The long-time head of Transparency International-USA has announced she will step down amid what people familiar with the anti-corruption organization said were mounting concerns about her management.
Nancy Boswell sent out an e-mail on Tuesday to her contacts announcing her decision.
“After 17 years and considerable reflection, I have decided it is time to step down as President and CEO of Transparency International-USA,” Boswell wrote in the e-mail, a copy of which was obtained by Just Anti-Corruption. “I have every expectation that there will be strong continuity and, indeed, great future growth for TI-USA.”
Boswell said she would continue to serve until a successor is found. The U.S. affiliate of Berlin-based Transparency International is a prominent national chapter of one of the oldest and most recognizable brands in the anti-corruption movement.
Alan Larson, a Covington & Burling LLP lobbyist who is TI-USA’s board chairman, said Wednesday that Boswell had not been under pressure to resign. “In my view, and in the view of the board, Nancy has been doing a really good job,” he said.
Former employees told a different story. In the last five years, 15 staffers have churned through TI-USA’s Washington, D.C., office, according to public records and interviews with 10 of them. The former employees said they were either fired by Boswell, or quit because she had made their work environment intolerable. The number of departed staffers stands out because TI-USA has had only four or five employees at any given time, including Boswell, public records show.
Last July a TI-USA board member, Frank Piantidosi, the New York-based chairman and CEO of Deloitte Financial Advisory Services LLP, held an unusual series of private meetings with TI-USA staff members in Washington, knowledgeable people said. He spent about 30 minutes with each employee and asked what was on their minds. “Everyone dished,” one person familiar with the talks told Just Anti-Corruption.
There’s also been internal criticism within the Transparency International network of TI-USA’s fundraising, grant management and lack of grassroots support. Some had pushed Boswell to open the U.S. national chapter to broad community participation. The board is now an exclusive club of well connected insiders, many of whom are lawyers, lobbyists or consultants who make a lucrative living advising companies in anti-corruption matters.
Boswell earned $198,000 from TI-USA in 2009, the latest year for which the non-profit organization’s public tax records are available. Her salary was approximately one-fourth of the organization’s total revenue of $800,000 in 2009, the tax records show.
Former staffers blamed the TI-USA board for allowing the organization to run aground. “She’s technically not in charge. The board is,” Siobhan Kelly, a former TI-USA office assistant who worked there for a year until August 2009, said of Boswell in an interview last fall. “And the board of directors has done exactly nothing.”
Piantidosi was “the only board member who’s shown any interest in this,” added Kelly. The rest of the board “shows up twice a year for board meetings then wanders off,” she said.
Piantidosi did not respond to phone messages and an email seeking comment last November. On Wednesday, an assistant in Piantidosi’s office said he had given notice of his intention to step down from the TI-USA board. Larson, the board, chairman, also did not engage with a request from Just Anti-Corruption last year to discuss the management review. But reached on his direct-dial at his office Wednesday, he said it would be “barking up the wrong tree” to link Boswell’s resignation to concerns about her management.
Reached via email Wednesday, Boswell confirmed her intention to resign but did not respond to a request for comment on the management review. Transparency International headquarters in Berlin also declined to comment on her intended departure.
In an interview in December with Just Anti-Corruption, Boswell defended her leadership of the organization, which she joined in 1994 as a volunteer. “Our mission from the early years was to attack corruption because of its corrosive impact on the economy,” she said.
She said she had heard the criticism that TI-USA pays scant attention to corruption issues inside the United States. “The chapters vary considerably,” she said. “We have chapters in much of the developing world where they are 100 percent focused on addressing corruption within their countries. That’s the mission we’re all trying to address.”
She added: “So when we talk about a domestic agenda, it’s a domestic agenda in the service of an international mission.”
Boswell said TI-USA makes an important “contribution” by networking with officials of the U.S. government and international organizations. “I have people coming through here all the time from all over the world, and we take them into to meet with the U.S. officials,” she said, describing that access as invaluable to supporting a global anti-corruption agenda.
Addressing the controversy over TI-USAs corporate donors, she said in December: “We follow the TI policy that is on the website that we do not allow contributors to influence the position we take, and if they do we’ll give it back.”
Gentle push for change
Piantidosi’s review last year coincided with a push from the TI headquarters in Berlin for changes in the way TI-USA operates. Specifically, the Berlin secretariat asked TI-USA to sharpen its focus on a domestic agenda, be more transparent about its donors, and to consider opening up its elite board-based membership to the general public.
Last June, Transparency International chairwoman Huguette Labelle and TI board member Boris Divjak, chair of the TI Membership Accreditation Committee, wrote Boswell a letter about the U.S. chapter’s triennial membership-accreditation review.
The letter, reviewed by Just Anti-Corruption, thanked Boswell for her “diligent follow-up and continuous effort” to ensure TI-USA met Berlin’s accreditation standards. It indicated that Berlin had asked TI-USA for, and received, the following:
• “A detailed list of TI-USA activities in the domestic corruption field.”
• “A clear message from TI-USA that the chapter has focused on diversifying its own base of support and has applied to foundations and public-sector institutions” for funding since its last accreditation review.
• “A clear message from TI-USA that its board of directors is looking into opening up its membership of the organization for additional individuals members.”
The letter indicated that TI-USA had lagged on satisfying a request to disclose more about its funding sources. “As to the fourth … requirement (to extend the website disclosure of its funding), we have observed that TI-USA has not yet addressed it.”
After an inquiry from Just Anti-Corruption, TI-USA in December complied with a long-time request from Berlin that it disclose on its website in broad terms how much its corporate donors give.
The TI-USA chapter was founded in 1994 simultaneously with the establishment of TI’s main operation in Berlin. Boswell, who had practiced international and trade law at Steptoe & Johnson, has been with the organization from the beginning, when anti-corruption issues were relatively obscure. The United States in the mid 1990s was a major force in foisting them onto the international agenda.
“I started here in 1994 as a volunteer. At that point people thought I had lost my mind working on anti-corruption,” Boswell said in the interview last December. “No one would talk to us, except the U.S. government.”
Boswell, who is married to top State Department official Eric Boswell, the Assistant Secretary of State for diplomatic security, said TI-USA initially focused on getting developing countries to build institutions and codes of conduct to fight graft. “From the U.S. perspective, we had that already,” she said, referring to the 1977 Foreign Corrupt Practices Act, a pioneering law prohibiting paying bribes to foreign officials for business.
But what may have made sense in the mid 1990s, when anti-corruption was in its infancy, began to rankle other TI national chapters a decade later, when corruption and governance problems in the United States were perceived to be on the rise.
With its gaze cast abroad, the TI-USA chapter did little to address major U.S. lobbying and corporate scandals, such as those involving Jack Abramoff and Enron. The omission was notable because the stated mission of TI national chapters is to address domestic corruption. TI-USA was seen as being held to a different standard.
“TI-USA has virtually said nothing or done nothing about corruption in the U.S. or by its business corporations,” researcher Luis De Sousa wrote in a 2005 study of TI’s national chapters for the Asia and Pacific School of Economics and Government at the Australian National University.
By 2010, when the Berlin secretariat asked TI-USA to focus more on domestic issues, the omission was even more glaring. A lack of regulation of Wall Street, and its influence over the political process, was seen as contributing to the financial industry meltdown that plunged the United States and world economy into crisis.
The financial crisis, plus a flood of unregulated corporate money into a U.S. political system increasingly seen as dysfunctional, appeared to cause the United States to slip last year in TI’s own annual “corruption perceptions index,” from 19th to 22nd place.
While TI-USA has put out some papers and statements on these issues, its voice has been muted. There is no record, for example, of TI-USA being quoted in news articles about domestic corruption, even as those issues dominated newspaper front pages in recent years.
Sore point: Corporate donors
TI-USA’s reliance on corporate donors has long been a sore point among other TI national chapters. “From the standpoint of TI’s moral crusader banner, TI-USA funding rapports are probably more a problem than a solution,” wrote the academic De Sousa in his 2005 study of TI chapters.
The organization is supported financially by many big companies that also have been under U.S. scrutiny in international bribery probes.
They include oil companies ExxonMobil Corp. and Chevron Corp.; pharmaceutical company Pfizer Inc., conglomerate Tyco Inc., and medical products company Johnson & Johnson.
For years, Boswell resisted disclosing how much those companies give TI-USA. Last year, at the prodding of the Berlin secretariat, she put on the TI-USA website general categories – such as “Corporate Leaders Circle” — to describe giving levels. It was only after Just Anti-Corruption inquired in December what those levels corresponded to that TI-USA became specific.
It now discloses that the “Corporate Leaders Circle” level – to which Deloitte, Pfizer, Tyco and ExxonMobil belong – have given more than $50,000. A category called “Corporate Counsel Forum” is now shown to be donors who gave between $25,000 and $49,999. “Corporate Sponsors” including Bechtel Corp., Johnson & Johnson and The Coca-Cola Company, give under $25,000.
After Just Anti-Corruption’s December interview with Boswell, the organization also added the GE Foundation to its list of “Project Grant Supporters.”
The addition of the GE Foundation was telling, because several former staff members said Boswell had tried in the past to portray the support as coming from General Electric Co., the corporation, and not its charitable arm. The misrepresentation was made in order to encourage other corporations to make donations by citing GE’s support, the former employees said.
Project failures, judgment lapses
TI-USA employees, meanwhile, became frustrated with the organization’s difficulties in producing meaningful work. They said Boswell insisted on approving everything, but often couldn’t make timely decisions.
As an example of wasted resources, several people pointed to a three-year, $150,000 grant from German software maker SAP AG to TI-USA in the mid 2000s. The grant was to produce a “compliance toolkit” to help small businesses understand how to comply with anti-bribery and anti-corruption laws.
TI-USA’s public tax returns confirm that it was working in 2007 on “developing a web-based compliance ‘tool kit’ for U.S. small and medium-sized enterprises.” Indeed, a consultant named Michael Fine was toiling on the project as late as 2009, even though the grant expired in 2006, former employees say. But the compliance guide was never published.
Boswell also appeared to have lost perspective on TI’s watchdog mission as she turned the organization into what many observers said resembled an exclusive networking club and resume burnisher for her board members and donors.
In what one former staffer described as a “lapse of judgment,” Boswell last September held an event that also gave a professional boost to her son, Jeremy Zucker, a lawyer who advises companies on anti-corruption compliance.
Boswell moderated a TI-USA panel at the Washington office of her son’s firm, Hogan Lovells, titled “Combating Foreign Bribery in International Business and Development.” In attendance were delegations of Chinese and U.S. government officials who work on anti-corruption issues. Boswell’s son, Zucker, gave a welcoming speech and participated in a panel discussion, according to an agenda for the event.
Speakers included an executive from one of TI-USA’s big corporate donors, Tyco International Ltd., and Larson, the TI-USA board chairman and Covington & Burling lobbyist whose business intersects TI’s agenda.
Senate records show that Dallas-based Kosmos Energy LLC paid Covington $830,000 since 2009 for Larson to lobby U.S. officials for help protecting an oil investment in Ghana that also brought the exploration company under Department of Justice scrutiny for alleged FCPA violations. The U.S. later cleared Kosmos of the bribery allegations. Larson also worked on a six-month, $450,000 contract in 2008 to represent tax-haven Lichtenstein in the U.S. on bank secrecy developments, Justice Department records show.
After the event at Zucker’s firm, TI-USA posted a short article about it on its website with a photo showing Boswell, Larson and her son in a conference room with the U.S. and Chinese officials. The photo and article have since been removed from the TI-USA homepage.
“The fact that my son would be at Hogan — should I not host something there because of what you’re saying?” Boswell said in December, arguing that TI-USA saves money by not having to pay for a room for such events. “I guess I have to think twice about it. It’s really unfortunate.”
When asked whether TI-USA provides a business benefit to board members through networking opportunities and brand association, Boswell said: “It’s an interesting slant, I guess, on it.” She added: “If you exclude from the board the professionals who know the issues, then I think it will take away a tremendous resource that helps us have the impact we have.”
Aruna Viswanatha contributed to this report.