Report No. 20133-AR Anti-Corruption Diagnostic for Argentina An Overview of Three Reports and General Recommendations Volume l: Main Report July 30, 2000 Public Sector Group Poverty Reduction and Economic Management Unit Argentina, Chile and Uruguay Country Management Unit Latin America and the Caribbean Region Document of the World Bank CURRENCY EQUIVALENTS (Exchange Rate Effective January 16, 2001) Currency Unit = Argentine Peso Argentine Pesos 0.995 = US$1 US$1.005 = 1 Argentine Peso Vice President: David de Ferranti Country Director: Myrna Alexander Sector Director: Ernesto May Lead Specialist: Paul Levy Task Manager: Linn Hammergren Table of Contents Glossary of Names and Acronyms .........................i Biographies ........................ iii Acknowledgements ........................ iii Introductory Remarks ........................ iv Executive Summary ........................ vi Background .........................1 Procurement .........................5 Findings .........................5 Short-Term Recommendations ...................................................7...................... ...7 Medium-Term Recommendations ................................................................................8 Long-Term Recommendations ...........................................................9... ..........9 The Detection and Investigation of Corruption ................................................. 10 Legal Framework ................................................................ 10 Impediments arising in formal and informal practices ....... 10 Recommendations ........ 13 The Right to Information as a Means of Controlling Corruption ............................. 16 The Legal Framework ............................................. . .................. 16 Extent and Limits of Real Access to Information ..... 17 Actions Taken or Under Discussion in Argentina ....................................................... I 8 Conclusions and Recommendations ........................................................................... 19 Toward a National Anti-Corruption Strategy ........................................................ 21 Illustrative Elements for the Elaboration of an Anti-Corruption Program ........ ..... 24 Volume II: Annexes 1. Investigation Report - prepared by Maria Gabriela Femrndez (October 14 - November 10, 1999) 2. Esquema General del Derecho a la Informacion como Mecanismo de Control a la Corrupci6n en Argentina, by Cristina Motta, December, 1999 3. El Estado de las Operaciones del Regimen de Contrataciones Publicas en Argentina Mejoras Recomendadas para Combatir VulnerabilidadesyAbusos, by Jaime Sdnchez V. October, 1999 Glossary of Names and Acronyms AGN - Auditoria General de la Naci6n, Argentina's external auditing agency, attached to the Congress, created by Law 24.156 (Administraci6n Financiera y de los Sistemas de Control del Sector Publico Nacional). CPI - Corruption Perception Index, instrument developed by Transparency International to rank nations as to level of perceived corruption; based on a series of international polls and surveys. Defensor del Pueblo de la Naci6n - Ombudsman's Office created under the 1994 constitutional reforms to control administrative acts of omission or commission prejudicial to individual or community rights and interests. The Defensor is selected by the Congress, but operates autonomously, serving a five-year, renewable term. DPPT - Direction for the Planning of Transparency Policies; division within the Anti- Corruption Office which most closely approximates the responsibilities of the former ONEP. Fiscales - Variety of meanings; here used to denote prosecutors in criminal or disciplinary investigations and trials. (See Public Ministry, Fiscalia de Investigaciones Administrativas below) Fiscalia de Investigaciones Administrativas - Executive branch entity created in the 1980s to investigate non criminal public sector malfeasance. Its relative inactivity over the past few years has created uncertainty as to its role and some suggestions that it be eliminated. Following its intervention, a recent decree (467 of 1999) attempts to specify its activities and relationships with other entities (e.g. SIGEN) with related responsibilities. Habeas datum - Relatively new legal right being adopted in Latin America, guaranteeing individuals access to information governments hold on them. Impugnaci6n - Post-award administrative protest available to participants in a bidding process, objecting the award itself Libros de queja - Books traditionally kept by public agencies to record complaints registered by individuals NGOs - Nongovernmental organizations Oficina Anti-Corrupci6n - Located in the Ministry of Justice, this office, established by the de la Rua government, inherited many of the functions performed by ONEP, and adds several others, including a mandate for investigating allegedly corrupt acts in the executive branch. ONC - Oficina Nacional de Contrataciones, created in 1994 to oversee and regulate contracting processes in the executive branch. Located in the Ministry of Economy and Public Works and Services ONEP - Oficina Nacional de Etica Ptiblica, Argentina's executive branch ethics office, established by decree under the Menem government. Responsibilities were educational and preventive. It also was charged with handling the assets declarations process. Replaced by the Officina Anti-Corrupci6n. Oposici6n - Pre-award administrative complaint available to participants in a bidding process. usually objecting the format, standards, or content of the bidding documents Procuraci6n General del Tesoro - Office heading executive legal services, the Executive's chief counsel. In the late 1990's also assumed some responsibility for investigating reported corruption, but has no prosecutorial powers. Public Ministry - With recent changes in the Federal Criminal Procedures Code has assumed responsibility for prosecuting crimes. Investigative responsibilities are shared with the instructional judges. Headed by Procurador General de la Naci6n (roughly comparable to US Attorney General). Secretariat for Public Administration - Executive branch office officially charged with overseeing and setting norms for performance of specified executive branch administrative systems (e.g. training, information policy). SIGEN - Sindicatura General de la Naci6n, Argentina's executive branch agency for internal control TI - Transparency International, international non-profit organization dedicated to combating corruption. Biographies Linn Hammergren, the research coordinator and author of the overview document, is a Senior Public Sector Management Specialist at the World Bank. She has a Ph.D. in Political Science and has worked for twenty years with international assistance programs in public sector and judicial reform, corruption and related areas. She has also done independent research and published numerous articles and books on these themes. Jaime Sanchez, the author of the report on procurement, is an Ecuadorian with twenty-five years experience in procurement systems and project auditing. Most recently, he has advised the Government of Bolivia on the elaboration of new procurement norms with an emphasis on anti-corruption and transparency and worked with the Bolivian Comptroller General to develop systems for auditing projects. In Ecuador, he has held a series of government posts, including that of the General Manger for the Petroleum Company. Maria Gabriela Femrndez, the author of the report on the detection and investigation of corruption, is a specialist in strategic planning and organizational analysis with a B.A in Political Science and a Master's degree in Public Administration. She has directed judicial reform programs financed by the IDB and USAID, and has worked as a consultant in related themes for the UNDP, the European Union and the World Bank. Most recently, she served as the principal advisor to the Ecuadorian government's development of an anti-corruption strategy. Cristina Motta, author of the section on public information, has a law degree from the Universidad de los Andes (Bogota, Colombia) and a Master's degree in law from Harvard University. She has done research on justice and corruption and taught the "Theory of Law and Ethics" at Los Andes. She was an advisor to the President of Colombia on the topic of administrative corruption and has done other World Bank consultancies in the areas ofjustice and gender. Acknowledgements The research team is indebted to many individuals within and outside of the World Bank without whose collaboration this report would never have been written. We would specifically like to thank Myrna Alexander, Director for the World Bank Country Managing Unit for Argentina, Chile, Uruguay and Paraguay; Paul Levy, Lead Economist and Anchor for that region; Jacob Gammelgaard, Sr. Public Sector Management Specialist (World Bank) and Richard Werksman (U.S. Department of State) our two peer reviewers; as well as other members of the concept paper committee for their various contributions to pushing this project from inception to completion. We also are particularly grateful to members of the former Argentine National Office of Public Ethics (ONEP), of the current Anti-Corruption Office, and of the US Office of Government Ethics (OGE) for their intellectual and moral support. Amalia Mattio (ex-ONEP), Roberto De Michele (Anti-Corruption Office) and Stuart Gilman (U.S. OGE) deserve special mention for the time they dedicated to us. Various other World Bank staff members, officials of the past and present Argentine administrations, and private citizens generously contributed both time and materials to enhance the consultants' efforts. We will not list them by name here, but they appear in the respective annexes to this report as the individuals interviewed. Finally, the entire team thanks Patricia Mendez of the LAC Public Sector Unit for the excellent logistical and administrative assistance she provided. The World Bank, its Board of Executive Directors or its members countries, as well as all of our supporters are of course absolved of any responsibility for errors we may have committed in our findings and interpretations. . . Introductory Remarks One of the challenges of writing on a topic like transparency is that it is very much a moving target. For both international assistance agencies and individual countries, this is an area with a steep learning curve, and as entities learn, their programs of activities change rapidly. The present report is caught up in that phenomenon. Based on research done in Argentina in late 1999, it was first drafted on the eve of a change of national administrations. While then President Carlos Menem had begun to introduce an anti-corruption program, his successor, Fernando de la Rua, vowed to make combating corruption a major priority of his government. His first eight months in office demonstrated the reality of that promise, bringing a long list of new initiatives, including the following: * The elimination of the old National Office of Public Ethics (ONEP) and the creation of an Anti-Corruption Office with a larger staff, and an expanded mandate, reflected in its internal structure of two divisions, one to investigate suspected cases of corruption and the other (DPPT) to develop anti-corruption policies - including those in the areas marked of high risk by the present Diagnostic. - The Anti-Corruption Office's continuation of the assets declaration program begun by ONEP, its processing and analysis of the 30,000 declarations collected by the latter body, and changes in the design and application of the program to resolve problems encountered. * The drafting of a new "Reglamento de Contrataciones del Estado," approved by decree 436/2000 (published June 5, 2000). The regulations are intended to increase the transparency, efficiency, and equity of contracting procedures and to this end stipulate the use of anti-corruption clauses. * Decision (by Resolution MJDH No. 17 of January 7, 2000) that the Anti- Corruption Office is the entity responsible for applying the Ethics Law (Ley No. 25.188 of September, 1999). This resolves a problem of the Ethics Law having been entrusted to a National Commission which was never created. * The creation of a plan, and an office responsible for its implementation, within the Secretariat for the Modernization of the State, to put all public tenders and awards on the internet, thus making them publicly available. The same office will also be charged with making available a list of other types of information included in the Ethics Law. * The Anti-Corruption Office's (DPPT) adoption of a pilot plan for holding public hearings on proposed public works projects. * The Anti-Corruption Office's proposed signing of an agreement with a number of local NGO's to monitor the results of the assets declarations. * The initiation of a research program (again by the Anti-Corruption Office's DPPT) to diagnose the incidence and form of corruption in the public sector. • Initial measures taken toward the drafting of a new law on access to information. iv * A number of well-publicized investigations of allegedly corrupt acts occurring under the prior government and an equally well publicized investigation of conflicts of interest entered into by 46 high-ranking officials of the current administration. As all of these measures were taken after the present study was completed, it can offer no comment on their efficacy, adequacy, or impact. We only note that many of them coincide with recommendations made in the diagnostic, although they were clearly reached independently by the Argentine government actors. Undoubtedly, by the time this report is published, the list of new initiatives will be still longer and may well enter areas this study has completely overlooked. Given the enormous public concern about the issue, and indications of areas of vulnerability (both in findings discussed here and in the later research by the Anti-Corrupticin Office), it will clearly take some time to make permanent changes both in the real situation and in public perceptions. However, the actions taken since December 10, 1999, indicate a political will to move ahead and an unprecedented dynamism on the part of those charged with designing and implementing the new policies. While some of our recommendations have been overtaken by events, we are hopeful that the study will serve Argentina's on-going campaign for greater transparency, and that both it and the campaign itself will be useful to other international agencies and countries interested in embarking on similar efforts. v Anti-Corruption Diagnostic for Argentina Executive Summary 1. In mid 1999, the World Bank initiated diagnostic studies of three topics relevant to improving public sector transparency in Argentina. The topics proposed for study -- procurement, the detection and investigation of corrupt acts, and the role of public information -were seen to be critical to any Argentine Government program to combat corruption. The three resulting papers (attached as annexes) are synthesized in the present overview which provides a number of specific recommendations for improvements and a suggested course of action for the future. The research focused almost exclusively on the federal government, but we believe it holds lessons for the other levels (provincial and municipal) as well. 2. It should be noted from the start that the entire report describes the situation prior to the assumption of office by President Fernando de la Rua (December 10, 1999). President De la Rua has begun an anti-corruption program, which is addressing many of the problems identified here. This report does not and cannot assess these new efforts, and to avoid any impression to the contrary, the overview section has been redrafted in the past tense. The attached consultants' reports have not been so modified, but should be read with this understanding. 3. In addition to their specific findings in each area, the three studies reached several common conclusions as to the nature of the problem and its remedies. Among the most important were the following: • The existing legal framework was not the source of the problem; new laws were not the answer, although there were areas where changes of detail might improve the incentive structure or otherwise facilitate the elimination of tempting opportunities or unusual impediments to effective control. Likewise, Argentina was not short of organizations needed to control or investigate corruption. Rather than the creation of new ones, steps were required to ensure that those in existence dedicated more resources to this task, that they were adequately staffed to do so, and that their confused and sometimes overlapping mandates were rationalized. a There was a need for more regulation of many procedures (which for the most part could be done under existing laws and in fact was required by many of them). Many problems of omission or commission originated in a lack of clear guidance as to how functions should be carried out. vi * Effectively fighting corruption requires a more proactive approach to the task; agencies charged with controlling or investigating corruption cannot limit themselves to reviewing formal rule-compliance, but must actively seek out problems. * Given complaints about the lack of transparency and the belief that adequately informed citizens can play an important role in encouraging government probity, it is essential that the government develop a strategy for making more information available to citizen groups. This goes beyond the right to access (which requires a specific request). However, it will require improved record keeping by public organizations the operations of which were also prejudiced by their failure to collect and analyze data essential to planning and evaluating performance. * Especially if it provides more information to citizens, the government must also improve means for receiving complaints and introduce a systematic and transparent process for handling them. * Although the three areas selected are critical to any anti-corruption program, they will be most effective if incorporated in an overall national strategy which draws on the resources and conmmitments of topmost leadership, the public sector as a whole (and in all its branches) and broader society. vii Anti-Corruption Diagnostic for Argentina Background 1. Over the past decade corruption has emerged as a topic of concern for governments and their citizens around the world. It remains debatable whether this development originates in a higher incidence of objected acts or factors which encourage more attention to what has "always been." Among these factors can be counted the emergence of less authoritarian governments with less complacent citizenry, the increased availability of information on government performance both within and among national populations, a more active and more critical press, economic changes linked to globalization and the creation of new economic ties and actors, cultural change, and the activities of a variety of national and international nongovermnental organizations which have made this their theme. Among the latter certainly can be counted Transparency International whose corruption perception index (CPI) has caused considerable controversy because of its ranking of countries from most to least corrupt. Still another factor, which has affected the outlooks of international assistance agencies as well, is a vastly altered appreciation of the costs of corruption and the obstacles it poses to efforts to promote economic and social development. 2. Corruption is a shorthand term for a variety of illicit behaviors. While opinions vary as to which activities should be included and how the overall concept should be defined, most observers agree that the central issue is the abuse of public resources (both material resources like finances and equipment and more abstract ones like power, and position) for private benefit. Although the usual emphasis is on public resources,' private as well as public parties may participate in the corrupt act, either as the initiators, or the voluntary or involuntary accomplices. Bribery, the quintessential act of corruption, usually involves a public and private party, but it may also occur only between public actors (as when one official pays another for a promotion or to overlook some administrative infraction). Sometimes corruption requires only a single public actor (the misappropriation of public property). 3. Because of the variety of types of actions included it is somewhat difficult to generalize about the effects of corruption. In recent years, efforts to do so demonstrate two trends: increased attempts to quantify the impact and a general conclusion that it is on the whole, negative. The latter trend in particular represents an interesting departure I Some commentators would also include misuse of private resources, expanding the definition to improper and unlawful enrichment by public or private officials, or their enrichment of those close to them, through misuse of the position in which they are placed. Robert P. Beschel, Jr., "Asian Development Bank: Anticorruption Policy." World Bank PREM seminar series, July 13, 1998. For the purposes of the present report, this addition is not relevant, but it bears noting. 2 Interestingly, when this is effected by a private actor, it is usually regarded as theft, not corruption, indicating the importance placed on at least one participant's holding public office and so legitimate claim to control over the resource in question. 1 from arguments offered only a few decades ago, that corruption could be a beneficial phenomenon, a way of redistributing wealth, providing a living wage to public servants, greasing the wheels of an overly rigid bureaucratic apparatus, providing access to groups normally excluded from public benefits or even from private economic activity (as in the case of ethnic minorities in some countries), and of otherwise reducing transaction costs for socially desirable operations. Current observers do not deny that in certain instances, corruption may have this effect, but they now argue, with a growing amount of empirical evidence, that on a whole, corruption is not beneficial and that where it is particularly widespread it poses immense obstacles to such common goals as increasing productivity, economic growth, equity, citizen security, and the creation of legitimate governance bodies and institutions. 4. As regards bribery alone, it is now argued that it impedes long-term foreign and domestic investment; misallocates taleint to rent-seeking activities; distorts sectoral priorities and technology choices; pushies firms underground; undercuts the state's ability to raise revenues thus leading to ever-higher tax rates being levied on fewer and fewer citizens; regressively falls on trade and service activities performed by small enterprises; and discourages citizen compliance with all rules and regulations.3 5. Studies of the impact of corrupition in individual cases begin to provide some notion of the economics costs incurred:4 * Some estimates calculate that as much as $30 billion in aid for Africa ended up in foreign bank accounts, an amotnt twice as large as the combined annual GDPs of Ghana, Kenya, and UJganda. * Studies in several Asian countries revealed that their governments paid from 20 to 100 percent more for goods and services because of corruption. * Businesses .i one North American city cut $330 million from an annual waste disposal bill of $1.5 billion by r idding the garbage industry of Mafia domination. * When customs officials in one Latin American country were allowed to receive a percentage of what they collected, there was a 60 percent increase in customs revenues in one year. * Estimates from one European country concluded that corruption inflated outstanding government debt by as much as 15 percent or $200 billion. In another city, anti-corruption measures reduced the costs of infra-structure outlays by 35 to 40 percent. 6. Aggregate quantitative analysis; provides further evidence of the negative effects. World Bank research using data from 39 industrial and developing countries, after controlling for income, education, and policy distortion, found a positive correlation between perceptions of a low level of corruption and the ability to attract foreign investment.5 IMF economist Paolo Mauro, using data for over 70 countries during the 3 From Cheryl W. Gray and Daniel Kaufman, "Corruption and Development," World Bank, PREM Notes. May, 1998. 4Beschel, op cit. 5 World Development Report, 1997. Washingnon D.C: the World Bank, pp. 102-9. late 1970s and early 1980s, found that corruption "is strongly negatively associated with the investment rate, regardless of the amount of red tape." His model indicates that a one standard deviation improvement in the "corruption index" translates into a 2.9 percent of GDP increase in the investment rate and a 1.3 percent annual per capita increase in the GDP growth rate.f6 Responses from over 3,000 firms in 58 countries surveyed in the World Economic Forum's Global Competitiveness Survey for 1997 showed that firms reporting most involvement with corruption also had to spend more (not less) time negotiating with bureaucrats and public officials.7 7. Although none of these studies definitively measures the real rate of corruption, having to rely on participants' reports and perceptions, they fairly effectively demolish the notion that corruption offers any sort of net benefit to societies. Along with less systematic observation, they also counter the Robin Hood thesis, that corruption redistributes wealth from the rich to the poor. Indeed not only does corruption appear to lead to further concentrations of wealth; it also has other negative social impacts, intensifying partisan and ethnic conflicts, crippling the merit system, ruining the efficiency of national and sub-national agencies, and generating an atmosphere of distrust and cynicism. In this light, citizen protests about corruption and their demands for effective anti-corruption programs are hardly a surprising development. 8. Argentina is no exception to these universal trends. Press coverage of real and alleged abuses, a series of well-publicized investigations, and the debates in the October, 1999 national elections placed attention to this issue at an all time high. Public opinion polls conducted over the past few years indicated that citizens identified corruption as one of the most pressing national problems. The country's ranking in the aforementioned CPI raised concerns about its international image, despite criticisms of the index's validity. Thus, if the actual incidence of corruption in Argentina was still unknown, citizen perceptions constituted a problem in their own right - suggesting a two-part challenge confronting the government. The first is eliminating undesirable actions (a real reduction in corruption). The second is reducing citizens' cynicism about how the state operates. The two problems could be treated separately. However, it is unlikely that perceptions can be altered much without a real reduction in at least some of the actions that give rise to it. Similarly, a successful reduction will have a limited impact if citizens do not change their views to match a new reality. 9. When the prior Argentine administration suggested that the Bank conduct research on corruption, it apparently had this two-part dilemma in mind. Given that the study could not cover all aspects of the topic, the three topics selected on the basis of joint discussions - procurement, detection and investigation, and public information - represent areas where citizens have most protested either the direct costs of corruption or the state's apparent lack of interest in attacking it. Procurement was not the only area where corruption was believed to exist, but it was most frequently mentioned by citizens. If their perceptions were correct, it represented substantial losses to the public budget. 6~~~~~~~~~ 6 Paolo Mauro, "Corruption and Growth." Quarterly Journal of Ecnomics, 681 (August, 1995), pp. 681- 711. 7 Cited in Gray and Kaufinan, p. 1. 3 Detection and investigation responded both to citizen beliefs that the corrupt were not punished and the fact that any attempt to combat corruption will require credible sanctions. Finally, public information was chosen because of a perceived lack of transparency in public operations, a belief that citizens themselves might help to monitor and detect irregularities, and the need to increase awareness of and thus support for actions taken to combat the problem. T hus, the larger purpose of this study is to generate recommendations for eliminating specific instances of corruption, strengthening the state's capacity to continue the battle inr these and other areas, and mobilizing citizen support for and direct participation in the effort. 10. A successful anti-corruption campaign must both link these three areas and add a number of other activities. If corruption, as the studies suggest, is a systemic problem in Argentina, then a systemic and systematic program will be needed to deal with it. In a final chapter of this overview, a proposed program, drawing on the individual studies, is presented. The preceding sections review the individual findings, conclusions, and recommendations in each area, based on investigations conducted in late 1999. Since its assumption of office in December of that year, the administration of President Fernando de la Rua has already initiated some of the actions suggested here. However, because the underlying problems are so complex, we believe that aside from its historical value, the present document can still serve as a source of further ideas as well as of support for the ongoing campaign. 11. It is important to recognize, that between 1989 and 1999, constitutional and related legal reforms introduced important changes in the state's economic and regulatory activities and in the systems of financial and administrative control for Argentina's federal government.8 Collectively these have set the stage for more effective, efficient, and transparent public sector operations. Among the changes effected are the enactment of Law 24.156 on financial administration and control (Administraci6n Financiera y de los sistemas de Control del Sector Pubibico Nacional), and its creation of an internal control body (Sindicatura General de la Naci6n) and an external Controller (Auditoria General de la Naci6n); Law 24.284 regulating the organization and operation of the Ombudsman, (Defensor del Pueblo); Law 24.946 creating an autonomous Public Ministry; Decree 1492 of August 23, 1994 creating the Subsecretariat for the Administration of State Goods; Decree 1545/94 creating the system of Contracting and the National Contracts Office (ONC); Decree 152/97 creating a National Public Ethics Office (ONEP); Decree 41/99 approving an Ethics Code for the Executive Branch; Law 24.759 approving the Inter-American Convention on Corruption; and the Law on Public Ethics (25.188, enacted September 29, 1999). To this should be added a massive and largely completed privatization campaign and a simultaneous if still ongoing decentralization program. These policies substantially reduced the federal government's direct economic activity while decreasing its share in the remaining public budget. Of course, while reducing the space for private manipulation of federal funds, they cannot eliminate it (the state remains as an important purchaser of private goods and services) BAlthough as mentioned, only federal institutions are covered in this report, similar changes have been adopted by some provincial govermnents. 4 and to some extent may displace the problem to the provincial level - where it will also have to be addressed. Procurements Findings 12. Although the study did not attempt to verify or measure the actual level of corruption, it did document numerous complaints and suspicions about its occurrence. Generally, in the area of procurement of goods, public works, and consulting services, as well as in the sale of privatized companies and concessions, there was a widespread impression that corruption had been an important factor. More importantly, and especially as concerns the first three areas, there were specific formal and informal practices which increased vulnerability and thus merited rectification - to either eliminate a real problem or a mere perception of its existence. 13. Despite the significant changes introduced in the 1990s, there were areas within the federal public sector requiring further attention if potential abuses were to be adequately controlled. Among the most important were the following: • Failure to enact a new contracting law: Law 24.156 (Financial Administration and Control Systems) eliminated all of the 1956 Law on Accounting (Ley de Contabilidad) except for the sections relating to public contracting. These few articles had yet to be replaced by a specific law. They had instead been modified and elaborated over time by a series of decrees of more limited application, which, while they often fulfilled their specific purpose, tended to create confusion and less rather than greater standardization in procedures. * Inadequate secondary legislation and excessive dependence on partial regulations and exceptional procedures: The situation as regards the purchase of goods was less problematic, governed by adequate and sufficient regulations. That for the contracting of public works, consulting services, and concessions was far less satisfactory, giving rise to excessive discretion and a frequent reliance on emergency decrees and exceptional procedures. * The National Contracts Office 's (ONC) incomplete assumption of its role of setting and enforcing procurement norms: Its recent creation to oversee public sector contracting was a positive step, but the office remained relatively unknown, even by the principal professional and business associations. One of its major accomplishments was the creation of a list of prices for goods frequently purchased by the state. It had not made similar strides in regulating public works and contracts for services. 9 Based on report prepared by Jaime Sanchez, independent consultant, November, 1999. 5 * The lack of complementary rules to guide the contracting process: Still needed were clear definitions of administrative procedures, requirements for the production of information and statistics on results, standardized bidding documents and contacts, clear guidelines on the formation and operations of evaluation committees (comisiones de preajudicacion), etc Their absence was a further source of excessive discretion and in turn more space for abuses. a Failure to incorporate clauses to guarantee transparency in existing regulations, bidding documents, and contracts: Not only were specific clauses not included; contracts did not stipulate sanctions for those engaging in nontransparent practices. * Public entities' noncompliance with regulations as regards making information available to the public or attention to complaints or denunciations: Notifications of tenders and awards were published in the Official Bulletin in Buenos Aires and in the provinces, but the practice was criticized for reasons of timeliness, adequacy of coverage, and accessibility. There were also complaints about the failure to respond to denunciations and the relative absence of information on the progress of specific cases. * Failure to use formal mechanisms for registering protests and mediating conflicts: The mechanisms existed, but when post-award conflicts occurred, private parties preferred to work out their differences with the contracting agency rather than recurring to the Arbitration Tribunal or the ordinary courts. * Inefficient cperation of the various control organs and especially those for internal control: Inefficiencies arising in a duplication of efforts, an emphasis on compliance with formal regulations, and a failure to complete investigations led to an impression of inactivity and a general policy of impunity. * Inadequate emphasis on the kinds of audits more likely to detect corruption: The A uditoria General de la Naci6n, despite its organization and technical capacity, did not devote sufficient resources to management audits or special audits of contracting procedures and results. * A series of additional practices which compounded the public impression that no one was interested in monitoring corruption: Contrary to the official policy, little publicity was given to cases of corruption under investigation or brought to justice. Informal practices tended to discourage individuals from making claims, made access to information difficult, and privileged a formalistic investigation focusing on whether or not legal procedures had been carried out. As regards this last point, a finding of all three consultants was that control as practiced in Argentina, by focusing on compliance with formal procedures, tended to miss the areas where corruption was most likely to occur. This was less a problem of the law than of orientation - for corruption to be controlled, a more proactive 6 approach is required, one which looks for problems rather than only checking to see whether procedures have been followed. Short-Term Recommendations 14. The recommendations in the area of procurement were divided into short-term (within a year), medium, and longer-term actions. The short-term actions did not require legal changes although they did involve drafting and issuance of more specific instructions in many areas. Among the recommended short-term measures were the following: • The ONC should prepare guidelines (instructivos) to standardize administrative procedures in all three types of contracting, but especially for public works and consultant services. These should include specifications on the composition, functions, and responsibilities of evaluation committees; the statistics kept and information to be made available on awards, progress, and results achieved; the internal control system; information to be provided for external control; internal authorizations, etc. * The ONC should also prepare model bidding documents and contracts for all types and modalities of contracts. These should allow the contracting entities to simply add the specific terms of reference for the work or consulting service to be provided, thereby limiting the space for manipulation. * Government entities should be required to include proposed procurements in their annual operating plans, and this requirement should be enforced. * A decision should be taken as regards efforts to construct a single Registry of Contractors, Providers of Goods, and Consultants.'0 Under the existing system, a legally required registry was only partly implemented and coexisted with the pre- qualification stage of the normal bidding process where much of the same information was again required. If the registry is retained, it should be fully implemented, but separated from the qualification process (i.e. it should not be used to prequalify bidders as this might encourage manipulation to exclude some of them unfairly). Adequately maintained and updated, and with appropriate safeguards against manipulation, it could be used to supply basic information in the prequalification stage and perhaps more importantly, to provide checks to guard against conflicts of interest (see below). * Standardized evaluation criteria should be developed along with forms to be filled out by members of the evaluation committees. The bid evaluation and contract award criteria for goods, works, and services of a non-intellectual nature should be based on substantive responsiveness to the bidding documents and 10 Such registries have fallen out of favor with many international experts, who believe they add little value and may encourage certain vices. However, those consulted were not adament about eliminating the registry, only stressing that if implemented, care should be taken to avoid possible negative consequences. 7 specifications and price. ONC might want to study ways to imnprove the specification and application of minimum requirements for bid responsiveness. * The evaluation methodology for consultant services should be primarily based on the quality of the technical proposals with a reduced weight given to price. In the evaluation of technical proposals, primary importance should be given to the qualifications of the team proposed for the assignment, with a limited weight given to the experience of the firm. The firm's experience should be considered when preparing the short-list. Other factors such as methodology and transfer of knowledge to government counterparts should also be considered in the evaluation. * Both the model contracts and bidding documents should include clauses defining fraudulent practices and the relevant sanctions as well as a clear definition of conflict of interest. * Training programs should be designed and implemented for public servants who will be involved in contracting; a multiplier program could be used to enhance their effect. • Contracts for the supervision and administration of contracted works should be more specific as to the responsibilities of those holding them and should require a final report evaluating the impact, costs, use of equipment and problems encountered. * The signing of anti-corruption pacts with economic associations and as part of proposals and contracts should be encouraged. Medium-Term Recommendations 15. The medium-term steps introduce a few new practices (public audiences prior to the contracting of major public works) while also expanding on some of the measures introduced over the short run: * Further specify the principles guiding public contracting, the rights and responsibilities of the public and private parties, the circumstances in which emergency or exceptional procedures will be allowed (toward the end of restricting their use) and provide a clear definition of conflicts of interest. * Prohibit direct contracting when all bids are rejected on the first round. * Prohibit post-award negotiations from introducing substantial changes to price or the specifications of the works, ,goods, and services originally put to bidding. • Introduce public hearings for major public works projects to allow discussion of the possible damages to public or private interests. 8 * Better define opportunities for registering pre- (oposici6n) or post- (impugnaci6n) award protests and introduce measures to ensure their availability. These administrative appeals should be rapidly decided so as not to create further delays. Those not satisfied with the administrative response could seek judicial recourse for cause, but without prejudice to the progress of the award. * Introduce measures to combat conflict of interest. These might include incorporating information on the shareholders and participants in a company in the registry of potential contractors (if one is maintained) or as part of the pre- qualification process, so that they can be compared with the officials who will participate in the selection. * Change the practices of the internal and external control organs to focus on the content of the contracting process and the results of contracted works. Introduce specialized training for their personnel in the evaluation of contracts and contract performance. Long-Term Recommendations 16. The longer-term actions focus largely on the enactment of a new contracting law. The development of this law should, however, begin immediately to ensure the ample participation of the interested economic and professional associations. If an appropriate law can be produced earlier, that is to the better. However, the principal concern is that it receive adequate prior discussion and consultation so that it effectively represents what the country needs and can execute. The annexed report provides an outline of the law with suggested contents. There is room for disagreement on some of the details of any proposal, but not on the principles informing it. The overall recommendations suggest that the vulnerabilities of the existing procurement system did not derive from its general structure but from two secondary elements: * A failure to go far enough in laying out standardized procedures a An insufficient attention to controlling behaviors giving rise to citizen complaints 17. Addressing the first element would require greater activity on the part of the ONC. This should be based on consultations with interested parties (both potential contractors and civil society organizations) to ensure that the new regulations are realistic and will be followed. The second element would require strengthening the capacity of officials in the ONC, the contracting entities, and the various control organs (SIGEN and AGN in particular) in the oversight of contracting procedures and management and a change in the orientation of the latter bodies in particular. 9 The Detection and Investigation of Corruption,, Legal Framework 18. The analysis found no major defects in the legal framework, concluding that this aspect of combating corruption in Argentina would not be resolved with new laws. Nonetheless, it also identified specific areas where either additional guidelines and regulations were required (for the processes of procurement, appointments, and especially for the handling of requests for information and complaints and denunciations of irregular actions) or particular legal provisions might be reconsidered. Among these were: * The rules on and definition of conflicts of interest (where the burden of proof might be shifted more toward the individual suspected of a conflict rather than lying in large part with the complainant 2) and nepotism (where the prohibitions introduced in the Code of Ethics were virtually eliminated with its stipulation that hiring of relatives was prohibited "unless they were qualified for the position".) * Various legal measures discouraging reporting of suspected abuses - these included the concept of false accusation (which might be further refined so as not to be so readily invoked); certain informal or legally backed requirements as to making known the identity of a complainant; and the absence of legal and other protections for witnesses and whistle-blowers. * Certain legally based redundancies and gaps as involve the responsibilities for receiving, investigating, and reporting crimes and infractions. As discussed below, while redundancy has its uses, it often became a pretext for avoiding actions - wl-ich became the responsibility of some other agency. * Provisions in the Criminal Code placing a greater sanction on the individual who offers a bribe than on the official who receives it. A better formulation might reduce or eliminate (depending on the circumstances) the sanction for the party who reports a bribe, regardless of whether he is the briber or bribee. Impediments arising in formal and informal practices 19. These are of two types, those aspects related to how complaints were made, received and directed; and those relating to the specifics of the investigative process itself As regards the first, there were (as partially discussed above) various legal factors discouraging the filing of complaints by either private citizens or public officials. Based on a report prepared by Maria Gabriela Fernmndez, independent consultant, November, 1999. 12 In situations like this there is something to be said for the utility of bright line rules - blanket prohibitions. While they reduce flexibility and may exclude certain harmless activities, given the current level of concern about use of public office to further private personal projects, at least over the short run Argentina might consider adopting a policy of exclusive dedication. In this formulation, outside employment is usually precluded and it is up to an office holder or employee to prove the merits of an exception for a particular case. 10 Additionally, there was the perceived futility of doing so, and the vicious circle it created -- the sensation that little would be done (and that the price of complaining could be high for the individual actor) discouraged cooperation and thus increased the sense and perhaps reality of impunity. Argentina does not have a history in which denunciations have been taken seriously, and citizens and public servants did not see this as a particularly effective action on their part. 20. Further problems arose in how the system received and directed the complaint. The multiplicity of legally responsible entities -- ranging from those within each agency (the complaints books or "libros de quejas" and the respective legal departments), through the courts, the Public Ministry, the Office of the Prosecutor for Administrative Investigations (Fiscalia de Investigacion Administrativa), the Solicitor General's Office (Procuraci6n del Tesoro), Auditor General's Office (AGN), Internal Control System (SIGEN), Human Rights Ombudsman, and National Office of Public Ethics'3 (ONEP) -- created considerable confusion as to real responsibilities for both initial and follow-up actions, and a lack of clarity as to real functions that extended even to members of the legal community. For the general public or ordinary civil servants, the question of where to lodge a complaint and what to expect of the receiving agency further discouraged such actions and caused disappointment when responses were not forthcoming.14 For many of these entities, the confusion as to roles and duties encouraged a dominant strategy of passing the responsibility on to someone else. 21. In the case of administrative infractions in particular, if records on complaints received were kept, they were not readily available, making it virtually impossible to determine how many had been processed or with what results. The traditional complaints books or registries long ago ceased being a credible means for addressing this task and should be eliminated. The more recently created Fiscalia de Investigaci6n Administrativa had been so inactive that it had been intervened and only recently reactivated. At the end of the 1990s, the Procuraci6n del Tesoro moved into the role that the Fiscalfa had virtually abandoned and conducted at least one major investigation -- of the customs agency. However, its handling (and dismissal) of the 1,800 complaints of corruption presented by the Congress and private parties was widely criticized as superficial, 5 and its responsibilities vis-a-vis a reinvigorated Fiscalia Administrativa or ONEP16 remained to be defined. 22. What did seem clear was that the Procuraci6n's reliance on the legal departments of individual agencies to handle administrative investigations was misplaced and that internal control of administrative infractions (or the initial investigation of criminal 13 This office no longer exists. Its functions were transferred to the newly created Anti-Corruption Office, located in the Ministry of Justice, which, unlike ONEP, also has a clear responsibility for investigating suspected corruption. 14 It was reported by ONEP for example, that among the hundred complaints first received by that agency very few represented incidents on which any actions could be taken. Furthermore, the agency was criticized for not doing investigations, although that was not part of its mandate - which was instead to direct the complaint to the appropriate government office. 15 These are reported and discussed in the Procuraci6n's website. 16 See note 13 above. 11 corruption) required individuals with specialized training in this area. SIGEN with its internal auditors was also not prepared for this task. While ONEP during its existence in the Secretariat of the Presidency also received and forwarded complaints, neither it, nor the Ombudsman, whatever their other achievements,17 were reported to have accomplished much in this area. In shcrt, the diffusion of responsibilities for administrative investigations among a variety of agencies, none of which had been adequately equipped for the job, only encouraged a dilution of accountability and a tendency for cases to be lost in the system. And at the very least, the lack of adequate and publicly available records on processes initiated or on their transfer to other entities served to encourage these results. 23. As the handling of criminal complaints might also originate in any of the above- mentioned offices, it was prejudiced from the start by their inadequacies. However, when the action was clearly criminal, the initial responsibility lay with the Public Ministry or the judiciary. Both organizations did have clearly defined procedures for how and by whom investigations would be conducted. The one exception to this rule was the discretion exercised by the instructional judge as regards requiring an investigation by the Public Ministry or handling it without the latter's participation. Nonetheless, the absence of statistics or follow-up mechanisms tended to obscure the case's trajectory as well as its final result. In effect, the most frequent complaints made by private individuals and organizations interviewed concerned the paralysis or obstruction of cases involving alleged criminal corruption. This subjective impression was reinforced by those statistics available, which demonstrated that few of the cases that entered the judicial system actually resulted in a conviction. This did not mean that justice had not been done, but the Argentine public, based on their perceptions of the incidence of punishable acts, took this as a sign that something was amiss., Speculative explanations ranged from the difficulties of actually proving corruption (a problem in any system and compounded in Argentina by the disincentives facing witnesses) to overt interference in the processes. 24. As in the specific case of procurement, a further problem was that those organizations responsible for ex officio control (that is investigations originating in their own actions) did not seem technically prepared or oriented toward the task. The example of the Procuracion del Tesoro's investigation of the customs agency suggests what was missing - a proactive approach to unco-vering problems using individuals with the appropriate technical skills working in specialized task forces. Significantly, the Procurador borrowed investigative staif for the work in customs and placed them full- time on the assignment. As this example also suggests it is not necessary to create new entities for this purpose - those that exist already had the formal mission. The secret is to direct their activities to performing it and give them the technical capacity to do so. However, their existing staff of institutional lawyers and ordinary auditors and judges would either have to be retrained or supplemented with specialized agents. 17 It should also be recognized that the processing of complaints of this kind of administrative malfeasance was not a major part of the official mission of either agency. ONEP's role was largely preventive and the Ombudsman appeared to have dedicated its efforts to other areas - environmental rights and defense of certain marginalized groups. There was nothing wrong with either of them receiving complaints, but an effective attention to the latter requires organizations staffed and empowered for this sole purpose. 12 Recommendations 25. At the most general level the recommendations from this section point to the need for an overall anti-corruption strategy, one that transcends the problems related to detection and investigation alone. They also begin with the finding that the problem was neither in the legal framework nor the absence of sufficient organizations and would probably not be resolved by more laws or the creation of more public entities. The problem was structural, but as such lay in the spaces and opportunities created through informal practices, perverse incentives, and a failure to address the problems more proactively. As regards measures to improve the impact of investigation, the following revised policies and procedures were indicated: * Legal and normative dimensions: Despite the general adequacy of the legal framework, in its substantive, procedural, and organizational content, there was room for improvement. - This includes greater legal protections for witnesses and whistle-blowers, a narrowing of the definition of "false accusation," and a redefinition of conflict of interests. - In addition, recent changes in the criminal investigative procedures might be expanded to include the principle of opportunity (the ability of the responsible official to discard less important cases so as to devote more time to those of higher priority) and if not the elimination of the instructional judge, then the automatic delegation of complex cases, and especially those of public sector corruption, to a group of specialized prosecutors (fiscales). a Organizational dimensions: Once again the need was not for more entities working in this area, but for changes in their composition, mandates, and division of labor. - The organization (until late 1999, ONEP) charged with managing the assets declarations should have a fully autonomous status, and its director and sub- director should be named in a manner to ensure this - possibly by the Congress on the basis of lists presented by professional associations and civil society organizations and with ample opportunity for public observations and vetting. - The creation of new entities to handle corruption within and thus dependent on the executive should be avoided. Instead, the individual and collective efficacy of existing organizations should be strengthened with policies prioritizing activities to combat corruption, rationalizing the division of labor among them, and ensuring that they operate in a coordinated fashion to cover all the gaps. 13 E Operational dimensions - use of assets declarations: because in their current form,18 these are a recent innovation, it was not yet possible to evaluate their impact. Consequently, during the second year of their application, a study is recommended focusing on the following questions so as to allow improvements in the mechanism: - Their utility in detecting and investigating suspected cases of illicit enrichment - Their utility in discouraging acts of corruption - The efficacy of the responsible organization in the analysis, detection, and further investigation of irregularities - Adequacy of follow-up by the responsible organizations once irregularities are reported On the basis of this study, any necessary alterations should be made in the design of the declarations, their application, and analysis. In addition, the organization responsible for receiving the declarations should construct a data base on their contents to facilitate identification of irregularities visible over time as well as common problems which might require the design of new policies and regulations. (Funds from the Institutional Development Grant, already approved by the World Bank, are available for this work.) * Operational dimensions - detection and investigation - Elaboration of a simplified system within the executive branch for the reception of denunciations and the procedures for handling them - Creation of specialized structures, methodologies, and instruments within the internal and external control systems (SIGEN and AGN) specifically for the detection of instances of corruption - Design of integrated processes for the handling of suspected cases of corruption, whatever the origin of the suspicion, so as to avoid their "disappearance" in the system - Elimination of the complaints registries (libros de queja), and their replacement with an integrated, automated information system which records the initiation of each complaint and the steps taken to its resolution - Publication of statistics on complaints received and resolution, and measures to allow citizens to know the outcome of any specific case in which they have an interest In short, the process of detection and investigation required a focus on finding cases of corruption and the reorientation of existing organizations for this purpose. 18 Assets declarations were required for years, but were stored, unopened except under judicial order. Hence, as one observer noted, there was no way of telling whether those submitting them had stuffed the envelopes with blank paper, or with an endless series of questionable holdings. 14 * Creation of synergies and public responsibilities: This is important in all aspects of the anti-corruption strategy, but specific measures were also recommended in the area of detection and investigation: - The formation of working groups incorporating members of all relevant agencies, or other measures to allow exchange of information and experience and to identify specific problems, especially those resulting from inadequate coordination - The design of information systems to allow the tracking of cases across institutions and facilitate identification of related incidents * Incorporation of the private sector - Establishment of monitoring mechanisms with the participation of non- governmental entities, especially in areas of high vulnerability - Establishment of a working agenda with the participation of members of professional associations and NGOs to define commitments and strategies on the part of both the public and private sectors. * Focus on key areas of "high risk" - In areas characterized by a high potential for wide-spread corruption (procurement, appointments, and certain services where contact with the public encourages the exchange of payments to facilitate normal attention, e.g. tax collection)19, special effort should be made to identify and limit the opportunities for abuse, via the creation or strengthening of complaints services, simplification of procedures, elaboration and publication of procedural manuals, and increased citizen participation and information. There are also other measures which can help to avoid the institutionalization of corruption in these critical agencies-such as rotation of staff. * Measures to increase transparency - Strengthening of the role of civil society organizations in monitoring abuses with increased access to information - Design and implementation of public information systems directed at three kinds of clientele: social comptroller, researcher, and internal consumption (for improved institutional planning). - Selection, with the participation of interested civil society groups, of prioritized areas for the immediate initiation of these systems 19 These include "fees" paid to obtain a normal service or for special treatment (including an official's failure to take a required action -e.g. overlook an infraction of the rules). 15 The Right to Information as a Means of Controlling Corruption2o 26. The assessment of how access to information can be a tool to combat corruption is divided into three sections: a review ol the general legal framework and its adequacy for guaranteeing access to information; the identification of additional laws and practices which inhibited that access; and a series of recommendations as to how the situation might be remedied. Despite the emphasis on the "right" to information, the reason for selecting this theme was a more pragmatic one: the belief that an adequately informed citizenry can function as a source of control on potential abuses and irregularities, provide important inputs to policy, and develop more positively cooperative relationships with government. 27. A series of examples in Argentina and elsewhere offer evidence for that belief, but do not provide further guidance as to the most effective or efficient means of making information available - especially, for example, as regards: * The kinds of information most essential to citizen control * The need, if any, to distinguish among kinds of publics and the types of information they require * The extent to which ease of accessibility is sufficient, as opposed to the automatic publication of certain data bases * If the latter is the case, which ones, in which form, and directed at whom. 28. Since the costs of collecting and disseminating easily intelligible information on all public services and actions could be substantial, selectivity is obviously needed - both as systems are installed and over the long run. As the diagnostic's major finding was that little information was easily accessible and still less was freely and automatically provided, Argentina had the advantage of developing a program from scratch. The problem was where to start. The Legal Framework 29. As in the review of procurement and investigation, Argentina's fundamental legal framework was adequate insofar as guaranteeing freedom of access to information. However, little had been done to operationalize these basic principles and enforce compliance with them. Reviving efforts to produce a general law on these themes thus could be an enormous aid. Over the shorter run, an executive decree or a series of intra- agency regulations (offering the opportunity of experimentation with solutions) might also be useful. Moreover, there was no official policy as regards the types of information agencies should gather, and how and in what form it should be made available. This posed a potential problem both for those seeking information (who might not find what was 20 Based on a report by Cristina Motta, independent consultant, December, 1999. 16 available useful) and for the agencies themselves, which, should these guarantees be enforced more stringently, might find themselves unable to produce information in a timely and efficient manner - because they did not collect it in any systematic form, or possibly, not at all. 30. The rights recognized in the Constitution, through international treaties, in secondary legislation and in judicial decisions include freedom of expression, freedom of the press, and the right of access, both to public information and to "private" information or that held by the government regarding the individual making the request (habeas datum). These are not absolute rights, and some explicit exceptions are normally recognized in national and international doctrine-state security, personal privacy, and during the investigative stage of a criminal case. However, Argentina's lack of secondary legislation elaborating on the basic rights also meant that other proposed exclusions (for reasons of sensitivity, for example) had not been made explicit. 31. Absent legislative refinement, further official interpretations of the basic principles have lain with the judiciary. In their general statements and specific rulings, the courts have usually been supportive of citizens' rights to be informed. However, they have been criticized as circumscribing the rights of the media unnecessarily and for affording excessive protections to their own members. Supreme Court decisions distinguished between the written press and radio and television, holding that the latter may be subject to censorship, including prior censorship, because of their fundamentally greater impact and accessibility to youth in particular. As regards alleged libel and slander whether by the press or by individuals, the Court recognized that different standards applied when public figures were the targets (where actual malice must be proven), but excluded judges from this category. In 1998, the journalists union reported 44 cases ofjudicial action against reporters originating in this interpretation. The press also objected a judicial ruling requiring them to reveal sources of published information held to be inaccurate or untrue. Extent and Limits of Real Access to Information 32. There were two immediate legal problems: most existing legislation spoke of freedom of access to information, not of a state responsibility to provide it absent a specific request; and in any case, the absence of secondary legislation left this as an abstract right or duty with few guidelines as to how it should be performed or effective sanctions for failure to comply. There were five additional practical impediments: Inadequacy of organizational statistical and record keeping systems: If the state is to provide information, it must have it in the first place. A few examples suggested that improving their own data collection and management systems would be a necessary prior step for some state agencies, and probably for a majority of them. For example, statistics kept by the Ministries of Labor, Education, and Health failed to include types of data which might measure the success of their major programs. Moreover, without common criteria and formats across agencies, it would be impossible to cross check the validity of individual data sets or to compare results and performance. For example, judicial statistics had only been aggregated at the 17 federal level since 1997, and did not coincide with those managed by related institutions (Police, Public Ministry, etc). * Laws criminalizing slander and libel, andfurtherjudicial interpretations: These provided powerful disincentives, especially as regards media's reporting of information they had obtained. There was an extensive corpus of legal opinions on this matter, but it seemed to contain internal contradictions, left certain questions unresolved, and, as noted, was criticized as unduly restrictive of press activity. * Refusal ofpublic entities to provide information, apparently in direct violation of their duty to do so: For example, according to reports from NGOs and lawyers, the judiciary refused to provide copies of the assets declarations of judges, the Direction of Immigration refused information on foreigners detained or deported, and the Federal Police refused to supply statistics on those killed or detained by police (until the court overruled this decision). The Auditor General's Office (Auditoria General de la Naci6n) did not publish the results of its investigations, and provided information on only half of them (those in which the auditors agreed on findings) to the Congress, but did not make them publicly available. * Public entities' internal rules as regards what they would release and the procedures to be followed by those requesting it: The courts were an example. The Federal Supreme Court required that those wishing to review judicial statistics or read judicial sentences (a right it has upheld in the abstract) make a written request, including the reasons for their interest. The Court itself reviewed the request, taking up a year to make a decision. Provincial courts also imposed restraints on judicial contact with the press or made case files available by internet but in encoded form, intelligible only to lawyers involved in each case. • Excessive, useless, or overly compolex information: In providing information to the public in their annual reports, many public entities erred on all counts. It is most likely that they simply had no real criteria for deciding what should be included. An example was the Procuraci6n del' Tesoro 's internet page. While intended to inform the public of the agency's activities, the contents, especially as regards its administrative investigations, were difficult to follow. Actions Taken or Under Discussion in Argentina 33. Citizen complaints about lack of access to information had not gone unattended. Both the Menem and De la Rua governrments had taken the issue under study, introduced proposals, and taken concrete steps to improve the situation. Many of these contemplate the use of electronic media to publish data on agency expenditures, contracts, and official assets declarations. Although not reviewed by the current study, it bears mentioning that within its first month in office, the De la Rua government had proposed or created several new entities, including an Anti-Corruption Office, established in the Ministry of Justice and incorporating functions formerly held by the National Ethics Office as well as a special unit to investigate corruption; a National System for Transparency in Public Expenditures; and 18 an electronic network giving access to all state offices and their information on contracts, finances, and public service management. 34. Individual state agencies had also introduced some measures independently. For example, the Federal appellate courts in Buenos Aires have begun to publish via internet the damages awarded in civil trials. An increasing number of entities had web pages in which they published information they believed to be of interest to the public. This trend is positive, and the individual experiments warrant evaluation for possible wider adoption. Both the province of Rio Negro and the City of Buenos Aires had passed laws intended to strengthen citizens' access to information. The Buenos Aires law (Ley de Acceso a la Informaci6n de la Ciudad Aut6noma de Buenos Aires) reemphasized the rights of citizens to request and receive complete and truthful information from any government entity, and the duty of public officials to respond in a timely fashion. It did place some limits to protect individual's privacy and to preclude opportunistic uses (e.g. access to internal discussion documents prior to a government decision on an issue.) Conclusions and Recommendations 35. There are a multitude of measures, some taken from international experience, some arising from local initiatives which might be adopted to improve the situation. Many of these are interesting, not only as ways to provide information but also to increase citizen understanding of their governments (e.g. the various citizens' days practiced in several European countries at both the municipal and national levels) and increase citizen input to government plans and policies. There is, however, a danger of excessive, undirected and uncoordinated action. A proliferation of experimental efforts may in the end exhaust funding without significantly increasing transparency or lessening popular cynicism. Citizens might conclude that the important facts are still being concealed, this time by a surplus rather than a scarcity of real access. It is also obvious that unless the government is prepared to respond to complaints and questions, better informed citizens could become still more skeptical about its sincerity. 36. Thus, a program to increase and improve information provided to citizens cannot be isolated from an overall anti-corruption strategy. As regards public information alone, there is also a need for a strategy. Its creation does not mean a curb on independent experimentation, but it does imply a concerted attack on the fundamental problems: * Poor recording and management of information by state entities * A tendency to make gaining access to what they have unduly difficult * A failure to provide what is made available automatically, in a form that sQrves some citizen needs 37. It is recommended that the information strategy address the various challenges by parts, dealing with the easiest ones first and proceeding to the more difficult after sufficient study can be done. While it might be tempting (and perhaps most logical) to start with an inventory of what information is available, it is probably more important to work toward 19 some immediate changes in practices and do any such inventory over the course of the program. Based on the diagnosis of the situation, the following are the suggested steps. * Step one: Designation of an official to head the public information program. This individual will be responsible for overseeing the design of, and monitoring the advances in the various program. parts, and for coordinating the activities of the entities involved. He/she should also have a major role in setting overall policy, for ensuring its adequacy, and for its public dissemination. In this step, and in all the others, it is essential that civil society input be actively sought so that the results reflect their needs andperceptions and will attract their support. * Step two: Restatement of the citizens' basic right to information on public operations and an imposition of sanctions for those who deny or unduly complicate its exercise. Over the short run, access will have to be limited to information normally kept by agencies in the format in which they keep it. As a result it will not match all possible requests - if the Ministry of Education does not currently keep records on drop-out rates, courts do not have statistics on the rate of reversals on appeal, or if the statistics are not aggregated or disaggregated in the form requested, then the specific request cannot be met for the time being. In as much as agencies can easily use this as a pretext for not providing information, a process for registering complaints, and an entity responsible for receiving and processing them should also be established (possibly annexed to the office of the program head) with the ability to apply or request sanctions for those who violate this guarantee. * Step three: In as much as this restatement may not affect the courts, or possibly the legislature (if it comes as an executive decree) those entities or branches of government excluded from its effects by virtue of their autonomy will have to reach their own policy. This is also true of provincial governments (including courts and legislatures). The courts in particular constitute a sensitive area. They should, however, be encouraged to review their policies, especially as regards access to basic statistics, declarations of assets, and completed sentences. While they may have good reasons for declaring their exceptional status, a national policy of increased transparency will not work if they exclude themselves from its reaches. * Stepfour: The creation of a data base, disseminated via internet, on one of the most commonly requested types of information (for example on contracts bid and awarded, budgetary allocations and expenditures by agency, or appointments). If contracts are selected, a review (for possible replication) of systems already operating in Mexico and Chile is recommended. The establishment of this system will be an important signal of the govermuent's commitment to the program. However, the creation of additional data bases might be postponed until steps five (and possibly six) are completecl so as not to undercut their effects and to enhance the possibility of an interactive, multi-part system. * Stepfive: Given the apparently poor state of public sector record keeping, a policy of increased transparency must be accompanied by a general information policy. 20 Agreement should be reached on the kinds of records that should be kept, in what form, and how they will be released to the public. Obvious candidates for a first round are budgets (as approved, received, and spent), annual work plans with proposed procurements included, contracts bid and awarded, personnel actions (appointments, status, grade and salary), complaints and disciplinary actions, and assets declarations (for those officials of whom this is required.) * Step six: Individual agencies should develop, on the basis of public discussion and consultations with higher levels, a set of indicators relating to their annual performance, which will be made publicly available, preferably as they occur rather than in end of year reports. * Step seven: Agencies should be encouraged to create or upgrade offices for the reception and processing of requests for information and further simplify the means of handling them. In decentralized dependencies, a single official might be given this responsibility. * Step eight: Various additional measures (public information programs, hearings, citizens days with specific offices) should be adopted on an experimental voluntary basis. Their adoption should be announced and the results discussed and evaluated after a reasonable period (possibly a year's practice). Toward a National Anti-Corruption Strategy 38. As noted in the prior sections, actions in each of these three areas are important, but they will be most effective if couched in terms of an overall anti-corruption strategy. The entering administration has already taken steps in this direction. If it has not already done so, it might want to consider some of the following suggestions: * However clear the law may look to those charged with enforcing it, the study detected considerable confusion among both private and public sector actors as regards the multiplicity of agencies involved in the detection, investigation, and prosecution of cases of criminal corruption and administrative infractions. Attention might thus be given to reviewing and possibly revising their mandates so as to ensure the optimal use of resources and more realistic public expectations as to the role of each. * One extremely important finding in all three reports was the opportunity for public and private agents to act contrary to the spirit of existing legislation because of a failure to rules or overseeing compliance to exercise their ability to set the standards clearly. This was noted in the case of the National Contracts Office, which had the clear, but largely unexercised authority to produce regulations on and models for contracting procedures. It also appeared in the discussion of public access to information - where both a failure to define what this meant (e.g. the time frame for responding to requests, a prohibition on 21 additional requirements for those seeking information) and the lack of a consistent policy on what information public entities should collect (a precondition to providing it) undercut the effect of constitutional guarantees and secondary legislation. * There also is room for attention ito other kinds of deterrent policies. The most important of these is the adoption of more proactive approaches to combating corruption on the part of the AGN and SIGEN, the organs of external and internal control. Especially in the area of procurement, these two agencies should be encouraged and provided with the resources (training and technical assistance) to look beyond formal compliance with financial and administrative procedures to the substance of how awards are made and the quality of the contracted works. Care should be taken, however, that these activities do not increase the level of prior control; they are most appropriate in the ex-post audit phase. It was also suggested that contracts awardecl for overseeing contracted projects should include monitoring of quality, problems, and overall results. * Many opportunities for corruption might be eliminated through the simplification of procedures and inclusion of measures to allow public input and oversight. The two might be combined by allowing principal stakeholders and civic interest groups to participate in agency reviews of operations to identify areas where convoluted or unclear regulations invite irregular behaviors. However this occurs it would be best to have a single authority responsible for coordinating the exercises, while giving the design of simplified procedures to the line agencies themselves. * The assessment identified several areas where new laws were required (on conflict of interest, protection of whistle-blowers and witnesses, "false accusations," and a new contractling law) as well as a need to drawn in other branches (especially the judiciary) and levels of government. It would be helpful to have one agency responsible lor overseeing legal reforms. This would facilitate a coordinated approach while allowing ample public participation in suggesting and responding to proposals. * Finally, as citizens are provided with more information and invited to help monitor public institutions, they will need better information on standards against which behavior will be judged, improved facilities for registering complaints, and access to follow-up on the handling of the resulting investigations. The last two items in particular will require changes in agencies' internal operations and an end to the practice of passing the res]ponsibility elsewhere so that it is most likely lost in the system. Once again, the question is how this would be coordinated and enforced. 39. With or without the inclusion of the above-mentioned suggestions, the development of a global strategy seems preferable to a series of uncoordinated programs. A global strategy should not, however, produce an extensive parallel bureaucracy to 22 implement it, but rather rely on existing offices and officials. Likewise, while citizen involvement is important, this should be seen as a way of providing information on problems, an additional mechanism for monitoring progress, and a source of pressure for results. The responsibility for designing and executing the strategy ultimately lies with the government and the individual agencies, which are best situated to grapple with the technical details. The following table illustrates how such a strategy might be designed and carried out. In general, the proposed program involves four fundamental principles: * Eliminate the opportunities for corruption or make it more difficult to utilize them. * Actively involve the citizenry and the business sector in the commitment to design and implement an anti-corruption strategy. * Attack key areas so as to produce immediate results and legitimize the efforts from the start. * Preach by example - adopt the strictest policies and programs in the Executive Branch especially as regards oversight, control, and follow-up of findings. 23 Illustrative Elements for the Elaboration of an Anti-Corruption Program Area Actions Timing Initial Steps Strategic Designate leaders ST - Name a coordinator for the overall program, directors for its major elements. and development who will be the individuals within each public institution who will direct and monitor progress in responsible for the their respective areas, oversee task forces and working groups, be the point of development and coordination with other public and private agencies, and provide reports on implementation of the advances. To the extent possible, those designated should be existing officials. overall program and not a new parallel bureaucracy. its elements. Design an ant- ST - Establish mechanisms for the design, consultation and elaboration of the strategy. corruption strategy - Incorporate measures ensuring extensive participation by and coordinabon with and a national plan of the public, especially via civil society organizations and private sector associations action. - On the basis of broad public and private sector consultaton, ratify the strategic areas on which the plan will focus - e.g. contracting, appointments, public inforrnation, control, invesfigafion and processing of complaints - and if still necessary, designate their respective lead agency, official coordinator, and consultative working group - Develop short, medium, and long range plans for the strategic elements using inter-agency task forces. - Establish intra-agency working groups (committees, quality circles, 'intelligent nuclei") to set benchmarks and monitor progress in each organizaton and tc generate additional in-house proposals to combat corruption. Declare national ST - Establish a political commitment to the program and the active involvement of the commitment to the press, the private sector, civil society, and the church in implementing, monitoring, program and pressuring for progress. - Define the specific areas of collaboraton of each public and private sector institutional actor and establish means for monitoring and reporting on progress, including civil society participation. - Establish a mechanism and format for issuing periodic progress reports. Legal Change the legal ST - Review current statutes, compare with intemational models, publidy discuss framework to remove alternatives and likely effects. disincentives for witnesses and MT - Draft and adopt amendments to criminal code, criminal procedures code, or whistleblowers, clarify independent laws to enhance protections and remove disincentives. and strengthen concept of conflict of - Adopt new formulation of conflict of interest and amend relevant laws (e g. ethics interest. law) 1D incorporate it for branches of govemment covered. Hold discussions with excluded branches and entities to encourage their adoption of a similar formulation I_______ I_for their members. 24 Area Actions Timing Initial Steps Elaborate secondary ST - Review comparabive experiences for possible models. legislation on "rights to information" to - -Issue an executive decree restating public rights to informabon and prohibiting discourage (within the execubive branch) requirements for justifications, unreasonable delays, unnecessary delays etc. and restrictions, and impose sanctions for - -Promote public discussion with judiciary, provinces, legislature to encourage their those in violation. adoption of similar policies. MT - Draft and enact new legislation regulating how access to informabion will be provided, legitimate exclusions or special requirements, reasonable bmes for delivery, sanctions for noncompliance, protest mechanisms, and agencies' responsibilities for the automatic publication of specific kinds of data. Draft new contracting MT to - Following consultations with public and private sector, review of existing models, law. LT and study of current problems, draft and enact a new law. Draft legislation ST to - First on a pilot basis and then systemwide, replace "libros de queja" with a more creating standardized LT efficient mechanism, induding automated capture of information on initial mechanisms for complaint and any follow-up. Coordinate with new legislabon on protection of agency receipt of witnesses and complainants. public complaints. Detection Insure independence MT - Introduce legal measures to enhance the office's independence. and of the entity charged - Create a process for the selection of the office's Director and Deputy Directors. investigation with managing assets Allow universities, NGOs, and professional associations to nominate candidates, of cases of declarations giving final selection to the Congress. Terms should not coincide with changes of corruption national administration. Evaluate and improve ST - Evaluate immediate needs as regards staffing, training, informaton technology, the assets declaraton and infrastructure to process the declarations, do initial analysis, and respond to format, coverage, public requests for information. Implement a plan to increase resources and analysis, and enhance technical capacity of the office. application. MT - Conduct an evaluation of the inital results, with the participation of public servants, civil society groups, and intemational experts, to identify immediate needs as to technical and operational changes in format, processing, and handling. - Identify the major problems (conflicts of interest, multiple positions, unreported or undervalued wealth or income) uncovered in the first round and develop means to deal with them. - Implement a data base for intemal use and external dissemination of the declarations. 25 Area Actions Timing Initial Steps Strengthening of ST - Standardize and clarify current definitions of unethical behavior so as to eliminate administrative uncertainties and grey areas that may allow abuses. investigation - Establish programs (training, networks of ethic officers, employee hotlines) to inform employees of their responsibilities and respond to their questions MT - Establish uniform procedures (including an appeals process) for handling abuses once detected - Require that data on infractions detected and their handling be maintained by each agency, and that aggregate statistics be publicly available. - Train designated employees (legal staff, intemal auditors) in the detection and handling of infractions. - Design guidelines and procedural manuals to fadlitate the identification and treatment of administrative infractions so that an altemative to criminal prosecution is available for lesser breaches of ethical behavior - Designate a lead office (either the Fiscalia de Investigacion Administrativa, the Procuracion del Tesoro, or some other) to oversee the process and monitor its results throughout the public sector Strengthen or create MT - Create within each public organization an office for the reception of public a system for receiving complaints and designate individual officials in decentralized dependencies. complaints. Require that these offices record complaints and immediately transfer them to the offidals responsible for investigation - Link these records to those maintained by the organization on infractions detected and follow-up activities (including transfer to other agencies) and require that statistics on complaints, investgatons, and disposition be publicly available. - Institute a permanent public information campaign on the processes for making a complaint, the various entities and offices to which it can be presented, and their responsibilities for further action. - Retain the extra-organizational complaints offices (ethics or anti-corruption office, Ombudsman) as an additional source of inputs and for monitoring follow-up. Reorient the practices MT - Evaluate the methods used by the SIGEN and AGN to detect fraud, misuse of of intemal and funds and other instances of corruption. extemal audit bodies - Introduce a policy of providing information on audits initiated and those completed to ensure their in a form accessible to all members of the public. effectve capture of information on LT - Design and introduce additional instruments and programs for use in intemal and corruption, abuses, extemal audits. and other irregular - Establish a manual and automated system for tracking denunciations or findings actions. and use it to assess quality of follow-up. - Identify any unnecessary duplication of efforts between the two control organs and take steps to eliminate them. - Promote exchange of information on intemal activities and findings between the audit entities and other organizatons investigating corruption. Incorporation Take measures to ST - In consultation with private sector groups, identify key points for the creation of of private ensure commitment of agreements on ethics, probity and transparency in both the public and private sector private sector to the sectors campaign and the - Identify a group of 'committed businessmen' to begin the process of agreements inclusion of their and commitments and use them to initiate it. perspectives, - Incorporate members of this group and other private sector representatives in the elaboration of plans and proposals in all other areas. Ask them to join with civil society groups in monitoring results. 26 Area Actions Timing Initial Steps Procurement Increase the ST - Conduct a diagnostic study to identify factors contributing to the ONC's low profile transparency and and take whatever steps are necessary to enhance its ability to fulfill its role. technical character of - Working within the exisf6ng legal framework, the ONC should prepare guidelines to the procurement of standardize contracting procedures, develop model bidding documents and goods, public works contracts (with anti-corruption dauses), and regulate the use of emergency and technical decrees. services. - Enforce requirement that government entities indude proposed procurements in their annual operating plans. - Train public servants on contracting procedures. - Include in contracts for supervision of contracted works the responsibility for reporting on impact, costs, quality, and problems encountered. - Develop a data base on tenders issued, bidders, and awards, for public release via MT to internet. LT - In consultation with business and professional associations and NGOs develop improved mechanisms for protesting contracting procedures and awards, better means for defining and detecting conflicts of interest, improved evaluation criteria, and potential use of public hearngs for proposed works or contracts - Take steps to reorient internal and extemal control organs (SIGEN and AGN) toward (ex-post) monitoring of the substantive aspects of the contracting process and contract performance. Draft and implement a new contracting law (see legal section above), including results of consultations 27 Area Actions Timing Initial Steps Recruitment Establish standard, ST - Establish pre-entry orientation programs to ensure that officials know their and selecton transparent responsibilities, duties and are aware of the ethical and legal limits on their actions. of personnel procedures for - Include as part of the pre-entry orientation for those jobs with a high risk of recruitment, corruption (tax agency, police, customs, etc) a special session on means to evaluation and combat and avoid corruption selection. - Design and implant personnel selection policies in the executive branch and MT to encourage similar actions in the other branches and levels of government. LT - Establish an administrative career service, with transparent, clearly defined procedures for recruitment, selection, promotion, and cessation. - Design and implant transparent qualification mechanisms, eliminating or minimizing the use of rankings based on subjective measures (e.g. interviews). - For those not included in the career civil service - political appointees - publicize openings to be filled, candidates to the positons (with an opportunity for outside observations) and final selections. - Establish means to appeal outcomes of selections procedures, including but not limited to the composition and procedures for a Review Committee. - Introduce transparency through the publication of the results of examinations and other qualification mechanisms, including average scores, rankings, and final selections. - Design prototypical job profiles for the different levels of the public sector. Access to Establish a policy on ST - In consultation with NGO's and business and professional associations, ascertain information information collection, the types and forms of information they most require. Determine to what extent this processing and information is already gathered by the public sector, what remains to be collected distribution which and at what costs. To the extent possible under the existing legal framework, responds to the needs issue regulafions and directives informing agencies of their responsibilities of the organizatons themselves, - On the basis of these consultations and studies, design a program to create a specialized publics, MT public sector information system (for intemal use and public dissemination). and the public as a Among the key areas for inclusion are a) selection criteria, final qualificaton, and whole. lists of candidates for public positions; b) statistics regarding complaints of administrative and criminal corruption, their processing, and disposition; c) tenders offered, bids submitted, and award of contracts for goods, public works, and services;* d) announcements of competitive examinations for public employment, results of the examinafions, and candidates selected; e) any changes negotiated in contracts awarded; f) evaluations of performance of public contracts*; g) prices of goods purchased and estimated prices;* h) assets declarafions of public officials,* i) lists of public employees with salary and position;* j) public budget, by agency, inifial allocation and execution;*k) exports and imports.* I) concessions awarded.* - Begin incremental implementation of the program, with the creation and electronic dissemination of those data bases most easily constructed. - Enact law on public information, including sanctions for those in violation (see legal, above). - Work with individual public entties to standardize and improve collection of data, to introduce key performance indicators, to simplify the reports they issue, and to LT develop the possibility for cross validation of informafion collected. Reduction of Identify and eliminate ST to - lnital candidates here are the use of "reserved funds" (gastos reservados), which areas of practices encouraging MT to the extent possible should be eliminated. Other practices which avoid the discretion excessive discretion normal channels of public control and accountability should also be identified and in the management of eliminated. public resources. I_I_I These and other starred entries are part of the De la Rua government's proposal. 28 29