Tag Archives: Mexico

The Taint of the Greased Palm (Is Kenya like Mexico?)

Tina Rosenberg of The New York Times, wrote an article on corruption in Mexico. Like the Kennedy-Lincoln comparisons, the article is startling and very revealing if you substitute Kenya for Mexico, Kibaki for Fox, KANU for P.R.I and so on. This article was written in 2003 (three years into the term of Vincent Fox in Mexico – we are now almost 3 years in Kibaki’s presidency)

· When Vicente Fox (Kibaki) was sworn in as president of Mexico on Dec. 1, 2000, he carried with him a huge burden: the public’s expectation that he would liberate from corruption a country that had become symbolic of the scourge.

· Fox was the first Mexican president from an opposition party after 71 (40) years of autocratic control by the Institutional Revolutionary Party, or P.R.I., (KANU) which maintained its grip on Mexico (Kenya) principally through corruption.

· In his inaugural address, Fox (Kibaki) said that combating corruption, ”until now a goal of secondary importance, will from today on be a national priority.”

· Yet just as sure as a new leader’s pledge to clean up the corruption of his predecessor is the certainty that his successor will, in a few years, (2007) be doing the same.

· Presidents who come to office promising to fight graft almost always fail — occasionally leaving office several million dollars (shillings) richer themselves.

· Arrests are made — but often only of political rivals.

· But corruption can be cleaned up – Australia, now one of the world’s cleanest nations, was a long-time Wild West of lawlessness. Singapore is now a model of probity, but in the 1950’s it was awash in corruption. Bolivia is one of the world’s most corrupt nations, but for a time a reformist mayor gave residents of its biggest city, La Paz, a reprieve. Ferdinand Marcos, of all people, cleaned up the Philippines’ tax bureau.

· Corruption also distorts spending. There is evidence that when levels of graft are high, governments spend less on education and health and more on public works — projects (passports) chosen not for their value to the nation but for their kickback potential.

· Corruption greatly discourages foreign investment.

· The transition to democracy tends to be a very corrupt period, during which shaky institutions, rapid privatisations and unclear rules contribute to the problem. Countries recently emerging from dictatorship tend to be more corrupt than the dictatorships they displaced.

· Mexico shows how easy it is to fight corruption once a government really wants to — and how hard it is to reach that point, despite what presidents say in their inaugural addresses.

· Another problem was the thicket of requirements necessary for getting goods through customs (bureaucracy at Mombasa port) – there were 16 steps, hence 16 opportunities for officials to solicit bribes. Gil Díaz got Mexico’s congress to convert customs to the system now in use in most of the world. Major shipments now had to be handled by licensed customs brokers, who would inventory the merchandise and calculate the correct duty. The 16 steps became 3. A process that had taken as long as a month was cut down to 10 minutes. From one month to the next, officially collected (KRA) duties jumped by 30 percent. In addition to raising revenue and greasing the movement of goods, that reform also curtailed corruption.

· Every week, Gil Díaz flew to a different post for a surprise inspection, not even telling the pilot where he was going until the plane was in the air. (Maitha)

· Gil Díaz changed the behaviour of customs workers by removing opportunities for theft and bribery and increasing the probability of their being caught. In short, he made illegal acts difficult.

· In his book ”Controlling Corruption,” Robert Klitgaard, now dean of the RAND Graduate School in Santa Monica, Calif., shows how in some of the most unlikely places corruption has been fought using such simple administrative reforms. His most spectacular example is the cleanup of the Philippine Bureau of Internal Revenue under that renowned graft-buster Ferdinand Marcos. It is amusing to recall that Marcos declared martial law in 1972 in part to combat corruption. Three years later, he installed Efren Plana, a respected judge, as the commissioner of internal revenue. Plana fired about a hundred of the most corrupt officials. He set higher professional standards and banned the hiring of officials’ relatives. Previously, tax assessors won promotion by bribing their superiors. Plana developed incentives that gave promotions and cash prizes to the most effective and fairest assessors. He brought in outside auditors and instituted frequent audits and spot checks. He recommended changes to simplify the tax laws, so that an individual agent’s discretion was reduced. In short, he used strategies any first-year business student could have designed.

· Gil Díaz’s reforms were similarly straightforward. ”It’s not that I’m an administrative genius,” he says. ”These changes were simply logical.”

· All those inaugural speeches declaring all-out war on graft? Lies. It’s actually easy to clean up corruption, absurdly easy, when you want to. What is difficult is really wanting to.

· Once corruption has become the norm, the system spits out those who try to fight it (Gladwell Otieno & Ahmednassir Abdullahi). In Argentina, President Fernando de la Rua, keeping a campaign promise, reduced the slush fund used to pay off legislators. But when Congress would not pass his labour-law reforms, 11 senators were said to have received bribes from members of his cabinet. When de la Rua went on to retain the two cabinet members accused of bribery in a cabinet reshuffle (Government of National Unity), the vice president, Carlos Alvarez, protested. The vice president ended up resigning. Those accused of bribery outlasted him. And the labour reforms passed.

· Corruption was found to be spectacularly concentrated in Mexico City (Nairobi) People in the capital stopped by a transit cop reported paying a bribe 69 percent of the time.

· Until elections were instituted in 1997 (1992), Mexico City’s mayors were appointed by the P.R.I. (KANU) All three mayors since then have come from the Democratic Revolutionary Party (P.R.D.), a leftist party that broke away from the P.R.I. (LDP?)

· Mexico City’s leadership today seems to think it is doing enough just by not being the (KANU) P.R.I. The P.R.D. (NARC) has fallen victim to a common misconception: corruption is the other guys.

· Politicians everywhere seem to believe that things automatically change when they (Ndwiga) win, when in fact the corporate culture of corruption is usually so strong that it swallows any party’s good intentions.

· ”You want the parties to take on the administrative process,” says Federico Reyes Heroles, the director of Transparency Mexico (Githongo), ”not simply to say, ‘When the saints come to power everything will be O.K.’ I have no doubt that mayor AMLO (Kibaki) is honest, but the important thing is the system.”

· Of course, along with a corrupt political culture, Mexico City’s leaders have inherited problems that make it difficult to change that culture.

· While the P.R.I. mafiosi (KANU) at the very top have been swept out of city government in the last few years, the municipal workers’ union (councillors) protects lower-level workers from being fired. City officials could try to take on the union but the P.R.D. (NARC) wants control of the union’s 100,000-plus members and its formidable election machine.

· It’s just one example of the single biggest reason corruption persists worldwide: fighting it requires alienating the influential groups and people — from labour unions to billionaire businessmen — who keep politicians in office and help them get things done.

· Ask Mexico City officials (Cabinet Ministers) how they are fighting corruption, and they point to the comptroller and the City Council’s auditor (Ringera & KACC). But these agencies are crippled by narrow mandates and tiny budgets – the office that monitors the price of public-works projects has only recently started using computers and reports from the City Council’s auditor regularly come out two years late.

· Corruption’s dirty little secret: the people’s cry that they are fed up with having to pay bribes is an exaggeration – the vast majority of citizens (Kenyans) who complain about corruption are full participants in the process. (Author) “I hate corruption enough to write an article about it, but I bribed my garbage man every Friday, as did all my neighbours. Should I complain to my garbage man’s boss? He probably enjoys a percentage of my tips.”

· Despite the complaints of citizens, the corruption accompanying an ordinary transaction in Mexico City usually begins with them. (Author)”In a neighbouring registry, an official had offered to do it for a large bribe we paid a gestor, or coyote, to help us with the transaction, and at least got mostly done in one morning. An acquaintance who went alone needed four trips.”

· Everyone complains, all the time. But when bribery is the only way to get services without taking a week off work, people bribe. What people (Kenyans) really need, of course, is a system that doesn’t require bribery to get things done.

· Nor do many people here believe in their own ability to influence a process of change.

· Officials here (MP’s) ignore corruption because they can — it doesn’t cost them at election time. Most voters have more urgent needs than clean government, like jobs, security and food (maendeleo). And if voters don’t really believe that corruption will ever disappear, then they figure they would be chumps not to get their own little piece.

· Votes here are not won through good service but through caudillo-style favours to constituent groups. The P.R.I. (KANU) no longer runs Mexico City, (Kenya) but its political system still does. Mayor AMLO (Kibaki) may be personally puritanical, but he relies on P.R.I.-style (KANU) electoral games to maintain political support. The strategy works. In midterm elections last month, Mexicans rewarded the nation’s two major political machines.

· Throughout the countryside, the P.R.I. (KANU), which never stopped doling out goodies, made a comeback. (Note: KANU has no more goodies to hand out and is losing most by-elections)

· In the Philippines, Efren Plana’s reforms slowly eroded, and they crashed completely when President Marcos apparently decided to install cronies in the tax bureau in the mid-1980’s to help his family avoid taxes (Mwiraria?) and to produce money for his 1986 (2007) re-election campaign.

· Even in places where officials have the power, initiative and imagination to clean house, their work can dissolve into nothing when the desire flags (Ringera).

· Still, I have yet to meet a Mexican (Kenyan) who says that President Fox (Kibaki) is doing much of anything to fight corruption, except those who work for him.

· The year after Fox (Kibaki) took office, more people actually thought corruption was rising rather than going down. I believe that this public perception of Fox’s failure is wrong, but it is understandable.

· His (Kibaki) is a notoriously lethargic presidency. Rooting out corruption was a theme — the theme — of his party. No one could have lived up to the hopes invested in him.

· Another reason for the public perception that Fox has failed is that his administration has chosen not to attempt widespread prosecutions for corruption (Ndwiga)– and when it has gone after big fish, it has so far failed to land them.

· For most Mexicans (Kenyans), and indeed, people everywhere, jailing the big fish is synonymous with fighting corruption.

· But in general, Fox has been right to emphasize other strategies. Prosecutions of past thievery (Goldenberg and Ndungu report) consume money and time better spent elsewhere. Especially in dysfunctional judicial systems like Mexico’s (Kenya’s), they often fail, and even when people do go to prison (Somaia), the event is so rare that it has no deterrent effect on the behaviour of current officials.

· But Fox (Kibaki) has actually made important investments in the future of clean government. He is bringing the anticorruption agency (KACC) up to global standards. And at his urging, this year Congress created a federal civil service. It will professionalize government and cut down on patronage, nepotism and jobs allocated by the applicant’s willingness to pay kickbacks to his superior. (Note: However Kibaki scuttled the new constitution which Kenyan’s believed would have reduced corruption)

· As Mexico City (Kenya) shows, general disgust about corruption does not produce change. Only when powerful sectors (private sector, donors and diplomats Clay) demand specific new ways of doing business do reforms occur.

· To call Mexico, where civil society is barely breathing after years on the P.R.I. (KANU) payroll, a successful example of corruption-fighting is an overstatement at this point. (Note: civil society has turned a myopic eye to NARC) But it might not be in a few years. ”

· In Mexico, as elsewhere, (anti-corruption) fences go up and fences fall. They remain standing only when a government (Kenya) knows that its fortunes are tied to the fences, that if the fences topple, the government topples along with them.

Where is Mexico today?

· According to the Economist Intelligence Unit, Mexico’s largest party, the PRI (KANU), has reason to be optimistic at the start of 2005. It scored numerous electoral successes in local and statewide contests last year, which have increased its prospects of regaining the presidency in 2006 after a six-year hiatus.

· The PRI’s president, Roberto Madrazo (Uhuru or Biwott?), has been able to claim success for mobilizing the party vote in the local polls, thereby strengthening his authority over the party and his chances of securing its presidential nomination. Given the party’s weak finances, another factor that will work in Mr. Madrazo’s favour is his ability to forge alliances with important financial backers, such as the controversial Hank Rhon brothers.

· Barring any major upsets, Mr. Madrazo will almost certainly be the PRI’s presidential candidate in 2006. And given the troubles afflicting the Partido Accion Nacional (PAN), (NAK) the party of President Vicente Fox, and the left-leaning Partido de la Revolución Democrática (PRD) (NARC), Mr. Madrazo’s chances of capturing the presidency are good.

· The PRD, meanwhile, generally had a poor year in 2004. The “videoscandals” (Anglo-leasing) that broke in March and exposed corruption at the heart of Mexico City’s government, which is run by a PRD mayor, have been extremely damaging for a party that has always sought to emphasize an anti-corruption agenda. The videoscandals were followed by the launch of the process to strip the mayor, Andres Manuel López Obrador, the PRD’s (Kibaki or his preferred successor?) best prospect of winning the presidency in 2006, of his parliamentary immunity, in a case that could yet endanger his ability to run.

· In the last quarter of 2004, the PRD suffered other setbacks. The arrest on October 9th of Gustavo Ponce Meléndez, the Mexico City administration’s former finance minister, demonstrates the extent to which the videoscandals have the potential to continue to harm the party. Mr. Ponce had been a fugitive since March 2nd, shortly after the release of a video showing him betting large sums of money in a casino in Las Vegas. Mr. Ponce is being held at La Palma, a maximum-security prison in the State of Mexico, and is being investigated for illicit enrichment. Following Mr. Ponce’s arrest, the criminal investigation he faces has the potential to reveal damaging facts that could incriminate Mr. López Obrador.

· So far, Mr. López Obrador (Kibaki) has been able to distance himself from the corruption scandals. Indeed, a poll carried out in mid-November by a national newspaper, Reforma, indicates a slight rebound in Mr. López Obrador’s popularity in recent months, with 34%—up from 32% in August—of those polled saying they would vote for him, compared with 26% for Santiago Creel Miranda, the frontrunner for the PAN candidacy, and 24% for Mr. Madrazo, the favorite for the PRI candidacy.

· When asked to give a preference for a particular party, regardless of its candidate, the PRI (KANU) comes out top in both polls. The November El Universal poll showed that 29% of those polled supported the PRI, followed by the PAN with 27% and the PRD with 23%. Similarly, the Reforma poll, using a slightly different methodology, found that 36% of those asked said they thought it likely that the next president would be from the PRI, with 25% believing him or her to be from the PAN, and only 22% from the PRD.

· The electorate’s apparent preference for the PRI appears to underscore its disillusionment with the ineffectiveness of the first non-PRI (non KANU) government in 71 (40) years and by the PRD’s failure to project itself as a convincing alternative party of government.