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Global Corruption
Corruption is a particularly viral form of cancer. It is caught here and there but it reappears somewhere else as soon as vigilance is relaxed. It is not eliminated, just driven underground. The corrupt merely suspend their operations temporarily. It lingers, hovering always in the background for its next opportunity.<br>                                                                         - Gerald E. Caiden <br>
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Corruption Eruption E-Magazine > > > "On Planet Corruption every day a new Eruption"

Corruption Eruption E-Magazine >   >  >            "On Planet Corruption every day a new Eruption" | Global Corruption | Scoop.it

*** Rampant corruption of Putin’s Russia is just devastating
*** The Double Sting - A power struggle between Russia’s rival security agencies.
*** People smuggling: how it works, who benefits and how it can be stopped
*** Latin America’s Anti-Corruption Crusade

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Prosecutor: Texas Attorney General Indicted for Felony Securities Fraud

A grand jury has indicted Texas Attorney General Ken Paxton on felony securities fraud charges that accuse the Republican of misleading investors before he took over as the state's top law enforcement officer, a special prosecutor said Saturday.

Kent Schaffer, a Houston defense attorney appointed by a judge to the case, told The New York Times that a Texas grand jury indicted Paxton on two counts of first-degree securities fraud and a lesser charge of not registering.

The most serious allegation is that he encouraged investment in McKinney-based tech startup company Servergy Inc., which is now under investigation by the Securities and Exchange Commission. The Associated Press reported Paxton's involvement with the company — and that a federal investigation was under way — last month.

Paxton also was fined last year for not disclosing to Texas securities regulators that he was getting commissions for soliciting investors.

Paxton's lawyer and a spokesman for his office didn't respond to messages seeking comment Saturday by the AP. Schaffer didn't immediately return messages from the AP, and his co-special prosecutor in the case, Brian Wice, declined comment.

The new indictment will be unsealed Monday.

Paxton's aides have said the investigation in Collin County, home to McKinney, was politically motivated. But Schaffer and Wice have rebuffed those accusations, noting that the investigation involved the Texas Rangers.

Schaffer told The New York Times that the allegations regarding Servergy are first-degree securities fraud. He said Paxton is accused of encouraging investors in 2011 to put more than $600,000 into Servergy, while not telling them he was making a commission on their investment and misrepresenting himself as an investor.
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Africa’s top 10 countries for anti-corruption

Africa’s top 10 countries for anti-corruption | Global Corruption | Scoop.it
In a speech delivered in front of thousands of Kenyans in Nairobi this week, President Barack Obama called on the African nation to “break the cycle” of corruption in government.

Bribery and a lack of transparency have long been a challenge to growth in Africa, where 80% of the population live on less than $2 a day. Obama called corruption Africa’s “biggest impediment to further growth” and urged Kenyans to hold “visible” trials to tackle the problem.

According to the 2014 survey by Transparency International, which tracks how corruption levels are perceived around the world, Kenya came 145th out of the 175 economies rated. But its poor performance paints a misleading picture of the continent as a whole. Thanks to solid and ever-improving performances from several African nations, the index shows that progress is being made across the region.

According to the data, Botswana scores 63 out of a possible 100, making it the least corrupt country in Africa. Even in global terms it’s a strong performance, since out of the 175 countries assessed around the world, two-thirds scored less than 50. (The higher a country’s number, the more transparent it is deemed to be.)

The index ranks a country according to the perception of corruption in its public sector. Corruption in this area traditionally leads to a host of unwanted social problems, from poorly equipped schools to rigged elections and a lack of trust in government.

The vast amount of money currently being lost through opaque practices poses a grave threat to the continent’s growth and development. The annual outflow of illicit finance in Africa – through trade mispricing, for instance – stands at around $60 billion, according to the United Nations Economic Commission for Africa. This is higher than any other developing region.

But despite the gloomy statistics, there are several African countries making huge strides towards achieving better transparency. As well as Botswana, three other African nations score above 50% on the index, putting them in the best-performing third worldwide: Cape Verde, Seychelles and Mauritius.
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In Las Vegas, mafia museum to display FIFA's 'rampant corruption'

In Las Vegas, mafia museum to display FIFA's 'rampant corruption' | Global Corruption | Scoop.it
A Las Vegas museum devoted to the exploits of Tommy gun-wielding mobsters will open a permanent display that explores the "rampant corruption" of global soccer's scandal-rocked governing body, which has drawn comparisons to organized crime.

The new exhibit, announced Tuesday by a museum showcasing some of the most brutal and exploitative criminal activity in U.S. history, follows a corruption scandal that has created the worst crisis in FIFA's 111-year history.

The Mob Museum will unveil the display of photographs, news articles, and original narratives called "The 'Beautiful Game' Turns Ugly", in September.

"The Museum's new FIFA exhibit gives a breakdown of the kickbacks, secrecy and match-fixing associated with the scandal," the museum said in a statement. "The display provides an incisive and eye-opening look into the rampant corruption that plagues (FIFA)."

In late May, U.S. prosecutors in New York indicted nine soccer officials, most of whom held or had held FIFA positions, and five sports media and promotions executives in schemes involving $150 million in bribes over a period of 24 years.

Prosecutors said their investigation exposed complex money laundering schemes, millions of dollars in untaxed income and tens of millions of dollars in offshore accounts held by the soccer officials.
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This fact about the rampant corruption of Putin’s Russia is just devastating

In most countries, criminals need to make their dirty money clean in order to make it useful in the legitimate economy. As any Breaking Bad fan knows, that’s what money laundering is: a way to bring the proceeds of crime onto account books and into bank accounts as the proceeds of a legitimate business.

But in Russia, corruption has gotten so bad that the logic of money laundering has turned upside down. There, many companies face the opposite problem: In order to get things done, they need to take clean money and make it dirty.

As Joshua Yaffa reports in an excellent piece in the New Yorker, Russia's answer is a service known as "obnal," or dark money: the process by which legitimate companies take legitimate profits and launder them into off-the-books slush funds to be used for bribes and tax evasion. Though it's not a universal practice, obnal has become a billion-dollar business in Russia. One of the biggest players in the trade was a midsize institution called Master Bank, which reportedly operated at a loss in order to provide cover for its roaring trade in obnal:

It was an open secret that the company issued bank cards with no daily limit and kept a network of A.T.M.s at Moscow’s Domodedevo airport filled with five-hundred-euro notes—convenient for obtaining large amounts of untraceable cash.

But this isn’t just about financial crimes. Master Bank may have been the one stocking those airport ATMs, but the real power in the obnal trade is Russia’s internal security agency, the FSB, which is the successor of the Soviet-era KGB.

Yaffa quotes Boris Grozovsky, a financial journalist, explaining why a government security agency would get involved in a massive illegal money laundering trade: "Not only do they earn money for themselves but they also get to see who is doing what in this business, which, as we say in Russian, allows them to grab anybody by the balls at any time."

The real currency here, in other words, is not money. It’s power and control. Controlling the obnal trade gives the FSB levers of power that they can pull all over the country. If an individual or company is involved in obnal, then the FSB can use that as a threat to hang over their heads: "Nice company you have there. Sure would be a shame if we had to confiscate it and send you to prison."
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Latin America Enforcement Report – July 2015

Latin America Enforcement Report – July 2015 | Global Corruption | Scoop.it
Here are highlights about Latin American corruption, enforcement, and compliance through June 2015.

Although some countries aren't strictly "Latin American" (Guyana and Puerto Rico, for example), they're usually included in the regional grouping, and I thought it was appropriate to mention them.

Argentina: According to the newspaper La Nación, the Federal Planning Minister, Julio De Vido, and his wife, Alessandra Minnicelli, are under investigations for unlawful enrichment. Their statement of assets didn't disclose a farm in Zarate, valued at $750,000, among other issues.

Bolivia and Peru: Martin Belaunde, a former adviser to Peruvian President Ollanta Hullama who is facing charges with graft and unlawful association, reportedly bribed judges in the six months he was in Bolivia, where he sought political asylum to avoid being extradited to his country.

Colombia: After Joseph Sigelman, PetroTiger's co-founder and former chief executive, pleaded guilty to one count of conspiracy to violate the FCPA, the U.S. DOJ declined to prosecute the company, which made a voluntary disclosure, fully cooperating with the department’s investigation.

Dominican Republic and Cuba: Eliécer Fuentes Valdez, 53, was arrested by the Dominican Interpol in Santo Domingo, and extradited to Cuba. Valdez was wanted by Cuban authorities on charges of commercial fraud and corruption against Raul Castro’s government.
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The Ponzi Scheme Blog: July 2015 Ponzi Scheme Roundup

The Ponzi Scheme Blog: July 2015 Ponzi Scheme Roundup | Global Corruption | Scoop.it
10 guilty pleas or convictions in pending cases; over 166 years of newly imposed sentences for people involved in Ponzi schemes; at least 11 new Ponzi schemes involving over $112 million; and an average age of approximately 50 for the alleged Ponzi schemers.
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Explainer: Hacking Team's Reach in the Americas | AS/COA

Explainer: Hacking Team's Reach in the Americas | AS/COA | Global Corruption | Scoop.it
At least 45 countries have used Hacking Team’s services, according to Privacy International, and seven are from the Americas: Chile, Colombia, Ecuador, Honduras, Mexico, Panama, and the United States. All have active contracts with the exception of Panama, and Mexico brings in more revenue for the spyware company than any other country in the world.

Hacking Team claims all contracts are legal under each country’s laws, though its clients include regimes considered oppressive, such as Saudi Arabia and Sudan.
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​Lessons From Toshiba: When Corporate Scandals Implicate Internal Audit

​Lessons From Toshiba: When Corporate Scandals Implicate Internal Audit | Global Corruption | Scoop.it
In Toshiba's case, it appears that an excessive reliance on the rotational staffing model left the internal audit department vulnerable in terms of resources and competency in accounting and in the company's ability to conduct effective audits, according to the report.

Additionally, the report found Toshiba's governance structure relied too heavily on internal audit as a consulting service rather than as an assurance provider. The audit department focused primarily on providing consulting services to various Toshiba's companies as part of operational audits, without assessing the appropriateness of accounting processes. While an effective internal audit function often provides advice and consultancy services for key stakeholders, internal audit will often struggle to address a company's critical risks if little or no assurance is provided to management and the board on the overall effectiveness of mitigating controls.

Despite a limited focus on assurance, audits by the department twice identified instances of irregularities that could have highlighted the company's accounting problems much earlier. However, they were dismissed as not significant enough to report.
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A Former Prosecutor without Borders: A Conversation with Luis Moreno Ocampo - IACA - International Anti-Corruption Academy

A Former Prosecutor without Borders: A Conversation with Luis Moreno Ocampo - IACA - International Anti-Corruption Academy | Global Corruption | Scoop.it
I think that the idea of using U.S. courts to deal with corruption in the world is a cutting edge exercise. Those companies using U.S. money are exposed to U.S. laws and we are developing strategies to enforce such laws. I am working as a Global Practice Counsel at Getnick & Getnick, a Manhattan boutique law firm specializing in whistleblowing. We like to show that integrity is a good business. I am also doing research on Global Order at Harvard University.
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Corrupto-landia

Corrupto-landia | Global Corruption | Scoop.it
If we keep on electing people who are more worried about not getting caught in corrupt activities rather than undoing them, then we will never solve the problem. To break the cycle of corruption, we need to empower good leaders and mercilessly punish bad ones—but under the rule of law and respect for political and civil rights. Zero tolerance government must be brought about by a zero tolerance society.
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KENYA: Auditor General Edward Ouko questions transfer of cash to counties

KENYA: Auditor General Edward Ouko questions transfer of cash to counties | Global Corruption | Scoop.it
The Auditor General Edward Ouko has criticised the Ministry of Devolution for the transfer of Sh1.9 billion to county governments, which had not been budgeted for.



"The ministry did not adhere to the budget provisions and no explanations and mitigating measures were provided. Consequently, the propriety of the amount could not be confirmed," says Mr Ouko.

In his report for 2013-2014 financial year, Ouko says the ministry acquired non-financial assets without disclosing the classes to the tune of Sh8 billion against a budget of Sh11.3 billion.

Members of NYS arrive in Town Centre to guard and ensure safety on the roads as United States President Barrack Obama opens the Global Enterprenuership Summit. (PHOTO:ANGELA MAINA/STANDARD)
"The supporting payment vouchers for the assets were not provided including a summary of fixed assets register," said Ouko.
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Exclusive: GSK faces new corruption allegations, this time in Romania

Exclusive: GSK faces new corruption allegations, this time in Romania | Global Corruption | Scoop.it
Drugmaker GlaxoSmithKline, which was fined a record 3 billion yuan ($483 million) for corruption in China last year and is examining possible staff misconduct elsewhere, faces new allegations of bribery in Romania.

GSK confirmed it was looking into the latest claims of improper payments set out in a whistleblower's email sent to its top management on Monday. A copy of the email was seen by Reuters.

The company is already probing alleged bribery in Poland, the United Arab Emirates, Lebanon, Jordan, Syria and Iraq.

The latest allegations say GSK paid Romanian doctors hundreds, and in one cases thousands, of euros between 2009 and 2012 for prescribing its medicines, including prostate treatments Avodart and Duodart and Parkinson's disease drug Requip.

According to the email, the doctors were notionally paid for speaking engagements, but in three out of six cases, including the most highly paid one, they did not give any speech. The other three medics gave only one speech each, despite receiving multiple payments.

GSK also provided doctors with many international trips and made payments to them under the guise of participation in advisory boards, the email said.
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E&Y Japan arm launches internal probe of Toshiba audit

E&Y Japan arm launches internal probe of Toshiba audit | Global Corruption | Scoop.it
The Japanese affiliate of Ernst & Young LLC has launched an in-house investigation into its audit of Toshiba Corp in the wake of the electronics maker's $1.2 billion accounting scandal, a person with knowledge of the matter said.

Ernst & Young ShinNihon LLC has established a team of about 20 executives to investigate whether there were any problems with how it conducted its audits of Toshiba, the person said.

The person spoke on condition of anonymity. No one could be reached at the company's offices in Tokyo on Saturday.

The news was first reported by the Nikkei newspaper.

Last month an external panel of lawyers and accountants hired to probe Toshiba's accounts found the company had inflated profits by 152 billion yen ($1.23 billion) over seven years by postponing the realization of losses and other schemes.

The scandal ranks as one of corporate Japan's biggest alongside the 2011 accounting fraud at medical equipment and camera maker Olympus Corp, which was also a client of Ernst & Young ShinNihon.

The Japan Institute of Certified Public Accountants, a self-regulatory body for the accounting industry, said last week that it had started investigating the audit of Toshiba. The Financial Services Agency, the country's financial regulator, is expected to follow with its own probe in the coming months.
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Sources: Grand jury indicts Attorney General Ken Paxton

Sources: Grand jury indicts Attorney General Ken Paxton | Global Corruption | Scoop.it

A grand jury has indicted Texas Attorney General Ken Paxton on multiple felony charges, according to several sources who are familiar with the complaints.

The charges will be unsealed in McKinney on Monday about noon, and a Tarrant County judge has already been appointed to preside over the case, sources told News 8.

After the indictments are unsealed, Paxton can surrender to be photographed, fingerprinted and booked at any of the state's 254 county jails.

It's unclear exactly what Paxton will be indicted for, although a grand jury here has heard evidence that Paxton, 52, violated securities laws.

Special prosecutors in the Paxton case told News 8 they planned to present a third-degree charge of failing to register with the state securities board, as the law requires. They also said they planned to present a first degree felony charge against Paxton accusing him of securities fraud. All indications are that charge is related to Servergy, a McKinney-based company that has been under investigation by the Securities and Exchange Commission.

Paxton does not have to resign or step down from statewide office as he prepares to face a criminal trial. He can continue to work, just as Gov. Rick Perry did after his two felony indictments in August 2014.

Paxton's case, legal experts predict, will go to trial since his law license and statewide office are now on the line.

This indictment comes after the watchdog group Texans for Public Justice pushed for Paxton to face felony charges beyond the fine he paid to the securities board last year.

News 8 spoke to the group's director, Craig McDonald, by phone Saturday. He said the organization is pleased with the grand jury's decision, and they feel Paxton should answer for it with his job.

"We think the only reasonable reply to these indictments would be the attorney general's resignation," McDonald said. "I don't see how the top law enforcement official for the State of Texas can have any credibility for that job when he's under federal indictment for securities fraud."

That sentiment was echoed by Texas Democratic Party deputy executive director Manny Garcia.

"It's time for Paxton to face the consequences," Garcia said in a written statement issued Saturday afternoon. "This is yet another example of the corrupt culture that fester [sic] with one-party, unchecked Republican power."

Ken Paxton was sworn in as attorney general on January 1. The indictments relate to alleged conduct that occurred while he was serving in the state legislature.

Special prosecutor Kent Schaffer first revealed to News 8 last month that the Texas Rangers had uncovered new evidence.

He said then that the securities fraud allegations involved losses in excess of $100,000, but Schaffer declined to reveal the specifics of them.

"The Rangers went out to investigate one thing, and they came back with information on something else," Schaffer said in early July. "It's turned into something different than when they started."

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Lights, Camera, Anti-Corruption!

Lights, Camera, Anti-Corruption! | Global Corruption | Scoop.it
For the last three years, the Chinese communist leadership has fought a bitter campaign against corruption in its ranks. Corruption, leaders say, could bring about the downfall of the Party and the nation. Few measures have been spared: detention and torture by the Party’s own secret police force, forced confessions on national television, expulsion from the Party, and the odium of peers are all among the consequences that wayward officials face.

And now there’s a new method: museums and exhibits with glass floors, tacky decorations, and flashing technicolor lights aimed to educate the cadre corps.

These centers are called “anti-corruption education bases.” They are being rolled out across the country in an effort to warn and indoctrinate the millions of Party members who are made to traipse through.
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A Death in Putin’s Police Force

A Death in Putin’s Police Force | Global Corruption | Scoop.it
In Putin’s first term as President, which began in 2000, he consolidated his rule on the basis of a public campaign to wrest back control for the Russian state, a goal he achieved by bringing the nineties-era oligarchs to heel and centralizing power under his personal authority. But he pursued this course—one generally popular with the Russian public—with the effect of further embedding the culture of corruption in civic life. The oligarchic class was subsumed by the bureaucratic and political élite, who, in effect, renationalized corruption.

State procurement and big-ticket infrastructure projects are the areas most susceptible to graft. Boris Nemtsov, a former first deputy prime minister and a high-profile opposition politician, who was gunned down in Moscow in February, 2015, released a report in 2013 alleging that as much as thirty billion dollars of the fifty-billion-dollar budget for the 2014 Winter Olympics, in Sochi, had effectively been stolen. According to Moscow’s chief of police, the average cost of a bribe in the city last year was the equivalent of around five thousand dollars. Public surveys consistently rank corruption as an important concern. As a way of keeping the most egregious, undisciplined offenders in check, Putin has launched sporadic anticorruption campaigns. But a genuine fight against corruption would mean targeting those whom he depends on in order to stay in power. Aside from a few high-profile arrests, those who are tried and punished for graft and accepting bribes are lower-level bureaucrats on the take.

Elena Panfilova, the chair of Transparency International’s Russian chapter, explained that the fight against corruption in Russia takes three forms: the passage of legislation and regulations that often exist only on paper and are scarcely ever implemented; individual law-enforcement investigations that from time to time produce big scandals and are often initiated not out of a desire to punish criminals but to achieve some political goal inside the ruling élite; and authentic civil-society activism, which puts pressure on the ruling system to make everything from health care to education more transparent and less vulnerable to graft. The attitude of Russia’s top officials, Panfilova told me, is that “they don’t really love the first, think that the second should be enough, and must outlaw the third.” Sugrobov and Kolesnikov’s activities fit into the second category. She was impressed by their energy at first. “The idea was to outwit the system that allows corrupt officials to escape criminal responsibility,” she said. But she came to think of them as “cowboys.” They wanted results, big ones, and fast—and so they began to cut corners, pushed by a combination of youth and ambition.

Before Sugrobov was named head of GUEBiPK, according to Mark Galeotti, a professor at New York University and an expert on Russian intelligence and law-enforcement agencies, the department had a “notoriously terrible reputation.” Officers ran the place like an entrepreneurial empire. “If you wanted a job there, you had to pay for your position, and that was considered a good business investment,” Galeotti said. Sugrobov and Kolesnikov felt that they had Kremlin approval to transform the department. Viktoria said that, for the first time, the department sensed it had a “green light” to go after big targets and, in Sugrobov and Kolesnikov, “the guys who were capable of carrying out such orders.” As several former officers in the department told me, after Sugrobov’s arrival the department concentrated less on doctors who took small bribes from patients or traffic police who shook down motorists, and began targeting people closer to the real levers of power in the Putin system.
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People smuggling: how it works, who benefits and how it can be stopped | Clár Ní Chonghaile

People smuggling: how it works, who benefits and how it can be stopped | Clár Ní Chonghaile | Global Corruption | Scoop.it
The lines between migration and human trafficking all too easily converge. While migration implies a level of individual choice, migrants are sometimes detained and even tortured by the people they pay to lead them across borders.

Following the cash across borders – through a network of kingpins, spotters, drivers and enforcers – is central to understanding how this opaque and complex business works.

Everyone agrees there is not enough data. No one knows how many migrants are smuggled. However, enough is known about the money paid – by Eritreans, Syrians, Rohingya, and Afghans, among others – to demonstrate it is a multimillion-dollar business.

As Europe debates measures ranging from military attacks to destroying smugglers’ boats to increasing asylum places, what more can be done to prosecute those profiting at the crossroads of dreams and despair?

How much do migrants pay?
The cost varies depending on the distance, destination, level of difficulty, method of transport (air travel is dearer and requires fake documents) and whether the migrant has personal links to the smugglers, or decides to work for them.

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The UN Office on Drugs and Crime (UNODC) says journeys in Asia can cost from a few hundred dollars up to $10,000 (£6,422) or more. For Mexicans wanting to enter the US, fees can run to $3,500, while Africans trying to cross the Mediterranean can pay up to $1,000, and Syrians up to $2,500.
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Kenya audit: Government accounts 'disturbing'

Kenya audit: Government accounts 'disturbing' | Global Corruption | Scoop.it
Only 26% of money spent and collected by the Kenyan government has been fully approved in an audit for 2013-2014.
The auditor-general, whose report covered an annual budget of about $16bn (£10bn), said there were "disturbing problems" in government's accounting.
It comes just days after US President Barack Obama warned on his visit to Africa that "the cancer of corruption" was holding the continent back.
Kenya is ranked amongst the world's most corrupt countries.
It came 145 out of 174 nations on the Transparency International's global corruption perceptions index.
BBC Africa Live: News updates
The East African nation's accounts are better than they were the year before, when the auditor-general said that only 12% of them were "true and fair".
The report released on Wednesday said that it was apparent that there were "still persistent and disturbing problems in collection and accounting for revenue".
Auditor-general Edward Ouko said that 16% of financial statements, including revenue and spending statements, from government ministries were "misleading".
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Xi Jinping’s fight against corruption in the military continues

Xi Jinping’s fight against corruption in the military continues | Global Corruption | Scoop.it
THERE had been rumours of his downfall since last year. On July 30th, they got him: Guo Boxiong, former vice-chairman of the Central Military Commission, which runs China’s armed forces, was expelled from the Communist Party for taking bribes. He is the most senior ranking official in the People's Liberation Army (PLA) to be toppled for corruption.

The move is a sign that President Xi Jinping’s campaign against corruption is still running at full tilt. Mr Guo’s son, also a senior officer, was put under investigation in March. But after Zhou Yongkang, China’s former security chief, was sentenced to life imprisonment in June for graft and leaking state secrets, some China-watchers suggested that Mr Xi might now scale back his efforts. The latest expulsion proves that view wrong. “One demon killed, all demons deterred,” ran a line in an article about Mr Guo in People’s Daily, a government mouthpiece.

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The arrest is a further assertion of Mr Xi’s control over the military; he has stressed the “absolute leadership” of the party over the PLA since taking office in 2012. More than 15 senior ranking figures have been accused of corruption in the past year, including Xu Caihou, another high-ranking figure who died of bladder cancer earlier this year before his case could come to trial. As with the anti-corruption in other parts of the government, lesser ranking army officers have been netted along side the big names.

This is not just about control, however. Though Mr Xi needs the PLA’s support, he is also keen to modernise the army to make it a lean, fighting force readily able to deploy. Taking bribes for promotions, as Mr Guo is accused of, does not fit that goal. The PLA is a key tool by which Mr Xi hopes to project China’s power abroad: on September 3rd there will be a giant military parade in Beijing to mark the 70th anniversary of the second world war, which the government hopes that dignitaries from around the world will attend.
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Latin America’s Anti-Corruption Crusade

Latin America’s Anti-Corruption Crusade | Global Corruption | Scoop.it
Latin America has been plagued by corruption for centuries, ever since it emerged from what the Mexican poet Octavio Paz called the “patrimonialist” nature of Spanish and Portuguese colonial rule. What is different today is the response to it, with societies and institutions refusing to remain complicit in corruption, or resigning themselves to its inevitability.

This attitude is exemplified in the proliferation of trials, investigations, demonstrations, convictions, and resignations relating to corruption, particularly in Brazil and Venezuela, and to a lesser extent Mexico and Guatemala. In all four countries, major scandals have erupted, with high-level government officials and business leaders being denounced by the media, the justice system, foreign governments, and/or the local opposition. Though none of the governments implicated in the scandals will collapse – at least not exclusively because of corruption – the sheer scale of the social and political protest, not to mention legal action, is astonishing.
The most shocking story has unfolded in Brazil. Late last year – at a time when discontent was already widespread, with protests against excesses and abuses in the preparations for last year’s World Cup having erupted in 2013 – the so-called petrolâo scandal hit. Huge sums of money, it was revealed, had been transferred directly, or via immense construction companies, from Brazil’s state oil company Petrobras to President Dilma Rousseff’s Workers’ Party.
Whistle-blowers and protected witnesses provided details of the graft to Brazilian judges, who pursued Petrobras officials, politicians, and the CEOs of the corporations under investigation. Both Rousseff and her predecessor, Luiz Inácio Lula da Silva, have been accused of graft and influence-peddling. Though Rousseff managed to hold onto power in the December election, which she won by a small margin, there is no denying that political crisis has engulfed Brazil, plunging the country into a deep recession.
In Venezuela, accusations leaked by the United States government suggested that many of the country’s leaders – including Diosdado Cabello, the head of Congress and President Nicolás Maduro’s closest aid – had not only enriched themselves, but did so partly through links with Colombian drug cartels. With Venezuela’s economy deteriorating sharply, and violence and human-rights violations proliferating, Maduro has been forced to call elections for this coming December. Polls indicate that, despite a rigged electoral system, his party will suffer serious setbacks. He may even lose his majority in Congress.
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Andres Oppenheimer: Obama should tell Latin Americans what he told Africans

Andres Oppenheimer: Obama should tell Latin Americans what he told Africans | Global Corruption | Scoop.it
In Latin America, just like in Africa, corruption is rampant, freedom of the press is routinely repressed, and current or previous presidents of Venezuela, Bolivia, Ecuador, Nicaragua, Colombia and several other countries have in recent years changed their constitutions to remain in power — or allow their appointees to do it for them — indefinitely.


Cuba, with which Obama has just reestablished diplomatic relations and where Secretary of State John Kerry is scheduled to preside over the flag-raising ceremony at the U.S. Embassy in Havana on Aug. 14, is an hereditary military dictatorship run by a general. There has not been a free election or an independent TV station in Cuba in more than five decades.

Obama probably doesn’t dare make his African Union speech in Latin America because much more U.S. trade and investments are at stake there. He did refer to these issues during the recent Summit of the Americas in Panama, but not nearly as bluntly as he did in Addis Ababa this week.

Granted, if he told these things to Latin American leaders, the region’s populist demagogues would immediately accuse him of meddling in their internal affairs in order to allegedly pursue sinister “imperialist” plans.

But after several years of corrupt leaders who hide behind nationalist demagoguery to justify their pursuit of absolute powers, many people in several Latin American autocracies want more rule of law, and more democracy.

To stress his point, Obama would just need to repeat what he said in Africa: that countries don’t need strong leaders, but strong institutions. And that if a leader claims to be the only one who can hold his nation together, the leader has failed to truly build that nation.
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Auditor General’s exposé triggers outrage, shock

Auditor General’s exposé triggers outrage, shock | Global Corruption | Scoop.it
National outrage greeted revelations of doubtful Sh67 billion expenditure by several Government departments outlined in a new report by Auditor General Edward Ouko.



The figure is twice the amount taxpayers lost in the infamous Goldenberg scandal; estimated to be Sh37.4 billion by the commission of inquiry into compensation paid to businessman Kamlesh Pattni in the 1990s for fictitious gold exports.


Homa Bay Governor Cyprian Owiti (left) and County Secretary Isaiah Ongwae address the Senate Committee when they were grilled on county spending at Parliament Buildings yesterday.

(PHOTO: MOSES OMUSULA/STANDARD)


Prof Terrence Ryan, an economic consultant who testified at the Goldenberg commission, said at the time that “the negative economic impact of the ‘Goldenberg Affair’ on the country was so massive that its effects continue to be felt to date.”

Yesterday, National Assembly’s Public Accounts Committee (PAC) Chairman Nicholas State auditor’s exposé triggers outrage, shock

See also: Several Kenya prisons bio-gas systems incomplete, faulty despite use of millions of shillings
National outrage greeted revelations of doubtful Sh67 billion expenditure by several Government departments outlined in a new report by Auditor General Edward Ouko.



The figure is twice the amount taxpayers lost in the infamous Goldenberg scandal; estimated to be Sh37.4 billion by the commission of inquiry into compensation paid to businessman Kamlesh Pattni in the 1990s for fictitious gold exports.

Prof Terrence Ryan, an economic consultant who testified at the Goldenberg commission, said at the time that “the negative economic impact of the ‘Goldenberg Affair’ on the country was so massive that its effects continue  to be felt to date.”

Yesterday, National Assembly’s Public Accounts Committee (PAC) Chairman Nicholas

Gumbo said his team would summon respective accounting officers in the ministries named in the report to get to the bottom of the matter.

"We are in the process of calling the respective accounting officers soon with a view to engaging them for the purposes of ascertaining culpability. Obviously, where public funds have been misused, you can be sure our committee will be unequivocal in recommending not only deterrent measures but also hash punishment for those responsible, "said Mr Gumbo who is also the ODM MP for Rarieda.
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Pa. Congressman Fattah indicted on corruption charges from 2007 mayor’s race

Pa. Congressman Fattah indicted on corruption charges from 2007 mayor’s race | Global Corruption | Scoop.it
Rep. Chaka Fattah (D-Pa.), a onetime rising star who came to Congress 20 years ago as a next-generation reformer, was charged Wednesday with racketeering related to an off-the-books $1 million loan to his unsuccessful campaign for Philadelphia mayor in 2007.

The Justice Department charged Fattah, a senior member of the powerful Appropriations Committee, and four supporters with 29 counts that included bribery, bank fraud and other corruption charges.

“The public expects their elected officials to act with honesty and integrity,” said U.S. Attorney Zane David Memeger for the Eastern District of Pennsylvania.  “By misusing campaign funds, misappropriating government funds, accepting bribes and committing bank fraud, as alleged in the Indictment, Congressman Fattah and his co-conspirators have betrayed the public trust and undermined faith in government.”

Following the indictment's unveiling, Fattah stepped down as ranking Democrat of the subcommittee that controls the budgets of the Justice Department, FBI and U.S. attorney's office. The congressman told reporters in the Capitol that he rejected the allegations but embraced the chance to formally fight them in federal court.
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Kenya Government Corruption: State Budget Missing $16B, 1 Percent Of Spending Is Lawful, Auditor General's Report Finds

Kenya Government Corruption: State Budget Missing $16B, 1 Percent Of Spending Is Lawful, Auditor General's Report Finds | Global Corruption | Scoop.it

The scale of Kenya’s government corruption was exposed in a damning report by the country’s auditor general, who revealed that about a quarter of Kenya’s $16 billion state budget was missing. The lengthy report, which was released late Tuesday, also found that just 1 percent of Kenyan government spending was “incurred lawfully and in an effective way.”

Sixty percent of Kenyan government spending, about $5.9 billion or 600 billion Kenyan shillings, “had issues,” Kenya’s Auditor General Edward Ouko’s office found, according to Agence France-Presse. Meanwhile, spending worth $4.43 billion, or 450 billion Kenyan shillings, was completely unaccounted for, according to Reuters. “These public funds may not have been utilized lawfully and in an effective manner,” Ouko said in the report.

Ouko’s office singled out 17 government departments, including the health and transport and infrastructure ministries, which failed to provide documents to support spending totaling $659 million, or 67 billion shillings. Another 10 government departments, including the agriculture and judiciary ministries, failed to pay bills totaling $167 million, or 17 billion shillings, AFP reported.

The 361-page report was released days after U.S. President Barack Obama urged the East African nation to tackle political corruption, which has stunted Kenya’s economic growth. “Here in Kenya, it’s time to change habits, and decisively break that cycle, because corruption holds back every aspect of economic and civil live. It’s an anchor that weighs you down and prevents you from achieving what you could," Obama, whose father was Kenyan, said Sunday during his trip to Nairobi for an international business summit.

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