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Good Governance and the Rule of Law

The concept of rule of law forms a cornerstone of the OSCE's human rights and democratization activities. It not only describes formal legal frameworks, but also aims at justice based on the full acceptance of human dignity. It ties in closely with the establishment of democratic, accountable state institutions.

In recent years, the Helsinki Commission has paid particular attention to rule-of-law violations in countries including Russia and Azerbaijan, and throughout Central Asia.

 

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  • Beyond Corporate Raiding: A Discussion of Advanced Fraud Schemes in the Russian Market

    This briefing was part of a number of Helsinki Commission events focusing on corruption and fraud in modern Russia’s businesses and law enforcement. Kyle Parker led a fascinating and provocative discussion with Russia's leading anti-corruption crusader, shareholder activist, and blogger extraordinaire Alexei Navalny who Time Magazine dubbed "Russia's Erin Brockovich." Alexei shared his experiences with Russian corruption and shed light on the measures one must take to be successful. Parker and Navalny addressed the death of Sergei Magnitsky in 2009 and the fraud against Hermitage Capital. They looked at the possibility of similar situations in the future and whether or not there is hope for change. They also discussed the sharp contrast of this corruption against the strident anti-corruption rhetoric of President Dmitriy Medvedev, who has called for an end to "legal nihilism" and the corrosive practice of law enforcement "nightmaring" legitimate businesses.

  • In the Eye of the Storm: Chechnya and the Mounting Violence in the North Caucasus

    A year after the leading Russian human rights defender, Natalya Estemirova, was abducted near her apartment building in the Chechen capital Grozny, transported to the neighboring republic of Ingushetia and brutally killed, human rights abuses and a continuing climate of fear prevailed in Chechnya and elsewhere in the North Caucasus region of the Russian Federation.  Ronald McNamara, International Policy Director at the Commission, led a discussion on the marked increase in extrajudicial killings and politically motivated disappearances in Chechnya as well as in neighboring Ingushetia and Dagestan.  Witnesses – Elena Milashina, Raisa Turlueva, and Igor Kalyapin – discussed how strongman Ramzan Kadyrov, the Republic’s Kremlin-backed president, publicly labeled independent journalists and rights activists as “traitors and enemies of the state” and how he reportedly praised the perpetrators of recent paintball gun attacks on the streets of Grozny targeting women for not wearing headscarves.  They emphasized the difficulty of resolving the problem because of Moscow’s backing of Ramzan and of a political model in which “bandits” serve as a prop for the federal powers that be.

  • The Link Between Revenue Transparency and Human Rights

    This hearing focused on the lack of transparency within governments and the energy sector posing both a threat to energy exports and the ability of governments to properly manage revenue for their citizens. The hearing examined how such policies affect government accountability. Instead of serving their citizens, politicians often take advantage of the resources of the country in pursuit of their own self-interest. In particular, the continued assaults on freedom of speech and on civil society and how that bodes for the future of EITI implementation in Azerbaijan were discussed. The Commissioners and the witnesses looked into the present actions of the U.S. and what could be done within the OSCE process to address these issues.

  • U.S. Helsinki Commission: Ukraine Needs to Accelerate Reforms

    Ukraine's new President Viktor Yanukovych 'will need to accelerate economic and political reforms, tackle systemic corruption and overcome the rule of law deficit, including building up an underdeveloped judiciary to strengthen its independence', U.S. Helsinki Commission Chairman Senator Benjamin L. Cardin said in the first Congressional hearing on Ukraine in Washington on Tuesday, information of the Voice of America. "Such reforms will reduce Ukraine's vulnerability to outside pressures and bring it closer to its stated goals of European integration," Senator Cardin emphasized. "Ukraine has developed an open and pluralistic political system and media freedoms have expanded," said U.S. Helsinki Commission Co-Chairman Congressman Alcee L. Hastings, who served as deputy head of the OSCE Parliamentary Assembly election observation mission in Ukraine in February and has observed two other national elections there. "Although Ukraine has had good elections now for the last five years, I can tell you that you need more than good elections to make a functioning democracy," he added. In turn, Anders Aslund, Senior Fellow at Peterson Institute for International Economics, underlined that two thirds of young Ukrainians have higher education, but they have no opportunity to apply their knowledge in particular areas. Aslund said that this is a reason why Ukraine is ranked 110th worldwide on GDP per capita.

  • Ukraine: Moving Beyond Stalemate

    This hearing examined how the U.S. can best continue to encourage and assist Ukraine in developing democracy, rule of law, and a market economy.   The panel also discussed Ukraine’s relationships with its neighbors, the United States, and European states and organizations. The panel of witnesses explored the democratic developments and progress since the Orange revolution and U.S. policy implications of Ukraine’s interest in further integration with Europe.

  • U.S. Senator Laud Iraq's Plan to Become EITI Candidate Country

    US Sens. Benjamin L. Cardin (D-Md.) and Richard G. Lugar (R-Ind.) expressed their strong support for Iraq’s commitment to make its oil and gas industry more transparent following Iraq’s Jan. 11 announcement that it plans to become an Extractive Industries Transparency Initiative candidate country. EITI is an international coalition of governments, companies, and others that promotes good governance through publication of oil, gas, and mining revenues, the two Senate Foreign Relations Committee members noted on Jan. 12. “Corruption remains a significant problem in Iraq,” said Lugar, the committee’s ranking minority member. “As oil and gas is the single largest source of revenue [there], it is important that the revenue generated benefit the people of Iraq and not just a handful of businessmen and officials. By committing to implement EITI, Iraq is creating a foundation for good governance in a sector critical to Iraq’s future stability.” Cardin said, “This is a significant step toward a greater future for Iraq.” The senator also has promoted EITI as chairman of the Commission on Security and Cooperation in Europe, more commonly known as the US-Helsinki Commission. “The EITI process has proven to strengthen civil society and increase revenue transparency. By joining this coalition, Iraq’s leaders are committing to transparency that will empower citizens to hold their government accountable,” Cardin maintained. Iraqi Prime Minister Noori al Malaki announced Jan. 11 that Iraq plans to become an EITI candidate country in February and would implement the initiative in May. With 11% of the world’s total reserves, Iraq would become the largest oil-producing nation to implement the standards, EITI officials said. At a conference launching Iraq’s effort in Baghdad, Jonas Moberg, who heads EITI’s secretariat, said the country’s implementation of EITI would be important in driving Iraq’s recovery and ensuring that its oil and gas wealth was managed for its citizens’ benefit. Lugar and Cardin, along with eight other cosponsors, recently introduced S 1700, the Energy Security Through Transparency Act, which aims to increase transparency through public disclosure of oil, gas, and mining payments, and encourage US participation in EITI.

  • Corruption: A Problem that Spans the OSCE Region and Dimensions

    By Troy C. Ware, with contributions from Shelly Han In July 2008, Members of the Commission on Security and Cooperation in Europe (U.S. Helsinki Commission) and other Members of Congress traveled to Astana, Kazakhstan for the seventeenth Annual Session of the Organization for Security and Cooperation in Europe Parliamentary Assembly (OSCE PA). The session’s theme was “Transparency in the OSCE.” At the outset of the trip, Congressman Alcee L. Hastings, then Chairman of the Commission, remarked that while he supported the candidacy of Kazakhstan for the Chairmanship of the OSCE it was “imperative that the government undertake concrete reforms on human rights and democratization.”1 A number of nongovernmental organizations have cited the high level of corruption in Kazakhstan as one impediment to democratic reform. Kazakhstan is by no means alone. Recognizing the existence of corruption throughout the OSCE region, Helsinki Commissioners have consistently addressed the problem by raising it through hearings, legislation, and the OSCE Parliamentary Assembly. Hearings in 2006 identified corruption as a hindrance to fulfilling human rights commitments and economic development in South-Central Europe (Helsinki Commission June 2006 Hearing). The role of corruption as a force in restricting freedom of the media in Azerbaijan was highlighted in a 2007 hearing (Helsinki Commission August 2007 Hearing). This report will draw attention to recent initiatives undertaken by the Helsinki Commission that have shown corruption undermines human rights, fundamental freedoms and overall security. Wherever found, corruption not only stunts democratic reform, but also weakens the security and economic condition of states. Although corruption manifests itself in various ways, this report can practically only discuss a few. For example, prominent manifestations within the three OSCE dimensions discussed include parliamentary corruption, diversion of funding from infrastructure and human trafficking. Understandably, countries will not solve a widespread and pervasive problem with a singular approach. Additionally, this report will discuss the importance of capacity building initiatives that focus on prevention as a critical element in an anti-corruption campaign. This is an element that must be included alongside the high profile anti-corruption prosecutions governments may be inclined to conduct. A number of international governmental and nongovernmental organizations produce regular surveys or reports on corruption. The 2008 survey of corruption by Transparency International (TI), an international nongovernmental organization that promotes anti-corruption policies worldwide, ranked twelve OSCE participating States in the bottom half of 180 countries surveyed. The least corrupt countries were assigned the highest ranking. Kazakhstan ranked 145, which was still ahead of the OSCE countries of Azerbaijan, Belarus, Kyrgyzstan, Russia, Tajikistan, Turkmenistan and Uzbekistan.2 Experts point out that since TI uses a survey, its findings may lag behind reality, reflecting only perceptions based on increased reporting resulting from government enforcement of anti-corruption laws. Others point out that surveys place too much emphasis on bribery although forms of corruption vary greatly from country to country.3 Nonetheless, other barometers, such as evaluations of the Group of States Against Corruption (GRECO), which measures anti-corruption policy reform and capacity through a multi-year expert evaluation process, suggest that some OSCE participating States are only partially implementing standards set by the group. Corruption, which was explicitly highlighted in the Parliamentary Assembly’s concluding document, the Astana Declaration,4 is a multidimensional blight that undermines human, economic, environmental, and security dimension policy goals throughout the OSCE region. Human Dimension Genuine democracy and rule of law cannot exist if the passage, implementation and judgment of the law favor the highest bidder. Moreover, the rule of law requires more than elections and a neutral and impartial judiciary; it requires that individuals receive the unbiased and dispassionate benefits of the law from all public servants. Larry Diamond wrote in the March/April 2008 issue of Foreign Affairs that, “[f]or a country to be a democracy, it must have more than regular, multiparty elections under a civilian constitutional order.” He points out that when regular elections are accompanied by corrupt police and bureaucracies, many people are “citizens only in name” and in their disillusionment gravitate toward authoritarian leadership.5 Observers frequently focus attention on removing graft from courts and elections. However, corruption in other spheres of society, such as among lower level public servants, contributes to the notion of corruption as an acceptable behavior often having the most immediate adverse effect on the average person. Government employees of modest rank are capable of denying basic fundamental freedoms such as equal protection of the law, enjoyment of property, the right of minorities to exercise human rights and freedoms, and the independence of legal practitioners.6 Those who advocate for the victims of corruption, even within the judicial systems, often cannot do so without repercussions. Furthermore, when parliaments become sanctuaries for persons engaged in corruption the protection conveys a message that corruption will be tolerated elsewhere in society. Parliamentary Immunity In a 2006 brief, the U.S. Agency for International Development (USAID) defined parliamentary immunity as “a system in which members of a legislature are granted partial immunity from prosecution from civil and/or criminal offenses.” USAID further states that parliamentary immunity’s purpose is to “reduce the possibility of pressuring a member to change his or her official behavior [with] the threat of prosecution.”7 Unrestrained parliamentary immunity impedes the investigation and prosecution of corruption, makes parliamentary acquiescence and perpetuation of corruption possible, fosters a culture of corruption among other government officials and security officials, and disproportionately affects minority populations. According to Development Alternative Incorporated (DAI), a development consulting company, developing democracies tend to favor the broadest scope of immunity which allows corrupt activities almost with impunity. Although rare, a parliament may vote to lift immunity from one of its members, as was the case in Armenia in 2006 when immunity was removed for a parliament member who allegedly failed to pay taxes and instigated a gun fight.8 While parliamentary immunity can protect the independence of legislatures, frequently it is a shield for illicit activity. A 2007 USAID report, Corruption Assessment: Ukraine, found that “legislators have amassed fortunes through business interests and other means . . . with little transparency or accountability.” Moreover the report found that broad immunity created a powerful incentive to seek public office and introduced “illicit funding” into the political process.9 Even if prosecuting agencies investigate the activities of legislators, the individuals are rarely prosecuted because the parliament will not lift immunity. ArmeniaNow, an NGO publication, found that in the first fifteen years of Armenian independence, immunity was waived in only five instances.10 Although democratic attributes exist ostensibly in most OSCE participating States, features such as elections may ironically serve to conceal the self-serving rule that results from corruption. Parliamentary corruption can lead to a cycle in which the parliament cannot effectively exercise an oversight role because its members have a personal stake in the illicit activity. The Bulgarian parliament’s resistance to closing duty-free vendors along its borders is an example of the controlling power of corruption according to Bulgaria’s Center for the Study of Democracy. Since 1992, duty-free fuel, cigarette and alcohol vendors have operated at Bulgaria’s borders.11 These operations, allegedly tied to organized crime, deprived the state of significant tax revenue and could undercut prices of competitors subject to duties. As a condition of joining the European Union, Bulgaria was required to raise excise duties up to a standard set by the EU. Furthermore, in 2003 the Minister of Finance signed a letter of intent with the International Monetary Fund to close all duty-free shops.12 In response to the increased tax, the illegal trade in duty-free goods increased. In 2004, the Finance Minister extended a license for the shops to continue until 2009 despite international commitments to the contrary. In 2006, the Bulgarian Parliament, instead of closing the shops, passed a law that allowed the shops to shift to the non-EU borders with Serbia, Turkey, and Macedonia.13 Finally, in early 2008, the Parliament passed a law to close the duty-free shops.14 Previously, the Center for the Study of Democracy asserted that “national level illegal proceeds from duty-free trade [had] been deployed to capture the state” and the vendors had used “political corruption to secure perpetual monopoly business positions.”15 Helsinki Commission Chairman Senator Benjamin L. Cardin has raised the issue of unbridled parliamentary immunity on many occasions. In a hearing in June 2006 on Human Rights, Democracy, and Integration in South Central Europe, Senator Cardin made a commitment to push the Parliamentary Assembly to adopt initiatives calling for changes to parliamentary immunity laws. At the July 2006 OSCE Annual Session Cardin authored a resolution on parliamentary immunity, which passed, urging the OSCE participating States to “[p]rovide clear, balanced, transparent, and enforceable procedures for waiving parliamentary immunities in cases of criminal acts or ethical violations.” In 2007, Cardin raised the issue of how parliamentary immunity can serve as cover for corruption in a Helsinki Commission hearing on Energy and Democracy (Helsinki Commission July 2007 Hearing). He has also urged nations such as Ukraine to consider changing their parliamentary immunity laws.16 Petty Corruption Like water flowing downhill, if corruption exists at the higher levels of government and society, it will permeate the performance of public servants at every level. During a 2008 Helsinki Commission hearing on Kazakhstan’s accession to the OSCE Chairmanship, Martha Olcott of the Carnegie Endowment for International Peace identified corruption that is “rampant in daily life” in Kazakhstan and present at all levels of government (Helsinki Commission July 2008 Hearing).17 Endemic corruption within the government bureaucracy has an immediate effect in terms of confidence in government and cost to the people of any country. A 2009 report stated that among European Union countries, 17 percent of Greeks and thirty percent of Lithuanians had admitted to paying a bribe to obtain service from a public administrative body.18 In many countries, widespread corruption has led to a level of acceptance. GfK Research, an international marketing and research company, conducted a study in 2006 which reported that 61 percent of Romanians, 58 percent of Bosnians, and 56 percent of Czechs regarded bribes as a normal part of life.19 Frequently, national health care service is provided only to those willing to pay extra to medical personnel. In Romania, $225 paid by Alina Lungu to her doctor was apparently not enough to prevent him from leaving the pregnant women alone for an hour during labor and her baby from being born blind, deaf, and with brain damage due to the umbilical cord being wrapped around him.20 Global Integrity, a nonprofit organization that monitors governance and corruption worldwide, provides an account of a Latvian girl experiencing stomach pain who was allowed to sit in a hospital for several days without pain-killers or treatment until her father paid money to the doctor.21 A survey in Bulgaria showed that the amount of Bulgarians identifying the health sector as the most corrupt in comparison to others such as customs, police, and judiciary increased from 20 percent in 2002 to 39 percent in 2007.22 According to 2007 reporting, Bulgarians experienced corruption in almost every type of health service including referrals, surgery, birth delivery, and emergency care. The problem is very widespread in hospital care.23 Some conclude that health workers take extra payments from patients for services already covered by health insurance and administrators overstate costs in hospital care due to insufficient hospital financing and financing regulations that encourage overspending.24 fficials regularly abuse their authority in the enforcement of traffic laws and in the area of travel. Vladimir Voinovich, a prominent Russian author, points out that to become a public official or policeman you must pay off your boss and that payment is financed through taking bribes.25 Even when officials wish to behave honestly, providing “a stream of payments to patrons” becomes a matter of survival.26 In Uzbekistan, permission from the local government is required to move to another city and according to the 2008 Department of State Report on Human Rights Practices in Uzbekistan, local authorities commonly issue the required documents only in return for a bribe. The report also states that police “arbitrarily detained people to extort bribes” on a regular basis.27 The 2008 report on Human Rights Practices in Azerbaijan noted that police officers regularly impose arbitrary fines on citizens and seek protection money.28 The report on Poland recognized that corruption among police was widespread.29 In many countries, drinking and driving has become commonplace because police can be bribed to look the other way. The Effect of Corruption on Minorities More often than not, police corruption disproportionally affects minority groups. In a Helsinki Commission briefing in 2004, Leonid Raihman of the Open Society Institute described the plight of Roma in Russia who are trapped in a cycle of poverty exacerbated by bribes extracted by the Russian police (Helsinki Commission September 2004 Briefing). Often detained on charges of not possessing proper personal documents or a false accusation of committing a crime, Roma will hire an attorney whose sole function is to negotiate the price of the bribe for their release. According to Raihman, the situation is analogous to that of a hostage whose freedom is being negotiated. This can sometimes lead to families selling their car, life savings or home. He noted that the worst case scenario results in homelessness.30 Regulations that require people to register their official place of residence or obtain an internal passport provide fertile soil for minority exploitation through corruption. According to the 2007 Department of State Report on Human Rights Practices in Russia, “darker skinned persons from the Caucasus or Central Asia” were regularly singled out to see if they possessed an internal passport and had registered with local authorities.31 Typically, if allowed to register, a person must pay a bribe.  Retaliation against Lawyers The legal profession, in addition to an independent judiciary, is an essential part of a functioning democracy. Still, government officials have used retaliatory criminal prosecution and coercive measures to discourage lawyers from representing clients in cases that expose corruption. An example from Russia is that of the attorneys representing Hermitage Capital and its executives.32 Lawyers from four independent law firms representing Hermitage have apparently been subject to unlawful office searches, illegal summonses demanding that they testify as witnesses in the same cases where they are representing clients, and that they falsify testimony against clients. Lawyers who failed to comply were subjected to criminal charges. Several of the lawyers have fled Russia.33 Sergei Magnitsky, a Russian lawyer with Firestone Duncan, a firm which represented Hermitage Capital, was arrested in November 2008 in connection with his investigation of government corruption. Magnitsky died in custody this November in a case that highlighted the difficulty of standing up to corruption and poor Russian prison conditions. As the dismissal of the head of the tax agency which Magnitsky was investigating suggests, the death is still reverberating at the Kremlin.34 However, it remains to be seen if long-term actions to protect lawyers exposing corruption will be undertaken. Persons familiar with the Russian legal system say little importance is placed on the attorney-client privilege.35 Allegedly, companies like the 2X2 television network, charged with committing crimes against the state by broadcasting content including the Simpsons and South Park encounter difficulties finding legal representation.36 Government attacks on lawyers and their clients who expose corruption represent a serious threat to the rule of law. When lawyers are intimidated and afraid to represent clients, citizens are defenseless against corruption. A primary reason for this is that courts present many complexities that non-attorneys may find difficult to overcome. The U. S. Supreme Court in Powell v. Alabama explained the challenge faced by a non-attorney representing himself in saying that the non-attorney often cannot recognize if the “indictment is good or bad,” is “unfamiliar with the rules of evidence,” and “lacks the skill and knowledge adequately to prepare his defense.”37 It is imperative that lawyers are protected from government interference and political persecution so that they may effectively represent and protect their clients’ interests. The Economic Dimension Studies suggest corruption retards economic development and generally results in a lower standard of living. The OSCE Best-Practice Guide for a Positive Business and Investment Climate, asserts that “corruption is clearly a major indicator of the health of a business and investment climate” and that the “wealthiest OSCE countries are generally the countries judged to be least corrupt by international observers.”38 Corruption adversely affects economic growth by slowing infrastructure development, increasing costs for businesses, and preventing competitive business outcomes. Moreover, the responsibility of wealthier OSCE participating States cannot be disregarded. Multinational corporations from developed nations, largely through acquiescent behavior, may promote corruption in countries where it is most prevalent. Cost to Business and the Overall Economy Bribes pose a significant cost for businesses in many OSCE countries. The Best Practice Guide notes that in former Soviet countries a higher percentage of business revenue is dedicated to paying bribes than in Western Europe.39 The guide reported that in some countries businesses pay up to four percent of their total costs in bribes.40 Whether through customs, licenses, or permits, the opportunity for graft exists where there are excessive bureaucracies or regulations. The CATO Institute’s report, The Rise of Populist Parties in Central Europe, identifies building permits as “an especially attractive source of extra income.”41 According to a World Bank report, building a general storage two-story warehouse in Moscow requires 54 procedures and 704 days.42 This interaction with numerous agencies and government officials increases the opportunity for bribes. Bribes ultimately distort market outcomes because the most competitive companies are not rewarded for their efforts and therefore some companies choose not to compete at all. For example, government contracting is one area where bribes undermine competition and the public good. J. Welby Leaman, an advisor to the U.S. Treasury Department wrote in the Pacific McGeorge Global Business and Development Law Journal, “public officials’ solicitation of their ‘cut’ impoverish government programs.”43 The CATO Institute report cites the case of Dell Corporation losing a computer contract with the Czech parliament. Dell’s bid reportedly met all technical specifications, was the lowest cost and offered to pay a penalty fee for late delivery. Nonetheless, the contract was awarded to a Czech firm that asked for twice as much as Dell.44 Leaman also notes that if a firm cannot pass on a bribe’s cost to the customer, that firm may choose not to compete, which robs the economy of “additional investment and competition.”45 Diversion of Wealth from Natural Resources While a number of OSCE participating States are fortunate to possess large reserves of oil and natural gas, in many instances the wealth produced by these resources does not benefit the citizens of the states, but only the few who control the resources. The Helsinki Commission held hearings in 2007 spotlighting this misappropriation and betrayal of public trust. Simon Taylor of Global Witness identified the problem’s crux in many countries noting that in Turkmenistan, a country of approximately five million people, “[60] percent of [the] population lives below the poverty line despite two billion dollars in annual gas revenues.”46 Remarkably, in Kazakhstan, the economy grew only 0.3 percent between 2000 and 2005 despite its exportation of 1.2 million barrels of oil a day. Taylor also framed the diversion of profits for personal use as a matter of energy security resulting in unreliable supply and higher prices (Helsinki Commission July 2007 Hearing).47 Following the hearings, then-Commission Chairman Alcee L. Hastings introduced an amendment to the Energy Independence and Security Act of 2007 (H.R. 3221), which became law, making it U.S. policy to support the Extractive Industries Transparency Initiative (EITI) and for the U.S. Secretary of State to report annually on U.S. efforts to promote transparency in extractive industry payments.48 The 2009 report notes United States contributions to the EITI Multi-Donor Trust Fund, senior level State Department encouragement to developing economies to join EITI, embassy officer engagement with government officials in developing economies, and U.S. Treasury Department collaboration with development banks.49 In 2008, then-Co-Chairman Cardin sponsored an amendment to the Statement of the July 2008 OSCE Parliamentary Assembly Annual Session that among other things, “encourages governments from oil and gas producing countries to introduce regulations that require all companies operating in their territories to make public information relevant to revenue transparency.” The amendment was approved by the OSCE parliamentarians and adopted as part of the Astana Declaration.50 If the economies of oil and natural gas rich OSCE participating States are to reach their full potential, transparency and accountability must exist between extractive industries and national government. Infrastructure In addition to the price of bribes, a business is disadvantaged to compete in a market with less infrastructure due to corruption. Ukraine exemplifies an OSCE country that stands to gain from economic growth if road projects are funded, efficient and transparent. The World Economic Forum’s Global Competitiveness report on Ukraine notes that the poor state of Ukraine’s roads is hindered by road construction processes that provide many opportunities for corruption.51 This situation impedes not only new road construction, but also repair of existing roads and bridge construction. The State Motor Road Service of Ukraine reported that Ukraine loses the equivalent of one billion U.S. dollars annually due to poor road conditions.52 While new road projects are underway, including a new ring road around Kyiv, current legislation does not allow for a competitive private bidding process, without which the road system will continue to rank 120th out of 134 countries ranked by the World Economic Forum in quality of roads. Ukraine is not alone, Moldova ranked 133rd out of 134 countries.53 Not surprisingly, business leaders in Moldova ranked corruption as the second most problematic business obstacle in that country behind access to financing.54 Fraudulent Appropriation of Private Property A pattern of takeovers of private companies and the government-directed persecution of their executives and lawyers is reportedly becoming the norm in Russia. A prime example was the illegal takeover of companies belonging to the Hermitage Fund, a joint venture between Hermitage Capital Management and HSBC Bank. The takeover was allegedly achieved through brazen abuses of power by law enforcement authorities and interference by government officials with Russian courts. William Browder, the founder of Hermitage, and Jamison Firestone, his attorney, recently met with Helsinki Commission staff to discuss their case. Browder’s visa was revoked in 2005 for what he believes was his work in exposing corruption in state controlled companies with close links to the Kremlin. He then appealed to high-level Russian officials, Browder said, including an impromptu conversation with then-First Deputy Prime Minister Dmitry Medvedev at the Davos annual meeting of the World Economic Forum. After these appeals, Browder alleges he received a phone call from a senior law enforcement officer apparently offering to restore his visa for a price. When this offer was rejected, the Russian Interior Ministry raided the offices of Hermitage and Firestone (see Human Dimension – Retaliation against Lawyers). Corporate seals, charters, and certificates of registration for the Hermitage Fund companies as well as documents belonging to numerous other clients were confiscated during the raids. Following the raids, the corporate documents taken by the Interior Ministry in the office raids were used to wipe HSBC off the share registry of the Hermitage Fund companies. The same documents were used to forge back dated contracts and to file lawsuits against the Hermitage companies alleging significant liabilities. Although Hermitage and HSBC were not aware of these cases, various judges awarded $973 million in damages in legal proceedings that were concluded in a matter of minutes. These same fraudulent liabilities were used by the perpetrators to seek a retroactive tax refund of $230 million in profit taxes that Hermitage had paid to the Russian government in 2006. At the time of the refund, HSBC and Hermitage had already filed six criminal complaints with the heads of Russian law enforcement authorities documenting the involvement of senior government officials in this fraud. Despite these detailed complaints, the fraudulent tax refund was promptly approved and paid to the perpetrators in a matter of days in sharp contrast to the lengthy process normally associated with such a refund. In response to the complaints Russian authorities created an investigative committee staffed by the very officials implicated in the complaints. Moreover, a number of spurious retaliatory criminal cases have been lodged against Browder, his colleagues, and four lawyers from four separate law firms. In the meantime, Mr. Browder and a senior colleague, Ivan Cherkasov, have been placed on the Russian Federal Search List and face the possibility of becoming the subjects of an Interpol Red Notice. Because of the coordinated nature of actions taken by state officials in this scheme together with the official reaction to the Hermitage complaints, Browder suspects high level political interference.55 A country where property can be seized without due process is one where investment is likely to be depressed for fear of arbitrary loss. Regulation of Multinationals While the OSCE participating States of Central and Eastern Europe and the former Soviet Union often receive the most criticism for failing to curtail corruption, West European countries also face problems with corruption. One notable case is the recent investigation of defense contractor BAE Systems, a British firm, for alleged bribery in arms sales to Saudi Arabia and separate probes into wrongdoing in arms transactions with Chile, the Czech Republic, Romania, South Africa, Tanzania, and Qatar. The British newspaper, The Telegraph, reported that an alleged six billion pounds (approximately nine billion dollars) were paid to various Saudi officials. Citing a threat to cease intelligence sharing by Saudi Arabia, the British government terminated the investigation.56 In response to the termination of the investigation, the Organisation for Economic Co-operation and Development (OECD), issued a report criticizing the British government for not considering alternatives to discontinuing the investigation. Moreover, the report criticized the U.K. for not enacting legislation to meet the country’s obligation under the OECD Anti-Bribery Convention.57 While other companies are under investigation, and some like Siemens A.G. have paid record-setting fines, the case of BAE systems stands out because of the record of the U.K. in holding its multinationals to account for overseas bribery. Writing in Foreign Affairs in 2006, Ben Heinemann and Fritz Heimann argue that an area of “emphasis must be the implementation of enforcement and prevention measures by developed nations, where bribery of foreign officials can be more readily exposed and prosecuted.” Unfortunately, their article points out that as of 2006, only France, South Korea, Spain and the United States have brought more than one prosecution.58 In July 2008, the House of Lords upheld the decision of the British government to end the investigation of BAE systems and the government of Prime Minister Gordon Brown has taken no steps to reopen the case. It should be noted that under the pioneer Foreign Corrupt Practices Act (FCPA), which predates the OECD Convention, the United States has steadily increased investigations and prosecutions.59 The FCPA has three major provisions. Its best known provision prohibits U.S. Corporations and individuals from using an instrumentality of interstate commerce to bribe a foreign official, political party or candidate.60The two other primary provisions require corporations to maintain records which accurately reflect transactions and to maintain “internal accounting controls” to provide assurance transactions61 are executed with management’s authorization.62 Observers note that U.S. courts are limiting exceptions to the law and extending its scope while the Department of Justice is joining FCPA charges with charges under other federal laws.63 Reportedly, as of May 2009, the Department of Justice was pursuing 120 investigations of possible FCPA violations.64Recent prosecutions have resulted in favorable court decisions for authorities. In 2004, in a broad interpretation of the law’s application, a Fifth Circuit Court ruling rejected the claim that Congress meant to limit the FCPA only to bribes relating to contracts. The court held that the legislative history implies that the law applies broadly even to payments that indirectly assist in obtaining or retaining business.65 A recent lower court narrowed an exception for lawful payments under the laws of the foreign country. In a situation where a person was relieved of liability after reporting the bribe, the court wrote there “is no immunity from prosecution under the FCPA . . . because a provision in the foreign law “relieves” a person of criminal responsibility.”66 The aggressive enforcement environment and the government’s willingness to consider company-implemented compliance programs in deciding whether to prosecute has a positive consequence of incentivizing other companies to establish such programs. What remains to be seen is to what extent nations with mature economies will hold multinational corporations to account during times of economic hardship. Although only a handful of countries have brought prosecutions, it should be noted that many investigations result in settlements which require fines. In the case of Siemens A.G., the company settled to pay more than $1.6 billion in fines to both German and U.S. authorities.67 If mature economies do not hold multinational corporations accountable, they are in effect promoting corrupt behavior and being duplicitous in criticizing corrupt practices elsewhere. The Security Dimension One account from the book The Natashas: Inside the New Global Sex Trade is the story of Stefa from Moldova who traveled to Romania looking for work. Stefa met a man who introduced himself as an agent marketing positions as maids. Regrettably, nothing could have been further from the truth. This man placed Stefa and other girls in a crowded apartment where they were paraded naked and auctioned like cattle. Natasha was eventually sold and smuggled to Italy where she was sexually assaulted and forced to work as a prostitute.68 Stefa’s story is a common one that is usually facilitated by corruption. Heinemann and Heimann write “one ignores corrupt states that are failed or failing at one’s peril, because they are incubators of terrorism, the narcotics trade, money laundering, human trafficking, and other global crime.”69 In addition to these illicit activities, many recent reports tie corruption to the proliferation of small arms trafficking and sales. Terrorism Many observers believe that terrorists appear to have taken advantage of corruption to conduct attacks. It was reported that one of two female suicide bombers from Chechnya who brought down two Russian passenger aircrafts in August 2004 paid a $34 bribe to board a plane for which she did not have a ticket. Shortly after, flight 1047 and another flight boarded by the second suicide bomber, flight 1303, blew up in mid-air after departing Moscow’s Domodedovo International Airport. Prominent Russian author Vladimir Voinovich, wrote on the Pakistani online newspaper The Daily Times that the terrorists who took control of the Dubrovka theatre in Moscow in 2002 were reportedly stopped fifty times by authorities while traveling to Moscow, but solely for the purpose of soliciting a bribe.70 An article inCrime & Justice International alleged that officials identified 100 Ministry of Internal Affairs (MVD) police personnel who were complicit in the travel of the Chechen fighters to Moscow.71 Corruption facilitates terrorism by decreasing border security and increasing money laundering. Kimberley Thachuk writes in the SAIS Review that “[c]riminal and terrorist groups depend on unimpeded cross-border movements, and so border guards, customs officers, and immigration personnel are notable targets of corruption.”72 In the U.S. Department of State’s Country Reports on Terrorism 2008, corruption among border guards was identified as a risk in the OSCE region, particularly Albania, Armenia, Kosovo, and Moldova.73 The targeting of border guards by criminal elements extends even to the United States. Recently, the U.S. Department of Homeland Security reestablished its internal affairs unit amid increased corruption investigations. It had been disbanded in 2003. In the spring of 2008, there were 200 open cases against U.S. law enforcement officers on the border. This corruption has involved smuggling of guns, drugs, and people.74 Corruption ultimately undermines the effectiveness of security forces to fight terrorism. Kimberly Thachuk notes that “such corruption spreads, as does an attendant loss of morale and respect for the command structure.”75 This deterioration in professionalism and morale could not come at a worse time. A July 2008 article in Forbes magazine on European crime claimed a 24 percent increase in terrorist attacks from 2006 to 2007.76 Arms Sales  As evidenced by prior testimony before the Helsinki Commission, corruption is a factor in many illicit arms sales worldwide. In June 2003, Roman Kupchinsky, then a Senior Analyst with Crime and Corruption Watch of Radio Free Europe/Radio Liberty, pointed out that sales from former Soviet states frequently involve a marriage of security forces and organized crime (Helsinki Commission June 2003 Hearing).77 This means individuals, not the government, are making the sales. Moreover, although OSCE participating States have agreed through the Forum for Security Cooperation to not issue export licenses for arms without an authenticated end-user certificate, these certificates are often forged. Accordingly, the buyer may not be the actual recipient of the weapons. United Nations arms embargoes notwithstanding, individuals and companies from numerous countries are involved in the manufacture, transit, diversion from legal use, and fraudulent company registration for illicit arms trafficking to countries or non-state actor groups under embargo according to Control Arms, a group of concerned non-governmental organizations. The list of countries included Albania, Belgium, Bulgaria, Moldova, Romania, Russia, Serbia, Ukraine and the United Kingdom.78 These illegal sales, which fuel conflict in the developing world, are estimated to be worth one billion dollars a year according to Rachel Stohl, an analyst at the World Security Institute’s Center for Defense Information. She noted in an article published for the SAIS Review that “[a]rms brokers are able to operate because they can circumvent national arms controls and international embargoes” frequently through corrupt practices.79 Human Trafficking The United Nations Protocol to Prevent, Suppress and Punish Trafficking in Persons defines trafficking as “the recruitment, transportation, transfer, harbouring or receipt of persons, by [involuntary means] for the purpose of exploitation.”80 Victor Malarek, author of The Natashas: Inside the New Global Sex Trade, makes clear that corruption is the lynchpin of the trade in women and girls. Even when countries enact laws and policies to prevent trafficking, corruption threatens to render them ineffective. Mohamed Mattar writes in the Loyola and Los Angeles International and Comparative Law Review that there are indications that exit requirements such as exit visas for trafficked victims are being obtained through bribes.81 Furthermore, Malarek asserts that besides former Soviet states corruption also exists in destination countries in which officials are complicit in allowing the illicit trade. Specifically, the book draws attention to corruption among border guards and police in Greece that enables the trafficking.82 Human trafficking for sexual and labor exploitation has wreaked havoc on Moldova. Moldova is an extremely susceptible source country because of poverty and associated corruption. The breadth of the problem is detailed in an article by William Finnegan in the May 2008 issue of The New Yorker. In large measure due to its economic plight, over 25 percent of Moldova’s workforce has migrated out of the country. A third of all children are missing a parent due to migration. Much of the population views emigration as the only hope to living a better life. Such conditions create a setting abundant with potential victims for traffickers. Finnegan asserts local authorities are generally not helpful unless you are a trafficker. He quotes a local prosecutor as saying “[t]he most powerful pimps in Moldova are all former cops.”83 In 2008 the U.S. Department of State initially ranked Moldova as a Tier 3 country meaning that it had failed to comply with minimum standards and failed to make significant efforts to eliminate human trafficking as outlined in U.S. law.84 In October 2008, the President upgraded Moldova to Tier 2 status because it had reopened investigations into official complicity and drafted a code of conduct for public officials.85 Although less reporting occurs on the breakaway republic of Transnistria than Moldova, the situation there appears alarming. Finnegan discovered that law enforcement officials are uncooperative with NGOs working on behalf of trafficked victims and corruption deters relatives of trafficked victims from contacting the police.86 Finnegan’s article makes clear that destination countries share a significant responsibility for human trafficking.87 Whether through deliberate corruption or turning a blind eye, doctors, police, border guards, accountants, lawyers, travel agencies or hotels in destination countries enable trafficking and exacerbate the problem in source countries. Every Western European country and the United States and Canada are destinations for trafficked persons. In its report, the Department of State claims that more than half of commercial sex workers in France were trafficking victims. The Department also recognizes Turkey as a significant destination country. Trafficked women and girls from Azerbaijan, Belarus, Bulgaria, Georgia, Kyrgyzstan, Moldova, Romania, Russia, Turkmenistan, Ukraine, and Uzbekistan find themselves in Turkey. The report notes that many police in Turkey are complicit in trafficking. The United States is not immune, the recent increase in corruption investigations against Customs and Border Protection officers are in part for taking bribes to allow the passage of human beings.88 OSCE Field Missions and Prevention Efforts89 While it is necessary to sound the alarm and call attention to corruption’s presence across the three OSCE dimensions, it is equally necessary to assess OSCE and non-OSCE efforts in the region to counter corruption. The last two decades have seen a consensus at the international level concerning norms and necessary anti-corruption action at the national level. This consensus is manifested in the United Nations Convention against Corruption (UNCAC). Despite international achievements, some would say that national level progress in decreasing corruption is at a standstill or being rolled back in some OSCE participating States. Broadly conceived, implementation is stalling. To understand why it is helpful to think of implementation occurring in two phases. The first phase consists of the passing of national laws implementing international commitments. The second phase, which is just as important, consists of institutions with independent and trained persons complying with and impartially executing the anti-corruption laws. This second phase has proven most problematic for many countries because the actions required to build capacity require a long term commitment and the dedication of resources and do not often attract media attention. Additionally, the notion that the nature of corruption differs from country to country should be embraced.90 The Office of the Coordinator of OSCE Economic and Environmental Activities (OCEEA) leads OSCE efforts in combating corruption. Through field missions, handbooks, and coordination with other international organizations, the OCEEA has promoted implementation of international anti-corruption agreements, efficient management of public resources and implementation of the Arhus Convention allowing greater access to information on the environment. Work to implement the UNCAC has paid off, with only thirteen OSCE participating States not having ratified the convention; and of those thirteen, only six have not yet signed the convention. However, this underscores the reality that ratification does not equate to true implementation of and compliance with the convention. This report cites corrupt activities within many OSCE participating States that have ratified the convention. With respect to this corrupt activity, OSCE field missions can be effective institutions for promoting substantive compliance with the convention. An official with one international organization stressed that the hard part in decreasing corruption is the taking of preventative measures. OSCE field missions routinely undertake and promote some of these measures which include identifying and resolving conflicts, training government officials, and engaging civil society. OSCE field missions commonly provide anti-corruption assistance to local governments. However, in a manner befitting the nature of the problem, field missions conduct distinctive work appropriate to their assigned country. For example, in Georgia the mission assisted, before being closed down this year, in establishing an Inspector General’s office to review the finances of government ministries. Advocacy and legal advice centers are operated by the mission in Azerbaijan to provide legal advice on complaints and to educate the public and government authorities. In 2008, the centers in Azerbaijan provided assistance in response to 2,500 complaints. Additionally, mobile workshops reached 2,360 people with awareness campaigns and frequently provided on the spot legal advice.91 Similar centers provide aid in Armenia. The use of existing advocacy and legal advice centers is not high among people in Kazakhstan. This lower use may exemplify the benefit of an approach that carefully addresses the needs of people and nature of corruption in a given country. Centers that target audiences other than the general public have been successful. In Tajikistan, Resource Centers for Small and Agribusiness and Centers for Promotion of Cross-Border Trade reportedly draw many patrons. It has also been reported that due to these centers, businesspeople have resisted illegal government inspections. Good Governance Centers in Georgia that assisted municipalities received high marks, and in addition to the government, were sometimes used by the general public. Prevention efforts directed at government employees at all levels are essential. Second round GRECO evaluation reports released in 2007 and 2008 identified a number of countries - some with field missions, such as Azerbaijan, and others without, such as Greece - that had not taken appropriate steps to protect government employees who are whistleblowers. In the case of Greece, sufficient protections for career advancement were not in place and employees typically could only report corruption to their immediate supervisor.92 Because the follow-on Addendum to the Compliance Reports are not public, it is unclear if adequate protections and measures to assist reporting has improved. Education coupled with preventative programs that build upon training are initiatives that field missions are well suited to provide through the various types of centers. The OSCE mission in Ukraine has initiated a public-private dialogue that addresses accountability in local government. Fostering a dialogue between government, private sector, and civil society is important because in many countries these groups mistrust one another. In Georgia, the OSCE is supporting the efforts of Transparency International to ensure that a broad range of voices from civil society and the business community are heard by the Task Force on Fighting Corruption as it develops a new Anti-Corruption Strategy and Action Plan. These initiatives recognize that not only will implementation vary from country to country, but that implementation measures will differ at different levels of government and require input from all facets of society. Field missions are conducting varying efforts to promote a similar dialogue between government and civil society in Tajikistan, Kazakhstan, and Azerbaijan. Recent meetings between Helsinki Commission staff and members of civil society and officials from international organizations suggest it may be misguided to keep a primary focus on national level authorities prosecuting alleged corrupt acts. One NGO member recently remarked that there are enough national level laws and that what is needed is impartial enforcement and an unbiased judiciary. In Curbing Corruption: Toward a Model for Building National Integrity, Daniel Kaufmann referred to this as the “Tackling-the-symptom bias” which “instead of identifying the root cause, involves thinking that the solution is to catch and jail a target number of criminals . . . or to pass another anti-corruption law in the country.”93 Kaufmann describes what may be the best case scenario. The worst case scenario expressed by both members of the NGO community and international organizations to the Helsinki Commission is that prosecution is used to target political opposition and journalists. Amplifying the problem are enforcement agencies that may lack the capacity to conduct an even-handed investigation. An official from Bosnia-Herzegovnia recently said that the country “has adopted three strategic plans and ratified numerous international conventions on corruption,” but there is no implementation and the commitments go unmet.94 Public GRECO compliance reports from its second round of evaluations conclude that Albania, Armenia, Azerbaijan, and Romania have only partially implemented measures to fully train investigators, prosecutors and judges to handle corruption cases.95Again, because the follow-on addendum to the reports are not public it is unclear if training has improved in these participating States. In 2005, the President of Kyrgyzstan signed a decree establishing the National Agency of the Kyrgyz Republic for Preventing Corruption. Reportedly, in that first year, the agency opted not to put into practice a number of recommendations of an outside expert sponsored by an international organization to provide support. Later, the agency disagreed with international organizations on the use of funds offered by those organizations. Reportedly, $300,000 were made available for capacity building, but the leadership of the agency was adamant that the money be used to increase salaries. Today the agency has seven computers for 49 staff and no Internet access, Helsinki Commission staff was told. Concerns also exist that a strong parliamentary immunity is a necessity when many governments are focused on prosecution of political opponents. The NGO member added that this prosecution is often targeted at politicians in a minority party highlighting the continued need for parliamentary immunity laws even if they allow some offenders and wrongdoers to evade prosecution. This view of targeted prosecutions has been echoed by workers with international organizations that have communicated with the Helsinki Commission on this subject. With the above in mind, it should be noted that the resolution authored by Chairman Cardin, and adopted by the Parliamentary Assembly in 2006, incorporates preventative measures by calling for the publishing of “rigorous standards of ethics and official conduct” and establishing “efficient mechanisms for public disclosure of financial information and potential conflicts of interest.”96 The goals set out in that resolution constitute a starting point that must be reinforced with other measures that over time build a common ethos of public integrity and service throughout government. It should also be noted that the OSCE has worked in tandem with the Global Organization of Parliamentarians Against Corruption (GOPAC) in participating States such as Kyrgyzstan to train parliamentarians in roles of oversight and budget control. Finally, Chairman Cardin’s resolution recommending that the Office of the Coordinator of OSCE Economic and Environmental Activities (OCEEA) develop best practices for parliamentarians to use echoed the 2005 OSCE PA’s Washington Declaration. That document praised the work of GOPAC and recommended that the OSCE “with other parliamentary associations and [GOPAC develop] a programme of peer support, education and anti-corruption initiatives.”97 The OSCE has also worked with GOPAC in running workshops and supporting local GOPAC chapters particularly in Southeast Europe. This is an effort that should receive continued support. The importance of capacity building within parliaments cannot be forgotten when confronting corruption. Conclusion: The Related Nature of Corruption Across the OSCE Dimensions No account of corruption in any dimension can be viewed in isolation. If corruption thwarts a competitive business environment or is endemic among public servants then the conditions are set for an underworld of crime to flourish. Once seedlings of graft take root, they grow rapidly. Soon the institutions of democracy that require the nutrients of transparency and accountability are choked by what people may have once considered the harmless taking of small amounts of money or property. In the aggregate, petty corruption emboldens grand corruption and vice versa. Eventually, a government cannot perform the basic tasks expected of it. It cannot defend individual rights enshrined in national law, protect the engagement of commerce, or provide for the security of its people. In many instances, elites restrict political access and limit economic competition. This is what Larry Diamond refers to as a “predatory state.” Moreover, Diamond asserts when people no longer advance “through productive activity and honest risk taking” but only through operating outside the law, the predatory state becomes a “predatory society.”98 While observers may disagree whether some OSCE participating States have reached such an extreme point, all states are always somewhere on the continuum between a functional electoral democracy and a predatory society. To combat corruption the OSCE, through existing field mission mandates, should continue to focus adequate attention to building capacity to identify and address corruption and promotion of a culture of integrity and anti-corruption among civil servants and civil society. All participating States should implement commitments under international treaties such as the UNCAC. However, ratifying the UNCAC and passing national laws targeting corruption is not enough. While prosecutions serve a deterrence function, they must be balanced by relatively low profile well-planned prevention programs that are sustained by sufficient resources. In order to identify and address the circumstances that foster corruption, collaboration must increase between governments, NGOs, corporations and small and medium size enterprises to develop specific strategies. OSCE countries should consider supporting neighbors by building upon the model of field missions. Corruption is a problem not likely to end soon, but is an area where progress may be made if small successes are reinforced with adequate resources. Work is needed to live up to the ideals recorded in the Parliamentary Assembly’s Astana Declaration and the earlier Istanbul Declaration of the 1999 OSCE Summit, in which OSCE participating States recognized corruption as a threat to “shared values” and pledged “to strengthen their efforts to combat corruption and the conditions that foster it.” The OSCE countries need to muster the political will, individually and collectively, to conduct a smarter fight against corruption – a threat to security, property, and fundamental freedoms throughout the expansive OSCE region. Footnotes 1 Joanna Lillis, “Kazakhstan: Nazarbayev Hints that Democratization will Take Back Seat on OSCE Agenda,” Eurasia Insight, July 9, 2008,http://www.eurasianet.org/departments/insight/articles/eav070908.shtml (accessed June 1, 2009) 2 2008 Corruption Perceptions Index: Persistently high corruption in low-income countries amounts to an “ongoing humanitarian disaster” (Berlin: Transparency International, 2008). 3 Michael Johnston, Syndromes of Corruption: Wealth, Power, and Democracy (New York: Cambridge, 2005), 19-21. 4 OSCE Parliamentary Assembly, Astana Declaration of the OSCE Parliamentary Assembly and Resolutions Adopted at the Seventeenth Annual Session, 2008, 7, 28, and 45. 5 Larry Diamond, “The Democratic Rollback: The Resurgence of the Predatory State,” Foreign Affairs87, no. 2 (2008): 39, and 42-44. 6 The participating States committed to support and advance these rights and freedoms, in addition to others, in the 1990 Copenhagen Document. “Document of the Copenhagen Meeting of the Conference on the Human Dimension of the CSCE,” June 29, 1990. 7 United States Agency for International Development, Parliamentary Immunity Brief: A Summary of Case Studies of Armenia, Ukraine and Guatemala, August 2006, 1-2. 8 Carmen Lane, Parliamentary Immunity and Democracy Development (Washington D.C.: DAI, 2007) 1-3. 9 United States Agency for International Development, Corruption Assessment Ukraine, Final Report February, 2006, 49 10 Gayane Mkrtchyan, “Not Above the Law?: Parliament Lifts Immunity, MP Hakobyan Must Face Prosecution,” ArmeniaNow.com, October 13, 2006, http://www.armenianow.com/?action=viewArticle&AID=1768 11 Center for the Study of Democracy, Effective Policies targeting the Corruption – Organized crime Nexus in Bulgaria: Closing Down Duty-Free Outlets, Brief, December 2007, 3. 12 Ibid., 5. 13 Ibid., 3. 14 Elena Koinova, “Changes to Duty-Free Trade Act passed in Parliament,” The Sofia Echo, March 28, 2008, http://sofiaecho.com/2008/03/21/659426_changes-to-duty-free-trade-act-passed-in-parliament 15 Center for the Study of Democracy, Effective Policies targeting the Corruption, 3. 16 Commission on Security and Cooperation in Europe, Energy and Democracy: Oil and Water?, 108th Cong., 2nd sess., 2007 (Prepared statement of Senator Benjamin L. Cardin, not unofficial transcript), https://www.csce.gov/international-impact/events/energy-and-democracy-oil-and-water (accessed June 22, 2009) 17 Commission on Security and Cooperation in Europe, Promises to Keep: Kazakhstan’s 2010 OSCE Chairmanship, 110th Cong., 2nd sess., 2008, (Prepared statement of Martha Olcott not unofficial transcript), https://www.csce.gov/international-impact/events/promises-keep-kazakhstan-s-2010-osce-chairmanship (accessed June 8, 2009). 18 Transparency International, 2009 Global Corruption Barometer Report, (Berlin: May, 2007) 32. 19 GfK Research, Corruption Climate in Europe, August 9, 2006, available athttp://www.gfk.hr/press1_en/corruption2.htm (accessed June 17, 2009). 20 Dan Bilefsky, “Medical Care in Romania Comes at an Extra Cost,” The New York Times, March 9, 2009. 21 Global Integrity, Global Integrity Scorecard: Latvia, 2007, 1-2. 22 Konstantin Pashev, Center for the Study of Democracy, Corruption in the Healthcare Sector in Bulgaria (Sofia, Bulgaria: 2007) 17. 23 Ibid, 17. 24 Ibid, 35. 25 Vladimir Voinovich, “Drunk on Corruption,” Daily Times, January 3, 2003,http://www.dailytimes.com.pk/default.asp?page=story_3-1-2003_pg3_4 (accessed June 18, 2009). 26 Michael Johnston, “Poverty and Corruption,” Forbes, January 22, 2009. 27 U.S. Department of State, 2008 Human Rights Report: Uzbekistan, February 25, 2009,http://www.state.gov/g/drl/rls/hrrpt/2008/sca/119143.htm. 28 U.S. Department of State, 2008 Human Rights Report: Azerbaijan, February 25, 2009,http://www.state.gov/g/drl/rls/hrrpt/2008/eur/119068.htm. 29 U.S. Department of State, 2008 Human Rights Report: Poland, February 25, 2009,http://www.state.gov/g/drl/rls/hrrpt/2008/eur/119098.htm. 30 Commission on Security and Cooperation in Europe, The Romani Minority in Russia, 108th Cong., 2nd sess., 2004, 8 (Prepared statement of Leonid Raihman found in official transcript). 31 U.S. Department of State, 2007 Country Reports on Human Rights Practices: Russia, March 11, 2008, http://www.state.gov/g/drl/rls/hrrpt/2007/100581.htm. 32 The account of how Hermitage Capital was seized corruptly through a series of non-transparent proceedings is told in the section addressing the Economic Dimension. 33 Jamison Firestone, conversation with Helsinki Commission staff, April 14, 2009. 34 Carl Mortished, “Kremlin sacking linked to Sergei Magnitsky case,” TimesOnline, December 16, 2009,http://business.timesonline.co.uk/tol/business/industry_sectors/banking_and_finance/article6957931.ece (accessed December 22, 2009). 35 Lynda Edwards, “Russia Claws at the Rule of Law,” ABA Journal 95 (2009): 41. 36 Ibid., 42. 37 Powell v. Alabama, 287 U.S. 45, 69 (1932). 38 The Organization for Security and Cooperation in Europe, Best-Practice Guide for a Positive Business and Investment Climate, 2006, 30. 39 Ibid. 40 OSCE, Best-Practice Guide 30-31. 41 Marian L. Tupy, CATO Institute, The Rise of Populist Parties in Central Europe: Big Government, Corruption, and the Threat to Liberalism, November 8, 2006, 14. 42 The World Bank, Doing Business 2009: Country Profile for Russian Federation, 2008, 12. 43 J. Welby Leaman, “It’s Not Always Nice to Play Nice: Collusion, Competition, and Development,”Pacific McGeorge Global Business and Development Law Journal 20, no. 2 (2007): 291. 44 Tupy, Rise of Populist Parties, 9. 45 Leaman, “It’s Not Always Nice to Play Nice,” 291. 46 CSCE, Energy and Democracy, 108th Cong., 2nd sess., 2007 (Prepared statement of Simon Taylor not unofficial transcript) (accessed June 12, 2009). 47 Ibid.  48 Energy Independence and Security Act of 2007, Public Law 110-140, 110th Cong., 1st sess. (December 19, 2007). 49 .S. Department of State, Report on Progress Made in Promoting Transparency in Extractive Industries Resource Payments, June 24, 2009. On file with United States House of Representatives Committee on Foreign Affairs, 50 Parliamentary Assembly, Astana Declaration, 28. 51 Margareta Drzeniek Hanouz and Thierry Geiger, eds., World Economic Forum, The Ukraine Competitiveness Report: Towards Sustained Growth and Prosperity, 2008, 56. 52 Hanouz and Geiger, eds., The Ukraine Competitiveness Report, 56. 53 Michael Porter and Klaus Schwab eds., World Economic Forum, The Global Competitiveness Report 2008-2009, 385. 54 Ibid., 242. 55 William Browder, conversation with Helsinki Commission staff, April 14, 2009. William Browder did testify at a Helsinki Commission hearing just as this report was being completed in June 2009. During his testimony he provided a website (http://www.compromat.ru/main/vragi/raderykak.htm) that provided a price list for a range of activities attacking a corporate entity in Russia from erasing a company’s registration data to a complete takeover. 56 Jon Swaine, “BAE Systems executive ‘questioned over alleged bribery,’” The Telegraph, October 23, 2008, http://www.telegraph.co.uk/finance/newsbysector/epic/badot/3245563/BAE-Systems-executive-questioned-over-alleged-European-bribery.html (accessed June 15, 2009). 57 Organizations for Economic Co-operating and Development, United Kingdom: Report on the Application of the Convention on Combating Bribery of Foreign Public Officials in International Business Transactions and the 1997 Recommendation on Combating Bribery in International business Transactions, October 17 2008, 4. 58 Ben W. Heineman, Jr., and Fritz Heimann, “The Long War Against Corruption,” Foreign Affairs 85, no. 3 (May/June 2006), 77, 82. 59 Control Risks, Corruption, Compliance and Change: Responding to Greater Scrutiny in Challenging Times (London: 2009) 3. 60 15 U.S.C. §§ 78dd-1. 61 15 U.S.C. § 78m(b)(2)(A). 62 15 U.S.C. § 78m(b)(2)(B). 63 Gail P. Granoff and Brian Mich, 2008 FCPA Review, January 28, 2009 (Presentation at International Quality & Productivity Center FCPA Conference). 64 Dionne Searcey, “U.S. Cracks Down on Corporate Bribes,” The Wall Street Journal, May 26, 2009. 65 United States v. Kay, 359 F.3d 738, 755 (5th Cir. 2004). 66 United States v. Kozeny, 582 F. Supp 2d 535, 539 (S.D.N.Y 2008). 67 Cary O’Reilly and Karin Matussek, “Siemens to Pay $1.6 Billion to Settle Bribery Cases,” The Washington Post, December 16, 2008. 68 Victor Malarek, The Natashas: Inside the New Global Sex Trade (New York: Arcade Publishing, 2003), 112-113. 69 Heineman and Heimann, “The Long War,” 79. 70 Voinovich, “Drunk on Corruption”. 71 Graham H. Turbiville, Jr., “Corruption, Crime and Murder Undermine Counter-terrorist Efforts,”Crime & Justice International 21, no. 87 (July/August 2005), 8. 72 Kimberly Thachuk, “Corruption and International Security,” SAIS Review XXV, no. 1 (Winter-Spring 2005), 147. 73 U.S. Department of State Country Reports on Terrorism 2008, Europe and Eurasia Overview, April 2009. 74 Randal Archibold and Andrew Becker, “Border Agents, Lured by the Other Side,” The New York Times, May 27, 2008. 75 Thachuk, “Corruption,” 147. 76 Parmy Olson, “Europe’s Crime Capitals,” Forbes, July 15, 2008,http://www.forbes.com/2008/07/15/europe-capitals-crime-forbeslife-cx_po_0715crime.html 77 Commission on Security and Cooperation in Europe, Arming Rogue Regimes: The Role of OSCE Participating States, 108th Cong., 1st sess., 2003, 40 (Prepared statement of Roman Kupchinsky found in official transcript). 78 Control Arms, UN Arms Embargoes: An Overview of the Last Ten Years, Briefing Note, March 16, 2006, 2. 79 Rachel Stohl, “Fighting the Illicit Trafficking of Small Arms,” SAIS Review (Winter-Spring 2005), 64. 80 “Protocol to Prevent, Suppress, and Punish Trafficking in Persons, Especially Women and Children, Supplementing the United Nations Convention Against Transnational Organized Crime,” Article 3 (a), United Nations, (2000). 81 Mohamed Y. Mattar, “State Responsibilities in Combating Trafficking in Persons in Central Asia,”Loyola and Los Angeles International and Comparative Law Review 27 (Spring 2005), 161 (see footnote 76). 82 Malarek, The Natashas, 140-141. 83 William Finnegan, “The Counter Traffickers: Rescuing Victims of the Global Sex Trade,” The New Yorker, 2, 6, 7-8, http://www.newyorker.com/reporting/2008/05/05/080505fa_fact_finnegan (accessed June 8, 2009). 84 U.S. Department of State, Trafficking in Persons Report, June 2008, 184. 85 U.S. Department of State Senior Coordinator for Public Outreach, Office to Monitor and Combat Trafficking in Persons, email to author, December 10, 2008; Embassy of the United States, Moldova, “Moldova Moved up to Tier 2 in Trafficking in Persons,” press release, October 10, 2008,http://moldova.usembassy.gov/pr102908.html. 86 Finnegan, “The Counter Traffickers,” 10. 87 Ibid., 9, 11. 88 Rick Jervis, “Arrests of Border Agents on The Rise,” USA Today, April 23, 2009. 89 This section of report is based upon meetings and discussions with a variety of international governmental organizations and nongovernmental organizations who to the extent possible are not identified. Any opinions expressed or conclusions drawn do not necessarily reflect the official views of any of these organizations. 90 Johnson, Syndromes of Corruption, 186. 91 Office of the Co-ordinator of OSCE Economic and Environmental Activities, March 25, 2009, email to author providing numbers of complaints and people contacted. 92 Group of States against Corruption, Second Evaluation Round: Compliance Report on Greece, February 15, 2008, 9. 93 Daniel Kaufmann, “Anticorruption Strategies: Starting Afresh? Unconventional Lessons from Comparative Analysis,” in Curbing Corruption: Towards a Model for Building National Integrity, ed. Rick Stapenhurst and Sahr J. Kpundeh (Washington, D.C.: World Bank Publications, 1999), 37. 94 Miroslav Ajder, “Corruption Claims Hold Back Bosnia: Allegations of Fraud in Government Contracts and Privatization are Pitting the Government Against Monitors and Scaring off Foreign Investors,” BusinessWeek, March 17, 2009. 95 These compliance reports may be found at the GRECO web page,http://www.coe.int/t/dghl/monitoring/greco/evaluations/round2/reports(round2)_en.asp (accessed June 15, 2009). 96 Resolution on Limiting Immunity for Parliamentarians in order to Strengthen Good Governance, Public Integrity and Rule of Law in the OSCE Region, OSCE Parliamentary Assembly, 15th sess., Brussels Declaration (July 7, 2006). 97 OSCE Parliamentary Assembly, Washington, DC Declaration of the OSCE Parliamentary Assembly and Resolutions Adopted at the Fourteenth Annual Session, 2005, 35. 98 Diamond, “The Democratic Rollback,” 43. 

  • U.S. Diplomats Rap Astana's Democratization Performance

    As Kazakhstan prepares to assume the chair of the Organization for Security and Cooperation in Europe, US diplomats are exerting pressure on Astana to enact promised reforms. Kazakhstan’s laws on media, elections and political parties continue to "fall short of OSCE standards," Philip Gordon, assistant secretary of state for European and Eurasian affairs, asserted in written testimony submitted for a hearing October 28 of the US Helsinki Commission. Gordon also pointed out in his testimony that "Kazakhstan has not held an election that the OSCE has deemed fully to have met OSCE commitments and international standards." Both Gordon and Michael Posner, the assistant secretary of state for democracy, human rights and labor, called attention to the case of Yevgeny Zhovtis, a human rights activist convicted in September for vehicular manslaughter. The trial was allegedly marred by procedural violations. Even so, a Kazakhstani judge rejected an appeal of the conviction. The US Helsinki Commission’s chair, Sen. Benjamin Cardin, a Democrat from Maryland, said the Obama administration and the State Department has given short shrift to human rights, adding that the issue of the OSCE summit in Kazakhstan presented an opportunity for the United States to take a strong stand on human rights.  

  • Bill Seeks Disclosure of Foreign Payments

    Five US senators have introduced a bill which would require companies with stock traded on US exchanges to report payments to foreign governments for oil, gas, and mineral extraction in their regular Securities and Exchange Commission filings. The measure is designed to prevent governments in countries rich with natural resources from hiding payments they receive from energy and mineral producers to finance corrupt activities, the lawmakers said. “History shows that oil and gas reserves and minerals can be a bane, not a blessing, for poor countries, leading to corruption, wasteful spending, military adventurism, and instability,” said Richard P. Lugar (R-Ind.), ranking minority member of the Senate Foreign Relations Committee and the bill’s primary sponsor. “Too often, oil money intended for a nation’s poor lines the pockets of the rich or is squandered on showcase projects instead of productive investments,” he continued. Sens. Benjamin L. Cardin (D-Md.), Russell J. Feingold (D-Wis.), Charles E. Schumer (D-NY), and Roger F. Wicker (R-Miss.) cosponsored the measure.

  • Helsinki Commission Condemns Murder of Russian Human Rights Activist Natalya Estemirova

    Senator Benjamin L. Cardin (D-MD), Chairman of the Commission on Security and Cooperation in Europe (U.S. Helsinki Commission), Co-Chairman Congressman Alcee L. Hastings (D-FL) and Ranking Republican Members Senator Sam Brownback (R-KS) and Congressman Chris Smith (R-NJ) issued the following statements today upon learning of the killing of Russian human rights activist Natalya Estemirova. “I am saddened and outraged by the kidnapping and killing of Natalya Estemirova, one of the region’s great defenders of human rights. The reports of her abduction in Chechnya and subsequent shooting in the North Caucasus republic of Ingushetia remind us of the urgent need to address human rights concerns throughout Russia. President Medvedev’s condemnation of this murder and his pledge to ‘take all necessary measures’ to solve the crime are welcomed, but his words must translate into a prompt and complete criminal investigation by federal authorities that brings those responsible to justice,” said Chairman Cardin. “I agree with what President Obama recently said in Moscow that history has shown ‘governments which serve their own people survive and thrive; governments which serve their own power do not.’ Murder and intimidation of activists and journalists is both a serious violation of human rights and an affront to any democracy.” “In 2006, Ms. Estemirova met with the staff of the Helsinki Commission as part of our work to shine a light on the abuses in Chechnya. Lawlessness and violence too often define the lives of journalists and activists who are simply pushing the cause of freedom.” said Co-Chairman Hastings. “Ms. Estemirova led a courageous life of denouncing corruption, calling for a fair judicial system, and standing up for human rights. While her killers may have ended her life, they will never silence the voice she brought to these issues.” “President Medvedev has talked about the legal nihilism rampant in his country and has made positive gestures in the direction of reform, yet these killings continue. It is time to see real action and real reform regarding the rule of law and respect for human rights in Russia. The death of Natalya Estemirova must not be in vain,” said Senator Brownback. “Natalya Estemirova gave her life and now her death in the service to the cause of human suffering and justice,” said Congressman Smith, who authored a resolution that passed the House in 2007 to address the large number of unsolved murders of investigative journalists in Russia. “Being a human rights activist or an independent journalist in Russia has become among the most dangerous professions in the world. The Russian government needs to create an environment in which the flagrant slaughter of human rights activists is unacceptable.” The Helsinki Commission has held many hearings and briefings on Russia’s human rights record, including one recently focusing on the North Caucasus.

  • The Medvedev Thaw: Is It Real? Will It Last?

    This hearing discussed U.S. foreign policy towards Russia, focusing on how to improve relations while taking Russia’s compliance with human rights seriously.   The witnesses and Commissioners discussed the implications of Dmitri Medvedev becoming president and Vladimir Putin retaining power as Prime Minister.

  • The Western Balkans: Challenges for U.S. and European Engagement

    This hearing discussed the recent progress of the seven countries of the Western Balkans with regards to internal stability, democratic development, minority rights, anti-corruption efforts, and the rule of law. The witnesses evaluated each country’s progress and that of the region as a whole. In addition, the hearing also focused on the on the election process in each country and whether they had met the OSCE standards for elections.

  • Turkmenistan: Prospect for Change?

    The purpose of this hearing was to examine Turkmenistan’s parliamentary elections- the first such election since the regime changed. The hearing focused on whether the election might mark a turning point at all for Turkmenistan as well as whether Turkmenistan has made progress on Democratic reforms. Positive signs were reviewed, particularly on education, but also areas of concern, such as reports of Turkmen officials pressuring young men not to apply for study programs in the United States. The distinguished witnesses and Commissioners reviewed the reform process and the significant advancements since the death of longtime President, Berdimuhamedov. In regards to areas of further reform and advancement, the hearing addressed measures in which the U.S. and the OSCE should respond to better the human rights condition in Turkmenistan.

  • The Role of OSCE Institutions in Advancing Human Rights and Democracy

    This hearing discussed the role of OSCE institutions in advancing human rights and democracy, highlighting the role of the United States. The United States was mentioned as a leading force of democracy promotion and protection of human rights. However, the witnesses mentioned certain issues like Guantanamo, Abu Ghraib, rendition flights, and detention centers that suggest double-standards. The discussion centered on the importance of inclusive voice in government and the need to find a way to build pluralism into single-party developing democracies by establishing political parties that can be competitive, that can be critical of governments and that can bring new ideas and fresh faces into their government.

  • Guantanamo Detainees after Boumediene: Now What?

    The hearing reviewed the detainee-related policy issues – particularly for Guantanamo detainees -- that remain in the aftermath of the Supreme Court’s recent decision in Boumediene. Witnesses also had the opportunity to discuss a related question: what does Europe do with its terror suspects, and are there any lessons for the United States from the European experience? The Supreme Court ruled in a 5-4 decision in Boumediene v. Bush that foreign terrorism suspects held at the Guantanamo Bay detention facility have the right under the Constitution to challenge their detention in a U.S. civilian court.

  • Ingushetia: The New Hot Spot in Russia’s North Caucasus

    John Finerty, staff advisor at the Commission, led this briefing on the increased destabilization in the North Caucasus region of Russia, specifically in Ingushetia. After the conclusion of the second Chechen war, the North Caucasus region was once again experiencing an increase in violence.  Although the entire region was fraught with instability, Ingushetia attracted particular attention, having undergone a rise in terrorist and counter-terrorist operations, illegal detentions, kidnappings and extra judicial executions over the past year.  Panelists – Eliza Musaeva, Gregory Shvedov, and Magomed Mutsolgov -described Ingushetia’s history and the arbitrary lack of rule of law that had originated in Chechnya and crept into Ingushetia. They highlighted the prolific kidnappings in the regions that were specifically Chechnya related, which led to Ingushetia being talked about as a republic of its own.  Since then, the Russian government had conducted counterterrorism operations, leading the panelists to speculate about the potential for another war in the North Caucasus. 

  • Uzbekistan: Three Years after Andijan

    This briefing examined the human rights situation and state of civil society in Uzbekistan three years after Andijan, when hundreds of demonstrators were killed by Uzbek security force, and in the subsequent crackdown, restrictions were imposed to further stifle dissent. While the human rights situation remains dire, the Government of Uzbekistan continues to pursue engagement with the EU and U.S., positioning itself as a key strategic ally in regional energy and security concerns.  Panelists testifying at the briefing explored prospects for democratization in Uzbekistan and the possibilities of improving U.S.-Uzbek relations.  Additionally, they discussed the need for reforms in cotton production, Uzbekistan's largest source of income. 

  • The New Cold War: Putin’s Russia and the Threat to the West

    This briefing featured Edward Lucas, Central and Eastern Europe correspondent and former Moscow bureau chief for The Economist. During this briefing, Lucas shared his thoughts on current political events in Russia including the upcoming Presidential elections and Moscow’s relations with the international community during President Putin’s era and beyond. Several developments in Russia were highlighted, including the increasing tensions between Russia and the West in light of Kosovo’s declaration of independence from Serbia. The perspective provided by Lucas during this hearing emphasized the both positives and negatives of these developments, and of Russia’s relationship with other countries like the United States.

  • Human Rights, Civil Society, and Democratic Governance in Russia: Current Situation and Prospects for the Future

    This hearing, chaired by Helsinki Commission Chairman Hon. Sam Brownback and Ranking Member the Hon. Benjamin Cardin, focused on the tumoltuous developement of human right in Russia. For the past few years, a series of events in Russia has given cause for concern about the fate of human rights, civil society, and democratic governance in that country. Of particular concern is the recent promulgation of a law establishing greater governmental control over NGOs and an attempt by the Russian secret services to link prominent Russian NGOs with foreign intelligence services. Newsweek International wrote in its February 6, 2006 issue: “The Russian secret service is acting more and more like the old KGB.” At the same time, the Russian Federation accedes this year to the chairmanship of the Group of Eight Industrialized Nations (G-8), and will chair the Council of Europe Committee of Ministers beginning in May 2006.  

  • The Future Belarus: Democracy or Dictatorship?

    This briefing, on the prospects for democratic change in Belarus, a country located in the heart of Europe, but which had the unfortunate distinction of having one of the worst human rights and democracy records in the European part of the OSCE region, was held by Hon. Alcee L. Hastings, Chairman of the Commission on Security and Cooperation in Europe. He was join by a delgation of courageous leaders of Belarus' democratic opposition and leading human rights and democracy activists: Aliaksandr Milinkevich, Anatoliy Lebedko, Sergey Kalyakin, Anatoliy Levkovich, and Dmitriy Fedaruk. The witnesses were commended for their courage to testify at the briefing and applauded for their commitment to the struggle for democracy, freedom, and human rights, even under very trying circumstances.

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