Anti-corruption diagnostic for Argentina : an overview of three reports and general recommendations

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.