Wednesday, August 31, 2011

Fighting Corruption - Successes, Challenges, and Staying the Course

Fighting Corruption - Successes, Challenges, and Staying the Course
(click link)

"x x x.

In December 2010, the World Bank hosted national authorities—“corruption hunters,” as we like to call ourselves—286 senior representatives from 134 countries. Our aim was to improve cooperation and thereby help resolve those cases of transnational bribery which might otherwise fall through the jurisdictional cracks that surround individual entities. By engaging national authorities from around the world, we can maximize the impact of our and their investigations, and build a cadre of crime fighters vested in protecting the interests of development. On April 13 this year, we released a results matrix that can be used to measure the activities of anticorruption authorities in order to increase our collective global effectiveness in the fight against crime.

As a young prosecutor in South Africa, I learned to litigate against small-time fraudsters, gangsters, and dishonest bureaucrats. Later, I graduated to organized-crime syndicates, market manipulators, and corrupt politicians who abused public office for personal gain. It became abundantly clear to me that when you deal with criminals, you have to be cleverer than they are, so that you can play by the rules and still come out ahead.

Recently, The Economist ran a piece about “harassment bribes,” or the small bribes citizens in India must pay in order to receive routine public services. Under the current system, someone who makes this kind of payment is equally liable under the law as the person who accepts the bribe. The proposed law change would allow citizens to file complaints, free from fear of prosecution, and to also receive a refund for their coerced payments. The payer of a harassment bribe would no longer face legal penalties (hence the legalization of the bribe-giving); the receiver of the bribe, however, would still be engaging in illegal activity. It is an untested and provocative idea that tries to weaken the demand side of corruption and repay its victims. The approach demonstrates how old problems can be addressed from a new perspective.

What other ideas lurk just outside our consciousness and are worth exploring? Should public institutions funnel the ill-gotten proceeds of corruption into a well-managed fund that compensates victims? If social media can mobilize protests against corruption, how can it also trigger, what Mr. Zoellick has called for, “a moral revulsion as well as a legal reaction to corruption”?

As you may have surmised from my remarks, while I like to push boundaries, I have utmost respect for the rule of law. Back in 1776 amidst another revolution, Adam Smith advocated the rule of law as an indispensable prerequisite for a society to flourish. It is a theme that has resonated throughout American history, and lies at the heart of economic recovery and prosperity.

Leonard F. McCarthy is Vice President for Integrity at the World Bank."

Wikileaks document on US Embassy (Manila) report on law enforcement corruption in Philippines (2005)



 1.  (SBU) SUMMARY.  The nexus of law enforcement corruption
in the Philippines lies in four key areas: 1) bribery in
recruitment and extortion in training; 2) ineffectual and
politically manipulated Internal Affairs; 3) financial
mismanagement; and, 4) procurement and resource
mismanagement.  PNP leadership has admitted that the PNP has
a problem with endemic corruption and taken initial steps
toward reform.  However, sustaining positive change is
dependent upon transient command personalities, resisted by
an entrenched old guard, and vulnerable to the exigencies of
politics.  Post,s proposed Management Assessment of the
Philippine Police (MAPP) would provide the basis for a
strategic overview and a comprehensive reform plan. END


2.  (SBU) According to Transparency International's "2004
Global Corruption Barometer," the Philippine National Police
(PNP) is the most corrupt national institution in the
Philippines.  Corruption in the PNP and related agencies
stems primarily from the unholy trinity of gambling, drugs,
and prostitution that beset law enforcement organizations
worldwide.  However, PNP corruption is exacerbated by
Philippine law, which gives local officials control over the
appointment and dismissal of local PNP commanders,
encouraging corrupt city mayors to make common cause with
dishonest police commanders.  Mission observers compare the
PNP to police forces in Al Capone,s Chicago or 1940,s "L.A.
Confidential" Los Angeles.


3.  (SBU) Apart from corruption, many cops undertake
investigative short cuts that often employ physical abuse,
the planting of evidence, and sometimes -- allegedly under
guidance from local elected officials -- the extra-judicial
killing of criminal suspects.  The PNP suffers from a potent
combination of malfeasance (misconduct or wrongdoing) and
misfeasance (improper and unlawful execution of an act that
in itself is lawful and proper) within an institutional
culture of poor management.  The results permit not only
corruption but also a level of incompetence that is often
indistinguishable from corruption.  Mission law enforcement
officials often find individual PNP members courageous, but
-- especially at junior levels -- tempted by the
opportunities (and, given the poverty-level wages, the
virtual necessity) to "learn how to earn" from corrupt
officers in the field.

4.  (SBU) The PNP leadership has admitted the PNP has a
problem with endemic corruption, and has publicly expressed a
willingness to improve the PNP as an institution.  After his
appointment as PNP Chief in September 2004, then-Director
General Edgar Aglipay made several moves to counter growing
criticism of PNP incompetence under the tenure of Hermogenes
Ebdane (formerly National Security Adviser and now Secretary
of Public Works and Highways).  Aglipay used his six-month
term in office to acknowledge publicly the PNP,s culture of
misfeasance, incompetence, and corruption, and to create
disciplinary barracks at the former U.S. Naval base at Subic
Bay and in Camp Molintas in Benguet province.  Since October
2004, 198 police officials identified by their commanders as
lazy, undisciplined, and abusive have had to undergo one of
five re-training courses or a "Values and Leadership
Enhancement Course."

5.  (SBU) In addition, Aglipay inaugurated campaigns against
the solicitation of petty bribes for minor traffic offenses,
and succeeded in getting officers back in proper uniform,
properly groomed, and visible on their beats.  Even the
appearance of PNP headquarters at Camp Crame noticeably
improved, with interior courtyards cleared of refuse, drained
of still water, and landscaped.  Under "Project Item," the
PNP optimized deployment of personnel to perform the three
basic police functions of patrolling, traffic management, and
investigation.  National Capitol Region command staff again
prowl the streets at night, conducting snap inspections of
police posts and checkpoints.  There is an increasingly
visible police presence on many major thoroughfares during
rush hour and at night, an important component of the "broken
windows" school of community policing.  Encouragingly,
incoming Director Auturo Lomibao appears ready to continue
with many of Aglipay,s initiatives (ref A).


6.  (SBU) In a PNP Anti-Corruption Plan submitted by outgoing
chief Director General Aglipay to President Arroyo, the PNP
made public what has been common knowledge for years --
bribery of police trainers and extortion of recruits are
common practices.  As one Internal Affairs Service Police
Superintendent (Colonel equivalent) at a PNP training
institution quipped to poloff, "when you start with garbage,
you get garbage."  The Filipino press has reported complaints
of extortion of recruits in the Visayas and the Autonomous
Region of Muslim Mindanao (ARMM) by officials of the National
Police Commission (NAPOLCOM), the official body charged with
supervision and recruitment of police officers.  Police
trainees and local government officials have complained that
NAPOLCOM officials also sometimes receive amounts ranging
from 50,000 to 100,000 pesos ($900-$1,800) for swearing in
police recruits who fail the entrance tests but are willing
to pay bribes.

7.  (SBU) Under Philippine law, the Department of Interior
and Local Government (DILG) controls the institutions -- the
Philippine Public Safety College (PPSC) and the Philippine
National Police Academy (PNPA) -- that provide entry-level
and senior-executive training for the PNP.  Both civilians
and PNP instructors staff the institutions.  Officially, the
PPSC provides equipment and training allowances to its
students, with the GRP budgeting 1,370 pesos (approximately
$25) per student per day for a 90-day training course for
enlisted police recruits.  However, according to Embassy
contacts, students only spend 60 of those 90 days in
training, with a third of the training days at the discretion
of the local training centers, providing an excellent
opportunity for skimming.  While the PNPA in principle
provides equipment and uniforms to officer recruits, much of
the equipment needed for training is reportedly either
non-existent or of poor quality (handguns in particular).
Recruits from both institutions often must take out loans or
buy what they need on installment plans from individuals and
businesses connected to PPSC or PNPA staff.  Many newly
minted officers graduate from the PPSC and PNPA heavily in
debt and unprepared to face the dangers of their new
assignments.  PNPA cadets are also sometimes expected to
perform personal errands for their instructors during class
time in exchange for passing grades, according to contacts.

8.  (SBU) According to PNP sources, PPSC misconduct continues
with the siphoning off of funds for the six-month Public
Safety Officer Senior Executive Course (PSOSEC), a
requirement for all PNP officials at the Superintendent rank
who want to be eligible for promotion to Chief Superintendent
(Brigadier General equivalent).  Internal PSOSEC documents
cited an unspecified Training Sustenance Allowance "subject
to availability of funds," which often do not exist in
practice despite budget allocations.  PSOSEC also contains a
foreign travel requirement supposedly funded by the PPSC,
where students travel to countries such as the United States
and Australia to observe counterpart institutions.  However,
according to PNP contacts, PPSC instructors often tell
students that there are "no funds available" for the trip and
the students must pay not only their own way, but also that
of their instructors.  Because the students fear they may not
qualify for coveted US and Australian visas as ordinary
tourists and want the promotions upon graduation, they
allegedly readily agree to the payola and go along with the
fiction that the trip is official GRP-funded travel.


9.  (SBU) PNP contacts have confirmed that the PNP has yet to
make much headway into cases of malfeasance, even when its
intelligence and surveillance operations collect proof of
cops planting evidence or extorting bribes from criminal
suspects.  According to experienced observers both within and
outside the PNP, the Internal Affairs Service (IAS) has a
relationship that is too close and collegial to the force it
is supposed to investigate.  PNP sources allege the highest
levels of the PNP Command Staff and elected officials often
pressure IAS to drop or whitewash investigations, and then
use dirty cops for their own political ends.

10.  (SBU) IAS is fractured -- each of the 13 regions and 5
districts in Metro Manila has its own IAS, leading to
fraternization with the commands each investigates and
inspects.  The IAS budget comes from the office of the PNP
Chief.  Past PNP Chiefs (including Aglipay) have shown
themselves reluctant to expend scarce resources to air dirty
laundry on their watch and harm their chances of a lucrative
Cabinet slot after their brief tenure (former PNP Chiefs in
Cabinet-level slots include not only Public Works Secretary
Ebdane but also Transportation Secretary Leandro Mendoza).
Given these parameters, much of the IAS budget appears to be
diverted to other needs.  Often, internal affairs
investigations are used to score public points against
members of rival PNP factions.  Even these operations usually
fail to deliver swift, sure, and public justice that would
deter corrupt cops.  Administrative dismissals of corrupt
police officials are possible, but are of mostly low-ranking
non-commissioned officers (in 2004 the PNP dismissed 269 NCOs
and 9 officers).  To fire higher-ranking officers for
corruption or incompetence requires consistent pressure from
the highest levels of the PNP command staff over a period of
months if not years, which many consider an unattainable goal
in a force that has had 12 chiefs in 14 years.

11.  (SBU) In one high profile case, onetime National Bureau
of Investigation (NBI) "Confidential Agent" Martin Soriano
was dismissed by the NBI in 1999 for a series of illegal
activities.  Soriano, allegedly operating under the
protection of and in cooperation with corrupt PNP officers,
then struck out on his own as a private detective,
specializing in confidence swindles of women that involved
kidnapping, false arrest, and extortion. The PNP's Police
Anti-Crime and Emergency Response (PACER) unit finally
arrested Soriano on January 31, 2005 after he received
200,000 pesos ($3,600) and a late model Mitsubishi van in
exchange for the release of his latest victim, whom he had
"arrested" on drug charges and held in a hotel for days.
According to PNP comments to the press, Soriano's extortion
efforts involved the cooperation of eighteen PNP members --
including a station commander -- from the Western Police
District (the command partially responsible for securing US
Mission facilities).  All eighteen, however, defied orders
from the Chief of the National Capitol Region Command (the
equivalent of a two-star general in command of all of Metro
Manila's police forces) and then-Chief Aglipay to appear for
questioning for over a week, although the PNP subsequently
placed them all on "floating" status -- no work with full pay
-- pending further disciplinary action.  According to PNP
contacts, many of the eighteen are now seeking the
protection/intercession of prominent politicians and hoping
to wait out the glacial pace of the criminal courts and the
PNP's disciplinary procedures.


12.  (SBU) In a January 2005 meeting on GRP anti-corruption
initiatives attended by the Ambassador and representatives of
the Millennium Challenge Corporation, then-Chief Aglipay
reported that 91.7 % of the PNP's 34.8 billion pesos budget
($633,036,363) is earmarked for "Personal Services" (salaries
and other direct payments).  A lack of efficient internal
controls traditionally allowed unscrupulous officers to pad
salary rolls with "ghost" (or "15-30") employees who do not
work, but only appear on the 15th and 30th of each month to
collect their salaries.  The former Chief of the Records
Management Division told poloff that it took the majority of
his two-year tenure to computerize the records of all 117,000
PNP members, including purging the rolls of "ghost cops."
NAPOLCOM is presently investigating three members of the
Masbate Police Provincial Office (PPO) in Region 5 working in
the finance and human resources section for their reported
failure to stop the issuance of paychecks in the name of a
fellow PNP NCO currently serving a six to ten-year sentence
for attempted murder.  Other corrupt activities include
officials swindling subordinates' salaries and/or allowances
by forging their signatures on the payroll list, submitting
documents to the unit's finance officials, and keeping the
money.  Red tape and corruption also plague the PNP's
processing of retirement claims.  Delays in the payment of
retirement benefits have created opportunities for "fixers"
to expedite claims, sparking a protest of dozens of retired
police officers in front of the PNP's Camp Crame headquarters
on March 7.

13.  (SBU) Before his retirement, Aglipay announced a series
of financial reforms including a tenure limit for PNP
comptrollers, as well as finance, budget, fiscal, and
disbursing officers, to terms of no longer than five years,
published monthly reports on the utilization of funds, use of
automated teller machines (ATMs) from the Land Bank of the
Philippines to pay employees instead of paper checks, removal
of management sections from the Comptrollership, and an
internal audit service.  Aglipay recommended as well the full
computerization of the personnel and financial information
database system by July 31.  However, Embassy contacts have
noted that the PNP faces severe fiscal and personnel
challenges in implementing these financial and personnel
reforms even if the new PNP leadership is serious about
continuing this effort.


14.  (SBU) The PNP's Camp Crame Headquarters sits across
Espiritu De Los Santos Avenue (EDSA) from the Department of
National Defense and Headquarters of the Armed Forces of the
Philippines (AFP).  As the AFP and PNP were only separated 14
years ago, most officers above the rank of Captain or Police
Chief Inspector share the common alma mater of the Philippine
Military Academy and face similar difficulties to DND and AFP
in procurement, logistics, and financial administration
related to corruption and incompetence.  PNP officers from
the Directorate for Plans sit in on briefings on Philippine
Defense Reform (PDR) by the AFPs J-5 (plans) counterparts.
Some have admitted to poloff that they now more fully realize
the need for a PDR-like process to improve the PNP's
procurement systems to allow for more accountability and
transparency.  At present, the PNP's attempts at reforms in
this area lack the PDR's comprehensive and strategic focus,
officers have noted.

15.  (SBU)  PNP officials have cited the example of a
controversial procurement decision in 2003 to replace
existing stocks of 9mm handguns with caliber .45 1911-A1
pistols.  In a 20-million peso ($377,358) contract, the PNP
amended its 1995 specifications for caliber .45 handguns.
This change caused gun dealers to complain that the changes
were made to allow only the purchase of model 1911-A1 pistols
made by Arms Corporation of the Philippines (Armscor).  Gun
dealers grumbled that the PNP sought to "change the rules to
favor the company owned by (First Gentleman) Mike Arroyo's
first cousin" (Demetrio "Bolo" Tuason).  One disgruntled gun
dealer commented that "if this isn't tailoring specs to favor
Armscor, then I don't know what is."  Gun dealers also
complained that, in tests conducted by the PNP in October and
November 2003, the Armscor pistols' safety broke during the
drop test and jammed at 3,000 rounds, when the PNP's minimum
for an endurance test is 5,000 rounds.  During training
conducted in 2005 in the Philippines by Joint Inter-Agency
Task Force-West personnel, trainers commented that the
Armscor .45s were unreliable, inaccurate, and potentially
dangerous to the operator.  Nevertheless, Armscor remains an
approved supplier to the PNP.

16.  (SBU) Almost 3 million pesos (about USD 52 million) --
or 8.29% of the PNP's total budget-- is dedicated to
maintenance and operations, but Embassy contacts have
reported that corrupt officers have many tricks to divert at
least some of these funds.  Popular practices include
skimming the operational funds as they come down the chain of
command, "conversion" (when officers spend money specifically
allocated for one item on another), and "throwback" (when
corrupt officers allocate funds for an imaginary project and
pocket the money).  PNP contacts have commented that the PNP
has zero funds dedicated for capital outlays, leading to some
"necessary" conversion in the form of misfeasance or "honest
graft," in order to provide construction support for needed
offices or services dedicated to officer welfare such as
sports, recreation, or health facilities.  Additionally, PNP
officers sometimes find themselves under a command order to
go on motorcycle patrol but without available gasoline funds,
leading them reportedly to solicit -- or coerce -- needed
funds from local businesses or individuals.


17.  (SBU) The PNP management is a mess.  Few PNP officials
would even try to deny this reality, which severely affects
the credibility of the GRP and public perceptions of
governance.  Cops are among the most noticeable of public
servants, and daily exposure to corrupt, inefficient, or
badly managed police officials is a cancer upon the body
politic.  Systemic flaws need institutional reforms that
training programs, such as the USG has conducted through
USDOJ's ICITAP as well as other assistance from international
donors including the Australians and the British, do not
provide.  Embassy's inter-agency Law Enforcement Working
Group strongly urges INL funding for our proposed Management
Assessment of the Philippine Police (MAPP) (ref E), which
envisions a joint US-Philippine analysis of the PNP's
institutional flaws in order to provide recommendations for
restructuring, modernization, and professionalism, similar to
what the Armed Forces of the Philippines hope to achieve from
the PDR bilateral initiative.  The PNP and senior GRP
leadership has never been more willing to buy into such an
in-depth study.  Embassy believes that the GRP would, as with
the PDR, agree to absorb the bulk of the costs for
undertaking suggested reforms, given the growing realization
that failure to pursue such a course will further enfeeble
the PNP, hamper the improvement of rule of law, lead to
greater crime and corruption, lessen the peace and order
needed for faster economic growth, and undermine public
safety and internal security in the face of existing
terrorist activities and insurgencies.  In the absence of
such systemic PNP reform, popular impatience for better
police performance and management -- exacerbated by the
belief that nearly everyone in the PNP is corrupt -- may also
encourage more public support for elected officials, such as
the mayors of Davao and Cebu, who have openly supported the
use of extra-judicial killings, coordinated in concert with
local police forces under their control, as a means of
controlling crime (refs B, C, D).  Such an outcome would be
disastrous to the human rights climate in this treaty ally
and democratic partner, and would also undermine or harm
progress on major USG goals here to combat terrorism,
narcotics trafficking, trafficking in persons, and other
transnational problems.