Political Accountability

Not only do regulatory frameworks achieve the objective for the reactive actions, but they also promote ethical behavior since they not only enforce compliance by threatening punishment but also by regulating practices (Miller, Roberts, and Spence 2005). Regulatory frameworks apply not only to professions (e.g., accountants) but also to elected and appointed officials such as public servants, commissioners, ministers, members of parliament, mayors, counselors, and so forth. It was previously mentioned that the ethical tone from the top or an ethical leader can provide the guidance for everyone to follow. Thus, if business leaders or government or the legislature do not adhere to basic principles to ensure transparency and accountability, it is very likely that neither employees nor the general public will. In fact, the European Commission (2014d, 52) found that most Europeans (81 percent) think corruption is part of their national business culture and is caused by close links between business and politics that hinder business competition. This finding makes the topic of lobbying more relevant because professional organizations, large entities, and powerful businessman will be lobbying for or against a piece of legislation or regulation.

Mulcahy (2015) argued that lobbying and the excessive access to key decision makers enjoyed by lobbyists were underlying causes of the economic policies that failed and resulted in the crisis (p. 16). Lobbying can have very harmful consequences for society and has, inter alia, been linked in Europe to cases of damage to the environment, corporations going bankrupt, abuses of human rights, and risk to public health and safety (p. 16). Furthermore, Yu and Yu (2011, 1890) found that firms involved in lobbying are significantly less likely to be detected as being involved in fraud and it will take 117 days longer for authorities to uncover the fraud, compared with firms not involved in lobbying. In addition, the same authors found that companies that commit fraud spend 77 percent more on lobbying expenses than firms that do not; furthermore, fraudulent firms spend 29 percent more on lobbying during their fraudulent period than the rest of the time (p. 1890). Lobbying thus has implications not only for corruption but also raises questions about governance because the fraudulent behavior of the lobbyist causes suspicions that the lobbied may have benefited by turning a blind eye to the fraudulent behavior.

Lobbying should be considered an integral part of a healthy democracy. It can be defined as “any direct or indirect communication with public officials, political decision-makers or representatives for the purposes of influencing public decision-making, and carried out by or on behalf of a client or any organized group” (Mulcahy 2015, 5). The lobbying landscape in Europe is diverse and complex, and it is becoming more complicated, even while the relevant regulation is terribly inadequate, thus making possible a state of “legal corruption” (p. 6). In such a situation, the wealthy and powerful corporations can exert influence on public officers and legislatures and influence the enactment of legislation, regulation, or public decision making in their favor.

Lobbying can be transparent and ethical when good practices are followed so as to mitigate potential corruption, such as the following:

• • The use of legislative footprint, which allows citizens to know who has influenced the passage of a law. Legislative footprint is a “document that would detail the time, person and subject of a decision-makers contact with stakeholders, and include any supporting materials provided by lobbyists in the course of legislative development. Such a footprint would give a picture of the interests mobilized by a decision-making process and thus help the public, the media, and anyone interested to scrutinize legislative work.¹⁴ It would also help address the issue of disproportionate influence by providing an incentive for policy-makers to seek out a balanced representation of views in their decision-making processes. The legislative footprint should ideally be a ‘live’ document, updated in close to real time, but an obligation to publish such a list as an annex to legislative reports would be a good start” (Mulcahy
• 2015, 24).
• • Controlling the risk of the revolving door phenomenon by using post-employment restrictions is an internationally recognized norm¹⁵ (Mulcahy 2015, 32). The term revolving door restriction relates to situations in which senior officials, legislatures, or ministers leave their position to work for the private sector in related industries having already been sympathetic to a particular company or sector that they had the responsibility to regulate. In addition, from their new job in the private sector they can influence former colleagues to decide in favor of their new employer—hence the cause for concern (Miller, Roberts, and Spence 2005, 141). An example would be a finance minister who upon leaving government immediately becomes a chief executive officer (CEO) at a bank, a minister of education who upon resigning is appointed at a private university, or a high-ranking official in the transport industry who takes up a top management position at a private entity in the same industry.

In the United States, the Ethics in Government Act 1978 mandated a 12-month cooling-off period. Additional measures that would contribute to making lobbying transparent include the following:

• 1. Use of mandatory registers for the lobbied and lobbyists, requiring timely registration and periodic reporting on activities by all professional lobbyists and organized interest groups as well as the lobbied. The registers ought to apply to both direct and indirect lobbying, targeting all institutions and stakeholders and capturing all lobbying activities, a summary of expenditures incurred, and any political donations and in-kind contributions provided.
• 2. Asset disclosure of elected and appointed officials ought to be made available to the public.
• 3. Self-regulation whereby a statutory code of conduct for lobbyists and the lobbied sets out “the core ethical principles including honesty and accuracy of information provided; early disclosure of identity and interests; respect for institutional rules incumbent on public officials; prohibition of undue influence, including inducements and gifts and hospitality above a minimum value; and a speedy resolution of conflicts of interests” (Mulcahy 2015, 44).
• 4. A robust system of conflict of interest disclosure of elected and public officials by establishing not only a code of conduct but a comprehensive ethical program, including (a) training of all stakeholders,
• (b) formation of ethics committee and appointment of ethics officer,
• (c) establishment of disciplinary procedures, and (d) policies on gifts and hospitality as well as procedures to be followed if there is conflict of interest on decisions to be taken that may place the elected or public officer in undue influence/knowledge that will provide him/her with direct or indirect benefit. In the United States, President Johnson authorized the Appearance of Impropriety Rule in 1965, aimed at conflict of interest issues. The rule required all executive branch employees and officials to avoid any action that might result in or create the appearance of

• (i) using public office for private gain;
• (ii) giving preferential treatment to any organization or person;
• (iii) impeding government efficiency or economy;
• (iv) losing complete independence or impartiality of action;
• (v) making a government decision outside official channels; or
• (vi) adversely affecting the confidence of the public in the integrity of the Government.¹⁶

Cognizant of the significance of lobbying and the fact that Australia, Canada, and the United States have relevant legislative frameworks, the Secretary General of the Council of Europe commissioned a study at the request of the European Committee on Legal Co-operation in order to determine the feasibility of preparing a legal instrument on a framework for lobbying.¹⁷

In addition to transparent and ethical lobbying, legislatures themselves ought to be transparent in their decisions and actions and they should not be gaining unlawful assets, hence the need for legislations on (a) regulation on political party funding; (b) asset disclosure of elected and appointed officials; (c) conflict of interest guidelines; and (d) ensuring there is a cooling-off period before an elected or appointed official is appointed in a related private industry (i.e., revolving door).

Political parties in many jurisdictions receive funding not only from the government budget (e.g., in Australia the rate of funding is AUD$1.84 per vote) (Miller, Roberts, and Spence 2005, 142) but from the private sector as well. Thus, to prevent any loopholes such as the private sector funding political campaigns or politicians in return for favors, contracts, enactment of legislation to their benefit, and so forth, the legislation demands transparent disclosure of funding received by political parties from legal or natural entities. Bertoa et al. (2014, 355) noted that political financing regulation “is often praised in terms of its ability to introduce equality among political parties, to create more transparent political parties and to lower the influence of affluent donors on the political decision-making process.” Interestingly, people in the United States are concerned with political party funding and are in favor of campaign finance reform (Shapiro 2003). In contrast, Avkiran, Kanol, and Oliver (2015) surveyed undergraduate students at one Australian university and found no relation between perceived level of trust in politicians and party financing regulation. One may question the representativeness of the sample used by Avkiran, Kanol, and Oliver, and consequently their findings cannot be generalized. Political party funding is not only about trust in politicians but also political accountability. The donor to a political party or election campaign could be a corporation advocating legislative measures, or individuals or even foreign governments who want to avoid paying taxation or wish to legalize an activity. It is beyond the scope of this chapter to address the amount of donations from particular industries toward influencing the enactment of particular legislation. What is certain is that the public has the right to know who is financing a political party’s election campaign and what they are receiving in return.

Reputation of the elected individuals is the mechanism that will keep “politicians in check” (Besley and Case 1995, 769). According to Ackerman (2014), enhancing government accountability is the best way to tackle corruption and thus guarantee the public interest aspect of the state (p. 294). This can be achieved if the government and public officers are accountable for each action they take, decisions they make, and expenditure they incur. Political accountability can be encouraged if there is a framework (legislative and comprehensive) protecting whistle-blowers. Miller, Roberts, and Spence (2005, 157) listed a number of famous whistle-blowers, including Karen Silkwood, who exposed the unsafe practices in Kerr McGee’s plutonium-processing plant where she worked; Clive Ponting, the British civil servant who exposed the government cover-up of the sinking of the Argentinian warship General Belgrano during the Falklands War; and Elsie Elliott, the Hong Kong resident whose tireless exposure of fraud and corruption assisted in creating the climate in which the Independent Commission Against Corruption could be established. A more recent whistle-blower, cited by Nielson (2013), is Hari Markopoulos who had tried for years to blow the whistle on the Madoff Ponzi scheme to the U.S. Securities and Exchange Commission.

For Jubb (1999), whistle-blowing contains six elements: (a) the act of disclosing damaging news; (b) the whistle-blower agent; (c) a disclosure subject, some (potential) wrongdoing; (d) a target organization held responsible; (e) a disclosure recipient; and (f) an outcome by which the disclosure enters the public domain (p. 78). In contrast, Johnson (2002) submitted that whistleblowing has four components: (a) an individual acts with the intention of making information public; (b) the information is conveyed to parties outside the organization who make it public and part of the public record; (c) the information has to do with possible or actual nontrivial wrongdoing in an organization; and (d) the person exposing the information is not a journalist or ordinary citizen but a member or former member of the organization (pp. 3—4). Regarding stages, Dworkin and Baucus (1998) suggested that whistle-blowing has four components: (a) a triggering event of unethical behavior or wrongdoing occurs; (b) the employee considers the activity, gathers information, and makes the decision to blow the whistle; (c) the employee speaks up and blows the whistle; and (d) the organization reacts with possible retaliation against the whistle-blower (p. 1282).

Enacting legislation to protect whistle-blowers is a piecemeal process unless there is a comprehensive framework supporting whistleblowers, psychologically and legally, during the period when they blow the whistle and at a later stage when the bullying and harassment begin. Similarly, a government ought to establish a committee/agency to address and deal with the issues raised by the whistle-blowers. For instance, if an army officer points out that some explosives are stored in a very dangerous way and there is a high risk of an explosion, who will undertake to investigate and avert the explosions in time before the disaster? The present author suggests that a whistle-blowing advice center be set up to assist (e.g., financially, emotionally, legally, and psychologically) the whistle-blowers and to address the issues raised if there is danger to human life or the potential for huge financial loss (e.g., explosives left in an area likely to cause an explosion¹⁸). Nielson (2013) noted that inexperienced regulators and understaffed regulatory agencies are provided with valuable assistance from whistle-blowers to understand key issues. Similarly, institutional change can occur but only if legislation provides a comprehensive framework.

If politicians want the public vote, they need to prove that they can be trusted (Krambia-Kapardis 2013). In order to be trusted, they should be transparent in their dealings and some good practices would go a long way in ensuring political accountability. To achieve this, the following suggestions are made:

• 1. Revolving door legislation ought to be enacted and cooling-offperiods ought to be set.
• 2. Asset disclosure legislation ought to be enacted whereby all elected and appointed public officials such as ministers and commissioners should disclose their assets at the commencement of their appointment and during their holding of office as well as when they leave their position to avoid illegal enrichment. Failure to do so would mean forfeiture of any emoluments or remuneration.
• 3. Conflicts of interests of all elected and appointed officials ought to be disclosed, and legislatures should avoid holding a position over and above their position in parliament that would impair their independence. For instance, there are some countries where members of parliament can be practicing lawyers, doctors, and so forth. This could place them in an awkward situation if they have clients who are interested in particular legislation being discussed in parliament.
• 4. A Code of Conduct for all elected and public appointed officials ought to be enacted. In addition, a disciplinary committee should be created to ensure that violations by these individuals are addressed.