The EC Report Card on Corruption

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Neither Turkey nor the countries of the so-called Western Balkans fared well on organized crime or corruption in last month’s European Commission (EC) reports on how these countries measure up on their respective roads towards European Union (EU) membership. The reports assess individual countries, under the EU’s political and economic criteria for membership, and discuss whether the country can meet the obligations of membership, such as the treaties, laws and policies of the EU.

Luckily for the countries’ senses of accomplishment, the reports by the EC on what the countries have done to eradicate organized crime and corruption always follow two steps: First, the EC applauds the country on what it has done to address certain shortcomings. Second, the EC notes other shortcomings and states that much more remains to be done. It’s rare that the EC notes that a country has moved absolutely nothing forward, but in the latest report, the EC noted precisely that about Europe’s newest state, Kosovo.

Candidate Countries

Croatia

The EU applauded Croatia’s new strategy and a new action plan against corruption, as well as the indictments issued by the country’s new Office for the Fight Against Corruption and Organized Crime (USKOK). But the number of actual prosecutions remains low, and the problem is enormous. “Overall, corruption at the political, economic and institutional level, including the judiciary, as well as the general tolerance of petty corruption remains widespread and poses a serious problem,” the report said. “Corruption in Croatia is aided by a lack of good governance, transparency and accountability in public administration and by a lack of ethics codes and codes of conduct in the public and private sectors.”

Preventing conflicts of interest has also been stymied, most recently by the black eye the country’s conflict of interest committee received when its chairperson resigned after corruption allegations.

The report said that “some progress” had been made against organized crime in Croatia – this in a report released the month after Croatia saw four gangland murders in as many weeks, including a massive car bombing that killed two journalists. The country was applauded for coming up with a national threat assessment, an IT system in which ministries can exchange information and an agreement between USKOK and the police. These improvements, however, have not yet led to significant convictions. And the police in general are not doing their jobs very well: “The police need to become more effective in the fight against corruption and organized crime.” It was only in the section on human rights that the EC brought up the journalists’ murders, and noted, “This raises concern about freedom of expression, particularly at the local level.”

Macedonia

Macedonia amended its 2006 law on courts to establish one, rather than five, specialized court departments for organized crime and corruption. Public prosecutors’ departments, however, face many vacancies, and the laws on public prosecutors are not being implemented because of pending amendments to the criminal procedure code. The report stated that court budgets are too low to cover operating costs and bills. The lack of resources and slow procedures, combined with the slow progress in addressing corruption and organized crime, led to this observation: “These weaknesses have a negative bearing on the quality of public services, the business environment and the country’s attractiveness to foreign investment.”

The state’s anti-corruption body can now publish asset reports on elected officials and directors of public companies without authorization from the person in question. Its budget was increased by 11 percent over last year’s and they have five new staff members. Their recommendations, however, as well as reports from the State Audit Office, are rarely followed up.

The criminal procedure code has been amended to allow the use of special investigative measures in cases of suspected corruption. There have been several convictions in high-profile corruption cases, including the former governor of the National Bank and the former director of the Public Revenue Office. Customs officers, police, tax officials, judges and prosecutors have all faced disciplinary measures for bribery and abuse of office, and some were dismissed or sent to prison. A new law on public procurement has been designed to make the process more transparent. The 2008 budget has €1.5 million allocated to specific anti-corruption measures under Macedonia’s anti-corruption action plan.

But corruption, the report found, remains a “particularly serious problem,” and the laws passed are shaky. It noted “deficiencies” in the electoral law on party and election financing, and the conflict of interest law has a loophole so that it does not apply to civil servants. No one is monitoring laws to see that they are consistent, or implemented.

On organized crime and human trafficking, the government prosecuted 55 cases related to trafficking and convicted 70 traffickers involved in 30 cases in 2007, up from 54 convictions in 18 cases the year before. In July 2008, Macedonia amended the criminal procedure code to allow the use of wiretapping (so-called “special investigative procedures”) for not only organized crime cases but also for crimes punishable by four or more years in prison.

The organized crime department’s eight locations countrywide have the ability to gather and analyze data, but the report notes that they have no common database. Logistics and funding for the witness protection department are not there. There is not enough staff or equipment to fight computer crime.

Turkey

Turkey has taken measures to implement existing laws, such as training police in corruption investigation, but the country has not drawn up an anti-corruption strategy. Members of parliament still enjoy full immunity, and there is no law on election campaign financing. The report deemed Turkey’s anti-corruption progress “limited.”

On organized crime, Turkey has adopted a witness protection law, with provisions that ensure the confidentiality and safety of witnesses who may come forward on organized crime cases. Turkey also has adopted a cyber-crime law and established an internet department within the telecommunications agency to uphold the law. Turkey does not have, however, a fingerprint and DNA database, nor a countrywide set of instructions for crime scene investigations. The report stated that Turkey needs to come up with and implement an anti-organized crime action plan.

Potential Candidate Countries

Albania

Albania has prosecuted low- and mid-level officials for bribery and corruption. The Interior Ministry’s internal affairs department has disciplined about 100 policemen for bribery. Last year, 53 of more than 200 officials identified as involved in corruption and conflicts of interest were arrested and prosecuted. One former deputy minister has served a one-year jail sentence. “However, a more systematic approach is needed to tackle corruption overall, particularly widespread bribery in the judiciary, police, health and customs sectors,” said the report.

The Albanian government adopted an anti-corruption strategy in October 2008 which has yet to be implemented, while the agency that is supposed to be monitoring the conflict of interest law adopted last year plays only a “limited role,” according to the report. Parliamentary immunity and the financing of political parties have yet to be addressed with laws.

Albania adopted an anti-organized crime strategy in July 2008 but has yet to implement it. Fighting money laundering is also in its early stages. Police and prosecutors are not cooperating, nor do police conduct long-term investigations essential to bring down organized crime. The lack of intelligence-led policing is also a problem – for example, one major information database is located at the Ministry of the Interior rather than police headquarters. “Organized crime continues to be a serious problem in Albania,” stated the report.

Bosnia and Herzegovina

Though Bosnia and Herzegovina adopted its anti-corruption strategy and its action plan in 2006, the authorities have made no progress on implementing either. Amendments to the conflict of interest of law adopted in July 2008 reduce the law’s scope in terms what constitutes a conflict of interest and to whom the law applies. The country has no independent anti-corruption body, and corruption convictions remain extremely limited. Pressure from the Serb-dominated Republika Srpska also meant the temporary shuttering of Transparency International’s office in the country. “Overall, Bosnia and Herzegovina has made very little progress on improving its tools to fight corruption,” the report said. “Corruption is widespread and remains a serious problem, especially within government.”

On organized crime, the Indirect Taxation Authority discovered an illegal cigarette factory and confiscated machinery, several tons of tobacco and counterfeit tax stamps. No additional action plans have been added to the country’s anti-organized crime strategy. “There has been limited progress in fighting organized crime,” the report said.

Kosovo

Kosovo, which declared independence from Serbia in February, fared the worst of all candidate and potential candidate countries in the Commission’s report. The new state has no anti-corruption strategy or action plan, and is plagued by “insufficient legislative and implementing measures and a lack of determination and the weakness of the judicial system.”

Overlap of different agencies is also a problem. The work of Kosovo’s Office for Good Governance overlaps that of the Anti-Corruption Agency; the inter-ministerial working group on corruption that exists on paper will likely also add to the confusion when the working group is operational.

But for all the anti-corruption groups in this former Serbian province the size of greater Los Angeles, the EC stated that corruption is “widespread and undermines the proper functioning of the institutions.” An auditor-general report revealed that the Kosovo budget has mysteriously lost €0.5 million to €5 million per ministry per year. Kosovo also has no law on civil service or other public administration laws, and the Commission reckons that civil servants are vulnerable to political interference, corruption and nepotism. Above all, the report stated numerous times that corruption, along with constant power outages and criminality, are some of  the main impediments to economic development.

The fight against organized crime in Kosovo has been on the same relatively nonexistent level as the fight against corruption, according to the report. The interlinked roles of police, prosecutors and judges that make up the rule of law are sketchy: The police don’t cooperate with prosecutors. Prosecutors don’t specialize, so have no idea what to do about cases of money laundering or human trafficking. And the EC gave the judiciary poor marks in general.

Kosovo adopted a strategy to fight money laundering in August, and various institutions oversee banking and other financial institutions. But the report noted that neither the police nor the judiciary were sophisticated enough to investigate or judge complex financial crime. Kosovo also lies on the southern Balkans heroin route, with heroin from Turkey entering Kosovo via its porous border with Macedonia, but Kosovo authorities lack the statistics and other intelligence to come up with a strategy to combat drug trafficking. The EC stated: “There has been no progress to report.” On organized crime in general, Kosovo has no action plan, no strategy, and as the EC reported, a lack of determination and ability. “Organized crime continues to be a very serious problem,” stated the report.

Montenegro

One development noted in this year’s progress report was Montenegro’s establishment of special high court departments that address corruption and organized crime in September, as well as extending the Special Prosecutor’s powers to fight organized crime. The report noted, however, that the judiciary in general is inefficient, susceptible to political interference and has no track record on implementing new laws. And the Special Prosecutor’s office may have received more powers against organized crime, but the office lacks deputies, staff and technical equipment.

The Montenegrin government updated its action plan for corruption and organized crime in May, and has ratified various conventions, and has adopted a law on political parties’ financing. But what Montenegro doesn’t have is a conflict of interest law without loopholes, or strong and independent supervisory or auditing authorities. When political parties submit their finances, for example, there is no body to investigate how complete and accurate the records are. The EC also noted that administrative corruption remains high, particularly on the coast, where development, privatization and public procurement are booming. The EC reported: “The declared commitment of the authorities to combat corruption has not been backed up by rigorous implementation with clear results, including higher conviction rates in corruption cases. Corruption continues to be widespread and inefficiently prosecuted, particularly in cases of high-level corruption.”

Organized crime remains a “matter of serious concern,” stated the EC. Meanwhile, one-fifth of the positions in the Police Directorate’s organized crime section remain vacant, and the unit has no staff at all on the local level. Six out of the 10 posts in the police’s drugs and smuggling section also remain vacant. In 2006, police investigated just one case of human trafficking; the next year they investigated two cases. 

Serbia

Serbia adopted a law establishing an anti-corruption agency, as well as new conflict of interest rules, in October. The agency has yet to be established. Serbia’s action plan against corruption also lacks deadlines, specifics and doesn’t allocate enough resources to implement it. No independent bodies currently monitor the region’s largest sources of corruption – public procurements, privatizations and major budgetary expenditures. Corruption in Serbia, noted the EC, is widespread and adversely affects both the business climate and public services in the country.

Serbia has adopted neither an action plan nor a strategy for fighting organized crime. Going after organized crime in Serbia is the responsibility of both the Interior Ministry’s department and a number of other specialized departments. Coordination between the departments is not good, according to the report, nor is there a common database on organized crime that all departments can use. The witness protection program does not have the trust or cooperation of all those involved in it. There is also no management of assets that may be seized by the police. The EC noted: “Preparations in the area of the fight against organized crime remain at an early stage, which is a matter of concern and affects the rule of law and the business environment.”

--Beth Kampschror