Corruption 2012-2017

Transparency International
The International Consortium of Investigative Journalists

Corruption in all its facets thrives on secrecy and on the perception by the corrupt that they are somehow above the law. We must ensure that there are real consequences to corruption.
— Huguette Labelle, Transparency International chair

25 December
The Trump administration sends a commendable signal to despots everywhere
(WaPost Editorial Board) Now, in a surprising and welcome turn of events, the Trump administration has taken action against the kind of people who tormented Mr. Magnitsky under a law that bears his name. Even if President Trump has shown little interest, his administration has launched a commendably aggressive effort to identify and sanction people for corruption and human rights abuses.
The Global Magnitsky Act, passed by Congress last year, is an enlarged version of sanctions legislation originally aimed at Russians and enacted after Mr. Magnitsky’s death in November 2009. Both laws are being implemented in a way that should be a signal to kleptocrats and despots that their misdeeds will have consequences. … the sanctions are about more than just travel. They make it hard to use the international financial system to stash money in the West, and they can also crimp plans by those sanctioned to send their families to luxury condos in Miami and New York.

17 November
Report: Trump Panama Tower ‘Riddled’ With Drug, Mob Money
(Daily Beast) A Panama City condo high-rise development that carried the Trump Organization’s marketing imprimatur in the late 2000s was “riddled” with drug traffickers and international mafia figures, beset with dubious sales, and became, as one financial-crimes investigator called it, a “a vehicle for money laundering.” A joint NBC News and Reuters investigation, along with a report issued by anti-corruption watchdog Global Watch, says transactions at the Trump Ocean Club International Hotel and Tower served as a laundering operation for Colombian cartel proceeds and Russian human traffickers, and Trump Organization officials did little if anything to question where the money was coming from.
Ivanka and the fugitive from Panama
How an alleged fraudster in Panama, working with Donald Trump’s daughter, helped make Trump’s first international hotel venture a success. The broker was in business with a money-launderer and two criminals from the former Soviet Union. Then he fled.
(Reuters) A Reuters investigation into the financing of the Trump Ocean Club, in conjunction with the American broadcaster NBC News, found Nogueira was responsible for between one-third and one-half of advance sales for the project. It also found he did business with a Colombian who was later convicted of money laundering and is now in detention in the United States; a Russian investor in the Trump project who was jailed in Israel in the 1990s for kidnap and threats to kill; and a Ukrainian investor who was arrested for alleged people-smuggling while working with Nogueira and later convicted by a Kiev court.
Three years after getting involved in the Trump Ocean Club, Nogueira was arrested by Panamanian authorities on charges of fraud and forgery, unrelated to the Trump project. Released on $1.4 million bail, he later fled the country.
Ivanka Trump declined to comment on her dealings with Nogueira. A White House spokesman referred questions to the Trump Organization. Alan Garten, the organization’s chief legal officer, said: “No one at the Trump Organization, including the Trump family, has any recollection of ever meeting or speaking with this individual.”

(Reuters) – Saudi authorities are striking agreements with some of those detained in an anti-corruption crackdown, asking them to hand over assets and cash in return for their freedom, sources familiar with the matter said.

16 November
Zimbabwe crisis: Who is ‘Gucci Grace’ Mugabe?
(Straits Times) She is known for deft political maneuvering, a volcanic temper and a reputation for corruption.
As Zimbabweans have been mired in poverty under President Robert Mugabe, Africa’s longest-serving leader, his wife, Grace, 52, became a target of anger over allegations that she siphoned profits from diamond mines and bought luxury palaces. She spent so much money on foreign trips that the European Union imposed sanctions on the Mugabes to stop them from sucking wealth out of the country.

9 November
Saudi Arabia: 201 people held in $100bn corruption inquiry
An estimated 1,700 bank accounts have been frozen in inquiry observers say is power grab by crown prince to sideline rivals
(The Guardian) More than $100bn (£76bn) has been misused through corruption and embezzlement in Saudi Arabia in recent decades, the country’s attorney general has said, as he announced the detention of 201 people as part of a sweeping investigation.
For years, Saudis have complained of rampant corruption and misuse of public funds by top officials in a system where nepotism is also widespread.
Still, Saudi observer Thomas Lippmann said he believes the anti- corruption probe is “a power grab” because it targets only select members of the royal family and business community. He said it was also difficult to draw the line between what constitutes corruption in Saudi Arabia and how business deals, contracts and access have been won over the years.

26 August
Nigeria quantifies its corruption. Yomi Kazeem looked at the country’s first-ever large-scale household survey on corruption, which found that Nigerians pay an average of six bribes per year, or one every two months. While most of the country’s anti-corruption campaigns have focused on government fraud and embezzlement, the survey shows that institutionalized bribery runs deep.

1 February

Towers of Secrecy: Piercing the Shell Companies
(NYT) From Manhattan condominiums to California mansions to gentrifying neighborhoods in Brooklyn, shell companies are increasingly pervasive in the world of real estate. These articles explore the people behind the opaque deals

Corruption and inequality: how populists mislead people
(Transparency International) With the launch of Transparency International’s Corruption Perceptions Index 2016 just five days after Donald Trump’s inauguration as US President, it’s timely to look at the links between populism, socio-economic malaise and the anti-corruption agenda. Indeed, Trump and many other populist leaders regularly make a connection between a “corrupt elite”  interested only in enriching themselves and their (rich) supporters and the marginalisation of “working people”.
Is there evidence to back this up? Yes. Corruption and social inequality are indeed closely related and provide a source for popular discontent. Yet, the track record of populist leaders in tackling this problem is dismal; they use the corruption-inequality message to drum up support but have no intention of tackling the problem seriously. But, first, let’s look at what corruption has to do with inequality and vice versa.
While the anti-corruption community has largely ignored the mutually reinforcing dynamics between corruption and social inequality, there are two quite different movements that made these issues a core element of their campaigning.
First is the emerging global inequality movement – the 99 percenters – spearheaded by progressive NGOs and supported by leftist thinkers, such as Thomas Piketty and Branko Milanovic.
An influential 2014 report by Oxfam, titled Working for the Few summarises the main point: “Extreme economic inequality and political capture are too often interdependent. Left unchecked, political institutions become undermined and governments overwhelmingly serve the interests of economic elites to the detriment of ordinary people.” In other words, corruption can flourish when elites control the levers of power without any accountability.
The second movement that links corruption and inequality is also global but it is not progressive. It is reactive, nativist and often right-wing. It is exemplified by politicians like Trump in the US, former Prime Minister Jarosław Kaczyński in Poland and presidential candidate Marine le Pen of the National Front in France.

2016

9 December
(Quartz) South Korea voted to impeach its president. The parliament voted 234 to 56 to impeach Park Geun-hye over an influence-peddling scandal featuring her close confidante, Choi Soon-sil. South Koreans have staged mass protests demanding her resignation in recent weeks. Park is now suspended and the constitutional court has six months to uphold or reject parliament’s motion.
5 December
How Republicans Justify Unlimited Trump Corruption
By Jonathan Chait
(NY Magazine) The notion that Trump’s conflicts of interest represent some hypothetical future case that may or may not arise is bizarre. For one thing, his unprecedented lack of transparency means the full extent of his financial interests will not be known to the public. If business leaders were giving Trump and his family stock or gifts in return for favorable policy, we would have no way to know. For another, a president-elect has power; since everybody knows Trump will become president soon, they have no reason to wait before ingratiating themselves with him. And even without public disclosure, reporters have already uncovered numerous conflicts of interest. Jeremy Venook has collected a dozen, a list that is already out of date.
27 August
Anonymous, Inc.
See what happens when hidden cameras capture New York lawyers being asked to move highly questionable funds into the U.S. Steve Kroft reports.
(CBS News 60 Minutes) If you like crime dramas and movies with international intrigue, then you probably have a basic understanding of money laundering. It’s how dictators, drug dealers, corrupt politicians, and other crooks avoid getting caught by transforming their ill-gotten gains into assets that appear to be legitimate.
They do it by moving the dirty money through a maze of dummy corporations and offshore bank accounts that conceal their identity and the source of the funds.
And most of it would never happen without the help — witting or unwitting — of lawyers, accountants and incorporators; the people who actually create these anonymous shell companies and help move the money. In fact, the U.S. has become one of the most popular places in the world to do it.
Tonight, with the help of hidden camera footage, we’re going to show you how easy it seems to have become to conceal questionable funds from law enforcement and the public.
You need look no further for evidence than the changing skyline of New York City, where much of the priciest residential real estate is being snapped up not by individuals, but by anonymous shell companies with secret owners.
Embattled Maldives President Faces Accusations of Corruption, Past and Present
President Abdulla Yameen of the Maldives, who is under pressure to step down, faces allegations of corruption dating back more than a decade, including oversight of questionable oil sales to a Myanmar dictatorship under economic sanctions.
Mohamed Nasheed, who became the country’s first democratically elected president in 2008 but was forced to resign in 2012, contends that a state-owned company once led by Mr. Yameen sold nearly $300 million worth of oil to Myanmar’s military dictatorship in the early 2000s. Later, Mr. Nasheed said, nearly half the money disappeared.
In his first public comments on the oil deal, Mr. Nasheed said he believed that his attempt as president to recover as much as $137 million of the missing money had been a significant factor in his ouster and subsequent imprisonment. He also contended that Mr. Yameen was now using the presidency to enrich himself, and that Mr. Yameen and his associates had received kickbacks from the sale of government-owned islands.
6 August
Fifa is awful, but the Olympics takes the gold medal for sleaze
This is the titanic battle. When one of them behaves shamefully, the other contrives to be even worse
(The Guardian) This week the former chief investigator for Wada detailed how his efforts to investigate Russian doping were frustrated – frequently by Wada, he alleges – and offered his take on the fact that despite all the revelations and all the IOC’s power, 271 Russian athletes will be competing in Rio. “The action the IOC took has forever set a bar for how the most outrageous doping and cover-up and corruption possible will be treated in the future.”
As that verdict makes clear, this catastrophic moment in the pursuit of sporting integrity must not be conveniently confined to Russia. It is much bigger than Russia, though it must be said Russia is, at least to my knowledge, the only country where the sudden death of the first head of its anti-doping unit was followed two weeks later by that of his successor. It’s often said that sudden heart attacks are no respecters of class or wealth, but they do arguably show a certain deference to the Russian security services.
I should say that I love the Olympics, which up until now have always ended up being rescued by the athletes once competition begins. Their fortnight of feats and fables eradicate the months and years of government overspending, martial displays, human rights abuses, neighbourhood cleansing, and all the other adorable fascist quirks that are an essential part of the undercard to any modern sporting mega-event. Once the games themselves started, you still had the sport. With a good few exceptions, of course, and a good few more suspicions – yet still not sufficient enough to wreck it. …
I’ll watch it, of course, and I’m sure there will still be plenty of marvellous moments – though I expect to develop RSI from all the eye-rolling. I can’t say precisely when the fatal tipping point came. I know that 10 years ago, I would have speculative discussions about which top athletes might be doping. Now I have discussions about which might conceivably not be.
Corruption at the IOC level is nothing new: on August 2nd, PBS aired the devastating documentary The Nazi Games – Berlin 1936  [that] chronicles the story of how the Nazis and the International Olympic Committee (IOC) turned, to their mutual advantage, a relatively small, elitist, sports event into an epic global and mass media spectacle that, despite the IOC’s determined attempts to forget, continues to this day. The grand themes from the 1936 Games are repeated with every quadrennial reprise: architectural grandiosity, catastrophic budget overruns, corruption, bribery, collusion with unsavory characters–including dictators and autocrats–and the unrelenting myth of heroic physical achievement. Despite the modern Olympic Games being “revived” in 1896 in Athens, the Games as we have come to know them were shaped by the collaboration of interests between the Nazis and the IOC in Berlin in 1936. The Olympic temple is not as virtuous as its acolytes insist, and in fact, it is merely a façade that hides earthly, and often insidious, actors who see collusion with the Nazis was a first step in a global deception. One of the worst was Avery Brundage who later reigned over the IOC for 20 years.
31 July
Malaysia’s new national security law gives Najib, army, police new powers, amid 1MDB probe
(CNBC) That represented a major expansion of powers for Najib, who has been embroiled in a scandal over funds allegedly funneled away from Malaysian state wealth investment fund 1MDB.
Malaysia’s Leader, Dogged by a Billion-Dollar Scandal, Proves Untouchable
(NYT) This month, the Justice Department filed a civil complaint in a money-laundering case outlining how Mr. Najib, identified as “Malaysian Official 1,” received $731 million from a government fund he oversaw. Investigators around the world are tracking the money trail to his bank accounts in what has become a billion-dollar scandal.
The bank transfers are not the first scandal to threaten the career of Mr. Najib, 63, one of America’s most important allies in Southeast Asia. Over the years, he has been accused of having ties to a murder, taking kickbacks from the purchase of military hardware and helping concoct a criminal prosecution against a rival.
He has deployed the formidable powers of his office to impede investigations, silence critics, block media outlets and maintain the backing of his largely rural, Muslim base. He has deftly played Malaysia’s brand of money politics, distributing cash to buy party leaders’ loyalty.
Not sure of the reliability of the post below
Malaysian PM Najib Razak indicted in multi-billion dollar embezzlement scandal, is seeking immunity in exchange for testimony against the Rothschilds
The indictment is calling for the seizure of all the profits from the Hollywood hit movie The Wolf of Wall Street, because it was financed with embezzled funds. The indictment also mentions Saudi Arabian royals, Goldman Sachs, JP Morgan and Bank Privee Edmond de Rothschild.
The CIA sources source say Najib has asked for immunity and placement for him and his family in the witness protection program in exchange for testifying about the links between the embezzlement scandal, the Rothschild family and missing Malaysian Airlines flight 370.
29 May
UK is most corrupt country in the world, says mafia expert Roberto Saviano
‘It’s not the bureaucracy, it’s not the police, it’s not the politics but what is corrupt is the financial capital’
25 May
World Bank dupes our Supreme Court
In its apparent ignorance of the World Bank’s culture of corruption, Canada’s Supreme Court ruled that the World Bank’s need to maintain immunity effectively trumped the needs of Canadians to our traditional right to “make full answer and defence.”
A Supreme Court decision involving the World Bank and Canadian engineering giant SNC-Lavalin could threaten fair trials for falsely accused Canadians in the future and help corrupt Canadians to escape punishment. Patricia Adams of Probe International for the Financial Post.
(Probe International) The Supreme Court – seemingly unaware of evidence to the contrary – all but declared the World Bank to be one of the world’s premier corruption fighters, a characterization the World Bank is now gleefully spreading far and wide, including this week in a hastily arranged panel discussion in Washington, D.C.
U.S. lawmakers have warned about corruption at the World Bank and its sister multilateral development banks (MDBs) for two decades. In 2004 hearings before the Senate Committee on Foreign Relations, Northwestern University’s Jeffrey Winters testified that, since the World Bank’s creation in 1946, roughly $100 billion in World Bank loans, and another $100 billion from MDBs, went into private pockets. …
As an internal report to the Bank itself found, Bank loans often cannot be accounted for because loans given to Third World governments, many of them governed by lifer-leaders, are impossible to track down. Moreover, these borrower nations, with nearly a majority of the shares and votes, regard anti-corruption campaigns as an infringement of their sovereignty. As the Wall Street Journal concluded in an assessment of the World Bank’s governance, “the inmates are now in charge.”
Panama Papers confirm Canadian billionaire and university benefactor as mystery man in global bribery case
McGill and York need better ‘due diligence’ after accepting donations from embattled tycoon, critic says
He has hobnobbed with the Queen and Bill Clinton. Donated a small fortune to Canadian universities. Runs a billion-dollar global business empire. And glides effortlessly in the highest echelons of corporate and political power.
Now, a joint CBC/Toronto Star investigation based on the Panama Papers provides the closing chapter in a years-long saga involving Canadian tycoon Victor Dahdaleh, which saw him battle criminal charges and a billion-dollar lawsuit on two continents over an international bribery scandal — all the while forging close ties with a trio of Canadian universities.
23 May
The average city dweller in Kenya pays 16 bribes a month
(Global Post) In a country where “activist” is a dirty word, [anti-corruption activist 32-year-old Boniface] Mwangi is a fearless, relentless firebrand. He’s a former journalist whose political activism is often a performance; he once covered pigs with fake blood outside parliament. … He runs Pawa254, a collective that tries to increase awareness of corruption through art, music, and high-profile events. Many might consider him over the top, but what he’s fighting is often similarly outrageous — and well-documented. Ninety-nine percent of the bribes that Kenyans pay are demanded by government officials, state employees and the police, according to Transparency International.
13 May
By ignoring corruption’s colonial roots, Cameron’s summit was destined to fail
Hadassah Egbedi
Nigeria may be corrupt, but denying the historical role Britain and others played in this rendered the event useless, argues Ventures Africa
(The Guardian) It is not far fetched to argue that these “networks of secrecy” in the UK and other European countries have helped to perpetuate fraud, money laundering, bribery, political impunity, and even devastating violence in affected countries, many of them in Africa.
That Nigeria’s politics suffers from corruption is not up for debate. At the same time, “fantastic” corruption in a globalised world is reliant on enablers, often the finely suited businessmen and politicians from developed nations who value rule of law at home but think nothing of subverting law and order in emerging markets.
11 May
Nigeria rebuffs David Cameron over corruption remarks
(Al Jazeera) President Buhari says he does not want an apology from the British PM for calling his country “fantastically corrupt”
The response on Tuesday came after Cameron was caught on tape saying in front of Queen Elizabeth II that “some leaders of some fantastically corrupt countries [are] coming to Britain” for an anti-corruption summit.
“Nigeria and Afghanistan, possibly the two most corrupt countries in the world,” Cameron said as Buhari and Afghanistan’s President Ashraf Ghani were due to attend the anti-corruption conference hosted by the Commonwealth Secretariat in London.
7 May
Hon. David Kilgour remarks at the second annual Anti-Corruption Symposium
He examines the cases of Botswana, Canada, China and Russia.
11 April
How widespread corruption is hurting Kenya
Other countries have mafia. In Kenya, the mafia have a country.
(PBS Newshour) In Kenya, corruption and bribery are commonplace in law enforcement and the government. Many police officers seem more interested in keeping citizens’ cash than keeping the peace, allowing criminals to get off. Meanwhile, the government has “misplaced” $999 million. Special correspondent Nick Schifrin and producer Zach Fannin report in partnership with the Pulitzer Center on Crisis Reporting.
The World Bank says Kenya is growing faster than any other sub-Saharan African country. But there is one major impediment to the country’s continued growth. … The wealth gap here makes the corruption more egregious. According to one study, Kenyans pay on average 16 bribes every month. And in a city where the bus fare is less than a dollar a ride, members of Parliament here makes 188 times the average salary, which is the equivalent of a member of the U.S. Congress making $8.5 million every year.
Hon. David Kilgour: Panama Papers May Trigger Demand for Good Government
(Epoch Times) The emerging tsunami for better governance provoked by the Panama Papers might just succeed. If it does, the first target should be tax loopholes deliberately created to benefit favored corporations and/or individuals. The rule of law must return to replace rule by lawyer.
9 April
The corrupt roots of global extremism. The explosive release of the Panama Papers offers an important opportunity to examine the role of corruption and socioeconomic inequality in the radicalization of terrorists. What do offshore bank accounts of the international elite have to do with violent extremism bred in neighborhoods that know no such affluence? For starters, as Haroon Moghul explains, when people know the system is rigged, some are bound to turn their anger outwards.
8 April
Those Who Are (and Are Not) Sheltered From the Panama Papers
(Stratfor) the effects of the leaks are not evenly spread; the documents contained far more information about the offshore activities of individuals in the developing world than in the developed world. Whatever the reasons for the imbalance, it will likely limit the papers’ impact. In the developing world, long histories of corruption have dulled the public’s sensitivity to scandal, and repressive governments leave little room for popular backlash.
So although less information was released on Western leaders, it is already doing more damage. Iceland’s leader has left his post, and relatively minor revelations have had a disporportionately large impact in the United Kingdom and France. Meanwhile, in the developing world, the Panama Papers’ effects have been most strongly felt in the former Soviet Union, a region in which political tensions were already high. The leaks’ results have been more mixed in China, where they have provided new targets for the anti-corruption drive already underway but have also implicated figures close to the administration’s upper ranks.
Five things you need to know about the Panama Papers
(Open Canada) This leak is just the tip of the iceberg. From Prime Minister Trudeau’s reaction to what’s next, here’s what Canadians should know about the issue
The CBC and the Toronto Star reported that among the hundreds of thousand of files was the passport information of 350 Canadians. So far only a few stories have broke regarding Canadian individuals and institutions, but both media companies promise more in the coming weeks. Some Canadian connections that have been revealed so far:
–A Canadian art research firm was involved in fighting for possession of a C$35 million Modigliani painting supposedly stolen by the Nazis, according to the Star.
–Helene Mathieu, a lawyer from Quebec currently based in Dubai, has provided legal services to almost 900 companies, including three tied to violence in Syria, registered in well-known tax havens, according to the Star.
–Both the CBC and the Star reported Monday that the Royal Bank of Canada (RBC) and its subsidiaries helped clients set up 378 offshore companies. The RBC is denying any wrongdoing.
–The Star also named five people who have registered companies through Mossack Fonseca, including a Montreal resident facing criminal charges in the U.S., a former Newfoundland cabinet minister, and a mixed martial arts trainer from Vancouver.
7 April
Are the Russians actually behind the Panama Papers?
By Clifford Gaddy
(Brookings Institution) In sum, my thinking is that this could have been a Russian intelligence operation, which orchestrated a high-profile leak and established total credibility by “implicating” (not really implicating) Russia and keeping the source hidden. Some documents would be used for anti-corruption campaigns in a few countries—topple some minor regimes, destroy a few careers and fortunes. By then blackmailing the real targets in the United States and elsewhere (individuals not in the current leak), the Russian puppet masters get “kontrol” and influence.
If the Russians are behind the Panama Papers, we know two things and both come back to Putin personally: First, it is an operation run by RFM, which means it’s run by Putin; second, it’s ultimately about blackmail. That means the real story lies in the information being concealed, not revealed. You reveal secrets in order to destroy; conceal in order to control. Putin is not a destroyer. He’s a controller.
(Seeking Alpha) Panama promised to improve transparency… President Juan Carlos Varela is to appoint an international “panel of experts” to oversee the country’s offshore financial industry, after the huge document leak from Panamanian law firm Mossack Fonseca revealed the extent of its work on behalf of the global elite.
…and the Panama Papers claimed another victim. Michael Grahammer, the chief executive of Austria’s Hypo Landesbank Vorarlberg, resigned after the Mossack Fonseca leak revealed his bank was connected to offshore companies through trustees in Liechtenstein. He is one of the first financial leaders to quit over the revelations.
Iceland named a new prime minister. Agriculture minister Sigurdur Ingi Johannsson will take over following the swift resignation of Sigmundur David Gunnlaugsson this week after the Panama Papers revealed his offshore holdings and sent the anti-establishment Pirate Party high in the polls.
6 April
Numerous links to other media
These 5 Facts Explain the Massive Political Fallout from the Panama Papers
When it comes to the Panama Papers, it’s not the laws that were broken that will matter. It’s the perception for politicians
4 April
Panama Papers: a massive document leak reveals a global web of corruption and tax avoidance
(Vox)  Mossack Fonseca is not a household name, but the Panamanian law firm has long been well-known to the global financial and political elite, and thanks to a massive 2.6-terabyte leak of its confidential papers to the International Consortium of Investigative Journalists it’s about to become much better known. A huge team of hundreds of journalists is poring over the documents they are calling the Panama Papers.
The firm’s operations are diverse and international in scope, but they originate in a single specialty — helping foreigners set up Panamanian shell companies to hold financial assets while obscuring the identities of their real owners. Since its founding in 1977, it’s expanded its interests outside of Panama to include more than 40 offices worldwide, helping a global client base work with shell companies not just in Panama but also the Bahamas, the British Virgin Islands, and other notorious tax havens around the world.The documents provide details on some shocking acts of corruption in Russia, hint at scandalous goings-on in a range of developing nations, and may prompt a political crisis in Iceland.
But they also offer the most granular look ever at a banal reality that’s long been hiding in plain sight. Even as the world’s wealthiest and most powerful nations have engaged in increasingly complex and intensive efforts at international cooperation to smooth the wheels of global commerce, they have willfully chosen to allow the wealthiest members of Western society to shield their financial assets from taxation (and in many cases divorce or bankruptcy settlement) by taking advantage of shell companies and tax havens.
What are the Panama Papers? A guide to the biggest data leak in history
What is Mossack Fonseca, how big is it, and who uses offshore firms? Key questions about one of the biggest ever data leaks

• Revealed: the $2bn offshore trail that leads to Vladimir Putin
• How the world’s rich and famous hide their money offshore
• Panama Papers: global reaction – live

The Panama Papers leak, explained with an adorable comic about piggy banks
(Vox) It’s easy to get confused by all the headlines about the Panama Papers, a massive 2.6-terabyte leak of documents that reveals a global web of corruption and tax avoidance. But Vox’s German Lopez uncovered a great explanation of what’s happening, and it’s courtesy of brilliant redditor DanGliesack. He uses piggy banks to help explain the main (and complicated-sounding) thing that was happening in Panama: foreigners setting up Panamanian shell companies to hold financial assets that obscure the identities of their real owners. We thought this analogy was quite fitting for a comic, so we created these illustrations to explain the key issue at the heart of the Panama Papers scandal.
The Panama Papers: Massive Leak Reveals the Global Elite’s Secret Cash Havens(VICE) The massive leak — dubbed the “Panama Papers” — includes more than 11.5 million documents and implicates 72 current and former heads of state. The documents were obtained by the German newspaper Suddeutsche Zeitung (SZ) and shared with the International Consortium of Investigative Journalists (ICIJ).
“The leak exposes the offshore holdings of 12 current and former world leaders and reveals how associates of Russian President Vladimir Putin secretly shuffled as much as $2 billion through banks and shadow companies,” the ICIJ wrote in its overview of the leak on Sunday. “The files contain new details about major scandals ranging from England’s most infamous gold heist, an unfolding political money laundering affair in Brazil and bribery allegations convulsing FIFA, the body that rules international soccer.”
How Reporters Pulled Off the Panama Papers, the Biggest Leak in Whistleblower History
On Sunday, more than a hundred media outlets around the world,coordinated by the Washington, DC-based International Consortium of Investigative Journalists, released stories on the Panama Papers, a gargantuan collection of leaked documents exposing a widespread system of global tax evasion. The leak includes more than 4.8 million emails, 3 million database files, and 2.1 million PDFs from the Panamanian law firm Mossack Fonseca.
3 February
Lawmakers call for change after 60 Minutes report
After watching Steve Kroft’s 60 Minutes story, members of Congress say it shouldn’t be so easy to conceal ownership of companies
On Sunday, 60 Minutes aired a story in which hidden camera footage showed what happened when New York City attorneys were presented with a pitch to help move questionable funds into the U.S. Some, including a former president of the American Bar Association, offered off-the-cuff advice on how it could be done. Only one attorney flatly declined to help, and ended the meeting.

2015

The politics of corruption — Squeezing the sleazy
Global anti-corruption efforts are growing in scope and clout. This year is set to be the best yet
(The Economist) IMPUNITY and euphemism used to be daunting obstacles for graft-busters. Not any more. International efforts are bearing fruit. New laws have raised the cost of wrongdoing. Financial markets are punishing corrupt companies. Most encouraging, activists have growing clout not only in high-profile cases but at grassroots level, where the internet helps to highlight instances of “quiet” (low-level) corruption.
The big international bodies dealing with corruption are making progress. A working group set up in 2010 by the G20 (the world’s largest economies) has done more than many observers expected, particularly in drawing up rules on seizure of corrupt assets and denial of visas to corrupt officials. Unlike the United Nations Convention Against Corruption, the G20 is not so far split between keen sleazebusters and countries like Russia and China. Another body, the Paris-based Financial Action Task Force, will start a fourth round of monitoring member states next year, chiefly for effectiveness in implementing anti-money-laundering laws. (15 December 2012)

The recent publication of the 2014 Transparency International Global Corruption Index has provoked the following  exchange among a group of Wednesday Nighters.
22 July
You do have a point. However, I have understood that Transparency tries to take all forms of corruption in its evaluation. That might be why the US does not come out flags flying. Whatever parameters are used, some countries do get different results than others. TB

An additional note on corruption. How do we define it?
When I was on the board of governors at the OECD we tried to sign an anti-corruption treaty vis-à-vis non-member countries. We specifically tried to stop the bribing of officials to get corporate contracts.
At this point the relativity of views became evident.
The American Delegation thought that giving a baksheesh to a petty functionary to accelerate the signing of a deal was corruption. But to give large subsidies to a ruling party or another party that we wished would become the ruling party, was OK.
The Americans transposed from their own democracy where elections are influenced by huge money subsidies and they consider that fair and square.
The other ambassadors thought this attitude was absurd. In both cases he who pays the piper calls the tune and the more you pay the piper, the more you can call the tune.
Having lived many years in Egypt, my own feeling is that the petty baksheesh, not to do something illegal but to accelerate the implementation of a legal deal, is less morally reprehensible than the huge subsidies to the government in charge. Yet, we in the West, think nothing about supporting foreign governments with money and contracts, as long as we like what they are doing.
I submit that we should introduce a dose of cultural relativity in our cross cultural analyses.
The world cannot be overnight reduced to the value system of the U,S, Canada, Finland or France. Especially when our own value systems need themselves, to be revised. KV

Transparency does not scrutinise tax-evasion only, but corruption on all levels in all forms. It compares nations as to the level of this “total corruption”. It does not say that there is no corruption in Finland or Denmark, it says that compared to most other nations there is less. TB

True enough. But this is also the case for organized crime. Very difficult to estimate yet we know it’s there.
As a betting man I would wager that the informal economy is actually much bigger than we think it is. Remember the housewife problem : household services by non working wives not measured. If they were measured by going through the money economy that would increase the GDP. There are many equivalents. Unmeasured and unmonitored value creation not going through the monetary exchanges.
In addition consider self service. We now produce a lot, especially in the informatics field by ourselves. Remember Jay Gershuny in the seventies in his book the Myth of the Service Economy. Remember Albin Toffler’s concept of the Prosumer, a consumer-producer all in one.
As technology advances we could all become prosumers. The more prosumers in self service mode the bigger the informal economy.
In fact I am wondering if the Informal Economy may not, one day surpass the GDP. Just a thought. KV

21 July
Another thing we should subject to scrutiny are estimates of the informal economy. The usual process is to derive them from the observed volume of cash and use a velocity multiplier. I would hate to risk my life on such estimates. Tony

Which raises two interesting points :
1. Are fiscal optimization procedures using high powered accountants and lawyers morally ok while paying a cleaning lady under the table not ok ? The fiscal optimization procedures are by definition legal. Tax evasion is by definition,illegal.
Legal tax avoidance and the use of tax havens is a thorny question, especially when it involves great sums of money. A code of ethics which could cover both legal tax avoidance and illegal tax evasion should, in my opinion, be drafted. After all isn’t this what Warren Buffett has been calling for, when he said that he deplored the fact that he was paying less taxes than his secretary ?
2, The shadow economy is often advanced as a indicator of illegal and immoral tax evasion. It used to be called the Informal Economy to include the ‘black’ brown and grey economies. It includes barter exchanges and transactions not involving legal tender. May take the form of a holiday home exchange, a dentist offering his services to his plumber and vice versa.
Are all such transactions necessarily culpable? This is what is implied by the term shadow economy. A pejorative word.
On the contrary, some may even argue that the strong Informal Economy in Greece (26% of GDP) similar to other informal economies (Belgium 21%, Israel 20%, Hungary 23%, Italy 26%, Russia 53%, Brazil 40%) helped Greeks survive the long six year recession. It acts as a safety net, a community exchange when the Government takes your money and closes banks.
On way or the other, I believe that, in the matters of corruption and tax evasion and avoidance, much of the conventional wisdom should be subjected to challenge and scrutiny.
KV

Tax evasion this is not. It is a legal dispute involving the applicability of a portion of VAT, where the agreed process of international arbitration (the usual means of dispute settlement written into such contracts) upheld Hochtief. The final outcome is not clear from the article, but the worst that could be said is that Hochtief has so arranged its affairs as to minimize its tax bill. That activity is known as tax avoidance (not evasion!) and its legal. Unfortunately, tax avoidance does not make headlines and sells no papers. Tony

May be of interest in the tax evasion debate.
The German Hochtief Company, in charge of managing Athens Airport has been accused of being the biggest tax evader in Greece, in recent yours.
Does this count as Greek tax evasion, German tax evasion or both ? KV

2014

11 December
Canadian Firm Recoups Cash in Bribery Case
SNC-Lavalin to Get $13.3 Million as Part of Probe Tied to Family of Former Libyan Dictator Gadhafi
(WSJ) One of Canada’s largest companies, claiming it was duped by its own executives, is recouping more than $13 million that was recovered in a bribery probe tied to the family of former Libyan dictator Moammar Gadhafi.
The judgment to return the money to SNC-Lavalin Group Inc. comes as Canada’s federal police are conducting a criminal investigation into the Montreal-based engineering and construction company’s alleged participation in bribery schemes in at least three countries, according to people familiar with the investigation.
The payment to SNC-Lavalin has surprised many lawyers involved with stolen-asset recovery efforts, because the work has been focused on returning ill-gotten gains to the countries, not firms whose officials paid bribes.
Investigators in Canada and elsewhere are probing whether SNC-Lavalin paid bribes through shell companies to the Gadhafi family as well as officials in Tunisia and Bangladesh. Another investigation involves company officials and an alleged scheme in Canada.
3 December

How the world’s biggest companies bribe foreign governments—in 11 charts

(Washington Post) Corruption knows no boundaries, or borders, according to a new study released by The Organization for Economic Cooperation and Development.
The OECD analyzed 427 foreign bribery cases that were closed between 1999 and 2014. What the researchers found is a steady stream of illicit money exchanges between multinational businesses and public officials in both poor and rich countries.
“We have learned that bribes are being paid across sectors to officials from countries at all stages of economic development,” the researchers wrote. “Corporate leadership is involved, or at least aware, of the practice of foreign bribery in most cases, rebutting perceptions of bribery as the act of rogue employees.”
Although the number of foreign bribery cases resulting in a punishment has fallen since its peak in 2011, it remains historically high.
Mapped: The world’s most corrupt officials
(Telegraph UK) Corruption among officials is most prevalent in Somalia and North Korea while the country where the authorities are seen as least likely to take a bribe is Denmark, according to an authoritative new study.
Britain is ranked as the 14th least corrupt nation, the same ranking as last year and three places better than in 2012, in Transparency International’s study of corruption in 175 nations.
Out of a possible score of 100, where a higher number indicated less bribery, Britain scored 78. The best rated country was Denmark with a score of 92, followed by New Zealand on 91 and Finland on 89.

2013

Corruption clamp-down
(RCI)  Canada has been criticized for not doing enough to stop Canadian companies from bribing foreign officials. Now the government has proposed changes to the law to correct that.
The amendments would close a loophole that made it difficult to prosecute Canadians who pay bribes outside of the country. It would increase the maximum sentence for bribing a foreign official from a maximum of five years to 14.
The proposed changes would also outlaw something called “facilitation payments.” That is money paid to foreign officials which may not be directly connected to a business deal. For example, a customs official may be bribed to allow construction materials to pass into a country. The changes would also make it illegal for companies to not report money spend on bribes in their own financial records.
31 January
Hackers in China Attacked The Times for Last 4 Months
(NYT) The timing of the attacks coincided with reporting for an investigation that found that the relatives of China’s prime minister had accumulated a fortune worth several billion dollars through business dealings. (BBC) The hackers used methods which have been “associated with the Chinese military” to target the emails of the report’s writer, the paper said. China’s foreign ministry dismissed the accusations as “groundless”.
19 January
Is society inherently corrupt?
A look at the global arms industry and the effect corruption has on our politics, society and culture.
(Al Jazeera) Redi Tlhabi takes a look at the effect corruption has on our politics, society and culture.
Redi talks to Andrew Feinstein, a former parliamentarian and co-founder of Corruption Watch UK, an organisation dedicated to exposing bribery and corruption. Feinstein is also a whistleblower on illegal arms deals and the author of the book, The Shadow World: Inside the Global Arms Trade, that investigates the dark side of this trillion-dollar industry. …
“It’s estimated that the trade in weapons accounts for around 40 percent of all corruption in all world trade .…The thing that I think is so important about it is it runs to the core of the way we’re governed, because the trade in weapons is extremely closely tied into the mechanics of government. The defence manufacturers, those who make the weapons, are closely tied in to governments, to militaries, to intelligence agencies and crucially to political parties. So they have enormous influence.” …
“The global trade in weapons is regulated less than the global trade in bananas. We’re producing something that kills people. Surely it should be amongst the most highly regulated products that are produced on this planet.”
12 January
CBC’s Doc Zone Counterfeit Culture is a one-hour documentary that explores the dangerous and sometimes deadly world of fake, fraudulent, and faux products. The imitation industry has a long history of peddled knock-off designer handbags, watches, and shoes but during the last 25 years, it has mushroomed into a global phenomenon.
The range of counterfeit goods now being produced includes pharmaceuticals, food, toys, electronic goods, car parts, and microchips. The traffic in counterfeit goods is now estimated at a staggering $700 billion representing nearly 10% of all global trade. This illicit and highly profitable criminal enterprise continues to grow unabated and has been linked to organized crime syndicates around the world.

2012

27 December
Montreal’s corruption culture ‘needs to be wiped out,’ whistleblower says
(Globe & Mail) Every single elected official who has been around Montreal city hall for more than a few years must be thrown out of office, according to André Cédilot, a long-time crime writer who first blew the whistle on corruption in the greater Montreal region in the early 1990s. … In 2013, Montrealers will have their chance to throw the bums out. A civic election will take place in November, punctuating a year that will see both the Charbonneau Commission and the province’s anti-corruption squad hit full stride while the first kickback prosecutions go to trial. The revelations of 2013 may make 2012 look like a mere preface.
26 December
Chinese Officials Find Misbehavior Now Carries Cost
(NYT) The Chinese have become largely inured to tales of voracious officials stockpiling luxury apartments, $30,000 Swiss watches or enough stolen cash to buy their mistress a Porsche.
But when images of a bulbous-faced Communist Party functionary in southwest China having sex with an 18-year-old girl spread on the Internet late last month, even the most jaded citizens took note — as did the local party watchdogs who ordered his dismissal.
These have been especially nerve-racking times for Chinese officials who cheat, steal and bribe. Since the local bureaucrat, Lei Zhengfu, became an unwilling celebrity here, a succession of others have been publicly exposed. And despite the usual cries of innocence, most have been removed from office while party investigators sort through their bedrooms and bank accounts.
19 December
Wal-Mart: Probe Continues In Mexico Bribery Case
Wal-Mart Stores Inc. said Tuesday that it is continuing an internal probe into allegations its Mexico subsidiary paid bribes to get stores built and will cooperate with any investigations by authorities.
The company’s statement came in response to a new report by The New York Times saying 19 store sites across Mexico were the target of Wal-Mart bribes.
Among those stores is one near Teotihuacan, the site of the famous pyramids outside Mexico City. The Times said Wal-Mart de Mexico paid more than $200,000 to circumvent zoning and other laws preserving archaeological sites to get the store built in 2004.
7 December

The Corruption Pandemic

Why corruption is set to become one of the defining political issues of the 21st century.
(Foreign Policy) Laurence Cockcroft is worried about global warming. Yes, like many of us, he’s concerned about the implications of rising temperatures. But he’s also aware of another danger that most people have probably overlooked — namely, the link between climate change and corruption.
So what could these two things possibly have to do with each other? A lot, it turns out. As Cockcroft points out, many forms of environmental destruction are against the law in the places where they happen, but the perpetrators — illegal loggers, say, in countries like Brazil, Indonesia, or the Congo — often resort to corruption to evade the law.
But there’s an even more interesting angle, too. Some of the mechanisms that the international community has put in place to tackle climate change, Cockcroft says, are potentially vulnerable to abuse. Carbon trading has proven notoriously susceptible to fraud. Rich countries are already committing hundreds of billions of dollars to funds that are supposed to compensate poorer nations for the cost of adapting to global warming.
The amounts involved, Cockcroft warns, are potentially bigger than all the money currently spent on development aid. So that makes them a tempting target for graft — especially when you consider how much of the money spent on aid projects in the past has been lost to corruption. “If corruption undermines those funds the way it has undermined a lot of aid programs,” he says, “it could prove a big obstacle to restricting temperature rises to less than two degrees before 2050.”

US starts a new ‘cold war’ over Magnitsky affair: Furious Russia vows to list Americans blocked from entering country, after US votes to name and shame corrupt officials
Russian Ministry of Foreign Affairs described ‘biased approach’ as ‘nothing but a vindictive desire to counter Russia in world affairs’
(The Independent) Yesterday the US Senate voted to name and shame Russian officials involved in corruption and to forbid them from travelling to America or investing there.
The overwhelming vote in favour of the new law prompted a furious response from Moscow – as well as demands from two former British Foreign Secretaries, Sir Malcolm Rifkind and David Miliband, for a similar ban to be introduced by the UK.
5 December
Off with Their Heads — Has Vladimir Putin lost control of his “corruption crackdown”?
(Foreign Policy) Over the past month, a surreal new element has come to dominate Russia’s nightly news. At times it feels like some sort of hybrid reality show, as if the Kremlin’s propaganda men have started splicing episodes of MTV Cribs with episodes of COPS. The entrancing new genre was born from the purge that President Vladimir Putin launched in October — the first anti-corruption campaign he has ever attempted — and it has made for excellent television.
Viewers have been treated to commando raids on posh apartments, seized boxes of diamonds and gold, stacks of bribe money being fed by police into counting machines that look about ready to burst. Perhaps most satisfying of all, for the millions of workaday Russians watching at home, has been the sight of once-mighty bureaucrats groveling for sympathy, clemency, or bail. That schadenfreude is part of the point. Purges are meant to be popular.

The world’s most corrupt region and country in 2012

(Emerging Markets) The levels of “bribery, abuse of power and secret dealings” are still “very high” in many emerging countries, Transparency International said
Two thirds of the 176 countries ranked in Transparency International’s index on corruption perceptions scored below 50 this year on a scale from 0 (perceived to be highly corrupt) to 100 (seen as very clean), the non-profit organization said.
Denmark, Finland and New Zealand all tied as the least corrupt countries in the world, with 90 points, while Somalia, North Korea and Afghanistan were perceived as the most corrupt with 8 points, the Transparency International Corruption Perceptions Index 2012 showed.
“While no country has a perfect score, the majority of countries score below 50, indicating a serious corruption problem,” Huguette Labelle, Transparency International chair, said.
“Corruption in all its facets thrives on secrecy and on the perception by the corrupt that they are somehow above the law. We must ensure that there are real consequences to corruption.”
By geographical region, Eastern Europe and central Asia was perceived as the most corrupt, with 95% of countries scoring below 50. Georgia – where a drastic reform of police forces which has seen thousands of officers replaced was carried out relatively recently – was ranked as the least corrupt with Turkmenistan and Uzbekistan perceived as the most corrupt.
28 November
Alexander Perepilichnyy: Supergrass who held key to huge Russian fraud is found dead in Surrey
Body of exiled businessman involved in Magnitsky case discovered on luxury private estate
The Independent has learned that Mr Perepilichnyy was a key witness against the “Klyuev Group”, an opaque network of corrupt Russian officials and underworld figures implicated in a series of multi-million pound tax frauds and the death in custody of the whistle-blowing Moscow lawyer Sergei Magnitsky. He is the fourth person to be linked to the scandal who has died suddenly.
Evidence provided by Mr Perepilichnyy detailed how a number of tax officials from Moscow became obscenely wealthy in the immediate aftermath of a tax fraud against a British investment fund and used Swiss based bank accounts to purchase luxury properties in Dubai and Montenegro.
21 November
Political Provocateurs Expose Kenya’s “MaVultures”
(IPS) – A new website linking corruption and other scandals to high-ranking Kenyan politicians, created by a team of political provocateurs, has become one of the most-visited web pages in the country.
MaVulture.com, which means “many vultures” in Swahili, aims to collect, condense, and air the past wrongdoings of Kenya’s political class. Going live on Nov. 13, the site is the latest project from activist Boniface Mwangi, known for his political graffiti murals around Nairobi and his photographic exhibitions that documented the violent aftermath of the 2007 presidential elections.
… The website so far features profiles on 17 politicians, including Uhuru Kenyatta, the son of Kenya’s first president, a current presidential candidate, and also one of the men under an International Criminal Court investigation for crimes against humanity during the 2007 post-election violence, which Kenyans refer to as “the Violence”.
Money laundering, land grabbing, drug trafficking and murder are just a few of the accusations Mavulture.com pins on its targets. Aside from articles, the site includes videos, infographics on each politician, and Wild-West-style wanted posters available for download. It is financed by anonymous donors.
9 November
Does being in politics mean never having to say you’re sorry?
Two years after our cover story provoked a defensive uproar, evidence of the deep-seated corruption has continued to pile up
(Maclean’s) We never argued Quebec was the only province to be visited by corruption or compromised politicians, merely that the scale and persistence on display in La Belle Province outdid anything we could find elsewhere. We argued further that this record constituted a tremendous disservice to honest Quebec taxpayers. Finally, we noted the heartening provincial tradition of promptly tossing out elected officials tainted by scandal. … Members of Parliament once claimed “profound sadness” over our coverage of Quebec politics. Surely mounting and incontrovertible evidence that Quebec politics is indeed deeply riven by corruption, bribes and assorted other illegal activities ought to make them feel even sadder. Perhaps a motion is in order.
8 November
Fighting corruption in China
Fighting corruption is high on the agenda of China’s new leaders. When Xi Jinping and Li Keqiang take over as party leaders they will have to deal with the political legacy of poor governance at the national and local levels, unequal social welfare distribution, growing civil disobedience, and expanding social polarisation.
7 November
Leaders and activists target impunity at the 15th International Anti-Corruption Conference in Brazil
The 15^th International Anti-Corruption Conference (IACC), a biennial meeting of world leaders, academics and activists, opens in Brasilia today with an urgent call for greater action against corruption around the world at a time when impunity threatens citizens’ trust in institutions.
With the theme “Mobilising people: Connecting agents of change”, this year’s four-day conference will address innovative solutions in over 50 workshop and plenary sessions of how to take the fight against corruption forward in five key areas: ending impunity, clean climate governance, preventing illicit financial flows, political transitions leading to stable and transparent governments and clean sports.
26 October
Brother Wristwatch and Grandpa Wen: Chinese Kleptocracy
(The New Yorker) … There is nothing inherently unique about the fact that China’s rise has been accompanied by enormous official theft. (In “Boss Rail,” a piece in the magazine last week, I examined the culture of corruption in China’s largest public-works project, as well as the corruption that shadowed America’s rise in the nineteenth century.) What is unique, however, and potentially harmful to political stability, is the nature of the corruption in China. In a new book, “The Double Paradox,” the sinologist Andrew Wedeman examines a raft of data on arrests, bribes, and prosecutions not only in China but in other countries with high rates of corruption such as Zaire, Nicaragua, and Haiti—as well as places with high growth such as Korea and Taiwan. “Although there is no good corruption,” Wedeman writes, “there is clearly bad and worse corruption: the corruption that has negative effects, and the corruption that can have potentially catastrophic effects.” The science of kleptocracy separates the behavior into two basic types: “developmental corruption” of the kind we see in Korea and Taiwan, which does not ultimately prevent the economy from recovering, and “degenerative corruption” of the kind that ruined the economies in Zaire and Haiti.
When investors and diplomats consider the risks facing China, they often assume that its corruption is of the kind we saw in Korea and Taiwan (or Chicago, for that matter), in which a political machine pulls money out of the state to give to favored friends and businesses, but does not ultimately kill the goose that laid the golden egg. But when Wedeman looked at the data, he concluded, to his surprise, that “corruption in China more closely resembled corruption in Zaire than it did corruption in Japan.” In short, he found, “the evidence suggests that corruption in contemporary China is essentially anarchy.”

TED Conversation
Debate: Is corruption a moral or a legal issue?
Too often the corruption debate and discussions all over the world are focused on how somebody broke a law. By that definition Mahatma Gandhi was the most corrupt man since he periodically broke British laws!
By dictionary definition corruption relates to doing things which are not ethical.
Hence how should the corruption be defined and fought for greater good?