Jamaica Corruption Assessment Report 9-11-08.pdf

SEPTEMBER 11, 2008

This publication was produced for review by the United States Agency for International Development. It was prepared by Corbin Lyday, Margaret O’Donnell and Trevor Munroe, Management Systems International.

CORRUPTION ASSESSMENT FOR

JAMAICA

CORRUPTION ASSESSMENT FOR

JAMAICA

A subsidiary of Coffey International, Ltd.

Management Systems International Corporate Offices 600 Water Street, SW Washington, DC 20024

Contracted under DFD-I-01-03-00144, Task Order #01

Jamaica Corruption Assessment

SEPTEMBER 11, 2008

DISCLAIMER

The author’s views expressed in this publication do not necessarily reflect the views of the United States Agency for International Development or the United States Government.

ACRONYMS

AMCHAM – American Chamber of Commerce CIDA – Canadian International Development Agency COMET – Community Empowerment and Transformation Project DFiD – Department for International Development, United Kingdom DPP – Director of Public Prosecutions FES – Friedrich Ebert Stiftung FID – Financial Investigations Directorate, Ministry of Finance IADB – Inter-American Development Bank ICAC – (Hong Kong) Independent Commission Against Corruption ITA – Island Traffic Authority JEC – Jamaican Electoral Commission JCC – Jamaican Chamber of Commerce JCF – Jamaica Constabulary Force JDF – Jamaica Defense Force JLP – Jamaica Labour Party JUTC – Jamaica Urban Transit Company LAPOP – Latin American Public Opinion Project MOE – Ministry of Education MOJ – Ministry of Justice MSI – Management Systems International OAS – Organization of American States PNP –People’s National Party PERF – Police Executive Research Forum RICO – Racketeer Influenced and Corruption Organization Act, USC Section 1961 SDF – Social Development Fund UNDP – United Nations Development Programme USAID – U.S. Agency for International Development

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CONTENTS

ACRONYMS...................................................................................................................................I

EXECUTIVE SUMMARY .........................................................................................................III

1. INTRODUCTION

2. ASSESSMENT METHODOLOGY AND APPROACH

3. SPECIFIC FINDINGS BY SECTOR: VULNERABILITIES AND

OBSTACLES TO CHANGE

3.1 Weaknesses of the Justice System

3.2 The State Contracting System

3.3 The Department of Customs

4. PUBLIC ATTITUDES TOWARD CORRUPTION

5. STRATEGIC AND PROGRAMMATIC RECOMMENDATIONS

5.1 Long Term: Moving Toward A Modern And Dynamic System Of Justice

5.2 Short-Term: Engaging The Public Toward Anti-Corruption Action

6. CONCLUSION

BIBLIOGRAPHY

KEY LEGISLATION EXAMINED

LIST OF INTERVIEWEES/MEETINGS

ANNEX 1. STATEMENT FROM CONTRACTOR-GENERAL THAT DPP

WILL PROSECUTE 17 PUBLIC AGENCIES FOR FAILURE TO COMPLY

WITH THE NATIONAL CONTRACTS COMMISSION

ANNEX 2. ANTICORRUPTION FOCUS GROUP LIST AND QUESTIONS

ANNEX 3. ANALYSIS AND RECOMMENDATIONS: CORRUPTION

PREVENTION ACT OF 2000 AND SPECIAL PROSECUTOR BILL OF 2008

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EXECUTIVE SUMMARY

In 2007, a newly-elected Government came to power in Jamaica with a strong anti-corruption focus. It has appointed new reform champions to key positions—particularly in the police and customs—to join other recent change agents. Together, these new officials have begun to use their statutory authority quickly and aggressively to uncover illicit wealth and non-compliance with laws and regulation, or to shake up existing law enforcement institutions and practices. Within the first 6 months of 2008, nearly 50 members of the Jamaican Constabulary Force (JCF)—the most visible arm of both the problem and potential solution—were arrested and charged with offenses linked to corruption. While most of those have been low-ranking officers, the Office of the Contractor General has documented credible allegations of large-scale violations of public procurement regulations. Other higher-ranking allegations are sure to follow.

In July 2008, public opinion polls for the first time listed corruption as the second-most serious problem facing Jamaica, behind crime and violence. Because independent media have followed recent developments carefully and systematically, there is a growing recognition by Jamaican society that such violations are not merely the result of mismanagement or incompetence, but a direct product of a political system that rewards patronage at the expense of transparency. While the way forward may not be clear, there is a growing sense society must take action against corruption in order to win the ‘other’ battles of crime, violence, and the squeeze on the country’s treasury made more acute by huge new increases in energy and food prices. The anti-corruption spotlight has been switched to the ‘on’ position and is now likely to stay that way for the foreseeable future, even as the Government of Jamaica (GOJ) pursues new anti-crime measures and alternative means to enhance food and fuel security.

The most visible champions have taken the reins within a small number of public sector agencies and ministries, such as the Anti-Corruption Branch of the JCF, the Customs Department, the Office of the Director of Public Prosecutions and the Office of the Contractor-General. But their influence in the current environment arguably goes beyond narrow mandates. Indeed, their continued success or failure rests heavily on the degree to which they can secure non-partisan, publicized support for their efforts from the country’s top political leadership as well as on the operational competence of their own organizations, especially at mid-levels. Indirectly, it also depends on the vigor with which the country’s systems of justice can investigate, arraign, prosecute and convict key ‘big fish’ accused of corruption.

Their combined success at more or less the same time will send a powerful message to a cynical and uneasy society that business as usual will simply not be tolerated.

The dynamics of these efforts are complicated and potentially dangerous. As the state moves to tighten procurement, clean up ‘ghost worker’ lists, move from low-level to higher-level targeting of corrupt police and public officials on a non-partisan basis, and move toward political party accountability, it will encounter fierce resistance. Many believe that the assassination of Jamaica Urban Transit Company (JUTC) Chairman Douglas Chambers in July 2008 can be construed to mean that the underworld has thrown down the gauntlet against this effort to ‘take back’ the state.1 Because both Jamaica’s state and

1 On Friday, June 27, during a break between meetings with officials from the University and Allied Workers (UAWU), Chambers was killed gangland-style, dying from multiple bullet wounds. Chambers, a chartered accountant and head of his own firm, had been asked by the Prime Minister to take leave to head the JUTC for a symbolic salary of J$1 per year to help clean it up and reduce losses of nearly $J100 million a month. His murderers initially escaped into the fringes of ‘Fish Ground’—a community in Spanish Town known for its loyalty to the Klansman gang, a garrison community which supports the PNP. Chambers attracted initial attention and controversy

CORRUPTION ASSESSMENT FOR JAMAICA iii society will need help and encouragement to continue to do the right thing, this Assessment urges 3-4 short-term examples of financial and organizational support from USAID/Jamaica in the following priority areas:

Immediate Convening of a National Integrity Roundtable With the consent of the GOJ, USAID/Jamaica, together with other key donors, could extend an invitation to provide organizational support for the convening of top anti-corruption champions in the justice sector, key ministries and public sector agencies, preferably through a non-partisan institute or association. The purpose of such regular meetings would be three-fold:

• to provide organizational and political space in a mutual forum ideas to secure additional critical resources to support organizational change and institutional reforms in key agencies, such as Customs, Police and the National Contracting Commission;

• to discuss the impact of ‘change management’ approaches and technology-based value-for-money reforms which are shown to help public agencies comply with accountability requirements as established by legislation;

• to facilitate interactions at high levels between the heads of various agencies, bringing best practices from other countries and sectors to their attention to strengthen international cooperation in the promotion of domestic integrity

The list of potential invitees might include the Minister of Finance, the recently-appointed director of the Financial Inspections Directorate, the Commissioners of Police and Customs, the Assistant Commissioner of Police Anti-Corruption Branch, the Contractor General, the Solicitor General, the Attorney General and the Auditor General, as well as the Director of Public Prosecutions (DPP). While respecting necessary constitutional boundaries, such an ‘inner circle’ of key reformers might be extended informally and downward to include senior magistrates and others in the larger justice and court system as well.

Personnel Secondment Contingent on successful identification by DPP, USAID/Jamaica is encouraged to support the secondment of 1-2 key senior US prosecutors with RICO-style experience from the Criminal Division of the U.S. Department of Justice of the to assist Director of Public Prosecutions Llewelyn to organize and train prosecutors to target high-profile illicit enrichment cases using POCA and other existing legislation.

Alternatively, USAID/Jamaica could support the placement of 1-2 additional seconded personnel instead to the Anti-Corruption Branch of the JCF to support its first-year strategic efforts to weed out high-level corruption within the police (Creating Real Fears of Detection). This would support budgetary support already offered jointly by the British Home Office, could be offered to the Customs Department to build institutional firewalls to prevent corruption.

Short-Term Mid-Level Leadership Development Upon identification by JCF, DPP, FID or other key enforcement agencies, USAID/Jamaica could support short-term (6 weeks or less) leadership skills training for 25-50 key managers in DPP, Customs or elsewhere, as determined by the GOJ. (The Senior Executive Fellows Training offered by the Kennedy School of Government at Harvard University is routinely used by many USG federal agencies to prepare candidates for Senior Executive Service (SES) and could play a critical role in supporting Jamaica’s ‘change management’ approaches.)

when he fired large numbers (several hundred) ghost workers on the JUTC payroll earlier in 2008. “JUTC Boss Slain,” The Jamaica Observer, June 28, 2008.

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Engaging Society Toward Corruption Awareness USAID/Jamaica should consider funding a targeted ethics and values curriculum project now operating or being proposed for primary and secondary schools in Jamaica. Key programs already being operated by the Ministry of Education include the University of the West Indies Change From Within project, and USAID/Jamaica’s Expanding Educational Horizons project’s proposed Counting on Character proposal.

USAID/Jamaica is urged to convene education-focused reform groups to promote a larger vision for an education program around corruption awareness and prevention. How communities and society-based organizations themselves should define the nature of the problem and develop their own plans in conjunction with those of others should be the goal of such a project.

While these may be considered short-term steps, they must be followed by a larger vision of an integrated, modern system of justice and engaged public sentiment to channel frustration and anger into positive action. Political leadership must underscore such a vision and will become central to the success of both shorter-term and longer-term efforts, as evidenced by the following schematic in Figure 1 below.

Figure 1

High Profile Prosecutions

Donor Leverage

Political Leadership

Institutional Support

Public Engagement

CORRUPTION ASSESSMENT FOR JAMAICA v

1. INTRODUCTION

In 2005, the Honorable Justice Ian Forte, then president of the Court of Appeal, launched the Civic Dialogue for Democratic Governance Project to involve a series of national town meetings through presentation and discussion of four video-clips symbolizing competing visions for a future Jamaica.

Paraphrasing Marley’s famous lyrics, Get Up, Stand Up—the first of the four—proclaimed a vision of unity, integrity and collective action toward prosperity, peace and social development.

Despite significant publicity, donor support through initial funding by UNDP, and the participation of high-level state and Government of Jamaica (GOJ) officials, the effort to galvanize the population largely floundered for inaction and lack of follow-through. While not successful, it is worth remembering the other three competing visions the Civic Dialogue Project presented: Nose’ Mus’ Run—a perilous security-dominated future response to violence and disorder as citizens gradually ceded democratic rights for unfettered police responses to crime; Sitting on the One-One Coco—a one-up, one-down, two-steps-forward, three-back stalemate intensified by shrinking domestic budgets, and finally Paradise Lost—a failed Haiti-like state and a poor, violent society presided over by a Don—an underworld gangster and community leader—as Prime Minister.2

The authors of this Anti-Corruption Assessment are keenly aware that Jamaica does not lack for reports on governance and security by specialists and scholars. Like the UNDP-funded effort above, many of these have simply disappeared into a well-intentioned elephant graveyard of paper. To that, the authors can only state that 2008 represents a watershed moment in the country’s development that must not be wasted. While this Assessment will raise many of the same red flags, sound many of the same alarm bells and issue a familiar summons to the donor and diplomatic communities to marshal scarce resources to avoid duplication, several factors not present before offer Jamaica a real, but narrowing window of opportunity for either rapid advancement or rapid decline.

A new Government—the first in a generation—has appointed energetic new reformers to key positions and retained critical champions of national integrity in important agencies. Together with the help of foreign experts and a public opinion increasingly intolerant of high-level corruption, these champions are beginning to use their formidable legislative and statutory authority to act as change agents in a country long accustomed to business as usual. Independent journalists are pursuing investigative leads with new vigor, using recently-enacted Freedom of Information legislation to uncover mismanagement at high levels. A sense of urgency is starting to de-fractionalize a society long accustomed to individualism and political tribalism. The authors of this Assessment believe such changes are real, and believe that both state and society need encouragement and technical support to continue to make the right choices.

And yet with opportunity comes even greater danger. Progress on debt repayment and modest budgetary efficiencies is being swallowed up by recent catastrophic increases in global food and fuel prices.

Narcotics trans-shippers between South and North America and the world are focusing on the true weak link in the drug and larger governance enforcement chain in the Americas: the Caribbean. Efforts to clean up ghost employee and sub rosa procurement mechanisms, in the eyes of many, have resulted in at least one well-publicized assassination. State and society appear to be reaching a new tipping point: either they go forward with new energy not seen thus far, or continue to tolerate the presence of rogue states within the State, which will inevitably lead to “penetration and weakening by criminal networks of the justice system, government, and the political process [that] could eventually lead to the demise of the State.”3

2 “Launching Civic Dialogue for Better Governance,” Observer Reporter, June 24, 2005.

3 National Security Policy, Government of Jamaica, Ministry of National Security, 12 and 14.

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2. ASSESSMENT METHODOLOGY AND APPROACH

In early 2008, with the permission of the Prime Minister, the Hon. Bruce Golding, USAID/Jamaica asked USAID/Washington to help secure the services of a team of technical experts to conduct a limited anti-corruption diagnostic in support of the new Government’s good governance objectives. Management Systems International (MSI) was contracted and secured a three-person team (composition below) to conduct this rapid-response assessment. In developing its Assessment, the team interviewed key officials in June-July 2008 from the public, private and civil society sectors in an effort to assist USAID/Jamaica to determine specifically where additional resources could be placed most strategically to support both discrete and longer-term anti-corruption objectives to support or augment those already articulated by the Government.4

The Team initially used USAID’s Corruption Assessment Handbook, developed jointly by USAID/Washington’s Office of Democracy and Governance and MSI. By placing the country’s key institutions and political economy into comparative perspective through a specific Corruption Assessment Framework that classifies states according to ‘corruption syndromes,’ the approach allows policymakers to match institutional problems with proposed strategic and tactical recommendations for reform, and to generate a list of prospective indicators to measure progress. Internal experts were consulted before the Team’s arrival to give their assessment of which specific syndrome Jamaica fit into. While their opinions sometimes differed, there seemed to be a partial consensus that Jamaica’s political economy placed into a specific type: Syndrome Type IIA. (A full description of that syndrome and additional methodological notes is contained in Annex 1).

The Team used USAID’s broad definition of corruption, similar to that employed by the World Bank and other development agencies as ‘the abuse of entrusted public authority for private gain.’5 Such a definition captures many (but not all) public-private interactions at least two, and possibly three distinct levels. Most scholars use the term administrative corruption to refer to small-scale, largely unorganized breaches of public space represented by petty bribery, malfeasance and misuse of power by individual state agents who take advantage of organizational loopholes or absences of accountability to engage in rent-seeking behavior without detection. Grand corruption describes abuses of power at both a higher and more organized level, where rent-seeking either becomes widespread or takes on large-scale proportions, involving political actors and even entire line ministries (such as the Customs or Police).

Using terminology borrowed from international relations theory, some scholars describe an additional level of systemic corruption to describe an end-state collapse of state and society familiar to those caught in the middle of ‘greed and grievance’ wars in places like Sudan, Colombia, Iraq and Congo. The

4 Management Systems International (MSI) assembled the technical team which met in Jamaica in June-July 2008, and included Dr. Corbin B. Lyday (Team Leader), a former USAID Senior Policy Analyst with experience designing anti-corruption and integrity-promoting interventions in comparative context; Dr. Trevor Munroe, a Professor of Political Science at the Centre for Leadership and Governance University of the West Indies, Jamaica— a former Jamaican Senator who has written widely on corruption, electoral reform and democratization, and Ms.

Margaret O’Donnell, Esq., an attorney in private practice, with experience implementing USAID-funded anti-corruption interventions in the Latin American & Caribbean (LAC) regions. The team was guided by USAID Mission Director Dr. Karen Hilliard and Cognizant Technical Officers, Ms. Sasha Parke and Mr. Sean Osner. The Team wishes to express its sincere appreciation to the Hon. Brenda LaGrange Johnson, U.S. Ambassador to Jamaica, for the opportunity to share the conclusions of this Report widely with other donors and the Government of Jamaica.

5 See USAID Anticorruption Strategy, Washington D.C. January 2005, http://www.usaid.gov/our_work/democracy_and_governance/publications/pdfs/ac_strategy_final.pdf.

CORRUPTION ASSESSMENT FOR JAMAICA 2

http://www.usaid.gov/our_work/democracy_and_governance/publications/pdfs/ac_strategy_final.pdf consequences of such conflicts include devastated communities, failed states, the destruction of ecosystems, and uncontrolled trafficking of persons, weapons, and narcotics.

In the early days of anti-corruption assistance, donors often invested considerable resources and efforts to target administrative corruption in the belief that improved performance of state institutions would change a corrupt society to a well-governed one. Many such efforts, while well-intentioned, often exposed glaring inequities between the rich and poor in a society, between those who could afford to buy justice and those who could not. Recent experience suggests that such strategies are not only ineffective, but often counterproductive, instilling anger and resentment at the inevitable sense that ‘little fish’ are being targeted while the big ones swim free. Because ‘the fish rots from the head down’ (according to a proverb with variations across many different cultures), anti-corruption practitioners are coming to appreciate that the head must be targeted, otherwise the tail will pay no attention.

A TYPE IIA corruption syndrome…with SOME cracks

As consistent with a Type IIA (below), Jamaica’s institutions are certainly stronger than in many countries where a voracious ‘hand-over-fist’ type of corruption and political repression predominate. But the system of economic and political opportunities remains fairly tightly controlled and dominated by elites, which control and limit the extent of change that can be introduced from outside. A Type IIA political economy is fairly collusive, politicized and controlled, potentially despite an outward free market form. An emerging exception to this in the Jamaican case is the country’s tourist economy. Some argue that tourism, like other internationally linked economic engines, can act as powerful change agents from within. On the other hand, as the Team discovered, that economy is also subject to, and operates within, the larger ‘rules of the game’ that continue to favor collusion and opacity.

Another important attribute of a Type IIA syndrome is the deterioration of a formal two-party democracy into a collusive, cartel-based ‘gentleman’s agreement’ form of political party contestation. Over time, differences between parties become much more pronounced in personality and organizational culture than they do in terms of ideology and policy. This greatly disposes an otherwise competitive political system to act in clientelistic ways, reinforcing, rather than undermining patronage and collusion.

Taken as a single snapshot, a Type IIA states arguably describes the opposite of what the World Bank Institute once called a captured state, where the sources of corruption lie within a powerful private sector pushing and probing the limits and boundaries between private and public to its constant advantage. In Jamaica, by contrast, most respondents appeared to agree that corruption originates in the public sectors, rather than the private. Whereas state capture points to a strong private sector attempting to take advantage of weak enforcement and accountability systems to gain preferential treatment, the Jamaican state seems operate in somewhat opposite ways.6 As in many developing low to middle-income countries, the situation is actually complex, where both public and private sectors share power in a dynamic relationship. At certain times, one side seems to enjoy dominance; at other times, the other.

Administrative and political elites do have final say (subject to corporate influence) in the important area of the country’s public procurement systems. But in another critical area of governance, campaign election finance and political party funding are strongly influenced by both licit corporate and illicit criminal ties. While Johnston’s specific corruption typology can capture some of the broad outlines of this type of collusion, as an abstract type, it fails to capture the dynamics of the relationship or the extent to which criminal activity—not simply a weak public or private sector—gets mixed into the legitimate business of both.

6 See Joel S. Hellman, Geraint Jones and Daniel Kaufman, “Seize the State, Seize the Day: State Capture, Corruption and Influence in Transition,” World Bank Policy Research Working Paper No. 2444, Social Science Research Network database (http://papers.ssrn.com/sol3/papers.cfm?abstract_id=240555).

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http://papers.ssrn.com/sol3/papers.cfm?abstract_id=240555

Because of this, the Team believed that Jamaica’s corruption syndrome is showing ‘cracks’ with holes large enough for new actors to enter—such as a strong, questioning and increasingly professional media demanding accountability and openness. The urgency with which many respondents responded to the larger question of corruption does indicate movement. It suggests that a Type IIA Syndrome may well be evolving into something either much worse (the ‘hand-over-fist’ type mentioned briefly above) or something more manageable, where instances of corruption can become more constrained, provided resources match critical reforms perhaps. As a methodology, the syndrome approach is simply a snapshot in time; it fails to tell us how a country got where it did, or where it is going.

TYPE IIA Corruption Syndrome7

Narrative description: In this Type IIA variant, elites still make deals and cement their alliances through exchanges of corrupt incentives, but are less insecure politically or economically because of the relative strength of institutions compared to basic Type II corruption cases. In some respects, that is good news, as Type IIA elites may have less reason to engage in voracious, “hand-over-fist” corruption (or, perhaps, political repression) because their positions are relatively secure. But both economic and political opportunities are scarce, and both are dominated by Type IIA elites. Relatively strong institutions dominated by Type IIA elites will offer little help or protection to would-be challengers, and can be used very effectively by the corrupt leadership to control the scope and pace of change.

Greece, Paraguay (under Stroessner), and Italy (before 1993) might be examples of this variant.

Problem Statement:

•Closed, collusive and politicized economy, politics, parties and elite stratum •Top elites overlap and are interlinked •Fraudulent, indecisive or uncompetitive elections foster collusion among party leaders •Large overlap between state and business; poor transparency •Moderately weak institutions:

--public/private boundaries are porous and politicized --colonization of bureaucracy and business by parties and political leaders •Civil society and press lack independence and are orchestrated from above

Strategic Objectives:

•Promote increased political and economic competition at an orderly pace •More decisive elections and competitive parties and leaders •Strengthen public/private and government/business boundaries •Promote smaller state role in economy and greater government/business transparency •Promote strong and independent judiciary •Promote greater bureaucratic quality and autonomy •Promote more independent and professional news media •Promote strong and independent civil society that is able to put transparency to use •Emphasize increased economic opportunities, if possible, outside the domination of elites.

•Promote economic initiatives and investment from outside the country, which may be facilitated by moderate strength of institutions.

•Promote judicious conditionality linking aid and technical assistance to treatment of political opposition groups and economic competitors, rewarding tolerance, transparency, and fair treatment.

•Seek gradual pluralization of the political system with new competing groups emerging based on a more open, vigorous, and broad-based economy.

Strategic Reform Options:

•Reform electoral systems to reduce fraud, implement voting systems that encourage and reward bona fide competition, and link to real groups in society •Make legitimate campaign funds easier to get and verify their use by campaigns; subsidies to increase competition

7 This table is based on Michael Johnston, Corruption Syndromes: Wealth, Power and Democracy (Cambridge:

Cambridge University Press, 2005).

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•More credible property rights, anti-trust and pro-competition policies •Promote selective and genuine privatization/deregulation and carefully monitor parastatals •Promote politically independent banking, lending, and news media •Promote constitutional reform: checks, balances, and stronger judiciary •Encourage stronger civil society -- not just around anti-corruption issues •Build professionalism in the civil service and political autonomy of judges, bureaucrats and military

Tactical Reform Options:

•Promote transparency initiatives in elections and the economy.

•Judiciously use conditionality and external resources to reward regime’s moves toward openness, increased economic and political competition.

Avoid: •Avoid an overly-rapid pace of change, which might create insecurity among elites and encourage both voracious corruption and political repression •Using conditionality and external resources to challenge regime directly.

•Avoid expectations of quick results from strategic reforms.

Progress Indicators:

•Economy, politics, and banking become more open, competitive, and transparent •Meaningful alternatives compete and power changes hands at elections •Party and elite infiltration of bureaucracy, courts, and business declines •Parties sink roots into civil society and speak for real segments of society •Bureaucracy, media, and capital markets become more autonomous •Reform activity independent of ruling elites becomes common •Privatizations are genuine and parastatal sector shrinks

As mentioned, is important to reiterate note that this syndrome may not accurately describe Jamaica’s strong and independent media, which stands out as an exception and offers ordinary Jamaicans a critical glimpse into the inner workings of state and Government. In other respects, Type IIA may be thought of as a fairly developed system of patronage and clientelism.

The corruption syndrome typology described above is not just significant for what it describes, but for what it prescribes and proscribes equally. Here, the match with Jamaica is an imperfect one. The Team strongly supports the notion that campaign and electoral reform do lie at the heart of long-term systemic political changes the syndrome above suggests. A Westminster-style winner-take-all political system strengthens a two-party system, which works to the advantage of an already developed economy and society, but entrenches political patronage and clientelism in an emerging one. Nonetheless, the specifics of such long-term electoral change lie outside the Team’s narrow anti-corruption mandate.

In another important regard, as was stated initially, the Team came to conclude that despite some outward similarities with this type, Jamaica needs to pursue change rapidly. Stagnation, rather than the pace of change, has led to the situation that exists today, and serious and thoughtful reformers—both within the current Government and outside it—understand that the status quo now carries such heavy opportunity costs that it simply cannot be pursued any longer.

Before proceeding with its diagnostic, the Team believes it is critical to understand why the status quo carries with it such high costs. Historically, the current system emerged with the late colonial and post-independence period after 1962. Despite the commendable consolidation of the principal institutions of democratic governance after independence, the political life of the country fostered collusion among significant sections of the population – at both elite and mass levels – in petty as well as grand corruption for many years. The process was allowed to infect politics and economics to such an extent that it now threatens the viability of both state and society. Politically, the characteristics of that process included:

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• On acceding to office following electoral victory, each party continued the practice of its predecessor (which it had previously attacked when it constituted the Opposition) of using state power to favor supporters and disadvantage opponents at both the elite and the mass levels;

• Each party developed associations with criminal gangs in which the gangs and their leaders (‘dons’) – enforced zones of political exclusion ‘(garrisons’) against the opposition party in return for protection and privileged access to benefits from the state;

• Each party utilized the public procurement system and, in particular, the award of public contracts and the divestment of public assets as the principal means of rewarding supporters and punishing opponents, relegating considerations of merit and competence to secondary significance;

• A broad acceptance thus developed amongst the people that there is ‘nothing wrong’ in paying or taking a bribe (for a motor vehicle license, to avoid a traffic ticket, to get anything substantive done.). Over time, this formed a significant part of a larger erosion of traditional ethical concerns, aided by sluggish enforcement procedures and the widespread perception that elite wrongdoing is not subject to law enforcement.

• Critical public sector agencies such as the Customs Department and the Jamaica Constabulary Force became not only enmeshed in corrupt relations with criminal elements as well as with political and business elites, but became widely perceived as fostering human rights abuses over the years. Consequently, a sense of public urgency over the failures of the police specifically became lost.

From time to time, the growth of such institutionalized corruption was accompanied by a public outcry for reform coming from within the political system itself. Such an outcry is most evident during election campaigns and post-election activism on the part of new administrations. In the early 1970s, for example, the newly elected People’s National Party (PNP) Government under Michael Manley charged the previous Jamaica Labour Party (JLP) administration with corruption, and established the DaCosta Commission of Enquiry into corruption allegations. The same Government subsequently passed the Parliament Integrity of Members Act (1973), which established the Parliamentary Integrity Commission.

For its part the JLP, which took office in 1980 under Prime Minister Edward Seaga, passed the Contractor General Act in 1986 and set up the office of the Contractor General with the mandate to protect the integrity of the public procurement system. More recently, at the turn of the century, the PNP Patterson Administration responded to allegations of corruption by passing the Corruption Prevention Act (2001) and establishing the Commission for the Prevention of Corruption. Later, the same Administration passed the Access to Information Act, liberalized the media landscape and, along with JLP opposition, endorsed a Political Code of Conduct, designed in part to eliminate the incidence of political violence and to exorcise zones of political exclusion form Jamaica’s system of democratic governance.

While such measures undoubtedly contained the potential of strengthening Jamaica’s national integrity system, they remained largely ineffective in stemming the tide of corruption – both perceived and real.

Neither legislative reform nor institutional innovation led to effective law enforcement largely because of vested interests in sustaining corruption within the political leadership, the bureaucracy, the business elite and organized crime. Opinion polls of the population now confirm the widespread view that corruption had become endemic by the current time and reveal low levels of public confidence in the ability of either the JLP or the PNP to reverse this trend.

Historically then, Jamaican corruption has managed to develop in ways that permitted extended networks of diverse elites, together with certain elements of the mass public, to share major benefits among

CORRUPTION ASSESSMENT FOR JAMAICA 6

themselves while staving off political and economic competitors. The costs of such a Faustian bargain, however, were played out in terms of violence and the increasing degradation of non-partisan state power.

Consequences of Recent History. Two critical broad consequences, together with a useful comparison, must be emphasized. As has been noted, Jamaica’s corruption did not originate with incompetence, administrative failure or inadequate accountability structures, but with the political system itself.

Improving the efficiency of the justice system, generating fiscal accountability among line ministries, and creating firewalls within key prevention bodies to attack a broader culture of mismanagement and non-compliance (all of which are strongly urged in this Report) cannot ultimately succeed unless they are adopted in tandem with similar political moves to “sever the umbilical cord”—in the words of a senior newspaper editor—that still links party politics and financing to criminal activity in the heart of Kingston, Montego Bay and elsewhere. One form of that ‘umbilical cord’ continues to operate in the shadows—the utilization by all MPs of a new Constituency Development Fund, which the new Government has promised that parliamentarians may tap into to support ‘constituency relations’—up to 2.5% of the entire budget. As with the previous Social and Economic Support Programme (SESP), the purpose of such nebulous ‘constituency support’ was never been clearly defined. In practice, it serves as a powerful backbone for maintaining the patronage system of both political parties. While even the previous PNP Government recommended abolishing the SESP, some voices believe that its replacement may offers even greater potential for shadow spending than its predecessor.8

A second manifestation of that umbilical cord is more dangerous. While overt garrison politics has faded from the violent elections of the 1970s and 1980s, the assassination of JUTC Chairman Chambers that coincided with the Team’s arrival in Jamaica may be a gripping example of this second form. While the press widely reported Chambers’ attempts to go after ghost workers, lending credence to a popular notion that this was a reprisal murder by disgruntled unionists, Chambers’ efforts to revise key procurement contracts, which initially received far less publicity, may ultimately have been more significant. That action in particular may have frightened the shadow economy far more, with its contractual and political linkages with key public sectors. But was his murder a sign that the Government is in fact taking bold steps to sever that umbilical cord? Or was it because he may have given appearances of continuing to balance PNP and JLP-related subcontracts in ways that were considered too partisan? The Team does not claim to know the answers, but ordinary Jamaicans believe that the answers will determine how serious recent moves to clean up the state really are.

How the Government responds to these issues is also critical for Jamaica’s economic recovery. With no changes to the political status quo, a high proportion of economic activity will continue to lie outside the formal sector. Without needed revenues, Jamaica cannot hope to manage its catastrophic debt re-servicing agreements and provide needed social services to its people at the same time. Political corruption thus directly causes the economic shortfalls Jamaica suffers from today.9 According to estimates supplied by the Jamaican Chamber of Commerce, 50-60% of the island’s economic activity already lies in the grey sector, part of which is easily explainable by Jamaica’s burdensome and counter-productive system of business licensure and tax enrollment.10 While systems of ‘one-stop shopping’ to reduce that burden

8 Martin Henry, “The Constituency Development Fund,” Jamaica Gleaner, February 7, 2008.

9 Recent figures suggest a current account deficit of around 10% of GDP in 2007 (with 2008 figures worse in trade, services and income balances—Economist Intelligence Unit, April 4, 2008) a combined debt re-payment schedule that drains half of Jamaica’s annual budget and a total debt-to-GDP ratio of 131.5% at the end of FY2005/06. Cheryl Lewis, Leah Bobb-Semple, Jamaica Country Report: Commonwealth Seminar on Debt Renegotiation, 2005.

Jamaica’s Sovereign Risk Rating currently stands at ‘CC.’

10 As a joint USAID/Washington and Booz Allen Hamilton report made clear, “there is no dispute that the tax system in Jamaica is in woeful condition—one of the poorest, least effective in the world” (Bizclir, 21). The system is particularly injurious to SMEs, responsible for generating 70% of the country’s GDP.

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could only help improve incentives to take part in the legitimate economy, they must be followed by similar moves politically to keep political favoritism and criminal activity out of legitimate economic activity altogether.

In thinking ahead, it is useful to reflect on a comparison between Jamaica and other states facing similar developmental choices over several decades. At independence, Jamaica was blessed with a strong light manufacturing and tourist sectors, natural resources of bauxite, coffee and sugar, a strong currency, and an energetic population. Singapore, by contrast, another former British colony, began its development with far less auspicious attributes. But 40 years later, the roles have seemingly reversed. In 2002, Singapore’s per capita income neared about $30,000 per year, while Jamaica’s hovered at around $2,500.

Jamaica’s record in public housing, health, education, and infrastructure has been one of relative failure and compromise, and its anti-corruption rating has plummeted while Singapore’s has soared. In the World Economic Forum’s Global Competitiveness Index—a broad measure of both future economic growth prospects as well as the effectiveness with which countries utilize existing physical and human capital resources, Jamaica ranks 78th, well below Puerto Rico’s 36th and Barbados’ 50th. The country was not even included in the 2007 Global Integrity Index, while on World Bank Governance Indicators for 1996-2007, Jamaica ranks well below even the Caribbean average in Voice/Accountability, Political Stability, Government Effectiveness, Regulatory Quality, Rule of Law and the Control of Corruption.

Within the Caribbean itself, in Transparency International’s 2007 Corruption Perception Index (CPI), Jamaica ranks 84th with a 3.3 score, far behind Barbados, with a 6.9 ranking, just edging out Panama—a country marked by high levels of money-laundering. In the CPI, Jamaica fell over 20 places in a single year, moving from 61st place in 2006 to 84th (out of 180).11 In less quantitative areas of social trust and capital, few countries on earth score as low as Jamaica. Only 14% of Jamaicans agree that “most people can be trusted,” according to a 2006 leadership and governance survey conducted by the University of the West Indies’ Centre for Leadership and Governance. Not even Kenya’s ethnically divided and violent polity scored as low.

What are the reasons for such low performance? The answers point more to politics than economics.

Formally a Westminster democracy, Jamaica’s adaptation of that system has been woefully inadequate.

Dons have grown up alongside an educated civil society and been given control of patronage and political turf. Past poor performance suggests that there is no real way forward for the country except the hard way: society must insist that its leaders ‘sever the umbilical cord’ by demanding accountability from nearly100 public enterprises, curtailing the abuses present within the Constituency Development Fund and demanding value-for-money institutional reforms within Customs, Police and other key agencies.

Together, state and society—with support from international actors—must help Jamaica reverse its ‘culture of non-compliance’ in the words of its Contractor-General before the gap between it and other emerging economies can hope to be bridged.

11 For the 2007 Global Integrity Index, see http://report.globalintegrity.org/globalindex/results.cfm; Global Competitiveness Index (http://www.gcr.weforum.org/ _ 0) and Transparency International, (www.transparency.org/policy_research/surveys_indices/cpi/2007/regional_highlights_factsheets).

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http://report.globalintegrity.org/globalindex/results.cfm http://www.transparency.org/policy_research/surveys_indices/cpi/2007/regional_highlights_factsheets

3. SPECIFIC FINDINGS BY SECTOR: VULNERABILITIES

AND OBSTACLES TO CHANGE

Separate from this larger political question, patterns of corruption in public sector bodies is best described as a “generalized culture of non-compliance” with laws, regulations and procedures. Such patterns of behavior and enforcement stem from larger political arrangements, but have taken on their own form over time. The key features common to all agencies and to the society generally include:

• Highly unequal opportunity structures for advancement;

• Relatively poor pay and working conditions for public officials;

• Inadequate internal controls in key institutions (customs and police especially) and ineffective application of disciplinary sanctions for corruption;

• A culture of tolerance of petty corruption and an attitude of cynicism towards previous anti-corruption efforts of the authorities;

• Jamaica’s geo-strategic vulnerabilities in the cocaine supply route;

• A political tradition of patron-client relations and inadequate checks and balances in a ‘winner-take-all’ political systems erroneously applied to state structures;

• An absence of top-down decisive integrity leadership by example;

• A decline in volunteer support for the political parties;

• Ineffective law enforcement in corruption-related offences.

Responsibility for changing this type of operational culture rests on a combination of right regulation and right management enforcing appropriate rules and leading by example. The critical relationship between these two elements is almost totally ignored in practice by Jamaica’s state bodies. For example, the most important of Jamaica’s 180 current public sector entities are permitted by law and practice to borrow and hold commercial debt outside of their budgets. In theory, each state agency is obligated to submit requests through 14 different line ministries and submit an Annual Report afterward. In practice, reports are up to 2 years late because penalties for non-compliance are either not enforced or non-existent. 70% of the country’s public debt is actually held not by the Treasury per sé, but by these statutory bodies. Most of that debt is also in private hands, according to the IADB. Agencies, such as the Urban Development Corporation, thus have legally protected authority to engage in unsustainable financial practices that protect them from immediate consequences at the cost of increasing the reckoning and repayment for future generations. Even world-class operational managers cannot staunch the bleeding of their agencies as long as regulations are not amended to prevent such structural mismanagement. Parallels from a recent review of the country’s community-based policing programs from 2002-07 are instructive:

In theory, control of the operational philosophy rests with management. In practice, however, if supervision, process, structure, policy, implementation, accountability, leadership, and all the other components of an effective organization are inadequate, effective management of even routine operations is a significant problem. These daily obstacles are even more daunting when sustained operational reform is the goal.12

While right operational management is more complex, it is not impossible. As former Minister of National Security Philips described it, “you have to create an environment where people will want to do the right thing.” As was mentioned previously, Jamaica suffers from a larger ‘culture of non-compliance’

12 John McLean, ACF, Anthony Harriott, Dr. Elizabeth Ward, John Buchanan and Roopa Karia, Jamaica— Community-Based Policing Assessment, USAID, March 2008.

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in the words of its Contractor-General. He rightly argues—either obey the laws or get rid of them— because nothing undermines respect for law more than enacting legislation which everyone knows will either be unenforced or ignored, particularly by the law-makers themselves or by ‘connected parties’.

With the right kind of ‘change management,’ however, operational cultures can and do change— sometimes quite quickly. Evidence for this is suggested by the rapid raise in auditory compliance rates that the Contractor-General has succeeded in obtaining from the country’s public sector agencies even without sanction authority in 2007. It seems clear that with the proper incentives—both negative and positive—Jamaica’s public agencies can improve their performance.

Sectors Most Vulnerable to Corruption. In the Contractor-General’s 2006 Annual…