Anti-corruption law violates business-owner privacy, EU court holds with myopic appraisal of transparency

A key European Union transparency law that allows watchdogs to trace corporate ownership to combat corruption has been struck down by the EU high court for compromising personal privacy.

EU beneficial owner registry map from Transparency International, 2021. Read more.
CC BY-NC-ND 3.0

I'm not a hard skeptic on the personal privacy prerogative of the EU General Data Protection Regulation. To the contrary, I've written that there's a lot to like about the emerging global privacy norms embodied in the GDPR, and, contrary to conventional wisdom, American social expectations, if not yet federal law, are converging with Europe's.

That said, the EU Court of Justice yesterday announced a profoundly problematic decision at the junction of public access and personal privacy. The blanket disclosure requirements of a key anti-money-laundering law can't stand, the court held, because they don't calibrate the public need for access with the privacy of natural-person business owners with sufficient precision, that is, as a function of necessity and proportionality.

Troublingly, the court characterized transparency norms, which are grounded in treaty and law more firmly in the EU than in the United States, as specially relevant to the public sector and not fully implicated in the private sector, in the context of business regulation.

The potential implication of this proposition is that access to information is limited to a requester learning "what the government is up to," to the exclusion of government oversight of the private sector. That's a cramped and problematic construction of access law that has dogged journalists and NGOs using the U.S. Freedom of Information Act (FOIA) for decades. Read more in Martin Halstuk and Charles Davis's classic 2002 treatment. As I have written in my comparative research on access to information, access to and accountability of the private sector is a problem of our times. We must solve it if we're to save ourselves from the maw of corporatocracy.

In my opinion, the CJEU decision fundamentally misunderstands and overstates the legitimate scope of data protection regulation with the effect of enervating transparency as a vital oversight tool. The impact is ironic, considering that data protection regulation came about as a bulwark to protect the public from private power. The court turned that logic on its head by using personal privacy to shield commercial actors from public scrutiny.

Unfortunately (for this purpose), I have my hands full in Europe (coincidentally) right now, and I lack time to write more. Fortunately, Helen Darbishire and the team at Access Info Europe already have written a superb summary. Their lede:

In a ruling that has sent shockwaves through Europe’s anti-corruption and transparency community, the Court found that the Fifth Anti-Money Laundering Directive (AMLD5, 2018) is too loosely framed and provides for overly-wide public access to the [ownership] registers without a proper justification of the necessity and proportionality of the interference with the rights to privacy and personal data protection of the beneficial owners.

A saving grace, Access Info observed, is that the court did not rule out transparency per se; rather, requesters will have to fight for access case by case on the facts, upon a properly narrowed regulation. In U.S. constitutional terms, it's like saying the one-size-fits-all law was struck for vagueness, but the regulatory objective still can be achieved under a narrower rule that works as applied. All the same, journalists and non-profit watchdogs are not famously well financed to fight for access on a case-by-case basis.

The case is No. C‑37/20 & No. C‑601/20 in the Grand Chamber of the CJEU.

Qatar World Cup opens Sunday; meanwhile, Netflix series stokes embers of FIFA corruption scandal

I visited CONMEBOL HQ in Asunción, Paraguay, in October.
The South American angle on the FIFA corruption scandal
was engagingly fictionalized in El Presidente in 2020.
(Photo by RJ Peltz-Steele CC BY-NC-SA 4.0.)

The sport world is abuzz over the Netflix documentary series, FIFA Uncovered, dropped November 9, just weeks before the FIFA World Cup opener in Qatar.

Many in Qatar are crying foul by filmmaker Miles Coleman for dredging up the ugliness of the FIFA corruption scandal, the focus of this docuseries, right now. But in an interview with renowned MENA scholar James Dorsey, Coleman, who created This Is Football for Amazon Prime in 2019, said he had no motive other than historical documentation. The timing of the release, Coleman said, is to bring football fans up to speed on the facts, so they can have informed conversations around the Qatar World Cup.

FIFA was rocked by scandal in 2015 when investigators led by the U.S. Department of Justice (DOJ) arrested top officials in Zurich and issued an avalanche of indictments. It was revealed then that corruption practically poisoned every part of world football governance, especially the bidding process for the world's top sporting event and its 2010 award to Russia for 2018 and Qatar for 2022.

Qatar narrowly edged out a bid from the United States in 2010, and disgraced FIFA President Sepp Blatter and his allies accused the United States of spite. Purportedly relieved of corrupt process, FIFA in 2018 awarded the 2026 World Cup to the joint bid of the United States, Canada, and Mexico.

When issues remain controverted, the docuseries presents all voices, Coleman told Dorsey. Indeed, the interviews are what makes the series worthwhile. Most of the story has been told already and well; I read and reviewed a number of books on the subject in the first pandemic summer. The docuseries, though, includes interviews with just about every key player, including Blatter himself, as well as Qatar bid chief H.E. Hassan Al Thawadi; "Qatar whistleblower" Phaedra Al-Majid, featured recently on Norwegian television; and Mary Lynn Blanks, romantic partner of corrupted American football official Chuck Blazer, who died in 2017.

Among the revelations, or at least confirmed suspicions, arising from the docuseries interviews is the fact, borne out by evidence besides his own testimony, that Blatter favored the United States rather than Qatar to host the 2022 World Cup. For all Blatter's failings, he was outmaneuvered by the colossal corruption machine that he helped to create. African Football Confederation President Issa Hayatou, a rival of Blatter's within FIFA, was key to securing the Qatari win. Hayatou was joined in his efforts by Jack Warner, president of the North, Central America and Caribbean Association, whose defection infuriated Blazer.

On Wednesday next week, November 23, at Jagiellonian University in Kraków, Poland, I will lead a discussion, "Law, Development, and the World Cup."  The program, in English, begins at 3 p.m. local time at Pałac Larischa 203, Bracka 12.

The World Cup opens Sunday night in Doha, Nov. 20, at 1100 US EST/1600 GMT, when Qatar hosts Ecuador in Group A. The United States MNT plays its Group B opener against Wales on Monday, Nov. 21, at 1400 US EST/1900 GMT. Poland plays its Group C opener against Mexico on Tuesday, Nov. 22, at 1100 US EST/1600 GMT/1700 CET.

Hat tip to Alessandro Balbo Forero, an alum of my Comparative Law class who wrote his final paper on football and Brexit, for alerting me to the drop of FIFA Uncovered. He's an Arsenal supporter, but nobody's perfect.

Here is the trailer for FIFA Uncovered:

And here is the Dorsey interview of Coleman:

Kenyan presidential election has Nairobi on edge

UPDATE, Aug. 19: William Ruto won the Kenya presidential election.  Read more at NPR, Aug. 15.

Kenya will vote for a new president next month in a general election laced with ethnic tensions, which has people in Nairobi on edge.

For two five-year terms, incumbent President Uhuru Kenyatta has labored to convince Kenyans that his agenda has generated economic opportunity and quelled corruption. Most of that time he has been effective, at least at the convincing, as evidenced by approval ratings exceeding 70%. But those ratings have occasionally plunged upon allegations that shook the moral high ground.

Perhaps most damning, Kenyatta faced charges in the International Criminal Court alleging complicity in violence, including the burning to death of 28 people inside a church, related to a previous election cycle. In 2014, the court dismissed the indictment for insufficient evidence. Frustrated prosecutors alleged witness tampering and intimidation.

Now Kenyatta is term limited. His exit from power has broader significance because he represents a family dynasty that has maintained control of Kenyan politics since 1963 independence. A rivalry with the Odinga family has lent Kenyatta dominance a gloss of competition, and sometimes a run for its money. But perennial presidential challenger Raila Odinga has never quite made the grade, and the seesawing fortunes of the families come off to more numerous outsiders as oligarchic.

Threads of ethnic tension underlie the contest, too.  The Kenyatta family is part of Kenya's plurality ethnic group, the Kikuyu, a Bantu people constituting about a fifth of the population. Fairly or unfairly, Kenyatta is perceived as having allocated political power to aggrandize Kikuyu hegemony.

But neither of the two leading candidates for the presidency is Kikuyu. One candidate is the familiar Odinga, who hails from the Luo ethnic group, a Nilotic people, like the well known Maasai. Traveling in the Maasai Mara in June, anecdotally, I found people more prone than their Nairobi fellows to view the presidential race through an ethnic prism. Or maybe they were just more willing to say so.

Me with a Maasai mate in June
(C) Alison 2022, licensed exclusively to RJ Peltz-Steele

Though they are longtime rivals, Kenyatta has endorsed Odinga. Further lending support to the feel of oligarchy, the two share a history of occasional accusations of financial improprieties.  Odinga has chosen a Kikuyu running mate with a history similarly suggestive of insider status.

The other contender is the incumbent deputy president, William Ruto. Ruto, who belongs to the Kalenjin ethnic group, also a Nilotic people, was charged in The Hague over election violence, alongside Kenyatta, and saw his charges dismissed likewise in 2016. Ruto also chose a Kikuyu running mate; Martha "Iron Lady" Karua would be the nation's first female deputy president.

That both candidates chose Kikuyu running mates shows the priority of appealing to an ethnic plurality that might fear the loss of long familiar station. Odinga and Ruto have traded the lead in polls, but either way, it is overwhelmingly likely that the highest office in Kenya will, historically, slip out of Kikuyu hands.

With a history of violence following elections—besides the '07-08 turmoil that precipitated ICC investigation, Kenyatta's narrow reelection margin five years ago led to civil unrest and a dramatic court challenge—people in Nairobi are on edge.  I was repeatedly warned to stay away from any assembly that might even morph into a political rally. And I found some city dwellers flatly unwilling to venture out after dark.

All that said, I have to admit, what first caused me to take an interest in the Kenyan presidential election is none of the above. Rather, it was a Ruto billboard that I saw in many places around Nairobi. The billboard boasts the curious tagline, "EVERY HUSTLE MATTERS," or, sometimes, "EVERY HUSTLE COUNTS."

CC BY-NC-SA 4.0 RJ Peltz-Steele

I laughed out loud when I first saw it. I asked a taxi driver what it meant, and he told me matter-of-factly that it meant Ruto promises plenty of jobs, "hustles," for people: important in an economy in which a person might derive income from many and various part-time gigs.

A more trusted Kenyan source later told me, yes, Kenyan English does recognize the negative connotation of the word "hustle." And Ruto did indeed take some heat for his unusual choice of words in an election in which anti-corruption figures prominently.

Maybe in the end, the hustle will work for Ruto. After two terms of Uhuru Kenyatta leadership and a half-century of dynastic family control, Kenya struck me as mired in a state of development ill-befitting its reputation as an East Africa leader and below par relative to neighboring Uganda and Tanzania. Perhaps for voters, it's the economy, stupid.

RIP Andrew Jennings, legendary investigative sport reporter who exposed corruption in FIFA, IOC

Andrew Jennings testifies in a Brazilian legislative probe  of the national football
federation (photo by Waldemir Barreto/Agência Senado CC BY 2.0).

A pause today to take stock of the work of investigative reporter and anti-corruption advocate Andrew Jennings, publisher of Transparency in Sport, who died on January 8.

Jennings was a tireless and cantankerous thorn in the side of Big Sport.  It would be difficult to overstate the role he played in precipitating the sea-changing revelations of corruption in the administration of the Olympics and international football.  He broke new ground with his books, The Lord of the Rings (1992) and Foul! The Secret World of FIFA (2006).  The "fall of the house of FIFA" and boss Sepp Blatter in the 2015 corruption scandal probably would not have happened had Jennings not sewed the seeds a decade earlier.

Jennings was a prolific writer across media, his many books besides.  Notwithstanding a more-than-fair share of earned global acclaim and enmity, Jennings also was a tirelessly supportive colleague in his crusade.  Email to his blog's contact address went directly to him; he personally and kindly answered a query of mine when I was researching on sport accountability.  He penned a foreword and praise for Whatever It Takes: The Inside Story of the FIFA Way, the book (reviewed) by Australian whistleblower (and friend of The Savory Tort) Bonita Mersiades.

Andrew Jennings has been widely memorialized, e.g., Sports Illustrated. His death leaves a gaping hole in the agencies of accountability for the quasi-corporate behemoths of transnational sport.  But his work has shown the world irrevocably that corruption thrives in the dark soil of secrecy.

Gambia AG initiates truth inquiry to get country on track

A Gambian customs office shades goats near the southern border with Senegal.
All images: RJ Peltz-Steele CC BY-SA 4.0.

The TRRC process includes public awareness via signage.

With the independence of a nation's attorney general now the subject of discussion in the United States, consider Ba Tambadou, AG of the African nation of Gambia, where I visited on its independence day, February 18. A former Hague prosecutor, Tambadou was instrumental in creating the present Truth, Reconciliation, and Reparations Commission, which now is holding hearings in Gambia and dropping revelations nearly by the day in the news there.

The Gambian TRRC concerns abuses of power, including repressive violence and press suppression, that kept Yahya Jammeh in control of the country from 1994 coup to surprise election upset in 2017. The ex president now lives in exile, in reportedly sweet digs in Equatorial Guinea. He seems to have ample access to the fortune he looted on the job, which is looking like hundreds of millions of dollars, despite a 2017 US freeze on his assets under the Magnitsky Act.

TRRC proceedings captivate public attention on TVs in Banjul.

Unfortunately Gambia's elected president, Adama Barrow, has raised eyebrows by recently rescinding a pledge to serve only three years, though the national constitution does permit five. Political opponents whisper about corruption, and no doubt nerves are raw since the country finally freed itself of Jammeh. All the more important then is the independent judgment exercised by Tambadou to shine light on historical misdeeds. The TRRC is the sixth of its kind on the African continent and essential to break the cycle of maladministration in government, and hence the cycle of underdevelopment and poverty in this brilliantly diverse yet smallest mainland nation of Africa.

American rice bags are repurposed to make a mattress in Gambia. All images: RJ Peltz-Steele CC BY-SA 4.0.

Money in soccer, money in higher ed: Lazio will never be Juventus; will the UMasses ever be ‘UMass’?

This morning I was reminded of this observation about football (soccer) from The Blizzard (#25, June 2017), spoken by Swedish football manager Sven-Göran Eriksson, now coaching in China, in an interview by football writer Vladimir Novak (@VNovak13):

Well, whether you like it or not, to make a winning team you need money. One could argue that Leicester has won the Premier League title even though they invested far less money than, for example, Manchester United or other clubs, but that was an exception. Fact is, in the long run, if you want to be a big club, you need money. Bayern Munich is Bayern Munich, Barcelona is Barcelona, Real Madrid is Real Madrid and so on. You cannot build a great team without money. I think you have a good example with Lazio. When I was at Lazio, Sergio Cragnotti was the chairman and owner of the club, and he invested a lot of money. And then, after he left, all changed. Lazio are still a big club. Maybe they have the chance to win the Serie A title now and then, but they are not Juventus.

The statement reminds me of why I stopped being a baseball fan many years ago.  The Baltimore Orioles were my Lazio.  They would never be the Red Sox or Yankees.

It struck me that this almost self-evident assertion is true of more than football and baseball—indeed, is true of higher education.  And in higher education, disparate resources play an out-sized role in perpetuating socio-economic disparity and widening the gap of opportunity and wealth that afflicts the United States.

In Arkansas, where I started in academics, the public higher ed system was loosely and unofficially divided in just this way.  The well-resourced University of Arkansas—the top tier never needs a geographic locator (Fayetteville)—served the state’s elite.  The slimly resourced University of Arkansas at Little Rock served an urban working class.  And the resource-starved University of Arkansas at Pine Bluff served the rural and poor—disproportionately African American.  The same dynamic described the state’s law schools in Fayetteville and Little Rock (with few graduate options in Pine Bluff).  Incentivized by monied interests, as usual in politics, the state legislature perennially resisted calls to level the playing field.  The schools themselves were complicit in maintaining the status quo.

I thought Massachusetts would take a more progressive approach with its first and only public law school in Dartmouth.  It hasn’t, at least not yet.  Boston’s many private schools fill in the top-tier options in Massachusetts, while the law school, affiliated with UMass Dartmouth, fits in at the Little Rock-like mid-level, focusing on the working-class South Coast.  The otherwise elite “UMass” (Amherst), the state flagship, has legal research resources—for that matter, research resources in any field—superior to UMass Dartmouth’s, even with no law school there.  UMass Boston might be the state’s Pine Bluff.  Each campus knows its place and stays in its socio-economic lane.

 

There is limited revenue sharing to level the playing field in European soccer and in American baseball.  Those measures resulted when, and only insofar as, the un-level playing field was recognized as a threat to the survival of the sport business model.  That’s OK; sport is business.

Higher education isn’t business.  Higher education is supposed to be about opportunity for all those who merit it.  To be clear, this is a libertarian ideal.  Higher education is about teaching people to fish, not giving fish away.  It’s potentially the best social welfare program ever conceived.

I was reminded of this sport-ed money analogy this morning when I received a text alert that the main library at UMass Dartmouth is closing because of an air conditioning failure—again.  I wonder how often the A/C fails at UMass (Amherst).  You cannot build a great library, law school, university, or team without money.

As a society, we have to come to grips with the role of money in higher education—especially the money managed by foundations that purport independence and entitlement to opacity despite being under the direct control of supposedly transparent public universities.

We have to decide whether higher ed will continue to be part of the wealth-and-opportunity gap problem or part of the solution.  The UMass campuses east of Amherst deserve more than an occasional title.  They should all be Juventus.