News 01st Apr 2016

5 Reasons Why We Can’t Quit the Fight Against Corruption

Rachel Davies Teka

Advocacy Director

Rachel has worked on anti-corruption policy for over a decade, focussing on corruption in the UK and the UK’s role as a safe haven for dirty money. She is Co-Chair of the UK Anti-Corruption Coalition and leads Transparency International's UK advocacy team. She was formerly Chair of the Economic Crime Civil Society Organisations Steering Group (CSOSG) and was a founding member of the UK Open Government Network steering group.

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We have been playing an April Fools prank today. Here, Rachel Davies, Senior Advocacy Manager explains why corruption is indeed still here and why we won’t stop the fight against corruption.

1. Corruption risks in UK politics

Many recent lobbying scandals have largely fallen within the rules, demonstrating that the current regulatory regime is inadequate. In fact, TI identified 39 examples of lobbying loopholes across the UK where rules allow behaviour that can open the door to corrupt activity and lobbying abuses.

For example, major political party donors can be offered positions in the legislature through appointment as peers. This doesn’t necessarily mean that every major donor is bribing their way into the Lords, but the door is wide open for abuse to occur –the rules allow the potential to create a system where people pay for influence within political parties.

2. Corrupt money in the housing market

There’s evidence that the UK has become a safe haven for corrupt money stolen from around the world, facilitated by the laws which allow UK property to be owned by secret offshore companies. We’re not talking about just one or two secret homes. Transparency International research shows that 36,342 London properties are owned by companies registered in offshore havens. Not even the Land Registry knows who owns these homes.

Layers of secrecy facilitated by the offshore company structure prevent effective investigations by police and checks by those working in sectors such as property. This means that UK houses can be acquired anonymously and anti-money laundering checks can be bypassed with relative ease. TI found that over 75% of properties under investigation for corruption used offshore corporate secrecy.

3. Corruption in healthcare and pharmaceuticals

Research has found that countries with a high prevalence of corruption also have higher rates of infant, child, and maternal mortality; indeed, the prevalence of bribery is positively correlated to death rates for women giving birth, even after adjusting for per capita income and share of total spending on health in the country.

Preventing abuse and reducing corruption is important to increase resources available for health, to make more efficient use of existing resources and to improve the general health status of the population.

4. UK multinationals bribing abroad

Investigations show that multinational companies are still finding ways to channel bribes to foreign officials, often using third parties such as agents and intermediaries, with the aim of winning contracts.

Corruption in public procurement denies access to contracts for more efficient competitors or those with better products, including other competitors from the UK.  For ordinary people in developing countries, the end result, besides poor or non-existent services, is an increased cost of living.  By working with UK companies willing to champion anti-corruption actions in their industry, we aim to raise standards and help to level the playing field.

5. A lack of accountability in the security sector

Unchecked military power undermines democracy. In places like Egypt, China, and Pakistan, relatively small groups of elites use the security institutions of government not to serve interests of people, but to retain power and control over the population – leading to the widespread violation of freedoms and human rights.

Moreover, the misappropriation of the state security apparatus creates risks to internal stability. Radical ideologies attract the disaffected. Disillusionment and distrust in government institutions bolster the ranks of non-state actors from organised crime groups to terrorist organisations – Boko Haram, ISIS, the Taliban and others have drawn on public anger and the narrative that governments are corrupt to secure recruits and support.

Unfortunately, despite earlier assertions, TI-UK staff can’t quit just yet. Maybe next year.