We continue to present a series of articles that shed light on the positive aspects of the American experience and how it can be employed to achieve positive changes in the main challenges Egypt faces. In the previous articles we discussed the issue of public spending priorities, the transparency system, and making information accessible through their original sources. In this article, we look at another side of the fight against corruption. We will discuss the establishment of a proactive system similar to those in the American model that could contribute to reducing the corruption plaguing the Egyptian state.
In the United States, the Foreign Corrupt Practices Act (FCPA) provides a strong legal framework to combat any possible corruption, whether by natural or legal American people, as well as by companies listed on the American stock market, whether American or non-American, and their executive managers. The investigations into acts prohibited by the FCPA are conducted by a special department affiliated with the U.S. Department of Justice.
This law provides effective mechanisms that encourage ordinary people to report corruption, whether employees of the companies involved in corruption or civil society and media organisations. It offers legal protection for those who report or witness corruption cases. The law also allows reconciliation in bribery cases if the defendant pleads guilty. It offers a special mechanism known as “deferred adjudication”, which allows the investigating authority to determine a financial penalty according to the value of the bribery and lays out a number of conditions that the defendant must meet. If the defendant meets the conditions, the charges are dismissed and the defendant will not have a record of conviction. This mechanism maintains the structure of the company and provides fair punishment for bribes.
There are famous cases of corrupt practices involving US companies in which the US government applied this mechanism and made them pay fines of more than $350m, even though the crimes were mostly committed outside the United States. Total Company, for example, has been investigated under this law for offenses committed in the African continent and paid a fine of about $400m.
In Egypt, we will find that this law has inspired the Egyptian legislation in the last two years, noticeable in the amendments in the illicit gains law and criminal proceedings, but that inspiration was not accurate or comprehensive enough. It only focused on reconciliation and did not establish an integrated legal environment to prevent corruption. The amendments did not put in place appropriate sanctions or fines in cases of violation, in addition to the total absence of the idea and philosophy of protecting informants and witnesses, as well as encouraging them to report corruption.
In America, there is the U.S. Government Accountability Office (GAO)—similar to the Central Auditing Organization (CAO) in Egypt. This independent agency is affiliated with the congress and presents its reports to the congress only—which in turn publishes it to the public. This office is responsible for examining all expenses of the federal government, whether inside or outside the United States. It is one of the largest federal agencies in terms of the number of employees, amounting to more than 4,500 federal employees.
The Egyptian Constitution provided a legal framework that ensures the independence of the CAO, but it did not strengthen its affiliation to the parliament, as is the case with the United States. The CAO submits its reports to the president, the prime minister, and the parliament. Moreover, the president is entitled to fire the head of the CAO, which reduces the independence of the organisation. Although the CAO has more than triple the number of employees than its US equivalent, there is a huge difference between the two agencies’ performance.
The American government has two accountability agencies in most states and cities. The first is the anti-corruption agency affiliated to the attorney general in each state, a position held by free and direct election of the citizens of the state. The second is a specialised department in “ethic code”. The first agency is responsible for investigation and examination of the corrupt practices that may occur by appointed or elected officials at the level of the state, county, or city, while the second agency works on ensuring the application of standards and ethics that prevent corrupt practices.
In Egypt, we will find that the public prosecutor carries out the same role as the first agency in the US. The public prosecutor is not elected, but he has a reasonable level of independence since he is nominated by the Supreme Judicial Council, which is better than election (from the author’s viewpoint). The Illicit Gains Authority also plays an additional role in this process, but it is affiliated with the Ministry of Justice, so it lacks independence in this case.
The second agency—specialised in ethic code—has no parallel entity in Egypt. Actually, I believe it would be very useful if we have a similar agency that can spread public awareness and mobilise community efforts to combat corruption.
The American experience in the fight against corruption clearly indicates that there are specific requirements for the success of national efforts in this field—notably the transparency system making information accessible, the freedom of media, inspection and investigation entities with appropriate human and financial resources, and examination and investigation offices independent from the executive authority and the political powers. I think that the Egyptian state’s ability to fight corruption will completely rely on applying these requirements.