Comment - No Coincidence Countries Suffering Most From Debt Crisis Have Major Corruption Problems

By Nuala Haughey, Advocacy and Research Manager, Transparency International Ireland

It is no coincidence that countries suffering most from the European debt crisis also have major problems with corruption. While international indicators suggest that corruption is less pervasive in Ireland than, say, Greece or Spain, its ravaging impact on public finances is just as tangible.

Corruption has played a starring role in our home-grown crisis. Not necessarily corruption in the traditional sense of bribery, but what is known as “legal” corruption - practices which, while unethical, are not punishable by law. Our banking meltdown was in no small part caused by legal corruption in the form of the “capture” of regulators and policy makers by a banking and property elite.

It is clear to indignant and increasingly impoverished citizens in both Ireland and the rest of Europe that the debt crisis is underpinned by a much more fundamental crisis of values and governance. It is also apparent that there will be no way out of this mess until we tackle the underlying corruption risks and governance gaps that led to obscene benefits for the few at the expense of the many.

But where to begin?


Transparency International today (June 6th 2012) publishes the first comprehensive assessment of the capacity of European countries, including Ireland, to fight corruption in all its forms. The report Money, Politics and Power: Corruption Risks in Europe, highlights common problems, identifies promising practices and promotes sustainable reforms. The study brings together the findings of 25 country-level ‘National Integrity System’ assessments which analyse a range of critical institutions and laws in terms of their anti-corruption efforts.

While the report finds huge variations within the region, no country comes of out these “integrity health checks” with a clean bill of health. It is no surprise that Greece, Italy, Portugal and Spain top the list of western European countries found to have serious deficits in their anti-corruption frameworks, particularly in relation to public sector accountability and efficiency.

Few eyebrows will be raised over the report’s findings that Europe’s integrity leaders - Denmark, Norway and Sweden - share entrenched transparency and accountability mechanisms including active, well-resourced and respected watchdog institutions. For example, Sweden’s freedom of information law dates back to 1766 while its ombudsman has existed since 1809. Denmark, Norway and Sweden, as well as Germany and Switzerland, also emerge as countries with relatively strong parliaments which keep a check on the executive’s actions and decisions, primarily through committee structures with robust investigative powers and strong budget oversight.

Ireland’s anti-corruption framework is decidedly patchy, with significant gaps that undermine the quality of our democracy and standards of governance. But there are also some signs of progress on several of the key recommendations in Transparency International Ireland’s National Integrity System assessment (which was published in 2009 and is currently being updated as part of the 25-country project).

On the downside, policy-making remains shrouded in secrecy and crucial institutions like NAMA, the Central Bank, the National Treasury Management Agency and the Garda Síochána remain outside the scope of our freedom of information laws. Political patronage is alive and well when it comes to appointments to state boards. Structural weaknesses in democratic governance mean the executive is not properly held to account by parliament. Our ethics watchdog, the Standards in Public Office Commission, is hobbled by weak investigative and sanctioning powers. And political party finance laws are riddled with loopholes -- significant corruption risks that draft legislation does not adequately address.

If we have learned one thing from our debt crisis, as well as our church and political corruption scandals, it is that there is an overwhelming need for a law to encourage and protect people who report wrongdoing and maladministration in the public interest. A draft whistleblower protection law shows promise, but is only one of many steps needed to break down the fear and cultural ambivalence that prevents decent people from acting for the common good.

The Mahon Tribunal laid bare the corrupting influence of furtive lobbying on our planning and political systems and a planned statutory register of lobbyists – provided it is mandatory – could help ensure that policy making is not skewed in favour of special interests.

As scandal after scandal has shown, Ireland’s integrity problems are not exclusively caused by the absence of legal or institutional powers, but often lie with the unwillingness of politicians, police, officials and even ordinary citizens to invoke them. A frustrated public has good reason to be sceptical about whether individuals exposed  recently in the final and damning reports of the Moriarty and Mahon tribunals will ever pay any price for their corrupt or crooked activities. Or whether the investigations arising from the banking crisis – despite the enhanced investigative powers provided by recent law reforms - will lead to bankers being put behind bars.

Delay or inaction in the pursuit of justice creates the impression of impunity, which erodes trust in democratic institutions; it shouldn’t be too surprising therefore that this year’s Edelman Trust Barometer found that seven in ten Irish people do not trust the government to tell them the truth. Tolerance of or ambivalence towards white collar crime or corruption also undermines social cohesion in a very tangible way. People, rightly or wrongly, say to themselves: ‘If that shower can get away with bringing the country to its knees, why should I pay my household charge?’

The Taoiseach’s election mantra was that he wanted to make Ireland the best small country in the world in which to do business, raise a family and grow old with dignity and respect.  If he is serious about this, he needs to go beyond austerity economics to tackling the fundamental causes of this crisis.

Certainly, we need political engagement at the highest level to drive a multi-agency approach to tackle corruption in all its forms. But more importantly, we need genuine and enlightened leadership to initiate the profound changes in cultural values that are required if we are to succeed in putting clear and honest conduct at the heart of public life.

Nuala Haughey is Advocacy and Research Manager at Transparency International Ireland

 

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17 July 2014 - 6:46pm

Our deepest sympathy to the family of Gustave Sharangabo Makonene of TI Rwanda, murdered one year ago today http://t.co/VqNHEZ4fVl...

15 July 2014 - 10:00am

TI Ireland will be pretty busy promoting and advising on the new Protected Disclosures Act over the coming months, We'll keep you posted..

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