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Report cites growing corruption, sees link with rising populism

By Andrea Shalal

BERLIN (Reuters) - Growing levels of perceived corruption and social inequality provided fertile ground for the rise of populist politicians in 2016, global watchdog Transparency International said on Wednesday.

TI said populist leaders like U.S. President Donald Trump and French presidential candidate Marine Le Pen regularly drew links between a "corrupt elite" and the marginalization of working people. But anti-establishment parties generally failed to address corruption once in office, the group said.

"In the case of Donald Trump, the first signs of such a betrayal of his promises are already there," TI's research chief Finn Heinrich wrote in a blog about the report. He said Trump was talking about "rolling back key anti-corruption legislation and ignoring potential conflicts of interest that will exacerbate, not control, corruption."

The TI report came two days after constitutional and ethics lawyers filed a lawsuit alleging that Trump was "submerged in conflicts of interest". Trump dismissed the allegations and said the lawsuit filed by Citizens for Responsibility and Ethics in Washington was "without merit".

The group's annual report said Qatar showed the biggest drop in confidence in 2016 after scandals involving the FIFA soccer scandals and reports of human rights abuses. Somalia was the worst performer on the list for the 10th year.

TI said the report showed pervasive public-sector corruption around the world. Sixty-nine percent of 176 countries scored below 50 on the index scale of 0 to 100, with 0 perceived to be highly corrupt and 100 considered "very clean." More countries declined in the index than improved in 2016, it noted.

Once in place, populist leaders appeared almost "immune to challenges about corrupt behavior," Heinrich wrote. The scores of Hungary and Turkey - countries with autocratic leaders - fell in recent years, for example. Argentina, which ousted a populist government, saw its score improve.

To break the "vicious circle" between corruption and the unequal distribution of power and wealth in societies, TI said, governments should stop the revolving door between business leaders and high-ranking government positions.

It also called for greater controls on banks and other businesses that helped launder money, and moves to ban secret companies that hide the identities of their real owners.

TI said big corruption cases like those involving oil giant Petroleo Brasileiro SA (Petrobras) in Brazil and Ukrainian ex-president Viktor Yanukovych showed how national revenues were being siphoned off to benefit the few, fueling social exclusion.

Brazil's score on the index had dropped over the past five year after a spate of corruption scandals, but independent law enforcement bodies there had begun bringing to justice those previously considered untouchable, TI said.

Denmark and New Zealand performed best in 2016, with scores of 90, followed closely by Finland (89) and Sweden (88). Somalia remained the worst performer with a score of 10, followed by South Sudan (11), North Korea (12) and Syria (13).

The United States ranked 18th on the list, down from 16th in 2016, with a perceived corruption score of 74.

(Reporting by Andrea Shalal, editing by Larry King)

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