International Municipal Lawyers Association: HOW TO FIGHT CORRUPTION? U.S. EXPERIENCE

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How do municipal governments in the USA minimize corruption, increase the level of confidence, promote transparency and increase public access to government? How transparency of local government has been achieved historically?

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International Municipal Lawyers Association: HOW TO FIGHT CORRUPTION? U.S. EXPERIENCE

  1. 1. SEMINAR AND DISCUSSIONPANEL AT THE OPEN UKRAINEFOUNDATION AS PART OFINTERNATIONAL DIALOGUE:MEETING WITH YOUNG LEADERSPROGRAMACTIVITY 7.1.
  2. 2. MEETING TOPICSU.S. Experience:Tackling Corruption;Community and SocialProblems (How thecommunity can organizeprotection of its interestsand control authorities?)
  3. 3. MEETING TOPICSNOTE: We will discuss from a USA perspective howmunicipal governments can aid in minimizing corruption,promoting transparency and maximizing citizen accessand trust through(1) open meetings laws,(2) public records acts,(3) public procurement laws based on a uniform modelprocurement code,(4) municipal home rule, intergovernmental cooperationagreements and other legal mechanisms that can beconsistently implemented in a predictable,understandable manner.
  4. 4. MEETING TOPICSWe will then examine the role of the USA in thehistorical run-up to the Foreign Corrupt PracticesAct, the ratification of the United NationsConvention Against Corruption (UNCAC) by 165countries, the role of civil society organizationsin promoting UNCAC, the experience of OECD inworking with civil society organizations topromote initiatives against corruption, and thehallmarks of effective civil society organizationsand those whose capabilities are limited bynational and demographic factors.
  5. 5. The U.S.A. PerspectiveMunicipal governmentshave a clear role inminimizing corruption,promoting transparencyand maximizing citizenaccess and trust. Thereare a number ofstatutory vehicles tofacilitate this process.
  6. 6. Open Meetings LawsOpenness in governmentis the rule and not theexception in the U.S. Amunicipality, county,school district or otherform of local governmentoperating in secret is notlightly tolerated. Secrecyin government generatessuspicion and mistrustamong the citizenry.
  7. 7. OPEN MEETING LAWSLegislative acts anddecisions by localgovernment bodies,including municipalities,counties, school districtsand special districts,should be deliberatedupon and decided in “openair” and are generallysubject to therequirements of OpenMeetings Laws.
  8. 8. OPEN MEETING LAWSWhile the statutorylanguage, procedure forgoing into executivesession, exceptions formatters that can bediscussed and deliberatedon outside the presence ofthe public may differ, moststates have enactedsubstantially similar lawsin this regards.
  9. 9. OPEN MEETING LAWSAs a general rule, theselaws are a reflection ofthe fundamentalphilosophy of theAmerican constitutionalform of representativegovernment.
  10. 10. OPEN MEETING LAWSIt is a matter deemedessential to the maintenanceof a democratic society thatpublic business beperformed in an open andpublic manner, and thatcitizens be advised of and beaware of the performance ofpublic officials and thedeliberations and decisionsthat go into the making ofpublic policy.
  11. 11. OPEN MEETING LAWSIt is thus state policy in mostof the states that theformation and determinationof public policy is publicbusiness and shall beconducted at open meetings,with specific exceptions forsensitive or extraordinarymatters such as pendingcriminal investigations,specific personnel mattersinvolving privacy rights ofpublic employees, andpending litigation.
  12. 12. PUBLIC RECORDSACTSMost states in the U.S. haveadopted a form of publicrecords act that, as ageneral rule, provides thatall public records are publicproperty and that anyperson has the right toinspect or obtain a copythere of subject to certainprocedures concerningcosts, time, place andmethod of access.
  13. 13. PUBLIC RECORDSACTSMost public records actsprovide for public access torecords, subject to certainexemptions, such as judicialrecords, jury records, certainpersonnel records, attorneyswork product, documents fromthird parties containingconfidential information,certain appraisal records,academic records,archeological records, hospitalrecords, investigative andcriminal justice records, andcertain commercial andfinancial records.
  14. 14. PUBLIC PROCUREMENTLAWS AND UNIFORM MODELPROCUREMENT CODEPublic purchasing laws and statutes,sometimes referred to as public procurementlaws, have been adopted in every state. Somestates have adopted their procurement lawsbased on a uniform model procurement codethat promotes transparency, fairness, andcompetitiveness in state and localgovernment procurement by encouragingadoption of the "best practices."
  15. 15. PUBLIC PROCUREMENTLAWS AND UNIFORM MODELPROCUREMENT CODEAt least 17 states haveadopted the modelprocurement code andaccompanying modelprocurement regulations,as have hundreds of localgovernments, in order toprovide public officials,vendors and contractors,and taxpayers withprocurement processeswith integrity and value formoney.
  16. 16. PUBLIC PROCUREMENT LAWSAND UNIFORM MODELPROCUREMENT CODESuch procurement lawswhen adopted andconsistently applied canprovide a transparent,competitive, and reliableprocess through whichpublic funds are expendedthrough contracts withprivate sector businesses,while substantially reducingtransactional costs andincreasing available levelsand ranges of competitionthrough modern methods ofelectronic communications.
  17. 17. THE FUNDAMENTAL PRINCIPLESSERVED BY PUBLICPROCUREMENT CODES INCLUDE1. Competition2. Ethics3. Predictability (stability, advancedpublication, accountability)4. Clear Statements of Procurement Needs5. Equal Treatment of Bidders/Offerors6. Methods of Source Selection
  18. 18. THE FUNDAMENTAL PRINCIPLESSERVED BY PUBLICPROCUREMENT CODES INCLUDE7. Bid / Proposal Evaluation8. Reduction in Transaction Costs forPublic and Private Sector Entities9. Procurement of Construction RelatedServices10. Remedies11. Facilitation of IntergovernmentalTransactions (Cooperative Procurements)
  19. 19. Municipal Home RuleThe United Statesʼsystem of governancehas many different levels—federal, state andlocal—and all have aspecific role to play inproviding publicservices for the citizenry.
  20. 20. MUNICIPLE HOMERULEAt times, these levels ofgovernance can overlap, orcreate gaps in the provisionof services, leavinguncertainty about who haswhat type of authority. In1886, a defining ruling wasmade in two Iowa SupremeCourt decisions which moreclearly defined therelationship between localautonomy and statesupremacy.
  21. 21. Dillon’s Rule: StrictConstruction ofMunicipal PowersThese rulings came to beknown as “Dillonʼs Rule.”Judge John F. Dillonʼs1886 ruling limited countygovernmental powers.Judge Dillon severelydistrusted localgovernment due to thepower and corruption ofpolitical “machines,” whooften controlled municipaland regional decisionmakers.
  22. 22. IN HIS LANDMARK OPINION,JUDGE DILLON WROTE:“It is a general and undisputed proposition oflaw that a municipal corporation possessesand can exercise the following powers, and noothers: first, those granted in express words;second, those necessarily or fairly implied inor incident to the powers expressly granted;third, those essential to the accomplishment ofthe declared objects and purposes of thecorporation—not simply convenient, butindispensable. Any fair, reasonable,substantial doubt concerning the existence ofpower is resolved by the courts against thecorporation, and the power is denied.”
  23. 23. Dillon’s Rule: StrictConstruction ofMunicipal PowersSome states still retain"Dillons Rule" by whichmunicipalities aresubordinated to the statelegislature and subject to arule of strict constructionwith respect to localgovernment powers. In short,if there is any reasonabledoubt whether a power hasbeen conferred on amunicipality or localgovernment, then the powerhas not been conferred.
  24. 24. Gradual Move from Dillon’s Rule toMunicipal Home RuleOther states have graduallymoved away from this strictconstruction approach tomunicipal authority. Todayforty-three states haveadopted municipal homerule, by which provisionseither in law or within thebody of their Constitutionsacknowledge the right ofcitizens, through theirmunicipal governments, toexercise local decision-making power with theweight of law.
  25. 25. Greater Local Autonomy andCommunity RightsIn other words,municipalities enjoygreater local autonomyand a community-rightsaffirming power. Municipalhome rule powers varywidely from state to state,and in some states,municipal authority isextended only to certainclasses of cities, counties,and towns.
  26. 26. GREATER LOCALAUTONOMY ANDCOMMUNITY RIGHTSRegardless of type, home rule gives localgovernment the capability to shape the way itserves the needs of its constituency. Differentmunicipalities and counties have differentneeds. The service delivery demands of a ruralmunicipality or county and an urbanmunicipality or county may differ. Therefore, instates that do not provide the flexibility ofhome rule, municipalities and counties mayprovide services that do not suit the needs oftheir residents.
  27. 27. GREATER LOCALAUTONOMY ANDCOMMUNITY RIGHTSHome rule gives localgovernment the ability toshape its services to fitits need, providingtimely, fiscally-responsible services,allowing it to respondquickly and effectively tothe needs, concerns andissues most important toits residents.
  28. 28. GREATER LOCALAUTONOMY ANDCOMMUNITY RIGHTSA listing of which stateshave municipal homerule provisions,including links todetailed information isavailable athttp://www.celdf.org/article.php?list=type&type=141.
  29. 29. IntergovernmentalCooperation AgreementsMost states have enactedstatutory provisions thatpermit local governmentalunits enter intointergovernmentalcooperation agreementswith other localgovernments in order tomake the most efficientuse of their taxingauthority and otherpowers.
  30. 30. INTERGOVERNMENTALCOOPERATIONAGREEMENTSSuch interlocal agreementsgenerally enable localgovernments to cooperatewith other localities on abasis of mutual advantageand thereby to provideservices and facilities in amanner and pursuant toforms of governmentalorganization that will accordbest with geographic,economic, population, andother factors influencing theneeds and development oflocal communities.
  31. 31. INTERGOVERNMENTALCOOPERATIONAGREEMENTSInterlocal cooperation agreements are usuallyrequired to contain certain mandatoryprovisions setting forth the statutorypurpose, powers, rights, objectives,responsibilities, applicable time period for theagreement to remain in effect, financingprovisions, termination, amendment andrenewal provisions, and in most states suchagreements become effective upon approvalby the state attorney general or through anapproval mechanism provided by statute.
  32. 32. Transparency, Accessibility andPredictability of GovernmentProcessesThere is a strong publicpolicy that demandsconsistent adherence to thelegal requirements governingthese statutory vehicles andtools of governance. Openmeetings laws, publicrecords acts, publicprocurement laws, municipalhome rule, andintergovernmentalcooperation agreementsprovide municipalgovernments with theframework for maintaining atransparent, accessible, andopen process.
  33. 33. TRANSPARENCY, ACCESSIBILITY ANDPREDICTABILITY OF GOVERNMENTPROCESSESIt is an open and accessibleprocess that invitesparticipation by citizens andminimizes the risk ofcorruption. When these andsimilar laws that govern thestructure, access, processesand day-to-day work ofmunicipal government areconsistently applied, fairlyimplemented and administeredin a predictable,understandable andtransparent manner, theaverage citizen will be theprimary beneficiary.
  34. 34. Corruption on theInternational LevelCorruption is a globalthreat and a seriousroadblock to economicdevelopment, divertingdesperately needed fundsfrom education, healthcare and essential publicservices. It aggravatesinequality and injustice,undermines stabilityespecially in the mostvulnerable regions of theworld.
  35. 35. CORRUPTION ON THEINTERNATIONAL LEVELCivil society must have aplace at the governmentdecision-making table inorder to keep corruption incheck. Civil societyorganizations have animportant role to play inimplementingintergovernmental measuresagainst corruption. They canand should contribute to thefight against corruption bymobilizing broad,coordinated efforts against it.
  36. 36. 1977 Lockheed BriberyScandalsCorruption at the internationallevel appeared to be “businessas usual” until the LockheedAircraft bribery scandalssurfaced in 1977. The Lockheedscandals encompassed a seriesof bribes and contributionsmade by officials of U.S.aerospace company Lockheedfrom the late 1950s to the 1970sin the process of negotiatingthe sale of aircraft. The scandalcaused considerable politicalcontroversy in West Germany,Italy, the Netherlands andJapan and nearly led toLockheed’s corporate downfall.
  37. 37. 1977 Lockheed BriberyScandalsIn late 1975 and early 1976, asub-committee of the U.S.Senate led by Senator FrankChurch concluded thatmembers of the Lockheedboard had paid members offriendly governments toguarantee contracts for militaryaircraft. In 1976, it was publiclyrevealed that Lockheed hadpaid $22 million in bribes toforeign officials in the processof negotiating the sale ofaircraft including the F-104Starfighter, the so-called "Dealof the Century".
  38. 38. 1977 Lockheed BriberyScandalsThe Lockheed briberyscandals prompted theU.S. Congress to enact theForeign Corrupt PracticesAct (FCPA), under whichcompanies could be heldliable for fines up to $2million per violation, andindividuals could be liablefor fines up to $100,000.00,with up to five yearsimprisonment.
  39. 39. 1977 Lockheed BriberyScandalsThe U.S. seemed tostand alone in forbiddingcompanies to bribeforeign public officials.Now, however, over 35nations have enactedlaws that imposecriminal penalties onthose who bribe foreignpublic officials in orderto obtain business deals.
  40. 40. UNCACAt the initiative of the U.S., the Organization forEconomic Cooperation and Development(OECD) began working on international briberyin 1989, leading ultimately to the majorexporting nations of the world adopting theUnited Nations Convention Against Corruption(UNCAC). 165 nations have now ratified theUNCAC, which established a legal frameworkfor governments to enact regulations tocombat corruption.
  41. 41. UNCACThe UNCAC emphasizesthe importance of civilsociety as part of effectiveanti-corruption efforts. Upuntil now, however, civilsociety has been excludedfrom the UNCAC’sintergovernmental meetingprocess for reviewing,monitoring and evaluatingwhether governments areliving up to theircommitments.
  42. 42. UNCACOn April 29, 2013, over 350civil society organizationsformally asked the UNCACImplementation ReviewGroup, which oversees thereview process, to improvethat process by allowingthe civil societyorganizations toparticipate in significantparts of the reviewprocess.
  43. 43. UNCACDuring the first week ofMay 2013, at a meeting ofthe U.N. CrimeCommission, thegovernment of Norwayurged civil societyparticipation and endorsedthe fundamental principlethat would allow citizens tosee and hear what theirgovernments are doing, tocontribute their know-howto the discussions and toengage in dialogue tosupport progress.
  44. 44. Civil Society OrganizationsPromoting UNCACFor over a decadeTransparency International anda large cross-section of civilsociety organizations havepromoted the U.N ConventionAgainst Corruption. They haveparticipated in negotiations,advocated ratification of theUNCAC by non-membernations, and mobilized supportfor a review process. Thesecivil society organizations havenow gained significantexperience in identifying whatworks in fighting corruptionand what doesn’t.
  45. 45. UNCAC COALITIONThrough the UNCACCoalition, they have workedwith governments toadvance the anti-corruptionagenda and have begun toprovide independentevaluations of howcountries are implementingthe UNCAC. As a result,there are now 17 countryreports that are aimed atsupporting and promotinggovernment efforts toimplement the UNCAC.
  46. 46. UNCAC COALITIONThis level of participation bycivil society organizations isvery important, because itcomes at a time when trust ingovernments’ commitment tofight corruption appears tobe declining. It underscoresthe kind of transparency thatlies at the heart of theUNCAC and tells the worldcommunity that the UnitedNations can set anexemplary standard for civilsociety participation.
  47. 47. UNCAC COALITIONTransparency is always the best policy. If civilsociety is not at the decision-making table, itwill be harder and harder for countries to beaccountable and easier for corruption toflourish. In combatting corruption,transparency, inclusiveness and dialoguebetween stakeholders will only help. SeeUNCAC Civil Society Coalition letter dated April29, 2013, online athttp://uncaccoalition.org/images/PDF/29Apr2013_UNCACCoalitionLetterToIRG_EN.pdf
  48. 48. The Experience of OECDThe Organization for EconomicCooperation and Developmenthas worked with civil societyorganizations, businessassociations, trade unions,nongovernmental organizationsand the media since 1989 infighting corruption and bribery.Civil society organizations havemade significant contributionsin promoting initiatives againstcorruption. The nature of theirinvolvement in the fight againstcorruption is a direct responseto the threat it poses.
  49. 49. The Experience of OECDCorruption and bribery ininternational businesstransactions underminesgood governance andeconomic developmentand distorts competitiveconditions, causingcompetitive disadvantagefor honest businesses.Left unchecked, corruptionand bribery can eliminate alevel playing field.
  50. 50. CIVIL SOCIETY ORGANIZATIONSCOMBATTING CORRUPTION ANDBRIBERYFour of the most active organizations that havecollaborated with the OECD in its fight againstcorruption and bribery are:The Business and Industry Advisory Committeeto the OECD, an independent organization thatrepresents business and industry (BIAC)The Trade Union Advisory Committee to theOECD, serving as labor union’s interface with theOECD (TUAC)
  51. 51. CIVIL SOCIETY ORGANIZATIONSCOMBATTING CORRUPTION ANDBRIBERYThe International Chamber of Commerce, abusiness association with thousands ofassociations grouped together to promotean open international trade and investmentsystem (ICC)Transparency International, an internationalNGO devoted to combatting corruption, withover 90 independent national chaptersworldwide (TI), working at the national andinternational level to curb the supply of anddemand for bribes.
  52. 52. CIVIL SOCIETY ORGANIZATIONSCOMBATTING CORRUPTION ANDBRIBERYOther civil societygroups and entities havecontributed their effortsto help combat bribery,working in tandem withBIAC and TUAC. Thesehave included ANPED,Oxfam, and Friends ofthe Earth.
  53. 53. AnpedANPED, the Northern Alliance forSustainability, is an internationalnot-for-profit organizationrepresenting a network of NGOsin the Northern hemisphere with amission to pro-actively promotethe agenda on environmentaljustice and systemic change forthe Economy, empoweringNorthern civil society throughcapacity development, exchangesand knowledge sharing whileworking in close cooperation withSouthern civil society and otherstakeholders, for the creation andprotection of sustainablesocieties worldwide.
  54. 54. OxfamOxfam is an internationalconfederation of 17organizations networkedtogether in more than 90countries, as part of a globalmovement for change, tobuild a future free from theinjustice of poverty, workingdirectly with communitiesand seeking to influence thepowerful to ensure that poorpeople can improve theirlives and livelihoods andhave a say in decisions thataffect them.
  55. 55. Friends of the EarthFriends of the Earth Internationalis a global network representingmore than two million activists in74 different countries. In theUnited States, Friends of theEarth advocates in the halls ofCongress, in state capitals, andwith community groups aroundthe country. With offices inWashington, D.C. and Berkeley,CA and members in all 50 states,Friends of the Earth urgespolicymakers to defend theenvironment and work towards ahealthy environment for allpeople.
  56. 56. ANTI-CORRUPTION NETWORKFOR TRANSITION ECONOMIES(ACN)Among the regionaloutreach initiatives is theAnti-Corruption Networkfor Transition Economies(ACN). Civil societyorganizations that includeTransparency Internationaland The Open SocietyInstitute took part indeveloping and managingthe international coalitionthat led to creation of ACNin 1998.
  57. 57. ANTI-CORRUPTION NETWORKFOR TRANSITION ECONOMIES(ACN)The ACN linkspolicymakers andnongovernmental actors in23 nations of CentralEurope, the CIS andEastern Europe, includingUkraine, Georgia and theRussian Federation. TheACN’s activities includeannual meetings and theDonor’s Standards forAnti-CorruptionAssistance Project.
  58. 58. EFFECTIVE CIVIL SOCIETYORGANIZATIONSThere are hallmarks or keycharacteristics by whichthe most developed andeffective civil societyorganizations can beidentified:They represent a widevariety of interests.With their variedorganizational cultures,they can more readily seethe problem of corruptionfrom differentperspectives.
  59. 59. EFFECTIVE CIVIL SOCIETYORGANIZATIONSThey are able to bring togetherdiverse viewpoints to develop,design and implement a strategyto fight corruption and increaseits chances of success.A political will to fight corruptionthat is based on broad supportfrom various sources in civilsociety is more likely to ensurethat the anti-corruption measurestaken are not politically biased.The variety of interests ensuresthat the anti-corruption effortultimately responds to the publicinterest.
  60. 60. Limiting FactorsUnfortunately, there are factors that limit the development, growthand effectiveness of civil society organizations and limit theirinvolvement in the fight against corruption:The state may impose limits. Public laws and rules in somecountries limit basis civil rights and do not facilitate thedevelopment of civil society organizations.Lack of transparency of public operations and difficulty gainingaccess to information can discourage direct involvement andparticipation of citizens in the conduct of public affairs. Participationby citizens is not seen as a normal component of political life.
  61. 61. LIMITING FACTORSCitizens in some countries may not have an adequate awarenessof the costs of corruption, the damage and harm that it causes, orthe existence of the means, methods and tools to curbcorruption. They may not see the link between access to qualityhealth services and other positive goals for their personal life andthe fight against corruption. They see no way they can contribute.A lack of resources can also limit the development and role ofcivil society in the fight against corruption. Citizens may not havethe financial resources, information, experience or technicalability and capacity to take effective action to fight corruption.They need funds, information, training, expertise and a synergythat can come from partnerships and collaborative actionbetween civil society organizations and actors.
  62. 62. LIMITING FACTORSAmong available resources to address some ofthese limiting factors is the OECD Anti-CorruptionRing Online, or AnCorR, a large informationalwebsite created by OECD with over 3000references to books, papers, anti-corruptiondocumentation such as laws, internationalconventions and anti-corruption statutes. TheAnti-Corruption Ring Online,athttp://www.oecdobserver.org/news/archivestory.php/aid/241/The_Anti-Corruption_Ring_Online.html
  63. 63. LIMITING FACTORSGrowing global supportfor anti-corruptionmeasures is evidencedby a host of internationalconventions such asUNCAC, new nationallaws, increasedenforcement of existinglaws and voluntaryinitiatives againstcorruption.
  64. 64. LIMITING FACTORSThrough collective action,innovative tools are beingdeveloped that allowcompanies to come togethercollectively, collaborativelyand voluntarily to raisecorporate practice standardsand reduce corruption andcompetitive risks. Suchcollective action includesintegrity pacts for individualprocurements, codes ofconduct and collective publicpolicy initiatives.
  65. 65. LIMITING FACTORSMany of these tools for collective action arediscussed in detail in a guide intended tohelp companies meet the legal,competitive, economic and ethicalchallenges posed by corruption as they dobusiness around the world, FightingCorruption: What Role for Civil Society?The Experience of the OECD (World BankInstitute, 2008), online athttp://www.oecd.org/daf/anti-bribery/anti-briberyconvention/19567549.pdf

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