January 19, 2009
On the eve of the presidential inauguration in the United States, many in the compliance community are speculating about what a new administration will mean for FCPA enforcement in the United States and anti-bribery efforts internationally. President-Elect Obama, then Senator Obama, addressed this issue directly and forcefully during his 2006 visit to Kenya. Because so much of his speech is devoted to a discussion of the cost of corruption, I have included it here in its entirety.August 28, 2006 An Honest Government, A Hopeful Future University of Nairobi
"The first time I came to Kenya was in 1987. I had just finished three years of work as a community organizer in low-income neighborhoods of Chicago, and was about to enroll in law school. My sister, Auma, was teaching that year at this university, and so I came to stay with her for a month.
My experience then was very different than it has been on this trip. Instead of a motorcade, we traveled in my sister's old VW Beetle, which even then was already ten years old. When it broke down in front of Uhuru Park, we had to push until some joakalis came to fix it by the side of the road. I slept on the couch of my sister's apartment, not a fancy hotel, and often took my meals at a small tea-house in downtown Nairobi. When we went upcountry, we traveled by train and matatu, with chickens and collard greens and sometimes babies placed in my lap.
But it was a magical trip. To begin with, I discovered the warmth and sense of community that the people of Kenya possess - their sense of hopefulness even in the face of great difficulty. I discovered the beauty of the land, a beauty that haunts you long after you've left.
And most importantly for me, I discovered the story of my father's life, and the story of his father before him.
I learned that my grandfather had been a cook for the British and, although he was a respected elder in his village, he was called "boy" by his employers for most of his life. I learned about the brutal repression of Operation Anvil, the days of rape and torture in the "Pipeline" camps, the lives that so many gave, and how my grandfather had been arrested briefly during this period, despite being at the periphery of Kenya's liberation struggles.
I learned how my father had grown up in a tiny village called Alego, near Siaya, during this period of tumult. I began to understand and appreciate the distance he had traveled - from being a boy herding goats to a student at the University of Hawaii and Harvard University to the respected economist that he was upon his return to Kenya. In many ways, he embodied the new Africa of the early Sixties, a man who had obtained the knowledge of the Western world, and sought to bring it back home, where he hoped he could help create a new nation.
And yet, I discovered that for all his education, my father's life ended up being filled with disappointments. His ideas about how Kenya should progress often put him at odds with the politics of tribe and patronage, and because he spoke his mind, sometimes to a fault, he ended up being fired from his job and prevented from finding work in the country for many, many years. And on a more personal level, because he never fully reconciled the traditions of his village with more modern conceptions of family - because he related to women as his father had, expecting them to obey him no matter what he did - his family life was unstable, and his children never knew him well.
In many ways, then, my family's life reflects some of the contradictions of Kenya, and indeed, the African continent as a whole. The history of Africa is a history of ancient kingdoms and great traditions; the story of people fighting to be free from colonial rule; the heroism of not only of great men like Nkrumah and Kenyatta and Mandela, but also ordinary people who endured great hardship, from Ghana to South Africa, to secure self-determination in the face of great odds.
But for all the progress that has been made, we must surely acknowledge that neither Kenya nor the African continent have yet fulfilled their potential - that the hopefulness of the post-colonial era has been replaced by cynicism and sometimes despair, and that true freedom has not yet been won for those struggling to live on less than a few shillings a day, for those who have fallen prey to HIV/AIDS or malaria, to those ordinary citizens who continue to find themselves trapped in the crossfire of war or ethnic conflict.
One statistic powerfully describes this unfulfilled promise. In early 1960's, as Kenya was gaining its independence, its gross national product was not very different from that of South Korea. Today, South Korea's economy is forty times larger than Kenya's.
How can we explain this fact? Certainly it is not due to lack of effort on the part of ordinary Kenyans - we know how hard Kenyans are willing to work, the tremendous sacrifices that Kenyan mothers make for their children, the Herculean efforts that Kenyan fathers make for their families. We know as well the talent, the intelligence, and the creativity that exists in this country. And we know how much this land is blessed - just as the entire African continent is blessed - with great gifts and riches.
So what explains this? I believe there a number of factors at work.
Kenya, like many African nations did not come of age under the best historical circumstances. It suffers from the legacy of colonialism, of national boundaries that were drawn without regard to the political and tribal alignments of indigenous peoples, and that therefore fed conflict and tribal strife.
Kenya was also forced to rapidly move from a highly agrarian to a more urban, industrialized nation. This means that the education and health care systems - issues that my own nation more than 200 years old still struggles with - lag behind, impacting its development.
Third, Kenya is hurt from factors unique to Africa's geography and place in the world -- disease, distance from viable markets and especially terms of trade. When African nations were just gaining independence, industrialized nations had decades of experience building their domestic economies and navigating the international financial system. And, as Frederick Douglass once stated: "Power concedes nothing without a demand. It never did, and it never will." As a result, many African nations have been asked to liberalize their markets without reciprocal concessions from mature economies. This lack of access for Africa's agriculture and commodities has restricted an important engine of economic growth. Other issues, such as resource extraction and the drain of human capital have also been major factors.
As a Senator from the United States, I believe that my country, and other nations, have an obligation and self-interest in being full partners with Kenya and with Africa. And, I will do my part to shape an intelligent foreign policy that promotes peace and prosperity. A foreign policy that gives hope and opportunity to the people of this great continent.
But, Kenya must do its part. It cannot wait for other nations to act first. The hard truth is that nations, by and large, will act in their self-interest and if Kenya does not act, it will fall behind.
It's more than just history and outside influences that explain why Kenya lags behind. Like many nations across this continent, where Kenya is failing is in its ability to create a government that is transparent and accountable. One that serves its people and is free from corruption.
There is no doubt that what Kenyans have accomplished with this independence is both impressive and inspiring. Among African nations, Kenya remains a model for representative democracy - a place where many different ethnic factions have found a way to live and work together in peace and stability. You enjoy a robust civil society; a press that's free, fair, and honest; and a strong partnership with my own country that has resulted in critical cooperation on terrorist issues, real strides in fighting disease and poverty, and an important alliance on fostering regional stability.
And yet, the reason I speak of the freedom that you fought so hard to win is because today that freedom is in jeopardy. It is being threatened by corruption.
Corruption is not a new problem. It's not just a Kenyan problem, or an African problem. It's a human problem, and it has existed in some form in almost every society. My own city of Chicago has been the home of some of the most corrupt local politics in American history, from patronage machines to questionable elections. In just the last year, our own U.S. Congress has seen a representative resign after taking bribes, and several others fall under investigation for using their public office for private gain.
But while corruption is a problem we all share, here in Kenya it is a crisis - a crisis that's robbing an honest people of the opportunities they have fought for - the opportunity they deserve.
I know that while recent reports have pointed to strong economic growth in this country, 56% of Kenyans still live in poverty. And I know that the vast majority of people in this country desperately want to change this.
It is painfully obvious that corruption stifles development - it siphons off scarce resources that could improve infrastructure, bolster education systems, and strengthen public health. It stacks the deck so high against entrepreneurs that they cannot get their job-creating ideas off the ground. In fact, one recent survey showed that corruption in Kenya costs local firms 6% of their revenues, the difference between good-paying jobs in Kenya or somewhere else. And corruption also erodes the state from the inside out, sickening the justice system until there is no justice to be found, poisoning the police forces until their presence becomes a source of insecurity rather than comfort.
Corruption has a way of magnifying the very worst twists of fate. It makes it impossible to respond effectively to crises -- whether it's the HIV/AIDS pandemic or malaria or crippling drought.
What's worse - corruption can also provide opportunities for those who would harness the fear and hatred of others to their agenda and ambitions.
It can shield a war criminal - even one like Felicien Kabuga, suspected of helping to finance and orchestrate the Rwandan genocide - by allowing him to purchase safe haven for a time and robbing all humanity of the opportunity to bring the criminal to justice.
Terrorist attacks - like those that have shed Kenyan blood and struck at the heart of the Kenyan economy - are facilitated by customs and border officers who can be paid off, by police forces so crippled by corruption that they do not protect the personal safety of Kenyans walking the streets of Nairobi, and by forged documents that are easy to find in a climate where graft and fraud thrive.
Some of the worst actors on the international stage can also take advantage of the collective exhaustion and outrage that people feel with official corruption, as we've seen with Islamic extremists who promise purification, but deliver totalitarianism. Endemic corruption opens the door to this kind of movement, and in its wake comes a new set of distortions and betrayals of public trust.
In the end, if the people cannot trust their government to do the job for which it exists - to protect them and to promote their common welfare - all else is lost. And this is why the struggle against corruption is one of the great struggles of our time.
The good news is that there are already signs of progress here. Willingness to report corruption is increasingly significantly in Kenya. The Kenyan media has been courageous in uncovering and reporting on some of the most blatant abuses of the system, and there has been a growing recognition among people and politicians that this is a critical issue.
Among other things, this recognition resulted in the coalition that came to power in the December elections of 2002. This coalition succeeded by promising change, and their early gestures - the dismissal of the shaky judges, the renewed vigor of the investigation into the Goldenberg scandal, the calls for real disclosure of elected officials' personal wealth - were all promising.
But elections are not enough. In a true democracy, it is what happens between elections that is the true measure of how a government treats its people.
Today, we're starting to see that the Kenyan people want more than a simple changing of the guard, more than piecemeal reforms to a crisis that's crippling their country. The Kenyan people are crying out for real change, and whether one voted orange or banana in last year's referendum, the message that many Kenyans seemed to be sending was one of dissatisfaction with the pace of reform, and real frustration with continued tolerance of corruption at high levels.
And so we know that there is more work to be done - more reforms to be made. I don't have all the solutions or think that they'll be easy, but there are a few places that a country truly committed to reform could start.
We know that the temptation to take a bribe is greater when you're not making enough on the job. And we also know that the more people there are on the government payroll, the more likely it is that someone will be encouraged to take a bribe. So if the government found ways to downsize the bureaucracy - to cut out the positions that aren't necessary or useful - it could use the extra money to increase the salary of other government officials.
Of course, the best way to reduce bureaucracy and increase pay is to create more private sector jobs. And the way to create good jobs is when the rules of a society are transparent - when there's a clear and advertised set of laws and regulations regarding how to start a business, what it takes to own property, how to go about getting a loan - there is less of a chance that some corrupt bureaucrat will make up his own rules that suit only his interests. Clarifying these rules and focusing resources on building a judicial system that can enforce them and resolve disputes should be a primary goal of any government suffering from corruption.
In addition, we know that the more information the public is provided, the easier it will be for your Kenyan brothers and sisters out in the villages to evaluate whether they are being treated fairly by their public servants or not. Wealth declarations do little good if no one can access them, and accountability in government spending is not possible if no one knows how much was available and allocated to a given project in the first place.
Finally, ethnic-based tribal politics has to stop. It is rooted in the bankrupt idea that the goal of politics or business is to funnel as much of the pie as possible to one's family, tribe, or circle with little regard for the public good. It stifles innovation and fractures the fabric of the society. Instead of opening businesses and engaging in commerce, people come to rely on patronage and payback as a means of advancing. Instead of unifying the country to move forward on solving problems, it divides neighbor from neighbor.An accountable, transparent government can break this cycle. When people are judged by merit, not connections, then the best and brightest can lead the country, people will work hard, and the entire economy will grow - everyone will benefit and more resources will be available for all, not just select groups.
Of course, in the end, one of the strongest weapons your country has against corruption is the ability of you, the people, to stand up and speak out about the injustices you see. The Kenyan people are the ultimate guardians against abuses.
The world knows the names of Wangari Maathai and John Githongo, who are fighting against the insidious corruption that has weakened Kenya. But there are so many others, some of whom I'm meeting during my visit here - Betty Murungi, Ken Njau, Jane Onyango, Maina Kiai, Milly Odhiombo, and Hussein Khalid. As well as numerous Kenyan men and women who have refused to pay bribes to get civil servants to perform their duties; the auditors and inspectors general who have done the job before them accurately and fairly, regardless of where the facts have led; the journalists who asked questions and pushed for answers when it may have been more lucrative to look the other way, or whip up a convenient fiction. And then there are anonymous Kenyan whistleblowers who show us what is, so that we can all work together to demand what should be.
By rejecting the insulting idea that corruption is somehow a part of Kenyan culture, these heroes reveal the very opposite - they reveal a strength and integrity of character that can build a great country, a great future. By focusing on building strong, independent institutions - like an anti-corruption commission with real authority - rather than cults of personality, they make a contribution to their country that will last longer than their own lives. They fight the fight of our time.Looking out at this crowd of young people, I have faith that you will fight this fight too. You will decide if your leaders will be held accountable, or if you will look the other way.
You will decide if the standards and the rules will be the same for everyone - regardless of ethnicity or of wealth.
And you will determine the direction of this country in the 21st century - whether the hard work of the many is lost to the selfish desires of a few, or whether you build an open, honest, stronger Kenya where everyone rises together.
This is the Kenya that so many who came before you envisioned - all those men and women who struggled and sacrificed and fought for the freedom you enjoy today.
I know that honoring their memory and making that freedom real may seem like an impossible task - an effort bigger than you can imagine - but sometimes all it takes to move us there is doing what little you can to right the wrongs you see.
As I said at the outset, I did not know my father well - he returned to Kenya from America when I was still young. Since that time I have known him through stories - those my mother would tell and those I heard from my relatives here in Kenya on my last trip to this country.
I know from these stories that my father was not a perfect man - that he made his share of mistakes and disappointed his share of people in his lifetime.
As our parents' children, we have the opportunity to learn from these mistakes and disappointments. We have the opportunity to muster the courage to fulfill the promise of our forefathers and lead our great nations towards a better future.
In today's Kenya - a Kenya already more open and less repressive than in my father's day - it is that courage that will bring the reform so many of you so desperately want and deserve. I wish all of you luck in finding this courage in the days and months to come, and I want you to know that as your ally, your friend, and your brother, I will be there to help in any way I can. Thank you."