How to tackle corruption | The Economist
Corrosive. Catastrophic. People feel what he is now. And often. Covertly. Monopoly. Corruption. Costs the world, nearly three, trillion, dollars. Every year. And blights the lives of hundreds, of. Millions. But in some parts of the world. There's a renewed, drive, to disrupt, corruption. We need to act with urgency. And purpose, to restore. Our state-owned. Enterprises. From bold moves at the top. We've got to make sure that there's strong. Committed. Ethical, leadership. To new technologies. Shining, a light on the problem. Now in ukraine. We have the most, transparent, corruption. In the world, communities. Companies. And countries. Are learning lessons in how to root out corruption. Our country. Changed, to, one of the obvious, technological. Leaders. Hold the guilty to account. This was one of the largest cases the sfo had worked on. And challenge the culture, that allows it to continue. Do we accept the way it is, or do you stand up for. Something. This is a notoriously. Violent, and lawless, district, of cape town in south africa. Here in cape flats. There were almost a thousand murders, in the first six months of 2019. And police corruption. Is helping to fuel this violence. Our quarter was a, year old year so we decided, to give him a little. Party. He grew up in the community. As a teenager. He got married. One kid. And then in 2015. He was murdered. Avril, andrews. Says both she and the police. Know the identity, of the killer. Who shot her son, alcardo. Dead. But avril believes police corruption, has stalled her search for justice. Corruption, affects, our community, very much, i've experienced. It myself, in police, even with the recent, case. One of the guys. Tried to intimidate. My family. Our community, is going down. You know, people feel there's no hope. Since her son's death. Avril, has spoken, out publicly. At great personal, risk. Against the corrupt, forces, undermining, the rule of law in her community. El cado. This is the fourth year, that, we, are, seeking justice. There are certain, things that you've discussed, with me. That you would have loved to do in the community. So i'm doing it for you. I believe, we're going to get justice. In south africa. The police are known to supply weapons to gangs. In 2016. A former police colonel pleaded guilty to illegally, selling 2, 400, guns. Most ended up in cape flats. Where nearly 2. 500, shootings, have been linked to illegal guns since 2010. Including. 261. Child, victims. Within the south african police. Anti-corruption. Campaigners, have documented, over, 475. Reports, of bribery. And over 300. Reports of abuses, of power. Avril, has founded a support, group for bereaved, mothers. Campaigning, for justice, in the face of this corruption. Thank you ladies for being here. In the past six years. 229. Dockets. Records, of court proceedings. Are reported to have gone missing, in western, cape. Leslie weingarte. Whose son was also murdered in cape flats. Says the files related to his case, mysteriously. Disappeared, from the courthouse. Prosecutor. Told me but i had the file i had the faster somebody, sneaked, that file, out of his office. And made it. Disappear. In south africa. The rot of corruption. Runs, deep. This secretly recorded, footage. Captured a successful, businessman. Gavin watson. Seemingly, organizing, to pay bribes, to government. Officials. Watson. Who died in 2019. Was a hero of the anti-apartheid. Struggle. And had close links to the anc, party. Which has been in power for 25. Years. During the nine-year, presidency, of jacob zuma. This corruption. Captured the state. Right up to the very top. He and his cronies, plundered, state-owned. Enterprises. In zuma's second term alone. About a hundred billion us dollars was stolen. Just short of a third of south africa's. Gdp. But south africans, demanded, change. And in 2019. They elected a new president, on an explicit, platform, to crack down on corruption.
Cyril Ramaphosa. Has set out to provide the clean leadership, that is vital. In any fight against, corruption. We need to act with urgency. And purpose, to restore. Our state-owned. Enterprises. Those who monitor the excesses, of the zoomy years. Are hopeful, his successor, will drive change from the top. Corruption watch has been in existing space. Years, now. Mostly, during the zuma administration. And working with the two administrations. Is like. Night and day. We now, encounter, an administration. That is much more willing. To work with the likes of us, doesn't mean that we don't have to be vigilant, in holding them to account. But it is there's definitely, a new. Spirit. A foot in the country. Although still, huge, problems to overcome. The new leadership, has already begun to make its mark. I think it's achieved. A fair amount. In the period, since. Ramaphosa, was installed, as president. Key, zuma, acolytes, who were leaders of critical, institutions. Have been fired. Others put in their place. State-owned, enterprise, boards have been. Revamped. But fighting corruption, on this scale. Demands, more than just political, leadership. Commission, chairperson. Deputy chief justice, raymond zondor, announced. Yesterday. Key appointments, to his commission. In 2018. Judge raymond zondo. Was appointed to head an unprecedented. Commission of inquiry. Into how corruption, captured the state, under the zuma. Administration. We want to, have an idea. About the levels, of corruption, in the country. And what forms, corruption, takes. So that we can make recommendations. As to. What. The country should do. To try and. Bring it up to the absolute, minimum, levels of corruption. The commission has heard thousands of hours of testimony. From over a hundred, witnesses, to fraud and corruption. Zondo's, warts and all approach to exposing, the problem. Has been compared, to the truth and reconciliation. Commission. After the apartheid, era. Above, all it educates, the public, it places. Before the public, exactly, what happened during the, zuma. Administration. Which as you can imagine. Was subject to a lot of, false. News, and, factual. Manipulation. With the truth now emerging. There's also a fresh push for justice. A new chief public prosecutor. Has promised to clean up the national prosecuting, authority. Another, institution. Infiltrated. By zuma's, cronies. All right okay good. Shamila, batoyi, is a respected, former lawyer from the international, criminal court in the hague. And president ramaphosa's. Most significant, appointment, to date. People know, that it's not business as usual. If we want to be serious about addressing, corruption, we've got to make sure that there's strong. Committed. Ethical, leadership. In shamila, batoy's, new job, that means getting serious, about enforcement. We've got to look at, prosecuting. The right people, that is where, i think in the past the prosecution, the npa lost credibility. They failed, to, demonstrate. That they were. Serious, about tackling, corruption, and that is not just within the npa but certainly within the broader, law enforcement. Space. This kind of leadership. May start to convince, south africans, that rhetoric, has finally, turned into action. So i know that the people of south africa are impatient. Understandably. So they have every, reason. What is the greatest deterrent, to crime, the certainty. That there will be, an investigation. That there will be a prosecution, and there will be consequences. And the sad reality, is that in south africa, that wasn't the case in the recent. Past. While clean leadership, is vital to tackling corruption. So is having the ability, to spot it. In ukraine. Another country with a deep history of corruption. The struggle for greater financial, transparency. Has been hard. Fought. In 2014. A violent revolution, deposed, its notoriously. Corrupt president. Viktor yanukovych. During, four years in office. He and his associates. Stole an estimated. 40 billion us dollars from the public, purse. Activists, who helped to depose yanukovych. Have since traced the flows of this stolen, money, and helped to reveal the extent, of his. Corruption. One of them. Is. So we're in michigan. As a in famous, mansion. That belonged, to ex-president. Yankovic. Yanukovych. Earned an official, salary of about a hundred thousand us dollars a year. But he used the proceeds, of corruption. To build this lavish, palace. On, 345. Acres of land. Outside the capital, kiev. This is a huge territory. With. Big houses. And golf courses, and boxing, rings and restaurants. And his personal, zoo, with ostriches. It's a nice one. He has nice eyebrows. Kickbacks, and bribes, from government, contracts. Were one of the principal, ways of stealing, money from the state.
Two Billion dollars a year, used to be lost through government, officials, paying over the odds for anything from building materials. To medicines. One of the reasons why those in power could afford little luxuries. Such as a gold panel, chapel. Limited edition john lennon steinway, piano. And even toilet, brushes encrusted, with swarovski, crystals. Everything, here. Was built obviously, using, money siphoned from the budget. So basically. All this is like a museum, to the. Corruption. This kleptocracy. Was catastrophic. For ukrainians. Denying them affordable, health care, and good public, services. After yanukovych. Was deposed. Max and other activists, set about changing the system. That had allowed, corruption, to flourish. They determined, that one thing in particular. Would be vital to transform. Ukraine. Transparency. Specifically. The ability, to trace, and track the flows, of public, money. The beauty of the system, is that. This is just sort of like a website, with explanations. And open data. This online, system. Made the bidding process for government, contracts, more transparent. Now whenever government, officials want to buy something. They must put out a tender, on a single platform. Accessible, to anyone. These are the ongoing, tenders, of the kiev region, there are just over, 10 000, ongoing, tenders, right now, verse. 1.8. Billion euro. And these are the statuses. Of procedures. And so on and so on. Roughly, a million, tenders, go through the system, each year. And the system must openly, log every bid for every government, contract. As a combination. Of. Better usability. Compulsory. Auctions. And. Different, mechanisms. To fight, collusion. And. Price fixing. And different types of fraud. We're able, to save. About, seven to eight percent. Of, for the value of each tender. It's estimated, that the system known as pro zorro. Has contributed, to reducing, the cost of corruption, to ukraine. By six billion us dollars per year, since 2014. And the system, is now being used in other countries. I'm actually proud, that our country. Changed its positioning. From being one of the worst. Places for public procurement, in the world, to, one of the obvious, technological. Leaders, and pioneers. In this area. But whilst greater transparency. Has helped ukraine, to discover, and expose, corruption. The country, still lacks a vital, tool to tackle it. Effective, enforcement. Authorities, to hold the guilty parties. Accountable. More than 11, million, documents.
They Reveal, what's alleged to be a global, network. Of tax avoidance, evasion. And money laundering. When the most ruthless of the mexican, drug cartels, wanted to hide their money. They went to hsbc. In today's, globalized, world. Enforcement. Agencies, in wealthy countries, face a challenge to root out corruption, and deliver, justice. And they're increasingly. Deploying. New technologies. To help. So the investigation, covered three decades. Across three business sectors. And seven different, jurisdictions. This was one of the largest cases the sfo had worked on. In 2013. The serious fraud office in london. Began investigating. Systematic. Bribery. By one of britain's most prestigious, companies. Rolls royce. Five years into their investigation. The sfo. Had gathered 30 million, documents. And needed to determine. Which could be used to prosecute, the firm. We started, reviewing, it using the the old method which was just to use keyword, searches, and then, instruct, independent barristers, to review that material, and we needed to find a way to speed that up. Advances, in technology, meant that, ai and machine learning based products became available, that could help with this work. In the first use of ai, in a british criminal case. The system was able to search documents, 2 000 times faster than human lawyers. And, more reliably. And what this tool does is looks for patterns within the documents, patterns in communication. And what we were able to find was the results were more consistent. And that's not to say that the lawyers were making mistakes, but the reality is if you have five different lawyers, they will make different determinations. In court. Rolls-royce. Admitted, that in six countries across the world. Middlemen, had paid tens of millions of dollars in bribes. In order to secure, contracts, for the company. Aware that the punishment, faced by rolls royce could act as a useful deterrent, to other companies. The british authorities, ordered the firm to pay a record, fine of around, 650. Million dollars. In return for avoiding, prosecution. Critics, say that individual, prosecutions. Rather than just a huge, fine. Would act as a clearer deterrent, to future wrongdoing. But the serious fraud office insists. That money talks. A settlement of this size will absolutely, act as a disincentive. Against corruption, particularly, in a case like rollerboys. Where not only, does it have that financial, impact immediately. But there are certain conditions, which they must meet in terms of their systems and processes, and how they have to operate in the future. To demonstrate. To the court, uh that they are not uh, continuing, with this sort of behavior. Rolls-royce, says it has made a raft of changes. Strengthening, its compliance. And oversight procedures. And introducing. New technology. We now have an app a code of conduct, app, rather than a written document. That means that everybody, on their iphone. Has access, to. Support. Both in respect, of the policies, and the processes, but know who to speak to if they need, help. The company, insists, its actions, have brought about a culture change. Which will make corrupt, behavior, less likely in the. Future. I can tell you. That the exercise, we have been through at rolls-royce. Has not been box ticking, we provided, super cooperation. In respect, of fixing the past issues. We have taken incredibly. Seriously, and frankly spent a lot of money, dealing with both the past. And trying to set up the framework, for the future. But none of this would have happened, had rolls-royce. Not been. Caught. All too often companies, efforts to educate, staff about avoiding, fraud are motivated, by the demands, of compliance, regulations. Rather, than a genuine, desire to change the culture, around, corruption. Doing that. Requires, a new attitude, to the men and women, who lift the lid on corruption, in the first place.
Cynthia, Stimpell. Was group treasurer, at south african airways. A state-owned. Enterprise. In 2016. She discovered, that the company was apparently, planning to avoid due diligence, procedures. Cynthia, was asked to raise money to finance, debts. By paying a new company substantially. Over the amount, charged by banks. I, then said well i'm not prepared to sign it i'm not prepared to approve it, we should go back to the banks let's get a different costing. And i'm sure we will save money, but it went ahead, and it was approved by board, despite, my, refusal, to sign the documents. Cynthia, blew the whistle on this highly irregular, transaction. Well at the time, was. Firstly, a determination. That i need to do this, and that it's the right thing to do for my own personal, conscious. For my personal, values. For my. Own moral compass. My name is cynthia. Agnes, suraya. When she testified, at the zondo commission, into corruption. Cynthia, hit the public eye. As her actions had helped save taxpayers. 17, million, dollars. But south african airways, wasn't so grateful. Cynthia, lost her job. She has since joined forces with other whistleblowers. Who have suffered, similar fates. Their message is clear. If companies, are serious, about installing, an ethical, culture. They need to reward, whistleblowers. Not punish them. Most of the people here, held senior, positions, at major companies. All alleged fraud, at those companies. Yet all ended up losing their jobs for blowing the whistle. I thought. I would be protected. Because i followed, everything, to the tea. But what, the first thing that happened i was called in, and immediately. Suspended, without, even being able to speak i wasn't able to give my side of the story, i still, haven't had a hearing. The end result, is, that i've lost my job. Without, whistleblowers. We wouldn't have zondo commission. Everybody, asked but why people not speaking up but if you look at all the people that's gone to all these commissions. All of them have lost their jobs. So what does that teach you. Don't speak up because you'll lose your job. The culturing, companies, may be slow to change. But the increased, visibility, of whistleblowers. Is helping drive a broader, shift in south africa's, collective, will to challenge, corruption. Do we accept, the way it is or do you stand up for something, i think, the people around this table, decided, to stand up for something. We've got some of the key change makers. That the globe has ever seen in our history, we have that fortitude the resilience, we want to better south africa. This determination. Of the few to make a stand. Is a vital, step to tackling, corruption. But it doesn't happen in a vacuum. Seeing corrupt individuals, or companies, held to account. May encourage, others to think twice. New tools make it easier to expose, wrongdoing, in the first place. And together. They feed the momentum, for change. From the public. From business. And from those in power. That's the key, to disrupting. Corruption. You.