought down and scores more indicted after gargantuan fraud at oil giant, Petrobras.

And for 30 years, Egyptians saw their money – many billions of dollars – siphoned off by President Hosni Mubarak.

From officials taking backhanders, to leaders bleeding their nations dry, corruption has been described as a cancer.

It takes a toll on countries’ prosperity and opportunities.

It takes away people’s livelihoods and even their lives.

It takes place in every country in every continent on earth.

And the world needs to take it far more seriously.

Because it is also now being used as a tool of statecraft…

…a weapon with which autocratic, anti-democratic regimes can undermine other countries’ systems, political parties and elections.

That’s why I describe corruption as more than a cancer.

Cancer suggests a malign force that attacks an otherwise healthy body. That we are passive in its wake.

But increasingly corruption is used consciously and intentionally as an instrument of statecraft.

So this is not only a development issue.

It is not only an economic issue.

It’s a full-on national security issue – and, for me, one of the defining issues of our time.

 

WHY CORRUPTION?

 

The longer I was Prime Minister, the more convinced I became of this.

Two random moments from my time in office help paint the picture.

The first was on one of my many visits to Afghanistan. I was sitting cross legged on the floor of a stone and mud hut speaking to village elders.

It was a beautifully clear Helmandi day, and they were explaining to me what was going on in their community.

Yes, there was a national government, they said. Yes, that government had been elected by the people.

But the reason it didn’t have the confidence of the people…

…the reason so many people still turned to the Taliban…

…was that, amazingly, they believed that violent, repressive, murderous organisation was better at dispensing justice and ensuring order than their government. It was, in their view, less corrupt.

The second memory is rather different.

It was in Zurich, at the headquarters of FIFA. The world capital of football.

I wasn’t with village elders this time, but with Prince William and David Beckham.

There we were, going from one country’s representative to the next, making our case for England to host the 2018 World Cup.

It was like a mixture of Dragons Den and speed dating – and we got plenty of offers.

But when it came down to it, how many of the delegates voted for Britain?

Two.

Even though we had the best plan, the best stadiums, the most enthusiastic supporters… we didn’t even make it to the second round.

President Putin actually boycotted the whole thing because he said it was riddled with corruption.

He was right – it was.

And – let me put it like this – I am sure he wasn’t completely surprised when Russia actually won the bid.

You couldn’t make it up.

In the years since, 10 of the 22 members of that FIFA Executive Committee were indicted or punished.

Sepp Blatter, the FIFA President who said we were just “bad losers”, remains under criminal investigation and banned from football.

And Russia is, of course, still hosting next year’s World Cup.

These were just two of many frustrating, yet enlightening, moments when I was confronted with corruption as Prime Minister.

Indeed, corruption became rather a theme.

What lay behind so much of the tumult during my premiership was corruption.

Why did people support the Arab Spring?

Because the things people wanted – “bread, freedom and social justice” – were stolen and stifled by their supposed protectors.

Why did the people of Ukraine rise up at the Euromaidan?

Because they were fed up with their kleptocratic, corrupt leaders.

Why were the Taliban and other extremist groups able to recruit so many followers?

Because they tapped into people’s – particularly young, disaffected people’s – grievances about the lack of justice.

And corruption wasn’t just the driver of so many of the big events over the last decade.

It was – it is – the blockage to so many of the things we need to achieve.

Why are people in nations as far apart as Equatorial Guinea and Venezuela so poor when their countries are so rich with minerals?

Corruption.

What is one of the main things that makes countries as different as Nigeria and Pakistan – both facing profound terrorist threats – unable to establish basic levels of security?

Corruption.

What stops some of the poorest countries on our planet – like South Sudan or Burundi – turning aid money into food and healthcare and education?

Corruption.

That is why I see it as such a defining issue.

It’s complex. Brazen. Endemic. Seemingly unstoppable. And absolutely central to our fight for progress and prosperity.

As I’ve said, there were several moments that inspired my interest in this subject.

But what shaped my outlook on it was when, in 2013, I co-chaired the panel set up by Ban Ki-moon to look at how we should replace the Millennium Development Goals.

We didn’t want it to be an exercise in well-meaning western liberals handing down instructions to the poorest people and the poorest countries in the world.

So we commissioned research into what people really wanted.

And hard on the heels of material poverty – which was, unsurprisingly, the top priority – was the yearning for justice and the rule of the law.

That’s proof that this is not some Western-imposed agenda.

That people aren’t OK with corruption.

That it’s not just “one of those things” or “how they do things there”.

Indeed, my argument is that there are no countries where corruption is inevitable.

Nor – and this is the flip side to it – are there any countries that are immune from it.

Corruption infects every society in every part of the world.

That includes Europe. Look at the FIFA debacle.

That includes the UK. Look at the Bribery Act – the first three convictions were all for crimes that took place right here in Britain.

Indeed, when it comes to corruption, there is an important link between developed and developing countries.

It’s often wealth stolen from the latter that is hidden in the former.

It is often our lawyers defending these crooked regimes and businesses…

…our PR companies spinning for them…

…our property market providing a place to stash their dodgy cash, like one giant piggy bank.

Even our institutions – including the police – can fall prey to corruption.

Corruption is one big, tangled web – and all countries are caught up in it.

 

TREPIDATION AND AWE

Of course, I approach this subject with trepidation.

No politician, political party or country has a spotless record.

Here we had the MPs’ expenses saga.

Questions are always rightly asked about – among other things – lobbying and party funding.

That said, when I tell Americans that to fight the election to become leader of one of the oldest and most successful political parties in the world, my campaign was only allowed to spend 150,000 dollars, I usually have to add that I am not joking.

But it is right that no country, however “clean”, is exempt from scrutiny.

Even Denmark had a case of fraudulent use of EU funds.

And it’s right that all of us are on the Transparency International Corruption Perceptions Index.

Which is why I also approach this subject with awe – awe of what this charity does.

You’re out there, on the frontline, collecting the data.

Your chapters cover the globe.

Your updates keep us informed.

Your index, as I’ve said, keeps us on our toes.

Your work has raised awareness like no one else.

And your impact is extraordinary given your size and the nature of the problem you are tackling.

I witnessed that first-hand as Prime Minister, at the receiving end of your advocacy.

I have to say, I agree with Sir Paul Collier when he says that our increased knowledge of corruption – the fact that it is considered as an issue today, when just a generation ago it was ignored…

…is largely down to you and the work of this charity.

That is an enormous achievement – and also a huge responsibility. So keep going.

 

PERFECT STORM

I’ve talked about the scale of corruption. I’ve talked about why I care about this issue.

But why now?

Why is this the subject of my first public lecture in Britain since leaving office?

The fact is that I am worried.

The cancer of corruption is developing. It is metastasizing.

It is becoming more commonplace, more complex, more multi-layered, elusive and ingrained.

That is, I think, because of five big, converging factors.

Let me take each of them in turn.

The first is demographic.

One statistic continues to fascinate me:

In 1950, the population of the Middle East and Africa was equivalent to half of Europe’s.

By the end of this century, the population of that region will be eight times that size of Europe’s.

More than half of the world’s poor will live in fragile states – countries racked by conflict, division and the threat of state failure. Whose governments can’t or won’t provide for all their people. Where corruption is king.

And with the demographic picture I’ve described, if nothing changes, the problem is going to get far worse.

That’s why I’m chairing the Fragile States Commission, in conjunction with Oxford University and the LSE…

…taking evidence from experts across the world.

Simple fact: if we don’t improve governance, help build functioning states and reduce corruption, we won’t tackle poverty.

These two things aren’t alternatives; they’re two sides of the same coin.

And we need big changes.

It’s not easy.

Building trusted tax collecting authorities in Pakistan and reinforcing the rule of law in Somalia is far harder than vaccinating a child or delivering a food parcel.

It takes years. It’s constantly threatened with failure. It is itself susceptible to corruption.

But just because it’s difficult doesn’t mean we shouldn’t do it.

The second factor is technological.

Just a few years ago, the Cloud was something in the sky, a Tweet was the sound made by a bird, and Skype was a typo.

Now, these are part of our lives.

A third of the world’s population has smartphones – that’s up from one in ten just six years ago.

Of course, the exponential growth of technology can be a huge force for good.

People can report wrongdoing online.

Technology can help catch out the crooks.

We need to be creative.

In Britain we designed a way to encourage small businesses and innovators to help solve public policy challenges.

We should do the same when it comes to international aid, prompting the so-called DevTech sector – in which Britain is something of a leader – to come up with smart solutions to corruption.

But there’s also a worrying fact: the first people to exploit new technology are often the corrupt, using it for extracting money, stealing resources – even, as I’ll come onto – interfering in other countries’ democracies.

And we’ve got to get wise to their methods and how to counteract them – fast.

The third factor is ideological.

In recent years, we have seen the rise of anti-globalisation.

In other words, a backlash against the open economies and multi-lateral, rules-based system that have helped us build prosperity and stability for decades.

Indeed, that anti-globalisation sentiment was reflected in some of the votes for Brexit in Britain, Trump in America, populist parties across Europe and strongmen systems across the world.

I am not some starry-eyed Davos-devotee who thinks there is nothing wrong with globalisation.

Of course we need to help those left behind economically, with better skills, more apprenticeships and higher minimum wages.

And we cannot ignore those who feel left behind culturally, whether by immigration that has been too high, or by international organisations – yes, including the European Union – that have been too high handed.

What we mustn’t do is throw the baby out with the bathwater. Market economics. Institutions with rules. Openness to the world. These are things that make us strong.

But the things the wave of anti-globalisation is in danger of ushering in – isolationism, protectionism, unilateralism – endanger our countries and our world. And they particularly threaten the fight against corruption.

Why?

Because these multi-lateral bodies and NGOs are often the bulwark against corruption.

The OECD, for example, has been painstakingly pursuing this for decades.

Markets that are open and competitive are better at self-scrutiny, at innovation, at rooting out bad practice and breaking up cartels.

Just as with all our biggest challenges – on trade, on terrorism, on climate change, on global poverty – we need to work with other nations if we want change.

We canot do this alone.

The fourth factor is political.

It is states – almost always autocratic, illiberal, anti-democratic states – using corruption as a weapon of foreign policy.

Using propaganda to interfere in other countries’ affairs.

Buying influence through gift-giving and donations for political campaigns.

Turning influence into outright loyalty through threats of coercion.

To be honest, this is one area where, far from being too quick to act, the EU has been far too slow.

Barack Obama used to challenge European leaders over how we seemed to ignore or even tolerate Russian subversion of some Eastern European business, energy, media or even political interests. He was bang on target.

And my successor, Theresa May, has been quite right to put this on the EU Council agenda.

The fifth factor ties together all these things and it is about communication and information.

We all know that well-funded, properly-resourced, rigorous journalism has been under pressure for many years.

That’s bad news for the fight against corruption.

Journalists don’t just write the first draft of history; they’re the first on the scene – often the only ones on the scene – when it comes to corrupt acts.

Without a reporter at that inquest, court case or council meeting…

…without that Freedom of Information request; without that undercover investigation…

…so much goes unchecked and unquestioned.

In its stead – thanks to the growth of technology and the increasing domination of social media – propaganda, misinformation and “fake news” are better able to get a foothold.

There’s the danger that will then squeeze out the genuine scrutineers and drown out the genuine reporting – some of it at the behest of those foreign governments I’ve just talked about.

And let me say this: when Donald Trump uses the term “fake news” to describe CNN and the BBC, that is not just a questionable political tactic. It’s actually dangerous.

Of course broadcasters make mistakes and it’s right they correct them.

But what is being attempted here goes far beyond that.

It’s an attempt to question the whole legitimacy of organisations that have an important role in our democracy.

Let me put it like this. President Trump: “fake news” is not broadcasters criticising you, it’s Russian bots and trolls targeting your democracy…

…pumping out untrue stories day after day, night after night.

When you misappropriate the term fake news, you are deflecting attention from real abuses.

Ignoring what’s happening on social media is facilitating a form of corruption that is undermining democracy.

Any one of these causes of the perfect storm deserves serious consideration.

But in the time I’ve got I want to focus on things we can do now – an agenda for action.

 

PRIORITY

As I’ve said, corruption needs to be treated as an international priority.

That requires leadership.

Too often leaders shy away from it, either because they worry about the scrutiny they themselves will get, or because they worry that action will get in the way of other priorities like growth, or jobs, or exports.

These fears must be cast aside.

Frankly – and rightly – leaders get the scrutiny anyway.

And when it comes to growth, we proved in the UK that you can run a government that is pro-business, pro-market, pro-enterprise, but anti-corruption.

The Bribery Act, Registers of beneficial ownership, battles over sharing tax information… all of these things can be made as part of a pro-business case.

After all, even if you are sceptical about these measures individually – and I am not – it is surely far better for British business to try and compete at the top, with high standards, than to scrabble around at the bottom, with the bribers and the corner cutters.

Leadership must involve getting countries to jump together.

That is why in 2011, Barack Obama and I, alongside six other nations, founded the Open Government Partnership.

For the first time, countries were being asked to sign up, work with organisations from civil society, agree a plan of action, and prioritise the fight against corruption.

It started with 8 members. There are 75 today. Let’s not leave it at that – let’s make it a truly global movement and bring every freedom-loving, prosperity-seeking nation along with us.

I had another opportunity to push corruption to the top of the global agenda when I chaired that High Level Panel on the replacement for the Millennium Development Goals.

For a long time I had been convinced that, alongside financial support and aid, we needed to focus on the building blocks that take countries from poverty to prosperity.

The absence of conflict and corruption.

The presence of property rights and the rule of law.

That for many in the world the closest relative of poverty is injustice.

So I helped secure Sustainable Development Goal 16.

For the first time ever – as part of a set of goals about tackling poverty – there is a global goal that deals with governance. With justice. With corruption.

And believing in the importance of taking a lead is why I hosted the first-ever Anti-Corruption Summit in London in 2016…

…43 countries making 600 commitments, including the first ever Global Declaration against corruption.

I’ll never forget the eve of that summit in 2016.

I was visiting Her Majesty the Queen at Buckingham Palace, when I was boasting about the amazing guest list.

I forgot that the cameras were rolling and the mics were picking up our conversation…

…as I told her that we had representatives from “fantastically corrupt” countries like Nigeria and Afghanistan.

Sometimes there is such a thing as being too open and transparent.

Rather embarrassed, I got back to Downing Street and immediately called the Nigerian President, Muhammadu Buhari, who was in his aeroplane, shortly to land. I was worried he might turn around and go home.

“David,” he said, “I heard what you said… You’re absolutely right – that’s why I am coming!”

And the next day he signed up to the Open Government Partnership!

That conference was the high-water mark for action.

We made some great plans on paper; many have been put into practice.

I’m delighted to see that the government launched the UK’s long-awaited Anti-Corruption Strategy this week, and John Penrose will do a great job as Anti-Corruption Champion.

But there are still outstanding pledges that need to be fulfilled.

So that hub for innovators to produce solutions to corruption – let’s set it up.

Our economic crimes legislation – let’s beef it up.

Anti-corruption requirements for contract bidders – let’s push them.

Those who blow the whistle on wrongdoing – let’s encourage and protect them.

The more we delay it, the more the corrupt people get away with it.

So we must get on with it.

 

TRANSPARENCY

When I came to office one of the first things I did was release vast amounts of data:

Government spending over £25,000.

Ministers’, advisers’ and civil servants’ pay.

All new government contracts.

Local crime information.

Even public transport data.

And in 2015, the World Wide Web Foundation named us as the most transparent government in the world.

Again, there’s the moral case for that openness.

Transparency is the antidote to corruption.

People should be able to see what’s being done with their money and in their name.

But once again, there’s also the economic case.

Off the back of public data so many entrepreneurs and innovators have built great businesses.

To get the world on board with this transparency revolution, I made it my focus for the G8 Summit in Northern Ireland in 2013.

We kick-started the process of far greater coordination of tax information so companies pay what they should.

And every major country in the world signed a national action plan to say how companies would reveal who owns and controls them.

The UK went one step further and made our central registry of beneficial ownership publicly accessible.

We are one of only three countries in the world to have done so.

But there’s a missing piece of the jigsaw.

What that legislation I introduced didn’t cover was foreign companies that own property here anonymously.

I announced in my anti-corruption lecture in Singapore in 2015 that we would put that right.

And I am delighted to see the government deliver on that promise with a draft bill that will be scrutinised in this session. That’s a huge step and it sends out a clear message:

No more foreign investors stashing dodgy cash in our property market.

 

PENALTIES 

But all the initiatives and investigations and legislation and data won’t mean a thing if people don’t feel the force of these penalties.

Yes, we’ve had the Bribery Act, Criminal Finances Act, Unexplained Wealth Orders – and we’ve imposed sanctions on countries.

But again, we need to prosecute more people under the legislation.

That applies particularly to stolen assets.

The World Bank estimates that over 20 billion dollars is stolen every single year by corrupt officials…

…money that should be spent on schools and hospitals and infrastructure that is instead lining the pockets of the corrupt.

And I’m delighted that the inaugural Global Forum on Asset Recovery took place last week – another one of the pledges we made at the Anti-Corruption Summit.

We need to think about other ways of hitting the corrupt where it hurts.

One of my regrets of my time in office was that we didn’t introduce the Magnitsky Act.

The Foreign Office argument was that Britain’s existing approach was better, because we could sanction all the people on that list – and more besides.

And I went along with it.

But I soon realised this ignored the advantages of working together – with other countries – under a common heading.

It’s not PR, it’s a fact.

You get extra clout from coming together across the world and saying with one voice to those who are responsible for unacceptable acts:

“We are united in our action against you.”

I pay tribute to my successor Theresa May for adding Magnitsky provisions to the recent Criminal Finances Act.

And I also pay tribute to someone who has fought longer and harder and at more risk to himself than anyone else – the man behind that campaign, the legislation and a brilliant book, Red Notice, on it, Bill Browder.

 

OPTIMISM

So yes, there is huge cause for concern when it comes to corruption.

But there are two major trends that should give us cause for cheer.

First, what’s happening with the legislation, the transparency agenda, the new international norms…

…all this may sound technical and obscure, but it is actually working – it is changing the ground rules and forcing a culture change.

Look at it like this.

When it was just companies versus states over hugely valuable but very long term projects like oil or mineral extraction, it was a painful and unequal struggle.

And for the poor country concerned – to coin a phrase – no deal was almost always worse than a bad deal.

These norms – like EITI, like the Open Contracting Partnership – mean that the countries now have something to aim at and judge things by, and, crucially, so do the companies.

Whatever is happening across the world – whether it’s the growth of populism or the rise of strongman systems – progress is being made and it continues to be made.

Second, there is a growing awareness of the need for corporate responsibility.

Internationally, the view that strong market economies need firms to be about more than making profit is becoming mainstream.

Indeed – although this is a topic for another speech – it is one of the things that will be vital in helping to safeguard the future for market economies.

Those trends didn’t happen out of thin air.

They happened because people like you called for them, campaigned for them, and didn’t give up until they were put in place.

It gives me a huge sense of optimism and pride in what everyone has achieved.

 

CONCLUSION

But for me, the biggest weapon we have – the biggest norm we have to preserve and trend we have to push – is the growth of democracy.

Corruption cannot thrive in real, robust, democratic societies.

And when I say democratic, I don’t just mean elections.

For too long the West has said: “put a cross in a box, and that’s it – tick – democracy has been done”.

No.

When I talk about democracy, I’m not just talking about the ballot box, I’m talking about the building blocks.

The rule of law.

Open economies.

Inclusive politics.

Accountable governments.

Free speech.

A strong civil society.

And journalism that’s free from state control and fearless.

These building blocks – the institutions that support them and the values that underpin them – are what make a real democracy.

And it is only in a real democracy – when people have a tangible stake in their country – that they can guarantee they won’t be scammed by the powerful.

With the arguments against globalisation and the aftermath of the financial crash, some have had their heads turned by the alternatives.

They look to the East – at the growth rates, the vast buildings, the speed and the scale and the sheer splendour of what they’re creating – and they think that maybe there are shortcuts to success, that maybe we can bypass democracy.

We see it today in leaders who condemn their judges or their press.

Or those who crack down on the opposition and create personality cults.

Or those who bombard other countries with black propaganda.

We must have the confidence to reject these shortcuts to democracy.

I say: the combination of political freedom and economic freedom is still the magic combination.

And we must be proactive.

We didn’t win in the Cold War because we sat behind the barricades.

We demonstrated our freedom. We promoted our values.

We argued passionately about how they can lead not just to a stronger economy but a better society.

We need to do the same all over again.

Politics matters. The choices countries make matter.

There’s any number of neighbouring countries with totally different outcomes.

Why are Botswanans richer than Zimbabweans?

Colombians safer than Venezuelans?

South Koreans longer-living than North Koreans?

It’s not climate, not ethnicity, not geography. It’s the choices those countries and their leaders have made.

So in the final analysis, it is vibrant, vigorous, open, contested, argumentative, robust democracies that will rid our countries of corruption and give everyone – wherever they are in the world – a stake in their future.

Now that is something worth fighting for, both now and in the future. Thank you.

 

Visit our Facebook page for a selection of images from the event

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Read 1504 times Last modified on Thursday, 14 December 2017 12:51

Guest

The TI-UK blog features thought and opinion from guest writers as well as TI staff. Any opinions expressed by external contributors do not necessarily reflect the views of Transparency International UK.

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