PUBLIC ACCOUNTS COMMITTEES AND CORRUPTION

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Rasheed Draman Director, Africa Programs Parliamentary Centre

Structure of Presentation z z z z z z z

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Key Messages Parliamentary Centre and Corruption What is Corruption? The role of PAC in Financial Scrutiny Case Study 1: Pioneering Work in Ghana Case Study 2: The Sponsorship Scandal in Canada Final Comments

Key Messages z z z

PAC is a very important institution of Parliament Its role is central to ensuring accountability, fighting corruption and to enhancing Parliamentary oversight But PAC cannot do its work alone. It needs allies – –

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The Media, but one that is focused on issues The Auditor General

Freedom and Access to Information legislation is crucial in helping PAC do its work effectively The Role of the Chair is crucial Consensus is key

The PC and Corruption/Oversight z z z z z z

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Our Mission Our commitment to ensuring strong and effective Parliaments The new aid relationship and oversight The PC around the world The PC, GOPAC and APNAC APNAC’s work – Country chapters – Focus APNAC achievements

APNAC Achievements z

Ratification of Anticorruption Conventions - AU and UN Conventions in Uganda, Ghana and Zimbabwe

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Advocacy of Anticorruption legislation - Access to Information Act – Uganda 2004 - Public Ethics Act; Anticorruption and Economic Crimes Act; and Privatization Bill – Kenya - Proceeds of Crime and Money Laundering (Prevention) Bill-Kenya 2004 - Amendment of Electoral Law – Benin 2006

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APNAC Achievements (2) z

Advocacy to set up Anticorruption Commissions - Anticorruption commission Act – Kenya - Amendment to anticorruption bureau Act – Tanzania 2007

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Successful advocacy to amend parliamentary rules and procedures - Standing Orders of Tanzania parliament, 2004 - Electoral practice in Benin (ban on use of campaign tools such as T-shirts), 2006

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What is Corruption? z z

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Corruption occurs when organizations or individuals profit improperly through their position in an activity Corruption can be found in all countries but is particularly widespread in states where the legal system, mass media and the public administration are weak and undeveloped Three levels of corruption are usually referred to: petty corruption (bureaucratic corruption), grand corruption (political corruption) and state capture (corruption which affects the entire state apparatus)

What is Corruption? (2) z

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Petty corruption is when a public servant, for example a customs officer, doctor or policeman, extracts illegal fees from the general public.\ Grand corruption is characterized by the involvement of high politicians and senior civil servants who take advantage of their positions to enrich themselves in order to stay in power. This often involves large international bribes and secret bank accounts in foreign banks. It is often promoted by businessmen from the rich countries who do not regard giving bribes to civil servants in developing countries as a crime but rather as accepted behavior

What is Corruption? (3) z

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State capture, arises when weak states allow businessmen and other powerful people in the country to exert an influence on legislation, regulations etc, with the effect that competition in the private sector is distorted Corruption always means that money is paid upwards, i.e. to those who already have a position, power and money. It is the poorest groups that are most severely affected by corruption. For example, it can be difficult enough for poor people to afford to go to a doctor when they have to. If the doctor must also be given a bribe to do his job, poor people might just not have enough money

The Role of PAC z z z z z

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Parliaments are about oversight, even if they have other functions And oversight starts with the Public Accounts Committee The primary role of a PAC is to examine whether monies are spent according the wishes of parliament This is Ex post scrutiny function Parliamentary engagement with the budget normally has several stages. First, parliament votes public moneys, then it might monitor budget execution. Finally, parliament has to consider whether budget implementation complied with its wishes

The Role of PAC (2) z

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The audit of accounts has traditionally been performed by a body distinct from the legislature, mostly an auditor general. But it is parliament that is tasked with considering the results of such an audit While some legislatures do not have a dedicated committee to perform this function, many legislatures have established PACs for this purpose This is especially the case in the Westminster tradition of government, where parliament has retained only minimal and usually symbolic ex ante control over the budget, and instead focuses on ex post scrutiny

Case One: Financial Scrutiny in Ghana z z

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The Parliamentary Centre as a long-term partner of the Parliament of Ghana Budget Support and the concern of the donor community re ‘disappearance’ of their traditional tools of accountability The development of a DFID funded project with a focus on the PAC and AG’s Dept. But also, other accountability institutions

Case One: Ghana (2) z z

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The October 2007 public hearings The meeting considered the Report of the Auditor General on Public Accounts of Ghana for the Year ended December 2004/2005 The public sitting of the PAC generated a lot interest among the general public including civil society organizations and political parties Many Commentators on the process agree that the process opened the audit stage of the budgetary process to the public and thereby contributing to openness and transparency of the budget process

Case One: Ghana (3) z

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Whilst there is general agreement that the process will induce accountability in the use of public funds, the exposure of cases of incompetence, mismanagement, fraud and dishonesty in the management of public funds sounded very alarming to the entire citizenry Associated with the different forms financial misconduct is the evidence to the effect that there is generally poor records and data management within the public sector PAC’s decision to go public has been applauded, with the hope that merely naming and shaming individuals and agencies in engaged in fraudulent conduct can contribute to reducing corruption

Case Two: The Canadian Sponsorship Scandal Origins z Canada and Quebec z The 1995 referendum on Quebec sovereignty z On Oct. 30, 1995, Quebec and the rest of Canada faced the prospect of breaking apart as Quebecers decided whether to separate from Canada z Though they voted to stay by the narrowest of margins, the referendum provoked questions about Canadian identity and Quebec's place in Confederation 15

Case Two: The Canadian Sponsorship Scandal (2) z z z z z z

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Fund set up by the Liberal government of the time to promote federalism in Quebec About $332 million spent on the program The fund was supposed to raise the profile of Canada in Quebec and prevent any future attempt to secede But it was not clear how the money was handed out No application forms for the fund There were rumours that the money was little more than a vehicle to reward loyal Liberal supporters

Case Two: The Canadian Sponsorship Scandal (2) z

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The Globe and Mail – under the Access to Information Act – tried to find out why the government paid $550,000 to advertising firm Groupaction Marketing for a report that could not be found This sparked a series of events The Auditor General investigated the program and condemns it as ‘scandalous’

Case Two: The Canadian Sponsorship Scandal (3) z

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She found that $100 million was paid to a variety of communications agencies in the form of fees and commissions and said the program was basically designed to generate commissions for these companies rather than produce any benefit for Canadians According to the AG, Public Works officials ‘broke just about every rule in the book’ when it came to awarding contracts

Case Two: The Canadian Sponsorship Scandal (4) z z z z

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Enter the Public Accounts Committee PAC conducted live public hearings Startling revelations as officials contradicted each other live on TV Canadians angered by revelations

Case Two: The Canadian Sponsorship Scandal (5) Consequences z A number of senior government officials lost their job and were prosecuted/jailed z In June 2004, thanks to the scandal, the Liberals saw their majority evaporated into a minority government z PM Paul Martin appeared before a commission. The first time in living memory since a sitting PM was forced to testify before a commission z No confidence vote and Liberals voted out 20

Final Comments z z z z

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It is clear PACs have enormous powers to hold governments to account Their work should not be a witch-hunt but an effort to ensure that citizens get what they deserve The role of the media is paramount in ensuring accountability Also important to emphasize the importance of Freedom and Access to Information