On May 12 the World Corruption Summit will take place in London. The Tax Justice Network conference, taking place today and tomorrow, is focussing on the issue of corruption, which it defines as follows:
Corruption is the abuse of public interest and the undermining of public confidence in the integrity of rules, systems and institutions that promote the public interest.
This definition is broader than those offered by the likes of Transparency International, who suggest it is “the misuse of entrusted power for private gain” or the World Bank's “the abuse of public office for private gain”. This is important. These very narrow definitions are themselves usually interpreted quite narrowly. What we need is a much broader perspective on this issue and in the context of May 12 this is vital: unless the definitions used are appropriate the outcomes of that conference will be inadequate.
I confess I am not confident that the appropriate definition will be used, and would suggest that if it is not that will, in itself, be a form of corruption.
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This is important in the context of the debate about divisions between ‘legal’ and ‘illegal’ abusive tax practices. Both can be captured under the TJN definition of corruption. So it may be legal, it may not. But it is, effectively, corrupt.
The ICRICT declaration: http://www.icrict.org/wp-content/uploads/2015/06/ICRICT_Com-Rec-Report_ENG_v1.4.pdf stated this very clearly:
‘Abusive multinational corporate tax practices are a form of corruption’
(Which turned out to be probably the most controversial statement in that document)
It is a line that was subsequently echoed by World bank President Jim Yong Kim when he said;
“Some companies use elaborate strategies to not pay taxes in countries in which they work, a form of corruption that hurts the poor.”
So there is some high level backing for the TJN view of corruption.
I agree Toby
And thanks
Even if the definitions are ‘appropriate’ the verbal loopholes will be grand canyon sized. Grift and graft is so endemic that it has become ‘mental wallpaper’ so power and private gain are synonymous.
Start with an examination of moral principles, then look for practical definitions that allow us to pursue a moral objective to good effect in an imperfect world.
Corruption is a failure to discharge contractual oblications or sworn duties, or a violation of trust, by action or wilful inaction, in pursuit of gain.
An aside:
Corruption exists in the private sector – purchasing and contract management! – as much as it does in public bodies.
…Back to principles:
Note that personal gain is not the only corrupting gain: class warfare, tribal ‘Mugabe economics’ and favouritism are somewhat indirect in their effects, compared to nepotism and private gain; but they can and do corrupt the discharge of public and private duties.
An act of malice whose effect is to the detriment of all is not corrupt, as there is no material gain; although it is arguable that the perpetrator’s satisfaction in the act is morally indistinguishable from ‘gain’.
What does this mean in practical terms?
The law will generally view such acts and omissions as wilful negligence or malfeasance, rather than corruption – there’s a pragmatic view that a prosecution for corruption should be founded on the material evidence that demonstrates a material gain.
It is difficult to place a political ideology in this moral analysis: we could argue that an ideologically-driven policy contrary to the public interest, conducted with a reckless disregard for evidence of its destructive effects, is corrupt – or at least constitutes malfeasance; but they, in turn, could argue that they act in a sincere belief that their ideology serves the greater good.
So I, too, take a pragmatic view: the pursuit of material gain for oneself, or for an affinity group, to the detriment of public duty, trust, or contract, is corruption.
You can build good law on that, and effective treaties and regulations; you can also build effective campaigns on that pragmatic approach, while remaining true to your principles.
Who gets to decide ‘public interest’?
It ends up being the people in charge.
Zimbabwe has a law forbidding ridiculing Mugabe. There is a German comedian in hot water over satirising Erdogan. Undermining confidence in the institution of the Presidency is the justification.
What is an institution that promotes the public interest? I imagine the Catholic Church and the Church of England would include themselves. If you disagree, you’ve got a fight on your hands.
I prefer the TI definition.
If you like the status quo you will
Wouldn’t just a straight definition of ‘lack of moral rectitude’ do the job?
Of course many may dispute the precise morality but if obliged to justify it in public I doubt there is much misunderstanding.
As is often said — and I think with justification — openness is the best disinfectant, and this would be a much more strightforward and effective aim than a conference against corruption.
There seems to be missing a set of defining human principles that can be agreed across cultures and jurisdictions, against which a “corrupt” activity and/or person can then be investigated further and assessed.
For example, is the action and/or person in question:
a) Honest
b) Open
c) Aboveboard
If not all of these three, then it is potentially corrupt action and/or person and worthy of further investigation (in my view).
A simple approach such as this avoids the need for complex legal and moralistic debate at an international and national level, as long as agreement can be achieved on the definition and meaning of these three words (which in itself could lead to lengthy philosophical discussion!)
Not directly relevant to this post, but I thought you might be interested in this entry in Naked Capitalism
http://www.nakedcapitalism.com/2016/04/has-the-time-come-to-consider-criminalising-tax-avoidance.html
Shared on Twitter
Thanks
Not sure about entering this particular bear pit but:
Reading some of the comments above I recognise a dichotomy I have found to exist in other areas. The offence of corruption is difficult to define because, as things are there, there is a need to seek malign intent to prove guilt. In this it holds parallels with other complex offences, tax evasion/avoidance for instance.
I begin my approach from a claim I make in a paper I have been writing for years:
Society exists and is property held in common by population and State. It operates as a compact. In return for freely surrendering some of our natural rights, to exercise our individual unfettered free will, an elected administration will zealously guard those rights we have chosen as a society to retain.
Corruption is an offence against society regardless of whether it is perpetrated by or on a group or an individual. Using the archaic meaning of the word, decay and putrefaction, corruption is an action or inaction that tends to undermine or distort the expressed values of society through covert means.
Remedy should be sought using a variation of principle recognised both under Common Law as in the UK and federal systems as in the USA (except Louisiana). That principle is similar to the General Anti Avoidance Regulation you proposed Richard. It is also similar to the Duty of Care regulations. These are applied using the ‘Reasonable Person’ test. Thus:
Corruption can be said to exist when a three stage test is applied successfully by a reasonable person.
The harm which occurred must have been a reasonably foreseeable result of the defendant’s conduct;
A sufficient relationship of proximity or neighbourhood exists between the alleged wrongdoer and those who have suffered damage
It is fair, just and reasonable to impose liability.
The harm caused need not be financial, that in my opinion would apply to the Hillsborough case or the Rotherham child exploitation case. I would also suggest that the time has come for the elected body to publish the Bill with a Judicial Advisory Narrative printed on the face of the Bill stating the intentions of the elected House. A judgement can be made by the population on the actions of their elected representatives at a General Election. The level and nature of intent it is necessary to prove for conviction is low. It follows from this that the level of penalty might be lower than some would wish. As a result I would suggest that the offence be tried under civil law (unless it entails fraud or other criminal act) and be judged on the balance of probabilities.
Tgat’s an interesting use of the double reasonableness test: would reasonable person think it reasonable to consider this corruption?
I recognise the complexities of this subject hence my trepidation. Sometimes I have failed to speak out when others have done wrong. Sometimes I have done wrong myself. Both could be considered corrupt behaviour. In my defence I would argue that these instances have been of minor substance and the harm caused was minimal. However, I contend that I have not suggested a hypocritical system in that I would be content to be judged by it and accept the judgement of my peers.
Considering Lord Acton’s statement on power and corruption, power should not be allowed to pool in a few hands. Practicality dictates that this is a nuanced aspiration. Common sense dictates that mistakes will be made, often for the best of intentions. The balance is in the retention of democratic process, operating under a rule of law applied equally to all. What I offered was an attempt to advance fairness, the antithesis of corruption and another indefinable yet tangible concept, without distorting the balance of power between the agencies of state and the populace. Your logical torpedo shows just how much more thought is required before I can feel confident enough to publish.
Thanks Bill
How about this for an example of state corruption!
It’s now looking even more like we’re are on a dangerous road to a stazi state.
http://www.thecanary.co/2016/04/28/government-using-anti-terrorism-measures-green-party/
And is this in any way an example of corruption?
Or just naked self-interest that sees no moral conflict in taking large sums of money from a member of a dictatorial, ruling family controlled, non-democratic, human rights abusing state in order to feather one’s own nest?
And even more ironically that he was helping them do business with the most dictatorial, non-democratic state on the planet. Quite astounding!
One thing is for certain, Tony Blair has nothing to do anymore (if he ever did) with the moral principles that form the bedrock of both real democracy and real socialism.
It really is not surprising that the vast majority of the public have no faith in most senior politicians of the major parties anymore. Personal values do not start and end when you become an MP (or a PM).
“According to the contract signed in November 2010 between TBA and PetroSaudi, Blair would arrange introductions to high-ranking officials in China. The work was lucrative: Blair’s firm was to be paid $65,000 a month plus a “success fee equal to 2%” of any deal TBA introduced to PetroSaudi. In the period from September 2010 to February 2011 Petrosaudi paid $382,000 for TBA’s services.”
http://www.theguardian.com/politics/2016/apr/28/tony-blair-chinese-leaders-saudi-princes-oil-firm-middle-east-envoy
Very interesting question. I live in the Netherlands and the common perception of corruption is Italian council workers taking cash to give planning permission or ‘Greeks’ not declaring their earnings.
Never mind the Netherlands exceedingly dubious role in corporate tax evasion or the plethora of politicians caught with their fingers in the cookie jar.
We even had the results of 2 parliamentary inquiries into fraud in the construction industry swept under the carpet since fault went as far up the chain as under-ministers.
Take this paradox
TI says the UK us the tenth least corrupt country in the world
And we had PPI and Libor rigging
And the biggest tax haven network
Absurd
Another good example of the political corruption of the legal system to try to suit the interests of a narrow group of individuals and their corporate paymasters.
Perhaps more shocking is the failure of the so called Opposition at the time (led by Miliband but essentially still New Labour in dominant ideology) to stop this abuse of power, which is a clear indication of the failure of the current (non-representative, non-democratic) two party political system to truly represent the interests of the ordinary people of this country.
http://anotherangryvoice.blogspot.co.uk/2016/04/iain-duncan-smiths-retroactive-workfare.html