Peter Eigen Fights Corruption with Cooperation

During the Monday opening General Session, Prof. Dr. Peter Eigen, the founder of Transparency International (TI), said that world governments have failed in their governance, which has resulted in corruption that has led to environmental degradation and poverty with “1 billion living below the poverty line.” However, “civil society organizations,” such as TI — working with governments and business — can fight corruption effectively. 

“Nation states have lost their capacity to govern the global economy,” said Eigen. He said they’re limited by self-interest, the inability to work across borders, politics and leaders’ short terms in office.

And multinational businesses have the capacity to circumvent border issues and create global governance, but many have been corrupted by competition with other companies and countries’ coercion. “Who gives the board rooms of General Electric or Siemens … the mandate to deal with what could be considered global public goods for the long-term fate of humanity or our planet?

“ …. Large companies need good governance in a globalized economy in order to behave socially responsible. Because if they’re faced with competitors that do not live up to the same standards of responsibility then they may very well come into a short-term competitive disadvantage. 

“So the enabling environment for good behavior of the private sector is just to be created somewhere else. The question is: ‘Who can step into this void?’ ”

Eigen said that civil society organizations can, and have, become important partners of these two other types of governance — nation-state governments and business. 

Eigen has seen this happen through TI — a civil society organization. When Eigen worked as the director in 1988 (coincidentally the same year Dr. Joseph T. Wells, CFE, CPA, founded the ACFE) of the World Bank Office in Nairobi for East Africa, he witnessed systemic corruption that was undermining their efforts. He began a movement to combat these crimes, but the World Bank pushed back. 

“I put together a system where a number of representatives in other countries worked together as we developed a systemic approach to protect the people of these countries against bribery,” he said.
However, he received a memo from the World Bank’s legal department saying that what he was doing was unacceptable. It told him he wasn’t allowed to fight against corruption because it interfered with the political, economic and social affairs of the partner countries.

So he began his anti-corruption work in the evenings after work. But he then received a memo from the president of World Bank saying that he was embarrassing the organization. 

Eigen eventually resigned his World Bank position, assembled a small group of like-minded activists in 1993 and began TI. He said that European governments, entrenched in bribery and corruption, showed him tremendous hostility. “The United States, of course, had the Foreign Corrupt Practices Act, since 1977, therefore they (the U.S.) has an interest to submit their competitors everywhere around the world to a similar regime. … But my government in Germany was absolutely opposed to my work.” 

In the early 1990s, most of the German companies were routinely bribing because the government allowed it and even sanctioned it as tax deductible, he said. 

However, gradually TI began to convince the business community and governments that it was in their best interests to compete globally in a corruption-free market, he said. 

Since then, TI — a global, nonpartisan nonprofit — has chapters in more than 100 countries to help governments, businesses, civil societies and individuals fight the scourge of corruption. 

TI is most known for its Corruption Perceptions Index (CPI) — a scorecard on corruption in countries’ public sectors. Bit TI also works with leaders and citizens to create international anti-corruption conventions, disseminates publications, prosecutes corrupt leaders, supports national elections for tackling corruption and holds companies accountable. 

Eigen began a global movement with one vision: “A world in which government, business, civil society and the daily lives of people are free of corruption.”

Eigen retired as chair of TI in 2005 but is now chair of the organization’s advisory council.

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