Why Anti-Corruption Agencies Fail

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The vast majority of 50 most corrupt countries, Kenya featuring prominently, boast of at least one centralized anti-corruption agency tasked with the duty of preventing, investigating and prosecuting corruption cases.

On the other hand, the 10 least corrupt countries do not have centralized anti-corruption agencies. There is therefore a strong negative correlation between the presence of a single, central anti-corruption agency and the reduction of corruption.

It is a matter of conjecture that the establishment of a centralised anti-corruption agency makes it too easy for corrupt politicians and bureaucrats to capture its organs and therefore prevent it from achieving its goals. Kenya has a multiple agencies dealing with corruption whose performance has become a blame game on their dismal failure.

That anti-corruption agencies in Kenya are not delivering on their mandate became very obvious during the Anti-Corruption and Governance Summit held at State House on October 18, 2016 where a ping-pong ball of blame game took the centre stage. President Uhuru Kenyatta pointedly asked heads of five multi-agency team to tell him and Kenyans what they lacked to tackle corruption but none volunteered any reason.

There are very few examples of centralized anti-corruption agencies that have succeeded in fighting corruption. Notable examples include Singapore and Hong Kong. The Corrupt Practices and Investigations Bureau (CPIB) in Singapore and the Hong Kong Independent Commission Against Corruption (ICAC) easily come to mind as the best examples of successful centralized anti-corruption agencies.

However, these two share certain unique characteristics which made centralized agencies that are independent of other law enforcement agencies most sensible:

(a)   They operate within relatively small islands which are highly urbanized.

(b)   They derive their power and independence from legislation passed in response to serious scandals that threatened the stability of the two governments.

The ICAC was formed in response to the 1974 Peter Godber affair while the CPIB was only strengthened in response to the 1970s scandals involving police officers in the narcotics trade. These crises forced policy makers to create anti-corruption agencies that were independent from the police since the police were themselves involved in the scandals.

In Kenya even after years of confirmation that police is the most corrupt government agency and confessions by police officers themselves that they engaged in corrupt deals vide huge accumulation of money they could not account for, they still are in the centre of every corruption case. They in very many cases deliberately mess up investigations in exchange for huge bribes.

During the State House Summit it emerged that the multi-agency team has problems synchronizing investigations, evidence and prosecution to win in a highly corrupt judicial system in which corruption determined outcomes. The audience of over 300 invited guests and millions of live television viewers were shocked by the depth into which those charged to fight corruption had sunk in neglect.

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The Summit was entertained to lengthy statements by Ethics and Anti Corruption Commission (EACC) Halakhe Dida Waqo, Director of Criminal investigations Ndegwa Muhoro, Director of Public Prosecutions Keriako Tobika and Appeal Court Judge Paul Kihara engage in a spectacular public blame-game  melodrama. Attorney general minced no words when he named judiciary as the weakest link ob the war on corruption.

The judiciary in turn blamed investigative agencies, which present weak evidence or fail to collaborate evidence with the crime. Indeed, the Summit heard that some cases take as long as eight years unheard in courts with endless injunctions or flimsy sickness and as long of such period of investigation. It is common knowledge that during the intervening period corruption takes charge. Hefty bribes are given to investigators and judicial officers, witnesses are killed or intimidated to silence and cases are eventually dismissed.

The idea of lifestyle audit of investigations and judicial officers was mooted by the Deputy Solicitor General & Director, Asset Recovery Agency Ms Muthoni Kimani who also insisted that those caught in corruption must be denied the opportunity to enjoy the fruits of their criminal activities by recovering all cash and assets. Her problem remains the great likelihood that even the recovered cash could end up being recycled by the same corrupt cartels.

Indeed, Kenyans have witnesses corrupt judges and senior police officers, who are confirmed as corrupt, sent home to enjoy their ill-gotten wealth without any action to prosecute them or recover any cash and assets. That is great encouragement to public officers to plunder public coffers and demand bribes from the same public without any remorse or fear or punishment.

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Kenya also has a rich reservoir of highly qualified lawyers dedicated to diligently serve the multi-billion-shilling corruption industry on hire. They process registration of shell companies, facilitate payments for central and county governments tenders, make company records disappear from registrar of companies inventory and finally rig those caught out of any judicial quagmire. They shamelessly bribe investigators and judicial officers, including some former Chief Justices, with abandon. All that is done in pursuit of client confidentiality, which also includes stashing corruption proceeds in secret local and off-shore accounts.

The Central Bank Governor Patrick Njoroge emphasized the need for a special court to deal exclusively with financial crimes to be set up. Njoroge opined, such a court would expedite cases where financial crime is involved. He pointed out that it would further reduce the cases back log within the Judiciary and ensure that perpetrators are dealt with decisively.

Some countries have borrowed the Hong Kong and Singapore models with little or no success. This is because they have failed to take into consideration the differences between their own circumstances and the circumstances prevalent in the two countries when they established their agencies.

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The centralized anti-corruption agency model has largely failed in Africa, and by extension, most of the Third World because several reasons:

  • The efforts to establish a centralized anti-corruption agency are usually driven by donors rather than the citizens. This motivates the governments to establish a weak agency to satisfy the minimum donor requirements. Good example in Kenya is the US government and its USAID agency funding government agencies mainly to sharped departments staff ability to avoid capture in corruption deals but fail to support initiatives which can raise common sense awareness and advocacy within the public.
  • The size of most Third World countries, state of infrastructure as well as their ethnic diversity can easily stretch the resources and effectiveness of a centralized anti-corruption agency to unmanageable extents.
  • There is lack of political will to provide sufficient resources as well as independence to the agencies. Most of these centralized agencies report to the same officials they are supposed to investigate.
  • A centralized anti-corruption agency provides politicians with a single definite target to manipulate and stymie in order to prevent it from exposing their corrupt schemes. Where all corruption efforts are coordinated by a single body, all anti-corruption efforts can be easily thwarted by interfering with its operations.
  • A new centralized agency requires a new set of laws, new infrastructure, new staff and the establishment of new bureaucracies which in itself takes a long time. Where these are not provided in the right quantities or quality, the agency cannot attain its goals.

As much as the State House Summit failed to pronounce the anti-corruption a lost cause, there was strong feeling that Kenya needs a new single anti-corruption agency modeled on the British Corruption and Serious Crimes under Serious Fraud Office (SFO) that prosecuted the so-called Chickengate corruption involving Interim Independent Electoral and Boundaries Commission (IIEBC). Kenyan suspects are still at large while their British collaborators are in jail since last year.

The Serious Fraud Office is a specialist organisation that investigates only the most serious types of economic crime. As a result a potential case must meet certain criteria before it is taken on. In deciding, the Director will take into account all the circumstances of the case and consider:

  • Cases which undermine British commercial/financial private companies in general and the City of London in particular;
  • Cases where the actual or potential loss involved are high;
  • Cases where actual or potential harm is significant;
  • Cases where there is a very significant public interest element; and
  • New species of fraud

If the fight against corruption is to be won in Kenya, the place of a centralized anti-corruption agency that is the singularly responsible for anti-corruption efforts must be rethought. The idea that once an anti-corruption agency is formed, integrity and accountability will trickle from it down to the society and permeate throughout a country is too optimistic.

It would be better to first concentrate on reforming the societies where corruption is endemic such that the people no longer tolerate corruption and fighting corruption is necessary for political survival of their leaders. It would also be effective to have existing agencies designed in such a way that they check each other. If a new, centralized agency is established, it should be for the purposes of coordination.

 

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Citizens Against Corruption (CAC) major objective is to concentrate on reforming the Kenyan society through attitude and behaviour change – especially the youth to de-link it with hardcore corrupt older generation. That is because “society” has become the scapegoat even by the notoriously corrupt police fallaciously arguing that corruption within its ranks is a “reflection of the Kenyan society”.

CAC will further seek to create awareness on the following serious corruption-related crimes:

Corporate fraud:

Asset stripping – asset stripping is taking company funds or assets of value while leaving behind the debts. Company directors transfer only the assets of one company to another and not the liabilities. The result is a dormant company with large liabilities that cannot be met and it has to be put into liquidation.

This has been a common feature in so-called privatization of[ parastatal organisations that are looted before they are sold to pre-determined inside traders. Examples include the Kenya National Assurance, Posts and Telecommunications Corporation, its successor Posta Corporation and National Milling Corporation among many others.

Fraudulent trading – fraudulent trading is where a company carries on a business with the intention of defrauding creditors or for any fraudulent purposes. This applies whether the company is trading, has ceased trading or is in the process of being wound up.

The fraud, which has been the case with some collapsed banks and insurance firms in Kenya, enables the defrauders to enjoy a successful business lifestyle, including corporate entertainment, good salaries and expensive company cars.

Share ramping – also known as ‘pump and dump’ or ‘book ramping’, is where criminals influence the share price of a company and then take advantage of it. It is commonly perpetrated by bringing a company to the market with false expectations of its profitability or, alternatively, by buying shares in a company when the price is low and then starting a rumour that the company is being taken over. When the share price then rises, the shares are sold at a profit.

Publishing false information – publishing false information is a type of fraud committed when a criminal creates, destroys, conceals or falsifies an account, record or report, which deliberately misleads people about the company’s financial position. This is usually done by deceitful auditors to mislead investors and creditors and to keep a failing company trading. Kenya Airways is a perfect example in recent times.

Bribery and corruption

Corruption is where the integrity of a person, Government, or company is manipulated and compromised for personal gain. There are two main types of corruption:

Political corruption – is the dysfunction of a political system or institution in which government officials, political officials or employees look for illegitimate personal gain through actions such as bribery, extortion, cronyism, patronage and embezzlement.

Corporate corruption – is where, for example, bribes are offered to agencies/ institutions/individuals in order to win a contract.

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