DOES THE UK NEED AN ANTI-CORRUPTION AGENCY? POLICY PAPER SERIES NUMBER FOUR
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Transparency International (TI) is the world’s leading non-governmental anti-corruption organisation. With more than 90 Chapters worldwide, TI has extensive global expertise and understanding of corruption. Transparency International UK (TI-UK) is the UK chapter of TI. We raise awareness about corruption; advocate legal and regulatory reform at national and international levels; design practical tools for institutions, individuals and companies wishing to combat corruption; and act as a leading centre of anti-corruption expertise in the UK.
Acknowledgements We are grateful to Tim Daniel of Edwards Wildman Palmer UK LLP for researching and drafting this policy paper. We would like to thank the European Commission - Directorate-General Home Affairs for funding this Policy Paper series as part of an EU-wide European National Integrity Systems project coordinated by Transparency International. Publisher: Transparency International UK Editors: Chandrashekhar Krishnan and Robert Barrington First published October 2012 © 2012 Transparency International UK. All rights reserved. Reproduction in whole or in parts is permitted, providing that full credit is given to Transparency International and provided that any such reproduction, whether in whole or in parts, is not sold or incorporated in other works that are sold.
Disclaimer Every effort has been made to verify the accuracy of the information contained in this report. All information was believed to be correct as of September 2012. Nevertheless, Transparency International UK cannot accept responsibility for the consequences of its use for other purposes or in other contexts. Policy recommendations reflect Transparency International UK’s opinion. They should not be taken to represent the views of those quoted or interviewed unless specifically stated. This project has been funded with support from Prevention of and Fight against Crime Programme European Commission - Directorate-General Home Affairs. This publication reflects the views only of the publisher, and the Commission cannot be held responsible for any use which may be made of the information contained therein.
Prevention of and Fight Against Crime. With financial support from the Prevention of and Fight Against Crime Programme. European Commission - Directorate-General Home Affairs
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There is a lack of understanding of the full extent of corruption in the UK... a more coherent and joinedup approach to tackling the problem is needed: the current policy response is incoherent and uncoordinated. This inadequate response has in certain areas created a culture of impunity
INTRODUCTION During the course of 2010 and 2011 TI-UK carried out a comprehensive survey on the prevalence of corruption in the UK.1 This Policy Paper summarises key areas of the Report in relation to the UK’s institutional arrangements for tackling corruption. The Report examined the nature and extent of corruption in the UK. It was divided into three parts, entitled respectively National Opinion Survey (‘the Survey’), Assessment of Key Sectors (‘Key Sectors Assessment’), and a National Integrity System Assessment (‘NIS Assessment’). The Report was followed by an overview entitled Overview and Policy Recommendations (‘Overview’). In our Report we concluded that: ‘…corruption is a much greater problem in the UK than recognised and …there is an inadequate response to its growing threat. The 3-volume report - the most extensive study into UK corruption ever undertaken - examines 23 sectors and concludes that there is complacency and a lack of knowledge about the problem in key institutions and sectors.’ We went on to say that our research suggested that there was a lack of understanding of the full extent of corruption in the UK and that a more coherent and joined-up approach to tackling the problem was needed: the current policy response was characterised as ‘incoherent and uncoordinated’. We noted that ‘(t)his inadequate response has in certain areas created a culture of impunity’. Although the NIS Assessment found that key pillars of national integrity were robust, there were found to be notable weaknesses. In our opinion ‘some of our most trusted institutions are vulnerable and there are inadequate procedures to detect and prevent corruption’. In a time of economic uncertainty we warned of ‘a particular danger that hasty institutional changes and cuts in specific areas of government expenditure may, as an unintended consequence, create an environment that greatly increases the risk of corruption’. The statement which accompanied the publication expressed the ‘…hope that our findings and recommendations will serve as a wake-up call to society and that the UK will seize this opportunity to adopt robust, coherent and coordinated policies to counter the growing threat of corruption’. This purpose of this paper is to generate a public debate about whether the creation of a UK Anti-Corruption Agency (‘ACA’) would serve to further the aim of addressing the twin problems highlighted by our research of growing threat and inadequate response.
1. Hereafter referred to as the ‘Report’
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THE INTERNATIONAL DIMENSION It is useful to examine the issues in the broader context of the UK’s international obligations to combat corruption. The UK ratified the UN Convention Against Corruption (‘UNCAC’) on 9 February 2006. Article 6 of Chapter II (Preventive Measures) of the Convention reads (in part): 1. Each State Party shall, in accordance with the fundamental principles of its legal system, ensure the existence of a body or bodies, as appropriate, that prevent corruption by such means as: (a) Implementing the policies referred to in article 5 of this Convention and, where appropriate, overseeing and coordinating the implementation of those policies; (b) Increasing and disseminating knowledge about the prevention of corruption. Article 5 reads (in part): 1. Each State Party shall, in accordance with the fundamental principles of its legal system, develop and implement or maintain effective, coordinated anti-corruption policies that promote the participation of society and reflect the principles of the rule of law, proper management of public affairs and public property, integrity, transparency and accountability. 2. Each State Party shall endeavour to establish and promote effective practices aimed at the prevention of corruption. 3. Each State Party shall endeavour to periodically evaluate relevant legal instruments and administrative measures with a view to determining their adequacy to prevent and fight corruption. And, in Part III (Criminalisation and Law Enforcement), Article 36 reads (in part): Each State Party shall, in accordance with the fundamental principles of its legal system, ensure the existence of a body or bodies or persons specialized in combating corruption through law enforcement. Such body or bodies or persons shall be granted the necessary independence, in accordance with the fundamental principles of the legal system of the State Party, to be able to carry out their functions effectively and without any undue influence. Such persons or staff of such body or bodies should have the appropriate training and resources to carry out their tasks.
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The UK does not have a single body, such as an independent Anticorruption Agency (ACA) which carries out all of these functions. What it does have is a plethora of agencies which the government claims are adequate for ensuring effective coordination and compliance with UNCAC
The UK does not have a single body, such as an independent Anti-corruption Agency (ACA) which carries out all of these functions. What it does have is a plethora of agencies which the government claims are adequate for ensuring effective coordination and compliance with UNCAC. If that were truly the case the findings in our Report might have been quite different. As it is, our Report is throughout explicitly and implicitly critical of the shortcomings in the present arrangements, shortcomings which full compliance with these UNCAC provisions might begin to tackle. The UNCAC rightly recognises that there can not be a ‘one size fits all’ approach to the functions of ACAs, precisely because, in many jurisdictions, there will already be in place institutions which fulfil some of the functions envisaged under the Convention. This paper will now examine the UK’s existing institutional arrangements in the light of our findings.
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PRESENT INSTITUTIONAL ARRANGEMENTS FOR COMBATING CORRUPTION IN THE UK 3.1 FOREIGN BRIBERY
Advocates of an ACA would say that the very multiplicity of prosecutorial possibilities militates in favour of having an ACA, which would be able to direct and coordinate cases to ensure maximum effectiveness in achieving positive outcomes
As already indicated, there is no single UK institution dedicated to combating corruption. Under extreme pressure from the Working Group on Bribery at the OECD in the wake of various huge corruption cases, the most notorious of which was the BAE Systems affair, the UK did finally produce anti-bribery legislation. The Bribery Act came into force on 1 July 2011. It replaced a number of out of date statutes, and is, in many ways, an innovative piece of legislation. The Act was passed as a key component of the government’s Foreign Bribery Strategy,2 which had as its objectives: …. how we will address and manage the evolving challenges [of corruption] and establish a clear legal, regulatory and policy framework for action against foreign bribery. Law reform through the new Bribery Bill will be the keystone of this approach but the strategy also reinforces links to the wider international anticorruption agenda – reflecting our commitment to focus on the causal drivers of foreign bribery and deepen our collaboration with international partners. It was also stated that: The Foreign Bribery Strategy complements other UK efforts to combat international corruption. The UK has an agreed plan to tackle money laundering by politically exposed persons (PEPs) and to recover stolen assets. Delivery of the objectives of the plan is overseen by the cross-departmental Politically Exposed Persons Strategic Group and supported by dedicated capacity within the Serious Organised Crime Agency, Metropolitan Police Service and Crown Prosecution Service. The PEPs Strategic Group reports to the Anti-Corruption Champion through his Secretariat, ensuring coordination with the activities of the Foreign Bribery Strategy Board.3 All of this is laudable, so far as it goes, and time will tell how effective the new Act is in dealing with foreign bribery, but the focus is entirely on business and foreign bribery. It does not begin to approach the wider corruption prevention agenda envisaged under UNCAC.
2. http://www.justice.gov.uk/publications/docs/uk-foreign-bribery-strategy.pdf 3. This body has subsequently ceased to exist.
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We made the following recommendations in our Report, arising in part out of the government’s declared foreign bribery strategy: A high-level policy response [should be made] to tackle corruption more effectively, in the form of a Government strategy that would coordinate anti-corruption activity and the sharing of information across all Government departments, bodies and related institutions. This could be achieved at little or no cost, for example, by extending the remit of the Government’s current overseas Anti-Corruption Champion to cover corruption within the UK, acknowledging the links between overseas corruption and corruption within the UK. The Anti-Corruption Champion should provide an annual report to Parliament on how he/she is discharging this role.4 We also made a third recommendation: The Government should conduct a public consultation on whether the UK should have an independent agency dedicated to combating overseas and UK corruption. Our three-part report shows that the problems are serious enough to justify a public consultation in the short term, without waiting for more research.5
3.2 CORRUPTION OTHER THAN FOREIGN BRIBERY The Overview of our Report provided the following information regarding our research, and summarised the results shown, which provide a backdrop to the issue of having an ACA: •
Our research examined twenty-three sectors and institutions in the UK.
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53.4% of respondents to our national opinion survey believe that corruption has increased either a little or a lot in the UK in the last three years; only 2.5% of respondents believe that corruption has decreased either a little or a lot.
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48.1% of respondents do not think the government is effective in tackling corruption; just over one quarter of respondents (25.9%) feel the government is effective, and 25.9% are unsure.
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92.7% of respondents would like to report corruption, but only 30.1% would know where to report it.6
While foreign bribery might have formed an element in these responses, it is clear that the issues are far wider. The last point is particularly telling, and the reason for it is apparent from the first point below, which forms part of the ‘background information’7 given in the Report:
4. Overview and Policy Recommendations: p. 4. Until the changes in Ministerial portfolios introduced in September 2012, the Government’s Anti-Corruption Champion was the Secretary of State for Justice. It is not clear whether the current Secretary of State for Justice continues to play this role. 5. Ibid. 6. Ibid. p. 2. 7. Ibid.
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There are at least 12 different agencies or government departments with partial responsibility for anticorruption activities, plus more than 40 police forces, and it is unclear whether they are doing enough to share information and good practice on corruption prevention
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There are at least 12 different agencies or government departments with partial responsibility for anti-corruption activities, plus more than 40 police forces, and it is unclear whether they are doing enough to share information and good practice on corruption prevention.
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A leaked Metropolitan Police investigation in 2006 estimated that there are around 1000 corrupt prison officers currently working, with a further 600 officers being involved in an inappropriate relationship with a prisoner. However, the Blakey report for the National Offender Management Service barely mentioned corruption as a mechanism for smuggling drugs and other contraband into prisons.
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In 2009 alone, there were 10,090 prosecutions under the 2006 Fraud Act, with no indication as to how many may have included some elements of corruption.
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In 2007, the Stevens Inquiry found that irregular payments had been involved in 17 football transfers.
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It is currently estimated that 38,000 people are involved in organised crime in the UK, and such activities cost the economy anywhere between £20 and £30 billion per year.
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Only 1.9% of respondents in our national opinion survey had paid a bribe in the past twelve months. Yet a 2006 survey for the construction sector found that 41% of respondents had personally been offered a bribe at least once in their career.
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Advocates of an ACA would say that the very multiplicity of prosecutorial possibilities militates in favour of having an ACA, which would be able to direct and co-ordinate cases to ensure maximum effectiveness in achieving positive outcomes
PROSECUTIONS In order to form a preliminary view on the need for an ACA it is worth considering the UK’s prosecution record. The Report’s findings on the prevalence of corruption as shown by the number of prosecutions involving corruption actually undertaken was summarised as: There are very few prosecutions for corruption in the UK. Between 2003 and 2007 a total of 27 cases were proceeded against under the 1906 Prevention of Corruption Act, and a total of 33 people found guilty (including prosecutions begun before 2003). Even fewer cases were prosecuted under the 1889 Public Bodies Corrupt Practices Act – with only 14 cases proceeded against between 2003 and 2007, and only four convictions. The reasons prosecutions were so few are the difficulty in applying prosecution legislation, and the efficacy of other legislation to secure convictions, particularly the Fraud Act 2006 and the common law offence of Misconduct in Public Office. The extent to which the 2010 Bribery Act (which comes into force in July 2011) alters this situation remains to be seen. Research by the Law Commission had produced similar results in its lengthy consideration of the introduction of corruption legislation which resulted in the Bribery Act, but the necessity for legislation was nevertheless widely recognised. The figures given in the ‘background information’ set out above indicate a different story. Many corruption prosecutions have been, and continue to be, brought as misuse of public office cases,8 and many of the recent large scale grand corruption cases have been brought as money laundering prosecutions.9 Advocates of an ACA would say that the very multiplicity of prosecutorial possibilities militates in favour of having an ACA, which would be able to direct and co-ordinate cases to ensure maximum effectiveness in achieving positive outcomes.
8. ‘The prosecution of choice’: Nicholls, Daniel, Bacarese & Hatchard, Corruption and Misuse of Public Office 2nd edition, OUP 2011 9. See, in particular, the Nigerian Governor cases, Alamieyeseigha, Dariye, Ibori - http://www.dfid.gov.uk/ Documents/consultations/draft-UK-self-assess-un-convention-corr.pdf, pp.43-44
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CORRUPTION IN KEY SECTORS To help form a preliminary view on the need for an ACA it would be instructive to consider our findings in all the 23 sectors we examined, with particular regard to the extent to which each sector has in place effective arrangements for combating corruption. This paper limits itself to seven sectors which form the main content of the Assessment of Key Sectors survey, which covered the Police, National Health Service (NHS), legal profession, prison service, social housing, procurement, and sport. The City of London, construction, local government and UK Border Agency were also covered in outline in Key Sectors, and Part Three of our Report, the National Integrity System Assessment, covered a further twelve sectors: business, civil society, electoral management body, executive, judiciary, law enforcement, media, ombudsman, political parties, public sector and the supreme audit institution. Each of the seven sectors is now examined from the point of view of anti-corruption measures in place, and a preliminary view is expressed on whether an ACA could play a meaningful role in assisting to curb corruption in that sector.
5.1 POLICE The report had this to say: There has certainly been a much more focused, direct and proactive approach to tackling police corruption. Each force now has its own dedicated anti-corruption team to investigate allegations of corruption and provide annual monitoring. These evaluations are subsequently subject to a meta-evaluation by the Serious Organised Crime Agency (SOCA) every three years. A recent report on all EU countries acknowledged that this approach is at least partly responsible for the low levels of police corruption in the UK. The study found that in the UK no respondents claimed to have had actual personal experience of police corruption, although 21 per cent suspected that corruption and bribery did occur in the UK police service.10 The TIUK 2010 survey suggested that the police were perceived by the public to be one of the less corrupt sectors in UK life.11 SOCA’s 201012 meta-evaluation of UK police force annual monitoring showed that the key areas of corrupt activity centred on disclosure of information (this particular vulnerability was exposed by the phone hacking scandal in 2011); drugs; abuse of authority; and misuse of IT systems. Disclosure of information remained the key corruption activity, and could be seen in different forms. It could involve general police activities – from current investigations to specific information on particular officers.
10. Gounev, P and Bezlov, T, (2010) Examining the Links Between Organised Crime and Corruption, Center for the Study of Democracy pp.80-81 11. Transparency International (2010) Corruption in the UK Part One: National Opinion Survey 12. SOCA (2010): UK Threat Assessment of Organised Crime.
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According to SOCA, corruptors also seek information on rival criminal activities in order to gain what is essentially a competitive advantage. Such information is rarely exchanged for financial reward and is principally brokered through close personal relations – linking unauthorised information disclosure to problems with inappropriate associations. Given the above analysis it might be thought that investigation of police corruption is an area best left to the police themselves, with little scope for an ACA to achieve any improvement. However, the fact remains that police corruption is for the most part investigated by the police themselves. It might be thought that the existence of the Independent Police Complaints Commission (IPCC) provides some form of safeguard: on this, we reported: Perhaps the most reliable indicators of the extent of police corruption are the IPCC’s annual figures on all complaints and investigations. In 2007/08 the IPCC received 290 allegations of corruption, and in 2008/09 the number had increased to 368 allegations. The total number of all complaints about the police in those years were 48,280 and 53,534 respectively.13 The IPCC shows that 152 out of the 368 corruption allegations put before the IPCC in 2008/09 were investigated. Out of these, only 11 were substantiated.14 As we went on to point out, however: The reliability of these figures is an important issue. In 2010, the Home Affairs Select Committee looked into the work of the IPCC and concluded that it actually dealt with a minor number of these total complaints about the police: “It is true to say that 99 times out of 100 and despite the existence of the IPCC, the complaints procedure remains “police investigating the police”.15 It may be tempting to infer, therefore, that the actual number of allegations and investigations into corruption can be multiplied nearly one hundred fold. However this would be inaccurate. All police corruption allegations are first investigated by the relevant police force, and once these have been substantiated they are automatically passed up to the IPCC for further investigation. It is not the case, therefore, that the allegations arriving at the IPCC are solely from members of the public. The majority of complaints are generated from internal police investigations, although there are no definitive figures available to show what this percentage is. The IPCC figures on police corruption are the best guide available, as the 2010 SOCA evaluation is not publicly available. It is worth noting however that a recent report16 stated that only 12 officers have served, or are currently serving, prison sentences for corruption. Although on the face of it corruption allegations form only a small proportion of the complaints made against the police, the comments of the Home Affairs Select Committee are a cause for concern. It is not so very long ago that prosecution of criminal cases was taken out of the hands of the police with the creation of the Crown Prosecution Service. The phone hacking scandal has created further cause for concern. It is perhaps time to review whether corruption cases within the police force could benefit from independent investigative powers of the kind an ACA could provide.
13. IPCC (2010) Police complaints statistics for England and Wales 2009/10 14. Ibid 15. Home Affairs Select Committee (2010) The Work of the Independent Police Complaints Commission HC 366 16. ‘Serious and Organised Crime Agency turns spotlight on police corruption’ The Guardian 14 February, 2010.
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5.2 NATIONAL HEALTH SERVICE The NHS has a significant integrity system, with oversight and scrutiny by the Audit Commission and the NHS Counter Fraud Service (CFS). Fraudulent activity is divided between four categories of perpetrator, Patients, Professionals, Managers, and Contractors. Although the number of cases dealt with by the CFS increased from 351 in 2007/8 to 482 in 2009/2010 (a 37% increase), none were categorised as corruption cases. The CFS successfully prosecuted 69 cases, with a success rate of 96%, and recovered nearly £5 million, out of a total NHS budget of £105 billion. On this evidence there does not at present appear to be a strong case for involvement of an ACA, but we warn that things may change with increased budgetary pressures, the abolition of Primary Care Trusts, and devolvement of commissioning services onto consortia of GPs, plus the abolition of the Audit Commission. The latter will mean that audit regimes must be organised by practitioners, with increased risk of conflicts of interest.
5.3 LEGAL PROFESSION Three organisations have responsibility for maintaining the integrity of the legal profession, the Office for Judicial Complaints, the Bar Standards Board, and the Solicitors Regulation Authority. Our research indicated that there were few known cases of corruption in the UK Legal Profession, and the NIS study showed that the judiciary is institutionally robust and well protected against corruption. There was data suggesting that corruption in the legal profession may be significantly under-reported, and the Report noted the potential role of solicitors as intermediaries or facilitators in certain illegal transactions. Again, there seems to be little requirement for the involvement of an ACA in the UK. This contrasts sharply with the situation regarding the legal profession in many developing countries, where judicial corruption in particular is a major manifestation of corrupt activity.
5.4 PRISONS Corruption in prisons is endemic. Five key risk areas were identified by us: the enclosed environment; the prevalence of organised crime; the lack of training and support to prison officers;17 the reduction in capacity for corruption prevention work (mainly due to budgetary cuts); and perverse incentives of performance management regimes (key performance indicators are more easily met when organised criminals are ‘comfortable’ with the prison regime). Official records show that only three prison officers have been prosecuted for drug smuggling since 2007: contrast this with the 2006 estimate mentioned above that, according to the Metropolitan Police, there were around 1,000 corrupt prison officers. This seems clearly to be an area in which an ACA could usefully become involved, particularly in terms of training and lobbying government to take proactive steps to improve the lot of prison officers. SOCA’s UK Threat Assessment of Organised Crime18 acknowledges that organised criminals meet new contacts, develop new networks, and generally learn new criminal techniques from the ‘experts’ they meet in prison.
17. Low pay is also a significant factor: the starting salary for a prison officer is £17,187, which makes smuggling and other corrupt activities very attractive 18. SOCA (2010): UK Threat Assessment of Organised Crime.
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Involvement of an ACA could produce tangible economic benefits by helping to tackle the corrupt networks that exist in prisons.
5.5 SOCIAL HOUSING There are approximately four million social housing properties in the UK, of which two and a half million are housing association properties, and around two million are in the hands of private landlords. The National Housing Federation estimates that up to two million people are on waiting lists for social housing properties. Regulation is in the hands of the Tenant Services Authority (TSA) and the Homes and Communities Agency (HCA). The Audit Commission has had an important role collecting data. Following the Commission’s abolition, the responsibilities of the TSA are to be handed over to the HCA. The TSA has not historically recorded the incidence of corruption in the sector, which has been seen to be the responsibility of individual landlords. Housing benefit fraud is dealt with by Local Authorities. Tenancy fraud (of which housing benefit fraud is a major part) is estimated at £1 billion per annum by the National Fraud Authority,19 and it is reckoned that organised crime is increasingly involved, subletting properties for drug and prostitution activities. We found it extremely difficult to assess the extent of corruption which may exist in the sector, but the amounts of money involved and the presence of organised crime indicate that this an area which could usefully be investigated further by an ACA, particularly given the absence of any regulatory authority taking steps to carry out any corruption investigations at the present time.
5.6 PROCUREMENT As we state in our Report: ‘procurement is clearly a very broad area that is difficult to summarise’. Figures for the UK public sector alone involve an annual spend of £200 billion on procurement of goods and services.20 The NHS spends £12 billion of which £1 billion is reckoned to be wasted through poor practices.21 The Ministry of Defence spends approximately £14 billion pa22 and the government’s Collaborative Procurement Programme is worth £18 billion annually.23 As we stated, numerous studies outline typologies of corruption in the procurement sector. Key risk areas in the procurement process identified by them24 include: • • • • •
Unnecessary purchases, where a purchase is of little or no value to society. Purchases which are economically unjustified or environmentally damaging. Goods or services which are needed, but overestimated to favour a particular provider. Old political favours or kickbacks are paid by including a “tagged” contract in the budget. Conflicts of interest are left unmanaged, with decision makers agreeing contracts that have an impact on their former employees.
19. National Fraud Authority Annual Fraud Indicator 2011 20. NAO and AC (2010) A review of collaborative procurement across the public sector 21. http://www.dh.gov.uk/en/Aboutus/Procurementandproposals/Procurement/index.htm 22. http://www.contracts.mod.uk/introduction/index.shtml 23. http://www.ogc.gov.uk/GPS.asp 24. http://www.transparency.org/publications/publications/other/procurement_handbook
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The Global Infrastructure Anti-Corruption Centre has identified 47 different activities relating to procurement “which may constitute the criminal offence of bribery, extortion, fraud, deception, collusion, cartel or similar offence.”25 Procurement is undoubtedly an area where a proactive ACA could bring many benefits. Some of these are identified in the Report, which records comments made to us by one of our interviewees:26 ‘ technical experts, including surveyors, can be vulnerable to approaches from tenderers and contractors with corrupt purposes in relation to contract specifications and contract monitoring. Anti-corruption training for these individuals could be of great value. There is also a risk that corruption of technical staff will not be discovered by general managers who have difficulty understanding the specifications and assessing the reliability of performance information.’ The interviewee added that technical people outside the finance area often lack anti-corruption training, and that there is a lack of short guides for the prevention of corruption for public and private sector employees to refer to.
5.7 SPORT ‘Of all the areas we were asked to look at, none was more challenging (and perhaps none more controversial) than sport. Sport corruption has a profound impact in terms of culture and public trust. Sporting stars are role models in a manner unlike other public figures such as politicians. For a leading sporting figure to be accused of corruption creates a ripple effect that can last for decades.’ These are the opening sentences in the section of our Report dealing with sport. The Report goes on to set out a suggested typology for investigation. This ranges from Systemic corruption, encompassing vote rigging, bribery, gifts and hospitality, and organised crime, through to Gambling corruption, particularly match-fixing and spotfixing, concluding with Competition corruption-the use of illegal drugs, and cheating. It is a broad spectrum and involves governing bodies at both international and domestic levels. We acknowledged that sport is, through its governing bodies, largely a self-regulated sector, but there are signs of change. In June 2010 the Sports Betting Integrity Unit (SBIU) was set up following recommendations of the Sports Betting Integrity Panel published in February 2010 (‘the Parry Report’). The SBIU is part of the Gambling Commission, which has powers under the 2005 Gambling Act to prosecute corruption cases, although, we say, the majority of investigations are referred to the relevant sport governing body, with a small number passed to the Crown Prosecution Service.27 As of September 2010, 74 cases had been closed, 40 of which had been passed on to the relevant governing body. Approximately one-third of the cases (24) involved football.28
25. Global Infrastructure Anti Corruption Centre (2008) Examples of corruption in infrastructure p. 2 26. Corruption in the UK Part 2, p.39; interview with the Audit Commission 27. http://www.gamblingcommission.gov.uk/pdf/Betting%20integrity%20decision%20making%20 framework%20-%20December%202010.pdf 28. http://www.gamblingcommission.gov.uk/pdf/Integrity%20in%20betting%20supplement%20-%20 December%202010.pdf
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We concluded that our research on sport had ‘only begun to scratch the surface of the myriad problems surrounding sport and corruption’. The creation of the SBIU is recognised as a step forward, but only tackles specific issues. We advocate further research to better chart the impacts (economic, cultural, professional) of specific types of corruption in different sports. In particular, we say, there needs to be a much more systematic approach in recording corruption cases.
A powerful, wellresourced Agency with wellestablished lines of communication to Agencies in foreign jurisdictions could provide significant assistance in tackling corruption in international sport
Would a UK-based ACA have a role to play in fighting corruption in sport? We said in our conclusions that it was clear that ‘nearly all types of corruption identified [in the report] have an international dimension’. That said, one of the fundamental objectives of the UNCAC is to promote international co-operation in fighting corruption through the use of mutual assistance. A powerful, well-resourced Agency with well-established lines of communication to Agencies in foreign jurisdictions could provide significant assistance in tackling corruption in international sport.
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SUMMARY There are now many examples of ACAs around the world: some only specialise in prevention, some specialise in law enforcement, and some do both.29 However, it is important to note the mixed press ACAs receive. The final paragraph in the AntiCorruption Activities section of our NIS assessment referred to above reads: Evidence suggests that the existence of an anti-corruption agency is not enough to combat corruption successfully. Indeed many anti-corruption agencies “fail to reduce public sector venality in all but a few special circumstances”30. Others have been able to identify few successful ACAs,31 and in some cases found ACAs that are “actively harmful”.32 ACAs are only likely to be successful when their work is driven by firm political will, and when the ACA is underpinned by full independence. Perhaps most interestingly for the UK, evidence suggests that ACAs are most successful when they legislation they work with is robust enough to deal with the problem.33 In the section of our NIS assessment entitled ‘Anti-Corruption Activities’, we list the UK agencies with investigative capacity to deal with corruption. The law enforcement agencies are the 40 regional police forces, SOCA, the MoD police, HMRC, and the UK Border Agency. Government departments with an internal investigative capacity are listed as the DWP, NHS, HM Prison Service, the MoD, DEFRA, and other nondepartmental bodies such as the Charity Commission, and the recently abolished Standards for England (SfE). The recently abolished Audit Commission has also conducted major corruption investigations into Local Authorities, such as Westminster and Doncaster. We go on to say that the closest the UK has to an ACA at present is the SFO, combined with the Overseas Anti-Corruption Unit (OACU).The SFO’s role is to investigate and prosecute cases of serious and complex fraud (usually with a value in excess of £1 million) and to contribute to deterring such fraud. Anti-corruption cases are only one element of the SFO’s workload and, at the time of our Report in 2011, accounted for one third of its budget (which was any event due to suffer further drastic cuts over the next two years).
29. The UNDP recently published a Practitioners’ Guide entitled Capacity Assessment of Anti-Corruption Agencies, which provides a useful summary of the different types of Agencies, their functions, and the countries in which they are to be found: http://www.beta.undp.org/content/dam/undp/library/Democratic%20Governance/IP/Practicioners_guideCapacity%20Assessment%20of%20ACAs.pdf 30. John R. Heilbrunn (2005) Anti-Corruption Commissions: Panacea or Real Medicine to Fight Corruption? The International Bank for Reconstruction and Development /The World Bank 31. UNDP (2005). Institutional Arrangements to Combat Corruption: A Comparative Study. Thailand: UNDP RCB 32. Meagher, P. (2005). ‘Anticorruption Agencies: Rhetoric Versus Reality’. Journal of Policy Reform, 8, 1. P. 69ti 33. Ibid.
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There is thus no lead body either investigating and prosecuting corruption or taking active steps to prevent corruption in the UK, let alone one that monitors the prevalence of corruption
Neither the SFO nor the OACU are much involved with fighting corruption in the UK. There is thus no lead body either investigating and prosecuting corruption or taking active steps to prevent corruption in the UK, let alone one that monitors the prevalence of corruption. Civil society is actively engaged, and studies such as those carried out by us provide, together with media coverage, the only means whereby corruption issues are exposed. There is scant evidence in our studies of any form of co-ordination amongst the various bodies listed above. There may be co-operation on individual cases and in relation to due diligence on PEPs in the context of anti-money laundering efforts, but that falls far short of a concerted drive against corruption in the UK. The only existing anti-corruption strategy in the UK is the foreign bribery strategy mentioned earlier. Yet, as the brief studies of the seven sectors above show, organised crime is active in six of the sectors. SOCA and local police forces may combine to bring successful prosecutions on a case by case basis, but there is little evidence of any central body directing strategy. The studies also demonstrate an urgent need for the preventive, educational, measures that a dedicated ACA would be able to initiate and provide. There is ample evidence that codes of conduct have an important role to play, yet, astonishingly, the coalition Government has not only dismantled Standards for England, which had oversight of standards in local government, but also replaced the local government statutory code of practice with a voluntary code. This step has attracted strong criticism from the Committee on Standards in Public Life. Once again, policy seems very much to have been directed at foreign bribery and the business sector: the big multi-nationals are all implementing measures to ensure that they have adequate procedures in place to combat bribery under the new Bribery Act, but very little of this is directed at UK corruption issues.
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7. CONCLUSION: WHAT IS THE BEST INSTITUTIONAL ARRANGEMENT FOR FIGHTING CORRUPTION IN THE UK?
Whatever institutional arrangements are put in place in the UK to fight corruption, we conclude that the current arrangements are not fit for purpose
Whatever institutional arrangements are put in place in the UK to fight corruption, we conclude that the current arrangements are not fit for purpose. It is clear that a case can be made for the UK to establish an ACA. The key elements of this case are: • • • • •
The demonstrated need for a more strategic, joined up approach to fighting corruption; The growing threat of corruption and the weaknesses in the current institutional arrangements; The additional educational and preventative functions of an ACA; The benefits of an ACA in focussing attention on the problem and gathering information and data; and Compliance with UNCAC.
However, set against this case are counter-arguments that also have merit: • • •
The expense of creating an additional body at a time when resources are tight and the SFO itself is severely under-resourced The potential for turf wars that might neutralise an ACA’s effectiveness The mixed track record of ACAs in other jurisdictions, notably when they have been under-resourced or not sufficiently independent of government interference and politicisation.
TI-UK therefore recommends: Given the growing threat of corruption in the UK, and the inadequate institutional response to date, there should be a proper debate by politicians, law enforcement officials, civil society and other stakeholders about the benefits of establishing an ACA in the United Kingdom.
Transparency International UK 32-36 Loman Street London SE1 0EH Tel: 020 7922 7906 Fax: 020 7922 7907 info@transparency.org.uk www.transparency.org.uk