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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>
Curated by Jim Wesberry
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Kenya Government Corruption: State Budget Missing $16B, 1 Percent Of Spending Is Lawful, Auditor General's Report Finds

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

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

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

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

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

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Police arrest 2 executives for alleged bribery scheme at Brazil's nuclear power company

Police arrest 2  executives for alleged bribery scheme at Brazil's nuclear power company | Global Corruption | Scoop.it
Brazilian police have arrested two executives for their alleged role in a bribery scheme involving the construction of a nuclear power plant.

The Federal Prosecutor's Office says in a statement that police on Tuesday detained Othon Luiz Pinheiro da Silva. He is, president of Eletronuclear, a subsidiary of Brazil's electric utilities company, Eletrobras.


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Police also arrested Flavio David Barra, the top energy executive at construction firm Andrade Gutierrez.

Prosecutors say Silva received 4.5 million reals ($1.3 million) in bribes from Andrade Gutierrez and other construction companies.
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Dorothy Retha Cook's curator insight, July 29, 6:28 PM

I WONDER HOW HIGH THE UTILITIES BILLS ARE OR WAS THERE ANY BENEFITS SHARE TO AND WITH THE RESIDENTIAL CUSTOMERS FROM THE BRIBES OF THE BUSINESS OWNERS PAID. WHAT EXACTLY IN DTAIL WAS THE BRIBERY FUNDS A PAYMENT FOR OR NOT FOR!

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How to guard against bribery and corruption in the tender process

How to guard against bribery and corruption in the tender process | Global Corruption | Scoop.it
The penalties for bribery are particularly severe for those involved in supplying goods and services to the public sector.

Any company caught paying bribes faces the prospect of a criminal conviction, an unlimited fine and terrible publicity. A further consequence for those supplying the public sector, is a discretionary ban from bidding for government contracts across the EU if the company is convicted of the offence of failing to prevent bribery under section seven of the Bribery Act 2010. The ban would be mandatory if one of the directors (or any person who has powers of representation, decision or control of the company) is involved and is convicted of bribing another person or a foreign public official under sections one or six of the Act.

The stakes are high so it is important to have policies to prevent bribes being paid on your behalf. A company can be liable for bribes paid on its behalf by anyone performing services for it anywhere in the world and in any capacity – including agents, distributors and logistics providers. What is required is a culture in which bribery is not tolerated at any level. Its policies must clearly set out what employees and agents can and cannot do.

The general offence of bribery is defined as offering, promising or giving something of value to another person with the intention to influence that person to do something improper in a business context. For example taking a procurement manager for an expensive day out shortly before they decide on a tender. This could be unlawful if the intention was to influence their decision to favour your bid for reasons other than the relative merits of your tender. Timing is everything. The closer in time the hospitality is to a contract award the greater the likelihood that there will be an inference of impropriety.
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NIGERIA: Let's praise, not condemn, Auditor-General for exposing Oronsaye's alleged corruption, group says

The Society for Accountability and Good Governance, says the report of the Special Audit of the Accounts of Civil Pension by the Office of Auditor- General for the Federation deserves commendation rather than criticisms.
In a statement in Abuja on Tuesday, Austin Aliyu, the director of the society, noted that the report gave an insight into past activities of Head of the Civil Service of the Federation that indicted the head of the office, Stephen Oronsaye.
“It is this report that the Economic and Financial Crimes Commission (EFCC) is holding on to in addressing some allegations levelled against Orosanye.
“It is worrisome to observe that in spite of the importance of the report to the ongoing fight against corruption, some groups are calling for the removal of Auditor-General for the Federation Samuel Ukura.
“Calling for the removal of the Auditor-General for the Federation is being sponsored by some people who are afraid of the ongoing anti-corruption crusade and all efforts must be made to discourage such moves,’’ the statement said.
The society said it was not logical that the auditor-general, who mastermind the special auditing in 2011, would also attempt to subvert, suppress or falsify some evidences in the contents as alleged by the critics.
The society insisted that since the report was referred to as an audit investigation, it would not follow the 90-day specification for reports to be submitted to the National Assembly as claimed by some groups.
“That is why it is called a special report. Investigations do not follow the 90-day specification because it must be done conclusively so it does not become a witch hunt exercise.
It also cautioned against the abuse of the application of the Freedom of Information Act.
He said that since the report had been submitted to the National Assembly, any person looking for it should obtain it at the appropriate place.
The society also urged the critics to note that the National Assembly, EFCC and KPMG did similar investigations before that of the Office of Auditor-General for the Federation.
“If everyone is now seeking the report of the Office of Auditor-General for the Federation only for a prosecution, then it leaves much to be desired.
“The public should also be told the outcomes of those celebrated reports and forensic investigations conducted at huge cost to taxpayers,’’ the society insisted.
PREMIUM TIMES had in September 2014 exposed a damning reportby the Office of the Auditor-General detailing the alleged involvement of Mr. Oronsaye in a N123billion fraud when he served as head of service between 2009 and 2010.
According to the report, entitled “Special Audit of the Accounts of Civil Pension,” Mr. Oronsaye was alleged to have presided over the looting of public funds during his tenure.
However, shortly after the story was published, the Auditor-General circulated statements and bought spaces in some major Nigerian newspapers to disown the report produced by his own office.
In the advertorials, Mr. Ukura claimed there was no such report as cited by PREMIUM TIMES in its story.
To counter Mr. Ukura’s claim, PREMIUM TIMES, in a subsequent story, made public the executive summary of the report indicting Mr. Oronsaye.
This newspaper also challenged the Auditor-General, who was apparently under pressure from unknown quarters to disown the report, to explain why he refused to dispatch the report to the National Assembly two years after it was produced even though he was required by law to do so within 90 days.
But after months of deceit and cover ups, Mr. Ukura has now admitted to the Economic and Financial Crimes Commission that his office was indeed in possession of the report cited by this newspaper in its report.
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Corrosive corruption uncovered: Kenya auditor exposes government misspending

Corrosive corruption uncovered: Kenya auditor exposes government misspending | Global Corruption | Scoop.it
Nairobi: Only one percent of Kenyan government spending can be properly accounted for, according to a report by the country's auditor-general released just days after US President Barack Obama warned corruption was holding the country back.
Auditor-General Edward Ouko's annual report, presented to parliament on Tuesday, said that just 1.2 percent of Kenya's one trillion shilling (8.9 billion euro) budget for 2013-14 "was incurred lawfully and in an effective way".
Representational Image. Kenyans await visit of US President Barack Obama. AP
The 361-page report is a litany of mismanagement, incompetence, wastage, misspending and possible corruption on a huge scale.
Ouko found that 60 percent of government spending -- roughly 600 billion shillings (5.3 billion euros) -- "had issues" while he "was unable to confirm" whether a further 390 billion shillings (3.5 billion euros) "was incurred effectively and lawfully".
The report was published two days after Obama left Kenya where he had addressed "the cancer of corruption", calling endemic graft "the single biggest impediment to Kenya growing even faster".
"Too often, here in Kenya corruption is tolerated because that's how things have always been done. People just think that that is sort of the normal state of affairs," said Obama.
The auditor-general's report exposes the everyday nature of malpractice and possible corruption in Kenya's government.
The ministry of health and ministry of transport and infrastructure were among 17 government departments singled out for failing to provide documents to support spending totalling 67 billion shillings (600 million euros).
"These public funds may not have been utilised lawfully and in an effective manner," said Ouko.
Former transport minister Michael Kamau, was among four ministers suspended in March, and has been charged with abuse of office.
Ten government departments -- including the ministry of agriculture and the judiciary -- failed to pay bills totalling 17 billion shillings (147 million euros).
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When it comes to corruption, Britain really should shut up | Simon Jenkins

When it comes to corruption, Britain really should shut up | Simon Jenkins | Global Corruption | Scoop.it
Why did the prime minister pay a sudden visit two years ago to the ostracised dictator of Kazakhstan, who showered him with gratitude and praise? Kazakhstan holds the Olympic gold for corruption, with its former police chief being linked to the ownership of £147m-worth of London properties. The visit was reportedly organised by Tony Blair under a £24m reputation-laundering “contract” with the Kazakh ruler. What did Cameron think he was doing in such company?

The truth is that hypocrisy is the occupational disease of British leaders
The truth is that hypocrisy is the occupational disease of British leaders. They lecture Africans and Asians on the venality of their politics, while blatantly selling seats in their own parliament for cash. I hope some insulted autocrat one day asks a British leader how much his party has garnered from auctioning honours. The government suppresses any inquiry into corrupt arms contracts to the Middle East. And when does lobbying stop and corruption start? The Cameron government is the most susceptible to lobbying of any in history.

As for London property, the promised transparency may yield a fund of wisdom, but it will not stop the sales. That requires a determined programme of regulation. If rural councils can restrict house sales to local people, so can London. If other cities can curb foreign buying-to-leave, so can London. If New York co-ops can restrict ownership to occupiers or renters, so can London. A London property left unused for a year should simply be sold or let. And it should be properly taxed. This is not about being left or right. It is about a civilised city proofed against corruption.

All such measures were available to Cameron five years ago. He did nothing. They are still available. I suspect he will do nothing but make another speech.
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Corruption Currents: Money Laundering Drives Up London Housing Prices

Corruption Currents: Money Laundering Drives Up London Housing Prices | Global Corruption | Scoop.it
Money Laundering:

Foreign criminals are laundering their money in London by buying property and driving up real estate prices, the National Crime Agency chief said in an interview. Is the U.K. in denial? Estate agents were warned. The statements come after a documentary highlighted the problem. (BBC, Guardian, UKPA, Times of London, Commentator EstateAgentToday, Daily Beast, RFE/RL)

A Mexican airplane broker made a U.S. court appearance on a 200-count money laundering indictment. (KPBS)

President Barack Obama offered to help Nigeria recover corrupt assets. Meanwhile, London jailed the cousin of a former Nigerian convicted of laundering money. (NY Amsterdam News, IPS, Newsday Nigeria)

Malta proposed a limit on cash transactions to fight money laundering. It also struggles with mafia links. (Malta Today, Times of Malta)

A new law in Tunisia against money laundering and terrorism authorizes the use of the death penalty, despite the protests of human rights groups. (Reuters, The National, DW)

Ghanian banks were fined for poor anti-money laundering controls. (StarrFM)

A Spanish priest was accused of money laundering. He didn’t appear to be contacted. (Olive Press)

Sanctions:

Russia is preparing for a foreign debt blitz despite sanctions that cut it off from international capital markets in the past year. (Financial Times)

When sanctions on Iran do lift, how will the country spend its money? Foreign insurers are cautiously looking at Iran. Many companies seeking business in Iran will go through Dubai. (Huffington Post, NPR, Reuters, Economist)

Mr. Obama is weighing new sanctions on South Sudan. He’s seeking a united front, and officials have little hope for the country’s success. (WSJ, Bloomberg, NY Times)

The EU is readying sanctions against Burundi. (Reuters)

U.S. tourists and companies won’t be flooding into Cuba despite normalization. U.S. lawmakers relaxed some restrictions, but Congressional Republicans are standing against significant change. (NPR, Miami Herald, Reuters, AP, NPR)

Transparency:

Shedding light on company ownership can help fight financial crime, experts say. (Guardian)

General Anti-Corruption:

Mr. Obama slammed corruption during his trip to Kenya, saying it’s a hindrance to growth. (Financial Times, NY Times, Bloomberg)

Romania’s anti-graft efforts are bearing fruit and exposing risks. (Financial Times, Financial Times)

Protesters called for the firing of a Ukrainian prosecutor amid a corruption scandal. Ukraine’s railways are rife with corruption. (Kyiv Post, Kyiv Post)

Lack of development and corruption go hand in hand in India. An Indian corruption scandal involving the anti-graft body is leading to changes. (Globe & Mail, NDTV, India Today)

Indian cricketers were cleared of match-fixing charges. The problem persists in soccer, however. (Financial Times, Hindustan Times, Reuters)

A Honduran journalist who exposed corruption took refuge in a human-rights office. (AFP)
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The World Wide Web, the New Frontier in Fraud

The World Wide Web, the New Frontier in Fraud | Global Corruption | Scoop.it
The Justice Department charged three men with securities fraud, identity theft and money-laundering conspiracy related to manipulation of penny stocks in 2011 and 2012, in what are known as pump-and-dump schemes. Two of the defendants, Gery Shalon and Ziv Orenstein, are Israeli citizens. They were arrested there last week and are being held. The third defendant, Joshua Samuel Aaron, is an American citizen living in Israel who is thought to have been in Russia recently, but he has not yet been arrested.

The indictment is a bare-bones set of allegations that gives few details about how the shares were manipulated. A statement by Preet Bharara, the United States attorney in Manhattan, asserts that the defendants funneled “millions of dollars in unlawful proceeds through a web of international shell companies.” But the indictment itself has nothing about how much money they made from the scheme or the amount of losses that investors suffered. The money-laundering conspiracy references transactions totaling about $1 million, but little else about any connection to the penny-stock fraud.
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Malaysia’s Premier Dismisses Deputy and Attorney General Amid Scandal

Malaysia’s Premier Dismisses Deputy and Attorney General Amid Scandal | Global Corruption | Scoop.it
Malaysia’s prime minister, Najib Razak, dismissed his deputy prime minister and the attorney general on Tuesday, amid a scandal involving a government-owned development fund that has roiled the country’s top levels of political power.

The moves came two days after Deputy Prime Minister Muhyiddin Yassin, in a speech, called on Mr. Najib to answer questions about the heavily indebted fund, 1Malaysia Development Berhad, also known as 1MDB. Mr. Najib appeared to suggest on Tuesday that his decision to remove Mr. Muhyiddin from office was related to the speech.

“Members of the cabinet should not air their differences in an open forum that can affect public opinion against the government and Malaysia,” Mr. Najib said in a televised statement announcing the removal of Mr. Muhyiddin and four other members of the cabinet. Mr. Najib added that he “must have a solid and unified team moving in the same direction.”

In a statement posted on Facebook, Mr. Muhyiddin said that he accepted his removal and supported the leadership of the prime minister and acknowledged that he had been dismissed because of his position on the 1MDB investigation.

The removal of Attorney General Abdul Gani Patail, which was announced by the state-run Bernama news service, led to speculation that it was also connected to the investigation into possible corruption at the development fund. The attorney general is one of four officials leading the investigation, along with the inspector general of Malaysia’s police, the head of the country’s anticorruption commission and the governor of Malaysia’s central bank.
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Nigeria: Oronsaye - Group Petitions Buhari, Demands Auditor-General's Removal, Prosecution

Nigeria: Oronsaye - Group Petitions Buhari, Demands Auditor-General's Removal, Prosecution | Global Corruption | Scoop.it
For alleged criminal cover up and shielding of the former Head of the Civil Service of the Federation, Stephen Oronsaye, accused of involvement in a N123 billion fraud, a coalition of anti-corruption groups in the country, Civil Society Network Against Corruption, CSNAC, has petitioned President Muhammadu Buhari to demand the immediate removal from office and prosecution of the Auditor-General of the Federation, Samuel Ukura.

For serially denying media reports on the findings and recommendations of a special committee he personally constituted to audit the accounts of the Civilian Pensions Department domiciled in the Office of the Head of the Civil Service of the Federation between 2005 and 2010 the group said Mr. Ukura was culpable of shielding government officials standing trial for graft.

Based on a 169-page report by the special committee, which indicted Mr. Oronsaye of involvement in the fraud during his tenure in office between 2009 and 2010, PREMIUM TIMES had, on September 15, 2014, published an exclusive story from the executive summary of the findings by the AuGF office.

The audit report entitled 'Special Audit of Accounts of the Civil Pensions for the period 2005 to 2010 Financial Years', revealed damning details of monumental graft allegedly perpetrated by Mr. Oronsaye and others.
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Higher Education: A Hotbed of Corruption? | The World View | InsideHigherEd

Higher Education: A Hotbed of Corruption?  | The World View | InsideHigherEd | Global Corruption | Scoop.it
Hardly any week goes by without the appearance of an article on corruption in higher education. The stories cover not only individual students or faculty but also whole institutions and even countries. And corruption in higher education has even crossed borders and become global. One cannot help asking whether higher education has become the hotbed of corruption.
“Corruption for resources, fame and notoriety place extraordinary pressures on higher education institutions…….In some instances, corruption has invaded whole systems of higher education and threatens the reputation of research products and graduates, regardless of their guilt and innocence”. This quote comes from Transparency International’s 2013 Global Corruption Report: Education. It can well be illustrated by what is apparently happening in Australia. In April 2015, the Four Corners program of the Australian Broadcasting Corporation revealed examples of how the standards of Australian universities are being compromised through corrupt practices, mainly as a result of the pressure on them to recruit foreign students and to ensure that they pass the exams in order to obtain much-needed funds. The examples given included the involvement of fraudulent recruitment agents, universities graduating poorly qualified or unqualified nurses, widespread plagiarism, cheating and exploitation. The program was appropriately labelled ‘Degrees of Deception’. In 2014, a story appeared relating how fraud and corruption within and outside Australia’s immigration services enabled thousands of foreign students to acquire illegal permanent residency visas in Australia, thereby resulting in unemployment of Australian graduates.
Corruption appears to be rampant in Russia as well. In September 2014, a paper was published in the online journal International Education Studies, describing the alarming situation of corruption in modern Russian higher education that might take the form of cheating on entrance exams, paying a bribe to facilitate the admissions process, bribing professors for better grades. Corruption is also suspected among faculty and senior administrators who may clandestinely negotiate any number of benefits for themselves.  It mentions that nearly 50% of the student intake of 7.5 million in 2008/2009 academic year had to face corruption and adds that “the corruption component of the whole industry could be compared with the budget of a small country”. The paper gives examples of the wide range of corrupt practices in higher education, mentioning the case of a Dean who accepted a bribe of €30,000 for a PhD admission, and the feedback from the Moscow Police that some 30-40 Professors are caught each year for accepting bribes for good grades.
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Honduras Breaks the Silence: Protests Persist Against Corruption

Honduras Breaks the Silence: Protests Persist Against Corruption | Global Corruption | Scoop.it
Since the coup against the democratically elected President of Honduras in 2009, Honduras has been experiencing a period of continuous crises. Despite deteriorating conditions, there had been only a limited organized outcry against the corruption, impunity, and lack of employment facing the country until two months ago, when weekly protests began crowding the streets of the nation’s capital, Tegucigalpa. The last straw for Honduran citizens came in May, when it was revealed that private businesses had embezzled $330 million USD from the country’s social security institute, the Instituto Hondureno de Seguirdad Social (IHSS). Ninety four million USD of the embezzled funds had been funneled directly into the campaign of Juan Orlando Hernandez, who, though he admits to receiving the funds, claims to have been unaware of their source.[1] In addition to the injustice of stealing money from the citizens, lack of funding to the hospitals brought about grave consequences. As a result, since the start of the embezzlement, 3,000 patients died due to a lack of appropriate medical assistance, which would have been available if the $330 million USD, previously designed for this purpose, had not been stolen and used to finance the individual interests of a few people.[2] Despite Hernandez’s claim that the money will be paid back to IHSS, the damage is irreversible as money cannot reimburse the lives taken from scandal victims and the pain caused to Honduran families.[3]

After the exposure of the scandal, demonstrations began in Tegucigalpa after a group of young Hondurans protested against Hernandez. The protestors, outraged by the scandal, adopted the name of los indigados (the outraged) and created the March of the Torches, gathering hundreds of people to march in the streets of the capital, illuminating the night with lit torches.[4] Every week, more and more people, the latest numbers totaling more than 60,000, join the protest ranks outside La Casa Presidencial, Hernandez’s residence, to voice their opposition to the injustice committed to the 3,000 victims.[5] The protestors are citizens of all ages, classes, and political parties including human rights defenders, as well as indigenous groups and political figures such as Amable Hernandez, the mayor of Colinas, in the department of Santa Barbara.[6] Although the majority of protestors gather once a week, a group of hunger strikers have stationed themselves permanently at the steps of the president’s house.[7] All of the protests have been peaceful, despite the incessant efforts of the police and military forces to violently silence the protestors’ cries.

Honduras is not alone in standing up against their government’s ceaseless corruption. Right across the nation’s northern border, Guatemala is also fighting against similar cases of corruption and fraud that have plagued their government in recent years. The former Guatemalan president, Pérez Molina, and his government are being questioned after a UN mission against impunity revealed in April that they were associated with a network of bribes at customs, earning millions in profits behind the scenes. As a result, Guatemalan citizens’ have taken to the streets in protest, refusing to stop until Molina is removed from office.[8] Similar intentions exist for Honduras. The Indigados protestors in Tegucigalpa are demanding the resignation of President Hernandez.[9] Although there is no formal indication that these leaders will resign, it is certain that both the Honduran and Guatemalan governments will need to increase their transparency and accountability if they intend to remain in power.
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Louis Berger Bribery Case: Goa Water Project Director Suspended

Goa government today suspended project director A Wachasunder who was heading the Water augmentation and sewerage line project which has run into controversy over bribery charges.

"I have directed that Wachasunder be placed under suspension for fair probe in the matter," chief minister Laxmikant Parsekar told reporters here today.

The Crime branch is investigating into the accusation by US company Louis Berger that it bribed Indian ministers to win consultancy contracts for water augmentation and sewerage projects in Goa and Guwahati.

Parsekar said Crime branch has been heading in a right direction in this investigation and will finish its preliminary report by next week.

The Crime Branch officials during their investigation have began interrogation of Wachasunder at its office tonight.
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Corruption Currents: Glaxo Faces New Bribery Allegations

Corruption Currents: Glaxo Faces New Bribery Allegations | Global Corruption | Scoop.it
Bribery:

GlaxosmithKline PLC faces new allegations of bribery in Romania. The company said it would look “very thoroughly” into the claims, which were made in a whistleblower’s email. Prosecutors this week also raided homes and offices looking for evidence that drug companies bribed doctors. (Reuters, AP)

Formosa Plastics Group said one of its top executives resigned over a years-long bribery scandal involving a supplier. (AFP)

A member of the Bermudan parliament denied allegations of bribery. (Royal Gazette)

An opposition lawmaker in South Korea is being investigated over alleged bribery, prosecutors said. He didn’t appear to be contacted. (Korea Herald)

Cybercrime:

A report from a cybersecurity firm said Russian government-backed hackers who penetrated high-profile U.S. government and defense industry computers this year used a method combining Twitter with data hidden in seemingly benign photographs. (Reuters, Financial Times)

Hackers attacked NY Magazine after it published interviews with 35 women who accused Bill Cosby of raping them over the past 45 years. The attackers say they knew one of the women. (Poynter, Quartz)

The Internet is the new fraud frontier. (NY Times)

Leaked emails show Hacking Team tried selling spyware to the Myanmar government, though it didn’t appear to be successful. (Irawaddy)

Banks have poured millions of dollars into securing their computer networks, but the number of hacks is rising. (Financial Times)
Researchers managed to hack into an airgapped computer. (Wired)

Hackers are using a Jane Austen novel for an attack. (Global Post)

Money Laundering:

Take an inside look at the de-risking process here. (BBC)

Western Union Co.WU +2.15% plans to invest more in its compliance and monitoring systems in a renewed effort to combat fraud and money laundering, a senior executive said. (Reuters)

France’s financial sector regulator fined Italian insurer Generali $5.52 million for failing to have sufficient money laundering controls in place. (Reuters)

Dubai regulators fined a bank for money laundering failures. (Reuters)

Columnists from the U.K. to Vancouver decry money laundering in real estate. (Times of London, Vancouver Sun, Guardian)

Did the FIFA case affect know-your-customer compliance procedures at banks? (MIT, Regulation Asia)
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The Dark Side of Government in the Sunshine

The Dark Side of Government in the Sunshine | Global Corruption | Scoop.it
Like motherhood, ice cream and the all-expenses-paid vacation, seemingly everybody should like transparency in government. The specter of elected or unelected officials making decisions behind closed doors conjures up visions of corruption and would seem to signify government on behalf of private interests. For this reason, most democratic governments, to varying degrees, now operate under various laws and rules intended to promote openness.

As a card-carrying good-government type, I am supposed to like transparency, and I generally do think it's a good thing. Certainly there are real downsides to secrecy and backroom deals. There are many positive effects that can come from subjecting public processes to greater scrutiny and from requiring the disclosure of processes and data. Transparency itself, however, is not without its pitfalls.
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Mead Johnson paying $12M to settle U.S. bribery charges

Mead Johnson paying $12M to settle U.S. bribery charges | Global Corruption | Scoop.it

Mead Johnson has agreed to pay $12 million to settle federal civil charges that its Chinese subsidiary bribed hospital professionals to recommend its infant formula to new or expecting mothers who were patients.

The Securities and Exchange Commission announced the settlement Tuesday with Mead Johnson Nutrition Co., which has operations around the world and makes Enfamil formula. The Glenview, Illinois, company neither admitted nor denied SEC allegations that it violated the Foreign Corrupt Practices Act, which prohibits bribery of foreign government officials or company executives to secure or retain business.

Mead Johnson has said its business in China, where it makes and sells products, is one of its most important operations.

The SEC said the Chinese subsidiary paid doctors and other professionals in government-owned hospitals to recommend the formula and to give the company the contact information of patients for marketing purposes.


The improper payments totaled more than $2 million from 2008 to 2013 and generated about $7.8 million in profits for the company, according to the SEC. Mead Johnson failed to accurately record the payments on its books, the agency alleged.

Employees of the subsidiary paid for the bribes by tapping funds for outside distributors that market and sell Mead Johnson products in China, the SEC said.

Kara Brockmeyer, who heads the foreign corrupt practices unit in the SEC's enforcement division, said the company's lax internal controls enabled the subsidiary to use “off-the-books slush funds” for the payments.

Mead Johnson is paying $7.77 million in restitution plus $1.26 million in interest and a $3 million penalty under the settlement.

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Dorothy Retha Cook's curator insight, July 29, 1:49 PM

WHO EVER GOT A CUT IN THIS BRIBERY BY RECOMMENDING ENFAMIL BABY FORMULA ASTHERE ARE ALSO SELECTED BRANDS THAT GOVERNMENT SUBSIDES PROGRAMS SUCH AS "WIC" WOMEN INFANT AND CHILDREN WHICH ALSO PROVIDES VOUCHERS FOR INFANT MILKA AMONG OTHER BUT ONLY CERTAIN BRANDS CAN BE PURCHASED , THINK THE BRANDING BRIBERY GOES THAT DEEP IN THE GOVERNMENT WAY OF GETTING THINGS DONE BECAUSE THE MILK IS GIVEN AT THE HOSPITAL ALSO AND THE HOSPITAL HAS "WIC" CONNECTIONS/ CONTACTS. EXSPECIALLY FOR PARENTS OF BABIES ON GOVERNMENT BENEFIT PROGRAMS OR WORKING ITH LOW INCOME COMING IN.

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Latin America’s anti-corruption crusade

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

This attitude is exemplified in the proliferation of trials, investigations, demonstrations, convictions, and resignations relating to corruption, particularly in Brazil and Venezuela, and to a lesser extent Mexico and Guatemala. In all four countries, major scandals have erupted, with high-level government officials and business leaders being denounced by the media, the justice system, foreign governments, and/or the local opposition. Though none of the governments implicated in the scandals will collapse – at least not exclusively because of corruption – the sheer scale of the social and political protest, not to mention legal action, is astonishing.

The most shocking story has unfolded in Brazil. Late last year – at a time when discontent was already widespread, with protests against excesses and abuses in the preparations for last year’s World Cup having erupted in 2013 – the so-called petrolâo scandal hit. Huge sums of money, it was revealed, had been transferred directly, or via immense construction companies, from Brazil’s state oil company Petrobras to President Dilma Rousseff’s Workers’ Party.

Whistle-blowers and protected witnesses provided details of the graft to Brazilian judges, who pursued Petrobras officials, politicians, and the CEOs of the corporations under investigation. Both Rousseff and her predecessor, Luiz Inácio Lula da Silva, have been accused of graft and influence-peddling. Though Rousseff managed to hold onto power in the December election, which she won by a small margin, there is no denying that political crisis has engulfed Brazil, plunging the country into a deep recession.
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Urgen en Guatemala a desbloquear casos de corrupción en juzgados

Urgen en Guatemala a desbloquear casos de corrupción en juzgados | Global Corruption | Scoop.it
La Comisión Internacional Contra la Impunidad en Guatemala (CICIG) desafió ayer al aparato judicial guatemalteco y le urgió a que permita desbloquear la presa de casos de corrupción política que se acumulan en los juzgados, mientras la jerarquía católica advirtió que ese país sufre “hambre de pan” pero también “de justicia y paz”.

“Poco servirán al país los esfuerzos que CICIG y MP (Ministerio Público) hacen para combatir la corrupción, si el OJ (Organismo Judicial) no asume su responsabilidad histórica”, escribió el colombiano Iván Velásquez, jerarca de la CICIG, en su cuenta de Twitter.

Consultado por EL UNIVERSAL, el vocero del OJ, Ángel Pineda, dijo que “respetamos la libertad de expresión” del comisionado, “pero el organismo seguirá siendo imparcial, objetivo e independiente y sólo está sometido a la Constitución Política y a las leyes que garantizan la forma en que se deben resolver los procesos. Apoyamos la lucha contra la corrupción”.

La alerta de Velásquez respondió al ataque que el opositor partido Libertad Democrática Renovada (LIDER) lanzó la semana pasada a la CICIG, a la que acusó de montar un “show mediático”, por involucrarle en casos corrupción.

La CICIG y la fiscalía asestaron este mes un golpe a LIDER —cuyo candidato presidencial Manuel Baldizón es favorito para ganar los comicios de septiembre—, al implicar a Edgar Barquín, candidato a la vicepresidencia, y a dos diputados del partido con una red que desde 2008 habría “lavado” 124 millones de dólares.
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SOUTH AFRICA: State of corruption

SOUTH AFRICA: State of corruption | Global Corruption | Scoop.it
Increasingly, the average citizen believes that you are untouchable and not beholden to the same rules as ordinary citizens – if you wield power. There is a strong and growing belief that the wealthy have undue access to power and the system can be manipulated in their favour. Oscar Pistorius’ case springs to mind, where wealth and fame are believed to have resulted in him facing the lesser charge of culpable homicide, rather than murder, for killing his partner. Cyril Ramaphosa, now deputy president, who was a nonexecutive director and shareholder at Lonmin in 2012 when the police killed 34 miners, is said to have used his political influence to help Lonmin in its conflict with the miners. 

Perception and reality 

The Farlam commission finding that none of the senior politicians and company executives bore any direct responsibility in the mass killing of the miners reinforces the perception of the powerful being beyond the reach of the law. These are perceptions, but in a country where there is a yawning and ever-increasing gap between the poor in their multitudes and the elite who revel in profligacy, they become reality. This is extremely dangerous for our democracy. 

Going back to the Foreign Corrupt Practices Act blog, the 2013 list of companies being investigated for corrupt practices puts South Africa at number nine, with $350.6 billion (R4.4 trillion) worth of cases under investigation. Net1, Gold Fields, Quanta Services and Walmart stores are on the list. 

With China leading the pack at $9.24 trillion, Brazil second at $2.246 trillion, India third at $1.887 trillion, Russia fourth at $2.097 trillion, South Africa, at $350.6 billion, does not look too bad – even though there is nothing honourable about being on a list of the infamous in the first instance. 

Note also that while South Africa may be perceived as less corrupt than its Brics partners, when the number of cases under investigation is examined relative to GDP, we jump three places to number six. We do seem to be in good company at Brics. 
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Sources: Disabled work program mired in fraud - CNN.com

The nation's premier federal program that provides work for people who are severely disabled is mired in widespread corruption, financial fraud and violations of the law, numerous sources tell CNN. And instead of helping the severely disabled find work, the taxpayer-funded agency is at times allowing jobs to be taken away from the disabled, the sources say.

AbilityOne, along with the nonprofit agency that manages its program for the severely disabled, SourceAmerica, are being investigated by authorities for illegal operations, financial fraud, mismanagement, operating in violation of the law, steering of contracts, and possibly obstruction of justice. Several inside sources tell CNN the program is among the worst cases of its type they've ever seen in a federal agency.

CNN has learned the U.S. Department of Justice has begun its own investigation into the various allegations. In addition, at least four separate inspectors general offices have active investigations into AbilityOne and SourceAmerica. The OIG from the General Services Administration, Department of Defense and the Veterans Administration are among those investigating, all led by the Office of Inspector General from the State Department.

What is AbilityOne?
The AbilityOne program was first created with ambitious, altruistic goals by President Franklin D. Roosevelt and Congress in 1938 to help give jobs to the blind.

The AbilityOne program funnels about $3 billion per year of taxpayer money to fund contracts for goods and services across the country. For a company to get a contract with AbilityOne, 75% of that company's work must be performed by blind or severely disabled employees, who cannot work in a normal job.

But CNN has learned that as many as half the companies contracting with SourceAmerica under AbilityOne may be operating in violation of the law, without enough severely disabled employees, according to sources with knowledge of the program. There are no such allegations of wrongdoing with AbilityOne's contracts for blind people.

What this means is the program responsible for making sure severely disabled people are being hired with taxpayer money through federal contracts is not enforcing or following the law, according to numerous inside sources with knowledge of the organization.

AbilityOne is run by a commission made up of presidential appointees. While they must approve all contracts, sources tell CNN they are essentially a "rubber stamp," for the referrals sent to them by SourceAmerica, which essentially operates independently with contracts for the severely disabled. So, one key allegation is that SourceAmerica, a nonprofit agency with virtually no oversight other than AbilityOne, largely decides how roughly $2.3 billion in U.S. taxpayer money is spent, according to numerous sources.
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US firm to pay $17.1m penalty over Kuwait bribery scandal

US firm to pay $17.1m penalty over Kuwait bribery scandal | Global Corruption | Scoop.it
Louis Berger International, a US-based construction management company active in the Gulf region, has agreed to pay a $17.1 million criminal penalty to resolve charges that it bribed foreign officials in India, Indonesia, Vietnam and Kuwait to secure government construction management contracts.
The company, which recently won a contract to project manage a major revamp of transport systems in Saudi Arabia's holy city of Madinah, admitted to violations of the Foreign Corrupt Practices Act (FCPA).
Two of the company’s former executives, including one based in Dubai, also pleaded guilty to conspiracy and FCPA charges in connection with the scheme.
Assistant Attorney General Leslie R Caldwell of the Justice Department’s Criminal Division, US Attorney Paul J Fishman of the District of New Jersey and Special Agent in Charge Richard M Frankel of the FBI’s Newark Division made the announcement.


A statement said Louis Berger entered into a deferred prosecution agreement (DPA) and admitted its criminal conduct, including its conspiracy to violate the anti-bribery provisions of the FCPA.
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Fighting Corruption Won’t End Poverty

Fighting Corruption Won’t End Poverty | Global Corruption | Scoop.it
Countries are poor because governments are corrupt. And, unless they ensure that public resources are not stolen, and that public power is not used for private gain, they will remain poor, right?
It certainly is tempting to believe so. Here, after all, is a narrative that neatly aligns the promise of prosperity with the struggle against injustice. As Pope Francis said on his recent trip to Latin America: “corruption is the moth, the gangrene of a people.” The corrupt deserve to be “tied to a rock and cast into the sea.”

Perhaps they do. But that won’t necessarily make their countries more prosperous.
Consider the data. Probably the best measure of corruption is the World Bank’s Control of Corruption Indicator, which has been published since 1996 for over 180 countries. The CCI shows that while rich countries tend to be less corrupt than poor ones, countries that are relatively less corrupt, for their level of development, such as Ghana, Costa Rica, or Denmark, do not grow any faster than others.
Nor do countries that improve in their CCI score, such as Zambia, Macedonia, Uruguay, or New Zealand, grow faster. By contrast, the World Bank’s Government Effectiveness Indicator suggests that countries that, given their income level, have relatively effective governments or improve their performance, do tend to grow faster.
For some reason – probably related to the nature of what NYU’s Jonathan Haidt calls our “righteous minds” – our moral sentiments are strongly related to feelings of empathy in the face of harm and unfairness. It is easier to mobilize against injustice than for justice. We are more enthusiastic to fight the bad – say, hunger and poverty – than to fight for, say, the kind of growth and development that makes food and sustainable livelihoods plentiful.
Sometimes switching from the “bad” to the corresponding “good” is simply a matter of semantics: to fight against racism is to fight for nondiscrimination. But, in the case of corruption, which is a bad that is caused by the absence of a good, attacking the bad is very different from creating the good.
The good is a capable state: a bureaucracy that can protect the country and its people, keep the peace, enforce rules and contracts, provide infrastructure and social services, regulate economic activity, credibly enter into inter-temporal obligations, and tax society to pay for it all. It is the absence of a capable state that causes corruption (the inability to prevent public officials, often in collusion with other members of society, from subverting decision-making for private gain), as well as poverty and backwardness.
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Obama highlights Kenya's stubborn corruption problem (+video)

Obama highlights Kenya's stubborn corruption problem (+video) | Global Corruption | Scoop.it
In a speech meant to inspire Kenyans, particularly young men and women, President Barack Obama praised the country’s immense progress, but warned that it is endangered by chronic corruption.

“Kenya is at a crossroads, a moment filled with peril, but also enormous promise,” he told an invitation-only crowd of about 5,000, who lined up outside Kasarani Stadium hours before the speech to get in.

“Across the country, one study shows corruption costs Kenyans 250,000 jobs every year -- because every shilling that’s paid as a bribe could be put into the pocket of somebody who’s actually doing an honest day’s work,” he said, prompting some of the loudest cheers of the day. “If someone in public office is taking a cut they don’t deserve, that’s taking away from the people who are paying their fair share…  It is important that not only low level corruption is punished but folks at the top if they are taking from the people."

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His mention of “folks at the top” got particular attention.


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“I like the fact that he talked about corruption, which is a very serious issue in this country. And the fact that he’s not looking at the issue of petty corruption, but he’s also looking at grand corruption, which is really ailing our economy,” says Dennitah Ghati, an MP and women’s representative from Migori County in western Kenya. “I love that he put a lot of emphasis and time to talk about corruption without fear.”
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PHILIPPINES:What stats, surveys say about Aquino's fight vs corruption

PHILIPPINES:What stats, surveys say about Aquino's fight vs corruption | Global Corruption | Scoop.it
Since he was elected in 2010, President Benigno Aquino III carried with him a tuwid na daan (straight path) slogan that defined his government's drive to fight corruption.
Under his administration, a string of corruption issues were exposed, including the undeclared wealth of former Supreme Court chief justice Renato Corona, the abuses of Janet Napoles, and the misuse of lawmakers' pork barrel funds.

Other issues put the government in a bad light, such as the Disbursement Acceleration Program (DAP) and the reported delay in the response to Super Typhoon Yolanda victims.

But how do we rate the anti-corruption campaign of the present administration?

Rappler looked at various data and surveys that tried to measure and assess the Aquino administration's campaign.
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Honduran Watchdog: Corruption Revelations Have Only Just Begun

Honduran Watchdog: Corruption Revelations Have Only Just Begun | Global Corruption | Scoop.it
Without a doubt, the corruption scheme unearthed at the Honduran Social Security Institute (IHSS) has unleashed one of the greatest scandals in the nation’s politics of late. Prosecutors have linked AstroPharma, a firm allegedly owned by the family of Congressional Vice-President and ruling National Party bigwig Lena Gutiérrez, to medications of dubious quality at the IHSS, sold at inflated prices.+

The Honduran chapter of Transparency International, the Association for a Fairer Society (ASJ), courageously pointed to apparent inconsistencies in statements by Lena Gutiérrez, who attempted to distance herself from Astropharma.+

On July 3, just days after the Honduran Supreme Court issued an arrest warrant for Gutiérrez, the designated judge granted her and three family members house arrest, apparently in violation of the country’s criminal code.+

Carlos Hernández, director of ASJ, spoke with the PanAm Post regarding the scandal that is shaking the nation.+

+

What triggered the investigations into Astropharma?+

Five years ago, we decided to investigate [the provision of] pharmaceuticals in the country because we heard many rumors of corruption. We conducted a preliminary investigation and found several inconsistencies. This company [Astropharma] stood out because the vice president of Congress was one of the owners, so we filed a complaint with the findings. Throughout the years we have strengthened this investigation and conducted others that have contributed evidence that finally lead to the Public Prosecutor’s Office’s indictments.+
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