The State of Anti-Corruption and Ethical Governance in the United States:

In 2018, The Coalition for Integrity released their first report on the States with Anticorruption Measures for Public Officials (S.W.A.M.P Index).? This report brought to our attention that there is a wide variation in state laws and regulations governing ethics and transparency in the executive and legislative branches[i]. What the report highlights, is that the vast majority of States are not yet at a place where anti-corruption and transparency issues are at an acceptable level, with 36 states scoring 60 percent and below[ii].

“Our principles are clear: that government service is a noble calling and public trust.”-President George H. W. Bush

What can be done to improve this?

??????????? It is important to note that none of the States scored 80 percent or above. This means that there is room for improvement in every State. However, States should try to strengthen their anti-corruption measures by ensuring that at least the following standards can be met[iii]:

§? Establishing independent ethics agencies with jurisdiction over the executive and legislative branches.

o?? These agencies need sweeping authority to investigate and sanction government officials and civil servants.

o?? An independent ethics agency/commission ensures that government is representative, responsible, and accountable[iv].

§? Once probable cause has determined the existence of a violation, hearings should be held in a public forum.

o?? This will keep the public informed and allow for transparency.

§? Everybody, from executive level to low-level employees, should be held to the same standards.

o?? Decision making can be executed consistently and quickly, when standardized measures are applied.

o?? Values and vision statements offer additional manners to assess standards[v]

§? Reporting of gifts (above a reasonable threshold) should apply uniformly to all government officials.

o?? Elected officials often have personal interests that conflict with their duty to serve the public. These officials may be influenced to make decisions based on private interests[vi].

o?? By requiring and ensuring officials set aside private interests in favor of public trust, transparency is administered, ensuring that officials know that they are accountable for the integrity of government institutions.[vii]

§? States should mandate disclosure of all beneficial owners of LLCs and donors to 501(c) organizations which contribute to outside spending.

o?? Highlighting the initiative administered in Delaware, U.S., the Business Code of Ethics and Conduct (Amended and Restated)[viii] Exhibit 14.1 identifies various conflicts of interests that could create an appearance of impropriety. Examples of which include[ix]:

§? Ownership of material financial interests in any business or other enterprise that does business (supplier, customer, or otherwise), or is seeking to do business, with the specific entity;

§? Serving as an officer, director, partner, or any other managerial position with respect to any business or other enterprise that does business (supplier, customer, or otherwise), or is seeking to do business with the specific entity;

§? Ownership of material financial interest in, or serving as director, officer or partner of, or in any other managerial role, or as consultant to, any competitor of the company;

§? Acting as a broker, finder, or other intermediary in any transaction involving the entity;

§? Any situation where and employee, officer or director will receive any payment of money, services, loans, guarantee or any other personal benefits from within the entity or a third party, in anticipation of, or as a result of, any transaction or business relationship between the entity and a third party.

§? Taking public position or making public statements contrary to the best interest of the company, or which could result in embarrassment of the entity.

o?? In the United States, internal affairs of the corporation will be governed by the laws of the state of incorporation. Noteworthy, is the Delaware surpasses the competition when it comes to the sale of corporate charters, with Delaware’s corporate law dominating the legal landscape[x]. It is believed that the dominant reasons for Delaware’s strong corporate position are the following[xi]:

§? Delaware’s corporate law is regarded as being more moderns and flexible.

§? Delaware’s corporate legal community are focused on stability and predictability – balancing the interests of shareholder, directors and managers; and holding these parties accountable if they fail to act loyally, carefully and in good faith.

Implementing a standardized measure across each state to regulate anti-corruption and ethical governance standards would promote transparency and accountability. Each jurisdiction may differ from one another, but “in order to be effective a commission must be structured to act and empowered to be effective”[xii].

What can each business in the U.S. do to improve ethical governance?

??????????? Each business – small and large- should strive to build an ethical culture with ethical leadership. Entities can identify key players within the structure, various authorities to rely on and provide a tailored mission statement[xiii]. Identify written, enforceable rules that set the company standard for ethical conduct[xiv]. Implementing internal educational opportunities with training and advisory authorities, encouraging financial disclosures, and highlighting internal and external enforcement responsibilities, are small but vital steps in the right direction.

[i] https://swamp.coalitionforintegrity.org/ - Accessed October 3, 2023.

[ii] https://swamp.coalitionforintegrity.org/ - Accessed October 3, 2023.

[iii] https://swamp.coalitionforintegrity.org/? - Accessed October 3, 2023.

[iv] Supra note iii.

[v] https://www.scu.edu/ethics/leadership-ethics-blog/create-an-ethical-decision-making-framework-for-your-organization/?? - Accessed October 5, 2023

[vi] Supra note iii.

[vii] Supra.

[viii] https://www.sec.gov/Archives/edgar/data/894871/000149315221019973/ex14-1.htm - Accessed October 5, 2023

[ix] See note vii, above.

[x] Supra note viii.

[xi] Supra.

[xii] https://campaignlegal.org/democracyu/accountability/independent-ethics-commissions/ -? Accessed October 5, 2023.

[xiii] https://www.oge.gov/ -Accessed October 3, 2023.

[xiv] Supra note ix.