Public Sector Governance

Democracy and Government Accountability

(more articles)

• Ireland: Challenges posed by Proposed Ethics Bill
• Is U.S. Ethics Reform Meaningful?
• CED Recommendations for US Lobbying Reform
• CED Report on "Making Washington Work"
• Hidden Rivers: Trade Associations and Political Spending
• James Thurber Senate Testimony on Lobbying Reform
• US Lobbying Reform Summit
• Corrupted By Lunch? WSJ editorial on US Lobbying Reform
• Russian Civil Society Under Threat
• Corruption and Democracy in Nepal
• World Bank Governance Indicators

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Ethics Bill Amendment to Increase Risk of Corruption in Ireland

A report from Transparency International, Ireland.

Dublin, 26 April 2007: Government proposals to raise the limit at which gifts and loans to Oireachtas members (Irish Parliament) should be disclosed are disproportionate and will only increase the risk of corruption in political finance and government.

The current disclosure limit of €650 is planned to be increased to €2000 in any one year. This will allow politicians to treble the value of gifts or loans that they can keep secret. The increase is five times the combined rate of inflation over the period since the limits were first introduced.

‘This is a significant step backwards and may further damage Ireland’s reputation for political integrity. Ireland already has a poor reputation for what is known as “legal corruption”. According to the World Bank, Ireland ranks behind some countries such as Malaysia and Ghana for levels of undue influence on politics.’ said TI Ireland’s Chief Executive John Devitt.

A number of proposed reforms have yet to be implemented to reduce the risk of corruption and undue influence in politics. Political parties are currently not obliged to publish audited accounts on income other than that they receive from the State; while appointments to the boards of public bodies remain largely at the discretion of individual Ministers. In addition, a recent OECD report on safeguards against bribery criticised the lack of comprehensive whistleblower safeguards for employees in the private and public sector.

According to the Global Corruption Barometer, a survey published by TI in 2005, political parties are believed to be the most corrupt institutions in the State. ‘Given the low level of public trust in politicians, it is regretful that Government is prepared to pass an Ethics Bill that actually increases the risk of corruption.’ added Devitt.

TI Ireland will publish a report on safeguards against corruption in Ireland later this year. The National Integrity System Study which is funded by the Department of Justice, Equality and Law Reform is due to be released this autumn.

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Is U.S. Ethics Reform in Congress Meaningful?

After years of scandal in the U.S. Congress the new Democratic Party majorities in the Senate and the House of Representatives rushed ahead in January to enact ethics reforms. Many people will be skeptical about whether these reforms will have any impact. The Committee for Economic Development (see following stories on this page) will continue to promote far-reaching changes in the U.S. system. To evaluate the new measures, however, we looked at the views of two observers with a very long record of insightful complaints about Congressional abuse. Below is an excerpt from an editorial published in The Washington Post (editorial of January 20, 2007) and a public statement by the Center for Public Integrity (released on January 26, 2007), a not-for-profit organization that has taken a forceful lead in exposing corruption in the United States.

From The Washington Post (an editorial published on editorial Saturday, January 20, 2007; Page A22)

Real Ethics Reform - The Senate passes a strong bill. It should stay that way.

THIS BEING a season for celebrating Shakespeare in Washington, perhaps the best way to describe the ethics and lobbying bill that passed the Senate on Thursday is to quote the Bard: "All's Well That Ends Well." The final package is the strongest ethics legislation to emerge from Congress yet. Like the rules changes the House adopted this month, it would bar lawmakers from taking free gifts, meals and entertainment. No longer would lobbyists and private interests be allowed to throw lavish parties honoring lawmakers at political conventions. Travel paid for by private interests would be dramatically curtailed. Lawmakers' cut-rate corporate jet flights would be grounded. The revolving door would be slowed, with lawmakers having to wait two years, not the current one year, before lobbying their former colleagues.

The bill would bring far more transparency to money in Washington: how lawmakers choose to spend it and how it is deployed to influence them. On the spending side, the measure calls for disclosure of an array of earmarked pet projects. On the influence side, lobbyists would not only have to report their own campaign contributions, but they also would have to list the fundraisers they held and the "bundled" contributions they arranged or collected for lawmakers, the real source of their power.

We've had our doubts about the commitment of Senate Majority Leader Harry M. Reid (D-Nev.) to a strong ethics bill; we've had our qualms about his conduct. But Mr. Reid, along with Sens. Russell Feingold (D-Wis.) and Barack Obama (D-Ill.), deserves credit for assembling and passing this package. Whether Minority Leader Mitch McConnell (R-Ky.) was trying to sabotage passage of the bill when he temporarily blocked a move to end debate, as reformers contend, or whether he was simply trying to demonstrate to the new majority that Senate Republicans can't be muscled aside, what matters is that the measure passed 96 to 2.

As always, there are provisions we wish had been included. It was disappointing that senators voted to strip from the bill a requirement that lobbyists disclose the costs of grass-roots efforts to influence lawmakers. It was unfortunate that backers of an independent Office of Public Integrity to beef up enforcement of ethics rules insisted on a vote on their measure, which lost even more resoundingly than it did last year. As the House studies how to improve the current, inadequate enforcement system, we hope the Senate vote won't be the chamber's last word on some kind of independent enforcement mechanism.

The focus now moves to the House, which adopted new ethics rules but still needs to move on the lobbying changes. Following that, it's important that the resulting conference be held quickly to meld the two bills, not used as a behind-the-scenes vehicle to make quiet but crippling changes.

From the Center for Public Integrity, January 26, 2007:

After Scandals, Federal, State Officials Strengthen Ethics Laws

WASHINGTON, January 26, 2007 — Last week's overwhelming Senate vote to take on congressional ethics represents adramatic attitude shift on Capitol Hill. The latest ethics reform contained in the Legislative Transparency and Accountability Act of 2007 (S.1) will need to be reconciled with the House ethics bill passed the first week of January before it goes to President Bush. But the bill would put an end to the customs of years past, when infractions involving privately funded congressional travel traditionally went unpunished.

Over the past five years, the Center for Public Integrity extensively documented and reported on congressional travel, revealing ethics oversights such as incomplete disclosure forms, spurious descriptions of trips and staffers traveling to vacation destinations funded by private sponsors. Over a 5½-year period, ending June 30, 2005, lawmakers and their aides took at least 23,000 privately sponsored trips, valued at nearly $50 million. The latest Senate action prohibits travel funded by lobbyists and would put trips funded by other private groups under the scrutiny of the Ethics Committee.

"The Center's investigation into congressional travel uncovered an unreliable, ambiguous and flawed system that is supposed to ensure transparency, accountability and how our government is influenced," said Center Executive Director Bill Buzenberg. "We believe our documented study of travel by each member of Congress and staff member totaling more than $50 million spurred Congressional action and we are encouraged by the recent government ethics reforms on both the federal and state level."

Governors and state legislatures have also been reviewing their ethics laws in reaction to scandals. According to a 2005 Center study, a record $1 billion was spent by lobbyists to influence state lawmakers and officials. Alaska, Arkansas, Connecticut Hawaii, New Mexico, New York, Ohio and Wisconsin have all pushed for stronger ethics legislation, with Hawaii citing the Center's work in legislation (S.B.1690) expanding its lobbying disclosure requirements.

Other notable Senate amendments include:

• increasing penalties for noncompliance with legislative disclosure requirements
• requiring the Comptroller General to annually audit lobbyist disclosure information
• requiring the House Committee on Standards of Official Conduct and the Senate Select Committee on Ethics to annually report on alleged ethics violations
• amending the federal criminal code to extend from one to two years the ban on lobbying contacts by former members of Congress and their senior staff
• requiring members to prohibit all staff from having any official contact with that member's spouse or immediate family if they are registered lobbyists
• allowing nonprofit 501(c)3 organizations to continue to pay for congressional trips
• requiring members to reimburse private aircraft owners at the full charter rate
• disclosing earmarks contained in reports that accompany bills and conference reports

Only two senators, Tom Coburn (R-Okla.) and Orrin Hatch (R-Utah), voted against the full bill. The Senate also rejected an amendment that would have created an independent Office of Public Integrity with authority to investigate ethics complaints.

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U.S. Business Group Campaigns for Ethics In U.S. Congress

On the eve of the start of a new U.S. session of the Congress a leading “think tank” in Washington, whose Trustees are largely leaders of U.S. corporations, released major recommendations to restore ethics to the political life of the U.S. capital.

The Committee for Economic Development (CED) noted in a statement on January 3, 2007, that its recommendations seek to respond to “widespread public concern – and even cynicism – about dysfunctional federal governance and policymaking.” CED President, Charles E.M. Kolb noted, “According to exit polls during the most recent Congressional elections, voters cited corruption as the most important issue that influenced their vote.  The integrity and competence of our political leadership – both parties and both elected branches – have been called into question by repeated failures and ethical scandals.  Quite simply, it’s time to fix the process and make Washington work again for all Americans.”

The recommendations are part of CED’s multi-year “Making Washington Work (MWW)” project that focuses on: Legislative process and procedure; Lobbying; Earmarks; Ethics; Campaign finance; and, Redistricting abuse.

CED issued the following summary of its lobbying reforms, which it has sent to key leaders of the United States Congress:

The lobbying profession has been sullied by the illegal actions of Jack Abramoff, the criminal convictions of Reps. Randy “Duke” Cunningham and Robert Ney, and the charges against Rep. William Jefferson.  In all, fifteen Members of Congress were connected with some form of ethical scandal in the 2006 election. 

CED’s Lobbying Recommendations:

• Lobbying reform should enhance disclosure and transparency of lobbying activities and lobbyists;
• Lobbying activities and financial disclosure reports should be made more effective;
• Lobbying activities must be reported more rigorously and made more accessible to the American public;
• Violators of these rules must be uncovered and penalized; and
• There should be strong enforcement of lobbying law for lobbyists, Members of Congress and Congressional staff.

CED’s Lobbying Recommendations for Earmarks (a system under which Members of Congress have been able to add billions of dollars to government spending without full oversight or review by the full Congress):

The recent ballooning of earmarks in the actions of Congress may be the most offensive legislative manipulation, and possibly the most egregious of all forms of misbehavior by Members of Congress.  In 1996, the Congressional Research Service identified some 3,000 earmarks worth $19.5 billion.  By 2006, those numbers rose to 15,500 earmarks valued at $64 billion. 

• CED supports transparency, accountability, and deliberation reforms for earmarks in all bills – appropriations, authorization, and revenue legislation;
  
  
• The sponsor of every earmarking provision, outlay or revenue should be identified and any relationship between that sponsor and the recipient of the earmark explained;
  
  
• Bills with earmarks should be subject to an extended layover period of three days (72 hours) after copies of the bills are available to Members; and
  
  
• Both chambers of the Congress, in their rules, should allow a single Member to demand a separate roll-call vote for any individual earmark.
  
  

Throughout the remainder of the year, CED will release additional recommendations on ethics reform, campaign finance and redistricting. 

Posted 1/12/07

U.S. Business Calls For Reform Of Congress

“Making Washington Work Project” Launched By the
Committee for Economic Development (CED) Strives to Enhance the Ethics,
Transparency and Accountability of the Congress

CED, founded more than 65 years ago, includes more than 250 American chief executive officers among its Trustees. It frequently publishes reports on public policy that reflect the views of business leaders concerned to see reforms, be it in education and health policies, trade and economic development, or political campaign finance and the ethical approaches of the U.S. Congress. CED’s new multi-year initiative involves not only business leaders, but also a spectrum of politicians and scholars. The following is from the introduction to a report published on November 9, 2006.

The Washington policymaking and political process is broken. There are hostility and paralysis in our national government. Washington politics has degenerated to the point where civic debate has become uncivil invective; analysis has been displaced by ideology; and vital public issues are not solved, but rather stored for future partisan use. And nowhere in Washington has this failure been more abject, and more consequential, than in the workings of Congress.

As members of the business community, we step forward not to ask for some law or regulation that will benefit our personal or business interest, but rather to pursue the public interest. Our own interest lies in the public interest as well. When Washington does not work, when critical issues are addressed only as political footballs, it is bad for business – and for all of America. The disappearance of what we call the “vital center,” where ideas are tested in good faith through fair debate, is a threat to our firms, our shareholders, our employees, our customers, our fellow voters, and ultimately our democracy – a threat that is unique and extreme in our experience. We cannot be silent when so much is at risk.

The inability of our political system - in the absence of a vigorous, bipartisan center - to address effectively such known and crucial issues as the rising accumulation of public debt, ballooning and crippling health-care costs, a looming Social Security shortfall, an education system that leaves too many of our children behind world standards, and serious energy and environmental problems is a scandal of monumental proportions. The governmental and political system that cannot confront these visible challenges will surely lack the reserves of comity and trust to face any unknown and sudden – and perhaps even more dangerous – crises.

In recent years, the U.S. Congress has responded to evidence of corruption and self-dealing in business with strong and swift action – especially in the Sarbanes-Oxley legislation. We believe that this law was proper, and has proved beneficial. So when faced with all of the recent evidence of its own abuse and dysfunction, Congress should have acted with the same vigor and resolve. The stakes were certainly even greater. But Congress has shown itself unwilling to impose upon itself the same kinds of disciplines that it has on others. It has done next to nothing, either to identify and root out scandal, or to resolve the pressing issues that threaten the prosperity of all Americans. This is unacceptable. It is time for Congress to adopt for itself the kind of oversight and accountability that it put on private enterprise with Sarbanes-Oxley.

Criticism without remedy has no value. So what are the principles for successful leadership in government, or in business?

First, there must be transparency. Decisions should be made in the open, following rules that are universally understood. The reasons why a decision is made should be stated clearly, and debated fairly. Reasonable alternatives must be allowed to be presented, and must be weighed against each other. All parties must be heard.

Second, there must be accountability. It must be clear who is assigned a given task – including who is responsible for monitoring and maintaining ethical behavior for an organization. Those who are assigned a task must be judged according to their performance, which must be documented fairly and openly. Also, those with responsibility must be given the tools to fulfill it, and other authorities must not interfere to pursue their own purposes.

Finally, there must be enforcement. In the first instance, rules should be followed. If and when rules are violated, those who have done so must be identified, and suitable sanctions must be imposed, lest the failure to do so should encourage successively greater and greater violations.

These three principles apply to virtually all of CED’s concerns regarding the breakdown of institutional Washington, and we will make reference to them in every statement that we issue as a part of this project.

For the full report, follow this link.

Posted 12/4/06

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Hidden Rivers: How Trade Associations Conceal Political Spending

In a new report entitled “Hidden Rivers: How trade associations conceal political spending, its threat to companies, and what shareholders can do,” the Center for Political Accountability (CPA), a non-profit coordinating a nationwide shareholder initiative on corporate political disclosure and accountability, describes how some trade associations help companies conceal and spend over $100 million in corporate funds.  Calling these trade associations “the Swiss bank accounts of American politics,” the report notes that this undisclosed spending poses serious risks to company economic interests and reputations and to shareholder value.

“Hidden Rivers” identifies 18 of well-known companies whose payments to several trade associations (including the U.S. Chamber of Commerce, the National Association of Manufacturers, the Business Roundtable, the American Tort Reform Association, the Pharmaceutical Research & Manufacturers of America, and Americans for Job Security) and political contributions underwrote, directly or indirectly, political activity in 2004 on behalf of a group of state judicial candidates with strong stands on controversial social issues that companies traditionally have avoided. In one case, $300,000 from a trade association funded ads on behalf of a Mississippi supreme court candidate accused of running a racist campaign.

According to the CPA, trade association political spending is subject to even less disclosure than the much criticized spending of independent political committees ("527s"). “Hidden Rivers” details how the 2002 Bi-Partisan Campaign Act of 2002, meant to limit “soft money” political contributions, served as a turning point in campaign funding, with companies redirecting money to other groups, such as trade associations. While soft money contributed by corporations to independent political committees must be disclosed by the recipient, corporate payments made to trade associations that are used for political purposes remain completely hidden. Neither companies nor associations are required to report the source, the amount or the recipients of these funds, in most cases, even if they are earmarked for a particular political purpose. Moreover, many trade associations do not disclose their membership.

The report examines judicial races in Illinois, Ohio, West Virginia, Alabama, Mississippi, Louisiana and Texas in 2004 to develop a picture of the secret flow of corporate money often passes through trade associations and related groups. It focuses on six judicial races in four states to trace how money went from companies through associations to candidates or campaign activities.

The report describes how, over the past decade, many trade associations have emerged as powerful conduits for political spending, which, in many cases, enable companies to claim ignorance when their money ends up supporting candidates or organizations they wouldn’t otherwise publicly associate with or whose interests are in direct conflict with those of their shareholders. Drawing upon specific case studies it shows how weak political disclosure at the state level makes corporate political spending difficult, if not impossible to uncover.

Among the study’s key points:

• 3M, Altria, Anheuser Busch, Boeing, DaimlerChrysler, Dow Chemical, Georgia-Pacific, GlaxoSmithKline, Johnson & Johnson, MeadWestvaco, Merck, MetLife, New York Life Insurance, Pfizer, R.J. Reynolds, TRW Automotive, Weyerhaeuser, and Wyeth were among the companies that made direct or indirect political payments in 2004 state judicial races that jeopardized their credibility and business reputations. The Center found that the companies have personnel policies regarding gay employees and diversity that were in direct conflict with the positions of the judicial candidates who the companies directly or indirectly supported in 2004;
  
  
• at least one trade association, Americans for Job Security, was apparently used solely as a conduit to hide corporate political spending and insulate companies from accountability; the use of the U.S. Chamber of Commerce to hide the political spending of Microsoft and the brand name pharmaceutical companies raises serious questions about whose interests the group represents and whether it may be working against the interests of its other members;
  
  
• the absence of disclosure and accountability in trade association political spending blocks shareholders from getting a full picture to assess a company’s political expenditures. They also deny directors information critical to carrying out their fiduciary responsibility to oversee all of a company’s activities; and
  
  
• the lack of corporate oversight of trade association political activity may unwittingly expose corporation members to legal liability for actions of the trade association.
  
  

The report lays out a seven-point action agenda to protect shareholders and companies from the risks of secret trade association political spending. Among other things, it calls on companies to disclose and account for payments to trade associations and other tax-exempt groups that are used for political activity, require board oversight of these expenditures, and demand that trade associations of which they are members inform and consult them about the group’s political activities and spending. Finally, in the report, the CPA urges companies to drop their memberships in associations that refuse to comply.

For the full report please visit the CPA’s website: www.politicalaccountability.net

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Expert James A. Thurber Outlines the Critical Ethics Reforms that the U.S. Senate Should Consider

Testimony to the U.S. Senate Committee on Rules and Administration, February 8, 2006.

By Dr. James A. Thurber, Distinguished Professor & Director, Center for Congressional and Presidential Studies American University Washington, DC

(Please See Below on this Page for Coverage of a January Washington Lobbying Reform Summitt, as well as a January 2006 Wall Street Journal Editorial on Reform Proposals)

Importance and Scale of Lobbying

Public advocacy, lobbying, is a fundamental right guaranteed by our Constitution and plays an essential role in the functions of Congress, representation, lawmaking, deliberation, oversight and the education of the American public.  Lobbying is an honorable profession, but this profession is in deep trouble as a result of the illegal actions of Jack Abramoff, the criminal case against Representative Duke Cunningham and the charges against Representative William Jefferson and a multitude of other accusations against lobbyists, Members and staff. All of this has damaged our democracy and the tarnished the image of how Washington works. 

Lobbying is the third largest enterprise in our nation’s capital after government and tourism, with an estimated 27,611 (plus) full-time professional lobbyists registered by Congress representing virtually every type of interest in America.  It has been estimated that the number of persons employed in Washington who are either lobbyists or associated with them in some way is well over 100,000.  Spending by registered lobbyists has increased thirty percent in the last five years to $2.1 billion.  That comes to $177 million per Member per year or $407,599 per month per Member.  That is just the tip of the lobbying expenditures since it only includes what is recorded by registered lobbyists in public records.  It does not include money spend for grassroots organizing, coalition building, issue advertising on television, radio, and in the print media, advocacy on the Internet and websites.  Some estimate the total spent on lobbying is closer to $8 billion per year in Washington. 

Several “dilemmas” are presented by the current interest group and lobbying scandals that have nothing to do with breaking the law as was done by Jack Abramoff and others.  They include the huge sums of money put into the process by lobbyists and interest groups and the norm of reciprocity that exists between those advocating public policy outside of government and those in government. I would like to focus on two aspects of lobbying and procedural reform that will address these two dilemmas:  enforcement and transparency. 

Enforcement

Lobbying reform should strengthen the enforcement of existing laws and ethics rules that cover Members of Congress, staff and lobbyists.  The congressional committees with jurisdiction over lobbying laws and ethics should pursue rigorous oversight over the administration of these laws and codes of ethics.  Congress and its committees need to enforce existing laws and ethics or create new institutions that will do that.  The congressional bodies that are responsible for enforcing the laws and ethics rules are broken, but fortunately for us all, not irretrievably broken. They have not been doing their job. The Senate and House Ethics Committees have neither the resources not the inclination to investigate serious allegations of ethics violations by Members of Congress. The failure of the ethics committees to oversee and enforce existing ethics rules must stop.  At a minimum the Congressional committees with jurisdiction over lobbying and ethics should hold regular oversight hearings, investigate allegations of existing ethics and lobbying law violations.  The committees should make recommendations to the full House and Senate for censure and sanctions.  Congress does not need to change the limit on gifts, it needs to effectively oversee and enforce the existing gift ban.  Congress does not need to prohibit the support of legitimate educational travel by Members and staff, it needs to enforce existing rules and significantly limit private interests from financing or subsidizing the travel for Members of Congress and staff.

In a perfect world all this would occur.  However, this is not a perfect world so I urge the Committee to support the establishment of an independent, nonpartisan and professional office to oversee and enforce ethics rules and lobbying laws.  Such an office would monitor and oversee lobbying reports, conduct investigations of allegations of ethics violations, advise Members, staff and lobbyists on compliance with the rules, and, if necessary, refer potential lobbying law violations to the Department of Justice for civil enforcement.  Several Members have introduced legislation to create the office.  It could be structured to assist the committees responsible for seeing that the rules are followed.  I support these proposed reforms.   

Transparency

Lobbying reform should enhance disclosure and transparency of lobbying activities and lobbyists.  Lobbying activities and financial disclosure reports should be improved.  Lobbying activities must be reported more rigorously and made more accessible to the American public.  I recommend that lobbying reports required under existing law be filed by lobbyists in a common format for the House and the Senate and that these reports be made available and easily retrievable from a common website.  The reports should be simple and easy to complete by lobbyists or they may not be filed.  They should be filed on a quarterly basis in a timely fashion rather than filed semi-annually.  In most instances, four weeks would be enough time for filing.  Many reports are now filed months late or not at all.  There should be sanctions for those not filing in a timely fashion.  The reports should include a list of Members’ offices and congressional committees that were directly lobbied during the quarter.  Congress should also make the reports of all privately funded travel transparent and available to the public.

In the sprit of transparency there should be a public report of earmarks, who sponsors them and the justification for each earmark especially if it is added to a final conference report without having been approved by a vote of either the House or Senate.  There is nothing inherently wrong with earmarks, but there is if they are hidden and done secretly and without deliberation.  When justified and appropriate, Members should be able to add earmarks to spending bills, but Members should be required to justify them to their colleagues and to the American public.  I support Senator Lott and Senator Feinstein’s bill on earmarks and conference reports. It does not specifically prohibit earmarks but allows a point of order against any that are added to a Conference Report that were not considered by either house.  A Senator would need 60 votes to wave the point of order.  It would also require the conference report to be available to the Senate on the Internet for a least 24 hours, another reform toward more transparency that would enhance deliberation.  The 24 hours is a fair amount of time for earmarks that are added during the work week, but more time should be allowed if an earmark is inserted over a weekend or holiday if the 24 hours falls within these days.

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Lobbying Reform, Ethics and the US Political System

A “Lobbying Reform Summit” convened at the National Press Club in Washington DC on January 26, 2006 to focus on some of the critical ethical challenges now confronting the American political system.

The meeting was organized by the Center for Congressional and Presidential Studies (CCPS) at American University and by the Committee for Economic Development.

Professor James Thurber, Director of CCPS, opened by highlighting the huge influence lobbyists exert in Washington: he noted that annual spending by lobbyists on Member of Congress amounts to around $2.1 billion (approximately a 30% gain in the last 5 years). Moreover, he pointed out that this sum represents only the tip of the iceberg as it does not include, for example, campaign spending and political advertising. He continued by saying that there are an estimated 150,000 lobbyists in Washington DC today.

While cleaning up the lobbying system has become a priority for policymakers, in part due to public outrage over the Abramoff scandal, Mr. Thurber emphasized that is only one piece of a larger effort to clean up Washington. He noted that lobbying reform is closely linked to the broader issues of campaign finance reform (total campaign spending in Federal elections in the United States in 2004 involved approximately $4.2 billion) and Congressional Procedural Reform, both of which must be addressed to achieve real change in Congressional ethics.

Former Congressman Lee Hamilton (D-Indiana) discussed the issue of private funding for travel by Members of Congress. He argued that, while Congressional travel can serve an important educational role in policymaking, it too often enables the special interests that fund the trips to exercise excessive control over the time and actions of Congressmen and, by extension, the legislative process. He proposed a full-scale ban on all forms of privately paid travel for Members of Congress. He contended that in order to ensure that trips truly serve the public interest, all travel should be fully disclosed and paid for by the government.

Leading expert on lobbying and President of Democracy 21, Fred Wertheimer, proposed the establishment of a special Congressional "office of integrity" with independent powers to oversee the enforcement of new ethics rules and regulations. According to Wertheimer, this suggestion is gathering support. This is partly because it is widely recognized that it is very difficult for Congressmen to fully and impartially oversee the ethics of their peers. In fact, he pointed out that both the ethics committees of the U.S. House of Representatives and the U.S. Senate have been largely inactive in recent years.

U.S. Senator Barack Obama (D-Illinois) noted that he has been designated by his Democratic colleagues to lead the reform effort in the U.S. Senate, which he hopes will be bi-partisan. He underscored that the fundamental problem in the current system is the dominating influence of money in politics, of which corruption in lobbying is a symptom. He said that politicians are forced to spend a disproportionate amount of time with the very small number of Americans wealthy enough to contribute to political campaigns and that major corporations (he singled-out oil and pharmaceutical industries) have displayed exceptional power in influencing legislation in ways that benefit them at the expense of the great majority of the American people.  

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Corrupted By Lunch

A Wall Street Journal Editorial, As Ethics Reforms Are Proposed in the United States Congress

"Corrupted by Lunch" Is the headline on the leading editorial article of The Wall Street Journal on January 19, 2006. The opinion article highlights the folly of some of the aspects of the current wave of public statements by leading members of the United States Congress on ethics reform.

As investigations deepen into unethical actions by numerous members of Congress and their current and former staff, so there is a scramble by political leaders to propose reforms. The editorial starts by suggesting that these leaders are: “telling the country they can all be seduced for as little as a free lunch. How else to interpret the House Republican proposal this week to clamp down on Members who dine out on a lobbyist's dime? "

The editorial then describes various other rather modest proposals that are being presented as if they were the solution to the ethics difficulties. Then, write the editors, “The truth is that none of this will truly reduce corruption any more than the many previous lobbying reforms did, or the campaign finance reform of 1974 did, or the McCain-Feingold reform of 2002 did. Money always finds a way in politics, as the American people instinctively understand.

“And because these reforms largely restrict the behavior of Americans who aren't in Congress, they have the cumulative effect of further insulating politicians from accountability by voters and their delegates, some of whom are lobbyists. We doubt it's an accident that the rate of incumbent re-election has only increased in recent decades along with the proliferation of lobbyist and campaign-finance restrictions. If the Members were serious about reform, they'd put in place rules that restrict themselves. They could insist, for example, that at least three days pass after final legislation is drafted, so they could actually read the bills before they vote on them. Or they could eliminate spending "earmarks," which have proliferated under GOP rule and are now a preferred way that Members pay off lobbyists. At a collective cost to taxpayers of about $27 billion in Fiscal 2005, earmarks are a lot more expensive than a free lunch.”

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Russia: Civil Society Under Threat

The Wall Street Journal reported on January 18 that "Russian prosecutors said they closed down a foreign charity in the country's troubled Caucasus region just as a much-criticized law tightening state control over nongovernmental organizations entered Russia's statute books. The Center for Peacemaking and Community Development, or CPCD, a Russian-British humanitarian group, confirmed that a local court had shut down its operations in Ingushetia, a small province in the North Caucasus that borders Chechnya. While the closure wasn't linked to the new law, the ban typifies the increasingly chilly climate for international humanitarian groups in Russia."

The news story continued: "Russian prosecutors said the court also was considering their request to ban another charity, the U.S.-based International Medical Corps. A statement issued by the Prosecutor General's Office said neither CPCD nor IMC had permission to operate in Ingushetia. But IMC's Russia director said the organization's current license is valid until 2008. CPCD, which ran a conflict-resolution program and women's center, said it plans to reregister as a Russian entity so it can continue to work in Ingushetia.The court action came as a controversial bill increasing state supervision of nongovernmental organizations officially became law with its publication yesterday in the government newspaper Rossiiskaya Gazeta."

Resolution by Transparency International
Annual Membership Meeting, 13 November 2005

Transparency International, the global coalition against corruption, strongly condemns provisions of the draft law “On Introducing Amendments to Certain Legislative Acts of the Russian Federation” which promotes discrimination against non-governmental organisations and the rights of foreign organisations and citizens in Russia. The draft legislation proposes putting severe restrictions on civil society organisations in Russia and contradicts existing laws, conventions and basic standards protecting the freedom of speech and association, and is contrary to the Constitution of the Russian Federation.

Corruption undermines the very fabric of the Russian state and society, and can only be fought effectively with the active participation of strong and independent civil society organisations. The Transparency International movement calls on the Russian State Duma, to abandon these restrictive provisions and publicly endorse the freedom of civil society organisations to operate freely throughout the Russian Federation. Transparency International urges the other countries of the Group of Eight industrialised nations to make specific representations on this issue to the government of Russia during its G-8 presidency.  (The resolution was proposed by Elena Panfilova, Director of TI-Russia.)

TI Resolution on Volcker Commission: The TI Annual Meeting also approved a resolution drawing attention to the danger that critical documents compiled by the Volcker Commission on the UN oil-for-food program in Iraq may be lost, thus gravely damaging prospects for follow-up prosecutions - TI.

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Corruption & Democracy in Nepal

by Dr. Devendra Raj Panday

Nepalese anti-corruption leader Dr. Devendra Raj Panday sent EthicsWorld a detailed article on the state of corruption in his country, which is published in full at the website of TI-Nepal.

He starts his article by noting, “ In order to have clean, impartial, and effective governance, one needs to go beyond the domain of the state for initiating reform. Much work needs to be done at the societal level on the issues of values and norms. Such work should be the responsibility of social leaders trusted by the people. Only social leaders can talk about higher motives and goals beyond what a personal utility maximizing political and economic man or woman (including the king) does, and inspire the society. Unfortunately, in the age of politics and power and consultants and experts, social leadership is a vanishing vocation.”

Dr. Panday introduces his analysis by stating, “ One cannot be sure of the real extent of corruption in any country. In Nepal, this is even more true due to a lack of appropriate surveys and data. Even Transparency International’s Corruption Perception Index (CPI) was able, for only the first time last year, to include Nepal. When the incidence or degree of corruption cannot be measured and debated with some certainty, opinion about it becomes subjective, even when the problem is real."

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World Bank Issues Key Governance Indicators

The World Bank’s governance indicators leave no doubt that corruption is seen to be pervasive in many of the very poorest countries. In these same countries where corruption flourishes we find, according to the indicators, that levels of press freedom and public accountability of officials is low; that political stability is often precarious; that government effectiveness and regulatory quality are inadequate; and that the rule of law provides cause for grave skepticism. The data provides a wealth of detailed insights into critical developments in governance and anti-corruption across the globe. The World Bank has just published: Governance Matters IV: Governance Indicators for 1996-2004, May 2005, by Daniel Kauffman, Aart Kraay, and Massimo Mastruzzi.

*Dataset based upon Percentile Rank (0-100), indicating the percentage of countries worldwide that rate below the selected country (therefore higher values imply better governance ratings). Subject to margin of error.
Notes on the next page

Notes:

Definition of Governance Indicators:

• Voice and Accountability—measuring political, civil and human rights; also includes indicators measuring the independence of the media.
• Political Stability—measuring the likelihood of violent threats to, or changes in, government, including terrorism.
• Government Effectiveness—measuring the competence of the bureaucracy and the quality of public service delivery; also measures the independence of the civil service from political pressures and the credibility of the government’s commitment to policies.
• Regulatory Quality—measuring the incidence of market-unfriendly policies such as price controls or inadequate bank supervision.
• Rule of Law—measuring the quality of contract enforcement, the police, and the courts, as well as the likelihood of crime and violence.
• Control of Corruption—measuring the exercise of public power for private gain, including both petty and grand corruption and state capture.

 

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