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France: politicians and banks put on the spot

It often takes a full-blown scandal to spur politicians to act on concrete measures to fight corruption. In France last week, it was disclosed that Jérôme Cahuzac, the former Minister of Budget, had hidden money in an undisclosed offshore account. French President François Hollande, who had made cleaning up politics a centrepiece of his election campaign, responded by going on the offensive.

By 15 April members of the French government will have to make public asset declarations. MPs, local elected representatives and high-level officials will all have to do the same as soon as there is a new law in place. President Hollande also announced the establishment of an independent oversight body to review and keep a check on local and national politicians’ declarations.

What is missing from President Hollande's proposals, however, is an immediate curb on the number of official posts that politicians can hold. This should happen now, rather than in 2017.

President Hollande also called on French banks to publish an annual list of all their subsidiaries around the world in an effort to bring greater transparency to their operations and thereby stem illicit financial flows. This is an essential step towards corporate transparency and a core recommendation in our report, Transparency in Corporate Reporting: Assessing the world's largest companies.

All these new measures are welcome. The next step is to turn them into laws and push for their swift implementation and enforcement.

Leaks led to action

Hollande's announcement follows the publication, last week, of information based on leaked data that showed how widespread the use of secrecy jurisdictions is. The International Consortium of Investigative Journalists, working with leading newspapers, published reports on records gathered from more than 120,000 companies registered in offshore locations famous for their secrecy – from the British Virgin Islands and the Caymans in the Caribbean, to the Cook Islands and Singapore in Asia. Mr. Cahuzac had deposited €600,000 in a Singapore bank, in a case revealed by Mediapart.

This scandal also appears to have spurred the governments of France, Germany, Italy, Spain and the United Kingdom to announce plans to exchange banking data, while Luxembourg said that it would end its bank secrecy laws.

Closing the gap

The requirement for French government members, their co-workers, MPs, local elected representatives and high-level officials to make public their asset declarations is – if a law is adopted by Parliament – an important step forward, one long overdue in French politics. The United Nations Convention against Corruption (UNCAC), which has been ratified by 166 countries including France, requires a legal framework for asset declarations of government officials. The 2011 study by Transparency International of France's institutions showed that the French parliament was rated the most vulnerable in the fight against corruption and recommended that the government publish politicians’ asset and interests declarations.

The French proposals are in line with seven key recommendations put forward by Transparency International France calling for greater transparency and accountability in French politics. President Hollande signed the Transparency International France pledge, committing to all of the recommendations, ahead of last year's election.

France is one of only two countries in Europe that has not made public the list of assets, incomes and interests of politicians, although the law mandating asset disclosure was passed in 1988. (The other is Slovenia.)

Best practices for asset declarations

Research shows that an asset declaration open to public scrutiny is a way for citizens to ensure leaders do not abuse their power for personal gain (our definition of corruption). Asset declarations are a means to anchor the issue of ethics and integrity in the political classes and should be part of all codes of conduct. They are a way to ensure that people in power do not have conflicts of interest.

There are no international standards mandating how asset declarations are made and monitored. However, there are core principles that should form the foundation of any legal framework.

An asset declaration is a person's balance sheet and should cover assets (from all properties, valuables and financial portfolios) to liabilities (such as debts and mortgages), and all sources of income from directorships and investments to consulting contracts. It should also include gifts and sponsorship deals and any potential conflicts of interest such as unpaid employment contracts and participation in non-governmental organisations.

  • The leadership of the three branches of government – executive, legislative and judiciary – and senior career civil servants should be required to file asset declarations before and after taking office as well as periodically (annually or every two years) during office.
  • Ideally, the asset declaration records exact values, but some countries opt for ranges of value.
  • Asset declarations should be made publicly available.
  • The administration of an asset disclosure programme requires a monitoring and evaluation agency to collect and verify information and investigate, prosecute and sanction those who fail to comply.

Countries

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