Posted on 26. July 2016
Trust between citizens and their elected representatives is a crucial component of a well-governed EU. Lacking trust, citizens become cynical about their political system and apathy rises. Even worse, distrust is making many people experiencing something stronger than apathy: the feeling of absolute disaffection. Clearly, there is a downright dissatisfaction with people in authority nowadays and voter disengagement is getting worse both at national and European level, with the last EU election having the lowest-ever turnout. People’s distrusts in Europe can ultimately threaten the unity of the Union, the strength of the EU in the face of external challenges and the quality of the European democratic process itself.
Tackling corruption to restore trust and increase participation
Political truth seems to be mutable and capricious in the rush to win. Words of politicians are regarded as a medley of partial truths destined to be self-serving. While truth might nurture trust, its absence does the contrary. Consequently, distrust can lead to alienation and withdrawal from the political process. When aggravated for too long, intense distrust may generate a hostile response against the political order and a quest for more radical and anti-system alternatives. Revolutions, failed states and other distressing failures of governance all somehow have in common the breakdown of trust between citizens and the state.
Nonetheless, scepticism can be healthy for good governance and democracy. A smart distrust of governance can help citizens and civil society organisations analyse what government does and check misuses of power. However, it is not scepticism that is prevailing in these times – cynicism and chaos are. Trust in parties and elected politicians is very low. Indeed, no institution is so distrusted and reviled as mainstream political parties and a key reason why this happens is that people regard politicians as a deeply corrupt class – is not just the fact that political truth is mutable or even absent. According to the Transparency International’s Global Corruption Barometer’s figures, more than 80 % of people in Greece, Ireland, Italy and Spain believe political parties are corrupt or extremely corrupt and in almost all EU countries surveyed political parties were rated as the most corrupt sector by the public. The term corruption covers a broad range of human actions. For the sake of simplicity, let us settle on a broad and straightforward definition of corruption – the abuse of public office for private gain.
This article aims to address three crucial topics in tackling corruption: firstly, how citizens are being deprived from access to information and how that enhances corruption and disengages citizens from political participation; secondly, how whistleblowing protection frameworks could facilitate political transparency and accountability and how the criminalisation of defamation is ultimately preventing citizens to expose corruption situations; and, finally, why tax evasion and offshore financial centres are hindering political transparency and accountability.
Access to information
Secrecy is fertile soil for wrongdoing to grow on; information, on the other hand, is the oxygen of democracy. Europe needs to ensure that government operations are transparent and open to scrutiny. Robust laws must be put in place to ensure citizens have the legal right to access information they need to expose mismanagement and corruption, particularly when it comes to government finance, contracting and procurement. But what one can see is a disquieting movement towards limiting the scope of those institutions that fall within the remit of access to information laws and the increase of exceptions that are permitted. Moreover, while it is true that access to information laws are in place, in practice there are many obstacles to actually retrieving that information, such as excessive fees, long delays, extensive exemptions regarding business and company secrets, lack of an independent oversight body and municipal authorities’ lack of capacity to comply with the rules.
Very importantly, it is fundamental that Europe actively raises public awareness of the freedom of information laws, as many people don’t know about these laws or how to use it to their benefit. If access to information laws are not properly implemented, citizens cannot exercise their rights properly. All public institutions, regulatory authorities and local governments in the EU should be obliged to publish their decisions online, including with regards to public procurement. If the EU wants to bridge the actual gap between citizens and EU policy-makers, it needs to get citizens to participate fully in political life and reduce distrust, while citizens deserve to see the questions they raised answered. Citizens must also be knowledgeable of all functions and decisions of government that are not elements of national security or that do not invade individual rights of privacy. They have the right to know what their representatives are working on and how they go about their jobs. Therefore, these obstacles need to be addressed so citizens can actively participate in the decision-making process and in the design, implementation and monitoring of public policies.
Whistleblowing can be regarded as the disclosure of information related to corrupt, illegal, fraudulent or hazardous activities that are of concern to or threaten the public interest.
While the value of whistleblowing in corruption-fighting efforts is increasingly recognised, protection mechanisms and adequate and independent follow-up are far from effective in the EU. Indeed, according to a report released by Transparency International, only four EU countries have legal frameworks for whistleblower protection that are considered to be advanced: Luxembourg, Romania, Slovenia and the UK. Whistleblowing legislation in the EU is mostly fragmented and ineffectively enforced, as researched by Transparency International. Consequently, the practice of whistleblowing remains very unusual in most European countries. Political will to pass and enforce whistleblowing legislation is also lacking in many countries, which consequently is aggravating distrust in the political class.
Whistleblowing is sometimes wrongly linked with spying and snitching. This is the result of years of authoritarian regimes and the existence of secrete polices. On the contrary, whistleblowing is actually a right — and a duty — that citizens have in order to protect the well-being of society. Whistleblowing contributes to an energetic, participatory and democratic culture. Therefore, the EU should be committed to promoting a cultural change that ultimately makes whistleblowers come to be appreciated and perceived as an essential resource to democracy.
Whistleblowers often take a great individual risk when exposing corruption, fraud and mismanagement: they can be fired, sued, threatened, or even assaulted and murdered. Therefore, it is fundamental that effective protection mechanisms are implemented so that fear of retaliation is reduced and would-be whistleblowers and media come forward and expose misdeeds.
While is it true that some countries have promised to legislate whistleblower protection laws through international conventions, there is still a lot of work to be done in terms of getting governments to establish appropriate channels for disclosure; enforce meaningful protection from retaliation and implement policies regarding compensation for retaliation and, finally, set up follow-up procedures.
The EU needs to take a more proactive role and create a directive that requires member states to achieve a symmetric result on whistleblowers’ protection and disclosure mechanisms. There should be a single, comprehensive legal agenda for whistleblower protection. Europe should follow the US Dodd-Frank Act, which stipulates that whistleblowers could be eligable for a reward if they provide the authorities with useful information, and that they should be protected from legal prosecution and job loss.
Some positive steps have already been taken at the EU level. For instance, the EP resolution of 25 November 2015 on tax rulings actually provided very straight to the point recommendations, such as the creation of an independent European body responsible for collecting information from whistleblowers and carrying out investigations, as well as a pan-European whistleblower common fund. This fund aims to guarantee that citizens who act in the public interest and disclose information of any conduct that infringes upon the fundamental principles of the EU, receive adequate financial assistance. However, given that a resolution does not have any binding effect, these very interesting proposals have not been translated into action yet. Therefore, without a European directive on whistleblowing, the EU is losing an opportunity to improve transparency and accountability in governance.
Criminal defamation laws
The EU should follow the UK example and make sure all criminal defamation laws are eradicated and swapped, where required, with suitable civil defamation laws. It is true that criminal penalties were seldom applied to defamation, but forming a tradition of not applying such sentences it not enough. Moreover, the majority of imprisoned journalists have been convicted for defamation. Just the fact that these laws exist has a ‘chilling effect’ on free speech and media freedoms. UN human rights committee warned to the fact that defamation laws should not be crafted in such a way that they serve to stifle the freedom of expression. The threat of harsh criminal sanctions, like imprisonment, is an effective way to prevent a critical article from getting published. When writing critical stories about public officials or institutions, investigative journalists should not face such disproportionate criminal charges, let alone facing state-sponsored repression of free speech. There are more reasonable alternative methods to protect reputation, including civil (private) litigation and a right of reply. The public interest in publication should be highly taken into account. A truly democratic society must not maintain criminal defamation laws.
Tax evasion and offshores financial centres
Tax evasion and offshore financial centres are decisive issues, fuelling corruption and hindering political transparency and accountability in Europe. The banking secrecy and trust services delivered by European financial institutions operating offshore offer a shelter for the laundering of the earnings of political corruption, fraud and embezzlement. Offshore financings’ innately secretive nature has a corrosive effect on governance, permitting dishonest representatives to keep their plundered wealth, mansions, art and other assets away from the inquisitive control of public authorities.
The complex offshore structures and the tactics that offshore centres use to keep companies, trusts and their owners under cover, such as appointing artificial directors and shareholders, makes it nearly impossible to expose who is really behind offshore companies. This fact ultimately makes the already distrusted political class seem even more suspicious. If the EU is to build trust in political institutions and create a perception of progress in reducing corruption, it is inevitable that efforts in identifying and fighting tax havens become a serious priority.
The lack of appropriate sanctions for tax havens and countries cooperating with them has facilitated criminals, corrupt leaders, wealthy individuals and multinational companies moving their wealth and profits offshore to avoid paying tax. In turn, democracy in the EU gets undermined, as is the principle of cooperation and the integration process itself. The more tax is avoided, the more the remaining tax burden falls on ordinary people, who are forced to pay higher taxes while corporations and the rich avoid theirs. Moreover, companies threatening of moving elsewhere unless given concessions on lower regulation and lower taxes is causing tax competition between EU countries, which are now out-competing each other to offer the lowest taxes possible to attract foreign investment. By acting passively and not building a common EU strategy on taxation, politicians are putting the concept of cooperation and solidarity between members of the Union in jeopardy, which, in turn, ultimately compromises the integration process.
Key policy recommendations
At the EU level:
- The EU should create a pan-European whistle-blower fund and apply effective protection mechanisms as well as adequate and independent follow-up to the disclosures;
- The EU should apply appropriate sanctions for tax havens and countries cooperating with them;
- The EU should build a common strategy on taxation;
At the national level, with the support of the EU
- Governments must be more transparent, responsible, accountable and responsive with the public;
- Robust laws must be put in place to ensure citizens have the legal right to access information;
- Governments should actively raise public awareness of the freedom of information laws;
- All public institutions, regulatory authorities and local governments in the EU should be obliged to publish their decisions online, including in relation to public procurement;
- Governments should eradicate all criminal defamation laws, which should be swapped with suitable civil defamation laws.
 Mueller, John. Seminar on “Honesty and Trust: Theory and Experience in the Light of Post‑Socialist Experience,” Collegium Budapest, December 13‑14, 2002
 Transparency International’s Global Corruption Barometer
 Diamond, Larry. Developing Democracy: Toward Consolidation. Baltimore: Johns Hopkins University Press, 1999
 The Public’s Right to Know, Principles on Freedom of Information Legislation
 Whistleblowing in Europe: legal protections for whistle-blowers in the EU
 Dodd Frank Act