• University Module Series: Anti-Corruption

• Module 6: Detecting and Investigating Corruption

 

 

   This module is a resource for lecturers   

 

Investigation of corruption

 

Handling of reports as a precondition for successful investigations

Once a report on corruption is submitted (by whistle-blowers, citizens, companies or journalists), handling it properly is vital for the effective combating of corruption. This is true regardless of whether reported corruption ultimately leads to criminal sanctions or is addressed internally. How agencies handle incoming reports of corruption is crucial because it affects the immediate case, and establishes impressions about whether complaints are taken seriously, thereby determining if others will come forward in the future. When people make the decision to report on corruption, they want to be sure that their report will be taken seriously and that filing the report will not risk their safety or the safety of their families or colleagues. In particular, they want to be certain that action will be taken where warranted. For example, UNODC (2017, p. 17) found that in Nigeria, among incidents of bribery reported by citizens, more than one third were not followed up (33.7 per cent) and only 17.6 per cent of the reported cases led to the initiation of a formal procedure against the public official concerned. According to people who have been asked to pay bribes in the country, the main reason for not reporting to the authorities was the perception that the reports would remain unaddressed (UNODC, 2017).

As part of the larger agenda to combat corruption, it is important that the responsible authorities, both internal and external to organizations, develop clear and transparent systems to receive and handle reports of corruption. Without these systems, the process of investigating corruption will be haphazard at best. When assessing or creating such systems, there are several considerations.

First, any system for handling reports, whether in the public or private sector, should meet certain standards of quality and fairness. After all, organizations have a duty of care towards the people who engage with them.

Second, organizations and governments should provide information to the public on what can be reported, to whom, how it should be reported, and what happens with the reports afterwards. The correct entity to which cases of corruption may be reported will vary in different countries and contexts. Reports of corruption within an organization, for example, should usually first be made to a supervisor or company ethics officer, while reports of corruption within civil society might be addressed directly to the police or the appropriate anti-corruption commission. Guidance in this regard should be provided to employees as potential whistle-blowers and to organizations as potential recipients of reports of corruption. In Australia, for example, the Office of the Commonwealth Ombudsman's Agency produced the Guide to the Public Interest Disclosure Act 2013, which explains how organizations should handle incoming concerns.

Third, there should be clear procedures about when reports can be handled internally by the organizations and when they must be investigated by an external body such as an anti-corruption agency or the police. For each reported incident of alleged corruption, an organization should be able to set out clear reasons why they did or did not decide to open an investigation. Limitations on resources, personnel and time mean that not all reports of corruption can be investigated, but without a protocol on how to determine which reports merit an investigation, organizations and States risk the arbitrary selection of cases to pursue or, worse, the selection of cases most advantageous to themselves. If an organization or government behaves arbitrarily or is self-serving in its investigation of corruption, both employees and the public will lose trust and the system will degrade.

Finally, organizations must find ways to prevent corruption in the handling of complaints regarding corruption. Corruption among those responsible for receiving reports can suppress important information, discourage detection mechanisms and damage anti-corruption efforts (Stapenhurst and Kpundeh, 1999, p. 8).

While there are different methods of handling reports of corruption, often dictated by internal regulations or national laws, a good standard is offered by the International Organization for Standardization (ISO). ISO 37001 (anti-bribery management system) specifies a series of measures to help organizations prevent, detect and address bribery, including establishing reporting and investigation procedures.

Investigation purpose and principles

Once allegations of corruption have been brought to the attention of the appropriate entity, it is crucial that a thorough and fair investigation is conducted. Depending on the act of corruption that is exposed, investigations can be handled either internally by an organization (disciplinary) or externally (through regulatory or criminal procedures). The purpose of the investigation is to decide whether to take responsive measures, and, if so, which measures to adopt. The United Nations  Handbook on Practical Anti-Corruption Measures for Prosecutors and Investigators  (2004, p. 45) identifies four key responses to corruption: 1) criminal or administrative prosecutions, leading to possible imprisonment, fines, restitution orders or other punishment; 2) disciplinary actions of an administrative nature, leading to possible employment-related measures such as dismissal or demotion; 3) bringing or encouraging civil proceedings in which those directly affected (or the State) seek to recover the proceeds of corruption or ask for civil damages; and 4) remedial actions, such as the retraining of individuals or restructuring of operations in ways that reduce or eliminate opportunities for corruption (but without necessarily seeking to discipline those involved).

For each of these four responses, evidence of corruption must be gathered and evaluated through an investigation. Owing to the unique nature of corruption, investigations often require significant expertise, knowledge, experience and organizational strength (Kiyono, 2013, p. 1). Such investigations can be internal (within the organization) or external (such as a criminal investigation). Regardless of whether an investigation is conducted internally or externally, all investigations should consider how to maintain protections for the parties involved, confidentiality, and impartiality. Investigators themselves should endeavour to consider all evidence, to reach reasonable evidentiary requirements, and to protect witnesses to the extent that this is possible (UNODC, 2004, 18-19). During the 2003 Conference of International Investigators, the following 10 guidelines were determined as crucial for any investigation activity (UNODC, 2004, p. 45)  :

• Investigative activity should include the collection and analysis of documents and other material; the review of assets and premises of the organization; interviews of witnesses; observations of the investigators; and the opportunity for the subjects to respond to the complaints.
• Investigative activity and critical decisions should be documented regularly with the managers of the investigating officer.
• Investigative activity should require the examination of all evidence, both inculpatory and exculpatory.
• Evidence, including corroborative testimonial, and forensic and documentary evidence, should be subject to validation. To the extent possible, interviews should be conducted by two investigators.
• Documentary evidence should be identified and filed, with the designation of origin of the document, location and date, and name of the filing Investigator.
• Evidence likely to be used for judicial or administrative hearings should be secured and custody maintained.
• Investigative activities by the investigator should not be inconsistent with the rules and regulations of the organization, and with due consideration of the applicable laws of the State where such activities occur.
• The investigator may utilize informants and other sources of information and may assume responsibility for reasonable expenses incurred by such informants or sources.
• Interviews should be conducted in the language of the person being interviewed, using independent interpreters, unless otherwise agreed  .
• The investigator may seek advice on the legal, cultural and ethical norms in connection with an investigation.

These ten guidelines provide insights into the complexities of corruption investigations and the many considerations that investigators must take into account. Further, these guidelines give an indication of how long and expensive investigations can be. This is a crucial consideration in many countries where resources to fight corruption may be limited. For a more detailed discussion on the investigations process, see UNODC's  Handbook on Practical Anti-Corruption Measures for Prosecutors and Investigators  (UNODC, 2004, p. 45).

Internal versus external investigations

Cases of corruption in organizations and government bodies are often first discovered internally. Those working inside organizations will usually have the best access to information and knowledge that is critical for identifying cases of corruption. Thus, employees are often best suited to identify mistakes or patterns that have been overlooked and to inform supervisors. Consider the case of how the City of Dixon Comptroller Rita Crundwell was discovered stealing from the city by a co-worker (see the case as described below).

Organizations often have a desire to address internal corruption and to assist in investigations. Many organizations even have designated ethics officers to assist employees with conflict of interest or corruption cases. A useful discussion on how businesses conduct investigations is available in the UNODC publication An Anti-Corruption Ethics and Compliance Programme for Business: Practical Guide  (2013, p. 41). There is, however, a large range in the ability of different organizations to conduct internal investigations of corruption. Larger organizations, for example, may have an internal department or unit whose function is investigation, but this process can be trickier in smaller organizations where everyone knows each other. In that case, it may be helpful to call in neutral outside parties to assist in the investigation process.  

When an internal investigation is conducted within an organization, there is a range of sanctions that are possible - from firing or demoting someone, docking pay, or enforcing mandatory training or reporting. If there is evidence of a criminal offence, however, the organization will have to decide as to whether it will self-report the corrupt incident (see the discussion on self-reporting). If the organization does not self-report, it can be very difficult to uncover and expose corruption, unless a whistle-blower or journalist reports on the matter, or an audit detects the problem. In principle, there could also be cases of proactive investigation by law enforcement agencies or anti-corruption bodies. The most common form of external investigation is a criminal investigation.

Criminal investigations

Criminal proceedings can only be used to fight corruption when specific corrupt acts have already been criminalized under the laws of a country. Most legal systems require a higher degree burden of evidence in criminal cases than is expected in civil cases (Abdelsalam, 2017). For example, in many legal systems, in order to convict a person of a crime, each part of the offence must be proven beyond a reasonable doubt. Thus, even if a person was ordered to pay damages following a civil case, this does not mean that enough evidence exists for that person to be criminally convicted. Criminal cases, particularly large-scale corruption cases, are very difficult to gather evidence for and often require lengthy investigations. Depending on the country and context, criminal investigations may be conducted by a range of agencies, including but not limited to: the police, specialized anti-crime commissions, royal commissions, and regulatory bodies. 

In many jurisdictions, police agencies and specialized anti-crime agencies play a central role in investigating and preventing corruption. Once these agencies receive a complaint of criminal corruption, they must evaluate whether they can build a case that matches the evidentiary threshold required. If they do undertake an investigation, they must gather evidence of the offence from witnesses, records and many other sources. The police and anti-corruption commissions have considerable powers of investigation at their disposal, including: seizing articles and documents, questioning witnesses, recording testimonies, etc. Throughout the investigation process, it is of the utmost importance that these agencies adhere to policies of confidentiality and any required legal procedures so that the investigation will not be compromised.

Further, in many corruption investigations, it is critical that members of the investigation team have specialized knowledge to assist in the investigation and analyse information as it is discovered. In some countries, specially trained units have been established whose focus is solely to investigate corruption offences. In other countries, specialized anti-corruption commissions exist to navigate the complex lengthy and specialized investigation process necessary for cases of corruption. 

Differentiating between internal and external forms of investigations offers a useful analytical framework, but it is important to recognize that, when an individual is suspected of corruption within an organization, both internal and external processes can be, and often are, initiated simultaneously. An example of a case with elements of an internal and criminal investigation on corruption is the United States case of Rita Crundwell, Comptroller of Dixon, Illinois (see Carozza, 2018; and McDermott, 2012). In 2011, while Crundwell was on unpaid leave from her job as Comptroller for the City of Dixon, a fellow employee, Swanson, discovered that Crundwell had been depositing large sums of the city's money into a non-official account (Carozza, 2018). Following a review of the accounts, Swanson took steps internally within the City of Dixon to inform her superior, the Mayor of Dixon. The Mayor in turn reviewed the evidence of corruption and decided to call the Federal Bureau of Investigations (FBI) (Carozza, 2018). At this point a criminal investigation was initiated.

The FBI subpoenaed bank records and discovered millions of dollars of illegal transactions. According to  NPR Illinois, during the 20 years Crundwell worked for the city she managed to steal roughly a third of the city's budget each year, absconding with a total of more than $53 million (McDermott, 2012). After a lengthy investigation, the FBI compiled a criminal and civil case against Crundwell and she was sentenced to 19 years and seven months in prison (McDermott, 2012). During the federal investigation, the City of Dixon conducted its own internal process and decided to fire Crundwell (Carozza, 2018). This case is an example of how numerous internal and external processes can be set in motion during corruption investigations. As a result of this case the City of Dixon recovered $40 million. For more on this case, see the documentary All the Queen's Horses.

 

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