Global Corruption
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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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ARGENTINA: Impulsan una ley para que ex funcionarios condenados por corrupción no cobren pensión vitalicia

ARGENTINA: Impulsan una ley para que ex funcionarios condenados por corrupción no cobren pensión vitalicia | Global Corruption |
El diputado Hugo Marcucci (UCR-Santa Fe) propuso ayer un proyecto que en el caso de convertirse en ley podría repercutir en los ingresos del ex presidente Carlos Menem y, de ser encontrados culpables en las causas de corrupción en su contra, el ex vicepresidente Amado Boudou y la ex mandataria Cristina Kirchner.

En concreto, la propuesta busca suspender las pensiones vitalicias que cobran los ex presidentes, vicepresidentes y jueces de la Corte Suprema que hayan incurrido en delitos contra la administración pública. Para negar ese ingreso, los inculpados deberán estar procesados o con una condena con sentencia firme.

"Es una verdadera afrenta al ciudadano que fondos públicos estén destinados a sujetos que hayan cometido delitos en el ejercicio de la función pública, como es el caso de Amado Boudou", afirmó el diputado Marcucci.

El régimen especial de pensión para los ex altos funcionarios, según la ley 24.018, se trata de una asignación mensual móvil, vitalicia e inembargable del orden de los 170 mil pesos. Además, tiene la característica de no ser contributiva; es decir, no necesita aportes y no tiene tope ya que su otorgamiento es en base al mérito por desempeñar altas magistraturas.
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Mexico Strengthens Anti-Corruption Laws

Mexico Strengthens Anti-Corruption Laws | Global Corruption |

Mexico made amendments this week to its anti-corruption laws that will affect those doing business in Mexico and strives to change the way its people, and the world, perceive how business works there.

Some of the changes, most of them structural implementation of the National Anti-Corruption System put into place last year, took effect immediately.

But of greatest relevance to those working in Mexico are the regulations that will come into effect next year. Private parties—both individuals and corporations—will be liable for administrative sanctions and hefty fines, whereas in the past it was mostly public servants who faced noncriminal sanctions. A qualifying compliance program and cooperating with investigators will mitigate sanctions, much like they do with U.S. international anti-corruption laws.

“This is a very comprehensive and important reform for the anti-corruption legal framework in Mexico,” said Vicente Corta Fernandez, a compliance partner at White & Case in Mexico City. “It’s not perfect and has not been proven, but it’s a very big step toward fighting corruption in Mexico.”

The amendments also include broadened definitions of violations, ranging from bribery and abuse of office to concealed enrichment and obstruction of justice.

In particular, the new definition of influence peddling is very broad and relevant for Mexican and international corporations that work with Mexican officials, Corta Fernandez said. The definition makes it illegal for private individuals—relatives of a state official or executive, for example—to use their influence, economic or political power to pressure a public servant on behalf of the person applying the pressure, or a third party.

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Scooped by Jim Wesberry! | Accountant Suspended for Failing to Spot Fraud in Company Audit | Accountant Suspended for Failing to Spot Fraud in Company Audit | Global Corruption |
The Securities and Exchange Commission today suspended an accountant for conducting a faulty audit of the financial statements of a public company that was committing fraud, and the firm where he was a partner at the time has been prohibited from accepting new public company clients for one year.
New York-based accounting firm EFP Rotenberg LLP also agreed to pay a $100,000 penalty to settle the SEC’s charges, and it can only begin accepting new public company clients again next year after an independent consultant certifies that the firm has corrected the causes of its audit failures.  The accountant, Nicholas Bottini, agreed to pay a $25,000 penalty in addition to being permanently suspended from appearing and practicing before the SEC as an accountant, which includes not participating in the financial reporting or audits of public companies.

According to the SEC’s order instituting a settled administrative proceeding, the failed audit pertained to Illinois-based ContinuityX Solutions Inc., a publicly-traded company that claimed to sell internet services to businesses and whose executives have since been charged by the SEC for allegedly engineering a scheme to grossly overstate the company’s revenue through fraudulent sales.  

The SEC’s order finds that during the audits of ContinuityX, EFP Rotenberg and Bottini failed to perform sufficient procedures to detect the fraudulent sales in the company’s financial statements.  EFP Rotenberg and Bottini also failed to obtain sufficient audit evidence over revenue recognition and accounts receivable, identify related party transactions, investigate management representations that contradicted other audit evidence, perform procedures to resolve and properly document inconsistencies, and exercise due professional care. 
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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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Mexico’s president apologized for a corruption scandal. But the nightmare goes on for the reporter who uncovered it.

Mexico’s president apologized for a corruption scandal. But the nightmare goes on for the reporter who uncovered it. | Global Corruption |
As he signed into law new anti-corruption measures earlier this week, Mexican President Enrique Peña Nieto took the opportunity to apologize for one of the defining scandals of his tenure: the purchase by his wife of a $7 million mansion through a favored government contractor.

Peña Nieto acknowledged that the "White House" scandal, as it came to be known, had battered his government's credibility, even though he claimed his family had done nothing illegal.

"With all humility, I ask your forgiveness," he said. "I reiterate my sincere and profound apology for the offense and indignation I have caused you."

But while Peña Nieto apologized, the news network that aired the story remains locked in dispute with the reporter who broke it, the famous Mexican television journalist Carmen Aristegui.

In the aftermath of her bombshell story from November 2014, which badly embarrassed Peña Nieto's administration, the relationship between Aristegui and her employer, Noticias MVS, deteriorated sharply. Four months after the report, MVS fired Aristegui and other members of her team, which critics considered an act of revenge and an attempt to silence a powerful journalistic voice.

Now that Aristegui has contributed to a new book, "La Casa Blanca de Peña Nieto," that dispute has flared yet again. The president of MVS, Joaquin Vargas, has sued both Aristegui, who wrote the prologue, and the publisher, Penguin Random House Editorial Group, over his depiction in her introduction. (The book was written by Daniel Lizarraga, Rafael Cabrera, Irving Huerta and Sebastian Barragan, reporters who worked on the original story with Aristegui).
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97% of El Salvador Wants International Anti-Corruption Body

97% of El Salvador Wants International Anti-Corruption Body | Global Corruption |
El Salvador citizens are almost unanimously in favor of creating an international commission to investigate organized crime and corruption in the country, a sharp rebuke of the current administration's anti-crime strategy and handling of politically sensitive cases. 
Nearly 97 percent of respondents to a poll (pdf) published by the Central American University (Universidad Centroamericana José Simeón Cañas - UCA) said they support the government establishing an international commission to investigate cases of corruption and organized crime.
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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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