Fighting the Root Causes of Corruption

/
ACFE 2019 Zurich_-4.jpg

“One in four people pay bribes for public services,” Gretta Fenner quoted (from the Global Corruption Barometer 2017) during her keynote address titled, “Fighting Corruption and Returning Stolen Assets: Global Challenges and How to Make at Least Some Inroads” at the 2019 ACFE Fraud Conference Europe last week. “We have 300 people here; that means 80 of you would have paid a bribe in a 12-month period.” 

Bribery is just one of the crimes Fenner works to counter as the managing director of the Basel Institute on Governance. She is also the director of the Institute’s International Centre for Asset Recovery. She previously held these positions from 2005 to 2008, during the founding years of the Institute, and rejoined the Institute in late 2011 after three years in Australia and the U.K.

For Fenner and the Institute, many of the cases they work on do not make it to the cover of Vanity Fair or the Wall Street Journal. They work with some of the poorest countries in the world, like Mozambique, to track down sometimes billions of dollars lost to corruption. At the time of her address, the Institute had more than 100 active cases in 12 countries.

The Institute was founded by Mark Pieth in 2003, and according to Fenner, it was created in the hopes of giving a private-sector initiative akin to the Organisation for Economic Co-operation and Development (OECD). Much like how the OECD works to improve the quality of live for the public and for individuals all over the world through economic advice and collaboration, the Institute works to provide countries and government advice and help with recovering assets lost to, bribery, corruption or theft. Their priorities are research, prevention and enforcement.

“Countries come to us [asking for] help finding money,” Fenner said. “We work with law enforcement agencies on cases. That is where we are unique. We don’t have law enforcement powers. We have investigators and former police officers in these countries investigating some of the hugest money laundering cases.”

Fenner spoke candidly about Switzerland’s reputation as a money laundering hot spot. “We have been a money lauding haven for a long time, but there are other jurisdictions,” she said. “When we see cases and they have a link to Switzerland and the U.K., I say ‘yay’ because I know we will have a jurisdiction and financial center. If I was a criminal, I would put a bit in Switzerland, but I would diversify to some other jurisdictions where I just know no one is ever going to get to them.”

In addition to admitting the problems facing Switzerland, she also defined some of the contributing factors she sees at the heart of the problem. Because, as many of us know, if money is clean, it doesn’t need to be laundered.

She described the following as some of the root causes of corruption:

  • Greed for money and power

  • A normalization of corruption

  • Rampant bribery

  • The failures of democracy

  • Use of anonymous shell companies, money laundering, illegal tax evasion

  • Cryptocurrency

  • International cooperation system largely defunct

  • Lack of level playing field among financial centers

  • Social acceptance

  • Whistleblowers unprotected with or without laws

So, what do you do when you are up against overwhelming statistics, the realities of corruption fueling terrorism and a problem that only seems to be growing? Fenner suggested three main points: 1) increased cooperation between governments and jurisdictions with a shared sense of responsibility, 2) education, enforcement, transparency and accountability at the government level, and 3) a collection action at the private level.

One point Fenner’s stressed in her address was the emphasis on a hope and perseverance for change. “I personally think sometimes being able to take a step back and consider why we are doing what we are doing is important and it is absolutely essential for our world,” she said. “I can imagine when you do your job day in and day out, it might very well be you lose the connection with why you do the job. From our perspective, the job you do is so extremely important; not just for your company you work with, but for a more broader, global good.”