Centre for the Study of Corruption

Professor Robert Barrington looks at the intent behind flows of dark money into the UK – and concludes that the UK is ill-equipped to deal with the threat of strategic corruption. 

When lots of Russian money flows into London and the UK financial system, is there any malevolent intent behind it? Setting aside the unproven theories about Russian funding for the pro-Brexit campaign, there are plenty of examples that throw up red flags – such as the Lebedev peerage, the involvement of Russians as political party donors, oligarchs investing in strategic (though legitimate) businesses, and philanthropic donations to universities.  But these are red flags only because of the nationalities of those involved, not because of proven corruption.

The question of the intent behind such activities has arisen because the dealings of Russia in Ukraine – for some years before the invasion – have brought to the world’s attention an issue that has come to be known as ‘strategic corruption’. This is essentially the promotion of corruption in another country by a sponsoring government to further its national interest or foreign policy objectives. 

The concept of strategic corruption started to appear in the lexicon of corruption terms towards the end of the 2010s.  Alternative framings include ‘corruption as statecraft‘, used by Transparency International in a 2019 report; and the ‘weaponisation of corruption’. The term strategic corruption has gained wider exposure through being included in the US Government’s Countering-Corruption Strategy (2022), where it is defined as: “when a government weaponizes corrupt practices as a tenet of its foreign policy.” This echoes the description offered by a comprehensive article in Foreign Affairs (2020): “a country’s weaponization of corruption against other states in pursuit of national goals.” 

Russia’s involvement in various activities within Ukraine prior to 2022 – for example, in providing covert financial and other support for corrupt politicians known to support Russian influence over Ukraine – is often cited as an example of strategic corruption. However, many of its characteristics do not differ from those used by both sides in the Cold War to advance their national interests and foreign policy objectives.

There are several beneficiaries of strategic corruption, not all of whom may themselves be corrupt:  

• The sponsoring state which has enabled and promoted corruption in another country. The sponsoring state is a corruptor, but that does not in itself signify that the government of the sponsoring state is corrupt (although it may be).  
• Those within the ‘corrupted’ state who are the agents of the sponsoring state in carrying out the corruption. For example, a politician or public official who has been encouraged, supported, induced, or coerced by others to act corruptly. These agents may themselves be corrupt – if they are abusing entrusted power for private gain – or they may engage in other forms of wrongdoing, such as treason.
• The individuals who are corrupted, either directly by the sponsoring state, or indirectly by that state’s agents; they would usually be individuals who are abusing a position of entrusted power for private gain.  

Mechanisms for strategic corruption include:  

• Corrupt subversion of the political system through political financing or rewards to politicians
• Co-opting influential individuals through provision of jobs or other benefits
• Covertly supporting the promotion within key institutions of individuals who are known to be corrupt. 

Scholars and practitioners debate the question of intent. For example, when large quantities of cash are laundered into the economy of another country, it may be unclear whether that activity is in part or in whole intended to corrupt the destination country and its institutions. In such a case, if the money laundering is intended to corrupt the wider context, the activity would fall within the definition of strategic corruption; if corruption within the destination country is a by-product of the money laundering, it is contested as to whether this should be regarded as strategic corruption.  

Where does that leave the UK?  Of course, we do not have sufficient information on intent to be able to make a judgement about the large flows of money from Russia. But it is possible – indeed likely – that several things have been going on at once: 

• Money being parked in the UK as a safe haven 
• Money being infiltrated into the UK in order to gain influence or subvert key institutions 
• Money originally brought to the UK as a safe haven being re-purposed to curry favour with the Putin regime 
• Money originally brought to the UK as a safe haven being used in ways that promote or engender corruption as a by-product.

In a sense, it may not matter what the intent of Russia has been. The importance of the Russian case is that it highlights what could – very easily – be done by a hostile government through legitimate means. China, Iran, and other governments known to have used strategic corruption elsewhere would not have to do much work to find out how to deploy strategic corruption in the UK. It is exactly this kind of threat that has been worrying the authorities in the US – hence the FBI’s creation of a Foreign Influence Taskforce, among other initiatives.

What is the UK equivalent of such US initiatives? None, as far as we know. Might it fall within the remit of the Prime Minister’s Anti-Corruption Champion? Possibly, but that role has been empty now for fourteen months and counting. The truth is that this is one of the many areas related to corruption that is so low on the priority list of the UK government that there has been no coordinated or coherent response.

Further reading

Huss, O. and Pozsgai-Alvarez, J. 2022. “Strategic Corruption as a Threat to Security and the New Agenda for Anti-Corruption”. The Corruption in Fragile States Blog.  https://www.corruptionjusticeandlegitimacy.org/post/strategic-corruption-as-a-threat-to-security-and-the-new-agenda-for-anti-corruption.

Zelikow, P., Edeleman, E., Harrison, K. and Gventer, C.W. 2020. “The rise of strategic corruption”. Foreign Affairs 99: 107.

Frank Vogl (Adjunct Professor at Georgetown University, co-founder of Transparency International, Chairman of the Partnership for Transparency Fund) highlights the importance of a new report from The Sentry, a human rights NGO, on the role played by the Wagner Group in state capture. You can read his further reflections on state capture in this review of the seminal article on the subject by Prof Liz David-Barrett.

Many of us engaged in issues related to corruption have long been concerned about state capture. I would encourage everyone who is interested in the subject to read the new report by The Sentry, Architects of Terror: The Wagner Group’s Blueprint for State Capture in the Central African Republic.

We have seen elsewhere how military forces have captured key institutions of government and secured major business interests at the same time – from Myanmar to Egypt, from Pakistan to Iran. We have seen how highly corrupt influential groups of businessmen have bribed top government officials on a scale that has enabled them to massively steal from the state – for example, Zuma and his associates in South Africa. In so many countries, we have also seen how men like Orban in Hungary and Erdoğan in Turkey, and many more, have methodically replaced government workers with sycophants, illicitly secured national media control, undermined institutional checks and balances in government and so, in effect, captured the machinery of the state. 

Few anti-corruption specialists have, however, adequately looked at the monstrous form of state capture pursued by Russia’s Wagner Group in a number of countries in Africa. Under the explicit authority of the Kremlin, Russian commanders have forged blunt deals with several national leaders under which they will secure these leaders in power in return for rights to vast natural resources. The methods that the Wagner Group deploys include massacres, routine rape, destruction of homes, and the terrorising of national military troops so that they perpetrate extensive horrendous crimes under the direction of Wagner’s commanders. 

The Sentry’s important report contains a number of recommendations, including the designation of Wagner Group as a terrorist organisation by concerned governments, and the creation of “a coalition similar to the Global Coalition to Defeat Daesh/ISIS – critically including African states – to counter the Wagner Group’s malign influence on the African continent and elsewhere”.

We should all consider the humanitarian, governance and security implications of what the Wagner Group is now doing in Africa. It is not too late to counter the atrocities that are unfolding and the state capture that the Kremlin is orchestrating. 

Philip Trewhitt, formerly an investigator on fraud and corruption at the United Nations, gives an insight into the nature of such work and what lessons can be drawn for dealing with future scandals.

One day in the summer of 2004, I was running into a bunker in Baghdad to avoid some mortar fire. A normal day at the office at that time. When my phone started ringing I, for obvious reasons, chose to ignore it. It rang again a few minutes later. It was Paul Volcker, the former chairman of the US Federal Reserve now in charge of the investigations into breaches of UN sanctions imposed against the regime of Saddam Hussein – what became known as the UN oil-for-food scandal. He asked me to head up the Baghdad end of it. And so, I became a corruption investigator. For the next 18 months I worked with the best-qualified and most-motivated team I have ever been part of, drawn from across the globe. We achieved almost nothing. A couple of minor jail sentences; a few fines. But the numerous politicians and so-called human rights champions proved to have benefitted from kickbacks? The many well-known international companies who knowingly paid them, directly or indirectly? Pretty much zilch.

Fresh from that mighty success, I was asked to join a UN corruption task force in New York, with over 300 cases of fraud and corruption sitting on the books. A number of the cases I worked on showed clear criminality and were proved well beyond the required level for referral to law enforcement, yet few such referrals were made. Later, I worked on investigations for a succession of UN and other international agencies, either as staff or as a consultant. Once again, we proved the cases. Once again, very little resulted from this.

I should point out that is not fair to compare lack of action in the oil-for-food investigations with the failure to follow up internal investigations carried out by the UN and other international agencies themselves. The power to take action on the oil-for-food sanctions breaches was primarily in the hands of national authorities, who for the most part, and for a variety of reasons, had no interest in progressing cases. The international agencies do, however, have the power to take action on cases involving their own staff and contractors. I do not suggest that this never happened while I was involved. There were successes, just not very big ones, relatively speaking. If action was taken, it was generally too little, too late, or simply the wrong action. In combatting corruption, the grand proclamations and the mountain of policies were matched by a lack of ambition and action which was truly stunning, especially when investigators were providing solid grounds for taking action.

Operating in the most difficult and dangerous parts of the world, where corruption is often endemic and local authorities may be part of the problem, is not easy. Those working for the internal investigations bodies – mostly good, bright, motivated people – may reasonably point to the increased number of allegations coming in to the internal investigations as proof of their success in persuading people to come forward with concerns; they will point to substantially increased staffing of those internal agencies as evidence of the concerns being taken seriously; and they will produce annual reports filled with pie charts on different types of investigations ‘substantiated’ or ‘unsubstantiated’. They may also emphasise the type of allegations they have investigated and mention companies being ‘sanctioned’ or ‘debarred’, in other words prevented from doing business with the agency. What they will probably not be able to show, because it so rarely happens, is evidence of bad people going to jail.

Why not? There is no simple answer. It is not that those at the top of these agencies are mad, bad, irresponsible, lazy, self-interested or have built a career on studiously avoiding controversy. The key factor is that there are systemic faultlines in the way investigation bodies are structured and allegations are dealt with. The overriding goal for management is not to hold the guilty to account but the avoidance of reputational harm. There is a tendency to revert to the least confrontational response possible, particularly if the case involves government officials. It is widely acknowledged among the UN staff that stopping funds flowing to 10 or so countries in the world unless they sort themselves out would reduce corruption hugely, but the political costs are too high. There are other problems as well. Investigation mandates are too wide, conflating sexual harassment with systematic looting of projects, which makes it difficult for investigators to build up specialist expertise. Investigators face, in reality, a requirement to go well beyond the required level of proof, with those accused being accorded full rights and protections, but without investigators having comparable powers. The internal legal staff do not always help – for every one that offers a way forward there is another who whispers about threats to UN sovereign immunity if investigators are allowed to testify, or worries about being sued for libel.

Senior managers in international agencies are able to point to their robust anti-corruption policies. There are a certainly a lot of them out there. Everyone has a whistleblower protection policy. That did not stop a senior management official saying to me: ‘we shouldn’t be protecting scum’. Everyone has a ‘zero tolerance’ policy in relation to fraud and corruption. That did not stop another senior management official saying to me – in public – that he would expect me to be arrested if I tried to conduct an investigation in one of the countries for which he was responsible and that he would ensure the agency ‘would not lift a finger’ to have me released. (He added that it was ‘nothing personal’).

I left the UN around a decade ago, but have no reason to believe that things have changed in recent years. My advice to the donors who fund such international agencies is this: if you want to know whether an agency is taking corruption seriously, do not ask about policies or  ‘governance issues’ or ‘financial mismanagement’. Ask who is going to jail.

Laurence Cockcroft reviews Invisible Trillions: How Financial Secrecy Is Imperiling Capitalism and Democracy and the Way to Renew Our Broken System by Raymond Baker, writing that Baker offers a comprehensive overview of the danger that global financial secrecy poses to the capitalist-democratic system, even if he doesn’t provide perfect solutions: “an important book for anyone interested in the the cause and effect of the lack of transparency, the continuing role of secrecy in the modern world, and, above all, the consequent challenge to democracy itself.”

The various forms of secrecy which have come to characterise global capitalism have created threats to democracy in both high and low income countries. This secrecy hides numerous forms of corrupt behaviour by companies, banks and political parties, sustains inequality between and within nations  and is a major threat to existing and potential democratic systems. Raymond Baker’s Invisible Trillions maps out this theme, showing that western political systems are failing to address it, and proposes a set of measures which are feasible at both the national and international level without undermining the basic principles of capitalism. 

Baker has honed his argument over several decades. As a business practitioner in Nigeria in the early 1960s he quickly became knowledgable about the false invoicing which characterised the country’s international trade. He came to see that this would prove a fatal flaw in Nigeria’s economic development, transferring profits overseas and depriving the country’s exchequer of the revenue it would need, with ominous portent for the future of the oil industry. He spent several decades researching this phenomenon globally and in 2005 published Capitalism’s Achilles Heel : Dirty Money and How to Renew the Free Market System. In 2006, Baker was able to set up Global Financial Integrity (GFI) in Washington DC to carry out both further analysis and (more importantly for Baker) to campaign on this and related issues of transparency and corporate integrity. As such, he has been a key member of the informal coalition of NGOs active on this issue in the US and Europe. There are very few in this coalition who have his level of detailed knowledge of the mechanisms by which corruption, broadly defined, can flourish in a world of corporate secrecy.  

Baker fears that the phenomena which he described in Achilles Heel has exploded and is now a many-headed hydra. The starting point of Invisible Trillions is the gargantuan sum of illicit funds that flow through what he labels “capitalism’s financial secrecy system” from both the medium- and low-income countries of Latin America, Africa and Asia, as well as from Russia and China as the successful rich seek to deposit their funds in alleged safe havens – often via the world of the secrecy jurisdictions so actively supported by western governments, notably those of the US and the UK.

The mechanisms for this have been exposed in a series of leaks by the Investigative Consortium of Independent Journalists (ICIJ), amongst which the Pandora Papers showed that fifteen US states house more than two hundred trusts which in turn provide an anonymous home whose secrecy rivals that of more notorious places in the Caribbean. The vast gap between the flow and control of funds seeking a safe haven in the US is demonstrated by the fact that 99.9% of laundered funds are ultimately successful in finding a formal and authorised account in a US financial institution or legitimate property. It is this transition from illegal status to legal status which also lies at the heart of the phenomenon of illegally-sourced goods, such as oil ‘bunkered’ off Nigeria or timber illegally felled in Amazonia or DRC, which become legal as they reach the higher levels of the supply chain. 

While the phenomena described by Baker have long been recognized, his central argument is that illicit financial flows, tax evasion, tax avoidance, and schemes by corporations to hide revenues and profits all combine, “driving inequality, impoverishing billions, empowering criminals, enriching despots.” And, for good measure, he adds that the secret financial system leads to misallocations of finance to the point where the “trillions” are not invested productively, thus undermining potential economic growth. 

Baker offers a useful analysis of why there has been so little progress in fighting the financial secrecy system. Key issues are the lack of uniformity in collaboration between the various regulatory authorities fighting money laundering in Europe and the US; weaknesses in the new legislation addressing beneficial ownership; the ‘golden visa’ schemes which enable the corruptly rich to easily acquire citizenship in a range of tax havens; political party funding rules which are if anything increasingly loose – as was the defining case of Citizens United in the US  – allowing foreign donors to fund their target candidates; and the repeal of the US Glass-Steagall Act in 1999, which since 1933 had separated investment banking from commercial banking.  

Baker’s focus is more positive at the international level, highlighting the OECD, the World Trade Organisation and parts of the United Nations as being well ahead of the World Bank and the International Monetary Fund in trying to establish improved practice both within and between states.  

The alarm bell ringing loud and clear in this book is that the financial secrecy system has become so large and promotes such great inequalities of income and wealth that capitalism in this form now poses a core challenge to the survival of democracy. As he bluntly states: “The democratic-capitalist system is at risk.” 

Building on his analysis, Baker offers a roll call of activities for future action. The common theme is the imperative for an end to secrecy and an opening to transparency, with a direct impact on the quality of democracy. High on this list are corporate transparency (ending the practice by which companies can disguise even the existence of a subsidiary in a foreign jurisdiction), a convergence of trade and audit reports which would make trade mispricing (by invoice manipulation) impossible, an end to the defining characteristics of tax havens (perhaps now heralded by the new fifteen per cent minimum global corporation tax). Corporate governance with much stronger employee stakeholder role is also on the agenda. In the world of international finance, he calls for an end to financial products representing no real world assets (notably a range of derivatives) and a much more rigorous policing of auditors too long complicit in the behaviour of both multinationals and banks. Further, the book reverts to the broad theme of transparency trade and shows how the World Bank couid easily produce an annual report of progress in this area.  

Today, while there are greater efforts by governments on both sides of the Atlantic to develop approaches to reveal the true beneficial owners of the shell companies, no government has yet advocated closing down these entities. But then, as Baker argues on p.140, the complex structures that support the financial secrecy system are supported by Western governments and advocated for by powerful individuals and corporations who most benefit from the system. His overall synthesis is that: “A more equitable world cannot be realised while widespread secrecy pervades operations in one of the components of the democratic-capitalist equation, while the other component strives to operate with transparency.” 

The book’s strength, in addition to its warning of the risks to democracy and to capitalism, is its very comprehensive overview of the failure of reform to date of the trade, finance and banking sectors. Its roll call of actions is strong on conviction but the practical steps which are a condition for successful reform don’t always tie in with the analysis of why so little has been achieved in a meaningful way in the last twenty years. This is, however, an important book for anyone interested in the the cause and effect of the lack of transparency, the continuing role of secrecy in the modern world, and, above all, the consequent challenge to democracy itself.  

Frank Vogl, author of The Enablers: How the West Supports Kleptocrats and Corruption – Endangering Our Democracy, kindly commented on this draft. 

Laurence Cockroft is the author of Global Capitalism : Money Power and Ethics in the Modern World and (with Anne-Christine Wegener) Unmasked : Corruption in the West.  

Raymond Baker’s Invisible Trillions is published by Berrett-Koehler (USA) and available via Amazon (Hardcover, Audio and Kindle). 

Professor Robert Barrington looks at the crisis of values engulfing the UK’s foremost business lobbying group, the Confederation of British Industry (CBI), and offers some personal reflections on encountering the CBI’s lobbying techniques.

The CBI “meet with senior politicians and officials every day” to lobby on behalf of members.  Yet we have learned from its own Chair that it has hired “culturally toxic people” who were “promoted too quickly […] to protect our cultural values” and more generally “paid more attention to competence than behaviour”. Moreover “commentators concluded that the organisation was cold-hearted and toxic”.

Not all of the CBI staff, by any means, are ‘toxic’. We do not know the scale, although in addition to other staff, the Director General himself was ‘removed’ following unspecified allegations. The discussion on the CBI’s culture and values has rightly focussed on the immediate allegations of sexual harassment and rape, but that casts a wider shadow on the CBI’s culture and values. What does it stand for as an organisation? In other words, what values underpin its vast lobbying apparatus?

This challenge to the CBI’s values will come as no surprise to anti-corruption campaigners.  After all, it was the CBI that lobbied against the UK Bribery Act in 2010/11, with the Director General at the time declaring it was “not fit for purpose”. The CBI’s argument was that, despite bribery already being illegal, the new Bribery Act would disadvantage British companies – in other words, they could happily live with the ineffective and unenforced old anti-bribery laws, but should not be expected to live with a modern law that might prevent companies paying bribes, or continuing to bribe, to win business. Of course, it was not quite phrased like that but, despite being dressed up as a technical objection, the sub-text was clear from other conversations, statements and media articles.

This argument was a) implying that the CBI’s members would be justified in not adhering to the law, not just in the UK but in multiple other countries; b) in direct contradiction to the UK’s international obligations as a signatory to the OECD Anti-Bribery Convention; c) out of line with most FTSE-100 companies’ ESG statements at the time (or CSR/sustainability statement as they were generally known in those days); d) last, but not least, what might be politely termed as free of values.

On what basis was the CBI making this case in its frequent, secret, meetings with government? We do not know. Were its member companies telling it to say this – and if so which ones? Was there a debate in the CBI with companies that might disagree? What was the evidence that it would disadvantage British business, and how was this weighed against the harm that bribery does to the societies in which the bribes are paid?

At the time, as the person at Transparency International in charge of running the campaign to try and secure the Bribery Act, I could find none of this information. The CBI  did not publish its evidence base, nor basic details like who was sitting on its internal Bribery Act group or which Minister and officials it had spoken to. I could find nothing on the CBI website. In the several meetings I held with the CBI and its working group on the Bribery Act, there was plenty of assertion but no evidence, generally put forward by the lawyers of a small group of FTSE100 companies (including BAE Systems – the very company whose own huge bribery scandal had forced the government into passing the Bribery Act in the first place). On this issue at least, the CBI was a values-free zone. Actually, it had one value: to use its frequent secret lobbying meetings with government to put forward a viewpoint that it felt was representing its members. It represented business not society, and certainly not anything like integrity or good governance.

The Open Access database tells us that in the five years between 2018 and 2022, the CBI met government Ministers 265 times. That is a lot of lobbying – and those meetings were just the ones with Ministers. By contrast, I recall meeting Ministers to discuss the Bribery Act perhaps two or three times under the Labour government, and not at all under the Coalition government. Indeed, Ken Clarke, who was the Minister responsible for implementing the Bribery Act and notionally the government’s Anti-Corruption Champion, steadfastly ignored or refused requests to meet Transparency International, while at the same time meeting industry groups and delaying the Act at their behest.

The argument in favour of lobbying being permitted in a democracy is that it is an important part of the democratic process. All viewpoints should be represented to Ministers and officials. Those Ministers and officials are better informed, and evidence-led policy-making can result. But if one group has privileged and secret access, and is far better resourced, then it is not hard to guess whose opinion is likely to prevail.

The good news is that the CBI lost the argument over the Bribery Act. The law was passed, and not repealed, and I have not heard of a single British company that went out of business as a result. Of course, if a company can only survive by breaking national laws and international conventions, a values-based assessment might be that society is better off without such companies.

So what wider lessons might be drawn from this?  First, that there is a huge inequality of arms when business is lobbying. Second, this is compounded by a lack of transparency that tips too far into secrecy. Third, that member companies are far to slow to act when a trade body acting in their name has a significant dissonance with the values they claim lie at the heart of their own businesses.

Whether the CBI is reformed and survives, or whether it is replaced by other bodies, the spotlight should be on the members to make sure that their representative bodies live up to some semblance of ESG values. That does not just mean no more sexual harassment: it means responsible lobbying and finding means to reconcile the needs of society (who also happen to be employees and customers) with the needs of business. This is a timely re-think for the CBI and its members.

Frank Vogl, Adjunct Professor at Georgetown University, co-founder of Transparency International, Chairman of the Partnership for Transparency Fund and author of “The Enablers – How The West Supports Kleptocrats and Corruption – Endangering our Democracy,” reviews a recent article by CSC Director Professor Liz David-Barrett.  

Sussex University’s Professor Elizabeth Dávid‐Barrett’s new article – State capture and development: a conceptual framework– is published at a time when the leaders of democratic governments are grappling with the mounting challenges of autocracy and nationalist populism. Too often, these topics yield overly broad and general discussions without adequately delving into critical aspects of the core natures of the non-democratic regimes that abound today. This new article takes us towards a better understanding of the behaviors of governments that abuse their public offices as they serve themselves at the expense of their citizens.  

To start with, the Professor’s definition is one that should become widely accepted and used. She writes:  

“State capture is similar to regulatory capture but broader in scope. What is captured is not just regulation but core state functions, including the ability to shape the rules of the game through constitutional and legislative reform, but also the power of patronage which facilitates appointments to key power-holding or scrutiny bodies, and the power to distribute state assets and public money, and powers to regulate the space in which other oversight bodies such as the media and civil society act. State capture occurs when those who are entrusted with these powers abuse them consistently to shape the rules, appointments, allocation of state funds and rights in ways that make them less public-interest serving and more tailored to benefit narrow interest groups.”  

The importance of the article is underscored when it is recognized that approximately one-half of the world’s population live under regimes that pursue state capture. These are what the Economist Intelligence Unit describes as “hybrid regimes” and “authoritarian regimes” (see table below).

Looking at the operations of governments through the lens of state capture, as Professor Dávid‐Barrett encourages us to do, quite directly highlights who the victims of corruption are and how governments use diverse means to impoverish so many citizens as they seek both to increase their own wealth and secure their power. Too little research has focused explicitly on the impact of state capture on development and the section in this new article should serve to stimulate further substantive work with benefits for all development practitioners.  

Such an exploration might take into consideration a wide range of issues not detailed in the new article, but that no doubt are prominent on the Professor’s agenda for further research and more publications. For example, I have long been fascinated by the question of why some regimes have managed to secure themselves in power and promoted state capture over decades, while others have only managed relatively short periods of successful state capture. Consider, for example, that Teodoro Obiang has been President of Equatorial Guinea in West Africa since 1982, or that Yoweri Museveni has been President of Uganda in East Africa since 1986, while Alexander Lukashenko has served as Belarus’s President since 1994. These long-term captors of their states contrast, for example, with others who for only a handful of years used their powers to plunder their nations such as the now jailed former Malaysian Prime Minister Najib Razak and South Africa’s former President Jacob Zuma who faces criminal charges today.  

The degree of state capture and its duration under a single group of leaders depends in part on the extent to which those in power have captured all of the state’s institutions of justice and manipulated the judiciary to, in effect, permit the national political leadership to enjoy full impunity.  I suspect this is not the whole answer. In many countries, from Tunisia in 2012, to anti-Zuma protests from 2017 in South Africa, public protests have at times been so overwhelming that they have been the prime engine for ousting oppressive national leaders. With the rise of social media as a tool for organizing protests and the increased skills of civil society activists, the number of powerful protests by citizens has been formidable, as evident from the findings of the Global Protest Tracker developed by the Carnegie Endowment for International Peace. This is an increasingly important aspect of state capture and Professor Dávid‐Barrett, who discusses civil society in her article, may wish to expand on this in the future. 

Another feature of state capture worthy of deeper research and debate concerns the roles that the military plays in some countries. The military has been the power behind the governments of Pakistan for many years, stepping in to take control at times when it has considered appropriate to secure stability and its own real power. Egypt has long been under the iron fist of military rule, as have numerous other countries – and in every case the military has acquired businesses, developed its own enterprises to secure public procurement contracts, and taken control of state-owned enterprises. 

Professor Dávid‐Barrett draws attention to the close ties between business and political elites in conspiring to secure state capture. In many countries, it is useful to consider how the business elites attained their powerful positions in the first place. Professor Louise Shelley in her books, “Dirty Entanglements: Crime, Corruption, and Terrorism” (2014) and “Dark Commerce: How a New Illicit Economy Is Threatening Our Future”(2018), provides evidence of the close ties in many countries between business elites and organized crime. The late Professor Karen Dawisha in her book “Putin’s Kleptocracy – Who Owns Russia?” (2014) and journalist Catherine Belton in her book “Putin’s People: How the KGB Took Back Russia and Then Took On the West People” (2020), both detail the formidable roles that organized crime played in Russia in the 1990s in aiding and abetting businessmen and politicians to attain state capture.  

Indeed, this new article by Professor Dávid‐Barrett is likely to trigger much further research on state capture and prove to be a scholarly landmark that provides inroads to understanding not only the nature of hybrid regimes and authoritarian regimes, but the challenges that the victims of corruption confront in so many countries today.  

Professor Robert Barrington reviews three reports into the Met, and finds that there is confusion around the term corruption – and whether the Met is or is not a corrupt institution. 

Last week’s Casey Review on London’s Metropolitan Police force mentions the word ‘corrupt’ or ‘corruption’ twenty-two times in its 363 pages, most of which are incidental – for example, noting there is an ‘Anti-Corruption and Abuse Hotline’. What follows here is a detailed discussion on definitions, specific words, and some key phrases from recent reports on London’s policing. Switch channels now if that is not your cup of tea. To make it easier, you could just read the summary and conclusion, which are at the start rather than the end. 

Summary  

• The Casey Review says that the Morgan Panel says the Met are ‘institutionally corrupt’. 
• The Morgan panel actually says that there was ‘institutional corruption’ in the Met. 
• The HMICFRS review of the Morgan Report said that Report had concluded that the Met is ‘institutionally corrupt’ but the HMICFRS itself concluded ‘we would not describe the MPS as institutionally corrupt’ following an earlier report that concluded ‘corruption is not endemic in the police services’. 
• What does it all mean? 

Conclusions 

• It’s actually quite hard to work out whether the three independent reviews are or are not saying that the Met is institutionally corrupt, and what they might mean by that. In any event, they appear to disagree with each other. 
• There seems to be no clear reason why new definitions need to be created by these reports, and that further confuses the picture. 
• Contradictory terminology is used apparently interchangeably. 
• It is unclear whether these reviews have been carried out by those who are expert in institutional corruption, or familiar with the academic literature on institutional corruption. 
• Problem definition and analysis are considered as key by those who propose or design anti-corruption solutions; muddled definitions can lead to muddled solutions. 

Terminology 

From the anti-corruption perspective, the several reports on the Met have a confusion over terminology. To scholars in the field of corruption studies, as in any field, certain words mean certain things. Legal scholars also have their own vocabulary around corruption, but by and large there is a convergence of view over key terms. The reports on the Met use a number of terms, apparently interchangeably, and without apparent reference to what they mean in various areas of academic literature. 

• We can distinguish between ‘transactional’ and ‘systemic’ corruption. Transactional is fairly simple: an individual act of corruption, such as the payment of a bribe. Systemic corruption ‘[d]escribes environments where corrupt practices have become commonplace, institutionalised, or normalised‘ (Dobson Phillips, 2023). Neither of these terms are used in the reports, though they are both implied. 
• ‘Institutional corruption’ is a loaded term, with lots of debate about what it really means. Theories around this have been developed since about 2011, and one of the better known definitions is that of Harvard professor Laurence Lessig: ‘… manifest when there is a systemic and strategic influence which is legal, or even currently ethical, that undermines the institution’s effectiveness by diverting it from its purpose or weakening its ability to achieve its purpose, including, to the extent relevant to its purpose, weakening either the public’s trust in that institution or the institution’s inherent trustworthiness‘ (Lessig, 2013).  
• The variant of ‘institutionally corrupt’ might seem to mean the same as systemic corruption, but may also be used in the sense of an institution – i.e., senior personnel – colluding with transactional corruption; it is an open question as to whether this is the same as institutional corruption, particularly as used in the three reports on the Met. 
• ‘Endemic’ corruption may be considered akin to systemic corruption. 

Why it matters 

• Police forces are prone to corruption; we know this from regular research and investigations, from the Knapp Commission to TI’s Global Corruption Barometer.
• Police are the most immediate and high-impact point of connection between ordinary people and the power of the state; police officers have sufficient entrusted power that they can use their personal discretion to deprive individuals of their liberty. 
• The Met is a large and influential organisation with a long history of problems, but apparently with a difficulty accepting that it has problems (even after the coruscating Casey Review, the Commissioner would not accept the tag of ‘institutional’ to describe its problems – and that was probably not because of quibbles about definitions). 
• Problem diagnosis is critical to solutions.  This is well captured in a seminal paper by Paul Heywood (2017), who describes the need to focus (both on what type of corruption is at play, and in what unit of analysis – country, sector, etc) and to derive policy recommendations from a satisfactory analysis. 
• The independent inspectorate HMCFRS is about to undertake a new review into ‘the police service’s progress on vetting, misconduct and counter-corruption’, which is a timely reminder that any future reviews and reports should be on a proper footing – with a thorough understanding of what corruption means in this context, and which terms do and do not apply.

Analysis – Casey Review, Morgan Report, HMICFRS review 

The Casey Review was not set up to examine corruption specifically, but it is unambiguous in its conclusions about the areas it was examining:  

p.257: ‘The Review finds the Met to be institutionally homophobic’. 

p.285: ‘The Review finds the Met to be institutionally sexist and misogynistic’.

p.329: ‘We have found institutional racism in the Metropolitan Police’. 

It is not clear whether there is a distinction between ‘institutionally’ (homophobic, sexist, misogynistic) and ‘institutional’ (racism), but in terms of corruption, that may be a relevant distinction, as we will see. 

Perhaps the Casey Review’s clearest link between the subjects it examines and corruption comes in the section (p.278) on ‘Abuse of Position for a Sexual Purpose’.  This contains the chilling assertion that: 

‘As we have noted, the fact that police officers are given powers over their fellow citizens makes it likely that policing will attract people who want to abuse that power.’

In other words, a classic abuse of power or abuse of office definition. 

This is in line with other reports that link sexual activity to abuse of position -  in the words of Transparency International ‘[s]exual extortion or “sextortion” occurs when those entrusted with power use it to sexually exploit those dependent on that power‘.

Although the Casey Review does not deal substantively with the issue of corruption, it does refer back to ‘The Report of the Daniel Morgan Independent Panel‘ on the subject of corruption.  The Casey Review mentions this as (page 231): “the report [which] declared the force ‘institutionally corrupt’…”.  

This struck me as interesting, as I did not recall the reference to the Met being ‘institutionally corrupt’ from the Morgan Report. In fact, on checking, I only find reference to ‘institutional corruption’ – although in a report of such length – 1,256 pages - it is possible that, even with various searches, I have missed the reference to the Met being ‘institutionally corrupt’.  Suffice to say, if it is there, it is hard to find. 

This raises the question of whether there is a difference, intentional or unintentional, between ‘institutional corruption’ and being ‘institutionally corrupt’. The Morgan Report may not say the Met was ‘institutionally corrupt,’ but is clear that there was ‘institutional corruption’.  For example, Para 60 of the introduction: 

‘Concealing or denying failings, for the sake of the organisation’s public image, is dishonesty on the part of the organisation for reputational benefit and constitutes a form of institutional corruption’. 

The Morgan Report talks at length about different forms of corruption, especially the cover ups in and around the original investigation of Morgan’s murder, as well as corrupt relationships with the press. It was not able to find evidence of widespread corruption that may have led to the murder itself, and ultimately its findings on corruption therefore relate mostly to the cover up. There is a strong emphasis on ‘lack of candour’ in the Morgan Report, and in subsequent briefings and statements, and it seems that it the absence of being able to prove other forms of corruption (always an unenviable task), this was something provable on which the Panel could pin the label corruption. 

In fact, the Morgan panel’s terms of reference specifically included ‘the role played by police corruption in protecting those responsible for the murder from being brought to justice and the failure to confront that corruption’ and the Report has a whole chapter on the subject  – ‘Chapter 10: Corruption: Venality to lack of candour’.

For reasons that are not stated, the Morgan Panel decided to create its own definition of corruption, in section 2.2.  This might be considered a bit risky, as there is a danger that a definition might be retrofitted to the facts to prove that they were corrupt. In this case, although the Morgan Report definition draws broadly on other existing definitions and rules-based approaches (for example, the notions of dishonesty, benefit, omission, proper exercise of powers), there is an inescapable sense that the Panel has struggled with the interplay between what it senses is corruption and how it therefore needs to define corruption. Its rules-based approach is consolidated by a list of nine ‘failings’ (paras 26 and 27) which the report states constitute corruption if they are not incompetence. Interestingly, there are a number of existing definitions which might have done the job, encapsulating many if not all of the notions that the Morgan Panel definition is aiming to cover. The difference is perhaps that most definitions are shorter and more general, and thus widely applicable – the Morgan Report definition is unusually detailed and seems very specific to the circumstances that the Panel was examining. The Morgan Report definition, plus the failings, comprises fifteen points – it is complex and frankly a bit hard to understand: 

“The Panel has adopted a broad definition of corruption for the purposes of its work. The definition below is based on the key elements of dishonesty and benefit, and allows for the involvement of a variety of actors and a variety of forms of benefit: 

The improper behaviour by action or omission: 
i. by a person or persons in a position of power or exercising powers, such as 
police officers; 
ii. acting individually or collectively; 
iii. with or without the involvement of other actors who are not in a position of 
power or exercising powers; 

for direct or indirect benefit : 
iv. of the individual(s) involved; or 
v. for a cause or organisation valued by them; or 
vi. for the benefit or detriment of others; 
such that a reasonable person would not expect the powers to be exercised for 
the purpose of achieving that benefit or detriment. 

The Panel has used this definition to consider the conduct of the police officers involved in the investigations of the murder of Daniel Morgan”.

What is notable about this definition is that it covers very fully the notional of transactional corruption – individuals or groups of officers acting corruptly – but does not really help in an understanding of institutional corruption. Yet that is the big charge that the Morgan Report pins on the Met: 

Para 242: “When failings in police investigations are combined with unjustified reassurances rather than candour on the part of the Metropolitan Police, this may constitute institutional corruption. The Metropolitan Police’s culture of obfuscation and a lack of candour is unhealthy in any public service. Concealing or denying failings, for the sake of the organisation’s public image, is dishonesty on the part of the organisation for reputational benefit. In the Panel’s view, this constitutes a form of institutional corruption”.

Para 292: “These cumulative failures amount to institutional corruption on the part of all three organisations’ – referring also to the failures of others to investigate the Met“. 

Chapter 10 concludes with a further complexity that there are “symptoms of institutional corruption“: 

Para 502: “The Metropolitan Police placed the reputation of the organisation above the need for accountability and transparency. The lack of candour and the repeated failure to take a fresh, thorough and critical look at past failings are all symptoms of institutional corruption, which prioritises institutional reputation over public accountability. Most people become police officers to serve the public, not to engage in corrupt activities. They do very difficult and, at times, dangerous work without compromising their integrity. It is accepted that the management of policing is a very complex process, but there has been a failure over decades to tackle police corruption effectively and to resource anti-corruption work properly“.

The Morgan Report paints a bleak picture of corruption and the Met, but ultimately one that is confusing. There is a form of institutional corruption, symptoms of institutional corruption and – due primarily to a lack of candour – there is institutional corruption. But is that in the sense the Lessig meant, or in some other sense that is not defined?  Is the Met in fact ‘institutionally corrupt’ in the same sense that the Casey Review claims it is ‘institutionally misogynist’ – and again, what does that mean? And why do both the Casey Review and the HMICFRS review state that the Morgan Report said the Met was ‘institutionally corrupt’ when it does not use that term? 

A further difference from the Casey Review is that the Morgan Panel emphasises that “most people become police officers to serve the public” whereas the Casey Review takes the less optimistic view that “the fact that police officers are given powers over their fellow citizens makes it likely that policing will attract people who want to abuse that power“. It is a change of emphasis rather than scale, but an important change – not least because it gives a sense that there may be a higher likelihood of institutional corruption in the Lessig sense (diversion of purpose) if police officers are attracted to the Met for the purposes of corruption. 

After the Morgan report was published, the Home Secretary commissioned the independent inspectorate HMICFRS to undertake an “inspection of the Metropolitan Police Service’s counter-corruption arrangements and other matters related to the Daniel Morgan Independent Panel” which was published in March 2022. This specifically addressed the question of ‘institutional corruption’ but seems to make no distinction between that and being ‘institutionally corrupt’: 

“The institutional corruption label 

The Panel concluded that the MPS is “institutionally corrupt”. In essence, the Panel defined this type of corruption as one where an organisation protects its reputation, rather than where any individual benefits from a corrupt act….we would not describe the MPS as institutionally corrupt based upon the evidence we have seen. This should not for a moment be understood to be a finding that there are not serious areas of concern which have been, and continue to be, present in the MPS. It is essential that the MPS should be more open to criticism and prepared to change where necessary, including by implementing our recommendations. A further failure to do so (without good reason) may well justify the label of institutional corruption in due course“. 

It is unclear from this why the Met/MPS might not be labelled as institutionally corrupt at the time of the report’s writing, but if it does not change, might later be labelled as institutionally corrupt. To add to the confusion, an earlier review by the predecessor body, HMIC, had concluded that “[c]orruption is not endemic in the police service“, introducing the additional concept of endemic corruption. 

Inevitably, those who write such reviews are unlikely to be experts in corruption, or well versed in the copious literature that surrounds such terms. Notably, the HMICFRS does not have a definition of corruption in its list of Definitions and interpretations (though it is surely elsewhere), although it does have a literature review from 2015.  This review summarises the thinking at that time on police corruption but uses the term ‘institutionalised corruption’ in its conclusion with no related definition. 

What does this tell us? 

Given the analysis by Heywood (2017) and others about the importance of problem definition, the precise use of language for this complex field might be helpful both to understand what is happening and to plan ways forward.  However, the least that might be expected from the authors of such reports is a) that important terms are defined if they are to be used b) they are used consistently.   

What we can see from these reports on the Met is that no real distinction is being drawn between transactional and systemic corruption, and there is therefore a confused notion of what is meant by institutional/institutionalised corruption or institutionally corrupt – and this is even without any analysis of the territory into which Lessing draws the definitions when he talks of “diverting it from its purpose or weakening its ability to achieve its purpose” and “weakening either the public’s trust in that institution or the institution’s inherent trustworthiness“. It is a sobering thought that if the Lessig thinking on trust were applied, the Casey Review would essentially be staying that there is institutional corruption in the Met. That would seem to argue in favour of really fundamental reform, of the type seen in Northern Ireland, or even Georgia. 

Moreover, if definitions, like that of the Morgan Report, are essentially based on rules (rational choice), then it is likely that solutions will be built around rules, enforcement and incentives. But the Casey Report, looking at other areas than corruption, suggests that the wider problem is one of culture – to which a norms-based approach might therefore be applied. 

In sum: new definitions do not need to be created. Such reports do not need to contain a mini-treatise on the intellectual and historical underpinnings of the definition they use. But we do need to know what is meant by the terms that are being used, and for the analysis to make sense, such terms need to be used consistently. If existing definitions had been used, and used clearly, we would have a much clearer idea of how to view corruption in the Met, and therefore what needs to be done. 

Further reading

Dobson Phillips, R. 2023. “Systemic corruption”, in Dictionary of Corruption. Newcastle: Agenda Publishing (forthcoming).

Heywood, P. 2017. “Rethinking Corruption: Hocus-Pocus, Locus and Focus”. The Slavonic and East European Review 95(1): 21–48. 

Lessig, L. 2013. “’Institutional corruption’ defined”. The Journal of Law, Medicine & Ethics 41(3): 553-555. 

Professor Robert Barrington, Professor of Anti-Corruption Practice at the Centre for the Study of Corruption, University of Sussex

The UK has had a precipitous fall in this year’s Corruption Perceptions Index (CPI), the most widely used and cited ranking of countries in the field of corruption. The UK has moved from 11^th place down to 18th, its score going from 78% to 73%. Is that significant? Small falls in the score, or large drops in the ranking when several countries are tightly bunched, can be largely written off as statistically insignificant. But regrettably for the UK, this year’s decline in score and ranking are statistically significant.

This should come as no surprise. The US position took a similar tumble in the Trump era. The measurement period for this year’s result largely coincides with the tenure of Boris Johnson as Prime Minister. As I have written elsewhere, there was more corruption and corruption risk in and around the Johnson government than any British government since the second world war. Although former PM Sir John Major had already delivered his verdict that the UK was ‘politically corrupt‘ it can be hard to state this with conviction, when there are a series of apparently isolated incidents, some of which are clearly corrupt, some on the borderline, and some are disputed.

The Johnson government was notable for having barely a month without some new scandal related to standards, probity or integrity – and at times, out and out corruption (of which the Owen Paterson case and certain PPE procurement cases have most usually attracted that label). Viewed as individual incidents, each one might be written off as untypical, or the result of a rotten apple, or open to more benign interpretation. However, at some indefinable point such scandals aggregate into a larger picture of corruption, and the experts whose opinions feed into the CPI have now delivered their damning verdict.  

Perhaps it does not matter. One index from one NGO, when much else is happening in the world. Actually, it does matter.  The CPI has been heavily critiqued by academics, but after nearly thirty years of existence, is still closely watched by those who analyse political risk, by the media, by the business community, and by other governments.  It affects reputation, confidence and investment. And it is usually an indicator of other sets of problems – political instability, democratic decline, and rising inequality between a venal political elite and the interests of ordinary people. That will be the likely conclusion that the wider world draws from this year’s result.

The government will find it difficult to ignore this. Although many countries routinely criticise the CPI’s methodology when they perform badly – a standard response from Russia, China and Venezuela – the UK government has previously used the CPI as one of the measures of its success in tackling corruption. Moreover, there may be worse to come: CPI scores that are linked with ongoing scandals tend to get worse before they get better.

We need not undertake a detailed analysis of the Johnson government to know how the UK got here. Even now, we still see the fallout of a Prime Minister who casually set aside the standards of public life, reflected in the Zahawi tax affair and the claims that the then Prime Minister’s appointment of a senior banker to chair the BBC was linked to his own financial affairs. Investigations continue into PPE procurement, Tory donor Baroness Mone, and even into Johnson himself. The Johnson era did not just feature endless scandals and credible allegations of unambiguous corruption, it was accompanied by attacks on the constitutional checks and balances that provide institutional safeguards against corruption: the media, the civil service and the judiciary. The UK looks much more like Viktor Orban’s Hungary than the Scandinavians, Singapore and New Zealand, who head up the CPI table.

The last time the UK did this badly in the CPI was in the aftermath of the BAE Systems scandal around fifteen years ago. At that time, the Brown government took swift corrective action: it introduced the Bribery Act, responding to the prime reason for the UK’s declining position. Of course, the CPI does not actually tell us the reason for a country’s score: but just as the correlation between the previous decline and the BAE Systems case was inescapable, so it is with this year’s correlation with the actions of the Johnson government.

What should Rishi Sunak do? There are three obvious things, and then a more structural change to consider. First, he should accept in full and immediately the 34 recommendations from the Committee on Standards in Public Life, which reported in November 2021 to a resounding silence from the government. Conveniently, those recommendations have already been put into a Private Members’ Bill sponsored by Lord Anderson – the Public Service (Integrity & Ethics) Bill – which the government could decide to support. Secondly, he should appoint an Anti-Corruption Champion, a post which has been vacant since the last one resigned in disgust in the dying days of the Johnson premiership. Finally, he should publish a new national Anti-Corruption Strategy – the previous one expired in December – and placed at front and centre of this strategy should be an acknowledgement that the UK now has a problem with political corruption.

Even if Sunak were to do these things – and there is little sign to date that he will fulfil his proclaimed goal of ‘integrity, professionalism and accountability’ – the UK still has an underlying problem with what might be described as the governance of corruption. What the Johnson government demonstrated is that the UK system of standards, integrity and defences against corruption can be fundamentally undermined by the person at the apex of all decision-making – the Prime Minister. For the UK to restore its reputation, it needs a system which acknowledges the threat that comes from those who are themselves corrupt getting into positions of power.

France and Australia are among the countries that have recently created anti-corruption agencies, which have previously been rarely part of the institutional set up in developed economies. Such countries have tended to take a multi-agency approach, with lots of different bodies doing different things. The UK has sixty-six different bodies responsible for corruption, plus the police. That may have worked in the past, but the UK now needs a system which incorporates independence and coordination alongside a mechanism that has the teeth and remit to prevent corruption in and around government. The result of this year’s CPI is telling us that the current system for the governance of corruption in the UK has failed: serious consideration needs to be given to updating it with institutions that are fit for purpose, and this should be a high priority for any government that values integrity, professionalism and accountability.