Accountability of Political Leaders

Maria Livanos Cattaui, Milos Zeman, Ronald Noble, Eva Joly, Ann Pettifor, Fernando Oliveira, Joris Demmink, 10th IACC, Plenary transcript, Governance


Maria Livanos Cattaui, Secretary General, International Chamber of Commerce - Chair

  • Milos Zeman, Prime Minister of the Czech Republic - Keynote speaker

  • Ronald Noble, Secretary General, Interpol, France

  • Eva Joly, Investigating Magistrate, Tribunal of General Jurisdiction, France

  • Ann Pettifor, Director, JubileePlus, United Kingdom

  • Joris Demmink, Vice-Minister of Justice, The Netherlands

  • Fernando Oliveira, Minister of Justice, Peru

Maria Livanos Cattaui:

Excellencies, ladies and gentlemen. On behalf of the organizers, I am pleased to open the 10th International Anti-Corruption Conference. Before introducing our distinguished panelists of this opening plenary, I understand that there will be a projection of a short film featuring the gala opening and the exhibition "Art Against Corruption".

This certainly was a delightful reminder and in this respect I would first of all like to thank all those who have been responsible for organizing this tenth conference, the structures, organizations and above all each individual person who has put so much effort into this extremely important meeting.

Our opening plenary today is entitled "The Accountability of Political Leaders". When this session was originally devised, the terrible events of 11th September were still quite far away. However, I believe that perhaps more than anyone could have envisaged at that time, political accountability has assumed an ever greater importance. What has been brought home to each of us with renewed clarity is the fact that government does indeed count, that good government, accountable government is of paramount significance. It is clear that bad governance and leaders unanswerable to their people are at the core of failed states and catastrophic conditions. We can see the consequences all too clearly in the world. Integrity and trust form the link between leaders and their constituents whether in political, corporate, or social life. The obligation and the willingness to accept responsibility, to account for one's actions, and to be answerable to the people, to one's constituency, to one's followers and to the rules by which they consent to abide and be governed, all of this is assumed under the title of our session this morning.

We like to believe that in democracies confidence and trust vested in our elected political leaders is based on their moral standards and intellectual honesty. But what happens when this isn't the case? What are the structures and means, the mechanisms and ways through which we have to insure the accountability of political leaders, indeed of any leaders? What is the responsibility of citizens? They must insure that their leaders answer to them. And what is our responsibility worldwide? Actually I should ask: Do we have a responsibility in cases where citizens cannot or do not hold their leaders to account? Are there only national standards of accountability as for the traditions, structures, processes and practices of national democracies, or do we have any international standards, and if so, who in turn is responsible and accountable for imposing them?

These are some of the questions that occurred to me in preparing this session. I am sure that this distinguished panel here will address them. All of its members, by the way, are leaders themselves, in politics, law enforcement, the judiciary and society. Let me conclude this brief introduction by stressing that the International Chamber of Commerce has taken a strong position for many decades in the fight against corruption because any tolerance in this field harms all citizens, harms consumers, harms workers, harms businesses. It negates the proper functioning of a rules-based competition and markets, and it undermines all our concepts and structure of democracy.

Ladies and gentlemen, I will be turning to the panel now. It is my great honor to introduce our keynote speaker, the Prime Minister of the Czech Republic, Mr. Milos Zeman. He became Prime Minister in 1998. He is a member of the Czech Social Democratic Party. He began his political career by being very actively involved in the Civic Forum during the Velvet Revolution of 1989. He was elected to the Federal Assembly in 1990, and continued on to become his party's chairman shortly thereafter.

Milos Zeman:

Good morning, ladies and gentlemen. This is not my first anti-corruption conference. Three or four years ago, I visited Trieste in order to participate in a very interesting anti-corruption conference. I still remember two sentences said by Mr. Violante, the former Chair of the Italian Parliament. Let me repeat those two sentences. The first was: "The main tool of economic mafias in their battle against politicians is not to murder them but to corrupt them". And the second one: "The main tool of politicians in their battle against economic mafias is not to put them in jail, but to confiscate their property." I still remember those two sentences and I would like to concentrate on the topic of our panel discussion "The Accountability of Political Leaders" in the very context of those two sentences, as I doubt that a reception, for instance, would be the main tool in the battle against corruption, even though it may indeed be a comfortable one. I am in favor of a strong fight against corruption.

Firstly, what are the necessary conditions, conditio sine qua non, for the accountability of political leaders? Politicans, of course, should be relatively poor both at the start and the end of their careers. There is practically no difference between the start and the end since politicians do not have salaries comparable to those of heads of commercial banks, for example. However, more than that is necessary. We politicians must declare completely and frankly all our property, including the property of our families, we must not to be involved in any form of business, enterprise or firm, in order not to be accused of a conflict of interests. This is a conditio sine qua non, this is a necessary condition, but not a sufficient one. What then is a sufficient condition for a politician in order to be accountable and successful in the battle against corruption? Either to be murdered, as this would imply that the politician started his battle successfully, or to put many people in jail, of course on the basis of an independent court trial in a democratic system, and to confiscate their property, the property of mafias.

You are well aware that corruption is the single type of crime that has advantages for both sides. This is why in the Czech Republic, as far as I remember, there has been only one case of large corruption that was actually investigated by the police. This suggests that either Czechia is a very good country, or that it is very, very difficult to reveal real corruption. This was why three years ago we launched a campaign called "Clean Hands", a very interesting action indeed. As you know, in Italy, this campaign lasted for more than ten years, in Czechia it has been three years. During the first two or three years, it was necessary to complete the documentation in full, and even to change some people with positions in the police force, of state attorneys, even in the courts. No matter how sad it may sound, even policemen may be corrupted. I am not saying they are corrupted. And what may seem strange, even journalists may be corrupted. Incidentally, there is a strange style of corrupting journalists: Let us create a PR agency and you will pay the journalist through this PR agency, rather than going directly. This is a very good tool for covering corruption.

In my opinion, these are the three necessary conditions for accountability of any political leader, independent of his political affiliation. Firstly, to be relatively poor, not like Mahatma Gandhi, of course; secondly, to stay relatively poor in the course of time; and, thirdly, not to be involved in any business except that of politics. Clearly, politics is a risky business in itself. Either a politician can be murdered, which is black humor of course, or a better solution would be to be successful in this fight. Rather than by words, such success is measured but by the number of people who were investigated for economic crime, who were sent to jail through independent courts, and whose property ended in the hands of the state. Incidentally, this is very good for the state budget, it is something like a side effect.

My friends, I would like to finish with the words of an old song: "Deep in my heart I do believe that we shall overcome some day." Thank you very much for your attention.

Maria Livanos Cattaui:

Mr. Prime Minister, you bring us to reality immediately, for which I think we all thank you. I have kept in mind particularly one phrase you said, that at times it is very, very difficult to actually investigate and uncover corruption.

I will now turn to our next speaker, Mr. Ronald Kenneth Noble, known as Ron Noble, if I am not mistaken, the Secretary General of Interpol. He is the first American to lead and to head this international criminal police organization. He was elected in November 2000 and comes to his new position with a wealth of experience in the public sector, as well as the academia. In addition to serving as the Deputy Assistant Attorney General, he was the chief law enforcement officer in the U. S. Treasury Department. In this position, he oversaw several of the largest law enforcement agencies in the United States. The Secret Service, the Customs Service, the Bureau of Alcohol, Tobacco and Firearms, the Office of Foreign Asset Control, the Criminal Investigation Division of the Internal Revenue Service, ... Ladies and gentlemen, watch what you say to him.

A former member of Interpol's Executive Committee, Ron Noble has also been president of the 26-nation Financial Action Taskforce, the anti-money laundering organization established by the G7 in 1989, one of particular relevance today. He was a professor at the New York University Law School just before he was elected the Secretary General of Interpol. He has been raised in New Jersey, that is in the United States, and Germany, that is in Europe, and he graduated from Stanford Law School.

Mr. Noble is going to address us on the role of the police in fostering political commitment. Mr. Noble, please take the podium.

Ronald Noble:

Mr. Prime Minister, Madam Chairperson, distinguished delegates, dear colleagues, I am generally humbled to be in your presence. Two years ago, at Durban, I addressed you as a delegate for Secretary General of Interpol. As the chairperson has just said, eleven months ago I was confirmed as the Secretary General, so I am pleased to be here not only to speak of the role of the police in fostering political commitment, but also to demonstrate the high priority that Interpol places on the issue of fighting corruption.

Interpol is a unique international organization. While it is made up of 179 countries committed to exchange police information, it has fewer than 200 full-time employees and 150 police officers at its headquarters in Lyons, France. What can such an organization provide in the struggle against corruption? The most important role we can play is to join with you as the representatives of civil society to create unique partnerships. Yes, we can and are developing codes of police conduct and establishing a library of best practices. Together, we are undertaking police integrity surveys and developing training manuals. Our last three general assemblies in Solun, Rhodes and Budapest enacted resolutions unanimously supporting anti-corruption initiatives and reaffirming these programs as high priorities.

However, the national police forces around the world do not have to act based on Interpol's guidance. We can provide leadership, but we cannot dictate to any police service. We can provide best practices, but no one needs to follow them. Thus, if we are to make progress against the problem of police corruption, we need your help to persuade civil societies, local governments, and the police about the importance of fighting corruption. I do not believe that democracy can flourish, that economies can grow and that human rights and dignity can be maintained without the citizens having confidence in the integrity of their police. This is a difficult and long-term struggle, as the Prime Minister has already indicated. Other priorities will arise, but we cannot forget that if our institutions do not continue to make progress towards eliminating the insidious disease of corruption, nothing else will much matter. Therefore I would personally like to thank the organizers of the 10th conference for the courage and commitment in insisting that this conference proceeds.

Interpol's general assembly was held two weeks ago in Budapest, when many believed that because of the events of September 11, we should not proceed. We, like you, stand shoulder to shoulder in saying that the work in fighting corruption here is as important as the world's fight against terrorism. It is true that on September 11 citizens of the world experienced unparalleled acts of violence and terror. These acts left a once vibrant city and its people initially devastated and although the dust and the rubble will be cleared away, the horror and scars will remain with us forever. As has been already indicated, I am a U. S. citizen and a resident of New York. I just returned from there yesterday, but it is important to know that among the thousands of people murdered in cold blood on that day were the citizens of 80 countries.

All of us were touched in some way by the events of September 11. The reaction of the international community was powerful. Condemnation of these barbaric acts was almost unanimous. The horror had touched people from all walks of life. Thousands rallied in the stricken city. Tens of thousands of offers of assistance were made. Last night, the long awaited or anticipated military response began. But the problem of terrorism cannot be won on a military battlefield. Terrorism, like corruption, requires civil society, local government, prosecutors and police to combine their efforts to bring those guilty to justice.

Let me briefly attempt to explain how the September 11 terrorist acts cannot be separated from the fight against corruption. Following the acts of September 11, we in law enforcement were awash with many new ideas; ideas on how to improve security and investigation processes. International cooperation had never been better. Arrests were executed in Hamburg and in the U. S. within hours after the tragedy. New security committees were formed. New legislation was introduced. The intelligence community, law enforcement, the financial institutions community, the airline industries and many others, each in their own way, tried to contribute something to ease the pain caused by the tragedy, to bring the guilty to justice, to prevent this from ever happening again.

Nevertheless, ladies and gentlemen, all of these good initiatives, these well-meaning intentions may amount to nothing if the potential for large-scale corruption remains. If customs, police and security professionals are corrupt, no expense of high-tech devices will provide our citizens the security they deserve. If corrupt public servants provide false identity documents, terrorists will move more freely throughout the world, and all of us and all of our society will remain threatened.

Frankly, ladies and gentlemen, the most sophisticated security systems, best structures, or trained and dedicated security personnel are useless if they are undermined from the inside by a simple act of corruption. The fact is that the strongest fortress will crumble if built upon sand. In addition to spending billions of dollars on improving our intelligence gathering systems and mechanisms and on new crime detection systems, we must also invest in people who operate them. Technological systems are good, but they are not enough.

So what do I mean by investing in people? We need to identify the people at risk, people in key positions, who for one reason or another are likely to be compromised, likely to be targets of organized crime, or any other group. These are not my ideas alone. These ideas came from people in Interpol who reached out to individuals from your community, such as Kevin Ford and Judge Keefe and others who will be named later in this conference. It is an effort that we have to engage in together.

Someone once said that for every problem there is a solution that is simple, elegant and wrong. In order to combat corruption effectively, we can no longer afford cheap, quick, and short-term solutions. In order to do the right thing, we need the uncompromising support of our political leaders. You as representatives of civil society are essential if we are to meet this challenge. I intend to make available to everyone who cares the guides and practices that Interpol's Secretariat General believes are essential to address the integrity needs of the world's police services. However, we must have your help to see that they are implemented.

At this conference, Interpol will be chairing two panels. My Director of Cabinet Stan Morris and Assistant Director for financial and high-tech crime Rainer Buhrer will represent Interpol. They have been long-time contributors to the fight against corruption, to this conference and to TI.

In conclusion, I am grateful and indeed honored to have been invited again, and hope that when we are together in two years, we can show continued progress - the world citizens deserve no less. Thank you very much.

Maria Livanos Cattaui:

Thank you very much, Mr. Noble. I think you echo in another way what has already been put forward many times, by yourself as well as by the Prime Minister, that we cannot rely any longer on cheap, quick, short-term solutions. Investing in people is always a long-term process and we must all remember this. I would almost say that it is a process that needs to be renewed generation after generation.

Our next speaker, ladies and gentlemen, is Eva Joly, who has been an investigating magistrate in France for seven years. She is Norwegian by birth, and came to France three decades ago as an au-pair in a family of Paris haute bourgeoisie. Eva is the daughter of a carpenter. She and the son of the family fell in love and they were married, but unfortunately he was disinherited.

This has not stopped Mme. Joly at all, obviously. Her legal career started when she became an assistant to the public prosecutor in the French town of Orleans. For a time, she also worked in the Ministry of Finance; in the mid-1990s, she rejoined the Magistrateuere focusing on financial crime. She started doggedly investigating high-profile cases, such as the state-owned Credit Lyonnaise, which I sometimes call Debit Lyonnaise, which had incurred staggering losses of billions, whether you measure it in pounds sterling, in dollars, or in francs. What has really propelled her into the limelight was her investigation of the Elf scandal.

Mme. Joly is seen as the leader of a new breed of judges who have not been afraid of calling to account any figure of prominence. Her investigations have made her the champion of determined efforts to defend judicial independence and uncover corruption wherever and at whatever level it may lie. Eva Joly will address the issue of the extent to which a country's judicial system is responsible for holding its political leaders accountable to the rule of law.

Eva Joly:

Mr. Prime Minister, Ministers, ladies and gentlemen. I think that before starting to talk about the extent to which a country's judicial system is responsible for holding its political leaders accountable to the rule of law, we have to define what we mean by political leaders. Obviously, there are different levels of political leaders. We are going to focus on political leaders in charge of institutions - the heads of state, the ministers, the members of parliament.

We will highlight the first two levels. Not that the members of parliament do not infringe the rule of law, but their infringement has a lesser effect. As a well-known English politician once said: "Power tends to corrupt and absolute power corrupts absolutely." Recent history has shown that this maxim has lost nothing of its relevance. Political leaders who do infringe the rule of law are careful to make sure that they will not be caught to account.

General Pinochet, the former Chilean President, is a good example of this. Not content with the protection offered by the international law to heads of state, he did not hesitate to have an amnesty law passed and to have himself written a senator for life, thus hoping to achieve immunity designed to keep him out of the clutches of law forever. Another interesting example is the Libyan head of state, Mr. Kaddafi. Although suspected of involvement in terrorist activities, such as the blowing up of a DC-10 aircraft of the UTA Airlines in 1989, he has just seen the highest French court in March of this year confirm his immunity from prosecution as a head of state under customary international law. That was on the 30th of March of this year.

There are, however, infringements of the rule of law, often concerning personal financial interests of political leaders, which may seem of lesser importance compared to terrorism and wholesale murder of opponents. Yet this type of financial corruption is the worm eating at the heart of society. As we would say in French: "Fish begins to stink at the head." And those who indulge in graft and corruption are obviously clever enough to cover their traces by subtler means than vulgar laws of amnesty or direct immunity.

As an investigating magistrate, I must express today my concern and astonishment when I see what is happening in Italy. The Italian government is attempting to push through legislation designed to hamper international investigations into financial offences at the very time the whole international community is aware of the need of a greater and more rapid judicial cooperation. And I think that today they have succeeded to get this law through. That's reality. In fields such as money laundering, we are confronted with the spectacle of the Italian government trying to create new barriers to investigators designed to make it ever more difficult to successfully prosecute political leaders found with their hands in the till. And once such justice-defeating laws are passed, courts have no choice but to apply them.

Let us contrast this attitude with that of Belgium, which has recently rewritten its legislation after the Augusta-Dassault corruption cases to make ministers more accountable before normal courts of law with only minimum exceptions. This attitude is in contrast to France, which has taken the opposite direction and set up a special court solely designed to try cases involving ministers or former ministers for offences committed in office. The majority of judges in this court are chosen from among both houses of the French Parliament. Nevertheless, ministers can be brought to trial before this court. On the contrary, the French head of state seems to be above all judgment of a human court. His Judgment Day is left to a more divine authority. Not only cannot the French President be brought to trial, he cannot even stand as a witness if he does not feel inclined to do so, should the French highest court follow the Attorney General's submissions. We will know this in November.

Ladies and gentlemen, immunity in this extent amounts to impunity, and the rule of law has no room for impunity, because impunity is the very negation of the rule of law. The rule of law is the lamp, which lights democracy. It abhors darkness. The French President's immunity theoretically ends with the end of his term in office, unless, of course, the law is changed between now and then. And even if there are laws which do go after financial offences by politicians, it is easy to slow down the machinery of justice by making the investigators´ work more difficult, either by placing obstacles along their path, or by giving discrete instructions to haste more slowly, as President Mitterand made it quite clear.

It is an open secret that many investigations into financial offences by politicians were snuffed out during the Mitterand presidency. The judicial system, judges and investigating magistrates can do their best to make political leaders accountable to the rule of law, but judges and magistrates are themselves governed by laws. When these laws do not enable them to succeed in their task, it is the parliament alone that can bring the solution, often under the pressure of the public opinion. And here, organizations such as Transparency International and local communities in Europe and other continents have a vital part to play in bringing about changes, which we hope are going to make politicians fully accountable to the rule of law. Thank you.

Maria Livanos Cattaui:

I think all we can say is that Mme. Joly does not mince her words and that we are clear that she is not an ambassador or a diplomat.

Ann Pettifor:

Jubilee 2000 agrees with Ron Noble that actually we cannot solve this problem in a quick, cheap and easy way. We are calling for a new international insolvency process. We are saying that it must be possible for debtors to declare their inability to repay their debts. And in all circumstances there must be a legal process for investigating what liabilities the debtor should bear and what liabilities the creditor should bear.

In the domestic field, when a company goes bankrupt, for example when Robert Maxwell's business went bust, the creditors lost money. And when they had lost their money, they went to the court and demanded that the sons of Robert Maxwell should repay the debts. However, the court argued that the sons of Robert Maxwell enjoyed something called "limited liability" and were not responsible for the sins of their father. However, in the case of Argentina, the sons and daughters of the military, of the regimes of Argentina do not enjoy limited liability. They are responsible for the unlimited liabilities of their regimes.

We want a process that would introduce discipline into the international lending and borrowing system, as well as transparency and accountability. And we believe that amendments to the international financial architecture which will allow countries, if you like, to declare themselves insolvent is a way of disciplining both borrowers and also international lenders.

This has happened in the past. It happened in Germany in 1953, when Germany cold not repay its foreign debts and an independent judge was appointed to oversee the resolution of Germany's debt crisis. This was done in the interest of Germany, and particularly also in the interest of foreign creditors because Germany was given a fresh start. It happened also in 1971 in Indonesia, when the same judge went to Indonesia to annul many of Suharto's debts.

We are calling for that process to happen in all countries which are effectively insolvent, but with this difference: We want a system where a judge will sit at a table with the debtor on the one hand and the creditor on the other, and consider who should bear the losses and liabilities for bad lending and borrowing decisions. Present at the table must be civil society. These, after all, are public debts, not private debts. So we want at the table the representatives of civil society, the opposition political parties, the media, the churches, the trade unions.

Wherever there is civil society, even where it is weak, we find that there are churches, there are mosques, there are temples, there are representatives of society that can be present at these negotiations. Only then, we believe, will it be impossible for elites and for the regimes to corruptly incur foreign debt that consequently ends up as a cancer in the economies of their countries. I thank you for your attention.

Maria Livanos Cattaui:

Thank you very much, Ann Pettifor, for this passionate plea. We have a few minutes before we go on to the second part of the panel, and during this time it would be interesting to share some views among the panelists, including those who have not yet spoken.

Ann, if I could clarify perhaps one of the most difficult parts of the issue that you are addressing. Debt in itself is not a crime. It may be a very useful instrument in development. I remind everyone here that not so long ago, the United States had the largest debt in the world and there were even times when a part of the government was ready to declare bankruptcy on itself. I wish to remind us that European countries developed through huge debt overhangs. It is not the debt that is the problem; it is perhaps the corrupt use of the money, the misuse of the money that eventually provokes situations that you are so well told about. It is very different when a country that is accountable for the use of its money declares itself on the brink of default and very different when the money has been totally misused, not on behalf of the people.

I would like to kick off this discussion by asking Ann a very difficult question. The countries that cannot pay their debt, for which debt forgiveness is not an act of charity but an immediate, overwhelming necessity, still have a massive need for capital in order to have any kind of development at all. If the same regimes are in place, if the same unaccountability is in place, how do you reconcile, how do you handle this difficulty? Given also that one hopes that some of that money will reach its destination, that is, the people and the poor and the structures that are needed to move them up from poverty. How would you suggest that this problem be looked at and handled, and what structures would be needed, I ask you, to hold whom accountable for the disaster that has been caused?

Ann Pettifor:

I want to say first of all that any country that is borrowing internationally and that is very poor is also receiving aid from the very people who are also providing loans. It seems to me, and wherever I've gone throughout Africa, Latin America and Asia, ordinary people have called for this, that there should be a form of conditionality, which is not just an IMF conditionality. People find that it is unhelpful in their own circumstances and that rather than helping them, it impoverishes the poor. A conditionality is needed which insists that those who are in receipt of aid and in receipt in loans should be transparent and accountable to their people.

Now when we ask the IMF and the World Bank to impose this conditionality, they say this is very, very difficult. When we ask our government to do that, they say this is an interference with sovereign governments, but actually this is the call that is coming from the people of Africa. What the people of Africa say to me when I go there is: "Why do your governments finance our corrupt regime?" And secondly: "Why do your governments arm our elites when they know that our elites are very corrupt and very repressive?" Why do we still sell weapons to Kenya? And my government, which only very recently resolved to sell spare parts for Hawk jets to Robert Mugabe of Zimbabwe after denouncing Robert Mugabe and attacking him viciously, answers: "Well, we need to make those loans because it's good for business in Britain."

Now I say that the trouble, though, is that Britain is making all the gains. Making gains from the sale of Hawk jets spare parts, making the gains from loans, making the gains from percentages, from interest made on that loan, making gains from improvement on their balance of payments. And what are the people in Kenya or people in Zimbabwe getting? One of the conditions that the British government should impose is first of all that the people in Zimbabwe should be asked whether they want these spare parts for their Hawk jets and whether they want that money.

However, I think that the second and more difficult part of the question put to me by the Chair is how do they find money for development. In those circumstances I always refer to Europe and the United States. They did not develop by borrowing on the international capital markets; they mobilized domestic savings in the first instance. It took them a very long time. It took Britain thousands of years to get to a point where it could set aside five percent of the GDP for the purpose of savings and for the purpose of investment for development. And when we did that, we built our economies on three structures or pillars: agriculture, textiles and construction. We fed our people through agriculture, clothed our people through the textile industry, and housed our people through our construction industry. Those three pillars are still the major pillars of any Western economy and they are highly protected. I say: Why cannot the poor countries do the same? Thank you.

Maria Livanos Cattaui:

Mr. Prime Minister, you have heard the panelists and I would like to ask you what kind of comments or questions would you wish to raise, or what would be your views on what you have heard so far?

Milos Zeman:

First of all, like the people in Kenya, I - as a prime minister who started with a deficit budget in order to launch the takeoff of the Czech economy - must also admit that debt is not a crime, since I myself do not wish to be accused of it. There are two levels of debt and payable debt, and I totally agree with the explanation if there is a limited amount of money for loans. I do not speak about bad loans, foreign loans. If you finance dictatorships, if you finance weapons, this is not a problem of those countries and their dictators; this is a problem of the rich countries, a problem which must be solved on the level of the rich countries.

However, let me return to the individual level, as there is not only governmental debt, but also individual debt. I believe that debt is a crime under one condition only: providing there is the intention not to repay the debt. Naturally, every such entrepreneur will tell you: "I intended to repay my debt with high interest, but unfortunate conditions have changed my mind and my economic situation."

Just imagine this, my colleagues: There is a kitchen company with negligible initial capital, with one office and a PO box. The company announces the invention of a "perpetum mobile" and asks one of the largest commercial banks for credit amounting to one billion Czech crowns. This is actually a true story, except for the invention part. Currently, the entrepreneur in question is somewhere in South Africa - not for tourism, mind you, we have lost one billion crowns and, as a consequence, the bank has gone bankrupt.

What then is the missing link with corruption? Well, this link is said to be 10 percent. I wonder what the situation is like in France or Germany. Ten percent in the Czech Republic is earmarked as a "bakshish", if you like, to low-, midddle- and sometimes even high-ranking officials in the banking sector. And again, do not initially question the problem on the level of the poor countries, the problem of bad loans or the failure of entrepreneurs. Instead, however unpleasant it may sound, question the corruption atmosphere inside the banking sector.

Maria Livanos Cattaui:

This is an extremely important point that you bring up, Mr. Prime Minister. Bad loans exist everywhere in the world. We all know it. Without loans, without risks, without debt, nothing can happen or move forward. Perhaps this is an area where the movement towards what we call "corporate governance" takes on such importance. And this means that in many of our private institutions, there are shareholders. In many countries there are no laws or a regulatory framework, proper regulatory framework, for accountability of management towards shareholders.

This, Mme. Joly, was one of the biggest problems in some of the banking scandals in your country. We at IACC are very, very concerned about how to put in place proper corporate governance structures, and not only for the protection of shareholders. What's really interesting is that without proper governance structures companies themselves will be at a disadvantage in the future and are at a disadvantage already now in terms of raising capital properly on properly regulated markets.

This is one of the consequences, if you wish, of incorrect corporate governance and the raising of loans. You brought up another important question, which is the degree of responsibility of lending countries and lending institutions and not only receiving institutions, and both of those issues are of high importance.

Before we continue with our session, I would like to ask our other two panelists here if they would like to bring in some comments. I am being totally unfair to you, Ron Noble, by asking you a very difficult question in light of everything that has happened, in light of our dual fight, as you have put it, fighting corruption and fighting terrorism, the two of which are linked. We have years, even decades and decades of a fight against, for instance, the drug lords, decades and decades of tracking their money down. What gives you any confidence that the international law enforcement community will do any better this time around against terrorism?

Ronald Noble:

Well, it is a difficult question. But what gives me confidence that a difference can be made is, and I am not just saying this, was the awardees last evening: Mme. Joly, the prosecutors and the civil society from Brazil, individuals such as yourselves and these organizations. My view is that you have to attack the problem of terrorism and the problem of corruption one person, one case at a time. If you think of it on the global or macro level, it will be too overwhelming for you and too depressing and you will continue to think that nothing can be done. On an individual basis, we are hearing about cases, hearing about prosecutors, such as Mme. Joly, and I myself have experienced the success of bringing certain individuals to justice.

I believe that this is the only way to do it. You have to chase the money, as the Prime Minister said. You have to make sure that those who are willing to come forward with evidence, the so-called whistleblowers, are protected, and again, we heard about one such whistleblower last night. You just can't give up, you just can't accept that a difference cannot be made. The people in this room and the people who are sitting with me at this table are a great proof of that fact. Thank you.

Maria Livanos Cattaui:

We will finish this part of our discussion with one last question. Mme. Joly, normally corruption is done only for two reasons, let's not look any further, for power and for money. What you take as the benchmark, if you wish, is the objective that the rule of law above all is the most important protection against this corruption for power and money. It is clear when it comes to money that you can do something about it, but what about power? What can a magistrate do, what can the rule of law do?

Eva Joly:

You say that we can do something about the money, but it's already very difficult to do something about the money, as it is circulating internationally and investigations are carried out very nationally. So we have a lot of problems here. I think that power is being used to enrich, to grasp money, and to get money to yourself, to your family, to your party. I do not know how we could combat power on its own. I don't know. We should be very much in the grassroots, try to follow the money, and to confiscate it. That would also be a very big challenge.

Maria Livanos Cattaui:

Thank you very much. I know it was unfair to ask this question, since we do not have an answer to it. Actually, we do have an answer: It is called accountable democracy. However, this is not so easy. It is even more difficult than just investing in people immediately, it is a very long-term investment.

I would like to turn now to our last two speakers and the second part of our session and call on Joris Demmink, the Vice-Minister of Justice of The Netherlands. This former director of police was responsible for organizing the second global forum on corruption held earlier this year in The Hague.

Joris Demmink:

Mr. Prime Minister, ladies and gentlemen. I should start by saying that my minister, Mr. Korthals, would have very much liked to address you in person. However, since in The Netherlands, the Minister of Justice is responsible not only for the fight against corruption, but also for the fight against terrorism, you may understand that he was unable to come here today, so you will have to make do with the Vice-Minister. Nevertheless, it is a great pleasure for me to address this conference and I'm particularly grateful to the organizers for offering me the opportunity to address here the results of the Global Forum II on fighting corruption and safeguarding integrity that was held in The Hague earlier this year.

I would like to say a few words about the interaction between Global Forum II, as we call it, and this conference, and on the preparation of a new United Nations convention against corruption that will start shortly. As many of you will know, a few months ago, the Dutch government hosted the second Global Forum on fighting corruption and safeguarding integrity in The Hague, in which 1,600 participants representing 153 countries engaged in a week of a lively debate. More than one hundred ministers participated in the ministerial meeting and adopted a substantial final declaration. They also took note of reports of five workshops containing best practices in a number of fields. Although the global forum and the international anti-corruption conference share exactly the same objective - that is, to combat corruption and safeguard integrity, there are differences as well. The Global Forum is basically an intergovernmental process even though many non-governmental organizations participate, and I've seen many of you in The Hague, and of course with great pleasure.

The idea behind the Global Forum is twofold. On the one hand it provides an opportunity for experts to discuss the latest trends in anti-corruption policies, on the other it calls on governments to reaffirm their active and strong commitment to any such policies, and to the main impact of the Global Forum II. Some 60 more countries were represented at the second forum than at the first one held in Washington a few years ago. Therefore the international commitment to fight corruption is now more widespread than ever. I would like to stress that the outcome of the second Global Forum should be of relevance to the elaboration of the United Nations convention against corruption.

I believe that, in this respect, the final declaration of the Global Forum contained a number of valuable elements. Firstly, the final declaration makes it clear that we need strong and reliable institutions to lead the fight against corruption. Secondly, corruption of foreign public officials should be just as punishable as corruption of national public officials. Thirdly, there can be no safe havens for the proceeds of corruption, and fourthly, we must be ready to lead by example. I listened with great care to what you, Mr. Prime Minister, said on entering the office poor and leaving it, if possible, as poor as you came into it. This holds true for politicians as well as for civil servants and, in particular, for the judiciary as one of the most important parts of strong institutions is a truly independent judiciary.

Finally, our performance in combating corruption should be monitored; it should be monitored not only on the national level, but also at regional and international levels. Such monitoring exercises should lead to open public reports so that there will be full transparency and accountability. May I add that for this we need a free press and a strong civil society, as has been said before. This was clear when the awards were given yesterday to our friends from Brazil.

During the past weeks, the Netherlands government has been making an effort to use both the final declaration of the Global Forum II and the comments of participating states to develop what should be the main ingredients of the United Nations convention to come. My government intends to submit a draft convention to the United Nations Secretariat before the end of this month so that it can be of use during the preparatory meeting to be be held in Argentina in early December. The following elements of an anti-corruption strategy should, in my view, be reflected in the UN convention to come. An extensive chapter on preventive measures should properly reflect policies on transparency and accountability at all levels of government. Both the issue of the defending of political parties and the special position of the judiciary should be addressed. The convention should be comprehensive and include not only the offences of bribery, but also related offences, such as money laundering. An important issue that should be addressed is the problem of embezzled state funds. As an underlying concept, mention should be made of abuse of power. I would favor further development of this concept so that it will be easier to agree on the necessary mutual legal assistance concerning the return of embezzled state funds that have been acquired by an abuse of power.

Mr. Prime Minister, ladies and gentlemen, international cooperation is indispensable and I hope that this conference will contribute to a permanent dialogue among countries and people, and confirm our genuine willingness to work together. Thank you very much.

Maria Livanos Cattaui:

Thank you very much indeed, Mr. Demmink. May I also congratulate you for the second Global Forum held in The Hague. This event was an outstanding step indeed, not only a success, both an outstanding step and a positive contribution to so many areas that we are concerned about.

Our closing speaker today is Mr. Fernando Oliveira, who is the Peruvian Minister of Justice. From 1980 to 1985, he was the first secretary general of the attorney general's office of Peru. From 1985 to 2001, he was a congressman and chairman of his party, which was called, if I'm translating it correctly from the Spanish, the Independent Moral Front. He is now the Minister of Justice and many of you might know him through another aspect: On September 14, 2000, he showed the first video demonstrating corruption at the highest level of the previous regime. Mr. Oliveira will speak to us in Spanish.

Fernando Oliveira:

Distinguished Prime Minister of the Czech Republic, distinguished representatives of the IACC, distinguished delegates of the 10th International Conference. Since September 11th, the whole world has been in shock due to the horrible terrorist attacks and the extremely high number of innocent victims resulting from the bombing of the Twin Towers in New York. We all support the war against terrorism now under way, as all of us strive for peace. Since we strive for peace and justice, we also ask ourselves the following question. What do we expect from the world that has declared war on corruption? Corruption, in a way, destroys Twin Towers every day. It kills people, and even though this death is slow, it is certain owing to the high economic costs it incurs due to poverty. It is costing huge numbers of innocent victims. The more corruption, the more poverty. The more poverty, the more undernourished people in the world. In our country in the past, corruption flourished. As a result, more than half of the population in the country now live in conditions of extreme poverty.

Corruption is powerful. Corruption has enormous economic resources, as well as enormous political power; it is spreading its tentacles across the world. There are financial havens which must be eliminated because corruption very often utilizes possibilities provided by the law, by legislation in order to carry out money laundering, to pretend that all its activities are legal. It also spreads its tentacles across the world of politics, across political parties. Corruption is an international phenomenon. If a politician becomes implicated in crime, he always tries to justify himself by arguing that he has become a subject of attack of his political enemies. Clearly, autocracy presents a great danger. The greater the autocracy, the greater the dictatorship, the less transparency and the more fertile soil there is for the further development of corruption. Power corrupts, absolute power corrupts absolutely. Corruption is like cancer that must be uprooted. Unless all of it is eliminated, it will recur and become even more widespread.

However, there is another side to this coin. This is cancer of impunity. Without exemplary sanctions, it will not be possible to eradicate corruption totally. This is why we should look into history and learn lessons from it in order to ensure that corrupt regimes no longer come to power. Campaigns should be launched to make certain that governments that come into power will show a good example.

Let me come back to Peru. Peru is a wonderful people with a thousand-year cultural history. We had the Inca history, we had the Inca population in Machu Picchu in Cuzco. Peru is not just a corrupt country, not recently at least. Peru is a country full of hard-working people. It is a country where the government enjoys very strong power.

The first corruption case appeared in 1992, at a time when some similar cases emerged in other Latin American countries as well. At that time, Alberto Fujimori carried out a coup-d´etat, and the biggest problem of the time was that people applauded this coup-d´etat and the international community also approved of it. In 1995 there was a war, which is still discussed today. In 1996 we managed to divest of power a large TV tycoon controlling 96% of television and 95% of the press. However, there were other examples of power abuse.

docAccountability of Political Leaders

Brazil 2012

Brazil 2012

IACC Video

IACC Video