Feasible and efficient measures (legislative, administrative, ecc.) against corruption: The Italian example1.
by Grazia Mannozzi,
1. Corruption as a relevant issue: economic, political and social concerns.
1.1. Criminological constants of corruption.
Fighting corruption and the crimes which are in a strict, functional inter-dependence with corruption itself (for example: false accounting2 and money laundering) represents one of the main criminal policy aims at both national and international level.
In particular, corruption is perceived as a relevant issue at international and domestic level (although at a different stage in the various European countries) for the following reasons:
a) it is a “criminological constant”: from the Roman law up till now, corruption is a crime expressly provided by all the legal systems;
b) it is characterised by an evolution toward more serious and pervasive forms, which are linked, for example, to the globalisation. Corruption is related to the activity of very big companies; the amount of slush-money becomes higher and higher; the number of public officials involved in corruption is increasing, as it includes, at least in cases of «systemic» corruption, the so called «intermediaries», which act as a «bridge» between the private person and the politician;
c) corruption is independent from economic frames and models. It characterises, although in a different measure, the capitalistic countries, the emerging countries and the developing countries3 ;
d) corruption is a typical exportable crime;
e) last but not least, corruption has a wide offensive dimension, which has been widely explained by economists4.
1.2. Corruption: economic, political and social concerns.
In order to better evaluate the real contents of the several concerns about the effects of corruption, a good starting point could be the analysis of the Preambles of the main international Conventions against corruption .
1.2.1. Following a diachronic perspective, I’m going to start by illustrating the most relevant concerns, expressed by the 1997 OECD Convention, about the dimension of corruption, linked both to the potential volume of the slush money exchanged, and to the effects of corruption on good governance and on the regular competition.
According to the OECD:
«bribery is a widespread phenomenon in international business transactions, including trade and investment, which raises serious moral and political concerns, undermines good governance and economic development, and distorts international competitive conditions».
Evidently, OECD adopts an economical perspective to look at corruption5. The correctness of such a perspective is confirmed by a lot of economic surveys, which explain how a high level of internal corruption may lower private investment, worsen the composition of public spending, produce misallocation of resources and talents, disparity and, finally, reduce the quality of the existing infrastructure and undermine the rationality of public spending.
Surveys on corruption were mainly carried out by the World Bank and the International Monetary Fund; the latter, in particular, underlines that:
"corrupted politicians appear to choose investment projects not on the basis of their intrinsic economic worth, but on the opportunity for bribes and kickbacks these project presents"6.
According to the reconstruction of the corruptive dynamics elaborated by Vito Tanzi and Hamid Davoodi :
"For a private enterprise, getting a contract to execute a project, especially a large one, can be very profitable. Therefore, managers of these enterprises may be willing to offer a “commission” to politicians who help them win the contract. Conversely, in many cases the act of bribery may not start with the enterprise but with the officials who control the decisions – in some countries it is apparently impossible to win a government contract without first paying a bribe. The payment of such a bribe is illegal in very few countries. In fact, the laws of certain major industrial countries regard commissions paid by domestic enterprises to foreign politicians as not only legal but also tax deductible, although this is changing, as discussed below. (…) When commissions are calculated as a percentage of project costs, the politicians or public officials who receive payment for helping the enterprise win the bid will have a vested interest in increasing the scope or the size of the project so they can get larger commissions. A commission of 2 percent of the cost of a four-lane road is understandably more tempting than 2 percent of the cost of a two-lane road. (…) The enterprise that pays the commission rarely suffers from the payment of the bribe, since it is usually fairly simple to recover that cost. First, if it is assured by corrupt officials of winning the bidding competition, the enterprise can include the cost of the commission in its bid. Second, it can reach an understanding with the influential official that the initial low bid can be adjusted upward along the way, presumably to reflect modifications to the basic design. Third, it can reduce its spending on the project by the amount of the bribe by skimping on the quality of the work performed and the materials used. Fourth, if the contract is stipulated in a cost-plus fashion, the enterprise can recover the cost of the commission by overpricing"7.
In short, corruption may distort decisions about the investment budget in such a way that the final results of public spending may be really miserable. As a consequence, the capital spending often fails to generate the growth economists expect8.
Thus, the survey carried out by Tanzi e Davoodi leads to four main hypothesis:
a) other things being equal, high corruption is associated with high public investment;
b) other things being equal, high corruption is associated with low government revenue;
c) other things being equal, high corruption is associated with low operation and maintenance expenditures;
d) other things being equal, high corruption is associated with poor quality of infrastructure.
1.2.2. In order to cope with corruption, the "Criminal Law Convention against corruption" adopted at Strasbourg in 1999 offers a wider perspective – including political ethic, rule of law, democracy and human rights. The economic profile is indeed linked to the human development, the stability of democratic rules and institutions, and the principle of equality.
In the Preamble it states that:
"corruption threatens the rule of law, democracy and human rights, undermines good governance, fairness and social justice, distorts competition, hinders economic development and endangers the stability of democratic institutions and the moral foundations of society".
Having this relevant statements in mind, it should be evaluated if contextualizing corruption among the violations of human rights may be correct and what kind of rights could be violated by a systemic and widespread corruption.
In the findings of the Anti-corruption conference held in Seoul in 2003, corruption should be seen as a crime against humanity as defined by the Rome Statute of the International Criminal Court Explanatory Memorandum. The human right violated is the right to live in a corruption free society9.
Corruption might violate human rights when10 ;
(a) it is at the origin of subsequent violations of human rights11;
(b) it may have a mere link to human right violation12 ;
(c) it is directly connected to a violation of human rights13.
In many other cases, corruption may represent a direct violation of human rights simply by creating unequal opportunity in gaining access to some right14. Such kind of corruption-induced disparity, which may alter the fair conditions of access to human rights produces the violation.
Nevertheless, it is necessary to be very prudent in considering corruption as a crime against human rights. From the point of view of the criminal law system (or, even better, from a "civil law country" point of view) it should be correct to separate the evaluation of socio-economic effects of corruption from the consideration of the juridical good damaged or endangered by corruption. If we re-think the crime of corruption as a violation of human rights, the lack of proportion between the concrete conduct (a single bribe) ad the damage to the juridical good protected by the norm on corruption (i.e. the total destruction of a specific human right) should be recognized. It implies that corruption has to be seen as a mere "crime of abstract danger"15. Re-thinking corruption as a crime against human rights may have negative effects on the correct selection of the Tatbestand of corruption, especially from the point of view of the enforcement of the rule of law. Finally, the option for a "human right" as a specific juridical good of corruption may affect the proper selection of the range of punishment fit to the objective and subjective seriousness of the crime.
1.2.3. In the UN Convention against corruption there is an express concern for the connection between corruption and other crimes, in particular organised crime, money laundering and economic crimes in general.
The Convention underlines that the States must be
"Concerned about the seriousness of problems and threats posed by corruption to the stability and security of societies, undermining the institutions and values of democracy, ethical values and justice and jeopardizing sustainable development and the rule of law,
Concerned also about the links between corruption and other forms of crime, in particular organized crime and economic crime, including money-laundering,
Concerned further about cases of corruption that involve vast quantities of assets, which may constitute a substantial portion of the resources of States, and that threaten the political stability and sustainable development of those States".
The range of problems showed by the UN is wide and is worthy of a great attention. The inter-dependence between criminal macro-phenomenon can be described through a metaphor of two different «chains», which are difficult to break: (a) Mafia-type organisations - public administration - political power; and (b) Mafia-type organisations - finance (the latter is aimed to solve the problem of money laundering).
Having regard to the total concerns emerging from all the above mentioned Conventions against corruption, corruption can’t be no longer considered as a "local" or marginal matter but as a transnational, serious phenomenon that affects all societies and economies.
This awareness should promote the improvement of a multilevel contrast action against corruption, involving super-national institutions, non-governmental organizations, state legislators – called to implement the domestic law according to conventions – and also companies, which are requested to modify their behavior according to shared ethic standards and to introduce compliance programs to prevent the commission of certain crimes. Such a synergic action should be carried on having in mind that "combating corruption is like a mountain climbing: making progress becomes more difficult the further you go"16 .
At a domestic level, any anti-corruption initiative must be founded on a realistic and as much as possible complete knowledge of the phenomenon that has to be contrasted. In other words, corruption has to be investigated in its empirical and criminological aspects in order to better select the penal and extra-penal devices fit to the aim of reducing internal and international cases of corruption. Thus, it is necessary to have an empirical know-how (by means of a quantitative and qualitative analysis) to implement remedies which are effective, proportionate and dissuasive.
2. Levels of corruption according to a socio-criminological perspective and essential terminological premises.
In order to propose some considerations on feasibility and efficiency in measures against corruption starting from the Italian experience, it is convenient to move from the analysis of the most relevant terminological qualifications of corruption and the description of its structural levels, as they are provided by the criminological and economic research.
As to the juridical "labels", it should be noticed that even in the last convention against corruption – the UN Convention open to signature in Mèrida (Mexico) in 2003 – there is no formal definition of corruption on the assumption that such a term is polyvalent and variable17, including several conducts, which may be differently qualified in each European Country. "Corruption" may include not only bribery but also some types of embezzlement, abuse of functions and/or power, misappropriation of funds or other diversions of property; moreover, corruption may occur both in public administration and in the private sector.
The term which best matches the Italian juridical approach is "bribery", as it is generally used to indicate a bilateral crime: offering money or another advantage to a public officer and accepting money or other advantage by the public officer in order to perform an act which may be or not be contrary to his/her official duties. The officer may be national or foreign or belonging to a public international organisation.
Finally, the term "facilitating payments"18– adopted to indicate a wide range of conducts which implies the use of the so called "grease money" – could correspond to the Italian less serious pattern of bribery, in which small amounts of money or other advantages can be offered to or accepted by a public officer even for acting according to his/her official duties.
Having pointed out these concise terminological clarifications, it is now possible to recall the identification of three different levels of corruption, elaborated from both the economical and the sociological points of view19 :
a) Administrative decentred corruption: this kind of corruption implies a close relationship between public officials and private persons or enterprises. There is a wide number of people involved; consequently it entails a high level of distortion within the application of rules, economy and market. Generally, the amount of money exchanged in this kind of bribery cases is not very high. Nevertheless, the effects on the collective welfare are serious since the State seems to be weak and the control devices are less effective.
b) Administrative centred corruption: it mainly implies relationships between public officials or political power and firms or organised crime. In this context the amount of money exchanged is generally very high for each case. The big corruptors tend to maintain low levels of alternative forms of corruption and the political power acts to maximize the amount of illicit income.
c) "State capture": it is characterised by the presence of the so called "politically connected firms"20. It includes every act aimed "to shape or affect the formation of basic rules of the game (i.e., laws, regulations and decrees) through private payments to public officials and politicians"21. On the contrary, administrative corruption «"efers to the so-called “petty” forms of bribery in connection with implementation of existing laws, rules and regulations"22.
Although the above mentioned distinctions have been elaborated for emerging countries or for transition economies typical of Eastern Europe23, it can’t be excluded that some factors or characteristics of "state capture" economies, that are similar to influence strategies realised by firms or lobbies (which don’t imply recourse to illicit payments), are present even in the capitalistic countries, where democracy has a consolidated tradition24.
In Italy, for example, in the phase of a «direct government» of white collars workers (the second Berlusconi government)25 many laws which were seen as aimed to protect the interests of firms or "excellent defendants" were passed26 .
Moreover, according to S. Katsios, there is a significant interaction between underground economy – which is typical (but not exclusive) of country having a transition economy – and corruption. In particular, referring about the Greek experience he has observed that
"the strong and consistent link relationship between the shadow economy and corruption in Greece is closely connected with the reflexes of those who are not willing or cannot afford to bribe central or local government bureaucrats, or who have not connections to these bureaucrats, systematically choosing the dark (shadow) side of economy as a substitute for corruption (bribery) and making the shadow economy complementary to a “corrupt state”"27.
One more time the statistical data confirm that Greece, Italy and Spain, the countries perceived as more corrupted in comparison with the other western democracies, have the largest shadow economies: respectively, 28.2%, 25.7% and 22.0% of the GDP (gross domestic product)28 .
An other way to classify corruption is by dividing it into "grand corruption" and "petty corruption"; this distinction is principally based on the level of public officials involved (in the first case politicians are involved) instead of on the amount of kickbacks or bribes exchanged (although usually petty corruption implies small monetary transactions29).
3. Quantitative analysis of bribery cases in Italy.
Given the super-national anti-corruption normative frame and the essential terminological and structural clarifications, it’s time to move from a synthesis of the quantitative analysis of corruption in Italy, to show how corruption has been discovered and fought over a period of 20 years and to evaluate the strategies that could better address the problem.
To this purpose I’m going to illustrate briefly how corruption is regulated by the Italian Criminal Code. Art. 318 incriminates the less serious form of bribery: acceptance by a public official, or by a person who performs public functions, of money or other advantages in exchange for any act or omission in the performance of his public functions. Both the public official and the briber shall be liable to imprisonment for between 6 months to three years. Art 319 provides the acceptance by a public official or a person who is charged with a public service, of money or other advantages in exchange for any act or omission in breach of his functions or duties. Either the public official or the briber shall be liable to imprisonment for between two to five years. This is the most serious form of bribery. In short, bribery can be divided into two basic categories of offence on the basis of the nature of the act that the public official performs (or omits to perform) in return for the bribe. Art. 317 of the Italian Criminal Code provides also the offence of concussion ("concussione") – the most serious crime in the context of crimes against public administration – which is similar to extortion, according to which a public officer or a person charged with a public service who, by abusing his position or his power, compels or induces anyone to unduly give or promise, to himself or a third person, money or other thing of value, shall be liable to imprisonment for between four and twelve years. In case of concussion, the private person who is compelled or induced to give or promise money is a victim, even if he/she obtained a gain or a rent from the payment 30. It should be underlined that the distinction between bribery and concussion, although it seems to be clear in the law in the books – since it relies on the presence of coercion or real imbalance of powers between the parties – it is often nebulous in practice and has created a lot of interpretative issues also related to the burden of proof. Art. 322 extends the application of norms on internal corruption to cases concerning corruption of European or international officials.
Finally, there are some norms, sometimes collocated outside the criminal code, that repress specific hypothesis of corruption in the private sector, which may especially occur in the medical sector and in the field of auditing of company or enterprises.
The Frame Decision 2003/598/GAI31 expressly asks for the implementation of a general norm against corruption in the private sector. Nevertheless, until now, Italy has not adopted such kind of provision.
The quantitative data are collected over a period of more than 20 years (1983-2004), during which many relevant changes occurred in Italy. At a normative level, an accusatory model of criminal trial and the sentence negotiation were adopted by the Italian legislator in 1989; all the crimes against public Administration were reformed in 1990; Act 300/2000 introduced corruption of the international public agent and other provisions concerning forfeiture; in 2001 an administrative liability for legal persons deriving from the commission of a crime was introduced. At a social level, the "discovery" of corruption – due to the wide investigation ("Clean hands"32) started from the prosecutors ("Procura della Repubblica") in Milan in 1992 – for the first time, promoted into the Italian society the awareness that Italy was a deeply corrupted country. Finally, at apolitical level, the investigation lead to so many arrests of politicians belonging to the governmental parties that in a short while those parties were completely cancelled.
From statistical data, corruption crimes had a steady course until 1991 (around 200 reported case yearly), after which begins an increase which peaks between 1992 and 1995 (around 1200 reported case in 1993). After 1996 there was a fall in reported crime rates (around 200-300 cases of reported crimes yearly).
The bribery conviction rate presents the same course of reported crime rate33.
A comparison between reported crime rate and convictions rate shows that there was a strong "funnel effect". As to people charged with corruption in the Milan District of Court of Appeal, only 40.03% of them received a final conviction34.
What happened between 1992 and 1994 and why corruption emerged so suddenly and widely? Was there an increase of the committed corruption crimes or only in the reported corruption cases? In other words, the key-issue is if corruption has a changing dark number over the time.
In order to answer to these questions it may be useful to cross the statistical data with other indicators as the Corruption Perception Index (CPI) yearly elaborated by Transparency International35, according to which Italy presents an almost steady bad performance over the years. The CPI temporarily worsens after the discovery of the huge and pervasive corruption occurred between 1992-1994. In short, Italy was perceived as a very corrupted country before "Clean Hands" investigation, as well as some years after it, when the crime rate fell to previous levels (i.e.: before such inquiry).
The WGI (Worldwide Governance Indicators) may be useful too as it is founded on a governance indicator, which includes also the control of corruption. From the comparative analysis of the Italian crime rate, the CPI and the WGI (according to which Italy has a bad performance too) it can be argued that between 1992 and 1996 there was not a sudden increase of bribery cases but only a reduction of the dark number of crimes. It was not due to the increasing of the victim attitude to report crimes but mainly to the effects of the investigations.
To this regard it will be convenient to briefly resume the history of Clean Hands investigation.
This anti-corruption inquiry started on February, 17th, 1992, when a local politician was arrested in Milan because of a bribery charge. As he felt that his political party tried to abandon him, by describing him as an isolated criminal in the context of the political activity, he started to tell a long story of corruption cases in Milan. On the basis of his statements, the prosecutors issued other warrants, and the politicians and the businessmen arrested told even more “interesting” stories. In a short while, this small investigation became a great one, involving hundreds of people (politicians, officers, entrepreneurs, mediators, etc.), included high level politicians.
"Clean Hands" lasted almost two years. At the beginning there was a wide support from the Press and from many political parties (especially those belonging to the opposition side). But after a while the public support started to diminish and the political consensus become uncertain. Indeed as the inquiry was becoming wider and wider all the political parties become more sceptical about the usefulness of such an inquiry. Thus, some reforms about pre-trial detention and about usability of acts (mainly transcriptions) in the criminal procedure were adopted (for example: the Berlusconi government passed a reform concerning the transcription of the interrogation made by the police in a way that they were no more usable during the trials; so if the accuse refused to answer during the cross examination what he/she said before the police could not be used any more by the judge as a means of proof). All those reforms concurred to diminish the capacity of prosecutors to go further36.
Despite the many political obstacles put between 1993 and 1994, "Clean Hands "remains a huge inquiry, as it involved a lot of white collars and politicians: some political parties disappeared in less than two years as their leaders were arrested. From a statistical point of view, there was a strong reduction of the dark number of corruption cases. From a procedural point of view, al lot of trials concerning corruption and concussion were carried out although they led to convictions of very lenient punishment.
Although "Clean Hands" is seen as concerning the District of Milan only, there were other inquiries in some other Italian regions during the same years (see District of Lecce, for example)37.
After "Clean Hands" investigation, bribery has emerged in its systemic, diffuse and capillary dimension. For the first time, in Italy, there was the awareness of the network of political corrupt exchanges and of their negative effects on the quality of the existing infrastructure, on public spending, on the allocation of resources, on fiscal transparency, on market regulation and competition. Corruption has involved the biggest Italian political parties at such a deep level that they disappeared.
In short, after "Clean Hands", bribery could not be considered an isolated crime any more and that is due to several reasons, clearly illustrated by the results of the investigations: firstly, it was discovered that those who commit bribery tend to repeat their illicit behaviour. Corruption may have the characteristics of a serial crime. Secondly, it emerged that a diffuse corrupted environment doesn’t tolerate the presence of honest, law abiding officers, which might be «dangerous» for whom accepts kickbacks regularly. Thirdly, corruption resulted as linked at least to two types of crimes: false accounting and money laundering. It is self-evident that in order to pay bribes enterprises need money. Thus they have to commit the crime of false accounting to have the so called «black money) to corrupt public officers and/or politicians. Many corruptions cases were discovered indeed by "following the money" (as judge Falcone used to say about the investigation of Mafia crimes) that is to say by following the black money related to the crimes of false accounting. Nowadays one of the causes of the enhanced difficulties in investigating corruption in Italy derives exactly from the reform of the crime of false accounting, whose prosecution is not mandatory any more but depends on victims’ complaint.
Given all these considerations, we can comprehend how Italy, despite the fall in the crime reported rate, continues to be perceived as a corrupted country and to have a high level of internal corruption widely unreported. It happens because the partners of a corruptive exchange have a convergent interest to keep the illicit agreement secret; therefore corruption is a crime characterised by the maximum standard of privacy in its perpetration, even more when it is linked, as often happened in Southern Italy, to organised crime.
4. The criminal law reaction against corruption: an evaluation of sentence severity.
Despite the fall in crime reported and conviction rate, the significant funnel effect and the wide application of the statute of limitation – which, generally speaking, paralyses the judicial decision about a corruption case seven years and half after the commission of the fact – many corruptors, public officials and politicians were convicted of corruption due to Clean Hands investigations.
Nevertheless, the sanctions inflicted were in concrete surprisingly lenient although corruption is punished by the Italian Criminal Code with severe sanctions.
The following sanctions were inflicted for corruption cases in the Italian Criminal Courts: in 87.63% of cases punishments up to 2 years were inflicted; in 8.86% of cases punishments between 2 years and one day and 3 years were inflicted; finally, in 3.5% of cases punishments more than 3 years were inflicted.
In short, the Italian Criminal Courts inflicted punishments which were expected to be served in custodial way in only 3.5% of corruption cases: sanction under 2 years, were generally converted into the so called «conditional suspension of punishment» (also the so called «collateral punishments», which mainly includes the disqualification sanctions are suspended); sanction between 2 and 3 years were often converted by the Court for the enforcement of sanctions into probation, a measure which was originally devoted to people who need rehabilitation and is now used also for white collars that obviously don’t need any kind of treatment.
Finally, we should mention Act 241/2006 that introduced the «indulto» («general pardon») allowing the reduction of 3 years of punishment to every final conviction to a custodial sentence (for those crimes committed before 2 May 2006). In a word, the few custodial sanctions for corruption (those which had not already expired) were «abolished» by the «pardon act» of 2006.
Given these data, we must conclude that the deterrent effect of punishment has only relied on the 3.5% of conviction for corruption, having a lot of bad consequences in the perspective of "positive general prevention" and thus having regard to the strengthening of collective moral standards.
5. Some qualitative observations on corruption from the quantitative analysis.
The results of the quantitative analysis of corruption in Italy entails at least four significant consequences at the qualitative level:
(a) Corruption is a crime with a significant dark number.
The wide dimension of the corruption dark number depends on several reasons. First of all victims – that represent the initial «filter» of the criminal justice as a selective process, letting the crimes emerge – have a scarce interest in reporting such a crime. Moreover, the dark number becomes even higher when corruption is linked to organised crime. According to the Italian experience, in the Reggio Calabria District of Appeal Court, at the far South of Italy, there were only 2 conviction for corruption in 20 years, while in Milan District of Appeal Court there were 1000 conviction in one year38. We could argue that Milan is a more corrupted area than Reggio Calabria, but it is more realistic to think that the presence of organised crime, and thus the culture of silence and the fear for reprisals, make the victims silent or inhibited39.
(b) Penal norms against corruption have a low level of enforcement.
To this regard it should be said that the model of bribery which is at the basis of the Italian penal norms is the one typical of XIX century, based on simple corrupt exchanges between two parities (individuals). On the contrary, contemporary corruption is characterised by a network of exchange, as it becomes systemic, and it involves a lot of partners, intermediaries and also enterprises. Sometimes corruption is linked to criminal organisations although not necessarily to the most dangerous Mafia-like ones.
According to a "mercantile model" of conceiving corruption, the Italian Criminal Code requests the proof of the act performed by the public official in exchange of a kickback. But the bribery patterns that emerged after "Clean Hands" investigations have demonstrated that the payment may not be related to any specific act. The parties don’t know in advance what kind of act will be necessary to be performed by the public official to obtain the illicit results.
Especially in a globalized economy made by big companies which are able to make cartels, and which needs protection by politicians, what the real object of bribery may be? Is it really an act? Still an act? What happens when the public officer promises that he will intervene in the administrative proceeding only if it will be necessary? He may not perform any act in return of a bribe and nevertheless he assures protection. Through kickbacks, the private party could «buy» protection instead of a specific act. In those cases the Italian penal norms on bribery don’t work at all. And what happens when the public officer is regularly paid by the Mafia-type organisation (the so called «funzionario a libro paga»)? In this way, the organisation aims at obtaining loyalty by the public officer. Even in this case the corrupt exchange does not match the penal provision. And given the Italian Civil Law tradition, penal norm can be applied only to the facts which exactly correspond to the description contained in the norms.
(c) Sentence severity for corruption is extremely low.
Traditionally the criminal reaction against white collars is lenient. The Italian case shows that corruption – that may be seen as a typical white collar crime – was punished by sanctions having a severity average that represents a very small fraction of the severity standard provided by criminal norms, according to the abstract seriousness of the crime.
The qualitative characteristics of the discovered crimes during "Clean Hands" are dystonic towards rationality/opportunity of sanctions’ policy concretely adopted. Corruptive episodes discovered during the early 1990s were more frequent than in the past; generally more serious than in the past; because of the two previous reasons, more dangerous for economy, markets and the strength of democratic rules; more worrying in terms of social alarm.
The recourse to very lenient sanctions has its explanation in the fact that the amount of corruption cases discovered through Clean Hands investigation was so huge that the judges, in order to avoid the devastating effect of the statute of limitation, preferred to agree with the proposal of adopting the «summary trial» or the "negotiation of sentence" 40– i.e. two procedural devices of the so called "bargain justice" which allow a reduction of the punishment respectively of one third and up to one third – instead of asking for the ordinary trial (which normally leads to more severe sanctions). All the traditional aims of punishment are undermined and even subverted by the recourse to sentence negotiation, as it is an institute which is used mainly to enhance the efficiency and to resolve some of the organisational problems of the judicial system and not to improve prevention or retribution; sentence negotiation also brings in elements which contrast with the key principles of sentencing as laid down in the Criminal Code41 .
(d) Penal norms have a low deterrent effect.
The low level of sentence severity for the corruption cases end, even more, the feeling of impunity deriving from the general application of the "suspension of punishment", have downgraded the deterrent effect of criminal sanctions. This phenomenon can be explained by the Economic Analysis of Law (EAL), according to the cost-benefit perspective, examined from the point of view of both the perpetrator of the crime (in order to commit it) and the criminal justice system (to prevent or to repress it). In general, the crime is seen as a behavioural strategy which is convenient (or efficient) when the hoped advantage deriving from the crime exceeds the disadvantage deriving from the probable infliction of punishment.
In Italy, corruption in the early 1990s has become an efficient crime for several reasons.
Firstly, the slush money (hereinafter "contribution") has not represented a real cost for firms involved in such illicit practices. The cost of "contribution" has been reabsorbed by variations in the final prices of services or products, or transferred on citizens by offering lower quality of goods or services.
Secondly, the penal risk has been perceived as quite low, with the exception of the short period under Clean Hands investigation effect, during which the prices of contribution had become higher due to the higher level of the enforcement of the law (better: because of the higher risk of crime discovering) .
Social costs of corruption seem to have not had a relevant impact in the decision making process regarding the commission of corruption crimes because there was a pervasive diffusion of the recourse to the technique of neutralisation (corruption representing the cost of democracy, the slush money serves the political parties needs and not individual interests) and because of the scarce awareness of the damages correlated to corruption at the economic level.
As regard to the behaviour of the perpetrators it should be pointed out that, from the criminological point of view, corruption may be contextualized into the white collar crime theory. But actually, due to the modalities and the background of perpetration (it is a serial crime, systemic, diffusive and mostly unreported) corruption typically grows in a «sub-cultural» context. In particular it needs a background in which people don’t perceive the deterrent effect of criminal norms, tend to accept the risk deriving from committing a crime and even to minimize it through the recourse of the well known "technique of neutralisation" elaborated by Sykes and Matza in 1954. In such a perspective, it becomes evident the paradox of a sub-cultural context in which the majority of firms and politicians were discovered to belong to. In short: may the "majority" have "sub-cultural" characteristics?
Moreover, from the EAL perspective, the perpetrator of corruption crimes should behave in an elastic way, that is to say he/she should perceive the deterrent effect of punishment and the penal risk of the enforcement of the law. The commission of crimes should be discouraged at a higher level of law enforcement. Nevertheless, corruption could be better assimilated to the "indifferent-economic model", according to which the sub-cultural components of behaviour and the learned criminal behaviour described by Sutherland tend to prevail over the mere cost-benefit calculus. Even the «rationale of the rules» described by Nobel Prize winner for Economy Robert Aumann, helps in reshuffling the role of cost-benefit analysis which precedes the commission of an economic crime. In an environment diffusively corrupt, being inserted in the firm sub-culture may minimize the impact of the threaten of punishment, even if it is supported at a high level of law enforcement or severity of sanctions.
6. Anticorruption measures: an overview.
While the evaluations elaborated by Transparency International and the World Bank confirm that corruption is a very relevant issue, both at national and international level, the praxis of the repression of corruption (see the Italian example) shows that corruption is a crime very hard to control and to prevent.
Thus, the first step to efficaciously fight against corruption is finding the best preventive praxis and the most dissuasive repressive measures.
Moving from the Italian experience of the early 1990s – through which it has emerged a systemic corruption having a lot of negative effects on economy, competition, good governance and citizens’ trust in the institutions– and having as a indispensable background the indications offered by the super-national Conventions, a platform for discussion about the principal measures to oppose to corruption, from the point of view of criminal law, might be founded at least on four steps.
6.1. Encouraging the crime report. In could be useful to introduce some devices which encourage the crime reporting by victims or witnesses of corruption. The comparative literature shows that tools of different nature may be used42 .
(a) Firstly, a reward mechanism for those who report crimes might be introduced. As an effort in this direction it could be mentioned the Italian "Progetto Cernobbio", a project elaborated by magistrates and criminal law professors (presented but not approved), which provided a specific cause of «non punishability» for the person (public officer or private person) which first reported the crime of corruption, within three months from the commission of corruption itself, also giving information about potential co-authors or other people involved to the prosecutors and returning the bribe43 . That project was based on the assumption that it could be useful to break from the inside the "silence bond" between the corruption partners, by using a device similar to the "prisoner’s dilemma"44 , deriving from the "game theories".
(b) Secondly, the anti-whistleblowing legislation45 should be improved.
(c) Thirdly, it could be useful to extend the legislation on withdrawal from a criminal conspiracy or association: the Italian experience about Mafia-type organisations and domestic terrorism of the 1970s showed that the "criminal systems" can be better contrasted through a reward legislation (to promote collaborations) than through a mere repressive approach46.
There is also a range of measures that could be used, although with caution, to promote the emersion of corruption from its wide dark number: those questionable ways include the use of undercover informers and the entrapment47 .
6.2. Improving the penal legislation. This aim could be achieved in several ways and through different devices, whose implementation mainly depend on the status of legislation of each country. From the perspective of a country where corruption has turned in a systematic crime, losing its episodic nature, at least three different reforms seem to be necessary:
(a) adopting a clearer distinction between bribery and concussion, as requested by the OECD Evaluation Report. This could help to avoid the procedural difficulties in the formulation of the criminal charge.
(b) Introducing a general norm about corruption in the private sector to comply with the Frame Decision 2003/598/GAI, which moves from the necessity of contrasting corruption cases linked to the process of privatisation of big public companies.
(c) Introducing a way of graduating corruption so that the abstract punishment ranges could better reflect the different seriousness of the concrete offences. According to the Italian experience, the same norm (art. 319 of the Italian Criminal Code ) is used to repress either petty corruptions (where kickbacks are of a small amount and the public officers have not a high rank or don’t perform relevant acts) or serious corruption cases (see the Italian Enimont case and the relative trial during the early 1990s: due to the huge amount of the proved kickback – 167 thousand millions lire – such a bribe was defined as «the mother of all the bribes»). Finding a proper indicator to evaluate the seriousness of corruption is not easy. The alternatives might be: (i) the amount of bribe (which, on the other side, could be hard to prove); (ii) the extent of contrariety to the official duties of the performed act, to obtain which the bribe was paid (but this parameter doesn’t work in corruption cases concerning acts which are not contrary to express official duties, i.e. discretionary acts); (iii) the damage caused (but this criterion can be scarcely applied to cases of attempted corruption); (iv) the distortion of markets or competition provoked by corruption (although it is difficult that a single corruption case may cause a relevant distortion effect on markets). In any case, it could be also envisaged a poly-factorial approach, that combines those criterion as rationally as possible.
(d) introducing the public shame for both individual and organisations and the blacklisting system also in order to reinforce the penal response to crimes through a communicative approach.
6.3 Improving the level of law enforcement. From the considerations that corruption is a typical white collar crime, which normally receive a lenient penal response (due also to the capacity of white collar even to lobby a bill through) and that the Italian experience showed a relevant funnel effect in the repression of corruption cases and a low level of sentence severity concretely inflicted, we find it convenient to underline that improving certainty and severity of sanctions may have positive effects in fighting corruption.
Both the above mentioned factors may influence not only the efficacy of sanctions having regard to its natural target (the white collars) but also may strengthen the collective moral standards. Otherwise, if corruption will be not punished by proportionate, adequate and dissuasive sanctions, people will tend to distrust the whole public system and lose interest in politics: it might also cause, as a consequence, a slow change in the ruling class, which, in that way, can go on taking advantage of corruption, being sure it won’t be substituted by means of the popular dissent.
6.4. Improving the enforcement of penal norms concerning the crimes which appear closely related to corruption. This aim could be achieved by several interventions:
(a) Potentiating the discovery and the repression of crimes related to false accounting: the diffusivity of corrupting practices involves the investment from economic subjects of huge financial resources that often are withdrawn from hidden secret funds in a false social accounting: the result is that these economic subjects, that seem to be healthy, are instead fragile and their crack can destroy the resources of many savers. Furthermore, the participation in market of subjects that don’t respect the rules, but that take an improper advantage by means of corruption, causes a distortion in competition to disadvantage of the correct and heal operators; the increase of the prices of the assets and services caused by corruption weights on the final consumers, which at the end pay the real price of the corruption.
(b) Strenghtening the efficacy of fighting organised crime: it’s worth remembering that often the capital used to corrupt public officials or public service charged comes out of crime and it is managed by international criminal organizations that in this manner make it possible to get access to money laundering.
(c) Improving the contrast to money laundering;
(d) Introducing an efficient model of corporate criminal liability;
(e) Improving the uniformity of norms against corruption and other related crimes in the various countries in order to avoid the so called «forum shopping», as the birth of common market produces interdependence among national economies and may induce some forms of international crime supported also by the different repression system of the countries. States have to improve the mutual cooperation. In short, it’s necessary to reply to a phenomenon that affects so many aspects of society with a variegated and multidisciplinary approach, for preventive and repressive purposes.
1 I’d like to express my deep gratitude to Dr. Raffaella Braghini for her assistance with the English version of this text.
2 "False accounting" is a crime provided by Art. 2621 of the Italian civil code concerning a false representation in the balance sheets of a matter of fact, mainly by false or misleading allegations, or by concealment of what should have been disclosed that deceives and is intended to deceive another so that the individual will act upon it to her or his legal injury. The balance sheets is defined by Italian legislation as a financial statement that summarizes a company΄s assets, liabilities and shareholders’ equity at a specific point in time. These three balance sheet segments give investors an idea as to what the company owns and owes, as well as the amount invested by the shareholders.
3 For an overview of corruption in Greece, a crime seen also in a wider perspective, which includes a survey on the characteristic and the development of financial crimes, see. N. Courakis, Financial Crime Today: Greece as a European Case Study,in European Journal on Criminal Policy and Research, 2001, p. 197-219.
4 See P. Mauro, Why worry About Corruption?, International Monetary Fund, 1997; see also P. Mauro, Corruption and Growth, in The Quarterly Journal of Economics, 1995, pp. 681-712.
5 This kind of approach principally derives from the US agenda setting after the Lockheed scandal, as the first step to fight corruption in international transactions was made by the United States through the Foreing Corrupt practices Act 1977.
6 V. Tanzi, H.R. Davoodi, Roads to nowhere: How Corruption in Public Investment Hurts Growth, International Monetary Fund, 1998, p. 1
7 V. Tanzi, H.R. Davoodi, Roads to nowhere, cit., p. 3 s.
8 «Too often, new projects are undertaken while the existing infrastructure is left to deteriorate. In cases of extreme corruption, operation and maintenance on the physical infrastructure of a country are intentionally neglected so that some infrastructure will need to be rebuilt, thus allowing corrupt officials the opportunity to extract additional commissions from new investment projects»: these considerations are expressed by V.
9 "In supporting his call, we condemn corruption as immoral, unjust and repugnant to the ideals of humanity enshrined in the Universal Declaration of Human Rights and we confirm our conviction that all human beings have a basic human right to live in a corruption-free society" (11th International Anti-Corruption Conference Seoul, May 2003 - The Seoul Findings, p. 1).
This is the perspective proposed by J. Bacio-Terracino, Corruption as a Violation of Human Rights
, paper available at http://ssrn.com/abstract=1107918
, p. 8.
11 For example "a corrupt election procedure may result in political instability in the form of protests, riots and subsequent suppression of human rights in order to restore stability. The human rights violations that take place after the election are originated by a corrupt practice but are independent from it" (J. Bacio-Terracino, Corruption, cit., p. 8).
12 "There are numerous cases where people investigating or reporting corruption cases, so called whistleblowers, are silenced through harassment, threat, imprisonment and even killings. In such cases the right to liberty, the right to freedom of expression, and the right to freedom from torture or cruel, inhuman or degrading treatment may be violated" (J. Bacio-Terracino, Corruption, cit., p. 8).
13 It happens «when the corrupt act is deliberately used as a means to violate the right. (…) For example, a bribe offered to a judge per se affects the independence and impartiality of that judge and hence the right to a fair trial is violated. In this case the bribe is specifically used to affect the fairness of a trial» (J. Bacio-Terracino, Corruption, cit., p. 11).
14 More in detail, according to Bacio-Terracino (See J. Bacio-Terracino, Corruption, cit., pp. 11 -28), the main rights that may be violated through corruption are: rights of the child (which may be violated through adoption procedures or in case of trafficking and sexual exploitation, or in case of child labour); right to work (for example in the field of the right to a safe and healthy work conditions); right to political participation (for example in cases of political-mafia-type electoral exchange); right to food, to water or to adequate standard of living; right to health, which can be affected from the hypothesis of corruption both in the public and in the private sector (See G. Mannozzi, Corruzione e salute dei cittadini: le nuove dinamiche del «comparaggio» farmaceutico, in A..VV. Studi in onore di Mario Romano, Milano, 2011, - forthcoming). Also corrupt practices in the pharmaceutical industry are particularly relevant. Unethical drug promotion and physician conflict of interest can have negative effects on health outcomes (See M. Angell, The Truth About the Drug Companies. How they deceive us and what to do about it, M.D. Random House, 2005); finally, the right to education my also be conditioned by corruption. First, «corrupt practices in the educational sector, particularly at the school and classroom levels, can restrict or completely obstruct access to education». So, corruption entails discrimination. The right to education may be affected by corruption also from the point of view of the correct allocation of resources. According to a recent survey, the empirical evidence shows that the more a country is corrupted, the less it invests in education (M. Arnone, E. Iliopulos, La corruzione costa, Milano, 2005, p. 87.). In short, corruption and public spending for education seem to be in a inverse proportion. It may be considered emblematic the case of public spending for education, research and health care made by Italy and Greece – the western democracy perceived as the most corrupted in Europe according to the Corruption Perception Index (CPI) elaborated by Transparency International – as they differentiate themselves from the other democratic European countries (also) owing to the lesser public investment in education, research and public health care system.
15 In the Italian literature see D. Pulitanò, Diritto penale, Torino, 2005, p. 240.
16 F. Heimann, M. Pieth, Moving Anti-Corruption to the Next Level, in Fighting Corruption, ICC Publication, Paris, 2003, p. 209.
17 See A. Rohwer, Measuring Corruption: A Comparison between the Transparency International’s Corruption perception Index and the World Bank’s Worldwide Governance Indicators, CESifo DICE Report, 3/2009. Also the Inter-American convention against corruption (1996) includes, in the section «Acts of Corruption», a variety of relevant behaviours.
See A. Argandoña, Corruption and companies: The case of facilitating payments, in Chair of Economics and Ethics,
paper available also at http://ssrn.com/abstract=685861
See M. Arnone, E. Iliopulos; La corruzione costa, cit., p. 22 ss.; see also J.S. Hellman, G. Jones, D. Kaufmann, Seize the State, Seize the Day. State Capture, Corruption and Influence in Transition,
research by the World Bank, September 2000, available at the following URL: www.worldbank.org/research/workingpapers
20 For a definition of the politically connected enterprise see M. Arnone, E. Iliopulos, La corruzione costa, cit., p. 44)
21J.S. Hellman, G. Jones, D. Kaufmann, Seize the State, Seize the Day, cit.
22 J.S. Hellman, G. Jones, D. Kaufmann, Seize the State, Seize the Day, cit.
23For an investigation about the relationship between shadow economy and corruption see S. Katsios, The Shadow Economy and Corruption in Greece¸ in South-Eastern Europe Journal of Economics, 2066, pp. 61-80.
24An overview of the main cases of corruption is proposed by P. Arlacchi, La mafia imprenditrice, cit., pp. 270 s.
25See Forti, Impresa e giustizia penale: tra passato e futuro, paper presented at the XXV Conference Enrico de Nicola, Milano, March, 14-15, 2008 (unpublished).
26See the reform of the crime of false accounting (Act. n 61/2002) or the reform of prescription (Act n. 251/2005).
27See S. Katsios, The Shadow Economy and Corruption in Greece¸ in South-Eastern Europe Journal of economics, 2006, p. 61.
28See S. Katsios, The Shadow Economy and Corruption in Greece¸ cit., p. 67. The data are referred to years 2002/2003.
29See A. Rohwer, Measuring Corruption, cit., p. 42 f.
30This is the reason why many private persons or businessmen have presented themselves as victims of concussion instead of bribers during a wide investigations about corruption and illicit financing of political parties carried out in Italy during the early 1990s.
31It should be noticed that, although the distinction among three pillars of the European Union has now been overcome by the Lisbon Treating, the existing juridical acts introduced according to the third pillar rules (i.e. the so called "frame decisions") are still «alive» and produce their effect. Thus Italy should conform to the 2003/598/GAI decision by introducing a general norm about corruption in the private sector. It should be remembered that the incrimination for corruption in the private sector was already present in the legislation of Sweden and UK, the latter radically amended by the Bribery Act 2010. See R. Monthy, The Bribery Act 2010, Oxford Univ. Press., 2010.
32The name "Clean Hands" comes from a secret code used by a policeman during the first phone taps L. Holmes underlines that the same name was used in many other anti-corruption campaigns in post-communists countries (Poland, Bulgaria, Czechia, the Republic of Macedonia, Russia and Ucraine) (see L. Holmes, Rotten States? Corruption, post-communism and neo liberalism, Duke Univ. Press., Durham & London, 2006, p. 238). On the contents of Clean Hands investigation see, infra, p. 12.
33See P. Davigo, G. Mannozzi, La corruzione in Italia, cit., p. 65 ss.
34In particular there were: 4,520 people investigated; 3,200 people sent to trial by the prosecutors (which means that the prosecutors asked to the judge of preliminary hearing that they should be sent to trial); 1,322 people sent to ordinary trial by the judge for the preliminary hearing; 620 people convicted by the judge for the preliminary hearing through summary trial; 661 people convicted by trial. The statute of limitation – which implies the extinguishment of a crime after a certain amount of time (Art. 157 of the Italian criminal code) – had a strong impact on the trials’ outcome. Every three trials concluded by conviction, one trial was stopped by the effects of the statute of limitation. See P. Davigo, G. Mannozzi, La corruzione in Italia, cit., p. 136 ff.
35On the validity of CPI see the consideration by N. Courakis, Confronting Corruption in Greece, paper presented at a conference on “anti-corruption” on 11 march 2001 in Lemesos, Cyprus (p. 1 f.)
36For further explanations see, P. Davigo, G. Mannozzi, La corruzione in Italia, Roma-Bari, 2007, p. 155 ff. (in particular p. 160) and p. 173 ff. (in particular p. 184).
37For specific data about convictions occurred in the other districts see, P. Davigo, G. Mannozzi, La corruzione in Italia, cit., p. 74.
38For the geographical distribution of corruption see. P. Davigo, G. Mannozzi, La corruzione in Italia, cit, p. 74.
39See the description of the levels of corruption in the public administration, at local and national level, made by A. Licandro, A. Varano, La città dolente. Confessione di un sindaco corrotto, Torino, Einaudi, 1993.
40In particular, if the defendant asks for a summary trial during the preliminary hearing, the punishment, in the case of the accused being found guilty, is reduced by exactly one third. In case of «sentence negotiation» – that the Italian Code of Criminal Procedure defines as "applicazione della pena su richiesta" (application of the sentence on request) –, the parties can agree on the sentence only if, after having taken into consideration all the circumstances and any reductions for having chosen this alternative procedure, it comes to less than two years of imprisonment. Any reduction in punishment for having chosen the sentence bargaining procedure does not amount to exactly one third but is up to one third, although the reduction is usually applied in its largest extension.
41See G. Mannozzi, Are Guided Sentencing and Sentence bargaining Incompatible? Perspectives of Reform in the Italian Legal System, in C. Tata, N. Hutton, Sentencing and Society, 2002, p. 110 ff.
42See, for example, L. Holmes, Rotten States?, cit., p 211 ff.
43Cfr. art. 10 delle Proposte in materia di prevenzione della corruzione e dell’illecito finanziamento ai partiti, in Riv. it. dir. e proc. pen., 1994, 1027. See also C. Ruga Riva, Il premio per la collaborazione processuale, Milano, 2002, 563-566.
44Cfr. A. Dixit-B. Nalebuff, Io vinco tu perdi, Milano, 1993, 97 ss.
45See, widely, G. Fraschini, N. Parisi, D. Rinoldi, Protezione delle “vedette civiche”: il ruolo del whistleblowing in Italia, Transparency International Italia, 2009.
46D. Pulitanò, Rigore e premio nella risposta alla criminalità organizzata, in AA.VV., I reati associativi, Milano, 1998, 145 ss.
47See again L. Holmes, Rotten States?, cit., p. 215.
Confronting Corruption in Greece
by Professor Nestor Courakis,
Faculty of Law, University of Athens, Greece
1. Greece is a country which, according to the 2010 Transparency International Corruption Perceptions Index, is ranked among the countries considered as particularly corrupt (78th globally and bottom of European countries). Of course there are a lot of reservations whether this subjective ascertainment can lead to the conclusion that Greece is really a corrupt country. By the term ‘subjective’ I mean, that the Index is based only on the criterion of perception. Hence, it merely shows how the people of a country perceive their own corruption, on the basis of several factors which shape their opinion; one factor, for example, is the frequency with which media report instances of corruption in each country. Personally, I have the feeling that such an index is not only misleading in relation to the real dimensions of corruption in a country, but that it is also dangerous, because it can be used by foreign enterprises in an erroneous or even improper manner; i.e. as a fundamental criterion in risk assessment for making decisions whether to realize or, not to realize investments in a specific country. It would be better, in my opinion, to base such crucial decisions, on a more complex index, which would take into account all important parameters of corruption in a country. For instance, parameters such as the existing legal framework, the way in which this legislation is enforced (Including cases of corruption revealed and/or brought before the courts) and last but not least, the guidelines of the strategy set forth by this country, in order for it to cope with its indigenous corruption. I believe that such a "Multidimensional Corruption Index" (MCI) would be more objective (NB. Provided that the MCI is based on up-to-date and comparable data as well as on cross-referenced facts) and consequently, more accurate, useful, pragmatic, and ultimately fair to the Country in question.
2. With a view to giving an example of how to construct such a Multidimensional Corruption Index for Greece in particular, I will present some facts on corruption, vis-à-vis this country.
3. First, it would be expedient and useful at this point, to offer a definition of corruption, mainly in order to use it as an implement, markedly assisting us in what I intend to discuss with you. There exists such a definition in Article 2 of the Council of Europe’s Civil Law Convention on Corruption (1999). In a more simplified way, the definition of this legal instrument can be formulated as follows: “Corruption is the illicit and abusive behavior of a (lato sensu) functionary who, within the framework of his/her duties, promotes the interests of another person (physical person or legal entity) in view to obtain for himself or for others a direct or indirect economic benefit.” Transparency International’s definition is wider and is “The abuse of entrusted power for private gain”.
4. Concerning its legal framework against corruption, Greece has signed (without significant reservations) and promulgated into laws with increased formal validity (Article 28, Paragraph 1, of the Greek Constitution) all important international and European Conventions as well as their Additional Protocols against corruption. In particular, Greece has given full legal force to the OECD, EU and Council of Europe conventions: The Organization for Economic Co-operation and Development (OECD) Convention on Combating Bribery of Foreign Public Officials in International Business Transactions of 17.12.1997 (Law-Number 2656/1998); the European Community’s Convention on Combating Bribery of Foreign Public Officials in International Business Transactions of 26.5.1997 (Law Number 2802/2000); the Council of Europe’s two Conventions on Corruption in Criminal Law and in Civil Law of 27.1.1999 and of 22.7.2003 respectively (Law-Number 3560/2007); and also, the United Nations’ Convention against Corruption of 31.10.2003 (Law-Number 3666/2008). Greece has harmonized her interior legislation to these conventions and as a result, apart from the ‘typical’ provisions on the legal hardcore of corruption, i.e. on active and passive bribery (Article 236 and 235 of the Criminal Code), there are also provisions for cases when bribery is committed to favour:
• a judge or, a referee (Article 237 of the Criminal Code, punished as a felony)
• a member of Parliament or, of Prefecture or Municipality in relation to elections or, votes (Article 159 of the Criminal Code)
• a member of the European Parliament and/or to functionaries, judges et cetera, of member-states, of international or, supranational organizations (Article 3, 4 of Law-Number 2802/2002 and Article 3, 4 of Law-Number 3560/2007), as well as when
• active bribery is committed in favour of foreign public officials (for example judges) by legal persons who are engaged in international business transactions (Article 2 of Law-Number 2656/1998, as it was replaced by Article 9, of Law-Number 3090/2002).
Furthermore, the provisions on bribery are equally applicable to cases of private sector, mainly by virtue of Article 5 Law-Number 3560/2007. Finally, the related case of "trading in influence" is also punishable in Greece, principally on the basis of an old Law-Number 5227/1931 on intermediaries, but, also, as concerns officials of member-states of the Convention of the Council of Europe, on the basis of Article 6 Law Number 3560/2007.
5. According to the Third Evaluation Report adapted on 7-11.6.2010 by GRECO (Groupe d’ Etats contre la Corruption), which is an institution of the Council of Europe, the Greek legal framework “Appears to be fairly comprehensive”, since “Greek criminal legislation deals with all forms of corruption and trading, in influence offences incriminated by the criminal Law Convention on Corruption and its Additional Protocol”. (page 22 of the Report). Nevertheless, the Report makes some recommendations with a view to improving the Greek legislation and making it more efficient. Among others, it recommends: “To reformulate all relevant provisions in a uniform manner and to insert them into the Criminal Code, to make it clear that active and passive bribery are autonomous and do not necessarily need an agreement between the two parties (i.e. the one who offers the bribe and the other who accepts it), and also to punish acts of bribery which are beyond the scope of the officials’ competences.” Other measures which can be taken are also: “The express penalization of the so called ‘investive corruption’ (i.e. gifts or other benefits which are offered to the functionary merely in order to cultivate a climate of good relations with him/her and consequently, to ask for his/her support later), and the express penalization of acts which are committed by legal entities, for instance, corporations” (note: In Greece such a penalization is not yet a part of the dogmatic legal system; however, Greece has already ratified international legal instruments inviting countries to take measures in this direction [for example Article 28 the U.N. Convention against Corruption] and as a result, she should comply respectively).
Regarding the enforcement of this anti-corruption legislation
, it is true what is said in the aforementioned GRECO’s Evaluation Report (page 25), that Greece should “Carry out a proper assessment of the effectiveness of the provisions concerning bribery and trading in influence”. Nevertheless, during the last decade there have been intensive efforts on the part of the police, judicial, and other public authorities to discover and bring before justice, persons who have been allegedly engaged in acts of bribery, irrespective of the level of their socioeconomic position. Consequently, there have been cases where judges and their accomplices, were sentenced to many years of incarceration (www.grreporter.info/en-2.2.2010-The
court cut the sentences of judicial officers to "favourable" attitude towards defendants against payment).
Similarly, deans and assistant deans, who have opted to be negligent as regards the legal provisions on their universities’ expenses, have been brought to justice and punished for their squandering of public funds (www.universityworldnews.com-5.12.2010
: Disgraced former Rector dies/ www.athensnews.gr-8.6.2007
: University rectors sent to prison). Furthermore, control measures and penalties have been applied to a general director of the Committee on Competition (i.e. the Independent Anti-Collusion Committee of Greece), and his colleagues, who attempted to compel the owners of a dairy company to a monetary bribe, in order to dissuade the Committee from imposing a huge fine on the company (www.ekathimerini.com-25.11.2008
: New revelation in Mevgal case). Moreover, there is a plethora of ongoing investigations and -in some cases- penal prosecutions, against highly ranked officials of Siemens Hellas S.A. (Siemens in Greece), and C-level employees of the Hellenic Telecommunications Organization (OTE) (www.greekreporter.com-25.1.2011
: Greece seeks restitution from Siemens΄ bribes scandal, 30.3.2011: Greek Minister claims German firms encouraged corruption), against persons who ordered submarines from the German company Ferrostaal (www.ekathimerini.com-30.3.2011
: Submarine bribes reached 100 million euros, report says/ www.athensnews.gr-20.2.2011
: Submarine scandal resurfaces), and also against those persons, who have allegedly fixed football games (www.goal.com-12.3.2011
: The Greek Government backs fighting corruptions in the Super League).
7. These investigations are mainly conducted:
• By senior ranked and competent prosecutors (Recently a vice-prosecutor of the Greek Supreme Court [i.e. ‘Areios Pagos’] was nominated as the special prosecutor responsible for Economic Crime)
• By the Greek Police (There is a special division, charged with the prosecution of economic crimes)
• By the so-called S.D.O.E. (i.e. Σ.Δ.Ο.Ε, also known as the Corps for the Prosecution of Economic Crime - Cf. the Greek newspaper "Kathimerini" of 6.3.2011, page 12, mentioning close to ten cases of corruption which are currently being investigated by S.D.O.E.)
• By the Corps of Inspectors and Auditors of Public Administration
• By the General Inspector of Public Administration
• By the Police Bureau of Internal Affairs (Tasked to investigate cases of intrinsic department corruption, i.e. amongst functionaries of the police), et cetera.
8. As a consequence of the competent efforts of the foregoing authorities (while combating corruption on various levels and sectors of the Greek society), in recent years, there seems to be a widespread perception, that these efforts are intense and -to a certain degree- effective. This tendency will, most probably, be augmented in the coming months as a part of the Government’s strategic plan to combat corruption, and also in an effort to preemptively counterbalance, the probable multiplication of corruption-related cases in the future, which may come to bear, as a result of the existing economic recession. However, it is evident that an efficient fight against corruption depends not only on the intensification of its prosecution, but also on other preventive strategies, meant to focus on and to tackle directly the principal factors which provoke, facilitate, or enable this ubiquitous phenomenon. In the remainder of this paper, I shall try to focus on these factors and afterwards, to outline some concrete and mainly costless measures, which in their greater part are already materialized in Greece, in order to diminish the influence of these negative factors. Evidently, this analysis can be also useful on a more general level, i.e. on how to combat corruption in a developed Mediterranean Country.
9. Concerning the causes of corruption and taking into account that corruption implies violation of duties by functionaries, it is evident that it can be favoured or facilitated especially in societies and countries where:
a. There exists in society a more general “climate” of tolerance towards corruption, as a result of an individualistic mentality and materialist orientation which gives priority to consumer goods and underestimates social or moral values
b. There are legal provisions which are complicated and need to be interpreted by functionaries or provisions which are unnecessary and create delays when they are applied
c. Functionaries in certain areas of policy domains, have a wide field of discretionary power to interpret legal provisions. Moreover, they are not the ones solely responsible to take decisions and to sign an act, so that they can sometimes interpret them (for instance, in order to issue a license) in accordance to and in favor of their own specific objectives and interests
d. Functionaries have been appointed and/or promoted to a position of the public sector not on the basis of a meritocratic system of selection, but according to criteria of nepotism and favouritism, being therefore dependent on politicians and on clientele-relations and having, consequently, a predisposition for trading in influence and even for corruption
e. There is direct contact between functionaries and private persons involved which facilitates clientele-like practices
f. There is lack of transparency on the level of formulation of administrative acts, so that it is not easy to find out which ones are being promoted by the government; this situation can evidently favour an atmosphere of immunity and arbitrariness on the part of the functionaries and can offer, as a result, occasions for corruption
g. There is lack of trustworthy and well-coordinated mechanisms of control and of law-enforcement, and as a result, legal provisions are ineffectively applied.
10. Now, it would be interesting to know in what way and with what measures Greece has tried (or can try harder in the future) to reduce the negative influence of these seven main factors, which give rise and growth to corruption:
(i) Concerning the more general climate of tolerance towards corruption, which appears mainly in individualistic and consumer-oriented societies, it can be said that such a climate is not unknown in modern Greece, as this fact is also corroborated by the results of the Transparency International Global Corruption Barometer (GCB). In particular, common citizens of Greece do frequently tolerate situations of corruption in the adamant belief that, promoting their own personal interests can be a priority. As a consequence, some Greeks may purport that, in order to achieve this egocentric objective, it is indispensable to have good relations (I.e. ‘investive corruption’) with politicians, and even more so to enable trafficking with functionaries. Surely this mentality is not only a Greek phenomenon; it is widely spread all over developed countries. The cardinal difference is that in Greece, the climate of implicit rather than explicit tolerance towards corruption is fomented by a strong bureaucratic system, which causes serious hardships to citizens and dominates almost every domain and facet of their life. To overturn this negative climate, that affects citizens, politicians and functionaries alike, is something which requires considerable effort on various levels.
• In schools, in order that children may learn at a formative stage the perennial adage of the “Importance of being honest” (There are already schoolbooks prepared by the Transparency International Hellas-Greek Branch, aiming at sensitizing schoolchildren against corruption)
• In society in general, with campaigns promoted by the Government (for example advertisements in the mass media)
• By Non-Governmental Organizations (NGOs) and by volunteers who would make a campaign and relay messages against corruption through social networks, such as Twitter and Facebook
• Finally on a political level, by means of the clear and steadfast example that the Prime Minister, Ministers, Parties, Members of Parliament, Municipal Officials (i.e. of villages, towns, and prefectures, where according to research, the corruption is deep-rooted and all-encompassing) and others in power would provide to society. In other words, the good example that they inexorably condemn corruption not only verbally, but also through actions in their public and private life.
(ii) Regarding the problem of complicated legal provisions and excessive formalism in law, which can be interpreted each time in different ways, according to the ‘needs’ and ‘wants’ of each specific transaction, it can be noted that this also is a more general problem, that is to say that it affects, not only Greece, but also every developed country which tries to cope, by means of its legislation, with complicated social and economic situations in a global yet also detailed way. Evidently, if a legal enactment fails to make distinctions which could concurrently cover several aspects of a problem, the more it resembles Prokrustes’ bed (whereupon, all kinds of bodies, tall or short, had to be adapted, by brute force, i.e. by pulling the shorter, or by dismembering the longer). Hence, a law’s anti-bureaucratic simplification should retain, in my opinion, a fundamental case-by-case structure and should not proceed farther; unless it is absolutely necessary, to secure the basic principles of justice and fairness, i.e. to provide everyone with what he/she is entitled to have under law. Concerning Greece, it is true that in many cases of existing legislation there are provisions which are contradictory, or cover the same material in a different way, and are thus, in need of interpretation (This happens in particular, when tax legislation and town-planning legislation must be enforced). A solution could be to promulgate through the internet and printed materials,concrete and clear directives as to how a solid interpretation of these provisions can be attained (for example there exists already legislation which provides ‘objective criteria’ or a commonly-accepted formula, on how to justly estimate the value of a real estate, in order to juxtapose the analogous tax levy- cf. art. 41 of Law-Number 1249/1982 and art. 14 of Law-Number 1473/1984). Similarly, concrete legislation could be enacted, with an aim to accelerate and simplify some sluggish bureaucratic procedures and to clarify the rights and entitlements of citizens. Such an undeviating legislation would additionally specify more transparently and accurately, the proper conditions for public tenders. However, apart from these solutions, which could be manipulated on occasion, by a shrewd functionary capable of finding a way to exploit the Law’s weaknesses and loopholes, it would be equally advisable, as it is mentioned below [Cf. (v)], to clearly separate the functionaries from the implicated private persons, in order to abolish the opportunity to trade influence and/or to enact illicit transactions through this contact.
(iii) As regards the problems deriving from an eventually, wide discretionary power of the functionaries, and from the diffusion of responsibilities, it is evident that it would be necessary for the state to establish a clear job-description for each functionary and in particular, to empower a designated functionary as responsible for having to sign a license or a certificate (Obviously division of labour and of responsibility is necessary and useful - the director of a public agency should hence sign only the most important documents). In Greece there exist ‘Regulations of Services’ for each public agency, which however fail to describe the clear-cut duties of each functionary in detail, except for those who are heads of units. Additionally, there are also steps being taken to reduce the necessary signatures needed for the enforcement of an administrative act. Needless to say that such a restriction of responsibilities and consequent reduction of signatures would also diminish the delays of any bureaucratic procedure, which behooves system and citizens alike.
(iv) Concerning the case of functionaries being appointed and/or promoted to a public position as an eventual result of nepotism and/or of political clientele favouritism, it must be said that since 1994 (Law Number 2190/1994) initial access and appointments to public service in Greece are realized according to a system of written competition, also known as A.S.E.P. (i.e. Α.Σ.Ε.Π.) for a number of administrative positions. By virtue of this system, the names of the candidates on their essays are concealed, so that the examiners and evaluators are not in a position to know the identity of each candidate and to thenceforth, illicitly promote some of them (by giving them better marks for example). Recently, the system of written examinations was supplemented by the provision (Law-Number 3320/2205) of a verbal interview assessing the personal capabilities of each candidate; that addendum however, made room for subjective, preferential, and thus unsustainable evaluations. Most probably that was the reason that the above provision was abolished (cf. Law-Number 3812/2009). From a general point of view, the A.S.E.P. System has been credited as meritocratic as far as access to the civil service is concerned and no serious complaints against it have been raised until now. On the other hand, the system of promotions to a higher position in the public sector has sufficient formal guarantees to be considered as one which is based on objective evaluations (for example, the evaluation committee for high-ranked functionaries, in particular for General Directors of Ministries, until recently was presided by an ex-judge). Recently, in accordance to Law-Number 3839/2010, the system was further improved, as it was placed under the responsibility of the ASEP and of the Ombudsman. Both systems however suffer from formalism, and thus, cannot be considered to be a sufficient guarantee against corruption.
(v) Concerning the problem of direct contacts between functionaries and implicated private citizens, it is noteworthy that since 2002 there has existed offices of the State and of Municipalities which are called “Centres for Serving Citizens” (I.e. Κ.Ε.Π or K.E.P. in English), and which function as intermediaries between public services and citizens. So, if a citizen needs a certificate, he/she can directly address the request to a K.E.P. which is in near proximity, instead of going to the pertinent public service division. In this way, there is no contact between a citizen and a public functionary who might ask for a bribe in order for instance to ‘accelerate’ the issuance of the certificat. It is evident that this system could be expanded to cover also cases of issuing a license from a town-planning agency, or to cases of making an arrangement with a tax-agency on pendent claims of taxes, given that these cases (together with the cases of bribe-money in hospitals) are the main categories of petty-corruption in modern Greece.
(vi) Regarding the need for transparency in administrative acts, the case is clear, as transparency is a kind of self-evident ‘antidote’, or even guarantee against corruption in the sense that the more transparency gains ground in public life, the less corruption can be developed there. An important step towards this direction has been made by the recent introduction by the Greek Government (Law Number 3861/2010) of the project “Transparency” (i.e. et.diavgheia.gov.gr). According to this project, no state-act bearing any cost to the budget can be valid or executable, unless first, it has been made public knowledge, via the internet site of “Transparency”, and has received a code number (as evidence that it has been publicly announced through the internet). Thanks to this project, any citizen, with access to a personal computer, can have good appreciation, of what is going on in the public sector and consequently, quickly gain a fair knowledge of how to react to and control illicit administrative actions, stemming from appointments and from promotions of functionaries, as well as from the signing of inappropriate or illegal contracts.
(vii) Finally, pertaining to the repression system and the need for trustworthy and coordinated mechanisms of control and law–enforcement, Greece, as was mentioned above (cf. Paragraph 7) has a plethora of such mechanisms functioning at various levels of its Justice System, its Police Administration and of its General Public Administration. Yet, it lacks a coordinating and oversight mechanism which would integrate their various, intertwined and overlapping efforts. A noteworthy solution to this conundrum would be the establishment of an Independent Authority, which would undertake the role of an ‘upper hand’ in the anti-corruption endeavour. A similar experiment was undertaken successfully in Hong Kong, where the so-called “Independent Committee against Corruption” (ICAC), having been allocated a sizeable budget of more than USD 90 million per annum, and enjoying legal and administrative autonomy (It can proceed to search bank accounts et cetera and must give account only to the Government of Hong Kong), managed to combat corruption efficiently. Apart from such an Authority which could coordinate the anti-corruption fighting on a general level, having also the responsibility for the overall strategy on this issue and for its scientific documentation, it would be equally important to secure a better enforcement of law on various specific levels, and mainly on the levels of disciplinary and judicial procedures. According to several reports, produced every year by the General Supervisor of Public Administration in Greece, the Disciplinary Councils are not severe towards functionaries for whom there is evidence of bribery. Moreover, Greek Courts proceed to the trial of allegedly corrupt functionaries with great delay, and they finally either acquit them (as a result of the difficulties to obtain witnesses who could testify against a functionary), or pronounce a light sentence on them, usually suspended with probation, up to five years or convertible up to three years to a fine (articles 100 and 82 of the Greek Criminal Code, as the former article was modified by Law-Nr. 3904/2010). This phenomenon of ‘restricted immunity’ is even connected with the criminal sanctions for bribery, which are foreseen by the Criminal Code, and which are indeed not so high (bribery is mainly punished as a misdemeanor). Yet, this problem is not particularly worrying because in serious cases, accusations of bribery are usually combined with other, more severe ones (i.e. for infidelity, money laundering, false ascertainment, fraud, or embezzlement of public money).
Taking into account the abovementioned observations, it would be appropriate to intensify Greek disciplinary and judicial law-enforcement mechanisms, and at the same time, to promote programmes of protection for witnesses who would like to testify against corruption, without the fear that this act could have any negative consequence for them (for example, they could be considered as authors of active bribery -cf. however, Article 236.2 of the Greek Criminal Code- or they could have ramifications with their future administrative transactions).
11. The seven anti-corruption measures which were analyzed above refer to all kinds of corruption. Consequently, these measures can be applied not only to cases of petty-corruption, i.e. having to do with great numbers of common people and with every-day routine matters, such as licenses from town-planning agencies, dealings with tax-agencies and treating of patients in hospitals, but also to cases of grand corruption, i.e. concerning exorbitant amounts of money and high-ranked officials, in their transactions with powerful domestic or international enterprises on deals related, among others, to armaments, public works and pharmaceutical products. However in Greece, tackling grand corruption is connected to a very important parameter, which is not usually the case in petty corruption. Indeed, in cases of grand corruption a great proportion of the economic benefit offered to the corrupted functionary, goes finally to the treasury of one or more political parties, mainly the couple which exercise governmental duties alternately. As the political philosopher Michael Walzer observed in an article published in Greece (cf. newspaper Kyriakatiki Eleftherotypia, 6.7.2008, page 26): In the U.S.A., and according to him, equally in the whole western world, politicians and electoral mechanisms have become very expensive. This is a rather predictable impact which television and the mass media have on electoral campaigns. The decline of political engagement on local and grassroots levels can also be attributed to the costly entrance fee demanded by the fourth estate. It is necessary for candidates and their teams to maintain high electoral publicity, run many polls, make numerous television appearances, et cetera. This is a strategy and tactics, which is repeated during the whole electoral campaign. Thus, this multi-faceted effort requires obscene amounts of money and drives the politicians to search for the support of those who control the sources of their financing. It is therefore, easily understood (this was also a conclusion from the Siemens corruption case in Greece) that political parties are more or less obliged to search and secure ‘dirty’ money. This questionable funding is procured for example, by ordering unnecessarily expensive -or unnecessary altogether- military equipment. This abundant cash flow and the ensuing monetary kickbacks, allow the politicians to preserve their ‘party-armies’ (i.e. ‘devoted’ party-followers transported around Greece to show ‘sincerely fervid’ support at a candidate’s speech, or at a town hall meeting for the incumbent, or appear as locals, at a far away town in front of the media, always for a handsome remuneration of course) and to be active players in the jousting for position in this self-aggrandizing and solipsistic political system. In fact, party expenses in Greece have been so high in the last years, that all political parties (except one) are indebted. In particular, the two main parties have already cashed in advance all state grants intended for them until the year 2017 (!) and have even mortgaged these grants for loans from banks, amounting to almost €234 million. Therefore, there is a need for the politicians to change the rules of engagement in this decadent political system and to agree on a maximum ceiling for their annual expenses, in order for there to be a sincere restriction in competitive practices concerning their electoral expenditures and their media publicity, as well as a bona fide effort to abolish the existence of the anachronistic ‘party-armies’. It is a fact that a similar regulation for restricted party expenditures exists in Greece by virtue of Law- Number 3023/2002. However, this law is not really respected by anyone, nor applied seriously. Hence, it would be very important that the maximum amount of expenses (per politician and per Party, per annum) become part and parcel of the rules, accepted by the parties, and that every violation of this maximum amount should result in severe and enforceable sanctions.
12. A further problem of the political system in Greece, which harbours and fosters corruption, is that the control and sanctioning mechanisms for politicians΄ offences (mainly for ministers and members of Parliament) are almost non-existent, thus allowing them to be under the umbrella of a ‘scandalous’ immunity. In particular, regarding their assets’ declarations, according to a law of 1964, in practice is there no further control or verification of this declaration. On the other hand, in the case that a politician in Greece commits a crime, even a serious one, beyond his/her duties, he/she does not have to give account for this to the justice system. This happens primarily because of the existing distinctly short prescriptions and secondly, because the Hellenic Parliament is the only organ which is deemed pertinent to exercise penal prosecution against its own members. (NB. Usually such prosecution is avoided due to a tendency of protecting their own, by opting to favor an “esprit-de-corps”). Nonetheless, this practice has been already condemned by the European Court of Human Rights (cf. Syngelides v. Greece, 11.2.2010), as it violated the elemental principle of equal treatment before Justice and furthermore, has been disputed repeatedly by GRECO (i.e. The Council of Europe), the most recent being in its Report of 2009 (GRECO Evaluation III, Rep. (2009) 9E, Theme II). The Greek Ministry of Justice, in view of these developments, has recently forwarded a draft of law, which attempts to correct some of these incongruities and extravagances, allocating more responsibilities to the judicial power pertaining to the control of politicians’ offenses. Yet, the amendments can be very restrictive, because the whole issue is regulated directly by the Greek Constitution, which cannot be revised in the near future and when it is indeed revised, it is done so, by the ministers and the parliament-members themselves – a case-in-point regarding conflict of interest, or as Juvenal remarked millennia ago: “Who watches the watchers?”
13. I have the feeling that the a.m. observations give an example of how to construct for a country a Multidimensional Corruption Index, taking into account all important parameters of corruption in this country (cf. Paragraphs 1 and 2). On the other hand, if one tries to draw a general conclusion from what was opined above, one could say that in Greece legislation against corruption is almost complete, but that there is still a climate of tolerance towards petty corruption, due to cumbersome bureaucratic procedures, which almost impel citizens to look for “oblique ways” in order to advance their cases through the bureaucracy. On the other hand, there are important cases of grand corruption, which have been discussed in recent years in Greece and investigated in depth by the prosecuting authorities. Moreover, in many of these cases, penal prosecutions have been exercised, and even penal convictions have been imposed for serious cases of corruption. Furthermore, important steps have been taken towards a more efficient administrative fighting of corruption: A programme of “Transparency” through internet has been introduced for every state-act; Measures of ‘objectivization’ of criteria have been adopted on different levels (for example appointments and promotions to public services - i.e. ASEP); Measures to disconnect the direct contact between functionaries and private citizens have been further promoted (i.e. KEP). Yet, a main problem which gives rise and growth to grand-corruption still remains: The immunity of persons belonging to the so-called "political system", such as ministers and members of Parliament. In the final analysis, the cost associated with democracy ought not to exceed certain limits, as far as the provision of material resources is concerned. Otherwise, it may very well undermine the value and quality of democracy itself.