Country: Czech Republic

EU Rule of Law Report Captive on its Tracks

The European Commission is already planning a second rule of law report, although the first brought no further evidence to the already known problems of Hungary or Poland, and only showed the weakness of conceptualization and methodology at this stage. The German presidency made the concession to Hungary and Poland that Courts will have the first say in the event of a sanction. While critics were fast to denounce Merkel to have yielded to the populists, the most elementary legal common sense shows that Courts would have anyway got involved. Is it not better, then, to have them involved sooner rather than later?

Quite a few Parliaments and Governments invited me since then to present my criticism of the report from this Carnegie paper (thank you) and the alternative ways to go about solving the rule of law problem. While I have nothing to add to the criticism and the commission seems unwilling or unable to modify anything in the bureaucratic logic of the report (and the power mechanisms which made it that Wirecard case did not even get a mention) the alternative is the one that I had already suggested. We need to separate the issues, which are luckily correlated. If we want to cut EU funds, we need to use the public procurement policy and its very good monitoring by another part of the Commission (in the EU Single Market PP Scoreboard). Member states who do not reach targets there are the same who infringe on rule of law: Hungary, Poland, Romania, Malta, Czech Republic. That is a technical issue and as such, it is entirely at the disposal of the Commission, which had already done a first excellent step in letting Hungary know that it would not get the funds until it proves it is able to spend the money correctly [1]. For freedom of speech and judicial interference we need to use the other mechanisms- political in essence, as the final and sustainable solution to the EU rule of law problems is to persuade voters not to endorse leaders who are against rule of law. Both on legal and on persuasive grounds, it is better to cut funds for poor governance and corruption than for motives Mr. Orban can say are just matters of different political opinion.

But the EC seems these days, as on the vaccine issue, a train captured by its own tracks and unable to adjust course sensibly. The second round of consultations on the ROL report, thus, is not really a consultation more than the first has been. It is merely an attempt to crowdsource, collecting information, and of course leaving at the absolute discretion of the Commission if to mention Wirecard, BAFIN, and the rest at all.

It is rather clear that the report could hardly help, had the case of some infringement end in Courts, where legal reasoning would instead prevail. The question then is why spend all this money to produce a weak and biased report, when the Commission could instead outsource reports on freedom of the press, corruption (not anticorruption, as the meagre report attempts, as there is no way to separate the two which makes any sense) and judicial independence to those who generally deal with these issues and are both independent and professional? Such reports could be cited by those who work on the legal cases, as we have already seen in the legal cases against Hungary and Poland so far, although, of course, they would not make the bulk of the argument any more than the ROL report would. At least, however, there will be no stringent omissions.

The rule of law report was a concession by Von der Leyen to those who think populism can be fought only by populism, by publishing unsubstantiated figures of social loss due to corruption that no reviewer would ever validate in a normal academic review procedure or by piling up facts which do not amount to evidence, as many are simply irrelevant. The fact that it goes on like nothing happened during last year negotiations and no justified criticism was made by governments and experts who are not on the side of Poland and Hungary is not proof of resilience, but one of incapacity of a bureaucracy to learn and adjust, and the indifference which accompanies too much money one can spend.

[1] EU tells Hungary to change procurement, cites ‘systemic’ fraud | Financial Post

The Good Governance of the Corona Crisis

The years since 1989, the previous threshold crossed by the contemporary world have seen unprecedented stress on good governance, with the adoption of international conventions and treaties, disclosures like Panama Papers and spectacular enforcement of the older American Foreign Corrupt Practice Act. But during this interval the world largely stagnated on the quality of governance. If anything, governance in top income countries declined slightly, and in less affluent countries stayed the same. Only a handful of countries registered significant progress- those good governance ‘achievers’ that I covered with an international team of researchers in several books and articles, and which are less than a dozen across continents.

It is very significant in these days’ debate to monitor the performance of these countries in the fight with the epidemic and to compare them with their income and regional counterparts, and why not, with older good governance achievers, like US, UK or Scandinavian countries. Of some, everybody heard in the past two weeks, even if not researching anticorruption: South Korea and Taiwan. These two democracies handled the Corona crisis brilliantly, acted swiftly on evidence to prevent the spread of the virus, learned from previous epidemics and summoned e-government, technology (apps to trace contacts) and the excellent relation between state and citizens, based on transparency and trust.

In Latin America, the good governance achievers have the lowest fatality rates. By Easter 2020, Chile with 1.1% and Costa Rica with 0.5% clearly stood out compared to Nicaragua’s 11.1%, Bolivia’s 8.2%, Mexico’s 6.6%, Honduras’ 6.3, the Dominican Republic 5.6%, Brazil’s  5.7% and Ecuador with 4.7%. Uruguay also did well. Africa was still at the very beginning, but already you could see that Tunisia, who is among the very recent countries which started on the good governance path (see map) has been handling the situation better than its neighbors.

It is more difficult to judge in Europe, the land of the oldest good governance achievers, but there it also seems that many countries which have improved their governance in the last thirty years- Estonia, Georgia, the Czech Republic, Portugal- handled the crisis better than ‘old achievers’- countries like France or UK.

This highlights a previously neglected issue- that the equilibrium representing good governance, the state-society balance that we capture in the Index for Public Integrity, needs to be sustained over time and should not be taken for granted. Indeed, the John Hopkins University-EUI who  estimated UK and US far better prepared than Germany or South Korea should revisit their criteria and allow a larger role for political leadership. Also, would it not be nice to include Taiwan in the 195 countries GHS index, as clearly its governance was superior to many and so some lessons could be learned from there? Poor leadership (as well as a good one) matters. It can enable or deter collective action needed in such times, and both these old good governance achievers showed that, leading to loss of lives. From the “old achievers”, Germany confirmed the most, with a low fatality rate (compared to the other West European countries) owing a lot to the same non-populist, solid social contract, where the state acts on evidence and broad consultation, the citizens trust it to do so and the public and private sector, as well as different branches of government cooperate well. Still, Germany did not react as swiftly as either Korea or Taiwan, who had more cases after China originally, but managed to curtail the spread from very early on. Or Iceland, the marginal European island which made a prime minister resign in half a day after it turned out his family’s money was invested offshore and tested all skiers returning in one flight from Ischgl, an Austrian virus hotspot.

The more a government is able to draw on trust and technology, the swifter and more effective the response. Taiwan merged its national health insurance data with customs and immigration databases to create real-time alerts to help identify vulnerable populations. Iceland made an app which created a log of where the user had been to enable contact-tracing – sharing it with authorities being done on a voluntary basis, unlike Korea where quarantined people have to use it. Countries which used e-government tools to lower red tape and electronic means of payment to increase tax collection and diminish the unaccountable money volume- like Estonia or Uruguay- found it easier to handle the crisis. They had been already reducing personal contacts and paperwork between government and its citizens.

Acting rapidly on the evidence to prevent corruption, with the help of both responsible and critical citizens is also the essence of successful anticorruption: what you do after the outbreak already matters less, because it cannot be so effective even in the best of circumstances, that few countries enjoy anyway (like great impartial prosecutors and effective courts). The countries which had managed to build control of corruption successfully in recent times were thus far more prepared for this crisis even than those advanced countries which had received it as a heritage from their ancestors. Good governance needs current practice, but also returns dividends, as we could see during this pandemic.

Czech Republic

The Czech Republic has been one of the most successful new democracies in building control of corruption, and its administrative simplicity and transparency are very good. The judiciary and the media have also managed to deliver on their role. The country has been struggling for many years with high resources for corruption, in particular in the form of EU funds, which had seriously put its corruption defenses to the test. It needs to upgrade its conflict of interest and political funding rules, where it lags behind the EU average.

The Splintering of Postcommunist Europe

There are two radically different versions of the postcommunist narrative. One tells the triumphal tale of the only world region in which the reforms recommended by the “Washington consensus” worked. The other and more realistic account speaks of a historic window of opportunity that lasted for only a quarter-century, during which efforts by the West and patriotic elites of Central and Eastern Europe managed to drag the region into Europe proper, leaving Europe and Russia pitted against each other along the old “civilizational” border between them. This essay argues that while Institutional choices matter in the postcommunist world, geopolitical and civilizational boundaries still set the horizons of political possibility.

Datlab

datlab_logoDatlab was founded two years ago and builds on five years of NGO experience of of the founders working with public finance data, mainly public procurement. Datlab gathers, cleans and further provides procurement data, enriched from business and other registries in the Czech Republic and Slovakia to numerous stakeholders such as government agencies and researchers. Its goal is to further develop open data capacities in Eastern Europe and beyond, especially for working with public sector data, which fits the project’s aim. Datlab’s main competitive advantage lies in its IT personnel, who are closely familiar with the public procurement’s legal framework. Some of Datlab’s relevant projects include the development and maintenance of the data gathering software for tender.sme.sk and vsechnyzakazky.cz, two NGO sites that provide data on public procurement. The team also created politickefinance.cz, a database to monitor funding of Czech political parties, including full lists of donors and zinfo.cz a tool for transparent publication of tenders by contracting authorities. Datlab also developed treemap budgets for the City of Prague and the Ministry of Labour and Social Affairs to track and display their spending data.

Waging Battle on The Anticorruption Frontline

ruslanThe demand for good governance is on the rise everywhere, from Kiev to Sao Paulo, Paris to New Delhi. But has any measurable progress been made recently? Do we know which countries are succeeding and why? Do anticorruption experts and policy makers understand public concerns about corruption?

The Anticorruption Frontline, the second volume of the FP7 ANTICORRP project policy report launched last week at the Hertie School of Governance in Berlin, finds less than encouraging answers to these questions: Despite increased effort to fight corruption worldwide, there remains little progress on the ground. Even in countries which have shown improvement, the use of public office for private gain remains an issue. Public opinion surveys tracking concerns about corruption are frequently misunderstood – by those being surveyed as well as those proposing anticorruption policy solutions.

New research by Prof. Alina Mungiu-Pippidi of the Hertie School of Governance shows that decreased confidence in the EU, especially in Western and Southern Europe, is linked closely to citizens’ perceptions of their national government’s ability to control corruption. This confidence has been eroded in the wake of the euro crisis, most markedly in countries with the worst growth performance. Central and Eastern Europe, however, remains the last bastion of trust in EU institutions, which is perceived largely as a counterweight to untrustworthy national institutions.

Two European case studies from The Anticorruption Frontline illustrate that EU funding regulations and anti-corruption legislation alone are no panacea for the rampant favoritism inherent in extant particularistic systems. Despite an improved Bulgarian anticorruption rating according to most accepted measures, findings from the Center for the Study of Democracy on Bulgarian governance show that the avoidance of market competition in areas such as public procurement remains the rule rather than the exception. In another chapter, Mihaly Fazekas’ unique data mining method on the awarding of EU structural funding uncovers systemic corruption in Czech, Slovak, and Hungarian public contracting methods.

Such preferential treatment – and its inherent abuse of power – is one of the most insidious forms of corruption facing the world today.  Further case studies from The Anticorruption Frontline include deeper analysis of Qatar and Rwanda, two countries singled out for their improvements on anticorruption measures, yet both of which still exhibit favoritism in public procurement, as well as a look into the corrupt bed of Ukraine‘s gas market, exposed in the wake of 2014’s uprising. As every case in the book makes clear, traditional measures of corruption often fail to measure the existence and subsequent impact of such exploitation of public trust for private gain.

The Anticorruption Frontline argues that further EU regulation is not the solution. As a multidimensional phenomenon, fighting corruption requires tailored policy approaches as well as sustained support in areas such as improving transparency and strengthening civil society. The answer instead may lie in a transition from EU co-financing of large public projects – where the risk of corruption is higher – to a more universal and non-discretionary allocation of EU funding, such as an Europe-wide unemployment benefit scheme.

The Anticorruption Frontline is available for purchase via Barbara Budrich Publishers.

Top Berlin Airport Official Accused of Bribery

Barely six months into his contract as Head of Technology for the Berlin Brandenburg Airport (Flughafen Berlin Brandenburg GmbH (FBB)), Jochen Grossmann has been accused of demanding a half a million Euro bribe from a prospective contractor. This is only the latest in a long list of problems for the airport which is now estimated to be as much as €6 billion over budget and at least five years behind schedule (the FBB has actually declined to set a new opening date). Harmut Mehdorn, FBB CEO, has admitted that even more irregularities in the awarding of contracts could be found.

The notion that there might be more corruption in such a large-scale infrastructure project would come as no surprise to anti-corruption researchers. Indeed, recent research by the FP 7 ANTICORRP project showed that big infrastructural projects are prone to high levels of corruption. The concluding chapter of The Anticorruption Report Volume 1, Controlling Corruption in Europe stated: “Spending on new infrastructure projects, for example, allows the channelling of government resources to favourite companies either directly or through local or regional governments producing unnecessary outputs with high costs.”

While the corruption allegations are nothing new for a large infrastructure project, they are interesting in Germany which is usually held up as an example of good governance. The second chapter of the same ANTICORRP book placed Germany in a group of countries with relatively low risk of corruption, where control of corruption has largely been achieved and occasional incidences of corruption are handled successfully. Thus far, the case of the airport appears to be one where such incidences are being addressed quickly and publicly.

The FBB signed an Integrity Pact with Transparency Germany in 2005 and engaged local public procurement expert Professor Peter Oettel (Oettel is honorary professor at the Technical University Berlin and was former Head of the Department of Structural Policy for the city where he was responsible for overseeing public procurement) to work with TI in monitoring contract awarding for the airport. According to the FBB, this was the first time a German company took such a step, however, according to Transparency Germany; it took nearly a decade to convince the company to sign the pact.

The FBB also has an ombudswoman, an anti-corruption officer and an anti-corruption task force. The FBB reported the suspected corruption to public prosecutor in Neuruppin who then conducted a search of the office of two accused associates as well as the private premises of the chief suspect. The public prosecutor has described the situation as a “classic model of corruption in business dealings.” The task force is comprised of: legal experts, examiners from the FBB, outside legal experts, anti-corruption experts and a representative from Transparency International (TI) who will now review all the contracts awarded by Mr. Grossmann.

The bribery allegation against Mr. Grossmann, which emerged near the two-year anniversary of the cancelling of the open date, is the second publicised incident of corruption involving the airport in a little over a year. Last April, three men were charged with corruption after bribes were paid by firms wanting to secure airport contracts.

Corruption in public procurement will continue to be a key research focus for the ANTICORRP project, with the result of research on the impact of EU funds on control of corruption due later this year. A study released late last year by ANTICORRP researchers  Mihály Fazekas and István János Tóth compared public procurement processes involving EU funds and national funds in Hungary, Slovakia and Czech Republic and found that up to 1/3 of EU funds are touched by corruption.

EU Funds Curse? New evidence on the reciprocal impact between EU funds and corruption in CEE

Finding an accurate measure of corruption is a problem that has puzzled anti-corruption researchers for some years now. In the framework of the ANTICORRP project, researchers are currently trying to produce a new generation of indicators which allow comparisons across countries and time while being more concrete and specific than the first generation which are based on perception aggregates (for instance the Corruption Perception Index).

This new European paper takes an important step in that direction by using a technique known in audit studies as data mining. Under this method, researchers look for deviations from an ordinary, normal pattern to identify corrupt behaviour. In this paper, Fazekas et al.[i] use a newly created database of public procurement procedures in Central and Eastern European countries to reach three objectives:

    1. Create an instrument based on data mining to assess procurement risk which can be used to estimate across countries and time (to see, for instance, if reforms are working);
    2. Compare corruption risks of EU funded and national public procurement as well as estimate the value of EU funds allocated in a particularistic way; and
    3. Make recommendations on how to monitor EU funds more effectively.

Fazekas et al produced a series of studies [ii]  developing new corruption measures, of which “Are EU funds a corruption risk? The impact of EU funds on grand corruption in Central and Eastern Europe” is only the first to have major findings. These are as follows:

  • The authors prove that public market domination by certain companies or bids won by single bidders are significantly related to irregularities in the procurement process. They furthermore infer that an early sanction of such irregularities would be able to curb corruption. Using a database of over 120 000 public procurement procedures in the Czech Republic, Hungary, and Slovakia they look for anomalies on two sides of each procedure: 1) at entry, unusual processes (e.g. an exceptionally short bidding period) and 2) at exit, unusual outcomes (e.g. the winning bid had no competition, or the winning company frequently wins bids, both indicating favouritism). Using inferential statistics they manage to link the former to the latter.
  • Fazekas et al. use their analysis of procurement process anomalies to calculate a corruption risk index (CRI) which expresses the probability of particularistic allocation of public procurement contracts. Particularistic resource allocation implies that prior explicit rules of spending are bent in order to benefit a closed circle while excluding others. Comparing CRI of EU funded and similar nationally funded procurement contracts, they assess the effectiveness of EU institutions to curb corruption. They find that EU funds represent higher corruption risks in Czech Republic (3%) and Hungary (8%) than comparable national spending, while in Slovakia EU funds are less risky than national funds (13%). Although Slovakia has a much higher level of corruption than the two other countries to start with.
  • In order to better gauge corruption risks in EU funds, the authors calculate the expected value of public resources allocated in a particularistic way by combining the probability of particularism and the value of procurement spending. They estimate that throughout 2009-2012 particularistic resource allocation affected 0.94% of GDP in Czech Republic, 1.15% of GDP in Hungary, and 1.61% of GDP in Slovakia. In total, they argue that the funds affected by particularism may reach up to 1.2% of their combined GDP which is an impressive figure especially when compared to the total amount of EU funds allocated to these countries: 3.3% of their combined GDP.
  • Despite coming with theoretically better legal protection attached, EU funds proved a double liability for public procurement as presented in this paper. First, because as the first ANTICORRP policy report, “Controlling Corruption in Europe” already warned, EU funds stimulate discretionary public spending (as compared to more predictable rule based spending, for instance on pensions). Second, because they seem to be targeted more by rent seekers resulting in a higher risk of funds being captured by a ‘favourite’ company.

Estimated value  of national and EU funded public procurement disbursed in a particularistic way, by country, % of 2009-2012 total GDP

grandcorruption_cee_graph

Source: PPC

Note: In order to arrive at an approximate  total public procurement spending figure, spending values based on announcements in the National Public Procurement Bulletins were approximated to total public procurement spending estimated by the OECD based on the system of national accounts (OECD, 2013). As the total public procurement spending figures are upper bound estimations and the proportion of EU funding within public procurement spending not reported in the National Public Procurement Bulletin is unknown, figures in the graph may be overestimations. 

Given the high risks, what can the EU do to better protect its investment and ensure that funds are disbursed in a more competitive and transparent manner?  The ANTICORRP policy team offers the following recommendations:

  • Introduce an EU-wide, real-time monitoring mechanism of EU funds spending designed to detect systematic fraud and corruption in public procurement using data mining techniques.
  • Increase national civil society capability for monitoring governance and controlling corruption at both national and local levels especially with regard to EU funds.
  • Consider re-allocating EU funding from discretionary investment projects which typically constitute high corruption risk, towards non-discretionary spending such as education.

[i] Mihály Fazekas, Jana Chvalkovska, Jiri Skuhrovec, István Janos Tóth, and Lawrence Peter King, (2013), Are EU funds a corruption risk? The impact of EU funds on grand corruption in Central and Eastern Europe. Published as through the Corruption Research Centre Budapest as CRCB-WP/2013:03 and through the European Research Centre for Anti-Corruption and State-Building as WP No.39 

[ii] Key publications are: Fazekas, M., Tóth, I. J., & King, L. P. (2013). Anatomy of grand corruption: A composite corruption risk index based on objective data. CRCB-WP/2013:02, Budapest: Corruption Research Centre.

Fazekas, M., Tóth, I. J., & King, L. P. (2013c). Corruption manual for beginners: Inventory of elementary “corruption techniques” in public procurement using the case of Hungary. CRCB-WP/2013:01, Corruption Research Centre, Budapest.

Fazekas, Mihály, István János Tóth, and Lawrence Peter King. 2013c. “Hidden Depths.The Case of Hungary.” In Controlling Corruption in Europe vol. 1, ed. Alina Mungiu-Pippidi. Berlin: Barbara Budrich Publishers, 74–82. ERCAS WP 37.

 

Are EU funds a corruption risk? The impact of EU funds on grand corruption in Central and Eastern Europe

Fazekas et al explore the impact of EU structural funds on institutionalised grand corruption in three countries where corruption is systemic – Czech Republic, Hungary, and Slovakia – between 2009-2012. They examine whether EU funds have contributed to weakening institutional quality in terms of wasteful public spending and increased ‘legal’ corruption conducted through public procurement. By exploiting a unique pooled database containing contract-level public procurement information for all three countries they are able to systematically examine corruption risks associated with EU funding at the micro-level. The authors also develop a composite corruption risks indicator based on the incidence and logical structure of ‘irregularities’ in individual public procurement transactions.

Fazekas et al. ultimately claim that EU funding impacts institutionalised grand corruption in CEE in two ways: first, by providing additional public resources available for corrupt rent extraction; second, by increasing the controls of corruption for the additionally allocated funding. Their preliminary calculations indicate that the first effect increases the value of particularistic resource allocation in the three countries up to 1.21% of their GDPs, while the second effect decreases the value of particularistic resource allocation by up to 0.03% of GDP. However, the latter beneficial effect is entirely driven by Slovakia, which has a high national corruption risk level; while in Czech Republic and Hungary this impact is even negative. The authors conclude with several policy recommendations calling for a radical improvement of the monitoring and controlling framework.

Are EU funds a corruption risk? The impact of EU funds on grand corruption in Central and Eastern Europe

Fazekas et al explore the impact of EU structural funds on institutionalised grand corruption in three countries where corruption is systemic – Czech Republic, Hungary, and Slovakia – between 2009-2012. They examine whether EU funds have contributed to weakening institutional quality in terms of wasteful public spending and increased ‘legal’ corruption conducted through public procurement. By exploiting a unique pooled database containing contract-level public procurement information for all three countries they are able to systematically examine corruption risks associated with EU funding at the micro-level. The authors also develop a composite corruption risks indicator based on the incidence and logical structure of ‘irregularities’ in individual public procurement transactions.

Fazekas et al. ultimately claim that EU funding impacts institutionalised grand corruption in CEE in two ways: first, by providing additional public resources available for corrupt rent extraction; second, by increasing the controls of corruption for the additionally allocated funding. Their preliminary calculations indicate that the first effect increases the value of particularistic resource allocation in the three countries up to 1.21% of their GDPs, while the second effect decreases the value of particularistic resource allocation by up to 0.03% of GDP. However, the latter beneficial effect is entirely driven by Slovakia, which has a high national corruption risk level; while in Czech Republic and Hungary this impact is even negative. The authors conclude with several policy recommendations calling for a radical improvement of the monitoring and controlling framework.

Batory Foundation Launches Website on Political Finance in 7 Countries

The Stefan Batory Foundation, in cooperation with other seven NGOs*, has launched the website www.politicalfinance.org, devoted to analysing the regulation systems of campaign and political party financing in 7 countries: Armenia, Czech Republic, Estonia, Georgia, Moldova, Mongolia and Poland.

The website is the result of a research project initiated in February 2012, whose goal was to examine political finance regulation in each country from the perspective of the mechanisms protecting policy-making against undue influence of interest groups. In addition to preparing the seven individual country reports, the project also conducted a comparative analysis of the different systems and highlighted advantages and disadvantages of each one, emphasising arrangements that can be seen as best practice.

The country reports are published on the website and cover the specific features of each regulatory system, including an assessment of the effectiveness of adopted solutions, case studies and policy recommendations. In addition to the country-specific recommendations, three common recommendations for the participating countries have been developed: (a) to increase availability of information on donors and original invoices and receipts on party expenditures; (b) to  strengthen the role of public institutions responsible for the oversight of party financing; and (c) to provide long-term financing of political parties from the public budget. The analysis and recommendations are published in English and Russian language versions.

A more detailed analysis of the country reports allows for a closer overview of how the regulatory systems differ from country to country and the particularly weaknesses that each country’s system presents.  The Armenia country report shows, for instance, how the lack of sanctions to false financial reports by political parties or illegal donations to election funds negatively affects the political finance environment in the country. In Estonia, the possibility of cash donations severely hinders transparency regarding the funds that political parties and campaigns receive. In Georgia, differently than in other of the selected countries, the country report emphasises issues related to the unequal application of electoral laws to different parties, which jeopardises the fairness of political competition and the electoral process. Apart from specific issues that each country faces, there are common obstacles to more integrity and equity in political finance in some of the countries, such as the need for restrictions on private or corporate donations, and for increased transparency and detail in the disclosure of donations and expenditures.

The participants to the project hope that the initiative will stimulate further discussion on the need for reforms in the political party financing sector and further advocacy efforts. In the long term, this initiative aims to determine positive changes in the financing of political parties and to contribute to improving transparency in this field as well as to prevent corruption.

 

*The other organisations contributing to this project are: Stefan Batory Foundation (Poland); Stanczyk Institute of Civic Thought Foundation (Poland); Institute for Development and Social Initiatives (IDIS) “Viitorul” (Moldova); Georgian Young Lawyers’ Association (GYLA) (Georgia); Transparency International Anti-Corruption Centre (Armenia); Transparency International Czech Republic; Transparency International Estonia; and Open Society Forum (Mongolia).

 

Corruption in Public Construction Target of Creative Initiatives in Eastern Europe

Public construction contracts are typically among the government activities most vulnerable to corruption in most countries plagued by this phenomenon. Scandals involving procurement fraud and embezzlement of funds from public works have become more and more common, and in some cases indications of corruption are so flagrant that the resulting buildings, bridges and other landmarks are seen by the public as true monuments to corruption. Recent initiatives in two Eastern European countries are now making use of that to increase awareness about the problem and insure that old abuses are not forgotten.

Delna Society for Transparency, Transparency International’s national chapter in Latvia, is one of the organisations exploring this issue. Already in 2009, Delna organised an exhibition entitled ‘History of Ugliness’, which featured photographs of 17 landmarks in Riga, all of which were suspected of having been built under severe irregularilities. According to the article “The ugly face of Latvia’s landmarks”, recently published by Delna’s representative Aiga Grisane on Transparency International’s blog, “[t]he aim of the exhibition was to bring the public’s attention to sites and buildings in Riga which are suspected of having been constructed using corrupt practices and to fuel discussions of urban planners of how to make the urban environment not only aesthetic but also ethical”.  Now the organisation has revisited its earlier initiative and has made all photos available on the online platform Foursquare, where users can spot the location of each landmark on a map of the city. This step is a great opportunity to give more visibility to their initiative.

Another initiative initiated in Prague, Czech Republic, takes a more satirical approach to putting corruption in public works in the spotlight. Theatre director and philosopher Petr Šourek is the creator of CorruptTour, an agency that takes Prague’s visitors and locals to see “the best of the worst” in the city, according to their slogan. In addition to the ‘Prague Corruption Tour’, they organise the tour ‘Hospitals on the Edge of the Law’, which takes people to three Prague hospitals where state money is allegedly being misused, and also lead visitors to addresses of individuals who have been involved in corruption cases. In an interview to Czech radio Mr. Šourek highlighted that “the main aim [of the project] was to find a fresh way to present the urgency of this issue to the public”. More details on this project and the motivations behind it are available in the interview with Mr. Šourek published by Radio Praha.

The pictures above are featured respectively in the article by Aiga Grisane and in the interview by Radio Praha.

 

TI Releases New Study on Corruption Risks in Eastern European Countries

A new report released by Transparency International (TI) examines the main corruption risks in four Eastern European countries, namely Czech Republic, Hungary, Poland and Slovakia. According to the study, reforms to strengthen democratic institutions and the anti-corruption legal framework in these countries, undertaken largely as part of their accession process to the European Union, have not been successful in minimising corruption risks, and the danger of political influence over fundamental control institutions remains.

The report points out that some of the institutions resulting from those reforms have in fact been weakened or entirely abandoned by dominant political actors after the accession. According to Miklos Marschall, Deputy Managing Director at Transparency International, “the laws and institutions against corruption in the Visegrad region will remain empty shells without a meaningful commitment to transparency. Most important is that high level public servants and politicians declare their assets and interests, public institutions must be independent from influence and there needs to be better checks on party financing”.

TI’s new report, based on national surveys assessing the strength of the anti-corruption frameworks of these four countries, captures some important similarities and differences in the region. Among the common risks identified in the study are weaknesses in party financing regulation and vulnerabilities related to corruption in the business sector. Nevertheless, some of the positive aspects raised are related to the relative independence and leeway of civil society and media and the importance of investigative journalists and bloggers in exposing corruption in these countries.

For more detailed information on the report, please read the press release “Post-communist institutions failing to stop corruption in Visegrad countries” on transparency.org.

 

Czech Doctor Persecuted after Blowing the Whistle

Last year, Dr. Martin Konečný, a doctor at a psychological clinic close to Karlovy Vary, broke patient confidentiality to denounce one of his pacients, a former policewoman convicted for bribery, who had told him that she was negotiating a presidential pardon of her sentence in exchange for a pay-off to President Václav Klaus (pictured here). In a recent interview, he revealed that his effort to expose a corruption case has cost him his job and even led him to move to another town.

Dr. Konečný stated that he faced strong pressure from his clinic to resign even before he denounced the pacient, when he consulted with the clinic’s management about his willigness to report the case. Eventually he decided to resign, but the hospital denies that this was the result of pressure from the management.

After moving away from the Karlovy Vary region and taking a position at another clinic, Dr. Konečný finally filed a criminal complaint about what he had witnessed and brought the case to the press. He was immediately asked to leave the new job by the clinic’s management, and was suddenly contacted by several instutions with inquiries about his tax declarations and finances. Even when he was called in by the police for questioning about the complaint he had filed, the focus of the questions were rather on his motivations and not on the facts that he had reported.

This case is an example of the kind of constraints and resistance that whistleblowers are still faced with in some societies when they decide to bring to light cases of wrongdoing by public authorities.

For additional information, read the article “Czech whistleblower ‘hounded’ over presidential pardon corruption claims” on ceskapozice.cz. The picture portrayed here is also featured in the article.

A Diagnosis of Corruption in the Czech Republic

As the different surveys and opinion polls suggest, corruption and lack of transparency is, despite minor improvements, the longstanding problem in the Czech Republic´s public space. Perceived as the burning issue, the discourse on introduction of new anticorruption measures is high on the political parties´ list of priority agenda within the current political campaign before May 2010 general elections. How does that play out in the long run?

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