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Integrity Against Shady Deals

Transparency International and the Fight against Corruption

 

From: Stimmen der Zeit, 2/2014, P. 108-118
webmaster's own, not authorized translation

 

    Last year, Transparency International celebrated its 20th anniversary. Paloma Fernández de la Hoz, social historian and educator at the Catholic Social Academy of Austria in Vienna, gives an insight into the aims and methods of the internationally operating organization.

 

In 2013, the umbrella organization Transparency International (TI) celebrated its 20th anniversary. On this occasion, on 8 November 2013 also the Secretary General of the United Nations, Ban Ki-moon, congratulated the non-governmental organization (NGO). He praised its commitment to fighting the "crime of corruption," as well as its method of working in networks with professionals, governments and other organizations. In November 2011, TI was awarded the prestigious prize in social science A.SK Social Science Award of the Science Center Berlin for Social Research. By it, contributions to societal and political reforms are honored. With TI, it was in 2011 for the first time given to an institution.

In the meantime, TI has become well-known worldwide. The organization is considered to be reputable and reliable - an indispensable commendation in the fight against corruption. Reports and opinions of TI are repeatedly cited in literature as well as by official institutions. The organization intensively uses the new mass media, in order to inform about its current activities. A few clicks in the Internet are sufficient to follow the work of its sections in Germany, Austria and Switzerland. What is its contribution to the fight against corruption? Where are the border-lines of its activities?

 

Corruption - a dark Phenomenon

From the Indo-European root "reup" (snatch, break) the Latin verb "corrumpere" developed. The terms break together, deprave together are constituent images of the original word. It expresses on the one hand the negative impact of the corrupting activity, and on the other it gives expression to the required complicity.

The answer to the question of what corruption means depends partly on the respective culture. That's why still no generally accepted juridical definition of corruption exists. In literature, however, two essential features of the phenomenon are repeatedly emphasized, namely abuse of power (means) and enforcement of one's private material interests (purpose). From the socio-ethical perspective, those who abuse their position of power are corrupt, because the responsibility which they should exercise is neglected by them in favor of their own material benefits.

 


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It is clear that corruption may basically occur in many areas of life (politics, economy, social coexistence, private domain) {1}. This fact is extremely problematic, because there are many subtle forms of exercising power in favor of one's own interests, and not all areas of life are equally transparent for legislators and society. In practice, one usually regards corruption as the abuse of power in public areas. In the following, we give our attention to this kind of corruption and its control by TI.

 

Corruption - a worldwide Phenomenon

Corruption phenomena have for about twenty years increasingly been intensively investigated. The economic studies at the beginning of the 1990s dealt mainly with the questions about the roots and the impact of corruption. These are already to a large extent clear for professionals, but not always for the public. That's why attention is now given rather to the various manifestations of such a diverse and so rapidly changing phenomenon.

1. The roots. Corruption is a global phenomenon. It flourishes both in rich and poor countries, resp. may flourish in principle. Contrary to a widespread wrong view on corruption, which is certainly satisfactory, and even flattering for citizens of post-industrial countries, abuse of power does not necessarily and exclusively correlate with educational deficits and substandard economies, although these factors increase poverty and have a tendency to promote considerably corruption.

According to the latest TI report of 2013, the Sudan and the Philippines, for example, are two of the few countries where corruption declined {2}. The causes of this phenomenon are different. Besides poverty and development deficits, they include also other economic and psychosocial factors: the presence or the increase of strong inequalities in the distribution of wealth; widespread anomie (corruption as a peccadillo); general distrust towards people with public responsibility and serious estrangement between the population of a country and its ruling institutions; the pressure of transnational companies on institutions to enforce their own interests at the expense of the interests of a country {3}.

The question about the roots of this self-centered abuse of power is politically quite relevant to the practical life. For beyond all these mentioned factors, it is possible to interpret corruption as an anomaly, i.e. as the result and the sum of individual aberrant behaviors within a society or as the endogenous problem of a particular social (dis) order - and subsequently to combat it.

 


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In the first case, emphasis is laid on the control of individuals. In the second case it is put on the reform or even on the reduction of those socio-economic and political structures which inevitably generate corruption.

Given the current development processes of the global market economy, this core question seems to be justified. But the answer is not definite. In practice, very few people position themselves at one extreme of these two interpretive poles. However, it is certainly important to what extent the members of an organization against corruption believe in the social order in which they live. TI here pursues rather a reform course, but without therefore refraining from advocating the need for certain structural changes. Other organizations - as e.g. Attac - prove to be more critical of current global processes, as a result of which financial capitalism and the primacy of the market prevail. They develop alternatives to the current economic order, as e.g. redistributive measures.

2. Consequences. As first consequences of corruption, the economic impact has been examined. Today, the negative consequences for the economic and social development within a country and also globally are undisputed. In the period from 1999 to about 2012, the European Anti-Fraud Office (OLAF) of the European Commission has recovered EU funds in the amount of 1.1 billion euros, which would otherwise have been lost through abuse of power {4}. Some authors claim to see positive effects in corrupt practices (as e.g. the black economy as a remedy for unemployment). What can be gained from such contributions is to take also cultural factors and different social contexts into account, in a time of "asynchronous concomitance." However, this may in no way leave out of account the long-term consequences of corruption. In some countries, corruption is blocking development processes. In others it is threatening the already achieved prosperity. And everywhere social instability is fuelled by it. In the long term, the State is undermined, and so its role as guarantor of rights is weakened, while social inequalities increase. This is the reason for the importance of tools which enable us to analyze as accurately as possible such a harmful phenomenon, and subsequently to combat it.

3. Manifestations. The juridical identification of corruption as a crime in public life and its subsequent punishment are very difficult. Firstly, because those who act illegally have no interest in clarity. And secondly this is precisely the reason why numerous varieties of corrupt actions exist. Bribery (corrupting of agents) needs not necessarily to be expressed explicitly or remunerated directly and in a blatantly obvious manner. Phenomena of the so-called "network corruption" ("people know each other and help each other" {5}) are also elusive.

 


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That's why not all corrupt practices are by law categorized and prosecuted as crimes - and even if this is the case, they are not always sufficiently provable. Transparency is therefore the indispensable prerequisite for the prevention and fight against corruption. The more clearly the powers and limits of action are defined for people who hold an office, the better all parties are informed, the less room remains for corrupt actions. The fact that today's most important civil organization against corruption is named "Transparency" refers to this core insight.

Moreover, in the age of globalization not only new forms of corruption emerge (as e.g. the "militarization of poverty in Africa" {6}) or old ones gain in importance (as e.g. in the area of human trafficking), but also transnational forms of abuse of power occur. Today, no country is free of corruption. On the contrary, its manifestations only change - depending on the socio-economic conditions.

"As a country becomes industrialized, its governance and corruption challenges do not disappear. They simply morph and become more sophisticated: Transfer of a briefcase stashed with cash is less frequent." {7}

The phenomenon of transnational corruption nowadays requires first of all continuously improved and intensive methods of observation, and then solid coalitions and networking activities with regard to combating it. How does TI take these two aspects - monitoring and networking activities - into account?

 

Transparency International and the Fight against Corruption today

The mentioned new forms of corruption raised the general awareness. That's why since the early 1990s the fight against corruption has become very active. The phenomenon is studied systematically in science. Official institutions define their own strategies. Even organizations and initiatives of civil society emerge, in order to declare war on corruption.

1. International Institutions. Depending on their identity, international institutions define their priorities in the fight against corruption. In their work, all of them put emphasis on monitoring and cooperation between states. The Council of Europe takes action against economic corruption and money laundering {8}. The Organization for Economic Cooperation and Development (OECD) regularly adopts guidelines and recommendations for the governments of its member countries for the fight against corruption in the public sector and points since 2009 to the growing importance of transnational corruption in trade.

 


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Within the European Union, in 1999 the Commission has established the department OLAF, in order to fight against corruption within the institutions and bodies of the EU {9}.

Also the United Nations fight against corruption. In 2003 they adopted the United Nations Convention against Corruption (UNCAC), the first treaty which is globally binding under international law, in order to combat corruption. In November 2013, it was ratified by 168 States - including Austria and Switzerland but not Germany {10}. This convention emphatically points out the necessity to counteract corruption by a combination of two types of intervention, namely by measures of prevention and control. This requires not only an accurate and updated legislation but also other elements, as e.g. coordination work between the various political institutions; ongoing reliable knowledge of the phenomenon (monitoring by scientists); training at different levels (schools, adult education, awareness- and information campaigns). The OECD, too, emphasizes the importance of those elements and has in addition to it presented an international comparison of different institutions which are specialized in the fight against corruption, in order to explore the effectiveness of different strategies {11}. The message is clear: The fight against corruption is a matter for everybody. It has to mobilize all forces in a society, in order to be successful. The same insight can be found on the websites of the sections of TI as starting point for their self-understanding.

2. Civilian organizations. In recent years, on the part of civil society numerous initiatives and associations emerged worldwide {12}. They vary in terms of geographical areas of action and also in the characteristics of their work. Just a few examples: Corporate Europe Observatory (CEO) is a non-profit organization. It investigates and combats the privileges of lobbyists and their improper influence on political decisions of the EU.

GOPAC (Global Organization of Parliamentarians Against Corruption) {13} is a network of politicians from Latin America (Mexico), Africa and Asia. They support each other, share experiences, and organize national campaigns to sensitize the public. In economy, too, specific initiatives emerge. In 2010, for instance, the German association BME (Bundesverband Materialwirtschaft, Einkauf und Logistik) started the "BME-Compliance," in order to help businesses in defining internal standards for the prevention of corruption. Some national initiatives and organizations have clear reactive traits and oppose the abuses in their own country, as e.g. the Austrian action "Zwitschern gegen Korruption" {14} or the Spanish "Liga Anticorrupción" {15}.

 


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A World without Corruption?

Transparency International was founded in 1993. Its Vision:

"A world where government, political life, economy, civil society and everyday life of people are free of corruption." {16}

Such an ambitious target is understandable from the genesis of the NGO. Peter Eigen, founder of TI, worked for years for the World Bank in East Africa and came from his own experience to realize that corruption ruins development projects. However, he realized that the necessary fight against corruption was impossible in the context of his professional career in the World Bank. And so the idea emerged in him to create a civil society organization for this purpose {17}.

1. An important organization. TI is now undoubtedly the most important non-governmental organization which specifically deals with integrity in the economic and political life. The reasons for its importance are different: TI has managed since 1993 to build a very large network. The umbrella organization has currently more than 100 national sections, although not all of them have the same weight: In Russia and Japan, the presence is in fact very weak, even if these countries appear on TI's world map as sections of the organization; the same applies to China {18}.

The TI network is nonetheless remarkable - not only quantitatively but also qualitatively. Exceptionally qualified people with specialist knowledge and often experience in the fields of politics, science and business belong to the bodies of the umbrella organization and the national sections. This human capital enables an effective and intensive networking work at a high level, which corresponds to a central conviction of the organization:

"An effective and sustainable control and reduction of corruption is only possible if government, industry and civil society cooperate and form coalitions."

2. Funding and organization. The funding criteria of TI are based on three principles: Independence from political institutions and economic establishments; far-reaching independence of the national sections; transparency in budgeting.

In order to take account of these principles, TI sets limits on the different types of financial contributions (membership, sponsorship). In addition, on the website of the umbrella organization detailed information on its funding criteria, its budgets, the donations received, and the institutions which it promotes can be found. In 2013, the NGO planned revenues worth 28.17 million euros.

 


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Approximately 90 percent of it came from institutions, 3.6 percent from private sponsors, just under 0.3 percent of foundations and 5.5 percent from other sources {19}. To date, TI enjoys a high reputation in the mass media, and there was no news of irregularities in the finances of TI. However, TI is - as other NGOs, too - dependent on public funds; a tendency that obviously becomes prevalent:

"Thus, the NGOs are more dependent on the political guidelines of the states which finance them than their name suggests it." {20}

3. Coalitions. The concern about coalitions characterizes the practice of TI: "We are not working confrontational". {21} One primarily tries to gain allies, in order to design prevention strategies. One abstains here from protest and denunciation in concrete cases of corruption, at least in principle. The focus of attention is primarily the target status and not the actual status. This accentuation distinguishes Transparency International from NGOs such as Human Rights Watch or Amnesty International {22}. The latter concern themselves with human rights, and not primarily with corruption. However, in practice so many violations of human rights are due to abuse of power, and so the two mentioned well-known organizations are constantly faced with corruption. Here, advocacy, moral denunciation and references to individual cases are essential elements of their practice. This is not the case with TI.

The search for coalitions also explains why the members of TI are both individuals and institutions as e.g. local authorities or juristic persons under private law - such as companies or associations. Among them are also very powerful juristic persons. In 2010, for instance, Daimler AG, German Bahn AG, German Lufthansa AG, Allianz SE, Hochtief AG and Robert Bosch GmbH were members of TI-Germany. By the membership of such heavyweights, the potential for action, influence and networking of the organization is obviously strengthened, but it also harbors significant risks. Thus, in December 2006 the Siemens AG's membership of TI-Germany was terminated by mutual agreement {23}. TI-Germany, in principle appreciates the membership of companies, because this opens up the opportunity to learn from each other in the fight against corruption. If a firm has no transparent profile or uses its membership of TI for image care, this may affect the authority of TI. The organization secures itself against this by a strict membership principle {24}. But the risk remains.

One mainly relies on competent coalitions, in order to enable integrity. This is in principle a legitimate action strategy. However, in the texts of TI it is not quite so clearly expressed, when and where coalitions are formed with not so qualified, not so powerful, not so influential people, although also they had valuable information for the prevention of forms of corruption with which they must so often live.

 


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4. Preventive work. TI is mainly working preventively. It is important to achieve structural changes in order to enable integrity. The main objectives of the organization are on the one hand to raise awareness of the harmful effects of corruption, and on the other hand to consolidate national and international corruption-free social areas. Networking work is not merely a phase of TI's activity. On the contrary, it is the axis of all activities. By means of contacts with governments, professionals, entrepreneurs and NGOs TI gets accurate data about corruption in diverse countries, namely about its degree, its manifestations. These findings are inserted in generally accessible publications. And together with its partners, the organization develops possible measures to combat corruption. In addition, TI-members practice educational work and do a lot of persuading by means of personal contacts with individuals, groups and institutions.

5. Explosive priorities. These constant exchange processes also enable TI to develop the appropriate focus areas for the detection of new forms of abuse of power and to start thus counter-strategies by the respective initiatives. Examples are the current initiative for the legal protection of whistleblowing (disclosure of serious shortcomings) in the European Union or the international observation of corruption in the military sector. The respective report, in which 28 kinds of this specific corruption are identified, was released in October 2013 {25}.

Since the national sections of TI work quite autonomously, most initiatives are launched at this level. Examples are the in 2010 by TI-Germany launched transparency campaign for donations and for the support of the DZI fund raising certifcate or the campaign of TI-Croatia "Public interest - not for sale" in 2011. The local sections represent not only the common themes of the umbrella organization but set also own work priorities. TI-Austria, for example, deals with the prevention of corruption in development cooperation and provides appropriate support. In 2012 TI-Poland provided an "Assessment of the National Integrity System (NIS)" for the evaluation of its Polish institutions. TI-Ireland provides templates for the regulation of lobbying. TI-Hungary observes and criticizes the Hungarian legislation on the financing of political parties and election campaigns.

Specific comments of the sections of TI are not usual but happen time and again. On 19 November 2013, for instance, TI-Austria has presented a total of 15 demands against corruption in politics, business, administration and civil society. They include, inter alia, the expansion of whistleblower systems or the involvement of communities with less than 10.000 inhabitants in the "Compliance regulations" (conformity with the rules regarding the measures against the abuse of power) {26}.

 


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In the course of the affair because of the large donation by the Quandt family to the CDU, TI-Germany has demanded that the President convenes a Special Commission. Just as the NGO LobbyControl, it advocated a limit on the amount of donations to political parties (up to 50.000 euro per company and year) {27}.

6. Publications: materials and reports. The publications of TI may be downloaded from the Internet free of charge. They pursue consistently either the goal of raising awareness by their dissemination or the goal of monitoring. To the first publications belong various materials in which the importance of anti-corruption is explained and prevention measures in everyday life are presented. They include, for example, the "Corruption Fighters' toolkits", which are primarily intended for educators and NGOs, or the "Integrity Pacts" for institutions.

And finally, TI also deals with research on corruption. It provides its "Gateway corruption assessment toolbox" for professionals. But the best known contribution of the NGO is undoubtedly the creation of the Corruption Perceptions Index (CPI). On the basis of this index, reports are regularly published. The most-cited are World Reports which give an overview of the state of corruption in different countries. These reports are annually published, and so it is possible also to follow up development processes. In addition, there are specific reports: in 2013, for instance, the "Global Corruption Report Education" and the report "Exporting Corruption." The latter publication assesses the efficiency of the enforcement of the OECD Anti-Bribery Convention.

7. Contribution and limits of an index. The Corruption Perceptions Index (CPI) of TI is compiled by the Internet Center for Corruption Research in Passau and is undoubtedly valuable. For the first time, a systematic observation of corruption is made possible. Due to this, the general awareness of this problem has significantly been increased. However, this instrument harbors some methodological difficulties. The Corruption Perceptions Index measures the perceived - but not the actual - corruption among civil servants and politicians in a country. It is created on the basis of various surveys and studies. A quite complex methodology is behind this. It is gradually developed and refined. The CPI must therefore be complemented by other access methods, as e.g. by the index of bribery payers, in order to overcome a distorted picture of the world: the countries of integrity in the North against the corrupt countries in the South.

It is difficult to communicate all these professional subtleties. That's why they hardly reach the public opinion, where only the ranking of countries usually becomes known. If one looks at it out of context then this is methodologically problematic {28}. For social scientists rankings are mostly approximate data, but in public they have a different effect. They often help to disseminate inaccurate pictures or to encourage prejudices.

 


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A reform-oriented NGO

Transparency International is a reputable and committed NGO with a clean image in the mass media. Like many other NGOs it is dependent on public funding. It works primarily through qualified members, coalitions and networks. Less qualified grassroots movements and partners are not so much visible. The partnership with corporations is admittedly risky, but to date the NGO managed it to remain unharmed by this cooperation.

Transparency International is a reform-oriented organization. In the fight against corruption it time and again takes decidedly a stand, without calling the social order as such into question. Although the dissemination of the results to the public is not always unproblematic, its contribution to the general awareness of corruption, to the research on this phenomenon, and to the fight against it is undeniable.

 

NOTES

{1} See www.transparency.de/was-ist-korruption.2176.0.html (accessed 12. 11. 2013).

{2} Transparency International, Global Corruption Barometer 2013, TI, 7.

{3} Alvaro González, Dimensiones de la corrupción, in: Luis Oblitas / Angel Rodriguez (eds.), Psicología política. Mexico 1999, 165-196.

{4} See http://ec.europa.eu/anti_fraud/investigations/fraud-in-figures/index_de.htm (accessed 2. 11. 2013).

{5} Konrad Adenauer, quoted from Robert Vehrkamp, Die ökonomischen Konsequenzen der Korruption, Wirtschaftsdienst 85 (2005) No. 12, 776-783, 777 (http://dx.doi.org/10.1007/s10273-005-0451-2 accessed 1. 11. 2013).

{6} Toby Moorsom, The militarisation of poverty in Africa: 29. 5. 201, in: http://www.aljazeera.com/indepth/opinion/2012/05/201252981756447470.html (accessed 2. 11. 2013).

{7} Original: "As a country becomes industrialized, its governance and corruption challenges do not disappear. They simply morph and become more sophisticated: Transfer of a briefcase stashed with cash is less frequent."

{8} Group of States against Corruption (GRECO); Committee of Experts an the Evaluation of Anti Money Laundering Measures and the Financing of Terrorism (MONEYVAL), in: www.coe.int/t/dghl/cooperation/economiccrime/corruption/default_en.asp (accessed 1. 11. 2013).

{9} Results of OLAF' work in: ec.europa.eu/anti_fraud/investigations/fraud-in-figures/index_en.htm (accessed 1. 11. 2013).

{10} Text in German in: www.un.org/depts/german/uebereinkommen/ar58004-oebgbl.pdf (accessed 1. 11. 2013.

{11} OECD (2008), Anti-Corruption Institutions. Review of models. Anti-Corruption Network for Eastern Europe and Central Asia, in: www.oecd.org/corruption/acn/library/39971975.pdf (accessed 1. 11. 2013).

{12} On the website of the UN-Departments for Economic & Social Affairs there is list of NGOs against corruption which cooperate with the United Nations: http://esango.un.org/civilsociety/login.do (accessed 2. 11. 2013)

 


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{13} http://gopacnetwork.org/fr/sections-de-gopac/ (accessed 1. 11. 2013).

{14} Source: Kurier, 10. 10. 2012, in: http://kurier.at/politik/inland/initiative-twittern-gegen-korruption/1.856.527 (accessed 1. 11. 2013).

{15} www.ligaanticorrupcion.net/ (accessed 1. 11. 2013).

{16} www.transparency.org/whoweare (accessed 1. 11. 2013).

{17} Peter Eigen, Das Netz der Korruption. Wie eine weltweite Bewegung gegen Bestechung kämpft. Frankfurt 2003, 35.

{18} www.transparency-usa.org/who/ (accessed 1. 11. 2013).

{19} www.transparency.org/whoweare/accountability/who_supports_us/1/ (accessed 1. 11. 2013).

{20} Vincent Troger, Les ONG à ľ épreuve de la critique, in: Sciences Humaines, 131 (Octobre 2002); accessable also in: www.scienceshumaines.com/les-ong-a-l-epreuve-de-la-critique_fr_2655.html (accessed 5. 11. 2013.

{21} www.transparency.de/was-macht-transparency-deutschland-dagegen.2177.0.html (accessed 2. 11. 2013).

{22} Vgl. Nikolaus Klein, Fünfzig Jahre Amnesty International, in: Stimmen der Zeit 229 (2011) 291-300.

{23} According to the statutes of TI-Germany an expulsion is only possible if "a member deliberatels and grossly negligent violates the interests of the association or his/her behavior is likely to impair severely the reputation of the association"; see www.transparency.de/Das-Institut-der-korporativen.977.0.html (accessed 2. 11. 2013).

{24} www.transparency.de/Das-Institut-der-korporativen.977.0.html (accessed 2. 11. 2013).

{25} Government Defence Anti-corruption Index, in: http://government.defenceindex.org/ (accessed 19. 11. 2013.)

{26} See http://derstandard.at/1381373819741/Transparency-International-15-Forderungen-gegen-Korruption (accessed 19. 11. 2013).

{27} Süddeutsche Zeitung, 16. 10. 2013.

{28} See Daniel Kaufmann, Corruption Index today, Development Aid Reform tomorrow?, in: http://thekaufmannpost.net/corruption-index-today-development-aid-reform-tomorrow/ (accessed 18. 10. 2013).

 

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