Plenary Short Report Form Day 2

Michael Holman, 12th IACC, Plenary report, Governance, Development, Sustainability, Energy Market, Financial Sector, Human Security, Climate Change, Natural Resources

The IACC’s Second plenary, State for sale: Corruption and embedded networks of influence, featured anti-corruption champions who have stood up to embedded networks of corruption in their respective countries. John Githongo,famous in the anti-corruption movement as (and founder of TI Kenya),

Speaking on the importance of accountable government was John Williams, Chair, GOPAC (Based in Canada).

Devendra Raj Panday, TI Advisory Board

José Ugaz, Lawyer Benites, De Las Casas, Forno & Ugaz

Soung-Jin Chung, Chairman, Korean Independent Commission Against Corruption

Michael Holman, Africa Editor, Financial Times (Moderator)



Many actors drive the network, not just politicians, not just governments or business...

Also actors of external networks

Five acotrs


Political class

Civil society


External sector

advocacy and raising awareness of transparency and accoutnability, develop tools etc

something new:

  1. values and attitudes

  2. peoples empowerent and invlovlment in campaigns


Opens the plenary.



I come from a coutnry nepal, kings and governemnets ruinging the country

Region from southasia, social leaders have done the same

Network of influences is but a part of extenses that existend favours. As human being We can’t live without.

Which kind of reciprocal exchanges are corrupt or not=

Reciprocal exchange becomes as corruption when ist socially identified and condemned,

Sicial condemnation becomes more effective when Systems get included in juridical

No naming and shaming

Third party suffers

Case of nepotism

Denies opportuniTIES

The government itselv becomes

This network is huge and very complex... paper on website

Five acotrs


Political class

Civil society


External sector


Espections from each other

Many actors drive the network, not just politicians, not just governments or business...

Also actors of external networks

Case of nepal:

Issue is outside of state

Loans of commercial banks,

Network of many collaborators:

40% income tax


what do we do:

conclusions adn recommendatiosn:

advocacy and raising awareness of transparency and accoutnability, develop tools etc


something new:

  1. values and attitudes

  2. peoples empowerent and invlovlment in campaigns


firm belief – grand idea

values are about knowledghe and committment, about knowing what#s right and what’s wrong.


Committments for fulfilling conventions and international rule

Political will comes democratically

civic and buisness culture


heroes of



  1. emphasize on values and ethical conduct

  2. study and research on corruption, concepts, rational conduct

  3. advocacy for a-c education, learning the purposes and how tools should be used

  4. political reforms transparency and accountability, broader picture of democratic accountability


  6. people’s participation and ownership, ordinary people, youth iand women involved, relation pverty and corruption

  7. power for local government

  8. moral authority for grassroots, naming and shaming

  9. law about aid and corruption,

  10. ti can design training programs, values in politics, social responsibility, 21st century ethics



Book: Moises Nain, “illicit trade”


Change of paradigm regarding global crime:

New world scenario: changes

  • Political (loose borders, geopolitical reform

  • Economical (global market, huge benefits)

  • Technological (internet, genetics, financial products, communications)


Change of model from mafia to network:



  • Hierarchy (lider) hierachical group

  • Centralized

  • Rigid

  • Specialized

  • Territorial


Not talk of mafias anymore, now:



  • Dynamic work of multiple agents and cells

  • Descentralized

  • No rigit standards, flexible

  • Non-specialized

  • Global


Network is a system of nodes, connected by ties


Illicit trade and corruption:

Corrupt practices in the centre of networks


Criminal network:

Great economical power,

Invest in politics and embedded in the political system and the public sector

State capture, (failed states): corruption has take power


Cia >>> 50 states with little or no control >>>> trnasdniester moldovan republic tiraspot: organised around illicit business


Crminal networks.

  • Lucrative and secure

  • Local and lgobal simultaneously

  • Autonomous and self sustaining

  • mercury effect”: when hit, splitting in docen fo smaller groups

  • deeply intertwined with licti ones (act in the legal space AND illegal space)


from commodities to skills:


before >>> trafficers specializsed according to merchandise

today: >>> network skills: obtain, transport, supply


network member a) high skills, b) experiences (east: expertise of smuggling)


criminal networks:

don’t believe in borders,

use intermedieativers,

use servies


wide market

  • weapons ($400’’ security business, 234’ weapons in USA)

  • drugs ($20’’ fed drug control in USA)

  • humans (SEA: 30’’

  • organs (Kidney from $ 50000 to $ 100,000, chinese prison system)

  • money laundering (US$ 100 bn of remittances - $800’’ to 2 trillion (2% to 5% GDP world)

  • counterfeiting (US$500 bn in losses)

  • art (150,000

  • species in danger (30,000)


asimmetryc struggle:


  • lack of coordination and collaboration (tunnel vision)

  • budget-oriented

  • legal restraints

  • teritorial limits


  • interaciton

  • large resources

  • task oriented

  • no borders

states vs networks:


networks have business opportuinites where problems instates, state failes

we are loosing the battle:

states are loosing the battle.

How to level the field

  • economical and pollitcal problem:

    • a) understand economy, create incentives for legal activities,

    • include governments

  • re-think rights and instituions

    • what is reasonable?

    • Sovereignity

    • Privacy

    • Protection

Governmental stragegy

  • Unified command

  • Multidisiplinary

  • Inetrated and ffuncitional team

  • Multiyear plan s and budgets

Corss-border soltuion

  • Internaionl cooperation

  • new solution

Civil society

  • pulbic pressure

  • make connections

  • integrity networks


  • software

  • surveillance

  • identification

  • security


Big title.

A lot of people, everyone is involved.

Who’s left. Poor tax payer. Always the poor tax payer.

Where’s the answer.

Opennes, transparency, rule of law. Accountabiltiy.

More and better governance.

Good governance tackles corruption head on.

If in place People will not tolerate. If in place, people will demand.

If in place, leaders and their friends will build societies an dnot bank accoutns.

How do we do build good governance.

One word: accountability.

They will, when the price of failure is high.

Corruption will never be eliminated, only controlled.

Accountability beyond your control, that causes you to think and act in a certain way.

Confessions. I drive to fast. Because I know i can get away with it. But only 10 km. Because they will stop me when i go 30 km over the speed limit.

If I know i can go get away with it, I will do it, if I now that the price is to high, i don’t do it. Human nature. Basic concept of accountability.

How can we difne

Responsibility of a democratic parliament to hold accountability. If parliament fails, government fails and society fails.

Democratic gvernance:

Standard triangle of ogranisations.

Service triangle.

Below teh people being served by the government.

Above the service triangle is an inverted triangle,

Where government reports to parliament and media.

When that system is in place, accountability and democracy works.

Parliament has 4 responsibility

  • Legislation approval

  • Approve Budget

  • Approve lines

  • Government reports to parliament


Mission is to improve democratic oversight of government.

Three pillows:

1) Peer support for parliaments

Need to now, they are not alone

2) education, train the parliament

3) leadership for results.

Create taskforces and recommendations

  1. Code of conduct for parliamentarians

  2. Parliemntary immunity

  3. Parliamentary oversight

  4. Access to government information

  5. Independant media

  6. Promote UNCAC

  7. Anti-money laundering legislation

  8. Return of stolen assets

Addition to Eiti: every country has to declare the revenues.

It’s time to engage for parliamentarians.

CPI: Inverse relationship between democracy and corruption. Democracy means that the y have to do their job righ

Strong leadercan only be constrained by strong instituions.

Onyl parliament has teh constitutional authority to hold its governemnts accountable. Its tiem we start doing that.

Why does governemnt keep getting awy with cash:

No opennes, no transparency, no governance, no accountability.

Choice is hours. Parliamentaries need to stand up.



50 years ago, problem of Korea: extreme poverty.

Devestated industrial infrastruture.

1950’s ,promote economy.

Relieng of foreing aid. No money for economical development.

Role of market and allocation capital.

State controlled banks. Government intervened in operating activities.

40 years after launch:

Successful. Korean economy is strong.

Form one of the poorest to ten of the largest economies.

Business grew on government support rather on market demand.

Recognising this problems, liberalise financial markets, since 80s

It was in teh late 1990s that shadz practice merged as a challenge for the korean economz.

In 1997 korea experienced an economic crisis unprecdented in our hx.

On the brink of defaulting in loans,

Was able to recover from loans from IMF. Experience of late 1997.8 hold for koreasn#

Past networks of influence are no longer a benefit for our economy

The government was alos to blame since it failed to oversee such strategies and used it for personal gain.

In the wake of hte korean crusus.

Takenmeasures to improve corporate governance and financial transparency. Protection for minority shareholders.

Verify the accuracy of disclosed documenets.

The success of this case , evidence of improved corporate governance. Incumbant administration, coordination with prosecutors office has greatly increased.

Mid 1990s koreea had rampant corruption involving pol paries and businesses, and in the last three zears we have not seen anz cases. Several factors

Kez elections laws march 2004,

Now illegal to operate

Companies and organisations prohibited from making contributinos

Koreaäs civic groups have become powerful, monitoring corporate behaviour and collusion.

The media has also played a role in combattingn collusion and government corruption.

Can see significant improvement in just 5 to 6 years.

BPI, CPI, and other int surveys, the status of corruption in Korea has improved steadily since 2000.

Ever changing demands of the day. Also need to monitor private organisations, esp. We need to est stricter criteria

Of particualr concern, non transparent criteria employed in these organisations has

Est. Cronyism,

We continue to make continued effort to develop and implement anti corruption measures at home.

I hope Koreas peers can use their experience in explaining the negative effect of networks on society.


John Githongo,

Explanation of the need for paradigm shift in

I am going to limit my intervention to just a few minutes because i am aware that the audience has a range of questions that they would like to put to the ver

Follow on

Overview of embeddednetwoks at the global level. Let me give a snapshot of em networks at national economy, a transition economy,

My exp is mostly from Africa,

Grand corruption, that effects the jud

Occurs mainly in three areas of procurement, extractive industries, defence / security, and communications.

This is changing quite rapidly across the continent because of liberalisation

4 actors in embedded networks at national level



Security people

Private sector,

Even when you have regular changes in the leaders themselves, embedded networks continue,

Business side of network provide politcal / campaign fiance

Who pays for democracy= often corruptino, especially in transition econnomues

Some of the resources will also be made available to teh politicians personally. Not only give resources to the party and the process, ,but also give to individuals themselvey, whether it is a rolex, or a 100, 000 in a bank in the caymans

In my personal exp. 70 percent for personal, onlz 30 percent for political support.

2. level of stability within brureaucracy that is very important for the embedded network. Middle level is key. Look for a civil servant wiht some accounting function, who refuses a promotion. Odd middle level civil servant who does not want to be promoted. Natural red flag for someone obivusly in emb. Network. Have historical and insituttional memory of particualr dept.

Also quick to suggest when a corruptino or transparenct problem arises, they will be the first to suggest the formation of a committe.. usually the first person to suggest the formation of a committee will be part of netowkd.

3.Military, police, intelligence,. You canät have a successul

Senior officials in intelligence service and police

4. So-called businessmen, I call them so called business men beause these private sector players are really just individuals wiht briefcases, ability to register off shore business, set up financial infrastructure that comptomises.

Auditors, accountant, lawyers, banking fraternity, the brokers that move between the other pillars of the embedded network. Paying the bribes, facilitating transactionos.

Executive powers are compromised.

Top leadership is complicit.


  1. dramatic developments in kenya requests jg’s reaction

Demonstrate the power of these embedded networks. Result will be continuing contradictions

  1. Directed to MH. Everyone knows that politics is corrupt, parties are corrupt, but could you suggest ways to curb corruptino in politics?

JG: Executive accountability must exist. Impunity leads to a sense of cynicism that corruption will thrive

Conflict of interest regarding polticians, their family, lack of clarity on that front, or where that is not taken seriously.

Must be full distinction between public officials and their private interest.

JU: Break impunity, when politicians know they can be put in prison, a lot will change. Civil society hs a great role here, monitoring, awareness


TI south africa

Why does this conensus, we donÄt talk about policy pressures that put government in this situatuion, to privaise, deregulate. This whole area of the debate has yet to take place.

Look at who the winners and losers are in the last 10 years at teh wto. Why dod we leave the private sector out when the major corporations have been the major winners?

JU: sometimes we put all our efforts on the public sector, but you are right that we shoudl drive our attention to the problem

Ti india

In our experience there is a lack of institutions to disclipline the legislators. 2 phenomenon, legislators have wall of protection around them. Can we talk about solutions, we plan to build up pressuree for political reforms, and we have gone to the supreme court..

John Harvard: i think you are right about networks being important. There is nothing new to networks exisitng in org. The idea of an embedded network is imp. Beuase we find it not just in dvping world but developed world as well. Old boy networks, policy networks, school networks, how to prevent that particular outcome without getting into the rhetoric of pol accountability, into prevention and eradication


Independent commssion against corruption, hong kong

For JU: refer to serious allegations against china

I have the Chinese delegation

Would like to see your

Rumours, hearsay, or is there any evidence, are you willing to pass on teh infomatino to the chinese delegation for investigation.

Illicit trade, he cites China specificallz regarding transfer of organs. You can look at the book, Moses Naim.


Vencer las barreras de extradictions. Ex-dictadores en paises de Francia (Zimbabwe, Mobuto)

Se refirió a estas barreras?

Fugirmori is in chile, he hass been there for a year while teh chilean authorities evaluate. Extradition processes date to years ago, to protect citizens from arbitrary process

Banking secrecy,

All of these instruments are obsolete and offer protection

From China, from Ministry of Supervision

Mentioned that you based your comments on a book. Just wanted to note that IACC is a serious forum that

Make comments on teh basis of truth rather than if you have evidence, i will report it to my

From Kenya

My question is to John Williams, who talks about accountablity by parliamentarians, through APANC

Everyone wants to blame members of parl for not being accountable, but how are members of gvmt going to be very accountable when they have been elected. Are members of parl a reflection of the people who put them there

For JG: how far has corruption fighting gone. He has started it when he was there, and we want him back so that he can continue it. We believe that corruption must be fought in Kenya and


Ayer la prensa informo, donde pesca fujimori, donde juega gold

Teine un anod e extraditarolo

Puede crear TI un organo jurídico para combaitr esta impuniad

Question is general. What is the role of champions in fighting embedded networks of corruption in goverment and what is the chance of integrity networks as against criminal networks?

JG. (answer),

Often you find that you have become part of the network. At most, from my experience, the most you can do is disrupt the netork, you cannot uproot it all at once without a revolution. 2 opp arise, transition, change of leadership. Also crisis provides an opp. When that happens, imp for top leadership not tó be part of emb. Network, and then to realise that they have only 2 years to fight that, so that they do not

To answer the question from Honorable Toro fom Kenya, look forward to coming back to Kenya

Ministers who have resigned because of corruptino have been reassigned.

I will not be part of any whitewash to pretend to be fighting corrupion.

David Nussbaum (TI): A few years ago, we passed a resolution at one of these meetings to the government of Japan.

Fugimori. Woudl it be helpful to include that in teh closing declaration of this conference that

Chile speed up the extradition of Fujimori.

docPlenary Short Report Form Day 2

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Brazil 2012

IACC Video

IACC Video