Transparency International's Corruption Perception Index for 2008 ranked Haiti the fourth most corrupt country in the world. Since his democratically victory in 2006 election, President Preval and the Government of Haiti [GoH] faced several challenges to lead Haiti to democracy, among which the fight against corruption is one of the biggest. The bureaucracy and "red tape" in the Haitian legal system is often excessive. There are persistent allegations that some Haitian officials use their public office position to influence commercial dispute outcomes for personal gain.
Haitian law is deficient in a number of areas, including: operation of the judicial system; organization and operation of the executive branch; publication of laws, regulations, and official notices; establishment of companies; land tenure and real property law and procedures; bank and credit operations; insurance and pension regulation; accounting standards; civil status documentation; customs law and administration; international trade and investment promotion; foreign investment regime; and regulation of market concentration and competition. Although these deficiencies hinder business activities, they are not specifically aimed at foreign firms and appear to have an equally negative effect on foreign and local companies.
Haiti's commercial code dates to 1826 and underwent a significant revision in 1944. There are few commercial legal remedies available. The protection and guarantees that Haitian law extends to investors are severely compromised by weak enforcement mechanisms, a lack of updated laws to handle modern commercial practices, and a weak judicial system. Injunctive relief is based upon penal sanctions rather than securing desirable civil action.
The GoH has made incremental progress in enforcing public accountability and transparency, but substantive institutional reforms are still needed. In 2004, the government established the Specialized Unit to Combat Corruption (ULCC) in the Ministry of Economy and Finance. In February 2008, the law on disclosure of assets by civil servants and high public officials prepared by ULCC was voted by the Parliament. The ULCC is in the process of drafting a national strategy to combat corruption and is preparing a code of ethics for the civil service. ULCC will send a specific anti-corruption bill to Parliament for consideration in the coming months.
In 2005, the GoH created the National Commission for Public Procurement (CNMP) to ensure that government contracts are awarded through competitive bidding and to establish effective procurement controls in public administration. The CNMP publishes lists of awarded government contracts. Substantial public procurement contracts, notably contracts involving the state-owned electricity company EDH, routinely bypass the CNMP, leaving open the possibility of graft.
The GoH in 2007 began a high-profile campaign to eliminate corruption in the public and private sector. This effort has led to high profile arrests in the business community. Former board members of SocaBank were imprisoned for embezzling the bank's assets in 2004. The bank's former director and several of his assistants remain in detention but have not been tried. Two prominent businessmen were subsequently imprisoned on suspicion of customs fraud, but have since been released and the case against them dropped. The assistant director of Customs as well as several customs employees implicated in that case remain in prison.
President Rene Preval has openly affirmed his commitment to fight corruption. He is actively seeking technical assistance and cooperation with countries in the region to reinforce Haiti's institutional capacity to fight corruption and financial crime. U.S. firms have complained that corruption is a major obstacle to effective business operation in Haiti. They point to requests for payment by customs officials in order to clear import shipments as examples of solicitation for bribes. Some importers reportedly "negotiate" customs duties with inspectors.
Haitian law, applicable to individuals and financial institutions, criminalizes corruption and money laundering. Bribes or attempted bribes toward a public employee are a criminal act and are punishable by the criminal code (Article 173) for one to three years of imprisonment. The law also contains provisions for the forfeiture and seizure of assets.
The law provides criminal penalties for official corruption; however, the government did not implement the law effectively, and officials often engaged in corrupt practices with impunity. According to the World Bank's worldwide governance indicators, government corruption was a severe problem. Corruption remained widespread in all branches and at all levels of government. The constitution mandates that high-level officials and parliament members accused of official corruption be prosecuted before the Senate, not within the judicial system. However, the Senate brought no such cases of corruption. Poverty, lack of economic opportunity, and weak governmental institutions (especially relating to law enforcement and the judiciary) contributed to widespread corruption.
The HNP, with the assistance of UN Civilian Police, continued efforts to eliminate corruption within its ranks, and the government continued to investigate individuals in the business sector and in government entities for corruption but brought no charges. The Center for Pleas and Legal Assistance (CEPAJ) began offering judicial assistance to victims and witnesses of government corruption and widely disseminated phone and e-mail contact information. The CEPAJ had taken five complaints since its inception in May 2008.
Authorities arrested or detained a few low-level public servants, mainly customs officials, on corruption or corruption-related charges. The government's Financial Intelligence Unit within the Ministry of Justice conducted an investigation into misuse of funds within the social security system. After parliamentary and public criticism of efforts by the chief prosecutor for Port-au-Prince to arrest the agency's director, judicial authorities questioned the director but did not arrest or charge him. The president relieved the director of his duties in November. There were no known developments in the investigation begun in 2007 concerning alleged mismanagement of funds at the Ministry of Foreign Affairs in 2004-06.
On December 8, 2009 the U.S. Embassy congratulated the Government of Haiti on the successful arrest and expulsion of Jean Rene Duperval, a former Haiti Telecommunications ("Haiti Teleco") senior official. The arrest and expulsion came as part of successful cooperation between the Ministry of Justice, the Bureau des Affaires Financieres et Economiques (BAFE), the United States Department of Justice and United States Internal Revenue Service in an on-going investigation into bribery of officials at Haiti Teleco by U.S. individuals and companies. "Corruption is deeply damaging both to Haiti and to the United States," said U.S. Ambassador Kenneth Merten. "We appreciate the Haitian Government's cooperation on this case." According to the court papers, from November 2001 through March 2005, a U.S. telecommunications company paid over $800,000 through shell companies to Duperval and another Teleco official. In exchange, Duperval provided the U.S. telecommunication company with a variety of business advantages, including preferred telecommunications rates, reduced payments, and credits toward sums owed. These actions deprived the Republic of Haiti of much-needed revenue.
There were reports of corruption in the HNP, which the HNP has mechanisms to investigate. For instance, affluent prisoners sometimes obtained favorable conditions of detention. A businessman arrested for fraud visited a local hospital for emergency medical services but he resided there many months after his recovery. The HNP conducted investigations of police malfeasance, leading to the arrest or termination of employment of some officers. The Inspector General's (IG) Office of the HNP accepts and investigates allegations from any complainant of police wrongdoing, including human rights violations, complicity in criminal acts, and other violations. The IG established two toll-free hot lines to accept citizen complaints--one directly to the HNP and one to MINUSTAH. Upon completion of investigations, the IG forwarded its findings to the director general of the HNP and high-level Ministry of Justice officials for appropriate action. IG investigations revealing criminal activity were referred to the regional prosecutor.
Although the law provides for an independent judiciary, in practice the executive and legislative branches exerted significant influence on the judicial branch. Judges assigned to politically sensitive cases complained about interference from the executive branch. Credible reports of judicial corruption were commonplace.
The Central Financial Enquiry Unit has responsibility for combating financial crimes. By September 2012 the Ministry of Economy and Finance’s anticorruption unit (ULCC) had conducted more than 1,000 seizure operations throughout the country that recovered more than 17.9 million HTG ($447,500). Similarly, the ULCC referred 16 corruption cases to the office of the Port-au-Prince prosecutor. Among those cases was that of Edrick Leandre, a former director general of the Office of Third Party Vehicle Insurance, whom authorities arrested in August 2011 on charges of corruption and embezzlement of public funds. His case was pending at the end of 2012. The ULCC was widely perceived as having sufficient funding, and it enjoyed a positive reputation. After the ULCC’s pursuit of delinquent taxpayers within the business community, civil society’s confidence in the institution grew and bolstered its willingness to cooperate with and support the ULCC’s anticorruption efforts.
In June 2012 President Martelly promulgated a decree authorizing the government to procure goods and services below a specified value through sole-source and closed bidding processes, as well as no-bid contracts. Government officials claimed that these new procurement measures would allow the country to expedite reconstruction projects and basic government operations. Some observers, however, including the World Bank and Inter-American Development Bank, expressed concern that the new law would decrease governmental accountability and transparency and could worsen corruption.
Shortly before his February 2012 resignation, Prime Minister Gary Conille released the results of an internal government audit detailing irregularities in post-earthquake emergency reconstruction contracts that then prime minister Jean Max Bellerive awarded between 2010 and 2011. Prime Minister Conille’s review revealed a connection between Bellerive and Dominican Senator Felix Bautista, who owned or had a controlling interest in the Dominican companies involved in the 41 contracts. In April 2012 media outlets began carrying reports alleging that President Martelly received $2.5 million in campaign contributions, real estate deals, and cash payments from Senator Bautista as a quid pro quo for the lucrative contracts. The president denied these allegations. In early July the Martelly government announced it would implement the Conille commission’s recommendations and cancelled 39 of the 41 Bautista reconstruction contracts. None of the Haitians allegedly involved faced legal action.
After former president Jean-Claude Duvalier returned to Haiti in January 2011, the government brought charges against him, including corruption, torture, and murder. In January 2012 Carves Jean, the investigating magistrate presiding over the case, ruled the former president would stand trial only on corruption charges stemming from his 15-year rule. In his decision Jean noted there was insufficient legal justification for pressing charges stemming from human rights violations and crimes against humanity. Civil society organizations, Duvalier-era torture victims, and international stakeholders immediately condemned the ruling, and activists noted they would seek justice for Duvalier’s human rights crimes at the Inter-American Court of Human Rights. President Martelly retracted initial statements saying he favored pardoning Duvalier.
In February 2014 Haitian President Michel Martelly said that his government had asked the United States to modify the way aid money is sent to Haiti, calling for more to be funneled through the government rather than non-governmental organizations. Martelly acknowledged that the reason for distributing money mainly through NGOs has been "corruption" in Haiti and "lack of confidence in the Haitian system." But he said that was changing. "Today, that there is a new dynamic, today that there is a new leadership, today that we are engaged in reinforcing the democratic process, reinforcing the judiciary power, reinforcing our police force, and of course, allowing the ULCC, which is the unit that fights corruption, to do its work, I believe they should give us a chance to control Haiti, spend that money the way we feel, or we think we have to do it," he said.
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