Malfeasance, dereliction of duty, and the problems of selective enforcementBy Bangkok Pundit Mar 13, 2014 10:00AM UTC
Medhi Krongkaew, a former NACC commissioner and Professor of Economics, in the NACC journal discussed the issue of Section 157:
[Section 157 Whoever, being an official, wrongfully exercises or does not exercise any of his functions to the injury of any person, or dishonestly exercises or omits to exercise any of his functions, shall be punished with imprisonment of one to ten years or fined of two thousand to twenty thousand Baht, or both.]
Many economists would see that this famous legal provision has a lot of loopholes. First, it is not only corruption offences that are included under this Section, but also malfeasance or misconduct in office that causes someone damage. As mentioned previously, this has created ambivalence concerning the proper role of the NACC. Second, an act by an official that causes anyone damage would be sufficient to incur this penalty if it could be proven that such act was intentional. In economics, we know that the same coin always has two sides. An action relating to something can always be seen as a non-action with regard to something else. The trade-off or opportunity cost concept, which is the life-line of economics, is often missing in a legal provision such as this. For example, a decision to privatize a state-owned enterprise may hurt or damage the interests of a certain group of people, even though it benefits a larger number of the population in the long run. Legally speaking, such a privatization could be deemed as violating Section 157 of the Penal Code, and the state official who is responsible for this act may face criminal punishment according to Section 157. In actual fact however the damage caused by not privatizing the enterprise may be even higher. Can this concept of economic trade-off be used in the correct interpretation of Section 157?
To be fair, economic interpretation by economists on these issues may be unacceptable to some legal scholars. Take for example the case of a government decision to spend public money in any way the government likes, or to follow certain policies that it sees fit, on the presumption that it is the prerogative of the government, or within the democratic rights of the government (since it has the consent of the majority of the people), to do anything while it is in power. Imagine a government continuing to implement an economic policy that could be proven beyond reasonable doubt to be wasteful, corrupt, or inefficient (such as the current rice mortgage policy of the government or the student loan program of the government). In such a situation, should the legal authorities have the right to question the propriety or legality of such policies? Should the anti-corruption authority consider this type of activity as a corrupt practice, and try to haul the responsible minister or even the entire Cabinet into the court of law?
BP: Now, in case you think that was a dig at the Puea Thai government, it doesn’t seem to be given it is taken from a keynote address in June 2009 – it should be noted that the Democrats also used rice pledging although in a much, much more limited scale than Puea Thai. The problem with malfeasance or misconduct is that it can be very vague. When a Minister cancels a concession with a private company against the advice of the Office of Attorney-General and then Thailand lost the arbitration case with the and was required to pay over 11 billion baht, was there an investigation? No. What about when a state broadcaster was accused of allowing defamatory comments of opponents? Yes. The “No” was when it was Suthep; “Yes” when it was a pro-Thaksin government.
Also, timing is an issue and the length of time it takes for decision. When deciding on whether a communique issued by the Cabinet was negligence it took the NACC a few months to decide to indict the Cabinet including Samak, but when Suthep wrote a letter to another minister requesting they appoint Democrat MPs to positions, it took over 3 years for the NACC to come to a decision of a prima facie case. By then Suthep was no longer in office so a suspension would not hurt him. Similarly, when there was an investigation into whether Abhisit and Korn had accepted more than 3,000 Baht in gifts by asking mobile phone operators to send text messages to 17 million mobile numbers free of charge, it took over 18 months and the NACC continued to postpone saying the ”commission was not yet able to make a ruling on the case which is very important as it concerns the removal of the prime minister and finance minister, thus requiring careful consideration”. Will we have careful consideration this time?
On malfeasance, Matthew Stephenson who is a P rofessor of Law at Harvard Law School and an expert in anticorruption law, legislation, administrative law, and the application of political economy to public institutional design and who is the Editor-in-Chief of the the Global Anticorruption Blog (well worth reading through some of the other posts) has written a post on the NACC decision to investigate Yingluck. Key excerpts:
But perhaps the most striking thing about the charges, with the greatest potential significance outside of Thailand, is that the NACC did not allege that Prime Minister Yingluck herself committed any corrupt act, or even that she oversaw or directed or approved of any corrupt act. Rather, the NACC’s criminal complaint alleges that Prime Minister Yingluck knew about the alleged corruption in the rice-buying program and failed to stop it. This is possible because Section 157 applies to any official who “wrongfully exercises or does not exercise any of his functions to the injury of any person” (emphasis added). The NACC seems to read the prohibition on wrongful failure to exercise official functions quite broadly, so that it extends not only to an official who corruptly fails to take action (such as a health inspector or customs officer who looks the other way in exchange for a bribe), but also to an official who fails to take action to prevent corruption in the programs that official supervises.
That theory of criminal liability, applied in this context, is bold, and perhaps unprecedented. Of course, in private organizations, many legal systems may impose civil liability on corporate officers and directors who knew (or should have known) about corrupt activities by the corporation and failed to take appropriate remedial measures. But I can’t think of another instance in which an anticorruption enforcement agency has brought criminal charges against a senior government official (let alone a sitting head of government) for that official’s failure to stop corruption in a government program.
So what should we think about this? Is the expansive theory of liability under Section 157—as interpreted by the NACC—something that other countries should emulate? The short answer is that I’m not sure, but I have a few preliminary thoughts.
First, it’s worth noting that there must be some cases in which failure to act to stop corruption is itself corrupt. For example, an official who knows about, and fails to prevent, specific corrupt acts by her subordinates, may be fairly deemed to have approved of those acts–and perhaps (depending on the applicable law) might be deemed part of a criminal conspiracy to commit those acts. So the idea that failure to act to prevent corruption can sometimes give rise to criminal liability is not, by itself, terribly controversial. And it might be possible to read the NACC’s charges against PM Yingluck as endorsing this narrower theory of liability. But at least on their face, the NACC charges seem more expansive. They do not allege that the PM knew about specific instances of corruption by specific subordinates . Rather, the NACC alleges that the PM was warned repeatedly, by the NACC itself and the Thai Auditor-General, about the potential for corruption or about evidence of accounting irregularities or general reports of widespread corruption. So, I think it’s fair to read the NACC charges not as a narrow allegation that the PM was complicit in a specific corruption scheme, but rather as a broad allegation that she neglected her duty to respond appropriately to repeated warnings of corruption in the program.
Assuming that’s the right interpretation of the NACC charges, is this a good idea? A “dereliction of duty” theory of liability does have the appealing feature it requires government officials to take seriously evidence of widespread or systemic corruption. After all, although some governments are true kleptocracies, in many cases senior government officials do not themselves loot the public treasury, but rather turn a blind eye to, or tacitly condone, corruption by their underlings and supporters (perhaps in exchange for continued political support). This gives the leaders “plausible deniability”: the leaders can benefit from the political support cultivated by a corrupt system, but when any individual acts of corruption are uncovered, the leaders can credibly claim not to have been directly involved, or even to have had specific knowledge. The NACC’s expansive theory of liability may undercut that strategy. More generally, the NACC’s theory of liability gives senior officials much stronger incentives to take seriously, and respond to, reports of corruption issued by entities like auditors general, ombudsman offices, and the like—even when those entities do not have the power directly to compel government action.
That’s all to the good. But however appealing the NACC’s approach may seem to committed anticorruption advocates, it raises a number of serious questions and concerns. Perhaps foremost among these is this: What, exactly, does an official have to do in response to reports of corruption in order to avoid liability under something like the NACC’s “dereliction of duty” theory ?
Suppose, for example, that PM Yingluck were to defend herself by saying something like this: “I acknowledge that there was corruption in the rice-buying program. There’s corruption in lots of government programs. Whenever I received credible information about specific, identifiable acts of corruption, my government took remedial action. But we couldn’t prevent all of it. Nonetheless, I determined that the program’s benefits outweighed the costs, including the costs associated with corruption. What do you want me to do, shut down every government program whenever there’s evidence of serious corruption within that program? That’s absurd. ” Call this the “Bill Gates Defense” – corruption is an implicit (and unwanted) tax on aid programs, but one that we should tolerate if the program is beneficial on net.
I suppose there are two things prosecutors could say in response: (1) you didn’t really take sufficient action to prevent corruption within the program; (2) if corruption is sufficiently widespread, and you haven’t been able to implement effective preventive or remedial measures, you do in fact have to shut the program down. Both responses are problematic, for similar reasons: prosecutors, and courts, are in the uncomfortable position of doing a cost-benefit analysis of the government’s anticorruption policies. And there are further complications: Should the prosecution need to identify some specific, concrete act (or acts) that the government official should have taken, but didn’t? (The NACC’s charging document does not seem to contain anything like that, though perhaps more will come later). Or is it enough to charge generally that the government official “failed to exercise” her supervisory functions to address corruption, without identifying any specific actions?
Now, despite these questions, maybe there are some easy, extreme cases, in which the government really does nothing at all to deal with corruption. It’s possible that the current Thai case is one of those extreme cases (I don’t know). But in most cases, government officials will learn to at least make a show of trying to deal with corruption allegations, even if their efforts are halfhearted at best. How comfortable are we with prosecutors and courts saying not just that government officials’ anticorruption efforts were inadequate, but that they were so inadequate that those officials should be removed from office, fined, and sent to prison?
And what if we’re worried that anticorruption enforcement may itself become politicized? Particularly in countries where corruption is widespread and deeply rooted, virtually every government official may receive credible reports of substantial corruption in the programs she oversees, and—given limited budgets and other demands—no official is likely to take all possible preventive and remedial measures. That means that any official might be a plausible target for prosecution under something like the NACC’s expansive “dereliction of duty” theory of liability. The subjective nature of judgments regarding the action that responsible officials were legally obligated to take in these settings gives the anticorruption enforcement agencies tremendous power, as they would not need to find credible evidence of actual corruption by the targeted official herself, but rather a failure on that official’s part to take sufficient action to deal with corruption by others. That significantly increases risks of politicized anticorruption enforcement, akin to the risks that Anna discussed in last week’s post about Russia, and that the current Thai government’s supporters have leveled (fairly or unfairly) at the NACC.
A fellow blogger of his on the site, Richard E. Messick, who was previously Chief Counsel of the Senate Committee on Foreign Relations and then at the World Bank where he worked until his retirement on legal and judicial reform and anticorruption projects, has a follow-up post entitled “Bright Line Rules: A Way to Reduce Politicized Enforcement?”. Key excerpts:
On the other hand, a broadly worded standard leaves much room for abusive enforcement, especially when law enforcement staff is poorly trained or not technically competent. An even greater danger than incompetent enforcement is politicization. When police, prosecutors, courts, and other enforcement agencies are not insulated from short-term political considerations, the pressure to conjure up a “creative” interpretation of the law to nail a political opponent can be overwhelming–as Anna’s post last week about Russia nicely illustrated.
Fortunately, the choice is not between letting some percentage of wrongdoers slip through the net or risking abusive enforcement. The solution is to replace broad, general standards with detailed, “bright-line” rules that state precisely what conduct is illegal . Consider again the individual or firm seeking to curry favor with an official by showering him or her with gifts. A law banning receipts of gifts from a single source of more than, say, $500 per year along with one requiring disclosure of all gifts will fill the gap created by the need to prove quid pro quo bribery. If a would-be corrupter gives an official more than $500 in gifts, and the official fails to report them, the predicate is laid for a straightforward, easy-to-understand prosecution for the violation of the limit and the failure to disclose.
The advantages of bright-line rules over open-ended standards are several. By taking discretion away from enforcement agencies, they reduce the risk that enforcement decisions will be politicized (or perceived as politicized). Because they are easy to understand – e.g. you must report all gifts received – they are a more effective deterrent than an injunction not to abuse one’s office. Finally, they can facilitate citizen oversight in countries with weak enforcement agencies or those susceptible to political pressures. Citizens may not be able to determine if an official has abused her office; they can much more easily determine if an official is being showered with gifts, particularly if the country has robust and independent investigative journalists.
To bring the discussion back to Thailand, a debate has been underway for many years on Article 157 that echoes these considerations. As recounted in a Bangkok Post article now behind a pay wall, Medhi Krongkaew, a now former commissioner of the Thai anticorruption agency, complained in op-eds in the Thai press that as written the law demands that the agency tackle two very different forms of conduct — corruption and malfeasance – and that the latter is far better suited for disciplinary remedies rather than criminal prosecution. Kanit Nanakorn, a former attorney-general and later dean of Dhurakij Pundit University’s Faculty of Law, urged that Article 157 be amended to specifically identify what is prohibited conduct. In contrast, Sarawut Benjakul, a senior court official, argued that the courts have shown they are capable of reigning in overly “creative” interpretations of the law,
A vigorous, thoughtful debate on rule versus standards — like that in Thailand — is long overdue – among those who advise lawmakers on anticorruption policy and those called on to enforce the result of lawmakers’ deliberations.
BP: BP agrees completely and have argued over the need for clear rules in the past. There are unintended consequences from vague subjective rules. Malfeasance is so open to interpretation and the test for the NACC is a prima facie case which is a very low threshold. To adapt a famous quote, the NACC would find a prime facie case against a ham sandwich (plate of rice ?) if that’s what the establishment wanted. Perhaps, its time to debate the role of the NACC and whether they should focus on *actual* corruption and have a clear set of rules….