Global Corruption
16.9K views | +11 today
Scooped by Jim Wesberry
onto Global Corruption!

China’s political purges call for financial sequel

China’s political purges call for financial sequel | Global Corruption |

The formal investigation of China’s former security chief Zhou Yongkang, almost ten months after he was last seen in public, makes compelling viewing. What is needed next is a financial sequel.

Zhou is the highest-ranking victim so far of President Xi Jinping’s anti-corruption campaign. Beyond that, only two things are knowable. First, Xi could not have brought Zhou down without broad support among the ruling Communist Party elite. That should be good for pushing through other tough decisions. Second, nothing has really changed. The masses will hardly notice the retired Zhou’s absence. It might be different if Xi turned his sights on a more popular former leader, or the close family of an incumbent.

In the long term, one thing would pay even greater dividends: uncovering the money trail. While Zhou’s alleged “disciplinary violations” may be behind him, money continues to pour out of China, through fake trade and underground banks. Overseas residential housing investment from China grew 84 percent in the first half of 2014, according to JLL, with London and San Francisco as the top destinations. As crackdowns loom, capital flight tends to accelerate, yet purges of the people who help the high and mighty break the rules are absent.

Dismantling the machinery that supports graft will be more than a domestic affair. Foreign banks, financial advisors and lawyers will come under scrutiny. Regulators in the United States are already keenly focused on whether banks’ nepotistic hiring practices were a form of bribery. JPMorgan, the U.S. bank, is one in the spotlight. If China picks up the fight, authorities there ought to be more successful in uncovering any evidence that might sit within its own borders.

No comment yet.
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>
Curated by Jim Wesberry
Your new post is loading...
Your new post is loading...
Scooped by Jim Wesberry!

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 |

*** 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

No comment yet.
Scooped by Jim Wesberry!

Honduras And Guatemala Anti-Corruption Protests Spur Hope For Change For The First Time In Decades

Honduras And Guatemala Anti-Corruption Protests Spur Hope For Change For The First Time In Decades | Global Corruption |
The crowds gather on Fridays or Saturdays, bearing torches, national flags and protest signs along the main plazas and streets of Honduras and Guatemala's capitals. They shout slogans, lead long marches toward government buildings and circulate social media hashtags calling for their presidents to step down.

Anti-corruption protests have gripped Honduras and Guatemala in recent weeks, sparked by explosive revelations of bribery and graft schemes. Thousands have been taking to the streets weekly for three months now to demand an end to impunity, and there are no signs that the demonstrations will soon die down. The mass movements are an extraordinary sight for two countries that have long been beset by military rule, entrenched poverty, legacies of civil war and soaring rates of violence, and protesters are trying hard to ensure that a crucial moment for change does not go to waste.

“This is a really historic time in Central America,” said Arturo Matute, a Guatemala-based analyst for the nonprofit International Crisis Group, headquartered in Belgium. “The question is whether this will really turn into a critical juncture in which society, civil organizations, the private sector and political parties can really come together in making the best out of this opportunity that’s being presented to us to begin really cleaning up our state institutions.”

Both countries struggle under the weight of high poverty rates, extreme inequality and some of the highest murder rates in the world, making the corruption issue that much more potent. Around 66.5 percent of Hondurans and 62.4 percent of Guatemalans live below the national poverty line, according to United Nations figures from 2012. Honduras was also at the top of the U.N.’s list of global homicide rates in 2013, with Guatemala in fifth place. Those conditions have spurred an exodus of migrants out of Central America through Mexico that prompted a humanitarian crisis at the southern U.S. border last year.
No comment yet.
Scooped by Jim Wesberry!

Two Men Plead Guilty in U.S. Department of State Contracting Fraud Scheme and Contractor Cover-Up | USAO-EDVA | Department of Justice

Two Men Plead Guilty in U.S. Department of State Contracting Fraud Scheme and Contractor Cover-Up | USAO-EDVA | Department of Justice | Global Corruption |
Tony Chandler, 68, of Severn, Maryland, pleaded guilty today to charges of conspiracy to commit wire fraud and a conflict of interest related to his conduct as a U.S. Department of State contracting officer’s representative. In a related case, Curtis L. Wrenn, Jr., 60, of Triangle, Virginia, formerly the president of a contractor performing under Chandler’s supervision, pleaded guilty today to making a false statement to the State Department by concealing that an internal investigation conducted by the contractor discovered credible information of fraud involving Chandler and Marvin Hulsey, 52, of Stafford, Virginia, one of Wrenn’s employees.   

In statements of facts filed with the plea agreements, Chandler admitted to conspiring with Hulsey to submit false invoices to the State Department in order to conceal unallowable costs for nutritional supplements purchased by employees under Hulsey’s supervision. As part of the scheme, Hulsey caused the employees to be reimbursed by his employer for the nutritional supplement purchases, and then caused false invoices to be made and submitted to the State Department for the cost of the nutritional supplements. Chandler, as an authorized distributor of the nutritional supplements for a multi-level marketing company, earned commissions in excess of $25,000 from the purchases made by Hulsey’s employees. Despite knowing that he was personally profiting from the sales of the nutritional supplements, Chandler, in his official capacity, approved the majority of the false invoices. The false invoices submitted to the State Department as part of the scheme totaled more than $170,000. 

Wrenn, as the president of the State Department contractor employing Hulsey, later learned of Hulsey’s submission of false invoices to the State Department and of Chandler’s role in the scheme. Wrenn knew that he had a responsibility under the Federal Acquisition Regulation to timely disclose to the government credible evidence of fraud, but instead omitted facts related to the fraud from the final letter delivered to the State Department. After submitting the altered letter, Wrenn met with Chandler and told him he had “saved his bacon.”  Wrenn later wrote in an email that he told Chandler “to get this resolved with minimal questions or we (sic) throw him under the bus.”   

Chandler was previously indicted by a federal grand jury on May 14, 2015. Chandler faces a maximum penalty of 25 years in prison if convicted, while Wrenn faces a maximum penalty of five years in prison if convicted. Both defendants will be sentenced on Sept. 18, 2015. The maximum statutory sentence is prescribed by Congress and is provided here for informational purposes, as the sentencing of the defendant will be determined by the court based on the advisory Sentencing Guidelines and other statutory factors.
No comment yet.
Scooped by Jim Wesberry!

E&Y Japan arm launches internal probe of Toshiba audit

E&Y Japan arm launches internal probe of Toshiba audit | Global Corruption |
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.
No comment yet.
Scooped by Jim Wesberry!

Sources: Grand jury indicts Attorney General Ken Paxton

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

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."

No comment yet.
Scooped by Jim Wesberry!

Lights, Camera, Anti-Corruption!

Lights, Camera, Anti-Corruption! | Global Corruption |
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.
No comment yet.
Scooped by Jim Wesberry!

A Death in Putin’s Police Force

A Death in Putin’s Police Force | Global Corruption |
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.
No comment yet.
Scooped by Jim Wesberry!

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 |
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.


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.
No comment yet.
Scooped by Jim Wesberry!

Kenya audit: Government accounts 'disturbing'

Kenya audit: Government accounts 'disturbing' | Global Corruption |
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".
No comment yet.
Scooped by Jim Wesberry!

Xi Jinping’s fight against corruption in the military continues

Xi Jinping’s fight against corruption in the military continues | Global Corruption |
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.

Related topics
Political corruption
Government and politics
World politics
Asia-Pacific politics
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.
No comment yet.
Scooped by Jim Wesberry!

Latin America’s Anti-Corruption Crusade

Latin America’s Anti-Corruption Crusade | Global Corruption |
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.
No comment yet.
Scooped by Jim Wesberry!

Andres Oppenheimer: Obama should tell Latin Americans what he told Africans

Andres Oppenheimer: Obama should tell Latin Americans what he told Africans | Global Corruption |
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.
No comment yet.
Scooped by Jim Wesberry!

Former vice-president of Louis Berger arrested in bribery case - The Times of India

Former vice-president of Louis Berger arrested in bribery case - The Times of India | Global Corruption |
Former Louis Berger vice-president Satyakam Mohanty was arrested on Monday in connection with the pay-off scandal involving the New Jersey-based consultancy firm that is charged with bribing Indian officials to win two major water developmental projects in Goa and Guwahati, police said.

Mohanty who was questioned by Goa crime branch on Sunday was placed under arrest on Monday, said superintendent of police (CB) Kartik Kashyap.

This is the second arrest in the case wherein officials of the US company confessed in a court in that country that they had paid bribes to an Indian minister to win consultancy contract for water augmentation and sewerage pipeline project under Japan International Cooperation Agency (JICA) in Goa in 2010 (when Congress was in power).
No comment yet.
Scooped by Jim Wesberry!

Corruption Currents: Diplomats Water Down Human-Trafficking Report

Corruption Currents: Diplomats Water Down Human-Trafficking Report | Global Corruption |
Money Laundering:

Deutsche Bank AGDBK.XE -2.09% acknowledged for the first time it’s investigating a “significant” volume of suspicious Russian and U.K. equities trades, saying it already took disciplinary action against a number of people. (Bloomberg)

The reputed boss of L.A.’s Israeli mob was sentenced to 32 years in prison for money laundering and other charges. (LA Weekly, LA Times)

Indian authorities halted one money laundering probe while launching another. (Business Standard, PTI, The Hindu)

A Colorado credit union is suing the Federal Reserve after the Fed rejected its bid to become the bank for bud. (Yahoo)


The U.S. issued an extradition order for Joaquin “El Chapo” Guzman, the fugitive Mexican drug lord under U.S. sanctions, and it was approved, but it was suspended a day later without explanation. (AFP, Reuters, Reuters)

The European Union removed two Iranian oil companies from its sanctions list. (BBC)

Two experts warned the U.S. against re-imposing sanctions on Iran. (Law360)

Russian vigilantes are on the lookout for foreign cheese, barred under embargoes imposed in response to Western sanctions. Separately, Moscow vowed to respond to the latest round of U.S. sanctions; were those sanctions an escalation or maintenance? (Financial Times, TASS, Sanction Law)

Family members denied reports of the death of Jalaluddin Haqqani, who is under U.S. sanctions. (Reuters)

General Anti-Corruption:

Diplomats overruled independent analyst assessments of global efforts to fight human trafficking, Reuters reported, citing interviews with more than a dozen sources. How does the business of human trafficking work?

An AP investigation led to another round of slave rescues.

The mystery surrounding a Buddhist monk accused of corruption deepened. (Financial Times)

Brazil’s corruption crackdown isn’t just a PR ploy. The widening scandal is threatening Rio’s Olympics plans. (Bloomberg, Reuters)

PEPWatch: The wives of Indonesian officials are playing a greater role in corruption. (Jakarta Post)

African schools are adding anti-corruption education to their curriculum. (Quartz)
No comment yet.
Scooped by Jim Wesberry!

Australian parliamentary speaker resigns over expenses scandal

Australian parliamentary speaker resigns over expenses scandal | Global Corruption |
Australian parliamentary Speaker Bronwyn Bishop announced her resignation Sunday, August 2, following public anger over her travel expenses, as Prime Minister Tony Abbott said a review would be launched into politicians' entitlements.

Bishop, a member of Abbott's Liberal Party, had been under fire for more than 3 weeks as media reports emerged of her use of taxpayers' money for trips including spending Aus$5,000 (US$3,600) on a 80-kilometer (50-mile) helicopter ride for a November political fundraiser.

"I have not taken this decision lightly, however it is because of my love and respect for the institution of parliament and the Australian people that I have resigned as Speaker," 72-year-old Bishop, who has served in the role since 2013, said in a statement.

Abbott said there would be a "fundamental review" of entitlements for members of parliament as "the public deserve to be absolutely confident that taxpayer money is not being abused".

"What has become apparent, particularly over the last few days, is that the problem is not any particular individual, the problem is the entitlements system more generally," the conservative leader told a press conference.

"There are still too many situations where members of parliament can do things which are inside entitlement but outside public expectations."
No comment yet.
Scooped by Jim Wesberry!

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.
No comment yet.
Scooped by Jim Wesberry!

Africa’s top 10 countries for anti-corruption

Africa’s top 10 countries for anti-corruption | Global Corruption |
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.
No comment yet.
Scooped by Jim Wesberry!

In Las Vegas, mafia museum to display FIFA's 'rampant corruption'

In Las Vegas, mafia museum to display FIFA's 'rampant corruption' | Global Corruption |
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.
No comment yet.
Scooped by Jim Wesberry!

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."
No comment yet.
Scooped by Jim Wesberry!

Latin America Enforcement Report – July 2015

Latin America Enforcement Report – July 2015 | Global Corruption |
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.
No comment yet.
Scooped by Jim Wesberry!

The Ponzi Scheme Blog: July 2015 Ponzi Scheme Roundup

The Ponzi Scheme Blog: July 2015 Ponzi Scheme Roundup | Global Corruption |
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.
No comment yet.
Scooped by Jim Wesberry!

Explainer: Hacking Team's Reach in the Americas | AS/COA

Explainer: Hacking Team's Reach in the Americas | AS/COA | Global Corruption |
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.
No comment yet.
Scooped by Jim Wesberry!

​Lessons From Toshiba: When Corporate Scandals Implicate Internal Audit

​Lessons From Toshiba: When Corporate Scandals Implicate Internal Audit | Global Corruption |
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.
No comment yet.
Scooped by Jim Wesberry!

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 |
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.
No comment yet.
Scooped by Jim Wesberry!


Corrupto-landia | Global Corruption |
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.
No comment yet.