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Waste and Fraud in Afghanistan: A Greatest Hits Collection

Waste and Fraud in Afghanistan: A Greatest Hits Collection | Global Corruption |

The government watchdog has 318 ongoing cases, according to its latest quarterly report.///


Allegations of waste, fraud, and mismanagement in U.S.-backed efforts in Afghanistan are catching Congress's attention.

Since fiscal 2002, the United States has allocated more than $102 billion for relief and reconstruction projects in Afghanistan. And as the Special Inspector General for Afghanistan Reconstruction looks through that 11-digit spending bill, its reports suggest a pattern of misused funds.

The military is livid over SIGAR's reports, accusing it of missing the mark and even setting up its own "4 Phase Plan of Action to be 1st with the truth" aimed at defending its programs and point of view.

But thus far, it hasn't been enough to stave off calls for action from member of Congress, including Sen. Jeanne Shaheen, D-N.H., who said SIGAR's latest quarterly report "stresses the dire need for increased scrutiny and reforms" for U.S.-backed reconstruction projects in Afghanistan.

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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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Ecuador Quake 'Deathtrap' Perpetrators Will Face Jail: Correa

Ecuador Quake 'Deathtrap' Perpetrators Will Face Jail: Correa | Global Corruption |

cuadorean President Rafael Correa announced the government is prepared to press charges against those responsible for building poorly designed infrastructure in light of the 7.8-magnitude earthquake that devastated the country on April 16, killing hundreds and injuring thousands more.

“There are individuals who acted with the intention to save a few extra pennies, and by doing so constructed death traps that were approved by local authorities,” President Correa stated via Twitter.

In the days after the earthquake, recovery officials reported numerous instances of poorly built housing structures. Initial government reports state that 805 buildings were destroyed and 608 were damaged. Meanwhile, preliminary surveys indicate that at least 119 schools have been damaged or collapsed.

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10 Most Corrupt World Leaders of Recent History

10 Most Corrupt World Leaders of Recent History | Global Corruption |
Read any article on corruption prevention, and the first thing you’ll be told is that ‘political will’, or the tone at the top, is the foundation of any successful anti-corruption effort.  But what if a country’s leader, whose ethics and integrity should be beyond question, isn’t as principled as they should be?  True to the old adage that ‘absolute power corrupts absolutely’, we have compiled a list of the ten most corrupt world leaders of recent history.
Proof that corruption is truly a global issue, the list de-bunks the myth that cases of grand corruption (and kleptocratic regimes responsible for it), are limited to certain parts of the world.  Of the ten world leaders who made the list: three are from Africa, three from the America’s, two from Asia, and two are from Europe.
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Mexico Wins: Anti-Corruption Reform Approved - Forbes

Mexico Wins: Anti-Corruption Reform Approved - Forbes | Global Corruption |
Mexico just approved an anti-corruption reform that required changing 14 constitutional articles, drafting 2 new general laws, and reforming five more. This is not minor. The reform is, by far, the most encompassing system to identify and sanction corruption that the country has ever had and its effects will be felt quite soon.

In this text, I present the story of how Mexico got here and provide an assessment of the virtues and challenges of this change.

The Government tries to fight corruption

The need to create an entity to fight corruption was among Mexico’s policy priorities, at least rhetorically, since well before the arrival of Enrique Peña Nieto to the presidency.  However, the first of the 266 commitments that Peña Nieto had made during his campaign was to create a “National Anti-Corruption Commission” (NAC).

Peña Nieto presented a bill to create the NAC in November 2012, but the proposal was poorly received by public opinion. Experts and civil society organizations (CSOs) considered it dysfunctional because the proposed NAC was a top-bottom entity (unable to coordinate efforts between the many state and federal entities) and most importantly, lacked real autonomy from other branches of power. The bill remained idle in Congress without approval or real discussion until the end of 2014.
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Corruption Currents: World’s Biggest Banks Spend Billions on ‘Conduct Costs’

Corruption Currents: World’s Biggest Banks Spend Billions on ‘Conduct Costs’ | Global Corruption |

United agreed to pay a $2.25 million fine in the Port Authority bribery case. (Ch-Aviation)

U.S. investigations exposed bribery and fraud in Syrian aid programs, USAID said. (Reuters)

Prosecutors offered a glimpse of evidence in the NYPD corruption cases. Do reforms ever stick? (NY Times, NY Daily News, City & State)

How have pharmaceutical companies paid doctors to sell drugs? (The Influence)

Bribery is a problem in the Swedish construction trades. (The Local)

In local politics: A former Taiwanese city councilor was acquitted in a bribery case. An aide to South Korea’s president is embroiled in a bribery scandal; he has said his role was legitimate. (Taipei Times, Korea Hearld)


The Silk Road case shows how U.S. authorities can get around cryptography. (PRI)

A prominent administrator of an Islamic State forum was hacked. (Motherboard)


U.K. fraud police released a most-wanted list. (BBC)
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The Structure of Corruption: A Systemic Analysis Using Eurasian Cases

The Structure of Corruption: A Systemic Analysis Using Eurasian Cases | Global Corruption |
Corruption is not just the behavior of some venal officials in a particular agency; it often represents the operating system of sophisticated—and successful—networks.
Examination of three dissimilar Eurasian countries—Azerbaijan, Kyrgyzstan, and Moldova—reveals some of the ways these networks may structure themselves.
Distinctions between public and private sectors, licit and illicit actors hardly apply. Kleptocratic networks integrate across sectors, with some individuals playing multiple roles. The network leader may be outside government.
Ruling kleptocratic networks harness levers of government power to the purpose of maximizing gains or ensuring discipline. Other elements of state function are disabled, meaning capacity deficits may be deliberate.
These networks’ practices are facilitated by developed-country business registration service providers, or real estate agents that sell to suspect buyers. But Western enabling goes further. Military and development assistance, the character of diplomatic relations, even foreign direct investment can contribute to an incentive structure that rewards corruption.
Investigative journalists and civil society organizations are well positioned to develop the information an analysis of such systems requires, but they may need help framing their efforts—which alone should not be expected to bring about change.
A clear infographic presentation of the structure of such networks may be helpful in driving home these realities.
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U.S. investigations expose fraud, bribery in Syrian aid response

U.S. investigations expose fraud, bribery in Syrian aid response | Global Corruption |
U.S. investigations have exposed bribery and fraud in Syrian aid programs, the United States Agency for International Development (USAID) said, raising concern about profiteering in the humanitarian sector.

In a statement to a U.S. House of Representatives committee on Thursday, USAID Inspector General Ann Calvaresi Barr said investigations, some ongoing, raised worries about USAID's oversight. The United States has contributed billions of dollars in aid to the Syria crisis.

The most common fraud involved collusion between companies selling humanitarian supplies and staff of USAID's local partners who accepted bribes or kickbacks in exchange for help in winning a contract, investigations found.

There were also cases when aid items were substituted for cheaper alternatives, resulting in inflated billing. In one case, a Turkish vendor delivered food ration kits with salt instead of lentils.

Because of the urgency to deliver aid to people in Syria, some of USAID's partners used "less than full and open competition to carry out large-scale procurements of food and non-food items", Barr said.

They also failed to properly inspect deliveries, she said, citing a case where the partner accepted food packages based on weight, not content, only to find some cheaper quality food had been substituted.
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Ecuador's Correa Takes Aim at Politicians Utilizing Tax Havens

Ecuador's Correa Takes Aim at Politicians Utilizing Tax Havens | Global Corruption |

Rafael Correa is seeking a mandate from the Ecuadorean people to see that politicians and public servants who store their money in offshore tax havens are not able to hold office, the president announced in a nationwide address Thursday.

Correa stated that his government had submitted a request to the country's Constitutional Court seeking permission to run a plebiscite in the upcoming 2017 elections that will consider the issue.

Should the “Yes” side win, all public servants and elected officials will be given a year to repatriate their capital or be removed from office or their post.

President Correa, a trained economist, previously said he would make it his mission to tackle tax havens after the publication of the Panama Papers revealed to the world the depths of the issue.
During his address, Correa said that these tax havens constituted “one of the biggest enemies of our democracies.”

Correa framed the issue as a matter of economic justice, emphasizing that only the rich utilized tax havens.

"In Latin America, 32 million people could escape poverty if this capital, hidden in tax havens, were subject to income tax that corresponds to it,” said Correa, who added secrecy is endemic to tax havens.

“All this not only generates corruption, but also deepens inequality and social differences,” said the Ecuadorean president.

Correa argued that lower-income countries, like Ecuador, are more gravely affected by tax havens.

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Handbook on "Designing and Implementing Anti-corruption Policies" of the Directorate General Human Rights and Rule of Law - Council of Europe

Sound anti-corruption policies are the starting point for any success in the fight against corruption. Check this Council of Europe Handbook on "Designing and Implementing Anti-corruption Policies"
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These Mexican states are way too corrupt, according to the scandal-plagued president

Mexico's presidency moved against two state governments, saying they had flouted federal anti-corruption laws, setting the scene for a possible conflict with two outgoing governors tarnished by graft accusations.

President Enrique Pena Nieto's office dubbed unconstitutional new state prosecutors' offices set up in oil-rich Veracruz and tourist hub Quintana Roo, bodies perceived by critics to be aimed at shielding the two outgoing governors. It called on the Supreme Court to rule against the measures.

Salvador Silva, a senior official at the attorney general's office, said earlier this week both states needed to wait for the roll-out of a federal government anti-corruption reform, rather than legislate individual measures.

"(The anti-corruption reform) is aimed at creating mechanisms which slam the brakes on abuse of power," Silva told a news conference on Monday.

Economists and financial sector professionals regularly cite impunity and weak rule of law as a major concern for investors in Mexican assets.

U.S. indictments are outstanding against at least three former governors from the ruling Institutional Revolutionary Party, or PRI, but no formal proceedings have been opened against them in Mexico so far.
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Electronics Smuggler Sentenced for Illegal Exports to Russia

Electronics Smuggler Sentenced for Illegal Exports to Russia | Global Corruption |
For more than six years, a New Jersey man who owned four microelectronics export companies skirted U.S. export laws enacted under the International Emergency Economic Powers Act (IEEPA). These laws are in place to help protect U.S. national security and make sure that items made in the U.S. don’t help strengthen another country’s military without proper licensing and careful consideration.

Alexander Brazhnikov, Jr., a 36-year-old naturalized American citizen born in Russia, admitted that, between January 2008 and June 2014, he smuggled $65 million worth of sensitive electronics components from the U.S. to Russia, where much of it eventually ended up in the hands of Russia’s Ministry of Defense and Federal Security Service.

In June 2015, Brazhnikov plead guilty in federal court—after a multiagency investigation by the FBI, the Department of Commerce, and Department of Homeland Security (DHS)—to the smuggling charges and to a charge of conspiring to commit money laundering to hide the illegal proceeds of his criminal activities. According to then-Newark FBI Special Agent in Charge Richard Frankel, Brazhnikov “significantly undermined the national security of the national security of the U.S.” and “enhanced the capabilities of both the Russian Military Service and the Russian Nuclear Weapons Program.” Last month, he was sentenced to more than five years in prison.

Investigators believe that Brazhnikov conspired with his father, Alexander Brazhnikov, Sr., owner of a Moscow-based procurement firm who brokered the purchasing of electronics components from U.S. vendors and manufacturers for their clients, mostly Russian defense contractors licensed to procure parts for the Russian military, security service, and other entities involved in the design of nuclear weapons and tactical platforms.

The case began in 2012, when another Bureau field office—investigating a similar matter—sent a lead to the Newark FBI Office concerning one of Brazhnikov’s companies. Joining forces with Commerce and DHS, investigators began looking into Brazhnikov and his New Jersey companies. Through a variety of investigative methods, including following the money trail, here’s what they found:
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For FOIA’s 50th, FEMA Still Dragging Feet After 10 Years

For FOIA’s 50th, FEMA Still Dragging Feet After 10 Years | Global Corruption |
HAPPY BIRTHDAY to the Freedom of Information Act (FOIA), which turned 50 years old yesterday, and which just got a boost from Congress and the White House. FOIA is a terrific democratic tool which enables the public to learn more about government operations, activities, and spending, but sometimes that tool is of limited usefulness. Nearly one decade ago, the Project On Government Oversight submitted a FOIA request to the Federal Emergency Management Agency (FEMA) for records involving some questionable contracts related to the Hurricane Katrina recovery and clean-up efforts. After a protracted run-around involving four separate FOIA case numbers, an appeal, and an abundance of useless documents released to POGO by FEMA, it is unclear if POGO is any closer to getting the information it seeks.

POGO first blogged about this particular FOIA case a few months ago. At that time, we were waiting for the results of an appeal we had filed to receive 39 pages the Department of Homeland Security (DHS) had found in 2013 and referred to the Office of Inspector General (OIG) for review, and that, two years later, the OIG declined to release because, they claimed, doing so would constitute an “unwarranted invasion of privacy.”

Our appeal has since been denied by the DHS OIG because it did not comply with the agency’s 60-day filing deadline: we mailed the appeal before the due date, but it arrived four days after the deadline. You read that right: the DHS OIG denied the appeal that was received a few days late despite the fact that DHS has been dragging its feet for nearly a decade. In a common-sense plea to the DHS OIG, and to avoid having to file a lawsuit or to file the same FOIA again, POGO begged the agency to reconsider its denial of the appeal and to provide POGO with the records that have already been collected and reviewed by multiple components inside DHS.

FEMA replied a few days ago, treating the request as a new FOIA and warning that procuring the documents will most likely prove a lengthy process because the request “seeks numerous documents that will necessitate a thorough and wide-ranging search.” It seems unlikely, however, that such a laborious search could be necessary, given that the 39 documents in question had already been located in December 2013. The correspondence from FEMA continues in a similarly evasive fashion, “If any responsive records are located, they will be reviewed for determination of releasability.” This statement by FEMA is problematic when it has been established that responsive records exist and have already undergone processing.

FEMA had let POGO know that our “new” request now finds itself behind 1,688 other inquiries, but a separate email from a DHS OIG employee suggested that processing might be sooner than later, explaining, “I reached out to the FEMA-FOIA office, and they are in the process of reviewing the records. As far as I can tell, you’re not in the back of the line and that was probably just an automatically generated email.”

In August 2006, POGO submitted a FOIA request for communications between former director of FEMA Daniel Craig and a contractor, The Shaw Group, that POGO believed could reveal unethical behavior. Mr. Craig captured POGO’s attention when The Shaw Group received one of four FEMA contracts, totaling $3.3 billion, to rebuild New Orleans following Hurricane Katrina only nine days after he disclosed in an ethics document that he was leaving FEMA and seeking employment with The Shaw Group.

The FOIA request also asked for communications between Craig and three other contract winners: Fluor Corp., Bechtel National Inc., and CH2M Hill; documents pertaining to Craig’s resignation from FEMA; and other ethics and conflict-of-interest documents related to Craig.

The ongoing struggle to obtain the requested documents constitutes such a large-scale failure on the part of FEMA and the DHS OIG that it feels almost deliberate. Correspondence between POGO and both FEMA and the DHS OIG suggest at best a broken system and at worst purposeful delay and equivocation.

In March 2008, the DHS OIG responded to the FOIA request by releasing several redacted pages documenting complaints against the work of three of the four winners of the large contract, none of which contained information relating to Craig. The DHS OIG wrote that “even to acknowledge the existence of such records pertaining to [Craig] could reasonably be expected to constitute an unwarranted invasion of their personal privacy.”

As expressed in the previous blog post on this case, POGO considers this defense inadequate. Information present in the requested documents that could imaginably pose a threat to individual privacy could simply be redacted. Further, legal precedent has established that the protections covering private citizens do not apply to those who have held high-ranking government positions, such as Craig.

A communication from FEMA in 2010 confirmed that the FOIA request, at the time five years old, had been had been flagged for priority processing. It should be stressed that this communication was written six years ago, and POGO has yet to receive the requested documents, though POGO narrowed the scope of the search in 2010. The following year, FEMA wrote to POGO requesting a confirmation of continued interest and said that it would close the investigation if it did not receive a reply within 14 days. POGO reaffirmed its interest but waited several years for more information.
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The Ponzi Scheme Blog: June 2016 Ponzi Scheme Roundup

The Ponzi Scheme Blog: June 2016 Ponzi Scheme Roundup | Global Corruption |

The reported stories reflect: 4 guilty pleas or convictions in pending cases; over 39 years of newly imposed sentences for people involved in Ponzi schemes; at least 14 new Ponzi schemes worldwide; and an average age of approximately 59 for the alleged Ponzi schemers.

    Charles E. Bennett, 57, was disbarred from the Bar of the State of New York. Matter of Bennett, 2016 N.Y. App. Div. LEXIS 4176 (Sup. NY, June 2, 2016). Bennett is a former corporate lawyer at Skadden, Arps, Slate, Meagher & Flom, who was sentenced to 5 years in prison for running a $5 million Ponzi scheme. Bennett had left a suicide note before trying to kill himself which revealed the scheme that defrauded 30 friends and family members. Bennett survived the suicide attempt.

    Andrew Caspersen, 39, was indicted on allegations that he ran a $40 million Ponzi scheme over an 18 month period. Caspersen pleaded not guilty to the charges, claiming that he had uncontrollable gambling addiction. Caspersen told the judge that he had been treated for “compulsive gambling and mental health illness.” He is expected to plead guilty next month.

    Thomas J. Connerton, 64, was charged by the SEC with defrauding 50 people, including 6 women that he met on an online dating site, to invest in his surgical glove company, Safety Technologies LLC. Connerton claimed that his company was developing a material to make surgical gloves more resistant to cuts or punctures and that major glove manufacturers wanted the technology.

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Argentina’s Culture of Corruption

Argentina’s Culture of Corruption | Global Corruption |
Cristina Kirchner was accused of amassing a fortune while she and her husband were in office, and then of far worse. In January, 2015, the prosecutor Alberto Nisman was found dead in his apartment, the night before he was due to deliver evidence that, he claimed, would show that she had conspired with Iran to conceal its involvement in the 1994 bombing of a Jewish community center in Buenos Aires. Kirchner’s first reaction was to suggest that Nisman had committed suicide; she then claimed that her own intelligence agency had murdered him, and called for its dissolution.

When I met Kirchner in Panama, last April, she told me that she was convinced that Nisman’s murder, as well as his denunciations of her, were part of a vast conspiracy “linked to the Middle East,” and having to do with “negotiations between Iran and the United States, with the Five Powers,” and with Israeli Prime Minister Benjamin Netanyahu’s “visit to the Congress.” She continued, “I believe we are looking at an international operation that involves the intelligence agencies of the world.” I asked her if she was suggesting that Israel was somehow involved. “No, I point to none of them, and to all of them,” she said. Kirchner told me that she couldn’t say anything further while a judicial inquiry was under way, but she urged me to watch a BBC spy drama she had recently enjoyed, called “The Honorable Woman,” about a British heiress who is the daughter of an Israeli arms dealer, and who gets caught up in the violent entanglements of the new Middle East.

I asked Kirchner what she thought her legacy would be. She said it would be egocentric to engage in this question, adding, “In any case, history will take care of defining the legacy—it always does.”

Since Kirchner left office, federal prosecutors have ramped up an investigation into the activities of a group of businessmen with close ties to her and her late husband. On April 5th, Lázaro Báez, who grew extremely wealthy from government construction contracts during the Kirchners’ years in power, was arrested after a former associate testified against him and the Kirchners. Báez has been charged with participating in a scheme in which hundreds of millions of dollars from government contracts were laundered through a complex web of fictitious offshore companies. Mossack Fonseca, the firm at the center of the recent Panama Papers scandal, is alleged to have played a role in the laundering scheme. Argentina’s new government also accused López—he of the bags-of-cash scandal—of favoring Báez’s construction firm in the allocation of road-building contracts.

After Báez’s arrest, the federal prosecutor’s office summoned Kirchner to testify as a person of interest in the corruption case. Her response to the summons was to arrive at the courthouse, on April 11th, only to refuse to speak to the judge assigned to hear the case, accusing him of bias against her. Kirchner stormed out to the steps of the courthouse, where, before a crowd of thousands of supporters, she tearfully accused the new “right-wing” government of being part of “a conspiracy” to sweep away Latin America’s “progressive” governments, and she called for the formation of a “citizens’ movement” to fight back. “I want the people to return to happiness in Argentina. I want them to return to freedom,” she said. “I want people to return to feeling love, because I see and I intuit, in the air, that things are not good.”
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UK: Councils trap £271m in fraud, CIPFA finds | Public Finance

UK: Councils trap £271m in fraud, CIPFA finds | Public Finance | Global Corruption |
The annual CIPFA Fraud and Corruption Tracker found an estimated 77,000 cases were tackled in the year as councils recruit more counter fraud specialists to tackle complex high-value offences such as illegal sub-letting of council houses.
The amount was around £100m higher than in 2014/15, when £171m was indentified across around 57,000 cases.
According to the figures in today’s report, housing scams amounted to the highest value fraud type in 2015/16, with 3,842 totaling £148.4m. Council tax fraud, such as falsely claiming the single occupancy discount, was the most common fraud type with 47,747 cases detected with a total value of £22.4m.
Rachael Tiffen, head of the CIPFA Counter Fraud Centre, said the report showed local authorities were getting smarter and more effective at identifying and tackling fraud.
“This is saving taxpayers’ money and helping to get council houses, disabled parking badges and other vital services to the people who really need them.
“However, more needs to be done. At least 10% of authorities still don’t have a dedicated counter fraud team and there remain many barriers to data sharing that could help to expose fraudsters.”
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Mexican Pres. asks country for forgiveness for corruption scandal

Mexican Pres. asks country for forgiveness for corruption scandal | Global Corruption |
Mexican President Enrique Pena Nieto’s plea for forgiveness came as a surprise to most everyone across the world’s largest Spanish-speaking nation.

The so-called Casa Blanca scandal erupted 18 months ago. The President purchased a $7 million mansion for his wife from a contract company with direct ties to the Mexican government.

It became one of the most embarrassing moments in the Nieto presidency. The Mexican president said he did not break the law, but critics quickly demanded the passage of anti-corruption laws aimed squarely at politicians.

Facing public outrage, Mexico’s President announced a plan on Monday that requires elected officials to declare their wealth and taxes. They must also make public any potential conflicts of interest.

Recent polls show that corruption among local, state, and federal police tops the list of concerns among Mexicans.

Political analyst Laura Carlsen said many Mexicans view the president’s anti-corruption announcement as another attempt to improve negative perceptions about his administration.
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Brazil’s Largest Newspaper Commits Major Journalistic Fraud to Boost Interim President Temer

Brazil’s Largest Newspaper Commits Major Journalistic Fraud to Boost Interim President Temer | Global Corruption |
So clearly, 50 percent of Brazilians did not say that it would be best for the country if Temer continues to complete Dilma’s term in 2018: They only said that would be the best choice if the only alternative was Dilma’s return. Moreover, it is plainly not the case that only 3 percent of Brazilians want new elections, given that they were not asked that. What happened was that 3 percent of the respondents went out of their way to volunteer that option when presented with the binary choice of “Dilma returns” or “Temer stays.” It’s impossible to know from this poll what the actual percentage is of those who want Temer to stay through 2018, or those who favor new elections, or, for that matter, what percentage wants Dilma to return. By falsely limiting the question to only two choices, Folha ensured that the results would be totally distorted.

For many reasons, asking the question in this manner — by excluding all choices but those two — is wholly unjustified. For one, Brazil’s Supreme Court previously ruled that the impeachment of Temer should be voted on given that he participated in the same actions that Dilma did. Beyond that, several of the country’s most prominent figures — including former chief Supreme Court justice Joaquim Barbosa and former presidential candidate Marina Silva, as well as Folha’s own editorial page — have called for new elections to choose the next president after Dilma’s impeachment. Andréa Freitas, professor of political science at Unicamp, told The Intercept: “Given that new elections are a viable option, it should have been included as an option.”

And as Cuadros noted, prior polls about Dilma and Temer, including the April 9 poll from Datafolha, expressly asked respondents whether they favored new elections. So it’s baffling why this Datafolha poll would purposely omit Temer’s impeachment and new elections and confine the choices to “Dilma returns” or “Temer stays.”

But that’s simply an argument about polling methodology — whether it makes sense to limit the choices to just those two outcomes. What happened here was much worse. Once Folha decided to limit the question this way, they can’t then deceive the country by pretending that the respondents were offered the full range of choices. By concealing that fact, Folha’s headline and lead graphic were not just misleading but outright false.

It is plainly false to say — as Folha’s graph did — that only 3 percent think “new elections would be best for the country” since the poll did not ask about new elections. Even more damagingly, it is also completely false to say that “50 percent of Brazilians believe it is best for the country if Temer continues” through completion of Dilma’s 2018 term. One can only say that 50 percent want Temer to stay if the only other choice is Dilma returns. 

But if the other options are included — Temer is impeached, Temer resigns, new elections are held — it is a virtual certainty that the percentage of Brazilians who want Temer to stay through 2018 will drop precipitously. As Professor Freitas put it: “It could be that 50 percent prefer Temer to Dilma if those are the only choices, but part of that 50 percent favor new elections. With that option not included, there’s no way to infer that these people prefer Temer.”

THIS IS NO small matter. It’s hard to overstate the impact that this hyped poll has had. It’s the only poll from a credible firm that has been published in months. It was timed right before the final Senate vote. And it contained the extraordinary announcement that half of the country is eager for Michel Temer to remain president through 2018: a headline as sensationalistic as it is false.
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This Guy Trains Computers to Find Future Criminals

This Guy Trains Computers to Find Future Criminals | Global Corruption |
Berk wants to predict at the moment of birth whether people will commit a crime by their 18th birthday, based on factors such as environment and the history of a new child’s parents. This would be almost impossible in the U.S., given that much of a person’s biographical information is spread out across many agencies and subject to many restrictions. He’s not sure if it’s possible in Norway, either, and he acknowledges he also hasn’t completely thought through how best to use such information.
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AUSTRALIA: :Corruption watchdog charges ex-official at $630m Bendigo Hospital project

AUSTRALIA: :Corruption watchdog charges ex-official at $630m Bendigo Hospital project | Global Corruption |
Victorian corruption investigators have laid more than two dozen fraud charges against the former construction manager of the $630 million Bendigo Hospital project after a long investigation.

Bendigo Health's former construction manager Adam Hardinge has been charged by the Independent Broad-based Anti-corruption Commission two years after Fairfax Media first revealed corruption allegations involving Victoria's largest regional hospital development.

The charges against Mr Hardinge, which include obtaining property by deception, were laid over allegations he misused his position overseeing construction on the state government project.

IBAC has been investigating allegations involving Mr Hardinge and another former senior figure, who has also left Bendigo Health but who has not been charged.

Fairfax Media is not suggesting the second senior official was involved in corruption. However, sources say the official failed to prevent alleged improper practices over an extended period.

A whistleblower who aided the investigation had worked alongside Mr Hardinge.

The whistleblower – who recently died – had carefully documented concerns about the suspected mismanagement of public assets at Bendigo Health and the failure to implement appropriate anti-corruption governance.

Among the issues referred to IBAC by the whistleblower were concerns about conflicts of interest involving a small number of Bendigo Health officials and some subcontractors working on the hospital redevelopment. Despite the ramifications about speaking out about fellow senior employees in a small regional community, the whistleblower took his concerns to Bendigo Health and, later, to IBAC.
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Hong Kong Loses a Corruption Watchdog

Hong Kong Loses a Corruption Watchdog | Global Corruption |

The Hong Kong government last week fired Rebecca Li Bo-lan as the head of operations at the Independent Commission Against Corruption. The ICAC was investigating the territory’s chief executive, Leung Chun-ying, for a $6.4 million payment four years ago from an Australian engineering company that does business with the government.

That’s no coincidence, according to local lawmaker and barrister Albert Ho Chun-yan. He accuses the government of shunting Ms. Li aside because she repeatedly asked the government for proof of whether Mr. Leung declared the payment. Mr. Ho says that, according to his sources in the ICAC, the government refused to turn over the evidence.

Mr. Leung says he did nothing wrong in accepting the payment, which was related to the sale of his former company. But as convenor of the Executive Council at the time, he was required to declare it. So far he hasn’t said whether he did so.

Concealing a conflict of interest is a serious offense for government officials in Hong Kong as elsewhere. It led to the resignation of Financial Secretary Antony Leung (no relation) in 2003. And the ICAC is prosecuting former Chief Executive Donald Tsang for failing to disclose gifts from tycoons; he pleaded not guilty and the trial is due to begin in January.

If Mr. Leung is responsible for Ms. Li’s firing, that would destroy the ICAC’s independence from political interference. Removing the agency’s chief investigative official is unprecedented. After ICAC Commissioner Simon Peh Yun-lu met with the ICAC’s 17 principal investigators Monday to explain the decision, one of them resigned. Mr. Peh told reporters Monday that he alone made the decision because Ms. Li wasn’t up to the job.

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PHILIPPINES: Ombudsman files corruption charges vs. former VP Binay

PHILIPPINES: Ombudsman files corruption charges vs. former VP Binay | Global Corruption |
The Ombudsman filed corruption charges at the Sandiganbayan against former Vice President Jejomar Binay on Thursday over the alleged overpriced Makati Parking Building.

Binay is accused of violating Section 3A of the Anti-Graft and Corrupt Practices Act which refers to an official who persuades another public officer to violate certain rules and regulations.

He is also facing a separate charge of falsifying public documents and violating the government procurement law.

These are the first criminal charges filed against Binay after his term ended on June 30. The president and the vice president cannot be charged in court while in office but they can be impeached.

The Commission on Audit (COA) has reported that the construction of the ₱2.8 billion Makati Parking Building II showed irregularities from budgeting to the execution of the project. The report said this resulted in misuse of public funds.

Also read: Ombudsman to file corruption charges against VP Binay after he steps down

Ombudsman Conchita Carpio Morales said in May they have found probable cause to indict the former Vice President.

Binay has denied any wrongdoing and claimed the Ombudsman is biased against members of the opposition and that the cases against him and his family are politically motivated.

Morales dismissed Binay's claims, saying her office is an independent body that goes where the evidence leads, and does not follow what politics dictate.
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Corruption Currents: International Regulators to Write New KYC Rules

Corruption Currents: International Regulators to Write New KYC Rules | Global Corruption |
The restructuring of OAS SA is a case study for business in Brazil amid the ever-widening bribery scandal. (Reuters)

A Hong Kong property tycoon is out on bail as he appeals a bribery conviction. (Nikkei)

A judge ruled that a Bahamas official who took bribes from Alstom is too sick to serve prison time. (FCPA Blog)

In local politics: A Ukrainian official was arrested on bribery charges, Russian media reported; he denies the allegations. Ministers can take bribes but only if they’re offered, an Indian official said. (Sputnik, AA)

Money Laundering:

International regulators will write new banking rules for checking whether a potential customer poses money-laundering or terrorist financing risks. (Reuters)

Adam Szubin, a top U.S. Treasury official, wrote an op-ed about the problems associated with shell companies. (The Hill)

De-risking has hit the Caribbean most deeply amid a U.S.-led crackdown on illicit finance. (Reuters)

A former president of Argentina, Cristina Fernandez de Kirchner, fought back against allegations of money laundering. (Buenos Aires Herald)

Lionel Messi’s tax fraud case concerns a basic human right. (Quartz)

Singapore is taking a firm stance against money laundering. (TodayOnline)

A former Long Island town official is set to be sentenced for tax evasion. (Newsday)
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Corruption Currents: Israeli Attorney General Orders Probe of Netanyahu

Corruption Currents: Israeli Attorney General Orders Probe of Netanyahu | Global Corruption |

Israel’s attorney general ordered an investigation into Prime Minister Benjamin Netanyahu into alleged money laundering. His spokesman said there’s nothing to the allegations. (Haaretz, Independent, Reuters)

The Bank of East Asia is facing questions over the robustness of its anti-money laundering procedures amid reports of suspicious transactions. The bank’s spokeswoman said the firm followed its know-your-customer procedures and has top-notch technology. (SCMP)

HSBC was tipped off to its U.S. settlement terms by dueling regulators. (NY Post, Guardian)

The U.K. rejected an Albanian extradition request for the owner of a soccer club accused of money laundering. (BNE IntelliNews)

Saudi Arabia banned certain prepaid cards, fearing their use for laundering money or financing terrorism. (Saudi Gazette)

A gang of ‘cash mules’ were jailed for laundering money for cybercriminals, Scotland Yard said. (ITV)

A former Indian minister, his brother and others appeared in court in a money-laundering case. The brothers sought bail. Everyone charged has denied the allegations. (Tribune, The Hindu, PTI)

An ex-Indian cricket chief applied for asylum in the Caribbean to evade extradition. (India Today)

A regional anti-money laundering meeting, scheduled for Bangladesh, was canceled amid terror fears. Separately, a meeting between the New York Fed and Bangladeshi officials over the hacking heist was postponed. (Daily Star, Reuters)


Swift hired cybersecurity help in the wake of the hacking heist. (Reuters)

Google notifies 4,000 users per month about state-sponsored cyberattacks. (Reuters)

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Corruption Currents: North Korea Calls U.S. Sanctions an Act of War

Corruption Currents: North Korea Calls U.S. Sanctions an Act of War | Global Corruption |
Brazilian police arrested 19 people as part of a probe into a graft scheme at a nuclear power plant owned by state-led utility Eletrobras that allegedly paid out more than $60 million in bribes. Eletrobras said it’s cooperating. (Reuters, WSJ)

Dutch prosecutors asked judges to seize more than 300 million euros in assets belonging to a Netherlands-based front company they say was used to bribe Gulnara Karimova, the daughter of Uzbekistan’s president. Ms. Karimova has denied the allegations. (Reuters)

The U.S. is appealing a ruling denying its role in an extradition hearing for Jack Warner. (Caribbean360)

In local politics: An aide to the head of Delhi admitted taking a bribe following his arrest. An Indian tax official was arrested in the act of taking a bribe. (Express, Hindustan Times, Hindustan Times)


A teen was convicted for conducting cyberattacks as a form of protest. (Guardian)


Italy arrested 11 people over mafia-related fraud linked to the Milan Expo. (Reuters)

Money Laundering:

Pavlo Lazarenko, a former Ukrainian prime minister wanted in his home country who was convicted of money laundering in the U.S., seeks his money and U.S. asylum. (NY Times)

The owners of a Filipino remittance firm denied money laundering charges linked to the hacking heist. (ABS-CBN News)

Rich landowners in India are using a tax loophole critics call money laundering. A long-running money-laundering investigation in India continues. (Bloomberg, India Today, Express)

Bitcoin companies are welcoming stronger anti-money laundering regulation in Europe. (Quartz)
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Argentina corruption cops search properties of ex-leader Fernandez

Argentina corruption cops search properties of ex-leader Fernandez | Global Corruption |
Argentine police searched properties of former President Cristina Fernandez on Thursday as part of an investigation into possible corruption during her two-term administration, which ended in December with the inauguration of Mauricio Macri.

Authorities are looking for documents related to a case that accuses Fernandez of illegal enrichment using a family real estate company called Los Sauces, state press agency Telam said.

Local television showed images of the searches being conducted. The judge and investigators in the case could not be reached for comment.

"It has been a while, decades I would say, since we've seen such an abuse of power and political persecution," Fernandez posted on Twitter.

The properties in question are located in three different parts of Patagonia: Rio Gallegos, El Calafate and El Chalten, Telam said. Television also broadcast a search of the municipal government office of El Calafate, where Los Sauces is based.

In a separate case, Fernandez was indicted in May on charges that she was responsible for central bank irregularities in the futures market.

After testifying in that case, she also accused the current administration of political persecution.

Macri's government has opened investigations into alleged corruption during Fernandez's 2007-15 presidency.
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Corruption Currents: U.S. Said to Downgrade Myanmar in Human-Trafficking Report

Corruption Currents: U.S. Said to Downgrade Myanmar in Human-Trafficking Report | Global Corruption |
North Korea is selling counterfeit U.S. currency to terrorists, analysts said in Seoul. (Korea Times)


Panama Papers: A Swiss IT worker for Mossack Fonseca was released after being detained in Geneva. Why haven’t U.S. authorities asked to see the documents? (The Local, McClatchy)

General Anti-Corruption:

China wants more cooperation with the West in its anti-graft drive. A rebellious Chinese village protested again after its elected leader was detained on corruption charges. (Reuters, NPR)

South Africa’s treasury said the president should repay the country for repairs made to his home at taxpayer expense. (AFP)

The Philippine president is “hell-bent” on fighting corruption; he’s setting up 12 hotlines to do it. (CNN, Jakarta Post)
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