This blog is the latest in an Anti-Corruption & Governance Center (ACGC) series taking a look at corruption and COVID-19.
So far, the brunt of the coronavirus pandemic has not fully shifted from the more developed world to the world’s poorest and least prepared countries. When it does, international organizations like the International Monetary Fund are standing ready to provide unprecedented levels of financial support to help countries most in need. Considering the bleak global economic outlook, even those escaping a major outbreak will likely require large-scale emergency funding.
Unfortunately, the certainty that enormous sums of aid will be needed is matched by a belief that, as in many developed countries, large portions of it will be lost to corruption. To discuss these risks, ACGC recently sat down with longtime anti-corruption practitioner James Wasserstrom to hear his practical advice on how to combat corruption during the pandemic.
Building Roads and Blowing Whistles
Wasserstrom is well acquainted with the world’s least developed countries after spending nearly three decades with the United Nations managing infrastructure development projects. In this role, he had several early encounters with the AIDS pandemic, an experience with parallels to the current emergency. He relates:
“Building infrastructure in remote areas of these countries in Sub-Saharan Africa…in the late 1980s and early 1990s… [we] stumbled across the AIDS pandemic before it was known as AIDS. Then it was called ‘slim disease’ in Uganda and a variety of other mysterious monikers. Our work was with populations that we were…employing to build bridges and roads and health centers, etc., [but] there was no one to build. They were all dead. The people we were finding in villages in Northwest Tanzania…were just grandmothers and orphans.”
Wasserstrom also spent over 17 years fighting corruption, sometimes at a personal cost. In the early 2000s, he was assigned by the UN to set up a public utilities watchdog in Kosovo. There, he systematically uncovered dozens of cases of corruption that extended from petty fraud to multi-million-dollar bribes. Some of those bribes were said to involve top UN officials in Kosovo. When Wasserstrom sent a seemingly confidential whistle-blower complaint to higher UN authorities, word got out to his in-country bosses.
Reprisal was swift. Wasserstrom’s former colleagues denied his claims. He was accused of wrongdoing and detained by UN police in Kosovo while his home and car were searched. The UN then fired him from his position. A years-long legal battle in the UN’s justice system ensued. Initially, the UN Ethics Office declared the facts of his case to be valid but subsequently threw out the case on procedural grounds. After an appeal, the UN Dispute Tribunal reopened the case and some damages were awarded.
Meanwhile, Wasserstrom’s anti-corruption work has continued unabated. He served for five years as the senior advisor on anti-corruption at the U.S. Embassy in Kabul, Afghanistan. Currently an international consultant on countering corruption, money-laundering and terrorist financing, Wasserstrom also serves on the committee of the Independent Defence Anti-Corruption Committee in Ukraine.
Note: This interview was recorded in April 2020, and has been edited for clarity and brevity.
How were you introduced to anti-corruption in your career?
“I think [Kosovo] is where the major turning point for me came in terms of corruption – before that, I wasn’t really working on corruption issues. We were administering the province [when] I was asked by the Special Representative of the Secretary-General – the governor of the province on behalf of the international community – to examine 2,250 pages of external audit reports on the public utilities. They were contributing at least a billion dollars to GDP – electricity, utilities, airports, railroads, post and telecommunications – the biggest employers in the biggest companies in Kosovo.
The fear was that they were riddled with corruption and the people in charge of the operation on the UN side were afraid of what they would find. I reviewed them and found that they were absolutely riddled with corruption and were cash cows for a variety of corrupt actors, including some in the current crop of political leaders.
So, I came up with a roadmap – 38 measures that should be taken – including law enforcement, dismissals and detentions, regulatory changes, and reorganization to clean them up. So, I originally got into the anti-corruption field via corporate governance and cleaning up these giant companies. And we did a lot of good work in transforming some of them into modern state-owned enterprises, one or two of which were privatized.”
Turning back to today, a lot of folks have started talking about corruption risks during the COVID-19 pandemic. Would you consider those risks unprecedented, or are they similar to things that we’ve dealt with in the past?
“We may not have dealt with this specific set of circumstances but we’ve dealt with other crises, whether they are in health or in other sectors that have led to massive infusions of funding. There are plenty of existing lessons that can be drawn from them. For example, in post-9/11 Afghanistan, the political imperative was to spend large quantities of money quickly with little attention to oversight – leading to vast amounts of fraud, waste, and abuse which ultimately undermined the objective.”
What previous pandemics or healthcare crises are useful parallels for the current one?
“There are health crises like Ebola and AIDS/HIV. Ebola was far more deadly, although much more contained than this one, requiring its own kind of massive response. In that situation, there were lots of reports of funds that were lost, or had gone astray, at the hands of governments and healthcare providers themselves, demonstrating that no institution is immunized from opportunistic behaviors.”
Around the world, governments are loosening their procurement processes, procedures, and rules. Would you say that’s one of the biggest risks to corruption right now – that loosening and kind of ramming things out the door?
“Yes, of course. But we need to be practical and not dogmatic about this. I don’t know much about testing and PPE, but I do know about corruption and how funds are siphoned off in health systems as well as in other systems. I don’t see that there’s any contradiction between the imperative of the emergency and urgency aspects of all this and ensuring the funding reaches the people in need. The emergency and urgency aspects always seem to trump common sense protections when it comes to delivery of assistance and that’s a false choice. You can have them both simultaneously. You can put in place obvious, relatively simple safeguards and you need to have people who are part of your response who are sensitive in real-time to the potential leakages.
This was an issue I had with a major international health organization some years ago when I was being interviewed to be inspector general of that agency. One of the board members asked me about my attitude towards corruption. I said that I would do everything I could to minimize corruption. They pushed back, saying, but isn’t some level of corruption just simply the cost of doing business in these places? And maybe there is some element of truth to that, but it doesn’t mean that we should then contribute to it or accept the status quo. We can actually try to effect change in broken systems at the same time that we’re dealing with the pandemic, and that’s exactly what should happen in this instance. We don’t need to feed plutocratic pigs at the trough.”
What would you say to those who say that we shouldn’t even be talking about anti-corruption right now?
“People always say that. At the beginning of an intervention, they’ll say ‘Oh it’s too much of an emergency. We can’t possibly do that.’ Then in the middle, ‘Oh, we can’t do that because we rely on those (often malign) actors to deliver our healthcare system, so we really can’t interfere with them.’ And then at the end, they’ll say, ‘Well, we’re leaving anyway, so we don’t really need to do this.’ They’ll always find an excuse not to deal with corruption. But without oversight, you’re undermining your own chances of success, as we saw in Afghanistan and other responses.”
Is there a perfect time to intervene on corruption?
“No, there’s never a perfect time. It’s all the time. Your intervention can include softer tools, like systems and processes, or harder tools, like law enforcement and punishment, depending on the circumstances in which you’re operating, but there’s never not a time to be dealing with this.”
If you were to build, maybe not 38 steps like in Kosovo, but maybe a three-to-five step intervention on corruption, what would it include?
“Well, they come down to the cliché in my business, transparency and accountability. But those concepts are always valid. And there are many, many ways that we can ensure transparency and accountability in the provision of people, money, and materiel in response to any emergency, including one in the healthcare sector.
One obvious way is by ensuring that you have diffused [instead of] centralized decision making, that there’s no one person or small elite in a recipient country — or in the donor for that matter, making decisions. Decisions [should] be made by a number of different actors that…have different kinds of interests. They all may share an interest in having an effective outcome, but they don’t share the same bureaucratic, political, or personal interests. People who will keep one another, to some degree, honest. When it comes to allocation of resources, allocation of equipment, and human resources…you need to have this diverse set of eyes on it all the time.”
When you move down to the next stage of post-procurement to whatever happens next – whether it be the supply chain or the actual providers themselves – what can be done in those stages to reduce corruption?
“There’s a whole host of measures for normal times, but in a crisis, especially one of health, at the ground level you need to have civil society [and] non-governmental independent experts in the room as procurement decisions are being made. They need to be present for [the] opening of bids and for the whole process. And they should also have staff at the community level who will be keeping an eye on what is happening at those hospitals and clinics and who can then report up the chain of command – including to the donor. If donors are providing the funding, they should be present or represented in the room. Donors must ensure that these governance structures are actually functioning properly where there is such a high risk of losses [at every stage]. And that includes not just technically but also in terms of transparency and accountability, publicly and privately.”
What does transparency and accountability at the top decision-making level mean in practice?
“[It means] a task force of some kind that’s united with a common purpose but without self-interest [either political, bureaucratic or personal]. It must include either outside independent technical experts who are funded by donors or civil society experts who…are not dependent on the government…to bring the watchdog role in the room at the outset. Essentially [you] need to follow that model through the setting of policies, allocation of resources, managing the supply chain and then the distribution and delivery of services, in this case, healthcare nationwide.”
If you don’t have any of that accountability and oversight and if you can’t get people in because the system up there is already just too corrupt, are there levels in which it’s easier to promote change and move the dial?
“At the community level—if you can’t find your way into the highest levels. But let me say at the outset [that] donors and anti-corruption concerns can get in the room by conditioning international assistance to include safeguards. God forbid anyone put guardrails in place during a crisis, such as conditioning assistance in an emergency, but I would argue it’s even more important in the pandemonium of a pandemic when people will feel justified to override oversight in the name of getting help to the people who need it. How can we condition assistance? Ensure you as [a] donor or your trusted agents have unfettered access to where these decisions are made. Donors will have to agree on one among them to coordinate the international community response to lay out the conditions. And donors already know who the trusted agents are, perhaps NGOs, because they’ve been working with them, usually for decades. You don’t have to go out and find them. Local NGOs and think tanks are generally funded by the donors anyway. Just bring them into the process and let them get to work.”
So not over-empowering government structures that are highly corruptible and creating a parallel stream of assistance to the civil society organizations with the specific directive to act as oversight and as watchdogs on the assistance that’s being delivered?
“Yes, or assign or insist on having independent monitors of the whole program. If you have the capacity nationally, great. If you don’t, then bring in [people] from outside to monitor this process on the ground as it happens, in real-time.
The problem there will be that you don’t have enough people who have experienced [this sort of thing] because there’s a very small number of international practitioners who do what we do. Most people in Brussels or Washington have never really had to fight [this] for real. But you can find or create the capacity to actually have specialized monitors [instead of] people who jet in from time to time. I’m talking about people who are actually there on the ground, who are in the meetings, consistently, who are observing the decision-making process, observing the resource allocation process, and observing the supply chain management process and the healthcare delivery at the local or community level.
There are plenty of dynamic local NGOs fighting corruption which may or may not have some expertise in healthcare and who have wonderful instincts when it comes to sniffing out schemes. Donors should step up and fund trusted agents and watchdogs [and] bring them in…upstream and downstream. Help them demand public reporting and accounting. Help them establish strong whistle-blowing programs. Help them put pressure on their legislators, too. It boggles the mind that people aren’t even talking about this.”