Combating Corruption in Kosovo-rev2

Combating Corruption in Kosovo A Report by Operation Kosovo1 Chicago-Kent College of Law Illinois Institute of Technology 23 October 20062 - 29 October revision Table of contents I Introduction II The problem A UNDP public opinion survey B USAID report C Serb-centric reports .9 D Effects 10 E Past Failures in Reducing Corruption 10 III Best practices from the United States and elsewhere 11 A Theory 11 B Case studies 17 Italian Falcone story 17 All the President’s Men 18 Operation Kosovo is a volunteer project of faculty, students, and staff at Chicago-Kent College of Law, directed by Henry H Perritt, Jr., Professor of Law and former Dean Operation Kosovo has been involved in Kosovo since August, 1998, initially providing refugee relief, and then, after the NATO bombing campaign, providing technical assistance for economic development, political party development, privatization, rule of law, and improved legal education Professor Perritt edited this report The project was directed by Jeffrey R LaMirand Frank Bieszczat and Lisa Atkins wrote major sections Caleb Fox, Carrie Weinland, Teymour ElTahry and Chad Mair provided useful contributions FBI Special Agents Patrick Murphy and Travis Carlisle, former Chicago Police Officer Roger Clark, two assistant U.S Attorneys, who preferred to remain anonymous, and D.C Attorney Phil Fox provided helpful background information on best practices for anti-corruption investigations in the United States Several activists, businessmen and public officials in Kosovo reviewed a draft of the report and made helpful suggestions Greylord 21 ABSCAM 22 Silver Shovel 23 Synthesis from U.S stories 25 C Axioms 27 Successful investigations depend on understanding the informal networks within which corruption occurs .27 a) Confidential informants are necessary to develop an understand of corruption networks and to select specific individuals for deeper investigation 27 b) Financial investigations and audits can be important aids to early identification of investigative targets 28 Criminal intelligence must be turned into admissible evidence 28 a) Cooperating witnesses must be recruited, often by threatening prosecution 28 b) Witnesses will not testify unless they believe they can be protected, and this often means being willing to uproot themselves and their families to move to a distant place and foreign culture .29 Electronic surveillance must be conducted to produce compelling evidence for use at trial 30 Experienced undercover agents usually are necessary to manage informants and cooperating witnesses and to conduct electronic surveillance 32 Anti-corruption campaigns cannot succeed without a professional criminal justice infrastructure 32 a) Investigators, prosecutors and judges must have the requisite skill, independence and resistance to corruption 32 b) Investigative journalism can complement official investigations but it cannot succeed on its own 34 c) Anti-corruption institutions must have the requisite legal, financial, and technological resources 35 IV Challenges in adapting best practices to Kosovo 35 A Introduction 35 B Application of Theoretical Models to Kosovo 36 C Four Preconditions 38 D Differentiating Types of Corruption and Setting the Right Priorities 41 V Recommendations 44 A Measures of Success 44 B Four Kosovo Hypotheticals 45 Public corporation procurement: member of the board bids, loses, causes re-evaluation 45 “You were the winner, but we are going to reopen bids unless you contribute $1 million to the fund of my party leader” .46 “If you give me ten thousand Euros, the contract is yours” .47 Blocking the hospital .47 C Building Political Will 48 Pick the right targets 48 Empower the right anti-corruption champion 49 Give full legal authority to a special prosecutor 49 Organize undercover investigations and recruit cooperating witnesses 52 a) Authorize undercover investigations 52 b) Allow cooperating witnesses .54 Permit electronic eavesdropping under appropriate conditions .55 a) Wiretapping 55 b) “Wires” 56 Institutionalize governmental monitoring 57 a) Model the Kosovo Auditor-General on the U.S GAO 57 b) Model the Kosovo Anti-Corruption Agency on U.S Inspectors General 58 Establish more “hotlines” 59 Improve witness protection 60 Support investigative journalism .61 10 Reinforce anti-corruption norms 62 VI Prospects for success .63 A What’s possible in one year 63 B What’s possible in three years .65 C What’s possible in ten years 65 VII Where to Begin? 66 A Drugs 66 B Human Trafficking 66 C Government Contracting .67 D Finding Potential Informants and Cooperating Witnesses to “Jam Up” .67 VIII Appendices 69 A Appendix I 69 Greylord Transcripts 69 ABSCAM Transcripts 74 B Appendix II 79 C Appendix III 80 Fighting Corruption at the Municipal (Local Government) Level 80 Fighting Corruption in Central Government 81 Fighting Corruption at the Parliamentary Level 82 Fighting Corruption in the Business Sector .84 I Introduction Kosovo, once prominent on Western TV screens and on the front pages of newspapers, is about to become independent Whether independence, long dreamed of by most of its Albanian inhabitants, helps them realize their aspirations depends on whether their leaders can eliminate pervasive corruption Kosovo is legally a province of Serbia, but 90% of the population is Albanian Geographically, Kosovo is about one-tenth the size of Switzerland and has a population of roughly two million The Albanian population has resisted what it sees as “occupation” by the Ottoman Empire, then the Serbs, and then the United Nations, for hundreds of years This resistance, especially after Serbian strongman Slobodan Milosevic revoked Kosovo’s political “autonomy” in 1989, manifests itself by reliance on extended family networks and traditional customs The modern insurgency, expressed through the “ Kosovo Liberation Army (KLA),” waged one of the most successful “Fourth Generation” guerilla wars of the Twentieth Century, proving that armed resistance to the Milosevicregime’s human rights abuses was necessary to induce international intervention against Milosevic The KLA necessarily was financed illegally and procured arms illegally, according to Serbian law, though not necessarily according to the law of other states The organizers and participants in the KLA are proud of their ability to operate “illegally” during the conflict and are fiercely loyal to each other The most effective political leaders of Kosovo today are former commanders of the KLA, and they mostly recruit former KLA sub-commanders and soldiers as their subordinates and aides Despite this history, Kosovo is today a modern society, at least in its cities Street crime is almost non-existent Kosovars are strongly patriotic to their long-standing dream of having their own country They love Americans, who, they think, rescued them from Serb occupation through the NATO intervention of 1999 Four elections have been held since the NATO intervention, and were characterized as free and fair by all international observers Sovereignty is shared between an elected Albanian national government and a UN mission (“UNMIK”) which retains ultimate decisionmaking power in the executive, legislative and judicial realms Both the UN administration and the elected local government have been largely ineffective and inattentive to the major domestic problem of 60% unemployment Each level of government blames the other for inaction Ordinary people cope through an extraordinary combination of entrepreneurship and patriotism Many of their economic activities operate “under the radar screen” of formal government institutions The most charismatic and effective indigenous leader is Ramush Haradinaj, former KLA commander, and Prime Minister until he was indicted by the International Criminal Tribunal for the former Yugoslavia (“ICTY”) A recent public opinion survey showed Haradinaj to be the second-most popular Kosovar, after former KLA chief-ofstaff Agim Çeku, the current Prime Minister Çeku is closely associated with Haradinaj, and, many observers believe, controlled by him Even those who support independence for Kosovo worry about the effect of corruption on its future Smuggling with impunity, nepotism, and bribes at all levels are believed to occur regularly More recently, a source of concern has been the unwillingness of Prime Minister Çeku to take action against ministers he inherited from his predecessor who are widely perceived to ineffective or corrupt or both, despite concrete charges against some of them Despite early promises that he would “clean house,” he has backed away from that declaration and acceded to public statements by the heads of both of the parties in his coalition government that the political parties, and not the Prime Minister, will decide whether ministers should be retained A few critics of the government assert that the defense fund for Haradinaj, organized to defend him against the war-crimes accusations, is a cover for intensified corruption in public contracting Most Kosovars, however, both publicly and privately, vigorously defend the fund as necessary to make sure that Haradinaj gets a fair trial of what are widely believed to be trumped up charges, motivated by the politics of the Tribunal’s desire to seem “even-handed,” by prosecuting Albanians as well as Serbs, Croats, and Bosniaks The defense fund has announced a goal of raising 12 million Euros There is no evidence that the defense fund receives money from illicit sources or spends it for improper purposes Michael O’Reilly, senior adviser to Haradinaj, and leader of his defense team, informed the author that “I have already published the first annual accounts for the fund at a time (April of this year) when we had raised approximately E6.5m, I held a press conference to so and that I made available to journalists a full list of donors and the amounts that they had gifted Every cent of the fund is and will continue to be accounted for.” Nevertheless, many continue to be unaware of the names of contributors or the fund’s expenditures The belief that the fund is insufficiently transparent, whether accurate or not, fuels suspicion in a society that embraces conspiracy theories Haradinaj, attractive to the international community as a decisive and effective leader—and one of the few who has sufficient credentials as a fighter to tamp down public disappointment about the terms of independence—is also impulsive and domineering Most internationals and locals believe that the international authorities block any serious investigation of Haradinaj’s widely-rumored ties and supervision of cigarette, drug, and human trafficking activities and of past political and witness-murders suspiciously linked to Haradinaj’s interests Some outside experts also believe that the internationals blocked the arrest of the revered and recently deceased president, Ibrihim Rugova, for corruption There is no publicly available evidence to support any of these allegations or suspicions The point is not to argue that the suspicions are correct, but to acknowledge that they fuel political alienation and undercut effective leadership The opposition political party, led by former KLA political director Hashim Thaỗi, launched a major anti-corruption campaign against the Haradinaj/Çeku government about a year ago, making specific allegations against several ministers The opinion surveys show that approval of Thaỗi and his party has declined since he began the campaign One reason may be that the public views Thaỗis party as equally corrupt and not particularly interested in rooting out corruption when it was part of the previous coalition government and controlled the Prime Ministership Ordinary citizens in Kosovo complain about corruption, but their definitions of corruption are diffuse Many of those who claim to have experienced it say they are afraid to complain lest they be killed The public prosecution service and the judiciary are widely viewed as incompetent, corrupt, and scared A new anti-corruption agency has no office facilities, no staff beyond the director, and no budget Despite widespread complaints about corruption, there have been no high-profile corruption prosecutions in seven years of international administration As of late fall, 2006, the attention of internationals involved in Kosovo and of the Kosovar political leadership naturally is focused primarily on final status negotiations and the possibility of independence Most participants and observers believe that a measure of independence will be the result, taking effect as early as mid-2007 Once Kosovo becomes independent, attention must shift to building an effective independent state, not only strengthening the democracy that already exists, but also demonstrating the capacity of an independent, locally elected government to solve domestic problems, particularly including stimulating economic growth and creating jobs Eliminating or reducing the effects of public corruption is an essential part of this undertaking As long as public corruption is widely perceived to be a significant reality, foreign investors will be reluctant to invest in Kosovo, local businessmen will have an incentive to evade responsibilities imposed by the law, and ordinary members of the public will become further alienated from the democratic political process This report, prepared without outside financial sponsorship, seeks to define the public corruption problem in Kosovo more precisely than previous public reports have done, and to consider what “best practices” from the United States and other developed democracies can be adapted to the realities of Kosovo’s history and political situation It offers concrete recommendations for a major anti-corruption initiative to be undertaken after independence The report draws upon Professor Perritt’s eight years of close involvement in Kosovo That involvement began during the conflict as the KLA was gaining strength, and more recently has included more than 100 interviews and other research for his forthcoming book on the KLA Under Professor Perritt’s leadership, several students from Chicago-Kent and Illinois Institute of Technology have worked in Kosovo and in Chicago on economic development, political party development, and establishing the rule of law in Kosovo Several of the students have visited Kosovo and others have worked for several months or longer as externs for Kosovo institutions II The problem Several outside institutions have collected data on corruption in Kosovo The United Nations Development Program (“UNDP”) conducted a public opinion survey in April, 2004 The United States Agency for International Development (“USAID”) conducted a survey in the summer of 2003 The government of Serbia claims that its intelligence services have monitored corruption in Kosovo closely Recent German press stories reported on German intelligence-service concerns about corrupt ties of major Kosovar political figures This section reviews their findings, and concludes with some observations about the effect of corruption—whether actual or merely perceived—on economic development, political development, and on the capacity of the local government in Kosovo to deliver good laws and public services A UNDP public opinion survey The UNDP survey labeled Kosovo as an area of high corruption possibility, due to its developing economy, transitional government, and young institutions Kosovars labeled low wages as the primary source of petty corruption in the survey Ordinary Kosovars, however, expressed a low tolerance for corruption in society Most responded that corruption was the greatest evil in their society Yet, more respondents accepted corruption when it dealt with receiving basic needs, such as jobs and healthcare services Kosovars blame the KEK (the electricity provider), hospitals, customs, the coalition government, and the presidency for most corruption in society Healthcare claims come from actual experience while claims regarding the KEK and customs seem to be based more on news stories than on experience There is a high perception of corruption in government institutions although no such evidence leads to this conclusion Most survey respondents did not report personal experience with corrupt conduct by governmental officials but nevertheless perceive such conduct to be widespread The survey shows differences of opinion about what constitutes corruption.3 Although eighty percent of survey respondents identified bribes and other illegal procedures as corrupt,4 fewer labeled preferences based on personal or family relationships as corrupt The younger generation in Kosovo is more optimistic about fighting corruption than older generations.5 In order for progress to occur, the survey suggests that accountability must increase, simplification of government processes must occur, and that prevention, enforcement, complaint, and coordination procedures must be clearer and more responsive Thirty percent of Kosovars feel that the Assembly of Kosovo should take the lead to fight corruption in Kosovo after the full transfer of power from the UNMIK, by far the largest level of support for any one institution to take the lead B USAID report A USAID survey in Kosovo was conducted over a four month period from May through August 2003 Levels of political, institutional, economic, and social stability were measured as well as inter-ethnic relations and public and personal security UNDP, Combating Corruption in Kosovo 13 (2004), http://www.ks.undp.org/Projects/TIK/tik_en.pdf [hereinafter UNDP] UNDP at 13 UNDP at 10 UNDP at The survey showed a general downward trend regarding public opinion about the economy in Kosovo.7 Organized crime and corruption contributed to this pessimism The public perceived a moderately high to high level of organized crime in Kosovo,8 focused on trafficking of human beings, drug smuggling, and other economic and violent crimes Many Albanians felt that the business community was connected to organized crime Corruption as a whole in Kosovo was perceived as second in importance behind unemployment, followed by low incomes, and high prices.9 Data compiled from surveys of Kosovo’s neighbors including Albania, Bosnia-Herzegovina, Bulgaria, Macedonia, Romania, Croatia, Serbia, and Montenegro show, however, that Kosovo is at the low end of the corruption index, placing it in a better position than its neighbors It may be that corruption in Kosovo is perceived by the public to be a greater problem than it actually is Corruption problems may intensify in Kosovo as a result of more powers being transferred from UNMIK to the PISG (Provisional Institutions of Self Government-the locally elected government) The report suggests that corruption be fought at its roots, with a focus on the development of fundamental judicial and legal institutions as a top priority It also suggests that the government in Kosovo must become more transparent in order to gain trust from the public C Serb-centric reports The government of Serbia, and interest groups supporting its position in opposition to independence for Kosovo, consistently claim that Kosovar Albanian society and the governmental institutions created by it after the NATO intervention are pervasively corrupt and tied to organized crime and to Islamic fundamentalist networks They make specific allegations against former KLA leaders, including Haradinaj, Thaỗi, and Xhavit Haliti The Serb reports, including a white book” apparently prepared by the Serb Intelligence Service, allege that governmental institutions and public funds are used by these political leaders to enrich themselves and their criminal associates It is also alleged that these former KLA leaders and other political leaders in Kosovo control active criminal networks, especially in the Drenica and Dukagjini regions of Kosovo These networks, the Serbs say, specialize in human trafficking, drug trafficking, and the arms trade, involving not only Kosovo itself, but also operating as part of a European and Middle Eastern network.10 An August, 2006, news story in the major German newspaper Berliner Zeitung cited German intelligence-service reports as backing up some of these claims The motive and validity of the story are open to question, however, and its allegations have not generally been repeated by other German press and media USAID, Corruption in Kosovo 25 (2003), http://www.usaid.gov/missions/ Kosovo/pdf/corruption_in_ Kosovo.pdf [hereinafter USAID] USAID at 26 USAID at 10 BIA (Security Information Agency), Albanian Terrorism and Organized Crime in Kosovo and Metohija (2003) D Effects If the perceptions and allegations of corruption are even partially true, corruption will cripple the effort to build a democratic and prosperous society in the context of independence The challenges for an independent Kosovo would be daunting even if corruption were altogether absent The transformation of a political culture that has been focused for 100 years or longer in criticizing the dominance of outside “occupiers” into one that can forge effective political coalitions focused on delivering results is incomplete In the economic arena, Kosovo depends on expenditures by internationals associated with the UN civil administration or with the many NGOs now present in Kosovo for close to 50 percent of its GDP A viable economic program must include plausible steps to prevent a sharp depression as these expenditures are reduced—as they surely will be after independence is achieved Even after privatization is completed, it is far from clear what sectors of the economy offer comparative advantage to Kosovar producers of goods and services Considerable insight and experimentation will be necessary to find Kosovo’s place in the regional and world economy When one adds corruption to this equation, the likelihood of meeting these challenges is low If local businessmen and outside investors discover or perceive that substantial amounts of their capital must be diverted to bribe public officials, the threshold for investing will increase significantly If tax revenues are diverted for the private advantage of public officials, the relationship between the burden of taxes on economic activity and governmental contributions to sound economic growth will be adverse The capacity of public institutions will be reduced if government positions are given to relatives or political cronies without regard for performance or ability To the extent that a culture of corruption also infects law enforcement personnel, public prosecutors, and the judiciary, rooting out corruption elsewhere will be more difficult Politically, widespread corruption or the perception of widespread corruption erodes trust in democracy and the rule of law If an ordinary Kosovar believes that government agencies and courts exist primarily to obtain bribes and private advantages, he will avoid participating in democracy and will evade the law E Past Failures in Reducing Corruption Despite widespread reports of corruption in Kosovo since the beginning of the UN civil administration of the territory, few high profile corruption investigations have been pursued, let alone concluded successfully The reasons for this are not entirely clear One distinct possibility is that top UN officials, and the major powers working through the Contact Group and the UN Security Council, have not been interested in attacking public corruption aggressively because they fear it would destabilize the political structure A serious anti-corruption initiative could reduce the effectiveness or actually remove from the scene the most effective and influential political leaders Another possibility is that the political will to attack corruption is absent in the Kosovar Albanian community, and without such political will, foreign prosecutors and judges cannot be effective in any anti-corruption campaign 10 “DeLeo proceeded to meet with Shields in his chambers, just before Shields heard the Nichols motion A brief exchange between Shields and DeLeo, in which DeLeo echoed the strategy he and Cooley had just discussed, confirms that Shields was on board with the plan to fix the case: “DELEO: I'm going out of town next week (IA) California (IA) stall it 'till next week and the case will be settled “SHIELDS: All right.”238 *** “One of DeLeo's first remarks to Cooley about the prospect of influencing Shields was: No, he'll whatever we want [A]ll he's wan worried about is this That's what I'm saying and you know and you, you know how, what to “Cooley testified that when DeLeo told him "all he's wan worried about is this," DeLeo had rubbed his fingers together in a gesture Cooley took to mean "money" Later in that conversation, the references to bribes became more explicit: “DELEO: (IA) all you got to is tell me what you want me to give him “COOLEY: Alright you tell me what's fair Patty “DELEO: I don't know “COOLEY: Yeah “DELEO: I know (IA) know all I want to do, all I want to is lock him up “COOLEY: There's big bucks involved in it “DELEO: (IA) You tell me what you want to “COOLEY: There's big bucks involved “DELEO: You tell me what you wanna (IA) “COOLEY: Well you tell me whatever is fair to start “DELEO: I don't care It don't make any difference “COOLEY: Alright give me a normal number “DELEO: I have no idea 238 United States v Shields, Slip Op at 70 “COOLEY: I've never done anything before in the civil area “DELEO: I have no idea “COOLEY: So numbers I, I don't care what the numbers are You know if it's worthwhile “DELEO: I don't know “COOLEY: If I, if I can walk in and look like a star “DELEO: He'll it, he'll it like this “COOLEY: Okay “DELEO: Okay He'll anything You tell me what you want me to give him “COOLEY: How about, how about 2500? “DELEO: Fine “Again, Cooley testified that when DeLeo said, "[A]ll you got to is tell me what you want me to give him," he understood DeLeo to mean how much money they were going to pay Shields “DeLeo later reiterated Shields' contentment to rule as Cooley wished so long as he was paid in his later conversations with Cooley When DeLeo and Cooley met on August 19, 1988, just before Shields first heard Cooley's motion for preliminary relief in the Nichols case, DeLeo told Cooley, "Give me the money and I'll give it (IA)." [citing recording] Cooley testified DeLeo had said "I'll give it to him," meaning "to Shields." The first bribe of $2,500 then changed hands between Cooley and DeLeo Shortly thereafter, DeLeo informed Cooley that "[Shields] won't take the money till it's granted." Several days later, when Cooley met with DeLeo to discuss an impending, second hearing in the Nichols case, Cooley asked DeLeo whether Shields had been happy with the first bribe: “COOLEY: Alright, but I mean, with him, (IA) was he happy with what I gave him before “COOLEY: Ok, as long as he's happy that's the you know that's the main thing (IA) Cooley testified that in response to his question, DeLeo had nodded his head The question of money came up again as Cooley emphasized to DeLeo that he wanted Shields to continue the forthcoming hearing so that the case would remain in a favorable posture for settlement: 71 “COOLEY: (IA) You tell me, you know again, you know I know he'll take some heat from the other side If he can get me couple weeks date Pat, we can probably get this whole thing done In other words if he can get me a couple weeks date “DELEO: (IA) Let's give him another two bits “COOLEY: Alright fine if that[']s fair with him “Cooley understood DeLeo to be suggesting that he pay Shields another $2,500 Cooley handed that amount to DeLeo at a subsequent meeting on August 30, 1988 Again Cooley asked DeLeo whether Shields was happy DeLeo's response was inaudible on the tape, but Cooley testified that DeLeo had responded affirmatively with a nod of the head DeLeo confirmed Shields' satisfaction with the money during a phone conversation he had with Cooley on September 1, 1988: “DELEO: I absolutely think it's no problem, because he was like doing somersaults “COOLEY: Okay, great “DELEO: He goes oh, I thought it was all part of this I says no, never part of the (IA) “COOLEY: Good “DELEO: Okay? (IA) “COOLEY: Oh, then you saw him a second time, then “DELEO: I actually don't think there's ever going to be a problem “COOLEY: Okay “DELEO: But I said no, I jus' told ya, now I'll, I'll see you at the end of this case “COOLEY: Okay “DELEO: I, I, told the other lawyer I said I'll see you at the end of the case and he's like doin' somersaults, (IA) I never expected to see you again until the end of the case “Cooley confirmed that he understood these references were to Shields and his satisfaction with the bribes that had been paid Ultimately, after the Nichols case was resolved, Cooley met once again with DeLeo and sought his guidance as to how he should pay both defendants for their assistance: “DELEO: You got your cut? 72 “COOLEY: Yeah I can probably take mine out now I put the check in there almost what, a week and a half ago so I'm sure the check is cleared by now “DELEO: So how much you wanna go? “COOLEY: I mean you tell me Patty “DELEO: I don't care Bob “COOLEY: Tell me what, cause I don't want, I don't want the other guy gettin angry either think we're cuttin' him out cause I mean if he needs some more let me know “*24 DELEO: (IA) “COOLEY: You tell me “DELEO: (IA) give him another twenty-five “COOLEY: I mean will that be enough, will he be uh “DELEO: (IA) I, you know what, (IA) have to give anything “COOLEY: I mean you tell me, again I have to go, may have to go back there again for something and he's the Chief Judge we don't [want] to have a problem up there (IA) we'll give him another 1,000 I mean that's not a whole lot, that's not a little “DELEO: (IA) “COOLEY: Is five thousand good for you? “DELEO: Sure “COOLEY: I mean is that fair? “DELEO: Yeah “COOLEY: Ok, then why don't I see you tomorrow morning, I'll give you call tomorrow morning and I'll met you tomorrow morning and I'll get it to you tomorrow “Cooley testified that he gave $6,000 to DeLeo on the following day “All of these exchanges supported the government's allegation that Shields and DeLeo had induced Cooley to part with his money by conveying the impression to Cooley that Shields would rule in whatever way Cooley desired so long as bribes were tendered Moreover, as the Court noted in its pretrial opinion denying defendants' motion to dismiss the Hobbs Act charges, the economic harm theory was not precluded by the fact that Cooley was a government informant and therefore could not truly have feared economic harm from the defendants.”239 239 United States v Shields, Slip Op at 23-24 [citations to trial transcript omitted] 73 ABSCAM Transcripts “On February 2, 1980, Weisz, accompanied by Rosenberg, drove to the Hilton Hotel at New York's Kennedy Airport to meet with Amoroso and Weinberg Amoroso told Weisz that the wealthy Arabs were pleased with the [Congressman Richard] Kelly transaction and, indicating that they “need[ed] a few [more] of these guys in our corner,” asked Weisz if he had “anybody else in mind at this particular time?” Weisz was agreeable to bringing additional people to the Abscam operatives: WEISZ: There's other ones, yes “AMOROSO: All right How about the same arrangement? “WEISZ: I don't see why not “AMOROSO: Okay “WEISZ: Seems satisfactory “···· “WEISZ: If you wanna exactly the same thing, I'll get you somebody else to exactly the same thing Weisz asked Weinberg to call Ciuzio and was surprised, but unconcerned, that Amoroso intended to deliver Congressman Kelly's $75,000 personally: “AMOROSO: I got fifty for you, fifty for Bill [Rosenberg], and then we got fifty for Gino [Ciuzio] “WEISZ: And you're gonna ··· deal direct with ··· Kelly? “AMOROSO: Yeah “WEISZ: Ok ··· I see···· As long as he agrees ··· [t]hat's perfectly okay I couldn't care one way or the other.”240 Repeatedly the public officials talked mostly about the legitimacy of the proposed projects, and had to be lured carefully into talking about bribes For example City Council President Schwartz said, “[I]f it isn’t something outlandish, if it is something that should and can be handled, and I can, I can’t think of anything that couldn’t be handled.”241 Evidence was collected through video recordings made of meetings between the targets and undercover agents at a house in Washington, a yacht in Florida and hotel 240 United States v Weisz, 718 F.2d 413, 423 (D.C Cir 1983) (affirming convictions of Ciuzio, Weisz and Rosenberg, intermediaries who arranged a meeting with Congressman Kelly) Anthony Amoroso was an FBI special agent operating undercover 241 Jannotti, 673 F.2d at 585 74 rooms in Pennsylvania and New Jersey In some cases, the defendants were willing to discuss the bribe, more or less explicitly: “In discussing the political situation in Philadelphia, and City Council in particular, Johanson boasted that of the 17 councilmen, he and Schwartz was each a “very bright fella”, and “after that there ain't a brain in the closet.” He spoke of his and Schwartz' importance, and stated that Schwartz, Jannotti and he “run the City Council.” Wald then asked about Jannotti: “WALD: Would he be interested in doing business with us “JOHANSON: I don't know that it's necessary but if you want to we can “WALD: I don't know-if it is-you're the best judge of that “JOHANSON: I think George is ah“CRIDEN: Well, it might not be a bad idea to bring Harry up “JOHANSON: We can bring Harry up Harry's the Majority Leader He's the-ya know, second in command “WALD: Yea “JOHANSON: He's got seniority “After some additional discussion, the following exchange took place: “HARIDOPOLOS: Are you acquainted with how much ah, ya know, ah for the favor and for all these assur-assurances, right “CRIDEN: Right “HARIDOPOLOS: You know how much it is? “JOHANSON: Sure “HARIDOPOLOS: How much is it? “JOHANSON: Twenty-five “HARIDOPOLOS: Okay, ah but, of course, ah, we have to have these proper assurances You us a favor, we're doin you a favor “CRIDEN: Obviously “JOHANSON: Sure 75 “Johanson gave his assurances and received $25,000 The following exchange took place: “WALD: And for 25 we've got a friend “JOHANSON: Right.”242 In the cases of other defendants, the video recording constituted essential evidence because the defendants could be seen taking bribe money from undercover agents, but refused to discuss it, or to discuss it only indirectly Councilman Jannotti was especially coy: “Wald then took an envelope from his briefcase (containing $10,000 cash), handed it to Jannotti, and asked if “that amount is sufficient.” Jannotti took the envelope, answering, ‘We've discussed it.’ “HARIDOPOLIS: You know how much it is? “CRIDEN: Tell him, you can tell him “HARIDOPOLIS: How much is it? “CRIDEN: Tell him? “JANNOTTI: We won't even discuss it “WALD: Ok, but you did discuss it with Howard? “JANNOTTI: We won't even discuss it “HARIDOPOLIS: Is this arrangement please, pleasing to you? “JANNOTTI: As I say, we won't even discuss it “WALD: Ok, well, we've done our business.”243 Council President Schwartz was a little less discreet: “WALD: I can go back and say I met a gentleman We had a business deal uh, I've made a friend in Philadelphia “SCHWARTZ: Yes “WALD: And things are taken care of 242 Jannotti, 673 F.2d at 583 United States v Jannotti, 673 F.2d 578, 589 (3d Cir 1982) Jannotti was the majority leader of the Philadelphia City Council Wald and Haridopolos were undercover FBI agents Criden was a Philadelphia attorney who functioned as an intermediary He was convicted along with Jannotti 243 76 “SCHWARTZ: Right “WALD: Okay, and the sums appropriate and we're in good shape Okay “Shortly thereafter as seen on the videotape, Wald opened his briefcase and, without discussion of the amount, handed Schwartz an envelope (containing $30,000 cash), which Schwartz placed in his jacket without counting The nature of the commitment Schwartz made was reiterated: “WALD: The legislative problems we've taken care of? “CRIDEN: No problem “WALD: Okay, that I can, that I, that I got assurance on “SCHWARTZ: Right “CRIDEN: You have, you have no problem “WALD: Okay, the other things can be done through attorneys, but the legislative problems don't exist anymore? “CRIDEN: That's right “SCHWARTZ: No Do not “WALD: Okay.”244 One video recording showed Congressman Kelly stuffing cash in his suit jacket pockets, after he tried to persuade the undercover agents to bribe him through an intermediary: “Kelly agreed to assist the Arabs, and, as recorded on the video tape, indicated that Amoroso's arrangement with Ciuzio was fine: “All of this stuff that you've been talking about ··· I don't know anything about that, I'm not involved with it··· Gino and these guys are my friend [s] ··· what you said makes a lot of sense to me ··· I'm gonna stick with ya ··· and you can put me out there on the hill, and when you come back in the morning, I'll still be there···· So this ··· will be helpful to me and ··· maybe ··· down the road sometime, you can me a favor But in the meantime, whatever these guys are doing is all right, but I got no part in that···· In other words, ··· your arrangement with these people is ··· all fine···· [Y]ou have my assurance that what you have told me here, sounds like a good thing and ··· I will ··· stick by these people After Amoroso received a call from Assistant United States Attorney Jacobs who was monitoring the meeting and who thought Kelly was being “cute,” and after Kelly 244 Jannotti, 673 F.2d at 586-587 [internal citations to transcript omitted] 77 conferred with Ciuzio, Amoroso sought to clarify Kelly's position Kelly made it clear that he wanted the money given to Ciuzio: KELLY: [Y]ou and I gotta ··· learn to talk to each other “AMOROSO: Well I know ··· “KELLY: [D]on't stumble around, jump in there ··· “AMOROSO: Jump in there and give it to you? “KELLY: Sure “AMOROSO: Ok I was under the impression ··· when this thing was set up ··· that I was gonna give you something ··· tonight ··· “KELLY: Yeah “AMOROSO: Ok, and that the rest was gonna come ··· “KELLY: Yeah “AMOROSO: when you introduce that “KELLY: That's right “AMOROSO: Ok, is that, is that still ··· “KELLY: Yeah Here's ··· what the thing is Umm ahh just simply deal with Gino [Ciuzio] about it “AMOROSO: Ok You want me to give him the money ··· here? “KELLY: Sure “However, when Amoroso indicated that all of the money was intended to go to Kelly, and that Ciuzio would be separately compensated, Kelly was confused: “I understood that what you were talking about was ··· all there was as far as Tony [sic, should be Ciuzio] was concerned and so as far as I'm concerned, he takes that···· [B]ut I see I didn't know ··· about this other arrangement···· It's ··· all right but I didn't know about that So lets talk about it some “Amoroso explained that he thought that giving the money directly to Kelly would avoid witnesses, thus protecting him Kelly agreed: “AMOROSO: I thought that the best way of doing it was ··· a one on one between you and I Now to me that sounds like ··· if you're looking for security ··· the best way of doing it 78 “KELLY: I think so too “Amoroso then gave Kelly $25,000 in cash and Kelly stuffed the money into the pockets of his suit.”245 Although Weinberg and the undercover agents consistently insisted on dealing with the public officials directly, in one case, involving Congressman Jenrette, the best they could was to pass money through an intermediary and then get telephone confirmation from Jenrette that he received it.246 Earlier, Jenrette said, “Don’t get me wrong I got larceny in my blood,”247 after he declined, for the time being, an offer of a $50,000 advance payment for introducing a private immigration bill for the sheik B Appendix II Position of Special Prosecutor • • • • • • • • • • • • • • Responsibilities conduct investigations into possible corrupt behavior by public officials create and lead a team of law enforcement officials whose duties will be to assist and participate in the special prosecutor’s investigations prosecute corrupt public officials report annually to the Assembly regarding the budget, the effectiveness of the investigations, and any requests for greater resources or authority; the report should be a public document Competencies intimate knowledge of Kosovo’s laws and criminal investigation procedures familiarity with undercover investigative procedures and technologies advanced knowledge of Kosovar political and financial institutions sophisticated understanding of Kosovo’s culture highly motivated individual with strong sense of civic and national duty strong leadership, political and organizational skills independence from the influence or intimidation of public officials and criminals Qualifications ethnic Kosovar Albanian advanced university degree in law investigative training – preferably from outside Kosovo 245 United States v Kelly, 707 F.2d 1460, 1466-1467 (D.C.Cir 1983) (reversing district court’s disapproval of ABSCAM investigative techniques as entrapment and reinstating conviction of Congressman Kelly); see also United States v Weisz, 718 F.2d 413, 430-431 (D.C.Cir 1983) (denying motion to exclude Kelly “money stuffing” scene from evidence because of likelihood it would inflame jury against co-defendant) Weisz was convicted of arranging meetings between undercover agents and congressmen for the purpose of bribing them 246 Jenrette, 744 F.2d at 820 (describing recorded telephone call) 247 United States v Jenrette, 744 F.2d 817, 820 (D.C Cir 1984) (affirming conviction of Congressman John Jenrette) 79 • • experience in leading a criminal investigation no prior convictions or participation in corrupt activities C Appendix III The following is a chart distributed at an anti-corruption conference held in Pristina in 2002 Fighting Corruption at the Municipal (Local Government) Level Problems • Lack of transparency in:  Drafting the budget in absence of public debate  Lack of transparency in decision-making  Tenders  Misinformation given to citizens with regard to municipal property and the regulations • Low salaries • Unresolved property issues  Legalization of illegal construction Solutions • • • • • • • • •  Unregulated public procurement  Lack of documentation and urban plans within the municipalities • Lack of transparency in the work of political and financial committees • Business permits issued by the municipality • Nepotism – Employment of family members • Lack of laws • • • Modify the rules and procedures of the municipal assembly to allow public participation in budget planning Publish the municipal budget in the media Adopt a law on public procurement Adopt a law on corruption and define sanctions against individuals involved in corruption Define through an act what constitutes a conflict of interest for municipal officials Define through a specific act what measures are to be taken against officials who hire administrative personnel on the basis of family or party affiliations Create a committee, external to the Municipal Assembly, to monitor budget implementation Incorporate into the Municipal regulations a requirement that the members of oversight committees for projects financed by the Municipal Assembly must not be employees of the municipal administration Adopt a regulation that prohibits the Central Fiscal Authority from working as bookkeepers/accountants for private businesses Require the municipality publish quarterly expense reports Provide anti-corruption training for the administration Identify private versus state owned property 80 • Lack of monitoring of the local government by citizens • Citizen awareness and education regarding authority of the local governments • Engaging in conflict of interest activities • Government bureaucracy Fighting Corruption in Central Government Problems Solutions • Lack of transparency • Adopt a freedom of information law that ensures public access to government information, government decision-making, except when there is a clear reason why this information should not be released • Financial disclosure • Adopt a financial disclosure law Public employees would be required to disclose on a yearly basis all of their financial interests This would apply to managers and directors of government run utilities and government funded utilities • Conduct an audit of government owned enterprises to ensure that they are being run properly 81 • Procurement law • Divide the regulatory function from the operational function; the person or organization responsible for enforcing procurement rules should not be engaging in any procurement activities themselves • Tenders • Selection committees at the operational level, i.e the committees that are actually selecting the winning tender, should be staffed by government representatives and independent NGO observers, to open up the process and ensure that the process is being conducted legitimately • Independent regulatory agencies • Should include some observers from NGOs and civil society, to see that regulations are being properly enforced • Transparency • Provide public clarity about who within Central government is responsible for what; • Dissemination of information on the organization and operations of Central government to the public so they know whom to address when they have a problem or issue • Creation of an independent Auditor General and creation of departments on anti-corruption within each ministry to police ministries The Auditor General will have the authority to police the ministries and the government and report directly to the Parliament Ministries and agencies Central government should be held more responsible to report to an Auditor General or in the case of procurement to a procurement regulator • Lack of accountability Fighting Corruption at the Parliamentary Level Problem • Solutions Conduct of members of Parliament – • MPs must be ethical and transparent in all their actions • • Code of conduct for MPs, with enforcement power Establish an Ethics Committee to ensure enforcement Require financial declarations by MPs and include penalties for providing false information on the financial declaration 82 • Conflict of interest • Create conflict of interest statutes • Establish a gift ban – public officials should not be allowed to accept gifts or they should at least be required to disclose this information to the public and let the public decide • Corruption of public companies and public officials • Bribery statutes and a code of conduct, enforceable for all people that are associated with agencies that take public money; if convicted of an act of bribery, that person would never again be allowed to work in a public agency • Parliamentary oversight UNMIK and the Executive Branch • Question time- MPs can ask questions of the government; • Auditing Committee with the authority to question the executive branch agencies regarding expenditures • Whistle-blower statutes that protect those people who expose corruption and ensure that they not lose their jobs • Sunset legislation – every two to three years, programs funded by the government should undergo a performance evaluation to ensure that these programs are effective and that money is being well spent through these programs • Funding of political parties • Create an independent agency to review the actions of parties and candidates • Business practices – contracts and procurement • Assembly should have clear guidelines regarding contracts and procurement; government oversight of this process • False documents – building permits, IDs, vehicle registrations • Incorporate into the criminal code; criminal sanctions, fines and penalties; ensure strict enforcement and adherence to these regulations • Money laundering • Strong regulations and criminal penalties for money laundering violations • Monopolies and price fixing • Adopt adequate legislation on anti-competitive practices, monopolistic practices, price fixing and collusion; requires an oversight function to monitor and police these kinds of activities 83 Fighting Corruption in the Business Sector Corruption increases costs for enterprises, and at the same time decreases profits, this decrease in profits decreases the motivation to continue in business and the businessman and may eventually decrease the level of staff or close the enterprise completely Problems • Delays in receiving permits • Relations with the tax officials and the corruption involved • Corruption in the tendering process • Lack of urban strategic plan, which results in ambiguities regarding property and awarding of permits; those seeking permits usually try to resolve the ambiguities in a corrupt manner • Privatization process may be accompanied by a high level of corruption • Lack of effective governance at the municipal level Solutions • Impose transparent regulations with regard to giving of permits, establishing clearly defined time frames, respecting the established time frames, and providing the reason when a permit is denied • The business community, i.e the private sector, needs to point out to government agencies cases of corruption ; businesses that refuse be included in this practice, may pay a high price by being denied access to certain markets • Raise the level of information and quality of corporate governance enterprises, by insisting on the development of management functions within these enterprises • Clearly define the concepts of partnership and conflict of interest • Ensure that property rights and the rights of shareholders, especially minority shareholders i.e those who have fewer shares, are respected • Develop reporting instruments and internal audit procedures, as well as undergo independent external audits • Create a web page concerning the issue of corruption • Encourage dialogue between government and the business community 84 ... site This information could be essential in helping the investigators figure out whom to target in recruiting informants, and what to look for in financial investigations and eavesdropping 115... particularly including stimulating economic growth and creating jobs Eliminating or reducing the effects of public corruption is an essential part of this undertaking As long as public corruption. .. essential factors in reducing or eliminating judicial corruption. 28 International involvement usually increases corruption, because of competition by major powers for natural resources, leading to corrupt