Transparency International


Corruption is undoubtedly a huge and probably growing problem throughout the world. But how best to combat it? The subject has been subject to manipulation by western powers which are themselves mired in corruption, and yet which finance NGOs supposedly dedicated to combating it. Leading amongst these is Transparency International (TI), a group which has been the subject of a number of investigations which establish that it is an organisation with which socialists should have no dealings.

TI is of course correct in its supposition that corruption is a major problem. It can undermine democracy and good government, lead to actions by the judiciary and the police, as well as by those awarding government contracts or taking corporate decisions, which may in the worst cases endanger lives and which invariably mean that taxpayers’ and consumers’ money is being used for purposes which are morally dubious.

TI is, however, not an effective instrument for dealing with corruption. It invariably – and by open policy – seeks out corruption in state bodies and political parties and ignores or downplays the corporate-led corruption which is a problem of at least equal proportions.

TI purports to know just what corruption is. Yet corruption is a culturally mediated and hugely nuanced phenomenon. In the United States, legislators routinely accept enormous payments from corporate sources in order to finance their election campaigns. TI does not, however, regard the US as the extraordinarily corrupt society it clearly is. It has no interest in the kind of corruption which grows out of the web of corporate interests and leads to events such as the thoroughly corrupt presidential election of 2000, the wars-for-profit being fought in Afghanistan and Iraq, or the extremely well-financed campaign to discredit the current President and derail his legislative programme. For TI, corruption is a largely third world or transition economy phenomenon and governments such as those of the Netherlands, the UK and the US are almost by definition no part of this problem. Corruption is in addition repeatedly associated with public bodies and public ownership, to the extent that makes TI part of the campaign to discredit these things led by the CIA daughter body the National Endowment for Democracy (NED) and related US groups.

TI takes an absolutist line on corruption which does not question the word’s definition, and which is therefore reminiscent of other US international initiatives, most notably the ‘war on terror’. It makes no allowances for the fact that newly democratised countries, or ones which have experienced recent changes of government, often have to deal with a legacy of corrupt practices which evolved over years, decades or even centuries of dictatorship. Reports are almost always critical of governments and of political parties, but pay little or no attention to the historical, social or cultural context in which the allegedly corrupt acts take place. TI also falsely associates parliamentary democracy with an absence of corruption and the ‘free market’ with both.

TI uses extremely flawed means of measuring the problem of corruption. Its main instrument, the Corruption Perceptions Index (CPI) , is not a measure of corruption at all, but of the perceptions of foreign business people and professionals. This is an inherently conservative group and one which has a clear interest in the investment opportunities which will follow on the privatisation of economic sectors or companies, or the deregulation of trade or capital movements. Its perceptions will in many cases thus be quite worthless, or at best tainted by its own political agenda. To take an example from one of TI’s other, equally flawed instruments, the Global Corruption Barometer (GCB): the GCB measures people’s perception of corruption in their own country. The fact that a massive majority in the US believes that corruption has ‘an insignificant impact on political and economic life’ (1) in the United States reflects the very corruption it denies. The sample ranks the private sector last in assessing the degree of the corruption of various institutions. Almost all the media are in private sector hands, and conduct an intense campaign to discredit government as a potential contributor to the solution or amelioration of problems. Can the views of people subject to a daily barrage of pro-corporate propaganda be taken as evidence? To be fair to TI , the CPI’s name does alert one to its true nature, but this is almost invariably ignored by the media, which are generally not good at nuances. And it is TI which selects the utterly unrepresentative CPI sample. The name of the GCB is, moreover, in contrast utterly misleading. While according to former TI researcher Fredrik Galtung, the CPI’s numerous flaws include a pro-private sector bias and the lack of representativeness of its sample of respondents, it is now regularly used by aid donors, including western governments and international financial institutions, in the drawing up of conditionality criteria. (2)

None of these instruments, which also include the Bribe Payers Index (BPI) and the Global Corruption Report , would be given a passing grade in a first year university course on the use of stats in social sciences. Their very nature determines, to a large extent, their outcome. Firstly, TI publishes reports highlighting corruption. These are then picked up by the media, often in distorted form, as when the opposition Venezuelan newspaper El Universal headlined a story ‘Venezuela is the most corrupt country in Latin America’. Read on, and you discover that this is not at all what the survey results indicated. People thus become aware of corruption (or rather, of other people’s belief in it) and thus begin to believe that their country, or some other country, is corrupt and getting more corrupt. It is true that it is hard to construct a study in which the researcher does not in some way influence the result. But it would be extremely difficult indeed to construct a study which makes so little attempt to prevent this.

Yet the failure to tackle corporate corruption is not simply a matter of flawed instruments. It is actual TI policy! When founder member Peter Eigen proposed establishing an international business monitor, the suggestion was rejected as ‘unlikely to be effective’. Naming and shaming business people would expose TI to legal action. It would be better to take a positive line and develop voluntary (on the part of the corporations) instruments whereby corporations would commit themselves to non-corrupt practices. (3) As socialists, of course, we know that voluntary agreements are worthless. TI’s policy is to rely on them when dealing with private corporations and it therefore does not name the companies involved in corrupt practices, still less initiate legal action against such companies. This contrasts with its approach to politicians and state officials, where it has no hesitation in naming alleged practitioners of corruption. Joseph Estrada was even named and shamed as corrupt during his trial on charges for which TI had apparently already convicted him.(4)

The reasons given by TI for this policy are implausible. The real reason is quite clearly connected to its funding sources, which include major corporations, western governments and organisations such as the Ford Foundation and the Open Society Foundation which have a clear right-wing agenda. TI has an anti-communist perspective which would be fine if it limited itself to opposing undemocratic practices, but which also manifests itself in a hostility to socialism’s bedrock, the public ownership of resources and of the means of production.  This may also explain why TI initially opposed a UN convention against corruption, preferring to work with the OECD.  (5)

Internally, TI is an elitist organisation whose structures of governance are undemocratic and anything but transparent. Decisions taken by its deliberative bodies are routinely ignored by its leadership. (6)

This is less damning than the relationship between TI and its funders, which goes a long way in explaining its failure to take on the corporate sector and the western governments whose priority is in general to protect and promote their country’s corporations. Firstly, the World Bank, prevented by legal advice from directly funding TI, hired two of its personnel as consultants on salaries sufficient to enable them to contribute to TI’s funding. Secondly, some of the government sources from which funds have been received have themselves carried a whiff of corruption. A $10,000 dollar donation from then Ecuadorian vice-president Alberto Dahik came from a secret fund gathered under the previous military dictatorship. The country’s parliament was not informed of the donation, and was highly critical when it later discovered that it had been made. Most government funding, however, comes from the west, with the US and UK topping the list. Thirdly, while the Nuffield and Rowntree Foundations seem clean enough, the Ford Foundation has well-documented links to the CIA. The biggest source of funds amongst foundations, however, is George Soros’s Open Society Institute, which also has a clear right-wing agenda. Soros himself, moreover, was in 2002 convicted by a French court of insider trading fourteen years previously.

Some national TI groups receive extensive funding from the NED, including one of its four core institutes, the US Chamber of Commerce affiliate the Center for International Private Enterprise. Local ‘chapters’ also receive funding from Shell, a corporation which is a byword for corruption. KPMG Netherlands finances TI’s international secretariat, while KPMG Germany audits its budget. Their affiliate in the US settled out of court an audit fraud charge at a cost of $22 million.  Many of TI’s corporate donors have been upbraided for fraud or failure to conform to company law in the US and elsewhere. Some, such as Vivendi, have repeatedly been hauled up for various forms of corruption. (7)

All of this makes unsurprising the best documented case of TI’s right-wing political agenda: Venezuela. As documented in The Guardian in May, 2008, TI made entirely false allegations against Venezuela’s state-owned oil company. (8)  What makes this especially unsurprising is not merely the fact that TI’s funders include major oil companies Shell and Exxon Mobil, as well as the US government, but the dominance of anti-government activists in the leadership of TI Venezuela. These include the publisher of the anti-government propaganda sheet Venecomia, the director of right-wing think tank the Centre for the Dissemination of Economic Knowledge, and Mercedes de Fritas, who emailed the NED on the night of the failed anti-democratic coup of 2002, claiming that it wasn’t a military coup at all. (9)  TI later failed completely to cooperate with the investigator’s attempts to extract an explanation from them as to why it published a report which was easily demonstrated to be a tissue of lies, and whether it would consider withdrawing or amending this report. Instead, having had this drawn to their attention, they continued to mail the report out to NGOs, business people and government across the world. (10) The inaccuracy of the report is not a matter of opinion, but a clear conclusion based on publicly available documents. (11) TI continues to assist the international and national opposition media to produce anti-government propaganda. Instead of relying on a committed Chavezista sources, the measured response from Gregory Wilpert should be read as a counterbalance.

As I began by saying, corruption is a real problem, but it is also a complex problem. Given the control of the media and powerful institutions such as the IFIs by corporate capital and western governments, socialists should be very careful in their response to it.

Steve McGiffen is Spectrezine’s editor and a professor of international relations at the American Graduate School in Paris. The photo is from and is reproduced here under a Creative Commons licence.


1. Bajolle, Julie, ‘The origins and motivations of the current emphasis on corruption: the case of Transparency International’, Oct.2005, p.13
2. Ibid.
3. Ibid. p.17
4. Ibid. p.22
5. Ibid. pp.22-24
6. Ibid. pp.21-26
7. Ibid. p.32
8. Calvin Tucker, ‘Seeing through Transparency International’, May 22, 2008,
9. Calvin Tucker, ‘Transparency International’s wall of silence’
10. Ibid.
11. SourceWatch, ‘Transparency International’