News items of worldwide relevance:
2006 Bribe Payer Index by Transparency
International shows
hypocrisy by many countries where multinational corporations pay bribes
directly or through their lawyers and other outsourced employees. See latest ranking along
with BPI published by Transparency International. Note that a higher BPI number means that
the country is less corrupt. Switzerland
has the highest BPI score meaning that the Swiss businesses have the least
tendency to pay bribes. However,
there is one problem with this stellar performance. But their banking secrecy laws do allow bribes being paid into
secret numbered accounts.
GLOBAL:
WOLFOWITZ’S CORRUPTION AGENDA
Paul Wolfowitz, President of the World Bank, has joined
with the heads of several regional development Banks in an anti-corruption
effort, which has provoked a staff backlash within the World Bank itself. The Bank has held up funding, canceled
contracts, blocked loans, interrupted projects, and postponed debt relief for
several countries, including India,
Chad, Bangladesh,
Kenya, Argentina
and Congo,
which are involved in various forms of corrupt practices. (The Washington Post, Feb.
20, 2006, summary by Marg Reynolds)
World Bank Leader Expects to Step Down. It was reported that the
president of the World Bank, James D. Wolfensohn, has said that he expects the White House will select a new
World Bank leader this year. This year Wolfensohn will retire as chief of the
World Bank. Wolfensohn’s future has been a subject of speculation. His second
five-year term expires in June 2005.
(The New York Times, January 3, 2005,
summary Sherldine Tomlinson).
ANNIVERSARY OF THE UN ANTI-CORRUPTION CONVENTION. December
7, 2004 is the one year anniversary of the signing of the UN
Convention against Corruption (UNCAC) by 114 nations. To date, 14 nations have ratified the
convention, all from emerging economies.
There has been a call for all nations, especially wealthy nations, to
ratify the convention. The World Bank
supports the UNCAC initiative and is working to find more interested donors
to fund these anti-corruption efforts.
The World Bank has also committed to continue to work with many other
international and national organizations and institutions to continue the
fight against fraud and corruption. (www.worldbank.org, December
7, 2004, summary by Andrew Myerberg).
APEC Leaders Commit to Fight
Corruption and Ensure Transparency.
The White House have issued a
fact sheet at the Asia-Pacific Economic Cooperation meetings in Santiago,
Chile, where President Bush and other APEC leaders launched the “Santiago
Commitment to Fight Corruption and Ensure Transparency” and the “APEC Course
of Action on Fighting Corruption and Ensuring transparency.” Leaders also
commenced the “APEC Anticorruption and Transparency Capacity Building
Program” to help developing economies meet their anticorruption commitments. (USINFO, November
23, 2004, summary by Sherldine Tomlinson).
Survey finds
rampant global corruption, hobbling poverty fight. According to a
Transparency international report, corruption is crippling the battle against
poverty and robbing oil-rich countries such as Iraq
of their development potential. Haiti
and Bangladesh
were perceived as the world’s most corrupt nations in the survey of 146
countries closely followed by Nigeria,
Myanmar and Chad. (Yahoo News (AFP), October
20, 2004, summary by Sherldine Tomlinson).
Iraq: Contractors for U.N.-Iraq aid AGREES to
congressional inquiry. It
was reported that two contractors for the United Nations oil-for-food
programme in Iraq
have agreed to cooperate with congressional panels investigating allegations
that the government of Saddam Hussein had siphoned billions of dollars from
it. Congressional investigators said that Cotecna Inspection SA, the
Switzerland-based company the United Nations hired in 1999 to monitor and
authenticate goods shipped to Iraq, and Saybolt International BV, the Dutch
company that monitored oil exports from Iraq, have arranged to cooperate with
House and Senate committees examining accusations of corruption in what was
the United Nations' largest relief programme. (The New York Times,
13 August 2004, summary
by Sherldine Tomlinson).
Subpoena seeks
Iraqi oil records. It
was reported that congressional committee investigating alleged corruption in
a United Nations humanitarian program for Iraq
has issued a subpoena for financial records from the French bank. According
to the chairman of the House Committee on Government Reform Thomas Davis, the
subpoena was necessary because the bank could not produce the documents
voluntarily. A report that was released in April by the U.S. Government
Accounting Office said that officials in the government of Saddam Hussein
received $10.1 billion in illegal revenues over the course of the six-year
program. The United Nations started the program in 1997 so that Iraqi oil
revenues could be used to pay for food, medicine and other goods, easing the
effects of the economic sanctions imposed on Iraq
after its 1990 invasion of Kuwait. (International Herald Tribune, 16
July 2004, summary by Sherldine Tomlinson).
Corruption arrests
in World Bank project. The
World Bank said Tuesday that Guinea
has convicted three people involved in corrupt activities related to bank
projects. The international agency
said the convictions come after Guinea’s
justice minister followed up on an investigation by the World Bank on suspect
activities by contractors to the project which was reported to the government
last October. According to the bank vice president for Africa Callisto
Madavo, "These convictions show that fraud and corruption will not be
tolerated on World Bank-financed projects. (Washington Times, June
29, 2004, summary by Sherldine Tomlinson).
World Bank, IDB Say
Need To Do More To Fight Corruption. According to World Bank and IDB
officials, the World Bank and Inter-American Development Bank are making
progress fighting corruption at multilateral development banks. According to
Hector Morales, acting US
executive director to the Inter-American Development Bank, the IDB has
"accelerated" its progress in fighting corruption, "but still
has much work to do." Morales further went on to say that The World Bank
has instituted reforms to eliminate conflicts of interest and possible corrupt
practices among its staff. (World
Bank Press Review, May 14, 2004,
summary Sherldine Tomlinson).
World Corruption May Top $100 Bln. According to Sen. Richard Lugar, an Indiana Republican,
corruption has cost the lives of uncounted individuals contending with
poverty and disease. Lugar commended World Bank President James Wolfensohn
for bringing greater attention to the issue, but also said that, Corruption
remains a serious problem. (Yahoo
News (Reuters), May 13, 2004,
summary by Sherldine Tomlinson).
UN chief hits out at fraud claims. The United Nations Secretary General Kofi Annan has
rejected allegations of corruption in the UN-administered oil-for-food
programme in Iraq.
Annan described reports that UN officials had colluded in smuggling Iraqi oil
through Turkey
to evade sanctions as “outrageous and exaggerated”. Anna told a news
conference that “We had no mandate to stop oil smuggling,” (BBC News, April
30, 2004 summary by Sherldine Tomlinson).
Study finds 25
nations hindered by corruption. A
survey of government accountability and openness in 25 countries around the
globe has found that each one is challenged by corruption and lacks
sufficient protections against electoral abuses, including developed
democracies such as the United States, Germany and Japan. The resulting
report produced a ranking of nations in which none was labeled "very
strong" on integrity of key institutions and accountability to the
public. (The Washington Post
30 Apr 2004 summary by Sherldine Tomlinson).
U.N. Under Probe,
Annan Assails CRITICS. Secretary-General
Kofi Annan accused critics of the U.N. oil-for-food program of treating
allegations of corruption as fact and ignoring the programmes role of
providing aid to nearly every Iraqi family.
Annan said that he met Wednesday with Benon Sevan, who headed the
oil-for-food program and has been accused of receiving kickbacks from Saddam
Hussein’s government, to discuss the allegations and cooperation with the
investigation. The U.N. chief also said that any U.N. official found guilty
of accepting bribes or kickbacks would be dealt with very severely. (The New
York Times, April 23, 2004,
summary by Sherldine Tomlinson).
Corruption survey singles
out ex-leaders. A global watchdog has identified what it said were
the world’s most corrupt former heads of government, singling out leaders of Indonesia,
the Philippines
and the former Zaire.
The transparency international found that widespread political corruption
undermines the stability of developing countries and damages the global
economy. (The Guardian 26
Mar 2004 summary by Sherldine Tomlinson).
South Korean IOC vice president indicted on
corruption charges. International Olympic Committee vice
president Kim Un-yong has been indicted on charges of taking bribes and
embezzling funds from South Korean sports organizations. Kim is charged with
embezzling 3.84 billion won (US$3.28 million) in funds from the World
Taekwondo Federation, the World Taekwondo Headquarters, which issues
taekwondo credentials as well as other sports organizations. (Associated Press 13 Feb 2004 summary by Sherldine Tomlinson).
Nations sign UN anti-graft pact. According
to UN reports more than 100 United Nations’ members are meeting in Mexico
to sign a landmark convention against corruption. The first legally-binding
international agreement on the issue is aimed at making it easier to hunt
down corrupt officials and to recover illicit funds. Mexico
and the United States
were among the first to sign. The terms of the treaty were agreed in October,
but will only enter into force when it is ratified by 30 countries. (BBC News, December
10, 2003 summary by Sherldine Tomlinson).
UK: Special investigation: BAE accused of hiding cash
paid to win deals. It was reported that Britain’s
biggest arms company stands accused of running an international system of
secret commission payments, using Swiss banks and a tiny island in the Caribbean.
The allegations, by sources involved in the transactions, are based on Swiss
bank records. BAE has denied any illegality or wrongdoing. (The Guardian 05 Dec 2003 summary by Sherldine Tomlinson).
UN GENERAL ASSEMBLY APPROVES FIRST GLOBAL TREATY AGAINST
CORRUPTION On 31 Oct, 2003, a landmark anti-corruption treaty which requires
politicians to disclose their campaign finances and countries to return
tainted assets to the nation they were stolen from was adopted by the UN
General Assembly. As scheduled, the signing conference will be held in Merida,
Mexico on Dec. 90-11,
and the treaty will enter into force on the 90th day after 30 nations have
formally ratified it. (AP, 31 Oct
2003, summarized by Hanh Vu).
Global Competitiveness Raanking
http://www.weforum.org/pdf/Gcr/GCR_2003_2004/Competitiveness_Rankings.pdf
World Economic Forum ranks are a useful indicator.
GLOBAL: GLOBAL CORRUPTION INDEX HIGHLIGHTS ENDEMIC SLEAZE
2003’s CPI’ reported by TI reveals that most of developing countries now
facing high corrupt epidemic while several other developed countries slip
their ranks on the list. The head of a global graft watchdog called for
further assistance from rich nations in a bid to tackle endemic corruption in
developing countries. According to him it’s the mutual support not penalty
should be considered an effective method to curb ill practices there. (AFP, 07
Oct 2003, summarized by Hanh Vu).
UN treaty against
transnational organized crime enters into force. The United Nations
Convention against Transnational Organized Crime, the first legally binding
treaty to fight crime on a worldwide scale, has entered into force. This
requires the member states to cooperate on issues ranging from money
laundering to human trafficking. (United Nations, September
30, 2003, summary by Sherldine Tomlinson).
Engineering &
Construction Industry Tackles Global Corruption. The World Economic
Forum today announced a major breakthrough in the fight against corruption in
the engineering and construction industry. Leading members of the industry,
who make up the World Economic Forum’s Governors for Engineering &
Construction, have established a multinational task force to develop
anti-corruption principles to guide companies that participate in engineering
and construction procurements around the world. According to the report, strong
anti-corruption policies within the E&C industry will promote the
principles of transparency, accountability and responsibility for the
long-term benefit of all stakeholders.
(World Economic Forum, July
31, 2003 summary by Sherldine Tomlinson).
UNODC Strengthens
Cooperation Among International Organizations to Fight Corruption. Following
a two day meeting hosted by the United Nations Office on Drugs and Crime,
representatives of a number of UN programmes and other intergovernmental and
nongovernmental organizations, agreed to formalize their interagency
coordination mechanisms and to set up a functioning coordinating group to
oversee the regular exchange of information and experiences as regards their
anti-corruption work. Participants also stressed the need to take a more
proactive approach to corruption by identifying high-risk areas, such as
procurement, and concentrating efforts in those fields to strengthen the
culture of prevention, thereby moving away from a reactive culture. (UNIS
Press Release, July 29, 2003,
summary by Sherldine Tomlinson).
Convention AgainSt
CORRUPTION. The
final round of negotiations on a United Nations treaty aimed at fighting the
proliferation of corruption has begun in Vienna,
with more than 110 Member States expected to discuss remaining areas of
divergence in order to reach consensus. The sixth session of the Ad Hoc
Committee for the Negotiation of the UN Convention against Corruption will
focus on areas where divergence still exists, which include the search for a
definition of corruption, assets recovery and the question of whether to
sanction only public, or also private, corruption. Finalizing the text would
allow the new instrument to be submitted to the General Assembly at its 58th
session this September and to the High-level Signing Conference scheduled to
take place in Merida, Mexico.
(The Accra Daily Mail, July 23, 2003,
summary by Sherldine Tomlinson).
UN CRIME CONVENTION AGAINST MAFIA STARTS SEPT.29 The UN
convention against Transnational Organized Crime - the first of its kind
among crime-control measures, namely the criminalization of participation in
an organized criminal group, money-laundering, corruption and obstruction of
justice, is set to come into force Sep. 29. According to executive director
of the US Office on Drugs and Crime, Antonio Maria Costa, the convention is so far signed on by 147
countries worldwide to counter the worldwide challenge of organized crime. (UN
wire, 07 Jul,2003, summary
by Hanh Vu).
U.N SECRETARY GENERAL ANNAN DENOUNCES CORRUPTION AS
OBSTACLE At the opening of the
Executive program on Corruption control and Organizational Integrity at
Harvard Universty UN Secretary General Kofi Anna said that corruption is
"insidious menace" that obstructs the economic and social
development worldwide. According to him, UN should be in the front line in
the fight against corruption, hoping that progress against the problem would
gain in December when UN member states gather in Mexico
City to sign the UN Convention Against Corruption,
which would criminalize diverse forms of corruption and oblige signatories to
protect their institutions from it. (Vietnam News Agency, 12
Jun 2003, summary by Hanh Vu).
EX-UNMIK OFFICIAL JAILED FOR EMBEZZLEMENT:- Joe Trutscher,
a former official with the UN Mission in Kosovo got a 3½ years jail term on
Tuesday after a Court in Bochum Germany found him guilty of embezzling about
$4.3 million from KEK Electrical company. The money was deposited in his
accounts in Gibraltor. He had said he was going to use this money to secretly
raise the salaries of UN energy workers. By the time her turned himself in
late last year, he had spent $445,000 of the money. (UN WIRE JUNE
18, 2003, SUMMARY BY DAVIS
J. WEDDI, STOCKHOLM SWEDEN).
GERMANY, GLOBAL & LESOTHO: GERMAN'S FIRM GUILTY OF
LESOTHO BRIBERY Following the Canadian company Acres International's
conviction which forced the company to pay price for bribing high-ranking
officials in Lesotho, the international engineering company Lahmeyer of
Germany recently was found guilty on giving bribes to Masapha Sole, former
chief executive of the Lesotho highlands water projects, who was sentenced to
15 years in jail last year for taking grafts. (The Guardian 19 Jun 2003,
summary by Hanh Vu).
EU BIDS TO CUT DOWN WORLDWIDE ILLEGAL TIMBER TRADE
According to a draft proposal made by the European Union, once a country or
regional bloc has signed up to a Forest Law Enforcement. Government and Trade
(FLEGT) agreement, the EU will refuse to accept imported timber from that
state unless it is certified as legal. A voluntary timber certification
system that might lead to a global agreement to clean up the $150bn. global
forest product trade is to be launched by the European Commission, said the
draft. The EU's proposal will target southeast Asia, south America, central Africa
and Russia.
The EU would help less developed countries improve their judiciary, police
and military to help to stop illegal logging. (Reuters 20 May 2003, summary
by Hanh Vu).
SALK LAKE TRIAL SET TO IMPLICATE IOC CHIEFS Olympic bosses
face a new round of corruption allegations when the 1998 Salt
Lake City cash-and-sex-for-votes scandal set to go to
trial in a Utah courtroom later
this year. Tom Welch and his co-defendant Dave Johnson will face jail
sentences with 15 charges of conspiracy, bribery, racketeering and fraud if
they do not prove they were victims of IOC greed. After 10 low-ranking
members, mostly from the developing world, were ejected in late 1998 when the
scandal broke, some of the biggest names, friends of disgraced IOC president
Juan Antonio Samaranch can now expect to be named in the trial. (Daily Mail, 24
Apr 2003, summary by Hanh VU).
GLOBAL. CHOCOLATE INDUSTRY MAKES WEAK EFFORT TO END CHILD
SLAVERY ON COCOA FARMS. The U.S. Agency
for International Development estimates approximately 300,000 children work
on cocoa farms, 64% below the age of 14 and the vast majority unpaid.
Hershey's and M&M/Mars earned $13 billion in chocolate sales from cocoa
primarily imported from the Ivory Coast,
the world’s largest cocoa farm producer and a practitioner of brutal child
slavery. Hershey’s and other major
chocolate producers have pledged to commit themselves to a plan to produce
slavery-free chocolate by July 2005. However
critics and child slavery monitoring agencies report little progress, citing
that the companies have failed to enact serious measures to end child slavery
practices. At issue is the industries’ avoidance of fair cocoa pricing and
it’s role in perpetuating child slavery. Fair pricing can provide farmers
with livable wages but threatens chocolate producers’ profits. (Salon Magazine, Feb.
14, 2003, http://www.salon.com/news/feature/2003/02/14/chocolate/,
summarized by Kelly Kristen).
US SETTING GOOD EXAMPLE BY DISCLOSING ASSETS OF POLITICAL CANDIDATES, on line. See http://www.public-i.org
BOOK
ARGUES THIRD WORLD ETHNIC HATRED A CONSEQUENCE OF CORRUPT LEADERS USING
EFFECTS OF FREE MARKET DEMOCRACY.
Yale law professor Amy Chua’s book “World on Fire: How Exporting Free
Market Democracy Breeds Ethnic Hatred and Global Instability” discusses how
the West’s impetus to export democracy as a panacea against tyranny, to
countries lacking the infrastructure necessary to support it, has the
unintended consequence of sparking violent ethnic conflict. Countries typically affected often have an
economically powerful ethnic minority in control of the dominant markets and
a poverty stricken majority. Chua
argues that rapid conversion to democracy enriches the market controlling
majority, while at the same time empowering the impoverished majority, who
then scapegoat the advantaged minority as the cause for the majority’s
ills. The result are a highly
predictable set of tensions that foster the emergence of morally corrupt
demagogues who incite the majority to violence against the minority. Regions
following this pattern include Rwanda,
Southeast Asia, Russia,
Yugoslavia,
the Philippines,
Indonesia,
and East Africa. (Salon Magazine, Jan.
13, 2003, http://www.salon.com/books/review/2003/01/13/democracy/index.html,
summarized by Kelly Kristen).
Interpol chief says fighting corruption
essential in the war against terrorism . According to the Chief of
Interpol, law enforcers around the world should not let the war on terrorism
undermine efforts to fight other serious crimes. Interpol Secretary-General
Ronald K. Noble also warned that other crimes, particularly corruption, could
feed into terrorism. Noble said Interpol has sought to stop the global
movement of terrorists by creating a database of stolen passports, giving
police from its 181 member countries access to ID numbers on stolen travel
documents that can be used by terrorists to move about. (Yahoo News (AP), January
22, 2003 summary by Sherldine Tomlinson).
ITALIAN
IN MALAYSIA
WINS FIGHT VS EXTRADITION TO INDIA
($1.4BN BOFORS ARMS SCANDAL). Ottavio Quattrocchi, an Italian businessman, is
accused of accepting US$7.3 million from Swedish arms maker Bofors to
facilitate the sale of 400 artillery guns to the Indian army in 1986. Paying
or receiving commissions on arms sales is prohibited by law in India.
A Malaysian court quashed extradition proceedings against the Italian
businessman, who is not going to be sent to India
to face the corruption charges. Sessions Court Judge Akhtar Tahir agreed with
Quattrocchi's lawyers that documents filed by Indian authorities were vague
and insufficient. (Dow Jones Newswires, December
2, 2002, summary by Pavlidis George).
STATE
NEWSPAPER EDITOR JAILED 14 YEARS FOR CORRUPTION Reports on Saturday said Fu
Guiyu, former editor of the Shenyang
Daily - a Communist Party newspaper in northern China, who was arrested in
October 2001, had been sentenced to 14 years in prison for taking more than
590,000 yuan (US$72,000) in bribes and confiscating 80,000 yuan (US$10,000)
in company property. No comment from the Shenyan Daily. Shenyang,
the biggest city in China's
northeast, has been rocked by a series of corruption scandals over the past
two years that brought down top party and government officials. (The Star, 23
Nov 2002, summary by Hanh Vu).
ASSET
MANAGER'S ETHICAL PROJECT (PROJECT FOR CORPORATE RESPONSIBILITY) A three-year
project to develop principles for corporate responsible in global operations,
especially in developing countries has been launched by Insight Investment,
the asset manager of banking group HBOS. Besides, It is found in this code
broad guidelines which still needed to be greater clarity for companies on
child labour, bribery and corruption, and human rights issues.( Financial
Times, 19 Nov 2002,
summary by Hanh Vu).
ABACHA'S
SON WANTS MONEY HELD BY BANKS Mohammed Abacha, son of Nigeria's late military
ruler General Sani Abacha, who was recently released from three years in
prison on charges of money laundering and corruption, has instructed lawyers
to retrieve millions of dollars which he says are rightfully his. Banks in Europe
have frozen accounts holding money allegedly siphoned off while General
Abacha ruled Nigeria
from 1993 to his death in 1998. (The
Independent, 20 Nov 2002,
summary by Hanh Vu).
Liberty = Prosperity, Greater economic freedom seems to lead to
greater prosperity. 2003 Index of Economic Freedom by the Heritage Foundation and The Wall
Street Journal suggests that economic freedom has advanced throughout the world;
every region has improved. World-wide, 74 countries have better scores, 49
have worse scores, and 32 have scores that are unchanged. Of the 156
countries numerically graded in the Index, 15 are classified as
"free," (with GDP exceeding $27,000 per capita. Less than half is
earned in 56 "mostly free" countries. Income is only around $3000 for 74 as
"mostly unfree," and even lower for the 11 "repressed" countries. Latin
America performed the worst as Chile
dropped out of top 10. Asia has both the freest
countries (like Hong Kong and Singapore)
and most repressed countries. Europe
is actually freer than socialist rhetoric might suggest. Estonia
made great strides. Ms. Mary O'Grady, Gerald P. O'Driscoll Jr. and Edwin J. Feulner
edited the Index (Nov.
12, 2002, Wall St. J.
Summary by H. Vinod).
JOURNALISTS
FACE INJURY AND DEATH FOR THE TRUTH (INTERNATIONAL PRESS FREEDOM AWARDS) 31
journalists died on the job last year, eight of them while covering the war
in Afghanistan.
Another 110 were thrown in jail, an increase of almost 50% over 2000 due to
sins known as "truth exposure", according to the international
pressure group Reporters Without Borders. To honour journalists' contribution
to the world's advancement, this year 's International Press Freedom Awards,
which sponsored by the Canadian Journalists for Free Expression, are said to
be presented to Lira Bayseitova, who
exposed government corruption in her native Kazakhstan; Ahmed Abdisalam Adan, Mohamed Elmi and Ali
Shamarke, three Somali-Canadians who returned to their war-torn native
country to establish HornAfrik, a modern and independent radio and TV network
that airs the only reliable information there; The Star's Kathleen Kenna, who
was critically injured in Afghanistan. Kenna, who is still on leave, has won
the Tara Singh Hayer Award, which goes to a Canadian journalist and
HornAfrik's Elmi, 46, Canadian, who brought "state of the art
broadcasting" and impartial journalism to the country of his birth. (Toronto Star, 12
Nov 2002, summary by Hanh Vu).
PROFITS FROM WAR International Consortium of Investigative Journalists has identified some 90 companies and a small group of individuals with connections to governments, multinational corporations and, sometimes, criminal syndicates in the United States, Europe, Africa and the Middle East that have profited from war commerce. Read more in ICIJ's 11-part series http://www.icij.org or Visit http://www.public-i.org
French pass
rights plan. The countries of the Francophone yesterday adopted a plan
to penalize, even expel, dictators and corrupt leaders among them that defy
standards of democracy and human rights. The organisations of 54 members approved
the declaration at the final day of the ninth summit of French-speaking
countries, which was being held in Lebanon.
The position marked a departure from past summits that addressed cultural
issues and avoided criticizing corrupt regimes. Prime Minister Jean Chretien
praised the gathering, saying that the meetings are very useful because we
can discuss all problems, even human rights, electoral systems and judicial
systems.(Calgary
Sun, October 21, 2002,
summary by Sherldine Tomlinson)
UN
EXPOSES CONTINUING PLUNDER OF CONGO.
According to a United Nations report, although Zimbabwe,
Rwanda and Uganda
have withdrawn their armies from the Democratic Republic of the Congo (DRC),
they are still plundering the country through corrupt DRC government
officials and criminal networks. Several senior figures are named in the UN
report to the UN Security Council. According to the report, "the looting
that was previously conducted by the armies themselves has been replaced by
organised systems of embezzlement, tax fraud, extortion, the use of stock
options as kickbacks and diversion of state funds." The report urges for
financial restrictions on 29 companies and 54 individuals allegedly involved
in the looting. (The Independent, October
22, 2002, summary by Pavlidis George).
Report Finds
Corruption a Serious Problem in International Business. According to reports, financial
corruption remains a serious problem in international business according to a
new survey released by a business risk consultancy. The survey, by the
Control Risks Group, found of companies in Britain,
Germany, the United
States, Hong Kong and
Singapore, 40
percent believed they had lost business in the last five years because a
competitor paid a bribe. CRG found that only 56 percent of British companies,
38 percent of German, and 30 percent of Dutch companies were familiar with
the 1997 OECD anti-bribery law. The law makes it possible to prosecute
companies in their home countries for paying bribes abroad. The survey also
found that British companies were the most sensitive to corruption risks,
with 48 percent saying they had stayed away from otherwise attractive
investments because bribes were encouraged. (VOA
News, October 18, 2002,
summary by Sherldine Tomlinson).
LAWS
FAIL TO HALT INTERNATIONAL BUSINESS BRIBERY 40% companies in the US, UK,
Germany, the Netherlands, Hongkong and Singapore asked believed that they had
lost business in the last five years because a competitor had paid a bribe
despite the widespread introduction of OECD anti-bribery convention some
years ago, a survey carried by the London-based Control Risks Group (CRG)
revealed. The survey found that UK
companies were the most sensitive to corruption risks, with 48 per cent
saying they had stayed away from otherwise attractive investments because
bribes were asked for. By contrast German companies were less likely to
introduce management practices to counter corruption than their OECD
counterparts, with 60 per cent perceiving the risk to be of "no real
significance." US companies were the most likely to have formal
agreements with agents that they would not pay bribes on the company's
behalf. However some 67 per cent of respondents in the survey believed that
US companies still used middlemen to circumvent anti-corruption legislation.
(Financial Times, 15 Oct 2002,
summary by Hanh Vu).
MONEY
LAUNDERING BLACKLIST NO LONGER INCLUDES RUSSIA AND DOMINICA Russia, Dominica,
Niue and the Marshall Islands, the countries appeared on the blacklist of
countries that fail to counter such a crime of money laundering since
2000, have been removed from the
blacklist, whereas 11 countries remain on the list are Cook Islands, Egypt,
Grenada, Guatemala, Indonesia, Burma, Nauru, Nigeria, Philippines, St.
Vincent and the Grenadines, and Ukraine, said the Paris-based Organization
for Economic Cooperation and Development (OECD). This move, according to
Russian officials, will help the nation to
attract more investment inflow to the country in the years to come.
(AP, 12 Oct 2002,
summary by Hanh Vu).
GLOBAL:
BRAZILIAN BUSINESSMAN, SLOVAK JUDGE AND GERMAN PROFESSOR AWARDED FOR FIGHT
AGAINST CORRUPTION Luis Roberto Mesquita, 43, a Brazilian businessman who
challenged local officials to govern cleanly; Jana Dubovcova, 50, chief
justice of the district court in the central Slovakian city of Banska
Bystrica who initiated efforts to wipe out courtroom bribery and Peter S.
Schoenhoefer, 67, a professor of pharmacology who has taken on drug makers
whom he accused of paying medical professionals to promote the unnecessary
prescription of their medications are to be given this year's Integrity
Awards on Oct. 11 in Casablanca, Morocco. The award have been handed out
annually sine 2000 to underline the effort of people and organizations who
have shown bravery or special initiative in combating corruption, according
Transparency International. (AP, 30
Sep 2002, summary by Hanh Vu).
WORLD'S LEGISLATORS WILL GATHER TO FIGHT
CORRUPTION 126 lawmakers from 40 countries will attend a 3 day conference
(Oct. 13-16) organized by Mr. John Williams, MP for the Alberta riding of St.
Albert and chairman of the commons public accounts committee and the
Ottawa-based Parliamentary Centre (non profit research institute) at
Parliament Hill - Ottawa - Canada to launch the Global Organization of
Parliamentarians Against Corruption (GOPAC) and discuss on practical ways
parliamentarians can keep tabs on their governments through institutions such
as auditor-generals offices, public accounts committees and question periods.
The organization will have regional chapters around the world, designed to
support legislators who risk their lives by speaking out against corrupt
governments. (National Post, 19 Sep
2002, summary by Hanh Vu).
GRAFT
'A BIGGER RISK TO BUSINESS THAN TERRORISM'
Economist Intelligence Unit (EIU) said in rating 60 countries across
the globe that the corporate world faces a much bigger risk from corruption
and bureaucracy than it does from terrorism. Its findings show that the
average rating for security risk was just 35, compared to 59 for the
government effectiveness risk (zero is the least risky score.) China,
Indonesia and
Pakistan in Asia
were listed as having high government effectiveness risk while Singapore
had the best overall business operations risk rating in the analysis, the
Business Times reported. (The Straits
Times 09 Sep 2002, summary by Hanh Vu).
COMPANIES
WERE TOLD TO ROOT OUT CORRUPTION A UK government-backed initiative known as
Publish What You Pay to make oil, gas and mining companies report all
payments made to politicians overseas, which launched in June this year and
still remains unclear whether the move would be based on introducing
regulation or would appeal to companies to take voluntary action, is intended
to reduce corruption and allow local
people in the developing world see how much is being paid to politicians. It
is thought if the figures had to appear in company accounts it would be a
severe blow to those guilty of corruption and the payments would soon
disappear. Senior politicians in many developing countries are said to be in
favor of payments appearing in company accounts because it might root out
low-ranking corrupt officials who operate virtually unrestrained.
(Accountancy Age, September 5, 2002,
summary by Hanh Vu).
CORRUPTION
PLAGUES ACADEME AROUND THE WORLD
From diverse cultures such as found in China,
Mexico, Kenya,
Japan and the
U.K.,
corruption in higher education is becoming a common denominator for
institutional educators. Ghost
writing of theses and taking tests for others is blended with institutional
corruption, which includes selling fake diplomas and using political
influence for admission or grading to the benefit institutional supporters
and their families. Transparency
International (TI) has identified a link which almost certainly extends to
higher education by which corruption’s victims are the world’s poorest
people. Efforts to improve education
abroad through exchange programs may limit confidence of American academics
if students habitually buy grades rather than earn them. (The Chronicle of Higher Education), Aug.
6, 2002, summary by Marg Reynolds).
US$320M
IN 'CORRUPTION FEES' PAID IN CARIBBEAN, SAYS UN OFFICIAL 10% of an estimated US$3.2
billion in illegal drugs passed through the Caribbean in 2000 was paid for
so-called "corruption fees" said Flavio Mirella, the United Nations
Drug Control Programme's (UNDCP's) acting resident representative in the
region. According to him corruption has created conditions in which public
servants are gradually drawn from minor forms into more serious activities
(The Jamaica Observer, July 30, 2002,
summary by Hanh Vu).
NO
WHALING VOTES ´SOLD´ FOR JAPANESE AID Six Caribbean
countries which includes Antigua, Dominica,
Grenada, St
Kitts-Nevis, St Lucia
and St Vincent have said they will support the
resumption of commercial whaling, but they have also rejected accusations
that they have sold their votes to Japan
or any other pro-whaling country. The islands will vote at the International
Whaling Commission meeting in Shimoneseki, Japan,
for an end to a ban on commercial whaling. The Commission is expected to vote
at the end of its plenary session. Some of the six islands also plan to
develop whale watching for tourists.(Financial Times, May
20, 2002 summary by Sherldine Tomlinson).
FIFA
OFFICIAL VOWS TO SPEAK OUT OVER CORRUPTION CLAIMS It was reported that Michel Zen-Ruffinen, shocked the world football
with allegations of corruption inside Fifa. Zen-Ruffinen’s allegations
concern the conduct of Sepp Blatter, Fifa’s embattled president, who is
embroiled in a bitter election campaign to retain his post. Zen-Ruffinen’s
have accuse Mr Blatter of involvement in corrupt practices and attempting to
hide the true state of Fifa’s fin-ances. Mr Blatter, who has consistently
denied any wrongdoing, maintains his innocence. (Financial Times, May
14, 2002, summary by Sherldine Tomlinson).
FIFA ALLEGATIONS TO BE FILED BEFORE WORLD CUP. Michel
Zen-Ruffinen, Fifa’s general secretary, has compiled a 21-page dossier with
300 pages of ancillary evidence, detailing alleged corruption at the football
body. The dossier will be passed to a Swiss judge. Allegedly, up to SFr800m
(Dollars 500m) has been lost during Mr Blatter's presidency, in a number of
corrupt practices, including paying a former referee Dollars 25,000 in return
for "information". Mr Blatter has denied any wrongdoing. However,
Chung Mong-Joon, head of the Asian Football Confederation, said: "Mr
Blatter must face a thorough investigation over the abuse of his authority
and misuse of Fifa funds." (Financial Times, May
9, 2002, summary by Pavlidis George).
Johannesburg,
INTERNATIONAL CRICKET COUNCIL ANTI-CORRUPTION UNIT CHECKS 2003 WORLD CUP
VENUES. The anti-corruption unit of the International Cricket Council’s (ICC)
has empowered a team to carry out a security audit of match venues of the
2003 Cricket World Cup. Bob Smalley and Bruce Ewan from the unit, together
with members of the World Cup Security Directorate, will undertake
inspections of host grounds in South Africa
and Kenya.
“By working closely with the security directorate we will be able to cover
both specific anti-corruption measures as well as the physical ground
security requirements for each stadium,” said Lord Condon, director of the
ICC unit. This means that South Africa’s
leading international venues will be among the first in the world game to
meet the anti-corruption standards recommended by last year’s Condon Report.
(Indo-Asian News Service, April 27,
2002, summary by Pavlidis George).
Pristina,
Yugoslavia, UN
AUTHORITIES INVESTIGATE CORRUPTION IN KOSOVO. The U.N. authorities in Kosovo
are investigating into a corruption case, which involves some 4.5 million
euros. Andy Bearpark, the official responsible for reconstruction and
economic development in the UN mission in Kosovo has now evidence of this
alleged fraud. Mr. Bearpark identified the Kosovo Energetic Corporation,
which handles power supply for the province, as a suspect in this corruption
case. The alleged scheme involves international aid money for the purchase
and import of electricity during the last three harsh winters in Kosovo.
According to the chief UN administrator of the Yugoslav province, Michael
Steiner, "there will be zero tolerance for crime." (Associated
Press, April 30, 2002,
summary by Pavlidis George).
Study finds world´s forests endangered
A Washington-based
environmental research group warns that the world’s forests are rapidly
declining which is the result of unsustainable development. New reports
released by the World Resources Institute’s Global Forest Watch say 40
percent of undisturbed forests could be lost in 10 to 20 years. The institute
blamed mining, road construction and logging activities. However, much of the
threat arises from bad economics, poor management and corruption. While many
countries have enacted laws to protect untouched forestland, regulations are
not always enforced. The survey results also cited the country Indonesia
as an example, claiming that 70 percent of its timber production is illegally
logged. It also targeted Central Africa as an example
of poor management. The reports also say logging concessions cover more than
half of the world’s second largest tropical rainforest. In addition to these
areas, the institute’s two-year study also covered North America,
Russia, Chile
and Venezuela. (VOA News, April
3, 2002, summary by Sherldine Tomlinson).
Trifin
J Roule at has posted the latest issue of the Corruption List: http://www.corruptionlist.com. In
List Members’ contribution section see (1) A report by Global Witness
entitled ‘All the Presidents’ Men’, which links the economic and
political disorder of the Angolan conflict to kickbacks on arms trafficking,
and a highly over-priced military procurement process. The report reveals how
a network of international leaders, bagmen and influence peddlers – ‘the
Presidents and their Men’ - have presided over a system that has led to the
embezzlement of Angola’s oil wealth. The report also examines links between
this process and the ‘Angolagate’ arms-to-Angola scandal, uncovered in France
at the end of 2000. (2)Also see http://www.house.gov/reform/newindex/presidential_pardons.htm
for a copy of : JUSTICE UNDONE: CLEMENCY DECISIONS IN THE CLINTON WHITE HOUSE by the U.S. House Committee on Government
Reform, which includes comprehensive analysis and recently de-classified
information on pardons issued during the final hours of the Clinton
presidency.] March 27, 2002.
FIFA critics seek fresh audit An unusual meeting of FIFA’s executive
committee has been scheduled. The meeting will discuss the call for the
creation of an independent panel to investigate the body’s financial affairs.
Sepp Blatter who is the president of FIFA has resisted calls for independent
investigation of FIFA. The investigation is due to the concern about FIFA
losing money following the bankruptcy of ISL/ISMM, the Swiss marketing agency
that was FIFA’s main commercial partner. Mr. Blatter responded by
commissioning a report from KPMG, which is FIFA’s official auditor, but this
failed to placate his critics. Mr. Blatter´s opponents believe KPMG is too closely
linked with FIFA and they want an audit by an independent body. Moreover,
there have also been calls to broaden the investigation to cover bribery
allegations, which was levelled at Mr. Blatter´s supporters. It was claimed
that some of Mr. Blatter’s supporters paid bribes to African FIFA delegates
to ensure his election in 1998. The
FIFA presidential elections are in May, which is before the start of the
World Cup in Seoul and Korea.
Mr. Blatter is so far the only candidate but a challenge is likely from Issa
Hayatou, president of the Confederation of African Football. (Financial Times, March
2, 2002, summary by Sherldine Tomlinson).
POOR
MOUTHING AID: THE TRUTH IS, IT
WORKS: COMMENTARY. (Editorial Writer, Sebastian Mallaby,
Washington Post. Pessimistic people say that poverty is a shame, but is
‘unfixable’; that bigger aid programs will be wasted; that previous
pro-market policy reforms have failed; that not much progress has been seen
in education or health clinics even with aid; and that measurable success in
developing countries cannot be attributed to aid, due to lack of
evidence. However, though billions of
people remain poor, the numbers of poor has been steadily declining even
though the world’s population has risen by 1.6 billion persons since
1990. Returns from health aid include
millions of years of productive labor to regional economies and simple
nutritional alterations can boost children’s IQ levels by at least 10
percent. The global international
institutions, think tanks, and government representatives are meeting in Monterrey,
Mexico this month to
discuss development strategies, to push for doubling aid to guarantee the
access of essential health care, a sound environment, and primary education
to the poor. The Bush administration
will be urged to join this campaign on behalf of the United
States.
A recently released macroeconomic and health report stated a yearly,
global $66 billion investment until 2015 could generate 6 times as high
benefits up to 2020. In conclusion,
aid to developing countries, especially in light of the anti-terror war being
at center stage, is not philanthropy, it is strategic. (WorldBank DevNews, Mar.
4, 2002, summary by Marg Reynolds)
Corruption ´deters Caspian investors´. With proven oil reserved of between 17 and
33 billion barrels, comparable to the Us, the Caspian Sea region has not
developed as expected since the collapse of the USSR, mainly due to
corruption and an inadequate legal framework that are scaring investors off,
in spite of recent optimism about two pipeline projects in the region taking
oil and gas from Azerbaijan to Turkey. The main problem now is territorial
claims, as the world’s largest inland sea which used to be divided between
URSS and Iran is now claimed by Azerbaijan, Kazakhstan and Turkmenistan, as
well as Russia and Iran, and no agreements on how to share it have been made
yet, but the there is a strong environmental threat that could turn it into
an ecological disaster area. (BBC
News 26 Feb 2002, summary by Monica Voitovici).
Break through on tax havens A group of 30 leading industrialised
countries, The Organisation for Economic Co-Operations and Developing has
made a breakthrough in the controversial campaign that force tax havens to improve
levels of financial transparency. The
coalition has made an accord with Barbados,
which has led opposition to its decision to blacklist 35 financial centres. A
joint press release issued by the OECD and Barbados
said Barbados
would be excluded from a second blacklist of "unco-operative" tax
havens, which is due after the end of this month. It is said that Barbados
had decided to extend its existing bilateral agreements with large economy
countries, such as the United Kingdom
to cover all OECD members.
(Financial Times, February 1,
2002, summary by Sherldine Tomlinson).
UN FIRST MEETING ON THE ELABORATION OF THE UN
CONVENTION AGAINST CORRUPTION In its
first meeting at Vienna this week, the Ad Hoc Committee is considering the
first draft of a Convention against Corruption derived from a wide range of
proposals from Member States, which were discussed at the Informal
Preparatory Meeting of the committee held in Buenos Aires in December last
year. The Officer- in- charge in the UN Office for Drug Control and Crime
Prevention, Mr. Steinar B. Bjornsson has said that this is a historic process
in the fight against corruption intended to equip the member countries with a
comprehensive, broad, effective and functional instrument to strengthen and
create capacity to counter corruption. He indicated that the proposals show a
keen interest from all countries to participate actively so that the final
product of the convention reflects the multifaceted problems of corruption,
and is accepted universally. The Chairman of the Ad Hoc Committee H.E.
Ambassador Charry Samper has said that the task would be to bring about a
change in behavior and obtain a commitment to act against the corruption
world wide, which is increasing, and encroaching on agencies designed to
curtail it. He has said that the measures to reach a common formula worldwide
should include strengthening of controls, reform practices, international
co-operation, and establishing a culture of transparency and integrity. He
sought the support of the World Bank and the IMF, and urged all the financial
and banking institutions to step up their efforts to combat corruption.
Encouraging the Ad Hoc committee to move the convention forward he concluded
that whilst no country, developed or developing is immune to corruption,
effective ways of dealing with it could definitely be worked out. (22
January 2002, www.un.org, summary by Aruna Balakrishnan).
WHISTLEBLOWING: PEEP AND WEEP Reaching corporate targets has caused companies such as BP
and Xerox to not only not reward whistleblowers for expressing concern about
environmental and accounting issues, but in fact, to punish them by
persistent harassment, reprimands, or outright firing. Many firms massage numbers to reach
unrealistic targets, but since September 11th, whistleblowers on
security issues have failed to receive a response to known cases of
breaches. Legislation for protection
of whistleblowers who expose corporate or government shenanigans is gradually
being introduced in a number of countries, but is bogged down in
congressional committees in the U.S. The Public Interest Disclosure Act,
recently introduced in great Britain,
is cited as the most far-reaching whistleblower protection in the world;
however, few firms see whistleblower protection as being in their best
interests. A British bank, Abbey
National, is an exception in its treatment of whistleblowers and now gives
regular advice to its employees on how to blow the whistle – far more
constructive than the approach of BP or Xerox. (The Economist, Jan.
10, 2002, summary by Marg Reynolds).
Annan urges Third World to fight corruption. Secretary
General Kofi Annan urged developing countries on Monday to agree to fight
corruption so as to persuade rich states to raise an extra 50 billion dollars
in aid at a major UN conference this year. The week-long conference, which
opens in Monterrey, Mexico,
on March 18, "offers us the best chance we have had for many years to
unlock the financial resources that are so desperately needed for development,"
Annan said. He was speaking at the start of the fourth and final round of
preparatory talks for the conference, which runs until the end of next week.
Annan told delegates he had appointed South African Finance Minister Trevor
Manuel and the former managing director of the IMF, Michel Camdessus, as his
special envoys to help rally support for the conference. "The role of
the special envoys is to contact heads of state and high-level political
leaders to foster national commitments to concrete outcomes in Monterrey,"
the UN department of public information said. Annan identified six criteria
for success at Monterrey -- a
prelude to the main UN event of the year, the conference on sustainable
development to be held in Johannesburg
in from August 26 to September 4. "First, it must strengthen and sharpen
the consensus that now exists" that developing countries must do more to
attract capital, in particular foreign direct investment, he said.
"Agreement to conclude a comprehensive international convention against
corruption -- providing for example for the repatriation of illegally
transferred funds -- would also be a major step forward," he said.
Second, there must be a promise of new trade negotiations going beyond what
was achieved by the World Trade Organisation in Qatar
in November, he said. Rich countries must double official development aid to
100 billion dollars a year, he said, noting that this would still fall short
of their pledge to devote 0.7 percent of gross domestic product to aid.
Creditor nations must go beyond current agreements on the debt of low-income
and middle-income nations so as "to prevent the tragic experience of Argentina
from being repeated elsewhere", Annan said. Developing nations must be
given a bigger say in the management of the global economy, he went on, and Monterrey
"must agree on effective follow-up mechanisms to make sure that whatever
it decides is actually done." (Times of India,
January 16, 2002,
,summary by Sherldine Tomlinson).
NEW
MEASURES IN INTERNATIONAL CRICKET COUNCIL'S FIGHT AGAINST CORRUPTION. The International Cricket Council (ICC) is
going to appoint an anti-corruption
co-ordinator and five regional managers, as part of the battle against match fixing. The
initiative follows a report, which was
commissioned last year by the Anti-Corruption Unit of the Council.
According to Malcolm Speed, the ICC
chief executive, "whilst this position is not required by the Condon Report, we believe it is an important
one to provide focus and momentum for
our ongoing fight against corruption." "Both the anti-corruption co-ordinator and the
security managers will play vital roles
in making sure cricket is clean in future," added the ICC chief
executive. (Source: The Times, January
9, 2002, summary by Pavlidis George).
ENRON,
A BAD BUSINESS Enron Corp. has
denied any role in the mid-1997 arrests and beatings of dozens of peaceful
objectors to the $2.6 bn. Natural gas plant planned by its subsidiary, the
Dabhol Power Company. However,
initial investigations by the American Human Rights Watch group found
categorical evidence that Enron paid the government to police the protests
and officially suppress dissent.
Further investigation by Amnesty revealed harassment, arbitrary arrest,
preventative detention, arbitrary and brutal misuse of the law, and
ill-treatment of anti-Enron protest leaders.
Enron, together with Monsanto, Shell, McDonald’s Gap, Nike, and Exxon
have been complicit in causing outrage on three continents; however due to
Enron’s sheer scale, business methods, and manipulation of the international
political process. Tight links with
the politically powerful, including James Baker, former U.S. Secretary of
State; Robert Mosbacher, former Commerce Secretary; and Thomas Kelly,
Director of Operations for the Joint Chiefs of Staff during the Gulf War, has
ensured massive contract awards far in excess of the payroll costs for the
political support. Enron has left a
trail of U.S. government cash, public accusations, and angry communities in Britain,
Germany, Panama,
the Philippines,
Argentina, Mozambique,
and Bolivia. Even in the U.S.,
due to special concessions by then Governor Bush, Enron was allowed to
pollute without a permit and received immunity from prosecution after
violating pollution laws at its Texas
methanol plant. Everyone is better
off without the giant rampaging bully.
(The Guardian, Nov. 30, 2001,
summary by Marg Reynolds).
TERRORISM,
ORGANISED CRIME, MONEY LAUNDERING. It goes without saying that there is a
strong connection between terrorism and organised crime. Estimates of the
total money laundered around the world range from $500 billion to $1.5
trillion, most of it from the illegal drugs trafficking. Secretary-general of
INTERPOL, Ronald Noble said: "If corrupt public servants provide false
identity documents, terrorists will move more freely throughout the world,
and all of us will remain threatened." The OECD-based Financial Action
Task Force on Money Laundering is holding a special meeting in Washington
to consider measures to stop the flow of these terrorist funds. There are 19
states that are identified by FATF as lax on money laundering, among them Egypt,
Israel, Lebanon,
Indonesia and
Russia; Afghanistan,
Iran and Iraq
have no regulations against money laundering; arrangements are inadequate in Saudi
Arabia and Pakistan.
According to the Global Corruption Report, published by Transparency
International, " laundering only needs to be good enough to defeat the
capacity of financial investigation skills and the burden of proof in any of
the jurisdictions along its economic path." (Source: TI, International
Herald Tribune, October 30, 2001,
summary by Pavlidis George).
THE
ANTI-CORRUPTION MOVEMENT GROWS IN COURAGE. It is well known that fighting
corruption is dangerous. Corrupt public figures do not hesitate to
assassinate journalists, public prosecutors and civil society activists who
try to expose corruption. At the recent International Anti-Corruption
Conference (IACC) in Prague,
attended by 1,400 participants from dozens of countries, Transparency
International paid tribute to four victims: Carlos Alberto Cardoso (Mozambique),
Luis Carlos Galan (Colombia),
Georgy Gongadze (Ukraine)
and Norbert Zongo (Burkina Faso).
The IACC noted, however, that progress has been made in the international
anti-corruption movement. TI was created only eight years ago (1993) and now
has national chapters in 80 countries; today, a rapidly growing set of
coalitions is being organized at national, regional and global levels to
force change. It is also impressive that leaders from official multilateral
organizations (the OECD, the World Bank, the European Bank for Reconstruction
and Development etc) should come together with top executives from
multinational corporations, journalists, judges, police and security agency
leaders and civil-society activists to work on new initiatives. (Source: TI,
Earth Times, October 31, 2001,
summary by Pavlidis George).
LEGISLATIVE
ACTIVISM TRIGGERED BY CURRENT TERRORIST THREATS LACK THE COORDINATION TO BE
EFFECTIVE – EDITORIAL (The writer is Chairman of the OECD’s working group on
bribery in international business transactions and a former member of the
FATF). The use of the financial
system by organized criminals for money management in hiding money in
offshore companies has been aided by the uncoordinated, patchy, incomplete,
and inadequate measures by the governments of countries such as Germany,
the United States,
and the United Kingdom. Ten years ago, the FATF advocated creation
of a central notification body to report suspected money laundering cases,
together with measures of identification of both foreign and domestic front
companies of terrorists. However,
bureaucratic controls will easily be evaded by the criminals and terrorists
and the financial institutions should be responsible for identification and
profiling of not only their individual clients and corporate vehicles, but
also the beneficiaries behind the customer.
All countries should be able to search, seize, and forfeit property
belonging to a terrorist organization and those assisting in hiding finances
should be charged with the criminal offense.
It should be mandatory for all countries to notify the central body
authorities of suspect funds, including countries such as Iran
and Russia,
who have expressed anti-terrorism solidarity but are not currently
participants in anti-laundering codes.
(FT, OCT. 24, 2001,
summary by Marg Reynolds)
NEW
U.S. TASK FORCE TO INVESTIGATE ILLICIT CHARITIES AND CORRUPT FINANCIAL
INSTITUTIONS A new team, called Operation
Green Quest and composed of prosecutors and investigators from the U.S.
Treasury Dept., Justice Dept., the Internal Revenue Service, the Customs
Service, and the Federal Bureau of Investigation, will target charities,
non-governmental organizations, and underground remittance systems to disrupt
terrorist financial networks such as al-Qaeda. The task force will track down and dismantle present and future
sources of financing by targeting hawalas (undocumented asset transfers),
illicit charities, corrupt financial institutions, counterfeiting, credit
card fraud, drug trafficking, and cash smuggling. (FT, Oct. 26, 2001,
summary by Marg Reynolds)
TRYING
A NEW APPROACH. The 10th Annual Anti-Corruption Conference was held from 7 to
11 October in Prague (Czech
Republic). A wide range of
subjects was discussed, including fighting corruption in the judicial system.
Keith E. Henderson, the creator of USAID's first official anti-corruption
policy, was interviewed about the roots of corruption in post-Soviet
judiciaries. Keith E. Henderson is currently working on a small
judicial-reform project in Bulgaria,
called the Black Sea Legal Community. Keith E. Henderson considers an
independent judiciary to be prerequisite for a corruption-free society.
"In the judiciary, economic interests agree to pay officials to appoint
certain people to judgeships." "The person appointed may get a call
from time to time to make a decision a certain way. By then the government
official may no longer be there. That means that the economic interest again
has to have someone else appointed to a position within that agency. There is
a huge turnover of officials, particularly in transition times...Many
officials want to be appointed to as many positions as possible, because
every time they get an appointment they get another bit of the action. So
there is a constant placement of corrupt officials. That's why this corrupt
network grows. That's just one form in which this corruption occurs."
According to Keith E. Henderson the fundamental problem is systemic
corruption, thus, the solution is to work with the state in a "very
targeted, strategic way." Accordingly, donors should give more emphasis
to the issues of judicial independence, rather than to judicial
administration and actual management. (Source: TI, Transitions Online, October
18, 2001, summary by Pavlidis George).
SOME
CORRUPTION BATTLE IS BEARING
FRUIT. The Global Corruption Report 2001 is the first
such survey of its kind. According to Transparency International,
which
prepared this study, " this new report contains rays of hope.
Increasing
numbers of governments and business organizations are starting, albeit
modestly, to take positive steps to curb bribery. In particular, citizens'
action is beginning to call politicians to account in all corners
of
the world." The survey provides an exhaustive list of examples of
corruption
around the world as well as how they were uncovered. (Source: TI,
Business
Day, October 16, 2001,
summary by Pavlidis George).
MIXED
RESULTS FOR GLOBAL ANTI-CORRUPTION DRIVE.
The results of anti-corruption drives are mixed,
according to the watchdog charity Transparency International (TI). TI
released its first Global Corruption Report, according to which the
problem had become a big political issue in many
countries. "On balance, the international community's efforts to fight
corruption
have had a positive impact," the report said. Peter Eigen, chairman
of Transparency International, said that the September 11 attacks
in
the US had
also made clear how high the stakes were in areas such as money
laundering. "Without corruption, the terror attacks would not have
been
possible," he said. "To fight corruption means to fight
terrorism." The report also warned some countries in Africa
that rushes into privatization and liberalization may increase the
potential for corruption. (Source: TI, Financial
Times, October 16, 2001,
summary by Pavlidis George).
TRADITIONAL
PAPERLESS MONEY TRANSFERS COULD BENEFIT BIN LADEN NETWORK. The traditional
system of import-export offices, or trading marts, the so-called "hawala,"
is believed to have been used by Osama bin Laden's terrorist network.
"Hawala" (="reference" in Urdu-language). is a low-tech method of money
transfers, which is widely used in south Asia, the Middle
East and beyond. The system is simple: a
customer walks into an office and tells the broker
where to send the cash. Soon, the faraway recipient goes to an affiliated
broker and collects the same amount of money, minus costs and perhaps
a small fee. Sometimes the money is even home-delivered. During this
transaction
the actual cash hasn't gone anywhere. The system is based on the trust
among the hawala brokers, who are often blood relatives. Although
almost
every country outlaws hawala, financial experts believe many of the
transactions
are innocent, involving customers who simply can't afford banking
fees or wish to avoid long delays. Nevertheless, the system's relative
anonymity and lack of any legal record keeping makes it useful to
drug
traffickers, weapons brokers, tax evaders, corrupt officials - or
operatives
of a shadowy network like that of bin Laden. (Source: The Independent,
October 17, 2001,
summary by Pavlidis George).
THE WORLD BANK AND
INVESTIGATIVE JOURNALISM COURSE
STRENGTHENS MEDIA IN LATIN AMERICA There is no more effective check on
corrupt officials, bribe takers, embezzlers and those who waste public funds
than a hard-nosed investigative journalist. In many parts of Latin
America, unfortunately, they are not abundant. No more. The World
Bank Institute is tapping its own knowledge, and that of media experts across
Latin America to train 200 journalists in nine
countries in how to dig up stories that make the corrupt tremble. (Source: World Bank Institute, September
26, 2001, originally published in “Today”, the daily e-zine of
World Bank Staff Summary by: Shatarupa Chaki).
JOURNALIST
KILLINGS, SELF-CENSORSHIP CONCERN IAPA. The Miami-based Inter American
Press Association (IAPA) has warned that Latin America's
media-freedom
problems have been heightened in recent months by the murders of
nine journalists and the emergence of a "culture of
self-censorship." In a recent report IAPA declared that
its "greatest concern" was the killing of seven
journalists in Colombia,
one journa |
