No Rest for the Wicked: Match-Fixing in the age of Lockdown

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immo-wegmann-DX3_dXuHVl8-unsplashThe Covid-19 crisis has led some sports to innovate by holding remote events. But that has also created new opportunities for corruption and match-fixing. Billy Pratt, currently taking our Master’s in Corruption and Governance, looks at match-fixing allegations in a remote darts match – and implications for how the sports industry can adapt to new conditions.

Following several months of Covid-19 related disruption, sports fans have been treated to a gradual return of live sport to their TV screens. Whilst the return of industry dominators such as football made news, a few others found ways of continuing despite strict lockdown regulations. The online suitability of esports lead to a boom in viewership for competitive gaming. Whilst not a sport in the purist sense, WWE were quick to move their wrestling shows to a crowd-less studio and never stopped. Then we have darts, which started to stage matches remotely with cameras in players’ homes to record them throwing darts at their own boards. Using this format, several professional events were hastily organised and streamed online, providing entertainment for sports-hungry fans at home and something to do for darts players with time on their hands.

Whilst these events were generally seen as a success, recent news has dampened the mood with two players, Wessel Nijman and Kyle McKinstry, being charged with match-fixing during a remote event in April. Nijman has confessed to the charges, whilst McKinstry is expected to appeal. Despite the occasional rumours, darts is not a sport typically associated with corruption, with only one confirmed betting-related match-fixing case in its professional history. The 2017 UK Sports Integrity Index even went as far as to name darts as the professional sport with the most integrity. For this reason, it is pertinent to question why this happened, if the move to a remote format was responsible and if so, what lessons anti-corruption efforts in professional sports should learn. With the winter months to come and another lockdown possible, sports fans may find themselves yet again at home watching darts being played remotely via video link.

Professional Uncertainty

The most obvious impact of the pandemic on sports as an industry has been the reduction of events, slashing earning opportunities for players. Whilst those at the top level of professional sports are well documented for their lucrative wages, the situation for those lower down is much less stable, even during normal times. Darts is no exception, with the number 1 ranked player Michael Van Gerwen earning over £1.5 million in prize money over the past 2 years whilst Nijman and McKinstry only earned several thousand each in the same time period. There are several papers within corruption literature which explore the relationship between salary and the incentive to corrupt. Within the realm of sport, Hill (2015) finds athletes are much more likely to match-fix later in their careers when they have greater awareness of their diminishing window for earning. With the pandemic postponing 14 PDC Development Tour events (which Nijman frequently played in), this may have been a factor. Given that the most high-profile remote darts tournament, the PDC Home Tour, had zero prize money on offer, it does not take an anti-corruption expert to see the allure of a match-fixing offer.

Gambling Increase

Whilst sports betting decreased during the UK lockdown as a function of there being less sport to bet on, sports corruptors quickly adapted. For example, one set of match-fixers managed to fool several well-known bookmakers into offering odds on an entirely fabricated Ukrainian football tournament. An estimated £100,000 of bets were placed before the tournament was revealed to be fake. What little sport remained saw huge betting interest with a 2,000% increase in bets placed on the basketball leagues of Tajikistan and Taiwan as well as in Belarusian football. Darts was one of the few sports that continued during this time and became a key asset for bookmakers, with several gambling websites even streaming these remote events. Match-fixing is often carried out with the intention of making or laundering money through gambling, and with Nijman and McKinstry being charged on the back of suspicious betting patterns, it is now clear that darts was targeted by match-fixers. Darts’s status as one of the few sports still available to bet on would only have made it a more attractive for fixers.

Remote Anti-Corruption Regulation

Professional darts is governed by the Darts Regulation Authority (DRA), who can be considered proactive in their anti-corruption work. They have confidential email addresses and hotlines for reporting corrupt approaches, clear and easy to follow regulations on betting and match-fixing [11] and partnerships with companies such as SportRadar to use the most refined match-fixing detection tools . These measures may partly explain why darts has rarely faced corruption issues before, and these measures also helped lead to Nijman and McKinstry being caught, for which the DRA deserves credit. However, the DRA’s usually effective approach failed to prevent corruption from taking place in this case and we must question why. With the change of format leading to players staying at home rather than travelling to a physical venue and interacting with officials, the DRA must examine if their anti-corruption efforts do enough to prevent match-fixers accessing and convincing players to fix when they are playing remotely. Match-fixing often depends on the ability of the fixer to communicate with the fixing player to relay information or instructions. In a physical tournament setting, such communication can be monitored or prohibited and there is evidence of this taking place with 2 players being officially warned for using internet devices during an event in 2017. During the remote events, officials were not only unable to physically monitor potentially corrupt communication but could not even prevent players from using internet devices capable of outside communication – indeed, the event relied on the players having internet access. The DRA’s anti-corruption approach was understandably designed for a pre-pandemic world, and must change before any more remote events are staged.

Going Forward

This case should prove instructive for a sports industry that will continue to be impacted economically until major gatherings are permitted again. The boom in esports viewership has led to the normalisation of watching two people playing video games against each other over the internet and betting on it. Even outside of a pandemic situation, remote darts events still provide content for bookmakers without having to pay for the logistics of a full sporting spectacle, but if they can’t be secured from corruption risks, these remote competitions may have to stop. The story of Nijman and McKinstry shows that even the more vigilant anti-corruption approaches need to be re-thought for our new conditions.

 

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What does the UK’s ‘algoshambles’ tell us about corruption?

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Robert Barrington, Professor of Anti-Corruption Practice at the Centre for the Study of Corruption (CSC), looks at the implications of the UK’s application of an algorithm to final-year exam results at schools – and detects some of the primary ingredients for corruption.

Many in the anti-corruption community have been puzzling in recent years about the relationship between tech advances and corruption.  There are some clear positives: such as greater transparency enabled by easier and more instant flows of information; and the arming of anti-money laundering officials with new tools for investigations. But our instincts also seem to say that there is something profoundly problematic going on, even if it is hard to pin down what that is. The tech revolution can have negative consequences for issues such as human rights, democracy, government accountability and basic freedoms; these have always been closely related to corruption, but is it an intellectual leap too far to state that the emerging ‘algocracy’, as it is increasingly known, has a tendency to be corrupt?

We have witnessed the unregulated power of large companies whose complexity, innovation and corporate governance prevents traditional accountability; abuses of surveillance tech by governments and law enforcement authorities; very high spending by tech companies on political and regulatory lobbying; and ordinary people feeling helpless in the face of the power that tech gives to both companies and governments.  A heady cocktail, but not fitting traditional definitions of corruption such as ‘the abuse of entrusted power for private gain.’

My colleague at the CSC Roxana Bratu has been researching this; and other deep thinkers such as Luminate’s Martin Tisne have put in the intellectual hard yards to bring us closer to understanding what we are really dealing with.  The UK’s A-level scandal seems to bring a few of these strands together.

For those unfamiliar with the scandal, here is a re-cap.  In the absence of pupils sitting final school year exams known as A-levels due to Covid-19, the UK’s constituent governments (education is devolved) decided to use an algorithm to generate the exam results.

The Financial Times described the outcome as an ‘algoshambles.’  The algorithm was designed by the exam regulators, under governmental instruction, to replicate the national patterns of previous years.  Everyone involved was well-intentioned.  But the outcome was indeed a shambles: elite private schools were favoured; brilliant pupils from historically poorly-performing schools were automatically marked down; many pupils missed out on grades their track records had every reason to suggest they would achieve.  The national pattern was accurately replicated and the government’s aim apparently achieved; but at the cost of many cases of individual injustice.

Why talk of corruption in this context?  The reason is simple: this gives us an insight into what government by algorithm could look like, and it looks very similar to a corrupt autocracy.  Here are five corruption-flavoured take-aways from the UK’s A-level scandal which lead to that conclusion:

  1. Algorithms make government easier.  They work brilliantly for central planning and nationwide implementation of centralised policy.  Governments will therefore like them and want more of them.  They give governments more control.
  2. The blanket application of an algorithm, however well-intentioned, inevitably smooths out the nuance of individual cases; even though society is made up of individual citizens with individual circumstances, applying algorithms in such a way is a blunt but effective mechanism.
  3. Inequality can easily be worsened: it may be by accident rather than design, but very clearly, those who are already privileged or advantaged can see that significantly increased if the algorithm works only marginally in their favour.
  4. Transparency allows citizens whose lives are affected by algorithms to assess whether they are designed and applied fairly; whereas the absence of transparency leaves the victim helpless and with little recourse except through a complex, expensive (in time, and possibly money if legal challenges are involved) and soul-destroying process of appeals.
  5. Governments and agencies that use algorithms are, however, very reluctant to be transparent about them; in this case, an apparently deliberate secrecy.  And even being transparent may leave citizens confused as to how interpret or challenge an algorithm.

That all sounds as though we need good algorithms sensitively applied, not bad ones that have negative consequences.  But what – if anything – does this tell us about corruption?

One obvious thing to do when looking for abuses of power is to look at where power is concentrated.  In this case, very high levels of power (over final school exam results, potentially determining an entire career – especially if it makes the difference to being able to study medicine or going to a top university) were concentrated in the exam regulator.  Of course, that is the case in normal years, but in the Covid-19 situation, the regulator was not only deciding on exam results, but deciding on the basis of its own discretionary judgement, under governmental instruction, rather than marking an exam paper.  It was above the norm – a super-concentration of power accompanied by an absence of transparency and limited accountability (to the Minister whose policy was complicit in the shambles).

This concentration of power created a severe problem – in part, because it also represented a transfer of power away from the student sitting an exam.  In other words, there was a big power gap through simultaneously taking away power from citizens and granting more power to the government.  Perhaps the most positive thing for the A-level students was that the shambles was so obvious that it was clear the algorithm’s findings had to be over-turned.  Around forty percent of pupils received grades from the algorithm that were lower than the teacher predictions that were eventually used. It is easy to envisage a scenario in which the impact was on perhaps five percent of the cohort, which could have been swept under the carpet.  And who knows what other algorithms are already in place, and already operating like this?

What is missing here with regard to standard definitions of corruption is the ‘abuse’ of the power and any ‘private gain’.  On the contrary, the exam regulator (and/or the relevant government minister) seems to have made a massive cock-up.

So this case may not be an example of corruption, but it should send a chilling warning.  Governments in mature democracies in advanced economies can play fast and loose with algorithms in areas that have a major impact on the lives of citizens.  We have now witnessed the enormous power of these algorithms.  Imagine what an abuse of such power would look like; and imagine the possibilities for private gain of an algorithm governing access to or exclusion from healthcare, finance, the best jobs, etc.  And note also that the culpable minister only performed his u-turn to by-pass the algorithm after sustained public and media pressure.

The conclusion has to be that such algorithms are not inevitably corrupt; but the potential for abuse of power and private gain gives a glimpse of what corruption may come to look like in the twenty-first century.

 

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No Filter: Children, Social Media and Revealing Questionable Wealth

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Corrupt elites usually invest a lot of resources in hiding their illicit funds, but that clashes with their tendency – or that of their relatives – to brag on social and regular media about their riches. Joseph Sinclair and Umedjon Majidi, current students on our MA Corruption and Governance course, look at the increasing use of social media in money laundering and corruption investigations.

When Naulila Diogo flew from Luanda to New York, she might not have expected the furore that followed. She was wedding-dress shopping. To her it was normal to spend over $200,000 at the luxury dress-maker, Kleinfeld. There was no problem featuring on the popular TV show, “Say Yes to the Dress”.

She is described in the show as “…royalty in her country”. What struck Angolan viewers was that Naulila was Bornito de Sousa’s daughter. He was a cabinet minister who had boasted about not taking a government salary. He was seen as incorruptible. His daughter’s act eviscerated that image. As put by a Zimbabwean blogger, “[$200,000] is a LOT of money!! So much question is how much did the wedding cost? I can’t even imagine how lavish it was!” Although no action followed, Naulila became a symbol of the billions in missing natural resource wealth from the Angolan government’s purse in a country mired with avoidable poverty.

Others have not put their foot in it as badly as Naulila. But it is a recurring theme. Children and family members often unwittingly expose the proceeds of questionable income on social media and are increasingly becoming a valuable source for investigators. For El Chapo’s sons, Instagram was a means to show off wealth gained from trafficking drugs: guns, cars and exotic animals. For others, it seems to simply be an accurate reflection of the life they have always lived. Their selfies provide an unwitting insight into the whereabouts of syphoned funds.

Latinen and Loynes found that over one-third of adults on social media leave their pages open to the public. Speaking to the Guardian in 2016, KR Intelligence said that social media is frequently used in private litigation to provide the wherewithal to freezing and seizing assets. Often social media posts not only show what they own, but where it is being held. It might not just be the expensive car, yacht, or designer watch, but the art on the wall of a holiday home. Or the home itself.

Habitual posters can reveal behaviour patterns that pin-point people to specific locations, or provide accurate data to predict their whereabouts at a given time. Indeed, her on-going Snapchat posts were attributed to robbers in Paris discerning Kim Kardashian’s whereabouts, leading to them stealing $9m in jewellery. For the FBI, Ray Hushpuppi’s Instagram posts of lavish living to his 2.4m followers allegedly revealed his part in a $138m money laundering conspiracy.

In the UK, social media played an important role in freezing Luca Filat’s assets. His father, Moldova’s former prime minister, had been imprisoned for assisting in the theft of $1bn from three Moldovan banks, equivalent to 12.5% of the country’s GDP.

A year after his father’s arrest, Luca arrived in London to study and quickly made his mark. His lavish spending is well-reported: a £390,000 upfront payment for a penthouse in Cadogan Square and a £200,000 Bentley, among other things. Photos taken from Facebook show him spraying €500 bottles of Dom Perignon and fist bumping a friend atop a G-class Mercedes. The NCA were able to get orders against Luca’s bank accounts with a total balance of £466,321.72.

Another example is Bellingcat’s investigation following the murder of Aierken Saimaiti, the money launderer who had assisted members of the Kyrgyz elite take money from Kyrgyzstan. Saimaiti had told journalists he laundered £5.65m into the UK for the benefit of Raimbek Matraimov, the deputy chief of the Kyrgyz Customs Service. Bellingcat say he “…is notorious for his family’s lavish lifestyle, seemingly at odds with the salary of a career public servant”.

Although the family deny the allegations, credence is given to them by his son’s expensive private education and habit for expensive watches. Instagram photos show Raimbek’s son, Bakai, putting up his middle finger with a Hublot watch on his wrist. Two other photos reveal a penchant for watches valued in the tens of thousands.

Bakai and Luca show the real value of monitoring family members’ open source and social media postings in discerning the whereabouts and ownership of questionable assets. But people are getting savvy. K2 told the Guardian that the super-rich were increasingly seeking help in devising social media policies for posting content.

While investigators become entangled to their eyeballs in shell companies and structures put in place to obfuscate ownership, social media posts may yield fruit of that vital connection. They may at the very least allow inference about a lifestyle over a long period of time inconsistent with one’s known earnings. This may be of particular use in the UK when seeking unexplained wealth orders. While already significant, we are likely to see social media playing an even more important and central role in investigations in the coming years.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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Odebrecht in Mexico: a game-changing scandal?

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Juan Cepeda, an alumnus of the LLM in Corruption, Law & Governance at the Centre for the Study of Corruption, looks at the Odebrecht case in Mexico.  He assesses whether the unique profile and features of the case will make it a rare example of justice triumphing over politics – concluding that international pressure may be the deciding factor.

The scandal involving Brazilian construction company Odebrecht might prove to be a game changer in the Mexican political system. The transnational nature of the case means there is a chance to break the cycle of corruption and impunity in politics and the administration of justice which all too often characterise the system in Mexico.

Odebrecht has already been convicted in multiple jurisdictions of paying bribes to gain contracts and influence. The action has now moved to Mexico, where the company is accused of paying multiple bribes to companies including Mexican oil company Pemex, some of which were then used to fund the 2012 election campaign of former President Pena Nieto.

Since we are dealing with a major transnational bribery scheme, interest in this scandal is not simply domestic. The international community will be watching closely the Odebrecht trial and will have an interest in seeing that due process is followed.  After all, Mexico was one of the earliest countries to ratify the OECD Anti-Bribery Convention, and the OECD’s influential Anti-Bribery Working Group will certainly be following the progress of this high-profile trial.  External pressure may be needed to push for the Mexican state to prioritise justice over politics.

Odebrecht represents perhaps one of the most sophisticated, transnational bribery strategies ever disclosed to the public. It involved one construction firm, twelve countries from two different continents (Africa and America), and more than USD 700 million delivered to high ranked officials in order for a considerable number of bids to be illegally awarded to the company.  Apart from Mexico and Venezuela, all Latin American countries have taken legal action against presidents, former presidents, ministers, vice-ministers, and other relevant public officers.

With the legal action now moving to Mexico, it appears that we might finally be witnessing an earthquake that could shake the Mexican political system. The movement of tectonic plates started with Emilio Lozoya, former CEO of Pemex (2012-2016) and head of the foreign affairs office during Enrique Peña Nieto’s presidential campaign in 2012. Lozoya was arrested in Spain in 2019 after being accused of money laundering, bribery and criminal association linked to Odebrecht’s bribery scheme. Three weeks ago, he arrived in Mexico after being extradited to face criminal trial in Mexico City.

From the moment Lozoya arrived from Spain after spending months incarcerated, the criminal process has been highly irregular and of questionable legality.

According to the Mexican law, Lozoya should have appeared before the judiciary immediately after landing in Mexican soil. Nevertheless, the Attorney General took him directly to a hospital, arguing health issues, such as anaemia and a hernia that needed to be urgently treated. Assuming that Lozoya was in fact in such an urgent need of medical care, the law allows a judge to pay a visit to the hospital to confirm the alleged health situation of the indicted person. This didn’t happen. The prosecutor -acting irregularly- never involved the judiciary. Lozoya spent 11 days in a private hospital in Mexico City and afterwards he appeared before a judge via a Voice over IP platform, which might also constitute a violation of due process.

Furthermore, pursuant to Mexican Law, the trial must be public. However, the judiciary decided to hold the initial hearings privately. The only information available was a series of WhatsApp messages sent to the media, allegedly with substantial information from the hearings.

Additionally, the judiciary has announced that the whole process will remain closed to the public, contravening the new criminal justice system in Mexico, which, amongst other reforms, enforces public oral trials. The argument behind this decision is the COVID-19 pandemic.

“Leaks” to the media – which may themselves be grounds for contesting the result of the trial – point to a corruption scheme that involves former ministers of state, the former presidents Enrique Peña Nieto and Felipe Calderón, and several congress people. Mexico is therefore facing what could be the biggest corruption trial in its history. The question for the country and its politicians is whether justice will this time predominate over politics. The track record is not encouraging: as a general rule, Mexican politicians make use of corruption scandals for electoral purposes, for revenge against the opposition or to deter certain actors in their quest for power.  Corruption and impunity for politicians have been more common than the administration of justice in the form of fair and effective law enforcement.

Odebrecht is a milestone in the study of corruption due to the scale of the corruption, the multiple prosecutions that have happened across Latin America, and the direct lines that can be traced to the very top of politics. It is an opportunity for Mexico to prioritise the rule of law over political advantage – although the situation is complicated further by the desire of the current government to use the case to damage the opposition. The world’s attention is elsewhere at present, with Covid-19 and a US election amongst other distractions.  However, external scrutiny, and diplomatic pressure, could do a great deal of good in reinforcing democratic values and the rule of law. This is the time for the international community to step up to the plate.

 

 

 

Posted in Regions

The Westferry Affair – the Fallout

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Recent events have focused attention on conflicts of interest and potential ‘cash for access’ in UK politics. Following his first post on the Westferry affair, Joseph Sinclair, a lawyer taking our Master’s in Corruption and Governance, examines the fall-out and wider implications.

 A Recap (see full background here)

The Conservative Housing Secretary, Robert Jenrick, has been implicated in a “cash-for-favours” arrangement with Richard Desmond, a billionaire property developer. Desmond’s company, Westferry Developments, sought to build 1,524 residential units to which the London mayor and local authority had objected.

Jenrick and Desmond had sat next to one another in a £900-per-head fundraising dinner. They spoke about the development and Jenrick was shown a video. The pair texted one another after dinner. Desmond said to Jenrick: “we appreciate the speed as we don’t want to give Marxists loads of doe for nothing!” The message referred to the £45m community infrastructure levy (“CIL”) due to be paid by Desmond’s company if the development was not approved by 15 January 2020.

Documents published show that Jenrick’s office put considerable pressure on civil servants to get the decision to him before the CIL deadline. Against his department’s advice he approved the development on 14 January 2020. On 29 January, Desmond made a £12,000 donation to the Conservative Party.

The local authority took the matter to court. On agreeing to quash the decision, Jenrick’s department accepted that the fair-minded observer would conclude a real possibility of bias towards Desmond’s company.

Further Developments

Jenrick told the Commons that he made the decision with an open mind and approved it with the view to the development producing 250 “affordable homes”. The Cabinet Secretary said that the Prime Minister, Boris Johnson, considered the matter closed.

Further allegations against Jenrick have been raised. In 2019, another property developer, Mark Quinn, gave the Conservative party £11,000. Shortly thereafter Jenrick’s department became involved in Quinn’s appeal against the refusal of planning permission for 675 homes in Kent. Three weeks after Jenrick’s involvement, Quinn donated a further £26,500. Jenrick denies being directly involved.

The Housing, Communities and Local Government Committee wrote to Jenrick with several questions, including a request to outline the measures in place to avoid “…such [an] obvious conflicts of interest”. They asked Jenrick why a target of 20% of affordable homes was deemed acceptable instead of the local authority’s required 35%. Jenrick responded by saying that the plan offered 142 more homes than the original permission given by Boris Johnson as London Mayor. He went before the Housing Committee on 22 July 2020 to answer questions.

What Does the Westferry Affair Tell Us?

This had the appearance of a significant conflict of interest, meaning that Jenrick ought to have recorded the meeting and recused himself. He told the Housing Committee that he did not because he was not advised to do so. This approach to monitoring conflict does not accord with the self-governing positive obligations in the Ministerial Code. The PM’s in fully investigating Jenrick’s against the Code actions also shows serious shortcomings in its operation.

While the platitude “build build build” bounces around the Commons, we need to ask who is going to benefit. Johnson has announced “…the most radical reforms of our planning system since the end of the second world war”. His government will “…scythe through red tape”. Will we see affordable sustainable housing or a perpetuation of what we see in London: multi-million pound new-builds sitting empty?

The Conservatives have received more than £11 million in donations from property developers since Johnson became PM. The government is also being taken to court over dishing out questionable contracts for personal protective equipment. A report by the National Audit Office on the £3.6bn Towns Fund suggests pork barrel spending. The fund is intended to help struggling towns. Yet all but one of the 61 towns chosen at Jenrick’s discretion to receive support were Conservative-held or were targets seats for the election – including his own.

Desmond’s relationship with the Conservative leadership is deep-rooted. A chummy email from Desmond to Johnson revealed in an FOI request reads:

Thank you so much for your book, The Churchill Factor: How One Man Made History, I will read it over the half term and when I say read I mean read. Keep in touch.

 I will see you on 22 Oct at 8 am at the Ruby Breakfast, London Hilton Park Lane, where I will be supporting you as always.

Boris’ diaries show countless opportunities for them to cross paths: Johnson had been for lunch with Desmond at Northern & Shell’s offices on 30 September 2015 and met Desmond for a drink at the Corinthian Hotel near Whitehall on 09 September 2015.

There should be real concern about the probity and motivations behind the government’s latest moves to remove ‘red tape’. Greater discretion gives the government free rein to favour their own ambitions or their cronies’.

What more does the Westfair affair tell us? Well­–

  • The public wants greater accountability

A survey commissioned by the i newspaper that found that only 23% of the public felt Jenrick should remain in the Cabinet. 41% believed that the PM backing Jenrick showed weak leadership. In a June 2020 survey of Conservative party members, Jenrick had an approval rating of -23.0% with 41.32% taking the view he should resign from government.

  • British politics is cheap, as the FT’s Henry Mance notes

Jenrick sought to approve a programme that denied £45m in CIL to one of the poorest boroughs in the UK. He argued that this was a “material change” which put the likelihood of the project in jeopardy. Whether you believe the reasons he gave or not, the Conservative coffers gained £12,000. A measly sum one might say.

  • Party fundraising remains a murky business

How Desmond and Jenrick came to sit next to one another remains a mystery. Jenrick told the Committee that he only found out he was sitting next to Desmond when he was at the table.

Members of the Conservative party have raised concerns that their co-chairman and superstar fundraiser, Ben Elliot, is not “…sufficiently careful to avoid unfortunate juxtapositions”. Elliott, the Duchess of Cornwall’s “favourite nephew”, is involved in his own scandal involving the use of public money for a “personal project”. His PR firm was previously retained by Desmond to lobby the government.

  • Measures for highlighting and resolving conflict in planning are insufficient

 Jenrick said that cases which come before him and other ministers are invariably complex. Decisions will often be based on subjective judgement which may depart from the planning inspectorate (there have been 14 such cases in the last 3 years).

In spite of this, on the decision’s face, there was no indication of Jenrick’s perceived or actual bias. It took a claim for judicial review and considerable political and public pressure to bring the light the extent and nature of Jenrick’s conflict. This clearly needs to change towards a transparent system of declaring conflicts. As the BBC’s Nick Robinson said, Jenrick has the power to back projects at the “stroke of a pen”.

‘Cash for access’ undermines the integrity of political representation. The Westferry affair embodies this notion. While the scythe is taken to the red tape, it seems that the Conservative party’s coffers and the colour of the constituency in the next election might be the prime motivations, rather than helping those in need of affordable and safe housing.

Posted in Politics

The Property Developer and the Housing Secretary: Does the Jenrick Affair demonstrate there is one law for the government’s friends and another for everyone else?

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Concerns about the cosy relationship between politics and business in the UK have re-surfaced in recent weeks through the exposure of an alleged ‘cash for influence’ deal involving a government minister and a property developer. In this post, Joseph Sinclair, a lawyer currently taking our Master’s in Corruption and Governance, discusses whether, in his view, a criminal offence has been committed.

I:          Introduction

It might have been different in a time not-so-far away. It was only two years ago that a minister sought to resign over being minutes late to answer questions in the Lords.

It might have been expected that the Housing Secretary, Robert Jenrick, would have resigned following allegations of inappropriately approving a housing development owned by a Tory donor. He hasn’t.

Aside from the shift to a political culture of battening the hatches and hoping for the media storm to pass, the Jenrick affair shows that potential political criminality is not taken seriously in the United Kingdom.

The Good Law Project is considering a private prosecution against Jenrick for misconduct in public office (“MIPO”). This blog post reviews what we know so far of the affair and asks: has an offence been committed; and if so, what is it? The answer might lie within section 2 of the Bribery Act.

II:        Alleged Salient Facts

Robert Jenrick MP was appointed as Housing Secretary on 24 July 2019. Richard Desmond is the billionaire former owner of the Express newspaper and pornographer.

Through Westferry Developments Ltd, Desmond sought to build 1,524 residential units on the Westferry Printworks Site in east London (the “Development”).

Desmond had previously been given planning permission in 2016 by the then mayor, Boris Johnson, for a smaller project. But Desmond had since decided to ramp up the size of the development. Both the Greater London Authority and Tower Hamlets LBC had objected to this. Westferry sought permission to appeal in 2018.

Changes to the Community Infrastructure Levy (“CIL”) meant that Desmond would have incurred a £45 million payment if the Development was approved after 15 January 2020. CIL is described by the government as an “…important tool for local authorities to use to help them deliver the infrastructure needed to support development”. Tower Hamlets is one of the poorest boroughs in the United Kingdom.

On 18 November 2019, Jenrick was seated next to Desmond at a £900-per-head Conservative party fundraising dinner at the Savoy. Jenrick initially denied that they spoke about the Development but later admitted that Desmond showed him a four-minute video. He allegedly agreed to attend a tour.

Documents subsequently published show that later that night Jenrick texted Desmond, saying “Good to spend time with you tonight Richard. See you again soon. I hope”. Two days later, Desmond texted Jenrick to say inter alia that Desmond had arranged for Jenrick to attend the site and that “we appreciate the speed as we don’t want to give Marxists loads of doe for nothing!”. Jenrick responded with a carefully worded message about “appearance of being influenced by applicants”. He did not attend the site.

However, on the same day, his private office contacted civil servants within Jenrick’s department saying:

SoS has flagged a case in Westferry London Docklands… He understands a ministerial decision on this is likely to be coming up soon and also there may be some sensitivity with timing of final decision…

Internal departmental emails show that they were under pressure to get the decision to Jenrick well before 15 January (eg. Jenrick’s office chased on 12 December 2019). On 13 December 2019, a day after the general election, Jenrick’s department wrote a briefing for him, advising him to dismiss and refuse planning permission. On 17 December 2019, an internal email says that “[Jenrick] has decided to take all planning casework decisions himself”.

Desmond sent Jenrick another text on 23 December 2019, saying that “[w]e have to get the approval before January 15 otherwise payment of 45 million pounds to tower hamlets…”  Five days later, an internal departmental email stated that Jenrick “…would like to approve the application (author’s emphasis)”. Jenrick had a meeting with his department to “…discuss his rationale for wanting to approve [the Development in spite of it] … going against the recc of inspector and officials”.

On 14 January 2020, Jenrick formally granted planning permission to the Development. On 29 January 2020, Desmond made a £12,000 cash donation to the Conservative party. There might have been an expectation that more would follow: Desmond’s companies had previously given £1.3m to UKIP in 2014/15, as well as £10,000 to the Conservatives in 2017.

Tower Hamlets sought to judicially review Jenrick’s decision. In pre-action correspondence, Jenrick’s department refused to disclose documents. The Government Legal Department said that “the council’s request for disclosure of documents is nothing more than a ‘fishing expedition’ without any proper foundation”.

After proceedings commenced, Jenrick’s department accepted that:

“…the timing of the [decision] on the eve of the approval… thereby avoiding a substantial financial liability… would lead the fair minded and informed observer to conclude that there was a real possibility that [Jenrick] was biased in favour of [Westferry Developments].

On this basis, they agreed to concede and consented to a quashing order (ie. treating Jenrick’s decision as though it was never made). This gave a bizarre twist to the story in that, apparently to keep the documents secret, the Government preferred to admit that it had acted unlawfully and have the planning decision reversed.  That obviously begs the question: what was it that they wanted to keep secret?

 A whistle-blower within Jenrick’s department subsequently informed The Times that:

  1. Jenrick had not informed officials that he had met and texted Desmond;
  2. Jenrick had been informed that it was 70-80% likely the decision would be judicially reviewed; and
  3. Civil servants were shocked by Jenrick’s urgency for a decision – the inference being that it was out of the ordinary.

On 15 June 2020, Jenrick responded to a question in the Commons, saying:

“…My Department knew about my attendance at the event before I went to it. It knew about the fact that I had inadvertently sat next to the applicant. I did not know who I was going to be seated by until I sat at the table. I discussed and took advice from my officials within the Department at all times.”

In answers to other questions (1), (2), Jenrick said:

“I made [the decision] with an open mind, because we want to see more homes built in this country and in particular in our capital city. This development would have led to 1,500 homes and 250 affordable homes. I remind the House that this contentious decision came to my desk as Secretary of State because the local council had failed to determine it in accordance with the law.

[ …]

“I discussed with my officials that the applicant had raised the matter. I advised the applicant that I was not able to discuss it, so I think I have answered her question comprehensively.”

The Cabinet Secretary wrote to an MP on 24 June 2020 to say that on these remarks, the Prime Minister “…considers that the matter is closed”. Defending Jenrick, Business Minister Nadhim Zahawi MP said:

“Viability is incredibly important. Getting stuff built is incredibly important to Robert Jenrick – that was his motivation.”

III:       Is There Evidence of an Offence?

The Good Law Project is considering the viability of a prosecution for MIPO. But it seems to be a good starting point to consider whether there might be a case to be answered under section 2 of the Bribery Act 2010, namely “being bribed”.

Being Bribed Offence

Section 2(2) reads:

[A person (“R”) is guilty of an offence] …where R requests, agrees to receive or accepts a financial or other advantage intending that, in consequence, a relevant function or activity should be performed improperly (whether by R or another person).

 This offence is informed by:

  1. Section 2(6)(b) that says “…it does not matter whether the [other] advantage is (or is to be) for the benefit of R or another person”. The SFO and CPS joint guidance says that “other advantage” is left to be determined as a matter of common sense by the tribunal of fact, i.e., a jury.
  2. Section 3(2)(a), (3), (4) and (5) which says a relevant function is one of public nature and the person performing this function is expected to perform it in good faith, impartially, and is in a position of trust by virtue of performing it.
  3. Section 4 which says that a relevant function is performed improperly where it is in breach of a relevant expectation.

Bribery offences can only be brought by the Director of Public Prosecutions or the Serious Fraud Office in accordance with section 10 of the Bribery Act.

If a prosecution was brought under the Bribery Act, a jury would need to decide whether this is a straight-forward case of: “you approve my housing development and I will make a donation to your party”. The jury would need to consider that Jenrick sat next to Desmond at a Conservative party dinner whose objective was to raise funds, where he was shown a video of the Development. They exchanged text messages and thereafter Jenrick’s office started to pressurise civil servants to meet the January deadline so that Desmond could achieve a £45m saving. A few days after this was achieved, Desmond paid Mr Jenrick’s political party £12,000.

Significance might be attached to Jenrick’s text message distancing himself from Desmond in December. Indeed, he has tried to use this as a defence. But it is important to ask:

  1. Why did he not tell his department about the meeting (though he disputes this)
  2. Why did he initially deny speaking to Desmond about the Development?
  3. Why did his department initially refuse to disclose the documents when they were clearly relevant to the probity of his decision?
  4. Why did he want to make these planning decisions himself?

From Jenrick and his colleagues’ statements cited, it appears that the likely retort is that this project would have delivered around 1500 residences. Jenrick took the view that this was needed and that the £45m CIL payment hindered the viability of the project. However, it is unclear how he reached the conclusion that the £45 million payment to the local council would make the project unviable: Desmond’s own texts give the reason as ‘we don’t want to give Marxists loads of doe for nothing.’ Jenrick acted accordingly and Desmond’s messages, the dinner and subsequent payment did not impact his decision in any way.

The facts of the case, although disputed at the edges, are increasingly clear.  They would certainly point towards prosecution.  This would leave a jury to decide whether what has occurred is a misjudgement made in good faith by a Minister trying to fulfil his public duty, or a criminal offence.

Misconduct in Public Office (MIPO)

MIPO is a common law offence and has four elements summarised in Attorney General’s Reference No. 3 of 2003:

  1. A public officer acting as such;
  2. Wilfully neglects to perform his duty and/or wilfully misconducts himself;
  3. to such a degree as to amount to an abuse of the public’s trust in the office holder; and
  4. without reasonable excuse or justification.

The first element is straightforward in this case, but that’s where simplicity ends. As to the second element, the prosecution must show that Jenrick was aware that his conduct was capable of amounting to misconduct. It must also amount to an affront to the standing of the public office held (see the CPS guidance).

Is a jury really going to take that view? In light of the anticipated defence, what might they make of the requirement of there being no reasonable excuse or justification? It seems that the moving parts of the offence leave greater scope for an acquittal.

IV:       Conclusions

The facts have become clearer since the documents were published, but there remain a number of assumed facts that would require hours of police and/or solicitor time to validate. However, there is enough already to suggest that there is potential for a prosecution.

In considering which offence is more appropriate, s2 seems the more attractive of the two. The provisions of the Bribery Act were put in place to simplify prosecuting these kinds of cases.

The Government has said it wants to move on from this case.  But if a Minister has committed a criminal offence, it would be wrong to move on.  It is hard to imagine that with this set of facts in a different situation – for example, a local councillor approving a planning decision and then receiving £12,000 for his or her re-election campaign – that moving on would be the right thing to do.  The immediate question in this case might be for a jury; but the ultimate question is for the electorate to decide whether it is happy for one law to apply to the government and its friends, and another to everyone else.

 

Posted in Politics

What lessons can be learnt from Ireland’s lobbying regulation?

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Megan Roe who is currently taking the Masters in Corruption & Governance at the Centre for the Study of Corruption, looks at what lessons the UK might learn from Ireland about the regulation of lobbying – an issue with particular relevance during the Covid-19 pandemic when government contracts and funds are awarded without the usual scrutiny and behind the scenes lobbying can produce an immediate financial reward.

When conducted in an appropriate way, lobbying plays an important role in the democratic process. But its often secretive nature, in combination with numerous political scandals across Europe, fuels perceptions of a shady world of influence peddling, where special interests are placed above the public good. Behind the scenes lobbying contains elements that Klitgaard’s ‘corruption formula’ (Corruption = Monopoly + Discretion – Accountability) suggests makes a favourable environment for corruption – in this case discretionary power without accountability. So in this regard, why is lobbying regulation so weak in so many countries?

Transparency, through a statutory lobbying register, is a way of improving perceptions of and limiting influence peddling. It puts back the accountability. The UK and Ireland both have registers of lobbyists, designed to increase the transparency. But even though the UK’s register was introduced a year before Ireland’s, the latter has received ten times more returns than the UK’s, and the UK’s register is strongly criticised by transparency campaigners. What does that tell us about good regulation in this area?

Ireland’s Regulation of Lobbying Act (2015) meant that from September 2015, those who lobby designated public officials (DPOs) are required to register and report their lobbying behaviour on a quarterly basis. The enforcement and investigative provisions of the Act came into force in January 2017, which helped fortify the 2015 law as one of the strictest lobbying regulations in the world. After a public consultation process, the Standards in Public Office Commissions introduced a Code of Conduct for lobbyists last year.

The essence of Ireland’s register is “to provide information to the public about who is lobbying whom about what.” The date and nature of all communications between lobbyists and DPOs are recorded – from meetings to tweets. The act itself employs one of the widest definitions of a lobbyist by international standards, and is easy to discern through the ‘Am I Lobbying?’ feature on the register’s website. Those within scope of the act include:

· Anyone who employs over 10 individuals

· A representative or advocacy body with one or more employees

· Professional lobbyists who are paid to communicate on behalf of a client

· Anyone communicating in regards to land development/zoning.

By comparison, the Association of Professional Political Consultants estimated that the UK register covers about one per cent of lobbying activity, contradicting the government’s statement that those unregulated under The Transparency of Lobbying, Non-party Campaigning and Trade Union Administration Act (2014) were already covered under existing transparency measures.

Back in Ireland, failure to register leads to an automatic fixed penalty notice of €200, and more serious violations of the act may be punishable by a fine of up to €2,500 or a two-year prison sentence. Greater compliance with the Act enables the public and press to know who is lobbying, who is being lobbied, and to what end.

Another function of Ireland’s regulation is to impose a one-year ‘cooling off’ period for former DPOs who wish to engage in lobbying. The flow of powerful figures between government and industry is not limited to lobbying alone, but is a major part of the problem when we consider the access, influence, and sensitive information former public servants and politicians can offer those seeking to lobby the state. Conflict of interest risks are particularly high, and in some circumstances, industry leaders trade promises of future employment for regulatory allowances, making revolving doors criminally corrupt.

These post-employment restrictions are not perfect, as the Labour party and Transparency International Ireland initially sought to impose a two-year ‘ethical firewall’. Canada, which was very much the model for Ireland’s reforms, has a five-year cooling off period. In the UK, former ministers and senior crown servants are prohibited from lobbying government for two years, and are required to contact the Advisory Committee on Business Appointments (ACOBA) for advice on any appointments within this period. In practice, ACOBA has been described as ‘toothless’ in its regulation of revolving-door employment.

Ireland’s Head of Ethics and Lobbying Regulation stated in the Standards in Public Office Commission’s 2018 report that lobbying is still thriving in Ireland – rebutting ideas that stricter laws would have a damaging impact on lobbying. This is not just the view of politicians and campaigners, as the CEO of one of Ireland’s largest lobbying firms agrees that the act has not tied the hands of lobbyists, arguing “it’s always better in our industry to have transparency, we’re all stronger for it.” Opening the books on lobbying can limit the likelihood of inappropriate influence and corrupt exchanges, as the public are afforded greater scrutiny into the decision-making process.

In the UK, only consultant lobbying firms are required to register – not campaigning organisations or in-house lobbyists. Prior to the Lobbying Act, self-regulation was promoted through three British associations, and operated under a shared code of conduct. The government did not include this code or any other ethical framework in the statute, and there are no post-employment restrictions on former public office holders becoming lobbyists. According to Transparency International, it is important to address issues surrounding lobbying, the revolving door, and also party funding in the same breath as greater regulation in one area can easily lead corruption to flow into another.

The effectiveness of Ireland’s regulation lies in its five-point approach. It is one of the only EU members with a lobbying law, register, a cooling-off period for public servants, an ethical code of conduct, and sanctions in the form of monetary penalties and imprisonment. A comprehensive approach built upon these five key elements promotes transparency and accountability within lobbying processes. France and Slovenia also include many of these provisions under their lobbying legislation, while much of Europe lags in implementing a rigorous lobbying framework, if any regulation at all. The UK has fallen short on regulating a clandestine lobbying industry, but Ireland demonstrates that reform is possible.

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The governance of the UK’s response to corruption: who is in charge?

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Robert Barrington, Professor of Anti-Corruption Practice at the Centre for the Study of Corruption, summarises two new papers in the CSC Discussion Paper series that address the question of how, and how well, the UK approaches the governance of its anti-corruption response.

When studying corruption, there is a lot of talk about governance.  Sometimes, it seems like a politer and more positive term to use than corruption, and sometimes it’s because good governance is seen as an effective defence against corruption.

To date, there has been little analysis of the governance of corruption: in other words, how a country provides oversight and accountability for its response to corruption.  This is fundamental, because as anti-corruption responses increase in number and complexity, there is a basic question about who is conducting the orchestra – and whether they have the powers, remit, resources, support and status necessary to do the job properly.

Two new papers in the CSC Discussion Paper series address this question in the context of the UK.

The Role of the UK Anti-Corruption Champion looks at a post, appointed by the Prime Minister, that is both important and frustrating.  The role, which has existed since 2006, is important because the Champion is responsible for overseeing delivery of the UK’s national Anti-Corruption Strategy, and in the absence of anyone else in charge, this is what we have.  But it is frustrating because ‘there are some structural flaws which date from the way in which the role was originally created…too many areas around a role of this importance have been, and remain, vague and ad-hoc.’

Of the seven Champions to date, some have been very poor, and some have been much better.  The paper looks at each Champion individually, and assesses their personal achievements in the role, as well as the strengths and weaknesses of the position as a whole.  Although the post has matured over the years, it is still not fit for purpose considering this person is at the centre of the UK’s anti-corruption response.   The paper concludes with five recommendations to make the role more coherent and effective:

  1. Terms of Reference: create and publish adequate Terms of Reference;
  2. Status: respond to the House of Lords Bribery Act Committee recommendations that the role should be at Cabinet or Ministerial level; and related to this, consideration should be given to re-locating the civil service support unit, JACU, back to the Cabinet Office;
  3. Accountability: formalise the accountability mechanism for the role and the discharge of its duties, and allow proper parliamentary scrutiny of this;
  4. Institutionalising the role: remove the highly inappropriate element of Prime Ministerial patronage by institutionalising it, and ensuring there is a swift re-appointment when the role is vacant;
  5. Transparency: remove unnecessary secrecy – for example, over the name and date of appointment of the Champion and the membership of the Inter-Ministerial Group on Anti-Corruption that the Champion co-chairs.

But The Governance of Corruption in the UK argues that since the post of Champion was created as a knee-jerk reaction to the BAE Systems scandal of 2006, the UK has missed out on a  proper review of how it should govern its approach to corruption; having an Anti-Corruption Champion may not be the right answer to the question of how the UK should plan, coordinate and implement its response to corruption.  Many countries have tried to fill this gap by creating an Anti-Corruption Agency; the UK has addressed other issues like Modern Slavery by creating an Independent Commissioner.  Would either of these be suitable for the UK?  We don’t know, beause they have never been properly looked at.  What we do know is that the UK’s response to corruption is split between dozens of agencies and departments, with at least two ministerial committees giving some form of oversight, little transparency and rare attempts at public accountability.

A reasonable counter-argument is that although the system looks to be messy from the outside, the UK has made considerable progress over the years.  The issue is therefore not whether the UK can continue to get by with its current approach; but how an improved approach might better help the UK achieve its stated objectives.

Ultimately, having reviewed numerous documents, and drawing on more than a decade of practical interactions with the UK government, the conclusion is that ‘above all it is simply not possible to answer one key question: who is in charge of overseeing the UK’s national well-being with regard to corruption?’  Regarding the role of Anti-Corruption Champion, particularly the important place it currently holds in the UK’s anti-corruption governance, the paper recommends that ‘after nearly fifteen years and creating a new Strategy, the Government should be reviewing the alternatives that exist – and if it concludes that the UK is best served by having the Champion at the core of its governance, re-design the role accordingly.’

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As Cricket explores new frontiers, those who run the game must do more to protect it from Corruption

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Billy Pratt, who is currently taking the Masters in Corruption & Governance at the Centre for the Study of Corruption, reflects on how the changing nature of broadcasting professional sport affects match-fixing in cricket and the corruption risks posed by the emergence of the professional women’s game.

Professional cricket may be currently on hold due to the COVID-19 pandemic, but corruption news never ceases. Towards the end of April, the Pakistan Cricket Board charged one of their own international players, Umar Akmal, for failing to report approaches to fix cricket matches, banning him for 3 years. News of Akmal’s suspension is welcome and strengthens the narrative that the governing bodies of cricket are taking action to root out match-fixing, from the game.

While professional sport faces several forms of corruption, match-fixing, or the act of playing a sporting contest to a pre-determined result in order for private gain (usually a bribe paid by a bookmaker), has been a scourge of cricket for decades – along with spot-fixing, in which a small incident is rigged rather than the whole game. In response to a high-profile fixing scandal centred around South Africa captain Hansie Cronje, the International Cricket Council (ICC) established an Anti-Corruption Unit in 2000 to prevent, detect and investigate match-fixing in the game. Akmal is now the third high-profile figure to be suspended internationally since 2017, joining Bangladesh captain Shakib Al Hasan and Sri Lanka legend Sanath Jayasuryia.

As positive as these signs are, there is an inevitable risk that as cricket expands to new territories and markets the opportunities for corruption will also grow. The rise of T20 and T10 cricket (shorter, more marketable forms of the game) has led to the creation of numerous franchise leagues around the world. Several early franchise leagues in established cricket markets had well documented match-fixing scandals, with the Indian Premier League, Pakistani Super League and South Africa’s Ram Slam T20 challenge suffering. Due to their high-profile status, these scandals prompted changes in domestic cricket anti-corruption policy, and so these leagues may no longer be the best place for match-fixers precisely due to the rise in scrutiny.

Outside of the core markets of the big cricket-playing nations, there have been new franchise leagues in territories such as Afghanistan, Canada, the UAE, Qatar, Hong Kong and Nepal. Out of sight from the more developed and better-funded governing bodies of cricket, these new leagues represent an exciting opportunity for those who want to fix cricket matches. The bizarre sight of Dubai Stars being bowled out for 46 against Sharjah Warriors in 2018 is – the media have widely alleged – a tragicomic symbol of this problem.

There are now more corruption risk factors facing cricket because of the expansion in these franchise leagues. The most obvious is that the opportunity for corruption has increased greatly because the number of live broadcast cricket matches to bet on has increased greatly. Before the advent of franchise leagues in 2008, corruptors relied on internationally televised matches to reach their betting markets and were therefore limited mostly to matches between nine international teams whose make-up of players remained stable throughout. Today, the corruptor can choose from a plethora of teams, players, tournaments and territories, with the rise of live streaming making it possible for a live coverage of a cricket match to reach any betting market.

The most pressing issue is perhaps that of player vulnerability. The growth of leagues in small cricket markets increases the number of players less familiar with anti-corruption codes and less well paid. For players based in these markets, less developed cricket infrastructures provides fewer pathways for advancement, making them more reliant on franchise leagues both for earning and developing a career.

Basic training and awareness are considered by the ICC as key tools in preventing the corruption of players. Yet while cricketers in England & Wales must undertake anti-corruption training before even setting foot on the field every season, the level of training in some newer territories hosting franchise leagues is much smaller. Peter Della Penna of ESPNCricinfo suggests the extent of anti-corruption training in the ICC’s smaller member countries is limited to 30-minute PowerPoint presentations before international events, meaning only players who play internationally receive any kind of training. Even then, it is much more limited than their counterparts in bigger cricketing territories.

Cricket authorities in England and Australia put player welfare at the centre of anti-corruption policy with education initiatives and well-advertised reporting channels. The wealthier, more developed cricket boards have started to make awareness of match-fixing – expressed as anti-corruption – an essential part of being a professional cricketer, in the same way that nutrition or fitness is. It is these players that are best equipped to avoid corruption.

This has not prevented a handful of high profile players from major cricket nations being suspended for match-fixing, showing us that cricketers can succumb to match-fixing even if they are familiar with anti-corruption codes or if they are well paid. However, given the levels of training and scrutiny, it is feasible that Sanath Jayasuryia, Shakib Al-Hasan and Umar Akmal are now the exception rather than the rule. By contrast, in the same period those players were suspended, no fewer than 8 players from the UAE, Hong Kong and Oman (countries with far less developed and rich cricket boards) have been charged with match-fixing.

The conclusion must be that a combination of factors – creation of franchise leagues, expansion into new territories, increase in player numbers, poor training and financial incentives – means that global franchise leagues have created a new army of cricketers vulnerable to corrupt approaches, and that the newer leagues with less sophisticated oversight are particularly at risk.

This is something cricket boards must consider with the next likely big area for expansion: women’s cricket.

The last big cricket event before the COVID-19 pandemic was the Women’s T20 World Cup, the final of which was attended by over 86,000 people. Professional women’s cricket is a relatively new concept with the game still transitioning from amateurism even in the wealthier territories. As women’s cricket is televised more and more, it will become more of a target for fixers. It is imperative cricket boards commit enough resources to ensure the transition from amateur to professional happens not just in nutrition and fitness, but in anti-corruption training too.

The case of Emily Smith, who was suspended for posting team line-ups before officially announced, suggests this transition may not be happening at the same pace as other aspects of the professionalisation of women’s cricket. As ESPNCricinfo’s Isabelle Westbury argues, her transgression was not motivated by corruption but was a light-hearted gesture more at home in the amateur game. Cricket’s governing bodies must ensure this transition takes place across all territories, leagues and genders if it stands any chance of making the game corruption-free. If cricket authorities fail to do this, the rapid expansion of the game risks reducing cricket in these territories to the ‘kayfabe’ (staged performances) of professional wrestling. Cricket matches played in the interests of unregulated betting markets rather than fans paying for a genuine contest will do little to serve the commercial viability of the sport.

Posted in Sport

CORRUPTION: When the Cheese Moved

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John Githongo, CEO of Inuka Kenya and a prominent figure in the global anti-corruption movement, explains how the nature and definition of corruption have changed over the past two decades.  He examines the intersection between complex financial transactions, professional enablers and unaccountable tech companies and warns that these ingredients allied to the Covid-19 crisis create long-term corruption risks

I have been involved in anti-corruption work in media, government, the academy, civil society and the private sector for 23 years. I have watched the topology of graft change over this time. By the time Transparency International was founded in the early 1990s corruption in the public sector was a particular focus especially vis-à-vis its impact on development, democracy and a free and open society generally. This was driven largely by the fall of the Berlin Wall in 1989 and the fact that of some of the essential political tools of Cold War political competition and leadership were essentially redesignated as ‘corruption’. Dictators across the world complained about this dramatic shifting of the goal posts by their allies and patrons in the West. A wave of democratic reform swept across Africa and Latin America in particular. Anti-corruption was an essential part of the reform package. For a while the interests of billions of citizens in developing countries coincided with the liberal democracy promotion efforts of the West as the Soviet Union fell apart and China started its rise.

Three decades later I have come to believe that ‘corruption’ has changed dramatically. This change has been driven first by the scale of financialisation of the global economy that globalisation forged, and the intersection of this financialisation with digital technology. Secondly, the nature of corruption, crime and other illicit networks of principal actors in corrupt transactions has also been transformed. This transformation has outstripped the capacity of governments to keep pace with it – to oversee and regulate its assorted permutations. The traditional private sector that makes and sells things, the political class, bureaucracy and security services were essential components of corruption networks from the 1950s through to the early 1990s. By the mid-1990s globalisation and deregulation meant that the service and technology sectors were far more central to corruption networks than ever previously contemplated. Technology acted and continues to act as an accelerator of the changes.

Once commonly viewed as corruption ‘enablers’, the banking; accounting and audit; law; big tech companies; and, other service sector players had become far more essential to the corruption reality – their transactional infrastructure increasingly central to the design of complex illicit endeavours in the hyper-financialised era. By 2010 it had become clear, for example, that the profound concentration of these actors in a few tax havens had caused trillions of dollars and the dealings that underlay them, to be lifted away from the effective oversight of nation-states. As entire chunks of the work lawyers and auditors once did have been rendered redundant by technology these professions have increasingly morphed into highly specialised ‘advisors’ to finance. This has nuanced the definition of corruption from being the ‘abuse of vested authority for private gain’ to also being ‘the illegitimate transfer of economic surpluses from those without power to the few who wield it’.

Prior to the current COVID-19 economic disruption UNCTAD warned late last year that the threat of recession had been attenuated by ‘excessive financialisation’ of a fragile global economy. It called for a ‘new approach that would boost public investment with an eye to averting environmental breakdown and promote wage led growth in place of finance-led growth.’ By 2017, total developing country debt had reached its highest level on record at 190 percent of GDP, most of it private sector debt which has risen from 79 percent of GDP to 139 percent of GDP in 2017 . An April 2020 blog by Homi Kharas for the Brookings Institution argued that “Emerging markets and developing countries have about $11 trillion in external debt and about $3.9 trillion in debt service due in 2020. Of this, about $3.5 trillion is for principal repayments. Around $1 trillion is debt service due on medium- and long-term (MLT) debt, while the remainder is short-term debt, much of which is normal trade finance.” Needless to say some of the egregious corruption scandals in the developing world over the past decade have emerged out of the acquisition and theft of sovereign debt by corrupt elites in collaboration with the service sector in the West and Chinese state owned entities. This will likely continue and accelerate in the coming months as a result of the COVID-19 pandemic.

The first 20 years of anti-corruption research and advocacy saw considerable discussion of a national integrity system based very much on an institutional, legal and civic infrastructure informed by the value of transparency as a public good in a society that aspires to openness and equity. We’ve gone from advocating national integrity systems to realising that integrity cannot be digitised. Everyone from tax dodgers, the titans of digital technology whose business model does not anticipate great oversight and accountability because it is changing quicker than lawmakers can keep up with; the corrupt, organised crime, drug traffickers etc – are combining to change the rules of the game so that you don’t have to steal when global public relations, lobbying, legal, management consultancy, audit firms together form a bulwark with the power to amend the law so your unethical behaviour does not offend it.

Much corruption has effectively been legalised by the transfer of such a huge proportion of the transactions of financial intermediation being digitised. In South Africa, the term for this repurposing of governance institutions to serve private interests is state capture. In truth, its morbid symptoms in a variety of countries have been exposed by the media and data leaks with increasing frequency over the last 15 years. The Panama Papers, Paradise Papers, Malaysia’s IMDB scandal that cost US$4 billion, the 2014 scandal that led Ukraine’s President Victor Yanukovych to flee to Russia are examples. So is the fate of assorted Eurobond borrowing in a whole raft of developing countries where huge sums borrowed have been predated upon by venal elites confident that using sovereign bonds as instruments of theft in processes tightly managed by the financial services sector makes them immune to accountability.

The COVID-19 pandemic could be about to take this to the next level as digital solutions are proffered for education, commerce, manufacturing, even health and transport etc in an era where humans have temporarily become biohazards. The planet’s apex predator has bumped into a resilient viral opponent. Additionally, though a huge amount of money is about to be spent quickly saving economies from the devastating impact of the measures introduced to mitigate the pandemic. As is the case when massive responses are necessitated by major disasters this is often a recipe for ‘leakages’ caused by incompetence and outright corruption. The COVID-19 response will likely play out over a longer period making mitigation of these risks all the more urgent.

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