Mon | May 25, 2015

The Next 50 years - Reduce corruption, spur growth

Published:Sunday | November 25, 2012

Professor Trevor Munroe, Contributor

I agree 100 per cent with the assessment of endemic corruption in Jamaica today as set out in Jamaica's National Security Policy, available online on the Ministry of National Security's website:

"... corruption in its various forms is a serious threat to the social order and the rule of law ... inhibits the ability of the State to effectively discharge its responsibilities and obligations ... political institutions and freedoms can also be affected by corruption ... through the corruption of public officials ... . through rewards but may also be coerced through direct threats.

"... penetration and weakening by criminal networks of the justice system, government and the political process could eventually lead to the demise of the State."

Lest anyone doubt the accuracy, gravity or implications of this national assessment, recall the following, illustrative of different aspects of Jamaica's corruption challenge.

David Smith, the Jamaican convicted of money laundering and other financial crimes, according to the Supreme Court of the Turks and Caicos Islands "benefited in the sum of at least US$220 million" and made "tainted gifts ... of US$5 million to the Jamaica Labour Party ... and US$2 million to the People's National Party". (TCI Supreme Court Confiscation Order, April 2012).

Despite having fleeced some 6,000 Jamaicans by his criminal conduct and despite having been raided, issued cease and desist orders by Jamaica's Financial Services Commission in March 2006, orders upheld by Jamaica's judiciary, Smith has neither been indicted nor prosecuted in Jamaica.

He is currently serving a sentence of 30 years, having been convicted in the courts
of South Florida and the Turks and Caicos
Islands.

Christopher Michael Coke, who pleaded guilty
on September 1, 2011 in the Federal District Court in Manhattan, to
racketeering conspiracy charges and was sentenced on June 8, 2012 to 23
years in prison, received 55 contracts totalling $77 million through his
company, Incomparable Enterprises, from Jamaican public-sector entities
between 2006 and 2010 - across successive
administrations.

Some contracts were awarded
subsequent to the extradition order served under the Mutual Legal
Assistance Criminal Matters Act by the United States (US) in August
2009. (See Quarterly Contract Awards, Office of the Contractor General
website).

Coke exercised significant autonomy in
Tivoli Gardens in Western Kingston and, despite credible allegations by
Jamaicans of his responsibility for serious crimes over many years, (see
transcript of interview with Leader of the Opposition, Edward Seaga,
The Gleaner, September 29, 1994, p23), as well as the
accusations in US Federal Court documents, Coke was never indicted,
tried nor convicted for any serious crimes in
Jamaica.

Scamming scandal

Currently,
the Jamaican lottery scam, according to the US Federal Trade Commission
(FTC), has generated, in 2011, about 30,000 complaints from American
citizens, scammed between US$300 million and US$1 billion per year (the
high estimate by C. Steven Baker, the FTC region midwest director based
in Chicago. See HUFF POST MONEY, September 7,
2012).

The scam has motivated scores of murders of
Jamaican citizens by Jamaican citizens in the single parish of St
James.

Yet, the public is unaware of any 'big fish'
being prosecuted and incarcerated because of involvement in this corrupt
transnational operation.

The scam continues to
seriously damage Jamaica's good name, damages incoming investment
prospects (along with associated job creation and income generation in
the ICT sector) and, by compromising the money-transfer mechanism, is
seriously threatening the prospects of innocent Jamaicans receiving
hassle-free well needed remittances from friends and family in the
United States.

These three examples (and many others
could be cited) validate the National Security Policy assessment that
endemic corruption threatens the rule of law, Jamaica's political
institutions and "could eventually lead to the demise of the
State".

The seriousness of this threat posed by
corruption is also reflected in the perceptions of both Jamaicans and in
the international community as a whole.

Two years
ago, a Don Anderson poll revealed that the Jamaican people ranked 'too
much corruption' as the second "main thing wrong with
Jamaica".

The 2010 Latin American Public Opinion
Project Survey saw Jamaicans second only to Trinidadians among 26 Latin
American and Caribbean states in their perception of levels of
corruption in their country.

Moreover, according to
the 2012 UNDP Report on Citizen Security in the Caribbean, the majority
of the Jamaican people believe that those who are powerful or
politically connected go free in our justice
system.

This perception by Jamaicans is shared by our
international partners. The US State Department's 2012 International
Narcotics Control Strategy Report concludes: "corruption of
public officials continues to be a major concern to the Jamaican and
United States governments as well as most
Jamaicans.

"The law penalises
official corruption; however, corruption is entrenched, widespread, and
compounded by a judicial system that is poorly equipped to handle
complex criminal prosecutions in a timely
manner."

More widely afield, the
Transparency International Annual Corruption
Perception Index has never ranked Jamaica above four on a scale of one
to 10, where one is most corrupt and 10 is perceived to be least
corrupt.

Both the reality and perception of corruption
is seriously damaging Jamaica's development.

The just
released Global Competitiveness Report 2012/13
identifies 'corruption' as the third in rank of the 16 "most problematic
factors for doing business in Jamaica" - ahead of 'tax rates',
'inefficient Government bureaucracy' and even 'tax
regulations'.

No wonder one authoritative scholarly
study estimates that the overall cost to Jamaica's GDP per capita, that
is, the loss each Jamaican experiences because of inadequate control of
corruption, is about US$550 per annum.

(See A. Dreher
and T. Herzfeld - The economic costs of corruption: a survey
and new evidence
, June 2005)

What have been
some of the contribution factors to this endemic corruption 50 years
after Jamaica's Independence in a country that has registered so many
exceptional achievements?

Just a few days ago, for
example, the Global Competitiveness Report 2012/2013
confirmed Jamaica as number one in the world in terms of the control of
malaria.

At independence less than 1,000 students were
in university or tertiary institutions. Today, almost 70,000 students
are enrolled at the tertiary level.

Over the years
since Independence, Jamaica has produced world-class scientists,
including Professor Anthony Chen, a co-recipient of the Nobel Peace
Prize.

The country has also produced world-class
public servants such as Justice Patrick Robinson, a judge of the
International Criminal Court in the Hague and world-class businesses
including Sandals and SuperClubs.

A Press Freedom
ranking Jamaica consistently in the top 10 per cent globally, to say
nothing of the well-known stellar achievements in sports, culture and
entertainment are all proof of how good the country can
be.

Yet whatever we would have achieved, we would have
achieved and shall achieve so much more with less
corruption.

What helps
corruption?

Major factors contributing to this endemic
corruption include the awarding of contracts big and small, jobs or
positions high and low on the basis of politics rather than on
merit.

The seeds of this deficiency, which evolved
into full-blown tribalism, were sown in the 1940s, institutionalised in
the political parties in the 1950s and became manifest, with seriously
harmful development impact, in the 1960s.

'The Report
of the Commission of Enquiry into the Award of Contracts, the Grant of
Work Permits and Licences and Other Matters' (The DaCosta
Commission Report 1973
) is replete with
evidence.

Had political corruption in the
school-building programme (1966-1968) been controlled, there is good
reason to believe that twice the number of schools may have been
built.

Twenty years after the DaCosta Commission
Enquiry Report, once again huge costs were incurred in Operation Pride
by putting "politics first with competence, need and merit
second".

Since 2006, the Special Investigation Reports
of the Office of the Contractor General are replete with evidence of
corruption, at the level of the Parliament, the parish councils and in
public sector entities.

Yet only two successful
prosecutions have emanated from more than 40 special investigation
reports.

In one case involving allegations of
trans-national bribery of a former member of Parliament pending since
2009, no decision has yet been announced as to prosecute or not to
prosecute.

The second contributing factor has been
excessive red tape and bureaucracy.

One study found
that it took an average of 414 hours, that is, over 50 days to pay taxes
in Jamaica, far greater than most other Caribbean
states.

This has been a clear incentive for 'passing
money' in order to achieve speedy and expeditious results in the grant
of licences, permits, etc., as well as in the payment and the
non-payment of taxes.

The third contributing factor
continues to be the deterioration in the values system, whereby
materialistic and individualistic 'bling values' have superseded social,
communitarian and production-oriented values, not least of all because
decades-long economic stagnation has reduced opportunity for those who
would "work for a living".

The deteriorating values
system has also elevated the attractiveness of the 'criminal lifestyle'
and undermined the value of honesty, integrity, as well as the 'work
ethic' in all its dimensions .

The final factor worth
mentioning is the growth in autonomy of the corrupt and of organised
crime groups.

The major contributory factor in this
regard continues to be the absence of any meaningful legal or regulatory
framework to curb the buying of influence by way of political campaign
contributions and to dismantle political garrisons, including the
punishment of systematic violations of human rights within these
enclaves.

Potentially important anti-corruption
instruments, such as the criminalisation of 'illicit enrichment' are
rarely, if at all, enforced.

One overall result is the
apparent impunity of the corrupt in high places, reflected in the fact
that in the 10 years prior to Jamaica's Independence, three ministers
were convicted of corruption, yet in the 50 years since, only one
successful prosecution has taken place.

What can we
do?

What has to be urgently done to rectify this
'endemic corruption'?

1 Build public awareness to the
extent to which corruption is holding back progress for the ordinary
Jamaican, even those whose values and conduct have become infected by
corruption, and enhance public demand for decisive
action.

2 Plug loopholes in the existing
legislative/institutional framework by the speedy passage of Campaign
Reform Legislation and the establishment of a single Anti-Corruption
Agency with prosecutorial powers.

3 Build
institutional capacity and reinforce 'professional will' to deal with
corruption. This requires enhanced training and targeted incentives for
our prosecutors, magistrates, judges, investigators,
etc.

This would increase the likelihood of 'big fish'
being brought to justice, thereby enhancing the credibility of the rule
of law now being seriously undermined by the perception that the law
only applies to the 'small man' and not to the 'big
man'.

4 Reinforce political will by developing
networks amongst and between persons of integrity in each of our
parliamentary parties and between 'honest politicians' and civil society
designed to bring to justice the corrupt on either or on neither side
of the aisle.

5 Renew and strengthen a national
programme, at all levels of the formal and informal educational system,
including the media, to combat values from top to bottom that facilitate
corruption and promote again, from top to bottom, a culture of honesty,
integrity and hard work.

Finally, Jamaica's
international development partners need to be challenged to be more
effective in collaborating with the Jamaican public and officials in
ensuring that grants and loans, (the latter increasing our debt), reach
their targets to enhance the country's productive capacity and reduce
poverty, and not be diverted into the pockets of the corrupt, in high
and low places.

Professor Trevor Munroe is the
executive director, National Integrity Action and a visiting honorary
professor at the Sir Arthur Lewis Institute, UWI, Mona. Send feedback to

editor@gleanerjm.com.