Combating Corruption in Kosovo

A Report by

Operation Kosovo[1]

Chicago-Kent College of Law

Illinois Institute of Technology

23 October 2006[2] - revised 29 October 2006

Table of contents

I. Introduction. 5

II. The problem.. 7

A. UNDP public opinion survey. 8

B. USAID report 8

C. Serb-centric reports. 9

E. Past Failures in Reducing Corruption. 10

III. Best practices from the United States and elsewhere. 11

B. Case studies. 16

1. Italian Falcone story. 16

2. All the President’s Men. 17

3. Greylord. 20

4. ABSCAM... 22

5. Silver Shovel 23

6. Synthesis from U.S. stories. 25

1. Successful investigations depend on understanding the informal networks within which corruption occurs 27

a) Confidential informants are necessary to develop an understand of corruption networks and to select specific individuals for deeper investigation. 27

b) Financial investigations and audits can be important aids to early identification of investigative targets. 28

2. Criminal intelligence must be turned into admissible evidence. 28

a) Cooperating witnesses must be recruited, often by threatening prosecution 28

b) Witnesses will not testify unless they believe they can be protected, and this often means being willing to uproot themselves and their families to move to a distant place and foreign culture. 29

3. Electronic surveillance must be conducted to produce compelling evidence for use at trial 30

4. Experienced undercover agents usually are necessary to manage informants and cooperating witnesses and to conduct electronic surveillance. 32

5. Anti-corruption campaigns cannot succeed without a professional criminal justice infrastructure 32

a) Investigators, prosecutors and judges must have the requisite skill, independence and resistance to corruption 32

b) Investigative journalism can complement official investigations but it cannot succeed on its own. 34

c) Anti-corruption institutions must have the requisite legal, financial, and technological resources 35

IV. Challenges in adapting best practices to Kosovo. 35

A. Introduction. 35

B. Application of Theoretical Models to Kosovo. 36

C. Four Preconditions. 38

D. Differentiating Types of Corruption and Setting the Right Priorities. 41

V. Recommendations. 44

A. Measures of Success. 45

B. Four Kosovo Hypotheticals. 45

1. Public corporation procurement: member of the board bids, loses, causes re-evaluation 46

2. “You were the winner, but we are going to reopen bids unless you contribute $1 million to the fund of my party leader” 46

3. “If you give me ten thousand Euros, the contract is yours”. 47

4. Blocking the hospital 47

C. Building Political Will 48

1. Pick the right targets. 48

2. Empower the right anti-corruption champion. 49

3. Give full legal authority to a special prosecutor 49

4. Organize undercover investigations and recruit cooperating witnesses. 52

a) Authorize undercover investigations. 52

b) Allow cooperating witnesses. 55

5. Permit electronic eavesdropping under appropriate conditions. 55

a) Wiretapping. 55

b) “Wires”. 56

6. Institutionalize governmental monitoring. 57

a) Model the Kosovo Auditor-General on the U.S. GAO.. 57

b) Model the Kosovo Anti-Corruption Agency on U.S. Inspectors General 58

7. Establish more “hotlines”. 59

8. Improve witness protection. 60

9. Support investigative journalism.. 62

10. Reinforce anti-corruption norms. 62

VI. Prospects for success. 64

A. What’s possible in one year 64

B. What’s possible in three years. 65

C. What’s possible in ten years. 66

VII. Where to Begin?. 66

B. Human Trafficking. 67

C. Government Contracting. 68

D. Finding Potential Informants and Cooperating Witnesses to “Jam Up”. 68

VIII. Appendices. 69

A. Appendix I 69

1. Greylord Transcripts. 69

2. ABSCAM Transcripts. 74

B. Appendix II 79

C. Appendix III 80

1. Fighting Corruption at the Municipal (Local Government) Level 80

2. Fighting Corruption in Central Government 82

3. Fighting Corruption at the Parliamentary Level 83

4. Fighting Corruption in the Business Sector 84

I. Introduction

Kosovo, once prominent on Western TV screens and on the front pages of newspapers, is about to become independent. Whether independence, long dreamed of by most of its Albanian inhabitants, helps them realize their aspirations depends on whether their leaders can eliminate pervasive corruption.

Kosovo is legally a province of Serbia, but 90% of the population is Albanian. Geographically, Kosovo is about one-tenth the size of Switzerland and has a population of roughly two million. The Albanian population has resisted what it sees as “occupation” by the Ottoman Empire