Deputy Administrator Isobel Coleman at USAID’s Anti-Corruption Policy Webinar

DEPUTY ADMINISTRATOR ISOBEL COLEMAN: Good morning. I’m thrilled to be here today to welcome you to our webinar on USAID’s first-ever Anti-Corruption Policy.

Countering corruption is critical to USAID’s mission to advance a free, peaceful, and prosperous world. 

It’s easy to imagine money hiding in offshore accounts or oligarchs purchasing yachts with stolen funds – and be lulled into a sense that this has nothing to do with development. However, corruption isn’t a victimless crime.  

It diverts crucial resources that are needed to lift people out of poverty, improve health outcomes, and ensure that children have access to a quality education. Corruption stymies progress in all the sectors in which we work and harms the most vulnerable in society, especially women; Indigenous Peoples; racial, religious, and ethnic minorities; and LGBTQI+ people. 

Corruption in the health sector limits access to quality and affordable care, increasing costs and decreasing the quality of services. When people must resort to paying bribes to access life saving medical care, it results in preventable death and suffering.

A 2019 survey by Transparency International found over 80 percent of people in low income countries have experienced corruption in the health sector – including requests for informal payments or bribes, ghost workers and absenteeism, referrals made on the basis of personal profit, and counterfeit pharmaceuticals – at an estimated loss of $500 billion per year.

A lack of transparency regarding major contracts and corruption in public procurement leads to dishonest spending of public funds, robbing citizens of fair and equitable access to quality public goods and services. In Zambia, the Lungu administration paid $33 million in 2016 to a PRC-linked contractor to build a university in Mansa; construction never began, but the money is gone. They also contracted to buy 42 fire trucks at one million dollars a piece; the real price was $200,000 per truck. These are resources that were supposed to be used for the benefit of the people and instead lined officials pockets.

Systematic corruption and weak governance across the public and private sectors enable illegal logging, fishing, and wildlife trade, generating billions in illicit income every year and resulting in the destruction and exploitation of valuable resources, often at the expense of local communities, and further compounding the impacts of climate change. 

And corruption negatively impacts long term economic development, discourages private sector investment, furthers inequality, and threatens sustainability. For example, 46 percent of companies surveyed in 2022 experienced corruption, fraud, or other economic crimes in the last two years.

That is why the Administrator has called corruption “development in reverse” and President Biden has established it as a core U.S. national security interest. 

As part of a whole-of-government approach, the U.S. Strategy on Countering Corruption, released in 2021, for the first time acknowledges not only the global nature of corruption, but also the role of foreign assistance in preventing corruption and holding corrupt actors accountable.

And that is where USAID’s critical role and in-country presence provides a tremendous opportunity for all of you to use your vast knowledge and expertise to help us achieve the  ambitious goals, laid out by the President, of promoting good governance; bringing transparency to global financial systems; preventing and countering corruption at home and abroad; and making it increasingly difficult for corrupt actors to shield their activities. 

To better align our work with these priorities, in December 2022, Administrator Power launched USAID’s first-ever Anti-Corruption Policy at the International Anti-Corruption Conference. 

The Policy elevates countering corruption as an Agency priority and calls on all of us, regardless of sector or position, to seek out opportunities to confront it at its source. 

The Policy also solidifies USAID’s emphasis on the most endemic forms of corruption, including:

• Grand corruption, when political elites steal large sums of public funds or otherwise abuse power for personal or political advantage;
• Kleptocracy, when a government is controlled by officials who use political power to appropriate the wealth of their nation; 
• And transnational corruption - corruption that crosses borders, involves global networks, and employs sophisticated schemes to siphon off the wealth of a country from its rightful owners: the people

At the heart of all these types of corruption is the abuse of entrusted power or influence for personal or political gain. The Policy outlines concrete actions we will take, over the next three years, to keep pace with these contemporary corruption threats. 

While it's an ambitious task, it's an important one. Without addressing corruption and its pernicious effects, so many other areas of our work will be at risk. 

At the same time, great strides have been made by reformers all over the world – many supported and championed by USAID and our partners.

In the Dominican Republic, with U.S. support, the government enacted a civil asset forfeiture law, enabling the government to seize the assets of corrupt and criminal actors. This move, hailed as one of the most significant institutional reforms in the DR since 2006, is a major new tool in the fight against corruption. 

With assistance from USAID and the State Department, Moldova is hardening its financial system and improving oversight to curb the illicit financing of political parties. The government has also begun vetting judges and prosecutors to reduce corruption in the justice sector. 

You’ll hear from several colleagues today, and I know that their insight will be invaluable in helping us think creatively about all the ways that we can use our resources, adapt our programming, and learn from one another to achieve our goals.  

I’d like to thank all our panelists today for taking the time to share their perspectives and experiences with us, and all of you for the energy and passion I know you will dedicate to this task.

With that, I’ll hand it over to Senior Deputy Assistant Administrator Christophe Tocco from the Bureau for Policy, Planning, and Learning to talk more about the Agency’s policy priorities.