“Ideas, institutions and laws give the necessary framework to get started. How things are implemented is the acid test. It remains to be seen how it will be facilitated and supported by member states or how it may be sabotaged. I consider european institution key to protection of financial interests in European Union for rule of law, integrity and deeper integrated processes that EU desperately needs of this points”, says Professor Nikos Passas in an interview with EURACTIV.pl.
By Mateusz Kucharczyk, EURACTIV.pl
Nikos Passas is Professor of Criminology and Criminal Justice at Northeastern University. His degrees are from the Universities of Athens, Paris-II and Edinburgh. He is also Distinguished Visiting Professor at Beijing Normal University and others.
He has more than 240 publications on corruption, good governance, illicit financial/trade flows, sanctions, informal fund transfers, remittances, terrorism, and financial regulation. He consults with law firms, financial institutions and various organizations, including the UN, EU, OECD, OSCE, IMF, the World Bank, research institutions and government agencies in all continents.
Mateusz Kucharczyk, EURACTIV.pl: You have been dealing with the problem of corruption for almost 40 years. In your view, is it possible to eliminate this phenomenon altogether?
Prof. Nikos Passas: We have invested a lot of money, a lot of human capital, combining the agenda of anti-corruption activity with those of good governance, rule of law and economic development.
One could have expected some strong positive results of all these measures, but the actual outcome is quite disappointing. Many things could be done a lot better and unfortunately we have backslidden in some areas. There is no progress at all in some respects.
What we have also noticed is that some anti-corruption measures have been in fact paradoxically used in corrupt ways targeting, for example the opposition and in discriminatory ways. This leads to demoralisation and brain drain, which causes society to lose the most vital part of their human resources – young people, who in fact feel disappointed with the lack of meritocracy in the society.
Different forms of corruption have very severe outcomes. I’ve recently published a paper devoted to the problem of corruption where I describe the effects of the phenomenon and present some thoughts and ideas about the future actions to combat it. There is no doubt a lot can be done much better.
Based on your research, could you indicate an example of successful elimination of corruption?
No, even if we observe a progress. And I don't think that we could hope to create a paradise on earth. I don't believe that perfect society is possible, but I am convinced that our goal should be a better society.
„Perfect” should not become the enemy of „better” and we need to look for the areas where improvement can be achieved in a sustainable way. The problem is not with the lack of success – our actions proved successful in many areas.
The problem is many of the achievements are reversible. Sometimes we take a step forward and then two steps back. Something works and then something changes and we go back to where we were and sometimes things are going even worse than before. When you disappoint people’s expectations, when people are frustrated, it is then even worse than doing nothing because you give people false hope. It’s hard to regain their trust.
Once the trust is undermined, when confidence in public institutions is shaken, it takes a much longer time to repair that. Unfortunately, this is a problem that we see in many countries, also in Europe.
Corruption has been present in societies since ancient times. Economic development and the evolution of cultures have not led to its elimination. Does globalization support corruption?
In the context of globalization, we can find a factors that can contribute to promoting integrity and accountability, but also opportunities for new structures, new forms of corruption that emerge. It is crucial to clarify from the beginning that a lot of metrics we use to measure corruption are actually focused on one type of it that is bribery, as one of the most traditional forms of corruption, which is also easier to detect and deal with.
But there are also other types of corruption like abuse of office, power, or function, as well as state or agency capture, conflicts of interests that are not resolved nor even clearly defined as corruption in many cases. The point of corruption is undue influence on the decision-making and action or inaction motivated by personal interests: business, political or other.
One example is offering or giving someone an undue advantage in exchange for specific actions. When you manage to have someone lead an agency of public authority so that decisions are basically made in your favour, you don't need to pay anybody a bribe. You can act much more efficiently and in a way that appears legitimate and fully legal.
The problem is, however, that some of us are more equal than others, much more influential, Therefore we can speak of institutional corruption which goes far beyond legal terms. It is a situation when the actions that are being taken stand in contradiction to the principal objectives of an agency or organization, a person or group uses its influence or take steps in a way that it promotes personal or private interests.
This includes situations when no actions are in place that the law defines as corruption. For instance, we can have an institution whose objective is public health and they do not serve or may even undermine that purpose.
To me corruption should be analyzed by means of the consequences of actions or inactions, rather than through legal definitions. More attention should be paid to whether we have in society people and institutions that serve the common good or they undercut it. If they do not fulfill their role as they should do, we are talking about institutional corruption.
The analysis of the effects of certain action, measures, and policies suggests that we have a problem, which calls for our attention, and that public policy must be reconsidered or even redesigned.
Many individuals can be found who deliberately and knowingly disserve the public good. But even if it happens unintentionally, the effect is the same, the problem is still there. People suffer and democracy is undermined. People get upset and frustrated. The quality of life needs to be improved with integrity and accountability.
The publication of Panama Papers and Paradise Papers has shown that investigative journalism can effectively disrupt criminal networks and force greater openness in politics. It seems to me, however, that it is rather law enforcement agencies that are responsible for this task. Would it help to create a new global unit to combat the transnational character of organized crime and corruption?
We already do have some networks. There are groups which are dealing precisely with organized crime and corruption. The revelations including leaks such as Panama Papers or even WikiLeaks would never come into light if not the networks of reporters who are doing an amazing work.
They need particular support, in fact, as their activity carries a great risk for their personal security and safety. We have seen the people get assassinated because of their investigative work. Prevention of corrupt practices is important, but it is far not enough.
Sometimes more analytical and critical contribution is required by researchers and academics. We have seen a substantial progress in this area, but the actions should definitely be better coordinated and systematized if we want them to become more effective. Still, the initiatives that we have observed so far are good and we can build on them.
What is your opinion on the establishment of the new European Public Prosecutor's Office (EPPO)? The EPPO may request the arrest of the suspect, but this must be confirmed by the relevant national authority. EPPO will be useful in fighting corruption in EU after coronavirus pandemic?
This is just another example of the development with regards of push and pull factors in the process of European integration. There are forces that are moving towards the pooling of sovereignty, to joint actions, but also centrifugal forces and processes. This is the response for the mishandling of financial crisis in many countries and the lack of the solidarity among the EU members states, as well as the problems that were brought into light by the pandemic.
I consider the establishment of EPPO to be a step in right direction. I do believe that the pooling of sovereignty and collective efforts are essential. The networked problems and activities call for a networked response.
Ideas, institutions and laws provide the necessary framework to start. How things are implemented is the acid test. They may be supported by member states or they may be sabotaged. I consider this institution key to the protection of financial interests in the European Union that demand the rule of law to be obeyed, integrity and deeper integration processes that EU desperately needs at this point.
What do you think of the nomination of Laura Codruța Kövesi as head of the EPPO?
I think that the selection of Laura Codruța Kövesi is a very good decision. I know her personally, I worked with her. I have met her when she was in charge in Romania and I know that she has appropriate skills to do a lot of good things. So she is definitely a promising person and I hope that she can enjoy the support of the EU member states and contribute to the common cause in EU.
But the jurisdiction of EPPO embraces only 22 EU countries – neither Poland nor Hungary. What effects will this fact have on the operation capacity of this office?
It's definitely a limiting factor. If some country is not participating in the common actions it means that when there is an investigation that is going to bring useful results, that country will not benefit from it. When a country reveals misconduct, those responsible cannot be brought to justice – so being outside the EPPO’s jurisdiction is by all means counterproductive
The non-participation is a bad sign, which must be remedied. People in Hungary and Poland will realize at some point that it is their vital interest to participate. I believe that sometimes making appeals to people's morality, ethics or values cannot bring as good results as when you provide a concrete incentive for active and effective participation.
What is strategic here is to demonstrate tangible, measurable, practical ways of how it is in the interest of Hungary and Poland to join the common effort and work with rest of the EU.
How the crisis of the rule of law and the coronavirus pandemic are destroying public life? Once the pandemic is over, we will have a „time of grand corruption”?
It's up to us. We are on the crossroad and which path we take depends to a large extent on all the stakeholders who have a role to play: public authorities, politicians, government and opposition, private sector, civil society, media, international organizations, and individual citizens.
Every crisis is a challenge, but also an opportunity for a better future. What we make of it depends on us. Nothing is predetermined. We can shape the future, influence it.
Problems that were revealed or exacerbated by the pandemic show that we did not have a perfect world. The way that I understand resilience in the face of the pandemic and the public health crises is not an effort to return to an old normality but to find a new normality that is much better. We have the chance, let's use it!
What is the nature of corruption during the pandemic, with the health crisis superimposed on the rule of law crisis?
There are 3 levels we can analyze: an institutional corruption, legally defined corruption and lawful but awful activities. In many cases awful practices are accepted or even encouraged by the governments. If we look at their effects, they may be even worse than organize crime.
With respect to the pandemic, the first thing to look at is what has failed at the level of preparedness by the countries. The pandemic came as no surprise to those who were attentive enough. For decades now, scientists, public health officials have been warning of such a scenario. It is easy to read books, papers and check what the institutions do in different countries to get ready for such situations. And yet, we hardly did what blueprints and guidance was already in place, we did not follow the experts’ advice.
In the institutional context, what was it that made the public health system so vulnerable for the situations like the pandemic? How small countries like Vietnam, Taiwan, New Zealand – with different political systems – were able to do a far better job than a lot of Europeans or North Americans have done?
The second level. How did governments respond once the pandemic was started? All kinds of reports of strange kinds of pneumonia or other illnesses back in 2019, there were reports from China and WHO, as well as intelligence services. China was very late to share what they know, but it did issue warnings and relevant information but most of the world ignore or underestimated the threat
Inaction by governments is also corruption?
The governments have intelligence services, whose work is paid for by the taxpayers. Their job is to know a little bit more than you and I about important matters. They constitute a component of national security systems and I am certain that they obtained information about the threat before any public announcement was made.
The question is how seriously did governments take the advice of the intelligence? Did they follow it and what response did they plan to the problem? How did they prepare the public health, population, the most vulnerable groups? What guidance was issued and how? How did they coordinate their actions?
What about the unprecedented billions of dollars/euros mobilized by governments to stimulate economies?
A lot of money was made available to support the economy and this is absolutely understandable. What history has taught us is that any time we have a natural, war or human emergency, then controls weaken.
A lot of money was distributed without usual checks and balances that we have for transparency and accountability. That provides a huge opportunity for people to take advantage of that. In history many fortunes were made during wars and other types of crisis.
Now, massive amounts have been given to parts of the society without proper checks and balances. However, many claim that it is not the time to investigative this, to do audits and checks. This is the wrong approach. This is precisely the time when the public good should be protected from inequalities, injustice and corruption. In the past, we have seen that when we mishandled such crises, wars happened in the worst case scenario.
And the third question is that some kind of measures that are introduced now have lasting effects that will exceed the current emergency. Surveillance technologies, for example, are very intrusive. New ways which public authorities and institutions use to acquire people’s data to some extent prove justified in the time of the pandemic. Still, some may abuse this opportunity in order to grab and consolidate power that they will use in an authoritative way even after the pandemic.
According to Nations in Transit 2020, an annual report on democratic governance in the Europe and Eurasia published May last year by freedom House, an increasing number of leaders in Central and Eastern Europe have dropped - I quote - „even the pretence that they play by the rules of democracy. They openly attack democratic institutions and are working to restrict individual freedoms”. Poland has dropped out of the group of Consolidated Democracies and become a Semiconsolidated Democracy, while Hungary, which was previously put in the category of democracies, now become Transitional/Hybrid Regime. What is the link of the rule of law crisis – based on the contestations of liberal values in recent years – and corruption?
What corruption actually does? It dismantles the basic elements of democracy based on citizens’ conscious participation in the country. Misinformation, disinformation and populist messages lead to depriving the citizens their right to information.
There is a critical problem. What we need is ethical perspective on the power and actions of authorities and on technology and pharmaceutical companies. We need science, but science with a conscience.
It is possible to have an ethic approach in the world of politics?
It is a must. Politicians are elected or appointed in order to serve the common good. If they don't, either knowingly or unknowingly, we have another type of corruption: institutional or legal corruption. Ethics should be an absolute imperative for anyone that is supposed to be elected for a public post. If someone acts unethically, it means that he or she prioritizes himself/herself, his/her party, friends or family.
The other thing is how the rules of ethics are actually implemented in practice, how do they influence the decision-making concerning laws, measures, and policies. Some actions are conducted unduly and not transparently, which is also an example of a corrupt practice that undermines democracy.
In this case we don't have a participating citizenry. There are citizens who think that are participating but this is not real. Then we have state capture by a clientelist elite that promote their own good against the good of the many.
This is not democracy. This is not even capitalism, by the way. This is neosocialism. We have neoliberalism and austerity for the many and neosocialism for the very few who receive huge support from the state. This is state interventionism in favour of those who may be acting behind the scenes unethically or illegally.
Why do you refer to this as neosocialism?
When the government provides selective support that is not necessary. This is an undue advantage acquired through unethical or illicit processes. This is about corrupt influences, which is the opposite of democracy. To me illiberal democracy is a contradiction in terms. Politicians cannot be illiberal and democratic at the same time.
How should society react to this kind of corruption – with mass protests, by mobilising international organizations – or as the EU is trying to do by linking cohesion funds to the rule of law – or in other ways?
This is an opportunity to do a lot of good, but it has to be done with thoughtfulness, based on risk analysis and an appropriate strategy. We have seen in several parts of the Balkans where conditions that relate to anti-corruption have not helped the process and have helped in fact to privatisation of state assets in ways that corrupt or have actually captured the state. It's important to understand the possible consequences of our actions to find out what [un]anticipated and undesirable effects certain policies might entail.
I do believe in a carrot and stick approach. That there have to be both incentives and sanctions when someone does not comply. However, it has to be in thoughtful way, with bearing in mind unanticipated and negative consequences of certain processes.
We need both a good diagnosis of the problem and basic analysis of the context, while paying attention to different forces that play out in particular countries. Only with such knowledge is it possible to come up with a good strategic plan and to implement it, and at the same time to have some indicators and measurements that can tell us where we are on the track or whether something is getting off track. And certain adjustments need to be made on a regular basis.
This is the time to actually lay down the bases, the foundation for something that will work. Our approach needs to be data-based, knowledge-based, fact-based. Having this kind of feedback and the support of different stakeholders, we will be able to estimate the progress and figure out what improvement needs to be make.
The EU has an important legitimation and effective integration opportunity but if it fumbles it, the consequences will be negative. The EU has to lead it by example. It has to show how important are transparency, integrity and accountability.
Observing the pandemic, can we say that corruption is taking new forms?
I don't think that it takes a new form. I think that certain forms are becoming much more prominent than the others. What I do fear is the integrity of supply and distribution chains for medical products like protective equipment, treatments and vaccines, which are for some time to come in short supply.
We do have initiatives here in USA that are sponsored by the national science foundation. This is a task force led by three universities with government and private company partners aiming to find how we can better detect illicit substandard and falsified medicinal products, how to disrupt illicit networks, how to mitigate their effects, and how to built capacity around the world with respect to these three objectives.
I think that whenever we have a demand-supply mismatch, we can expect all kinds of fraud, abuse, corruption and illegal markets. We must be ready for this, we need effective responses to this and we have to prevent the phenomenon to the maximum possible degree.
Do you think that the COVID-19 pandemic could be a turning point, which will open the way to reform, especially in countries ruled by authoritarian, corrupt governments?
I think it will be a turning point in one way or another. This kind of severe shock will not go without consequences. It would have both negative and positive effects. It is up to us to maximize the potential for positive consequences and come out of the crisis stronger than we were before the pandemic.