Combating Corruption in Kosovo
A Report by
OperationKosovo[1]
Chicago-Kent College of Law
Illinois Institute of Technology
23 October 2006[2] - 29 October revision
Table of contents
I.Introduction......
II.The problem......
A.UNDP public opinion survey......
B.USAID report......
C.Serb-centric reports......
D.Effects......
E.Past Failures in Reducing Corruption......
III.Best practices from the United States and elsewhere......
A.Theory
B.Case studies......
1.Italian Falcone story......
2.All the President’s Men......
3.Greylord......
4.ABSCAM......
5.Silver Shovel......
6.Synthesis from U.S. stories......
C.Axioms......
1.Successful investigations depend on understanding the informal networks within which corruption occurs
a)Confidential informants are necessary to develop an understand of corruption networks and to select specific individuals for deeper investigation
b)Financial investigations and audits can be important aids to early identification of investigative targets.
2.Criminal intelligence must be turned into admissible evidence
a)Cooperating witnesses must be recruited, often by threatening prosecution
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.
3.Electronic surveillance must be conducted to produce compelling evidence for use at trial
4.Experienced undercover agents usually are necessary to manage informants and cooperating witnesses and to conduct electronic surveillance
5.Anti-corruption campaigns cannot succeed without a professional criminal justice infrastructure
a)Investigators, prosecutors and judges must have the requisite skill, independence and resistance to corruption
b)Investigative journalism can complement official investigations but it cannot succeed on its own.
c)Anti-corruption institutions must have the requisite legal, financial, and technological resources
IV.Challenges in adapting best practices to Kosovo......
A.Introduction
B.Application of Theoretical Models to Kosovo
C.Four Preconditions......
D.Differentiating Types of Corruption and Setting the Right Priorities.....
V.Recommendations......
A.Measures of Success......
B.Four Kosovo Hypotheticals......
1.Public corporation procurement: member of the board bids, loses, causes re-evaluation
2.“You were the winner, but we are going to reopen bids unless you contribute $1 million to the fund of my party leader”
3.“If you give me ten thousand Euros, the contract is yours”......
4.Blocking the hospital......
C.Building Political Will......
1.Pick the right targets......
2.Empower the right anti-corruption champion......
3.Give full legal authority to a special prosecutor......
4.Organize undercover investigations and recruit cooperating witnesses..
a)Authorize undercover investigations
b)Allow cooperating witnesses
5.Permit electronic eavesdropping under appropriate conditions......
a)Wiretapping......
b)“Wires”......
6.Institutionalize governmental monitoring......
a)Model the Kosovo Auditor-General on the U.S. GAO......
b)Model the Kosovo Anti-Corruption Agency on U.S. Inspectors General
7.Establish more “hotlines”......
8.Improve witness protection......
9.Support investigative journalism......
10.Reinforce anti-corruption norms......
VI.Prospects for success......
A.What’s possible in one year......
B.What’s possible in three years......
C.What’s possible in ten years......
VII.Where to Begin?......
A.Drugs......
B.Human Trafficking......
C.Government Contracting......
D.Finding Potential Informants and Cooperating Witnesses to “Jam Up”...
VIII.Appendices......
A.Appendix I......
1.Greylord Transcripts......
2.ABSCAM Transcripts......
B.Appendix II......
C.Appendix III......
1.Fighting Corruption at the Municipal (Local Government) Level......
2.Fighting Corruption in Central Government......
3.Fighting Corruption at the Parliamentary Level......
4.Fighting Corruption in the Business Sector......
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 revokedKosovo’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 Milosevic-regime’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 ofKosovo 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, andPrime 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-of-staff Agim Çeku, the current Prime Minister. Çeku is closely associated with Haradinaj, and, many observers believe, controlled by him.
Even those who support independence forKosovoworry 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 do 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 Thaçi, 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 Thaçi and his party has declined since he began the campaign. One reason may be that the public views Thaçi’s 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 inKosovo 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 inKosovo 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. OnceKosovo 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 inKosovo, 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 inKosovo 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 ofKosovo’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 inKosovo. 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 inKosovo and inChicago on economic development, political party development, and establishing the rule of law inKosovo. Several of the students have visitedKosovo and others have worked for several months or longer as externs forKosovo institutions.
II.The problem
Several outside institutions have collected data on corruption inKosovo. 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 inKosovo 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 inKosovo to deliver good laws and public services.
A.UNDP public opinion survey
The UNDP survey labeledKosovo 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 inKosovo 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 ofKosovo should take the lead to fight corruption inKosovo after the full transfer of power from the UNMIK, by far the largest level of support for any one institution to take the lead.[6]
B.USAID report
A USAID survey inKosovo 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.
The survey showed a general downward trend regarding public opinion about the economy inKosovo.[7]Organized crime and corruption contributed to this pessimism. The public perceived a moderately high to high level of organized crime inKosovo,[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 inKosovo was perceived as second in importance behind unemployment, followed by low incomes, and high prices.[9] Data compiled from surveys ofKosovo’s neighbors including Albania, Bosnia-Herzegovina, Bulgaria, Macedonia, Romania, Croatia, Serbia, and Montenegro show, however, thatKosovo is at the low end of the corruption index, placing it in a better position than its neighbors.It may be that corruption inKosovo is perceived by the public to be a greater problem than it actually is.
Corruption problems may intensify inKosovo 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 inKosovo 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 forKosovo, 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, Thaçi, 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 inKosovo control active criminal networks, especially in the Drenica and Dukagjini regions ofKosovo. These networks, the Serbs say, specialize in human trafficking, drug trafficking, and the arms trade, involving not onlyKosovo 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.