Corruption

This is a guest blog post by Dr. Richard Messick, an anticorruption specialist. It is based on a CFR roundtable discussion on March 24 hosted by Matthew M. Taylor, adjunct senior fellow for Latin America Studies. One of the most promising developments in U.S. foreign relations is the all-out war on corruption being waged across Latin America. From “Operation Car Wash” in Brazil to investigations of presidential wrongdoing in Bolivia, El Salvador, Honduras, Guatemala, and Panama, across the region independent, tenacious prosecutors and investigators are out to end the massive theft of state resources that for so long has hobbled political development and throttled economic growth. The United States should be cheering for these corruption warriors, for we have much to gain if they succeed. Less corruption translates into more stable, reliable political allies; it means faster, more equitable growth and that means shared prosperity and less northward migration. Finally, less corruption in government will offer U.S. firms new opportunities. Think what the end of corruption in Brazilian public works would mean for U.S. engineering and construction companies. But given the stakes in Latin America’s corruption war, the United States should be doing more than cheering from the sidelines. It should be doing everything it can—without infringing the sovereignty or sensibilities of Latin American neighbors—to see its corruption warriors succeed. Here are five things to start with: Fund the U.S. Department of Justice’s Office of International Affairs (OIA) budget request. If a Latin American investigator learns an official he or she is investigating has a bank account in the United States, the investigator can ask the OIA to obtain the account’s records to see if corrupt money is being parked there. But the office had at latest count more than 11,000 requests pending and was receiving 3,000 plus new ones each year. Unless the investigator gets lucky and the request finds its way to the top of the pile, he or she will be long retired, and the suspect long dead, before the OIA responds. For years the U.S. Department of Justice (DOJ) has asked Congress, without success, for funds to hire more staff to speed requests. This year it requested $10 million to add 97 positions, 54 attorneys, and 43 paralegals and support staff. Isn’t it time Congress said yes to this modest request? Name a single focal point to help Latin American law enforcement agencies. When looking to the United States for assistance, Latin Americans face a bewildering number of agencies, bureaus, and offices: the Federal Bureau of Investigation (FBI), the Drug Enforcement Agency (DEA), U.S. Immigration and Customs Enforcement (ICE), the U.S. Secret Service, the Financial Crimes Enforcement Network (FinCEN), the 92 U.S. Attorney’s offices, and these are just at the federal level. There are hundreds, if not thousands, at the state and local level. It takes experienced U.S. law enforcement officers years to figure out where to go for information. Why not make it easy for Latin Americans who don’t have years to decipher the complex and bewildering U.S. system? Create one office, staffed with personnel fluent in Spanish and Portuguese from across the federal and state governments who can serve as a “one-stop shop” for Latin American police, prosecutors, and judges needing information from their U.S. counterparts. Create an interagency task force to work with Latin American counterparts to target corrupt Latin American officials. Whenever a corrupt Latin American official uses the proceeds of a bribe to buy an apartment in Miami or open a bank account in Houston or Los Angeles, he or she has violated U.S. antimoney laundering laws. Depending upon whether they traveled in the United States, used U.S. mail services, or U.S. email servers, they may have also committed wire fraud or violated the laws forbidding travel across state lines in furtherance of fraud or corruption. A task force of U.S. personnel drawn from ICE’s Foreign Corruption Investigations Group, DOJ’s Foreign Corrupt Practices Act (FCPA) unit, the U.S. Attorney’s offices in Miami, the FBI’s international corruption squads, DOJ’s kleptocracy unit, and other relevant agencies should be available to work with Latin American counterparts on possible violations of U.S. law committed by corrupt Latin American officials. Greater intelligence sharing and joint investigations in association with Latin American anticorruption agencies and prosecutors would enhance both regional and domestic efforts against corruption and ill-gotten gains. Enact the Incorporation Transparency and Law Enforcement Assistance Act. Introduced by Congresswoman Carolyn Maloney and colleagues in the House of Representatives and Senator Sheldon Whitehouse and colleagues in the Senate, this would end the ability of corrupt officials, as well as drug traffickers and other unsavory individuals, to keep investigators from learning how much money they have and where it came from. Under current law, a corrupt Latin American official can open a bank account in the United States in the name of a Delaware limited liability company. He or she can own the company anonymously, that is, without anyone, in Delaware or elsewhere, knowing his or her identity. If Global Witness’s exposé of U.S. lawyers counseling an investigator posing as the agent of a corrupt minister weren’t enough to persuade lawmakers of the need for the legislation, the April 3 revelations of massive abuses in the use of anonymous shell companies by the International Center for Investigative Journalism (ICIJ) should lay to rest any lingering doubts about how critical this legislation is to the fight against not only corruption but terrorism and organized crime as well. End secrecy in the U.S. real estate market. Thanks to gaps in U.S. antimoney laundering regulations, corrupt officials in Latin America (and elsewhere) can use the proceeds of corruption to secretly buy property in the United States. Requiring real estate agents, title insurance companies, and others involved in the purchase and sale of condominiums, houses, and other U.S. real estate to comply with the antimoney laundering rules will expose attempts by corrupt officials to create a “safe haven” for when they leave office. The U.S. Department of the Treasury took a small, first step in this direction in January when it issued an emergency order (in response to a New York Times’ exposé) requiring title insurance companies in Manhattan and Miami-Dade Country to apply antimoney laundering rules to all real estate purchases over $1 million in cash for the next six months. The rule should be made permanent and extended to all regions. Since 2002 the Treasury Department has given real estate brokers a “temporary” exemption from the antimoney laundering rules while it studies their situation. The time for study is over. The Treasury Department should follow the European Union’s lead and require brokers to comply with the antimoney laundering rules. The burden of ridding Latin America of the corruption that infests so many of its governments remains first and foremost the responsibility of its governments. But the United States has much to gain if they succeed, and there is much it can do to help them. The steps above are a modest beginning; it should move on them expeditiously. This piece also appeared on the Global Anticorruption Blog.

This is a guest blog post by Dr. Richard Messick, an anticorruption specialist. It is based on a talk he gave at a CFR roundtable on March 24 hosted by Matthew M. Taylor, adjunct senior fellow for Latin America Studies. One of the most promising developments in U.S. foreign relations is the all-out war on corruption being waged across Latin America. From “Operation Car Wash” in Brazil to investigations of presidential wrongdoing in Bolivia, El Salvador, Honduras, Guatemala, and Panama, across the region independent, tenacious prosecutors and investigators are out to end the massive theft of state resources that for so long has hobbled political development and throttled economic growth. The United States should be cheering for these corruption warriors, for we have much to gain if they succeed. Less corruption translates into more stable, reliable political allies; it means faster, more equitable growth and that means shared prosperity and less northward migration. Finally, less corruption in government will offer U.S. firms new opportunities. Think what the end of corruption in Brazilian public works would mean for U.S. engineering and construction companies. But given the stakes in Latin America’s corruption war, the United States should be doing more than cheering from the sidelines. It should be doing everything it can—without infringing the sovereignty or sensibilities of Latin American neighbors—to see its corruption warriors succeed. Here are five things to start with: Fund the U.S. Department of Justice’s Office of International Affairs (OIA) budget request. If a Latin American investigator learns an official he or she is investigating has a bank account in the United States, the investigator can ask the OIA to obtain the account’s records to see if corrupt money is being parked there. But the office had at latest count more than 11,000 requests pending and was receiving 3,000 plus new ones each year. Unless the investigator gets lucky and the request finds its way to the top of the pile, he or she will be long retired, and the suspect long dead, before the OIA responds. For years the U.S. Department of Justice (DOJ) has asked Congress, without success, for funds to hire more staff to speed requests. This year it has requested $10 millionto add 97 positions, 54 attorneys, and 43 paralegals and support staff. Isn’t it time Congress said yes to this modest request? Name a single focal point to help Latin American law enforcement agencies. When looking to the United States for assistance, Latin Americans face a bewildering number of agencies, bureaus, and offices: the Federal Bureau of Investigation (FBI), the Drug Enforcement Agency (DEA), U.S. Immigration and Customs Enforcement (ICE), the U.S. Secret Service, the Financial Crimes Enforcement Network (FinCEN), the 92 U.S. Attorney’s offices, and these are just at the federal level. There are hundreds, if not thousands, at the state and local level. It takes experienced U.S. law enforcement officers years to figure out where to go for information. Why not make it easy for Latin Americans who don’t have years to decipher the complex and bewildering U.S. system? Create one office, staffed with personnel fluent in Spanish and Portuguese from across the federal and state governments who can serve as a “one-stop shop” for Latin American police, prosecutors, and judges needing information from their U.S. counterparts. Create an interagency task force to work with Latin American counterparts to target corrupt Latin American officials. Whenever a corrupt Latin American official uses the proceeds of a bribe to buy an apartment in Miami or open a bank account in Houston or Los Angeles, he or she has violated U.S. antimoney laundering laws. Depending upon whether they traveled in the United States, used U.S. mail services, or U.S. email servers, they may have also committed wire fraud or violated the laws forbidding travel across state lines in furtherance of fraud or corruption. A task force of U.S. personnel drawn from ICE’s Foreign Corruption Investigations Group, DOJ’s Foreign Corrupt Practices Act (FCPA) unit, the U.S. Attorney’s offices in Miami, the FBI’s international corruption squads, DOJ’s kleptocracy unit, and other relevant agencies should be available to work with Latin American counterparts on possible violations of U.S. law committed by corrupt Latin American officials. Greater intelligence sharing and joint investigations in association with Latin American anticorruption agencies and prosecutors would enhance both regional and domestic efforts against corruption and ill-gotten gains. Enact the Incorporation Transparency and Law Enforcement Assistance Act. Introduced by Congresswoman Carolyn Maloney and colleagues in the House of Representatives and Senator Sheldon Whitehouse and colleagues in the Senate, this would end the ability of corrupt officials, as well as drug traffickers and other unsavory individuals, to keep investigators from learning how much money they have and where it came from. Under current law, a corrupt Latin American official can open a bank account in the United States in the name of a Delaware limited liability company. He or she can own the company anonymously, that is, without anyone, in Delaware or elsewhere, knowing his or her identity. If Global Witness’ expose of U.S. lawyers counseling an investigator posing as the agent of a corrupt minister weren’t enough to persuade lawmakers of the need for the legislation, the April 3 revelations of massive abuses in the use of anonymous shell companies by the International Center for Investigative Journalism (ICIJ) should lay to rest any lingering doubts about how critical this legislation is to the fight against not only corruption but terrorism and organized crime as well. End secrecy in the U.S. real estate market. Thanks to gaps in U.S. antimoney laundering regulations, corrupt officials in Latin America (and elsewhere) can use the proceeds of corruption to secretly buy property in the United States. Requiring real estate agents, title insurance companies, and others involved in the purchase and sale of condominiums, houses, and other U.S. real estate to comply with the antimoney laundering rules will expose attempts by corrupt officials to create a “safe haven” for when they leave office. The U.S. Department of the Treasury took a small, first step in this direction in January when it issued an emergency order (in response to a New York Times’ expose) requiring title insurance companies in Manhattan and Miami-Dade Country to apply antimoney laundering rules to all real estate purchases over $1 million in cash for the next six months. The rule should be made permanent and extended to all regions. Since 2002 the Treasury Department has given real estate brokers a “temporary” exemption from the antimoney laundering rules while it studies their situation. The time for study is over. The Treasury Department should follow the European Union’s lead and require brokers to comply with the antimoney laundering rules. The burden of ridding Latin America of the corruption that infests so many of its governments remains first and foremost the responsibility of its governments. But the United States has much to gain if they succeed, and there is much it can do to help them. The steps above are a modest beginning; it should move on them expeditiously. This piece also appeared on the Global Anticorruption Blog.

By all accounts, Mauricio Macri has had a remarkable honeymoon since he was inaugurated December 10, quickly moving to revise Argentina’s economic policies, restructure its relations with the world, and tackle a variety of rule of law challenges, ranging from corruption to the drug trade. President Obama’s trip to Argentina last week was in many ways the capstone to Macri’s dynamic first hundred days in office. The visit signaled a generational shift in U.S. policy toward Latin America, seeking to repair some of the worst damage done by U.S. support of the military dictatorship that took office when Obama was a teenager, but Obama and his entourage of more than four hundred business representatives were even more convincing in their strong praise for the Macri administration’s new openness to foreign investors. Indeed, Macri’s presidency has moved very quickly to change the climate. It has freed the foreign exchange market, cut government spending, fired public sector workers, raised repressed energy prices, reduced export taxes, and opened up trade. Early today, the government scored a major victory as the Senate approved legislation needed to end a fifteen-year debt dispute with creditors, paving the way for a return to international markets and demonstrating the government’s ability to corral the opposition toward pragmatic policies. The government’s rhetoric has been overhauled, shifting quickly away from the dirigiste and southern-focused language of Cristina Kirchner and her economics minister Axel Kicillof, and turning instead toward the global north and potential OECD membership. Hoping to change the tone, Macri has met the United Kingdom’s David Cameron to reassure him of his desire to improve ties between the two countries, flown to Brazil to reassure Rousseff of his desire to restart trade and revamp Mercosur, and moved toward isolating the chavista regime in Venezuela, including by withdrawing support for the Bolivarian-inspired broadcast company Telesur. For all these successes, however, the challenges Macri will face in coming months are formidable. Argentines are twice shy about economic liberalization after the deep trauma that accompanied the collapse of Domingo Cavallo’s convertibility plan and the subsequent debt default of 2002. Meanwhile, the economic situation Macri inherited is dire: high inflation, exchange rate depreciation, low foreign reserves, a primary fiscal deficit nearing 6 percent of GDP, and projections of negative real GDP growth in the coming year. Correcting the excesses of the past decade will be painful: utility and food prices are rising in response to Macri’s reforms, even as unemployment threatens, commodity prices remain low, and neighboring trading partners stagnate. Politically, Macri is governing with a bureaucracy populated by Kirchneristas and faces a court system stacked with the previous administration’s appointees. His Cambiemos coalition lacks a majority in either house of Congress, with only 15 of 72 seats in the Senate. Macri has managed to prevail in the crucial votes on debt repayment, but moving forward on deeper reforms will require him to continue to seek out common ground with portions of the opposition, such as the Frente Renovador faction of the Peronists, whose enthusiasm for radical reform is limited and self-interested. These conditions mean that while Macri represents a shift in Latin America, away from the “pink tide” of leftists who have governed the region since the turn of the century, his will not be a hard right turn. The positive upshot, as Andres Oppenheimer notes, is that Macri may be the leading edge of a “pragmatic cycle” in Latin America. But even accomplishing this pragmatic turn may be difficult until the economy and jobs creation perk up. In the interim, Macri may need to rely on symbolic and outward-looking moves that attract investment and build popular support, such as reforming Mercosur, driving forward EU-Mercosur negotiations (initial proposals are due on April 8), and perhaps even pushing a deal between Mercosur and the United States or signing on to the Trans-Pacific Partnership. Don’t be surprised if there are further surprises from Buenos Aires.

As Civil Society, Markets, and Democracy (CSMD) heads into spring break, here is what we will be reading. “This Week in Markets and Democracy” will return, relaxed and refreshed, on Friday, April 8. A new RAND study says corruption costs the European Union over a trillion U.S. dollars (€990 billion) every year—eight times higher than previously thought. The study’s authors, Marco Hafner and Jirka Taylor, recommend ways to stave off some of these losses, including better member-state monitoring, a new investigatory office, and an EU-wide procurement system. U.S. elections in 2012 and 2014 ranked the worst out of any long-established democracy, according to a new report from the Electoral Integrity Project. The United States scored particularly poorly on electoral registration and campaign finance. 90 percent of African trade is by sea, more than any other region in the world. The Economist argues its inefficient and poorly-managed ports fuel corruption. Anne-Marie Slaughter and Elmira Bayrasli write for Project Syndicate on how entrepreneurship is a powerful, but underused, diplomacy tool. They say policymakers should look to entrepreneurs to power development and to help find new solutions to big problems, such as climate change and migration. Writing for Just Security, Human Rights Watch’s Eileen Donahoe argues that by focusing on states, existing human rights institutions are ignoring how other actors defend or violate those rights. Technology accentuates this shift.

South Africa’s President Jacob Zuma has often been accused of corruption. But, until recently his hold on the governing African National Congress (ANC), with its huge parliamentary majority, has ensured that he could weather political storms. However, his recent missteps have eroded his support within the party. There is speculation that the party could remove him as party leader which would likely result in his resigning the presidency. While such speculation is premature, he is certainly politically damaged. The greatest threat to Zuma’s political future is now from within his own political party, rather than from the opposition. Zuma’s current round of troubles began in December 2015 when he abruptly fired his well-regarded finance minister, Nhlanhla Nene, and appointed a non-entity in his place. South African financial markets swooned, and Zuma was forced to back down, fire his newly appointed choice, and appoint Pravin Gordhan, who had previously served in that position. In February 2016, after months of insisting that public expenditure on his private estate, Nkandla, were justified on the grounds of national security, he reversed himself during legal proceedings before the Constitutional Court, South Africa’s highest. But, his reversal came after the ANC had defended him for months in parliament. Earlier this month, the High Court ruled that the Zuma government acted improperly in failing to enforce warrants against Sudan’s Omar al-Bashir when he was in South Africa, raising the possibility that the president is in contempt of court. Finally, Deputy Finance Minister Mcebisi Jonas, has gone public saying that three brothers of Indian origin—the Guptas—offered him the finance minister position before Zuma fired Nene. There are additional accusations that the Gupta brothers have been involved in high-level and para-statal appointments, that, in effect, Zuma has allowed them to “capture the state.” Jonas’ revelation would appear to be the “smoking gun.” Presumably, the Guptas will claim that they were acting on Zuma’s behalf. With respect to ministerial appointments, the South African president may appoint to his cabinet anybody he pleases, with no requirement that he consult. So the Guptas’ involvement with the finance minister position is not illegal. However, it does violate ANC policy and regulation, and as a party member Zuma is subject to party discipline. High level appointments are within the purview of the ANC deployment committee. So, Zuma is in trouble because the Gupta brothers usurped party functions. The three Gupta brothers and their families migrated to South Africa from India just before and after the 1994 transition to non-racial democracy. Their seemingly enormous wealth is based on Sahara Computers and Oakbay Investments, the latter of which includes significant interests in mining, real estate, and media. A prominent business partner is Duduzane Zuma, President Zuma’s son. The Gupta brothers are very close to the president, even on one occasion using a military airport for their private purposes. The media reports that they asked for South African diplomatic passports because they travel so frequently with the president. Thus far, President Zuma has refused to explain his relationship with the Gupta family, though he has acknowledged they have helped his son. Jonas’ revelation ties the Gupta brothers to the firing of Nene, an act that at the time seemed inexplicable. The South African media speculates that the Gupta brothers embarked on “state capture” to ensure favorable access of a variety of government contracts. Whether true of not, the story is widely believed, and many South Africans see the Gupta brothers as the face of Zuma government corruption. The ANC’s National Executive Committee meets March 19-20. It is no longer in Zuma’s pocket. Its agenda will include the president’s relationship with the Gupta family, according to the South African media. The credible Daily Maverick, citing unnamed sources, reports that within the ANC there is sentiment for a wide ranging discussion of the president’s conduct and his breach of constitutional duties. This discussion would include possible ANC disciplinary action and whether parliament should impeach him. Others believe that such consideration should be delayed until there is a final ruling by the Constitutional Court on Nkandla. Of the two scenarios, the latter is the more likely.

Brazil’s drama has escalated at breakneck speed. On March 4, former President Luiz Inácio Lula da Silva was detained for questioning. On March 8, construction magnate Marcelo Odebrecht was sentenced to nineteen years in prison for his role in the Lava Jato scandal. On March 9, state prosecutors in São Paulo filed a motion for Lula’s arrest, and on March 13, an estimated three million Brazilians hit the streets in the largest anti-government protests of recent years. On March 15, the plea bargain signed by Workers’ Party (PT) senator Delcídio Amaral was approved by the country’s high court, the Supreme Federal Tribunal (STF), revealing accusations against President Rousseff’s confidante and minister Aloizio Mercadante, against erstwhile government allies Vice President Michel Temer and Senate President Renan Calheiros, against opposition leader Aécio Neves, and even against Rousseff herself, who is alleged to have pushed judges to tamper with the ongoing investigation. Yesterday, March 16, spontaneous protests broke out in several cities after a wiretap was released of Lula and Rousseff discussing his appointment as presidential chief of staff, with protesters interpreting the conversation as obstruction of justice and an effort to ensure Lula special standing in a high court that has long been deferential to politicians (ministers, including the chief of staff, can only be tried in the STF). The speed with which the crisis has developed is reminiscent of another chaotic March, more than a half century ago, which culminated in the military coup of March 31, 1964. Today’s military is thankfully content to remain in its barracks, but although the democratic regime seems secure, the Rousseff administration is in deep trouble. A variety of well-informed observers are predicting Rousseff will be unseated. The arrest of Rousseff’s campaign manager, the charges against Lula, the turning of Senator Amaral, the likelihood of further explosive plea bargains within the next month, and the weakening of support from the PT rank and file all bode poorly for Rousseff. Stock markets have risen and the Brazilian real has strengthened, perhaps unreasonably, on the belief that any new government will be an improvement on the Rousseff administration’s disastrous economic record. But although the government is teetering, Rousseff’s removal is far from a done deal. The odds are still too close to call: a single revelation from the Lava Jato investigation could tip the balance at a moment’s notice. But the obstacles to removing Rousseff are significant enough to suggest that the crisis may still play out for some time, despite the tumult of the past few weeks: Legitimacy: As I noted last week, a central concern driving the calculations around Rousseff’s fate is “legitimacy.” Impeachment is more of a political process than a legal one, and the opposition is both divided and uncertain about how to proceed. The Workers’ Party has skillfully pushed a narrative about the conservatism of the media and the coup-mongering (golpismo) of the opposition parties (including Neves’ PSDB and the DEM, with its historical ties to the authoritarian regime). This narrative gives the opposition pause, and this hesitation has only been exacerbated by the ham-handed prosecutorial overreach by São Paulo state prosecutors last week, which allowed Lula to pose as the victim of a targeted onslaught, and led some Brazilians to question the legitimacy of the ongoing (and multiple) prosecutions of wrongdoing under the PT. Yesterday’s decision by Judge Sérgio Moro, presiding over the Lava Jato case, has generated controversy about potential judicial bias: the wiretap had been lifted by Moro several hours before the taped call, and although the conversation was suspect, it also suggested that the Lava Jato case has taken a more political turn. Meanwhile, none of the opposition has been particularly brave about leading the anti-Rousseff charge, except for Chamber President Eduardo Cunha, who is himself neck-deep in scandal and therefore not the best advocate for a procedurally legitimate impeachment. Street protests and the PMDB: Sunday’s protests sought to pressure Congress. In a secret vote on the impeachment process in December, Rousseff was able to garner 199 votes, only 28 more than she needs to block impeachment. The calculation is that the government has a hardcore bloc of about 125 supporters who are unlikely to switch sides, but the remainder are fair-weather friends, who may melt away if public disapproval is vehement enough. The PMDB is central to this calculus. Ominously, it has put off a decision about whether to support the government until April. But the protests may have less of an impact on changing the PMDB’s posture than many think. The Sunday protests remained a largely upper middle class phenomenon, heavily concentrated in the wealthy southern states, whose PMDB politicians were already largely in the pro-impeachment camp. Protesters reacted angrily to the presence of opposition politicians at Sunday’s march in São Paulo, forcing a hasty retreat by Aécio Neves and others, and suggesting that riding the political wave of impeachment may be fraught with peril. The events of recent weeks have exacerbated fissures within the PMDB: the Lava Jato investigation seems to be getting closer to many PMDB heavyweights, including Vice President Temer, which affects their ability to concentrate on organizing the party; and the PMDB is a fractious party of mutually jealous rivals, many of whom can be peeled away by a government willing to dispense goodies, such as the increasingly pressing renegotiation of state debts. This susceptibility to government pressure may be even more marked in the Senate, where governors’ concerns carry even greater weight, and may become more pronounced in coming months, now that Rousseff has hired a politically-savvy chief of staff. It is no coincidence that one of Lula’s first announced objectives is to begin a discussion of state debts. The path of removal: Rousseff has ruled out resignation, which leaves only two democratic avenues for removal. Impeachment is the most obvious, in part because it would be the most legitimate. Cunha intends to begin selection of the impeachment committee today. But a second path would be for the electoral court (TSE) to void the 2014 election, on the basis of campaign finance violations. Although Gilmar Mendes will soon become the president of the TSE, and he is not known for his love of the PT, TSE removal of the president would be an institutional innovation by a historically timid body. The TSE has traditionally turned a blind eye to almost all campaign finance violations, and over the past thirty years, it has removed only a handful of lower-level politicians for electoral wrongdoing. Furthermore, any TSE decision would likely be appealed up to the Supreme Federal Tribunal (STF), which would not necessarily agree with the TSE, and in any case, would string out the decision. The day after: Politicians deciding whether to support impeachment are also thinking about the day after. Already, there are allegations pending against every single politician in the line of presidential succession: Vice President Michel Temer, Chamber President Eduardo Cunha, and Senate President Renan Calheiros. Delcídio Amaral’s testimony even raises a cloud over the fourth in line, STF President Ricardo Lewandowski, as well Rousseff’s rival in the 2014 race, opposition leader Senator Aécio Neves. If the selection of a new president were thrown to the Congress—which it would be unless Temer survived or Rousseff and Temer were removed before the end of 2016—there are very few politicians who are both unsullied by allegations and simultaneously capable of pulling together the governing coalition needed to approve any meaningful reform that might jumpstart the moribund economy. Timing: The impeachment and Senate trial of Fernando Collor took seven months from start to finish. Next month, sitting politicians in both the Rousseff cabinet and the Congress will have to step down if they wish to run in October’s municipal elections. This is likely to lead to considerable turnover, muddying the impeachment calculus, and perhaps ensuring that any final decision comes in 2017, with only two years left in the Rousseff administration. Will it be worth the effort, especially if the justification for impeachment is weak, and the likelihood that the new government could turn things around is remote? Will it be worth the effort to join an impeachment drive driven forward by an unsavory Congress, only to replace Rousseff with an equally scandal-ridden Temer or Cunha administration? Justification: Impeachment is all about politics, and although the Lava Jato investigation seems to be marching inexorably toward the upper rungs of the political establishment, there is as yet no smoking gun against Rousseff that would tip the scales. There is evidence of massive campaign violations, confirmation of the kickbacks that helped convict Odebrecht, and allegations of government meddling in the courts. Yesterday’s wiretapped conversation with Lula also puts Rousseff in an unpalatable position, but the presidential palace has claimed that there was good justification for the conversation. Because of the legitimacy concerns noted above, none of these, as yet, seems sufficient to generate the momentum needed in the final push for impeachment, especially in the context of a rudderless, divided, and increasingly discredited opposition.

Al-Qaeda in the Islamic Maghreb (AQIM) and its affiliates launched an attack in Mali in November, one in Burkina Faso in January, and now in Ivory Coast over the past weekend. On March 16, Boko Haram attacked a mosque in Maiduguri, Nigeria, killing at least twenty-two people. The CFR’s Nigeria Security Tracker shows that Boko Haram has been associated with more than 150 deaths since January 1, 2016, but before the March 16 mosque attack. Even in Senegal, a genuine democracy where the opposition comes to power through elections, there is concern about signs of radical activity. There is no evidence of AQIM and Boko Haram tactical or strategic coordination; indeed, at least in rhetoric, they are mortal enemies, despite their common rhetoric. AQIM, like the broader al-Qaeda of which it is a part, is international in scope and violently hostile to the West. Its leadership appears to be Algerian. Boko Haram is focused on the destruction of the Nigerian state rather than war against the West. It appears to be centered in the Kanuri ethnic group, and while its rhetoric is hostile to the west, it has yet to attack western facilities or installations. Yet there do seem to be commonalities in the current wave of terrorism across West Africa. Burkina Faso, Mali, and Ivory Coast are post-civil war or post-coup states where France has played an important role in ending the most recent round of crises. All three states are internally divided with weak governance and marginalized population groups, despite successful elections (Mali, Ivory Coast) or coup failure (Burkina Faso). Nigeria faces an incipient insurrection in its oil patch, and Boko Haram has been seeking to destroy the secular government for almost seven years. Leadership certainly matters. Ivory Coast’s Allasane Ouattara, Nigeria’s Muhammadu Buhari, and Senegal’s Macky Sall have vision and are seeking to meet national challenges. But that takes time and resources, and the burden of recent history is heavy. Terrorism drives tourism and government revenue down in Mali, Ivory Coast, likely soon in Senegal. Nigerian government revenue has fallen with the decline in oil prices. Governments have less to work with than in the past, with the exception of Ivory Coast. AQIM and possibly the self-proclaimed Islamic State seem to be pushing into sub-Saharan Africa from North Africa. Both are under pressure in their North African areas of operation. Algeria, despite its present leadership issues, has a stronger military and better security services than those in West Africa and they have had some success against AQIM. In Libya, the international effort appears to be bringing pressure on the Islamic State. The response of both movements appears to be to push south, and possibly, to resolve some of their internal differences. Finally, recent terrorist attacks in Burkina Faso, Mali, Ivory Coast and Nigeria are all against soft targets. Beach resorts, hotels, and places of worship are easier to attack than police stations or army barracks, generate extensive carnage, and net international publicity. In those terms, the recent round has been remarkably successful.

Nike Bribes, Will the United States Prosecute? Bank records and emails show Nike paid a $500,000 “commitment bonus” to Kenya’s athletics federation, and hundreds of thousands more in “honoraria.” Though allegedly to support poor runners, Kenyan prosecutors say athletics officials quickly transferred the money to their personal bank accounts. Yet the United States cannot use the Foreign Corrupt Practices Act (FCPA) against the mega brand. The law only covers U.S. companies that bribe “foreign officials” and “public international organizations.” Sports associations are private, so outside the FCPA’s jurisdiction. In taking on FIFA, the U.S. Department of Justice (DOJ) worked around the FCPA, indicting foreign and U.S. officials for laundering money through U.S. banks, not bribery. The United States may need to do the same in the Nike case if it wants to follow up on President Obama’s pointed criticisms of Kenyan corruption with legal actions. Benin’s and Niger’s Democratic Paths Diverge Presidential elections highlight diverging political paths between the neighboring West African nations. After a free and fair first-round vote, Benin heads into a runoff between Prime Minister Lionel Zinsou and prominent businessman Patrice Talon. Abiding by his two-term limit, President Thomas Boni Yayi’s administration looks to make the fourth peaceful handover in twenty-five years after Sunday’s contest. In contrast, Niger’s presidential campaign saw opposition supporters detained, the leading opposition candidate jailed, and even a coup attempted. With the opposition now boycotting the March 20 runoff over alleged fraud, President Mahamadou Issoufou will likely get a second term. These elections reflect broader political trends. Benin is one of only six sub-Saharan African countries that Freedom House ranks as “free,” with high scores for political pluralism, freedom of expression, and civil society rights. Niger ranks just “partly free”—alongside Nigeria, Mali, and Burkina Faso—with the government banning public demonstrations and having yet to peacefully hand over power. The recent electoral results widen the divide, with Benin solidifying its status as one of West Africa’s most stable democracies while Niger risks backsliding. Women’s Role in Anticorruption Efforts In honor of International Women’s Day, these reads investigate how gender plays into anticorruption efforts globally: The Committee to Protect Journalists (CPJ) recognizes nine female journalists jailed for their work, including Khadija Ismayilova, who unmasked the corruption of Azerbaijan’s ruling elite. Americas Quarterly profiles Thelma Aldana, Guatemala’s attorney general who led the corruption investigation that brought down the country’s president. CFR’s Asia Unbound blog explains why women are largely missing from China’s ongoing corruption campaign. Finally, Transparency International looks at the links between gender inequality and corruption, arguing that countries making progress on women’s empowerment are likely to experience lower corruption levels over time.

Corruption dominates Mexico’s headlines: helicopter rides for officials’ family members, housing deals from favored government contractors, the still unexplained disappearance of 43 students, and a drug lord escaping a maximum-security prison, for the second time. In a recent survey, Mexicans listed corruption as the country’s top problem, ahead of security and the economy. In absolute terms corruption eats away at Mexico’s growth. The think tank IMCO estimates the costs at $53 billion, or five percent of GDP. It increases the costs of doing business, with bribes for permits and government contracts tacking on up to ten percent according to Transparency International. And business owners face an uneven playing field—65 percent report that on at least one occasion a competitor offered a bribe or tapped personal relationships to win new business. By undercutting the market, corruption stifles excellence, deters investment, and hinders growth. Corruption also distorts public spending. Studies show corrupt public officials direct funds to projects more amenable to personal enrichment than those that offer the highest public returns. This means they overweight spending on (often shoddy) infrastructure and underfund education, health, and other human capital building services—the very skills needed for a twenty-first century economy and society. Lastly, corruption delegitimizes the state and undercuts democracy. The belief by two-thirds of Mexican citizens that their taxes line the pockets of officials fuels the informal sector and limits the collection of government revenue necessary to provide public services: education, healthcare, and basic safety. And it threatens Mexico’s democratic gains. When citizens know about corruption and nothing is done—as is the case in Mexico, where impunity reigns—voter turnout falls. The 2012 Pact for Mexico promised to combat the scourge. Yet while energy, finance, education, and telecommunication reforms moved forward, anticorruption efforts languished. Initial PRI proposals in the Senate did little to change the status quo, giving a new anticorruption body no autonomy or prosecutorial powers. The proposal that eventually reached the Chamber of Deputies failed to gain support from the PAN or PRD and was abandoned. In 2014, as Mexicans mourned the loss of 43 students in Guerrero and consumed pictures of the first lady’s $7 million dollar abode, owned by contractor Grupo Higa (a similar if smaller house purchased for the finance minister would appear four weeks later), the PAN sent its own anticorruption bill to Congress. Written in conjunction with civil society groups, it proposed a new National Anticorruption System, created a new Court of Administrative Justice, strengthened the Federal Superior Audit Office, and increased Congress’s role through appointment oversight for the new anticorruption officials. Supported by the three main political parties and a majority of states, the president signed the constitutional reform into law last spring. Lawmakers now need to hash out the details in secondary legislation by May. Civil society groups are pushing their own version of the implementing laws through a citizen-led Ley 3de3 initiative (allowed under the recent political reforms). The bill would require public officials to disclose their tax statements, assets, and potential conflicts of interest. It would also explicitly and legally define corruption—encompassing bribes, using political influence for personal gain, and misusing public funds among other actions, and it would increase the investigatory, prosecutorial, and sanctioning power of the new National Anticorruption System. The proposal needs 100,000 signatures for Congress to consider it; its advocates are hoping to get several times more than that to force it onto the agenda. A challenge for Mexico is moving beyond Twitter, Facebook, and Periscope to express society’s mounting frustrations. And that is the potential of Ley 3de3—to change the country’s anticorruption institutions and create tools for future reformers to take on bad behavior.

Corruption dominates Mexico’s headlines: helicopter rides for officials’ family members, housing deals from favored government contractors, the still unexplained disappearance of 43 students, and a drug lord escaping a maximum-security prison, for the second time. In a recent survey, Mexicans listed corruption as the country’s top problem, ahead of security and the economy. In absolute terms corruption eats away at Mexico’s growth. The think tank IMCO estimates the costs at $53 billion, or five percent of GDP. It increases the costs of doing business, with bribes for permits and government contracts tacking on up to ten percent according to Transparency International. And business owners face an uneven playing field—65 percent report that on at least one occasion a competitor offered a bribe or tapped personal relationships to win new business. By undercutting the market, corruption stifles excellence, deters investment, and hinders growth. Corruption also distorts public spending. Studies show corrupt public officials direct funds to projects more amenable to personal enrichment than those that offer the highest public returns. This means they overweight spending on (often shoddy) infrastructure and underfund education, health, and other human capital building services—the very skills needed for a twenty-first century economy and society. Lastly, corruption delegitimizes the state and undercuts democracy. The belief by two-thirds of Mexican citizens that their taxes line the pockets of officials fuels the informal sector and limits the collection of government revenue necessary to provide basic public services: education, healthcare, and basic safety. And it threatens Mexico’s democratic gains. When citizens know about corruption and nothing is done—as is the case in Mexico, where impunity reigns—voter turnout falls. The 2012 Pact for Mexico promised to combat the scourge. Yet while energy, finance, education, and telecommunication reforms moved forward, anticorruption efforts languished. Initial PRI proposals in the Senate did little to change the status quo, giving a new anticorruption body no autonomy or prosecutorial powers. The proposal that eventually reached the Chamber of Deputies failed to gain support from the PAN or PRD and was abandoned. In 2014, as Mexicans mourned the loss of 43 students in Guerrero and consumed pictures of the first lady’s $7 million dollar abode, owned by contractor Grupo Higa (a similar if smaller house purchased for the finance minister would appear four weeks later), the PAN sent its own anticorruption bill to Congress. Written in conjunction with civil society groups, it proposed a new National Anticorruption System, created a new Court of Administrative Justice, strengthened the Federal Superior Audit Office, and increased Congress’s role through appointment oversight for the new anticorruption officials. Supported by the three main political parties and a majority of states, the president signed the constitutional reform into law last spring. Lawmakers now need to hash out the details in secondary legislation by May. Civil society groups are pushing their own version of the implementing laws through a citizen-led Ley 3de3 initiative (allowed under the recent political reforms). The bill would require public officials to disclose their tax statements, assets, and potential conflicts of interest. It would also explicitly and legally define corruption—encompassing bribes, using political influence for personal gain, and misusing public funds among other actions, and it would increase the investigatory, prosecutorial, and sanctioning power of the new National Anticorruption System. The proposal needs 100,000 signatures for Congress to consider it; its advocates are hoping to get several times more than that to force it onto the agenda. A challenge for Mexico is moving beyond Twitter, Facebook, and Periscope to express society’s mounting frustrations. And that is the potential of Ley 3de3—to change the country’s anti-corruption institutions and create tools for future reformers to take on bad behavior.

Resulting from negotiations between the British Empire and the defeated Boer republics that ended the second Anglo-Boer war and created the Union of South Africa were three capitals. Parliament meets in Cape Town, the former capital of the British Cape Province. The administration was based in Pretoria, the capital of the Boer republic of Transvaal, and the judiciary was based in Bloemfontein, the capital of the other Boer republic--the Orange Free State. At the time of South Africa’s 1994 transition to “non-racial” democracy, there were proposals to consolidate all functions of government in Pretoria or, alternatively, to build an altogether new capital city, following the model of Washington, D.C., Canberra, or Brasilia. The idea was especially popular within the governing African National Congress (ANC). Part of the appeal of a new capital was that it would be free of any vestiges or symbols of the hated apartheid regime. However, there were strong vested interests in favor of the status quo, and a general sense that the costs would be enormous at a time when the new government was seeking to address more pressing needs, such as housing, water, health, and education. But, the issue has never gone away, and continues to resonate within the ANC. (While the Supreme Court of Appeal continues to sit in Bloemfontein, the Constitutional Court—by far the most important—now sits in Johannesburg.) Cape Town and the province of the Western Cape are both governed by the opposition Democratic Alliance (DA), and they are widely regarded as the best-administered entities in the country. In addition, race plays a role: the Western Cape is the only region in sub-Saharan Africa where black Africans are not the majority of the population. (“Coloureds” are the largest racial group.) South Africans will often say that Cape Town is “white,” Durban is “Indian,” and Johannesburg is “African.” Cape Town, one of the most beautiful cities in the world, is also a major tourist destination. It is no surprise that President Jacob Zuma in his recent state of the nation address asked parliament to consider “consolidating” government functions in Pretoria. His argument was that it would be cost effective. No doubt there was political motivation as well. Zuma’s administration is widely criticized for being financially profligate and the president himself has been excoriated for spending public money on his private estate, Nkandla. With provincial elections in six months, Zuma and the ANC would prefer to move the discussion away from their financial shortcomings to the “savings” of consolidating government functions. Brooks Specter, in a thoughtful discussion in the Daily Maverick, demolishes the money-saving argument. He notes the huge costs of building new capitals—as well as the juicy contracts that result. (There is widespread criticism of ANC corruption around government contracts.) He also raises the interesting suggestion that making better use of technology, especially video conferencing, would significantly reduce the inconvenience of parliament being in Cape Town with the executive in Pretoria.

Brazil is getting back to business after an exuberant carnival that brought irrepressible Brazilian humor to bear on serious national travails, including the Zika virus, Lula’s legal troubles, and the Olympics. Reality’s bite may be harsh after two months’ holiday respite from the high political drama of 2015. The coming year will be jam-packed, including the highly contested election later this week of new party leadership, a PMDB party leadership convention in March, the April deadline for ministers and governors to step down if they are running for office, the August Olympics, and the October municipal elections. Layered over these events will be the ongoing Lava Jato and Zelotes corruption investigations, campaigns against the Aedes Aegypti mosquito, and of course, the continued drama of Chamber of Deputies’ president Eduardo Cunha’s cage match with President Rousseff. Looking ahead, the only major certainties for the year ahead are that GDP growth will be negative, and that there will be significant political upheaval, as a consequence of the elections and the corruption investigations, which have no end in sight. But there are also significant uncertainties that overlap with a compressed political calendar to raise questions about where Brazil will stand a year from now: The Olympics: most observers believe Rio is capable of pulling the Olympics off splendidly, despite lingering concerns about overspending, violence, and pollution. However, last week U.S. soccer icon Hope Solo expressed the fears of many foreign athletes, signaling that Zika may have a measurable impact on the success of the games and on the country’s tourism, which was expected have a boon of at least a million additional visitors during the games. Rousseff’s presidency: the impeachment drive hit a major roadblock in December, as the high court (STF) stepped in to restart the process. But support for impeachment was already fraying: the fiscal premise for impeachment seems flimsy, Vice President Temer is not a consensus replacement, Rousseff still holds the votes she needs to block impeachment in Congress, and the opposition parties, especially the PSDB, seem to be taking a more cautious posture. But impeachment was never the only risk to Rousseff: the electoral court (TSE) will consider charges against the 2014 Rousseff-Temer ticket later this year, which could void their election on campaign finance grounds. And though it seems far off, there is still the possibility that Lava Jato could reach the president, whose ties to Petrobras ran deep during her time in the Lula cabinet. Eduardo Cunha: The president of the Chamber remains on tenterhooks over accusations that he had a role in the corruption of Petrobras’ international operations. Cunha spent most of the past four months finding procedural runarounds of a congressional ethics investigation of his Swiss accounts, and he is likely to continue to play out the clock for as long as he is able. But the STF will resume hearings this week into his removal. Needless to say, Cunha’s ouster would remove one of the worst impediments to the Rousseff administration’s legislative agenda, while slowing congressional investigations of the president. Lula: the former president is in the crosshairs of two massive corruption investigations. January brought the Lava Jato case a step closer to the former president’s door, as plea bargaining witness Nestor Cerveró made allegations of forbidden foreign contributions to Lula’s 2006 campaign, a close friend of Lula’s was arrested, and a beachfront apartment and country home used by Lula’s family were investigated. There is increasing certainty among political analysts that Lula’s political future is grim; the uncertainty is what this means for the Workers’ Party (PT) in the 2016 municipal elections. PT party support has fallen closer to the level of more traditional parties, such as the PMDB and PSDB, and the 2018 presidential race is looking more open than anyone would have predicted as recently as a year ago. As yet, however, no force has risen to fill the void: the traditional opposition is divided, and there is as yet no new emergent force that could generate consensus. Fiscal reform: the government is pushing new spending cuts, pension reform, and new taxes to tackle the severe fiscal imbalance. The opposition seems more inclined to cooperate this year, but it is unclear how much Rousseff can deliver: the PT and many government supporters on the left oppose pension reform, and most of the government proposals remain either vague, or simply recycle old credit stimulus policies adopted during Rousseff’s first term. The streets: the demonstrations that have rocked Brazilian cities for three years began to taper off in 2015, as the organizers became more shrill and conservative than most of the angry middle class. But anger is palpable, some groups have already called for protests on March 13, and the spontaneous emergence of new protests similar to those seen in 2013 cannot be discarded. A Nixonian surprise?: Rousseff has not been an outside-the-box thinker, and she is deeply constrained by the fact that she relies on a coalition constructed by Lula, governs at the helm of two parties (PT and PMDB) that distrust her, and is heavily reliant on what remains of this coalition to block impeachment. The result is political immobility worse than any since the return to democracy in 1985. But this very paralysis might lead to policy creativity: perhaps a push for more active trade policies, akin to those being proffered by Development Minister Armando Monteiro, or perhaps negotiations for a unity coalition that might provide a space for consensual reforms?

In a February 9 statement, acting Director of Army Public Relations Sani Usman said that the military will be shutting markets in Yobe and Borno states where traders “have clandestinely been aiding the terrorists (Boko Haram) with logistics and other supplies through smuggling and other forms of illicit trading, thus sustaining them while the merchants of death make money out of it.” Hence, “from now on, some markets identified to be engaging in this illegal trade with the adversary in Borno and Yobe states will be closed.” He also said that the traders were “sabotaging the successes… against the Boko Haram insurgency.” The remainder of Sani Usman’s statement chronicled recent military successes against Boko Haram, which included the arrest of two soldiers in possession of “unauthorized military equipment,” perhaps intended for Boko Haram. Markets are at the center of daily life in northeast Nigeria, and they have been the venue for Boko Haram attacks. Some are a thousand years old, others emerging spontaneously and informally. In a country where few pay taxes of any kind, market fees can be an important source of revenue for local authorities. Closing even some markets is a significant step. Northeastern Nigeria has been a center of smuggling since pre-colonial times. The region is adjacent to Chad, Niger, and Cameroon and athwart the major east-west trading routes from Khartoum to Dakar. In a region that even absent strife is very poor, such fortunes that have been made are often based on trading and smuggling. National boundaries were drawn by the British, French, and Germans in the late nineteenth century and do not correspond to ethnic or logistical boundaries. Border control is minimal, and the line between trade and smuggling can be very thin. The military move to shut-down trading venues from which Boko Haram benefits is a sign of how deeply the latter is embedded in at least some parts of northeast Nigeria, and why Boko Haram operations continue despite the litany of military successes against it.

Once a year, policymakers and the press are forcibly reminded of the terrible costs of corruption. This year, it fell on January 27, when Transparency International’s Corruption Perceptions Index (CPI) was released, inciting the ritual gnashing of teeth and beating of chests about relative national corruption gains and losses. This is precisely the sort of attention that Transparency International hopes to draw to corruption. In this sense, the report is very much a continued success. But the CPI’s utility as a policy tool is less clear-cut, not least because there are so many reasons a country might rise or fall, including revelations of previously hidden corruption or simply the movement of other countries, which then push their peers up or down in relative terms. Transparency International routinely acknowledges these issues, and actively encourages readers not to use the measure as a longitudinal indicator. But this advice usually falls on the deaf ears of headline-seeking editors. The CPI remains a blunt tool, which doesn’t provide us much guidance on how and why public perceptions of corruption are changing, or broader lessons about what works in the fight for accountability. Nonetheless, there are a few important takeaways from the report that are especially relevant to Latin America. First, grand political corruption is ubiquitous and no country is immune. Shannon O’Neil pointed last year to the potentially significant political implications of the wave of corruption scandals that have beset Latin America over the past two years. These scandals have erupted at all levels of the CPI: in countries among the highest ranked (Chile, ranked 23rd of 167 positions), at the middle of the pack (Brazil and Mexico, 76th and 95th), and near the bottom (Honduras and Guatemala, 112th and 123rd). Second, if there is one policy recommendation that emerges from recent Latin American experience, it is that increasing checks and balances, granting true autonomy to watchdog agencies, and building budgetary and human resource capacities, all contribute to better control of corruption. Conversely, countries such as Venezuela in which these checks and balances have been eroded for political reasons suffer unintended consequences, including worsening corruption outcomes. Robust democracy, in other words, has some collateral accountability benefits. In the short term, improving capacity may lead to gains in corruption perceptions. One of the most improved countries in the CPI is Honduras, which rose fourteen spots, in part because of massive public protests last year that led a scandal-weakened government to acquiesce to the creation of an independent international panel of judges and prosecutors to investigate corruption: the Organization of American States (OAS)-sponsored Support Mission Against Corruption and Impunity (MACCIH), modelled on Guatemala’s UN-backed International Commission Against Impunity (CICIG). Despite its shortcomings, including fears that MACCIH may merely serve as a smokescreen to protect the president against removal, it is hoped that MACCIH will be strong enough to provide investigatory credibility in an institutional environment marked by a politically-dominated judiciary. Yet even in countries that are moving in the right direction and developing the autonomous capacity of their institutions, the perverse consequence may be the uncovering of major corruption, and a tumble in the CPI, as InsightCrime noted. Guatemala, where last year’s corruption scandal culminated in the forced resignation of President Otto Pérez Molina, declined eight spots. Brazil, where prosecutors have filed more than 1,000 charges, recovered more than a half-billion dollars, and convicted eighty for corruption associated with state-owned Petrobras, has fallen by seven spots. Let me close by floating two suspicions about the extent to which corruption will be relevant to Latin American politics in coming years. First, declining economic fortunes are likely to be accompanied by increasing revelations of corruption that was underway during the boom times. Bad economic times mean turnover in governments, closer scrutiny of past incumbents’ accounts, and an energetic scramble for tax revenue, including through tighter oversight. Able politicians may seek to deflect attention from current economic woes by pointing a finger of blame at corrupt predecessors who wasted the bonanza of the commodity boom. If the first suspicion is correct, the second follows: impunity is likely to be one of the next big political shibboleths in the region. Latin American countries have historically been a paradise for corruption; as Steve Morris noted with regard to Mexico, impunity has long been corruption’s evil twin. Impunity makes corruption much less risky and much more lucrative. A recent estimate suggests that only 3 percent of Argentina’s corruption cases since 1980 have led to convictions, and judges took on average fourteen years to reach final sentences in these cases. Of course, these dismal results are only the tip of the iceberg, since they refer only to those cases that actually saw the light of day. And it seems unlikely that Argentina is an outlier with regard to judicial ineffectiveness, although data on corruption prosecutions and trials is weak around the region. All of this suggests that for all its faults, the CPI release will continue to be closely watched throughout Latin America in years to come.  

The South African government spent about $24 million on “security upgrades” to President Jacob Zuma’s private estate, Nkandla. Those “security upgrades” included a swimming pool, a chicken run, and a football pitch. In 2014, Public Protector Thuli Madonsela investigated the expenditure and found some of it improper, and directed the president to pay back some—not all—of the public money spent on the estate. President Zuma refused, and was supported by his cabinet minister and the governing African National Congress (ANC) majority in parliament. Zuma has long been accused of corruption, and the two largest opposition parties, the Democratic Alliance (DA) and the Economic Freedom Fighters (EFF) actively campaigned for Zuma to follow the direction of the public protector. The EFF staged unruly demonstrations on the floor of parliament. In early February, President Zuma proposed a settlement by which he would pay back some of the money, but the amount would be determined by the auditor general and the finance ministry. It is widely thought that Zuma’s settlement offer was motivated by his weak political position. He was wounded politically by his efforts to change the finance minister, the fall in commodity prices, and a decline in the value of the national currency. His ANC faces important local government elections this year. However, the opposition parties refused to accept the offer. Instead, they are proceeding with a suit in the Constitutional Court. The purpose of the suit appears to be to strengthen the hand of the public protector. Zuma and his allies had claimed that the public protector’s findings were only advisory, and not binding. The Office of the Public Protector is established by the Constitution of South Africa. Its mandate is to investigate misconduct in any aspect of state affairs and all spheres of government. It is a so-called “Chapter 9” body—entities established by the constitution to protect citizens from bad governance and human rights violations. Chapter 9 institutions are part of a system of checks and balances designed to limit the power of the executive and the legislature. As such, it is independent of government. If the Constitutional Court finds that the public protector’s findings are binding in the Nkandla case, all Chapter 9 institutions will be strengthened, and the authority of parliament and the presidency reduced. Many in the ANC see parliament as the most important institution in a democracy. The opposition parties, on the other hand, are concerned more about the rule of law which Chapter 9 institutions promote. The DA is a center-right party associated with South Africa’s racial minorities; it is trying to attract support from the black majority. The EFF is a radical, left-wing party that uses anti-white rhetoric and has, among other things, called for the expropriation of white-owned property. The two parties are strange bedfellows, but both want to get rid of Zuma and both want to strengthen the hand of the public protector. Julius Malema, the EFF chieftain, was once a political ally of Zuma. Since their falling out, and Malema’s expulsion from the ANC, the latter’s animus against the president is palpable and personal. It is likely that the EFF hopes that the Constitutional Court will rule that by not implementing the public protector’s findings, President Zuma violated his oath of office: to uphold the constitution. Should that happen, the EFF and most of the other opposition parties are likely to demand Zuma’s impeachment. That almost certainly will not happen because the ANC retains a large majority in parliament. But, the effort will further wound Zuma and the ANC in the run-up to the local elections.