Tuesday, July 15, 2014

Kenya Launches Human Trafficking Committee



Kenya Launches Human Trafficking Committee


A committee to co-ordinate a campaign against human trafficking has been set up after reports indicate that the country is a transit and destination area for men, women and children subjected to forced labour and sex trafficking.

Photo: Graeme Williams/UNICEF
Unaccompanied children (file photo): Kenya launches human trafficking committee.

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New Report from GFI on Illicit Financial Flows: Answering Common Questions




Global Financial Integrity - Reports - Illicit ...

New Report from GFI on Illicit Financial Flows: Answering Common Questions

December 12, 2013

By EJ Fagan

EJ Fagan was New Media Coordinator for the FTC from 2011-2013. He is now Deputy Communications Director for Global Financial Integrity. You can follow him on Twitter @ejfagan.
Yesterday, Global Financial Integrity released the report, Illicit Financial Flows from Developing Countries 2002-2011, which found that developing countries lost $947 billion in illicit financial flows in 2011, and $5.8 trillion over the ten-year study period.
The subject of illicit financial flows is still a new one, and can be confusing. To help answer some common questions about the report, we’ve put together a quick FAQ below:
What Are Illicit Financial Flows? What Does This Report Measure?
Illicit financial flows are cross-border transfers of funds that are illegally earned, transferred, or utilized. These kinds of illegal transactions range from corrupt public officials transferring kickbacks offshore, to tax evasion by commercial entities, to the laundered proceeds of transnational crime.
Illicit Financial Flows from Developing Countries 2002-2011 does not measure all illicit financial flows. It uses two primary methodologies to estimate two different methods for illegally transferring funds across borders.
The first, Hot Money Narrow (HMN), looks at money that has disappeared from the balance of payments. GFI infers that is likely to represent kickbacks, bribery, and other forms of unrecorded wire transactions. Countries that are rich in natural resources, like oil, tend to have higher HMN numbers relative to others. HMN accounts for about 20.3% of illicit financial flows estimated in this report.
The second, Gross Excluding Reversals (GER), looks at trade misinvoicing, a common method used by commercial entities for the cross-border movement of illegal money. Exporters and importers manipulate trade invoices to over-represent or under-represent the value of the goods they are shipping. Often, this will involve re-invoicing the goods through a secrecy jurisdiction. The result is that a certain sum of money disappears on one side of the border—either from the importer or exporter. We detect this by comparing what a country says it is exporting, and what the rest of the world says it imports from that country, and vice versa.
Certain types of trade misinvoicing are used for different purposes. Drug cartels and terrorist networks have been known to use it to launder money. Importers and exporters use it to evade customs duties. Other tax evaders, criminals and corrupt public officials in developing countries use it to hide wealth or ill-gotten gains. GFI’s methodology is unable to distinguish between the different sources of trade mispricing.
What Impact Do Illicit Financial Flows Have?
US$947 billion is a tremendous amount of money to drain out of developing countries. It represents roughly ten times the amount of official development assistance (ODA) flowing in from advanced economies (.xls). In fact, a report by GFI found that even after you account for all types of financial flows, including investment, remittances, debt forgiveness, and natural resource exports, the continent of Africa is a net creditor to the world. GFI has not yet applied this analysis to the rest of the developing world.
Further, illicit financial flows have a subversive effect on government in a few ways. First, they encourage corruption, by allowing corrupt public officials to siphon money away from public coffers and into secret offshore bank accounts. Second, every country case study that GFI has performed has shown that increased illicit financial flows grow a country’s underground economy. As the underground economy expands, criminal elements become more powerful and more difficult for law enforcement to fight. To make matters worse, the research also shows that as a country’s underground economy grows, criminals respond by moving more money out of the country, and so on. This vicious cycle helps to explain why illicit flows grew at 10% per year from 2002-2011.
Finally, illicit financial flows are one of the world’s biggest, and least talked about, drivers of inequality. Those with the wealth and resources to use highly sophisticated money laundering techniques to smuggle money out of the country are almost exclusively powerful and affluent, and their victims are ordinary citizens.
What About Abusive Transfer Pricing?
Abusive transfer pricing is frequently cited as a resource drain out of developing countries, and can easily be confused with trade misinvoicing. Multinational corporations use transfer pricing to allocate costs and revenues between their webs of subsidiaries. Abusive transfer pricing occurs when the multinational corporation seeks to distort the prices its subsidiaries pay each other in transactions solely for the purpose of shifting profits from high-tax jurisdictions—such as most developing countries—to low-tax jurisdictions, like tax havens.
The trade misinvoicing numbers in this report should not be confused with abusive transfer pricing. Abusive transfer pricing generally does not involve two different invoices on different sides of the border. Instead, abusive transfer pricing involves placing false values on single invoices. This is a serious problem for developing countries, but it is not detected by GFI’s trade misinvoicing methodology. As abusive transfer pricing tends to occur with one single invoice on both sides of the border, there is no discrepancy between what is reported in the exporting country and what is reported in the importing country. Without the discrepancy, GFI cannot detect it.
The motivations and driving factors behind abusive transfer pricing and trade misinvoicing may also differ, requiring potentially different policy solutions. Abusive transfer pricing is driven mainly by a motivation to reduce corporate taxes for an entity, while trade misinvoicing is often used to move or launder money for tax evasion as well as many other crimes.

 
 
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New Report from GFI on Illicit Financial Flows: Answerin...
Yesterday, Global Financial Integrity released the report, Illicit Financial Flows from Developing Countries 2002-2011, which found that developing cou...

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Posted  Tuesday, July 15, 2014 |  by- PAUL OGEMBA

Kamani sues govt over Anglo Leasing information

Tycoon Deepak Kamani has moved to court to stop the Kenyan government from releasing information

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Business tycoon Deepak Kamani has moved to court to stop the Kenyan government from releasing information to the Swiss authorities in relation to the controversial Anglo Leasing contracts.
Mr Kamani, his father Chamanlal Kamani and his brother Rashmi Kamani want Attorney General Githu Muigai barred from acting on a request by the Swiss federal attorney for information about them relating to money laundering and dealings with companies implicated in the Anglo Leasing scandal.
(Read: Deepak Kamani quizzed over Anglo Leasing - VIDEO)
Through lawyer Paul Nyamodi, they argued that the AG had publicly stated he would act on the request that alleges that the three were involved in money laundering between 1999 and 2004 and could be extradited to Switzerland to face prosecution.
“From the face of the request, it is apparent that any intended prosecution of the petitioners will be a violation of their rights if the AG goes ahead without giving them an opportunity to be heard,” said Nyamodi.
PAYMENT DOCUMENTS
Justice Isaac Lenaola, however, declined to grant temporary orders restraining the AG from releasing the records sought by the Swiss government.
“I don’t think there is any prima facie case to grant interim orders before the hearing of the petition. There is nothing to warrant the orders at this stage and direct the respondents to file their replies before the hearing,” ruled Lenaola.
The Kamanis were linked to companies that were awarded 13 out of 18 Anglo Leasing security contracts. The remaining five went to Sri Lankan businessman Anura Perera, who was recently paid Sh1.4 billion by the government.
(Read: Anura Perera, the billionaire behind questionable deals)
The Swiss authorities wrote to Prof Muigai on June 3 requesting records of payments the government made to Anglo Leasing companies associated with the Kamanis, the bank documentations of the transfer of money and any deed of property transferred.
MONEY LAUNDERING
They further wanted recorded witness statements, evidence of any corrupt payment made by the government to the companies and any document likely to confirm the three were engaged in money laundering.
The companies listed as having benefitted from the Sh18 billion contracts were Sound Day Corporation, Apex Finance Corporation, Anglo Leasing and Finance Limited, Infotalent Limited, Globetel Incorporated and Midland Finance and Securities Limited.
Mr Nyamodi argued that the request violates the provisions of the Mutual Legal Assistance Act since the alleged particulars of the offence do not constitute an offence in Kenya.
“The request undermines the sovereignty of the country by questioning the contractual capability of the contracts the government entered with the companies and does not disclose any legal basis or criminal liabilities on the petitioners,” said Nyamodi.
In any event, Mr Nyamodi submitted that the Ethics and Anti-Corruption Commission is currently conducting investigations into the matter and any report given to the Swiss authorities would prejudice the investigations.
'BRIBE' DEMAND
Mr Deepak Kamani supported the application through an affidavit alleging that the request was a punishment for refusing to bribe the Swiss ambassador to Kenya.
He stated that before the request was made, the ambassador, Mr Jacques Pitteloud, met him and demanded that he pay US$55 million (Sh4.5 billion) to the Swiss government as settlements for the contracts his companies entered with the government.
“I told Mr Pitteloud that I could not afford the amount and even if I could afford I would not part with any money since I had done nothing wrong. It appears the request was a fulfilment of his promise to expect a rough time for failing to cooperate,” swore Kamani.
He added that the request was part of a concerted effort to force them into settling Anglo Leasing-related contracts in an unlawful manner.
Justice Lenaola directed the AG to respond to the petition within 14 days and scheduled the hearing for August 5.

Kamani sues govt over Anglo Leasing information
 
 
 
 
 
 
Kamani sues govt over Anglo Leasing information
Posted  Tuesday, July 15, 2014 |  by- PAUL OGEMBA Kamani sues govt over Anglo Leasing information

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Crime, corruption, and tax evasion drained US$946.7 billion from the developing world in 2011, up more than 13.7 percent from 2010. These findings by Washington based Think Tank Global Financial Integrity, which peg cumulative illicit financial outflows from developing countries at US$5.9 trillion between 2002 and 2011 are part of a new study. "As the world economy sputters along in the wake of the global financial crisis, the illicit underworld is thriving – siphoning more and more money from developing countries each year," says GFI President Raymond Baker.


Illicit Financial Outflows from Developing World Nearly $6 Trillion in Decade between 2002 and 2011

December 19, 2013 | Global Financial Integrity
The report Illicit Financial Flows from Developing Countries: 2002-2011 is GFI’s 2013 annual update on the amount of money flowing out of developing economies as a result of crime, corruption and tax evasion, and it is the first of GFI’s reports to include data for the year 2011.
GFI President Raymond Baker criticizes: “Anonymous shell companies, tax haven secrecy, and trade-based money laundering techniques drained nearly a trillion dollars from the world’s poorest in 2011, at a time when rich and poor nations alike are struggling to spur economic growth.  While global momentum has been building over the past year to curtail this problem, more must be done.  This study should serve as a wake-up call to world leaders: the time to act is now.”
Methodology
Authored by GFI Chief Economist Dev Kar and GFI Junior Economist Brian LeBlanc, the study is the first by GFI to incorporate trade data on re-exports from Hong Kong and the first to integrate bilateral trade data for those countries which report it—making this report the most accurate analysis of illicit financial outflows produced by GFI to date.
“The estimates provided by our new methodology are still likely to be extremely conservative as they do not include trade misinvoicing in services, same-invoice trade misinvoicing, hawala transactions, and dealings conducted in bulk cash,” explained Dr. Kar, who served as a Senior Economist at the International Monetary Fund before joining GFI in January 2008.  “This means that much of the proceeds of drug trafficking, human smuggling, and other criminal activities, which are often settled in cash, are not included in these estimates.”
Findings
The US$946.7 billion of illicit outflows lost in 2011 is a 13.7 percent uptick from 2010—which saw developing countries hemorrhage US$832.4 billion—and a dramatic increase from 2002, when illicit outflows totaled just US$270.3 billion.  The study estimates the developing world lost a total of US$5.9 trillion over the decade spanning 2002 through 2011.
“It’s extremely troubling to note just how fast illicit flows are growing,” stated Dr. Kar.  “Over the past decade, illicit outflows from developing countries increased by 10.2 percent each year in real terms—significantly outpacing GDP growth.  This underscores the urgency with which policymakers should address illicit financial flows.”
Moreover, the US$946.7 billion that flowed illicitly out of developing countries in 2011 was approximately 10 times the US$93.8 billion of net official development assistance (ODA) [XLS | 49 KB] that went into these specific 150 developing countries that year. This means that for every US$1 in economic development assistance going into a developing country, roughly US$10 of capital are lost via illicit outflows.
“Illicit financial flows have major consequences for developing economies,” explained Mr. LeBlanc, the co-author of the report.  “Poor countries hemorrhaged nearly a trillion dollars from their economies in 2011 that could have been invested in local businesses, healthcare, education, or infrastructure.  This is nearly a trillion dollars that could have been used to help pull people out of poverty and save lives.  Without concrete action, the drain on the developing world is only going to grow larger.”
Dr. Kar and Mr. LeBlanc’s research tracks the amount of illegal capital flowing out of 150 different developing countries over the 10-year period from 2002 through 2011, and it ranks the countries by the volume of illicit outflows. 
Sub-Saharan Africa Suffers Biggest Relative Problem
The new report is also the first GFI study to examine illicit financial outflows on a regional basis as a percent of GDP, determining that Sub-Saharan Africa—whose illicit outflows averaged 5.7 percent of GDP each year—suffers the most due to such outflows.  Globally, annual illicit financial outflows averaged 4.0 percent of GDP.
 

Illicit Financial Flows from Developing World Nearly $6 Trillion in last Decade

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Photo: Siegfried Modola/IRIN
Nairobi: Kenya cleared in anti-money laundering review.
Kenya has been taken off the list of countries at high risk for money laundering and terrorist financing, the government said on Tuesday.
In 2010, the Financial Action Task Force (FATF), the official global watchdog, placed Kenya on its "grey list" of high risk countries failing to combat money laundering, drug trafficking, corruption and terrorism.
Following a visit to Kenya in May and a review at the FATF meeting in Paris in June, Kenya has been given the all clear. This is welcome news for the government which plans to strike a deal with the City of London to build Nairobi into a major international financial hub.
"On the basis of the on-site visit report, the FATF concluded that Kenya has established the legal and regulatory framework to address the strategic deficiencies that the FATF had identified," Henry Rotich, cabinet secretary for the treasury, said in a newspaper statement.
"This is an achievement we all should embrace... I therefore wish to take this opportunity to thank all those who have been involved in this process for their relentless efforts to achieve this milestone."
As a result, Kenya no longer has to give public updates on progress made in implementing its anti-money laundering regime.
FATF was set up in 1989 to set international standards on anti-money laundering and combating terrorist financing.
During the review, FATF found that Kenya had ensured an effective financial intelligence unit, introduced laws to identify and freeze terrorist assets, established procedures for confiscating funds related to money laundering and imposed sanctions against people who did not comply with anti-money laundering requirements.
Data calculated for Thomson Reuters Foundation by Global Financial Integrity (GFI), a Washington-based financial watchdog, showed the amount of illicit money entering Kenya from faulty trade invoicing, crime, corruption and shady business activities increased more than five-fold in the last decade to equal roughly 8 percent of Kenya's economy.
More on This
IMF Gives Kenya Economy Thumbs Up
THE International Monetary Fund (IMF) mission to Kenya has concluded its tour by giving a positive rating of the … see more »
Read the original of this report on AlertNet Climate, the Thomson Reuters Foundation's daily news website on the human impacts of climate change.


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Global Corruption


Global Financial Integrity - Reports - Illicit Financial Flows from Developing Countries 2002-2011 - Overview 

 

Global Financial Integrity - Reports - Illicit Financial Flows from Developing Countries 2002-2011 - Overview | Global Corruption | Scoop.it
From iff.gfintegrity.org - December 11, 2013 8:29 PM
The developing world lost US$946.7 billion in illicit outflows in 2011, an increase of 13.7% over 2010. The capital outflows stem from crime, corruption, tax evasion, and other illicit activity.

The report finds that from 2002 to 2011, developing countries lost US$5.9 trillion to illicit outflows. The outflows increased at an average rate of 10.2% per year over the decade—significantly outpacing GDP growth.

As a percentage of GDP, Sub-Saharan Africa suffered the biggest loss of illicit capital. Illicit outflows from the region averaged 5.7% of GDP annually. Globally, illicit financial outflows averaged 4% of GDP.

China leads the world over the 10-year period with US$1.08 trillion in illicit outflows. However, 2011 marked the first time that Russia’s illicit outflows exceeded China’s, with a loss of US$191.14 billion against China’s US$151.35 billion. The previous methodology had significantly understated Russia’s illicit outflows, while it overstated China’s illicit outflows.
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Nevermore Sithole's curator insight, December 13, 2013 6:40 AM
Global Financial Integrity - Reports
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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.
- Gerald E. Caiden
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Corruption Eruption E-Magazine > > > "On Planet Corruption every day a new Eruption"

Corruption Eruption E-Magazine > > > "On Planet Corruption every day a new Eruption" | Global Corruption | Scoop.it
From flipboard.com - February 22, 7:54 AM
*** Key findings from PwC's 17th Annual Global Economic Crime Survey
*** Cyber crime: the Achilles heel of the business world
*** Ukraine’s $19-billion question of debt and corruption
*** FBI announces campaign to crack down on public corruption
*** Ukraine’s $19-billion question of debt and corruption
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USA: Former Utah Attorneys General John Swallow, Mark Shurtleff arrested

USA: Former Utah Attorneys General John Swallow, Mark Shurtleff arrested | Global Corruption | Scoop.it
From www.deseretnews.com - Today, 5:35 PM
Former Utah Attorneys General John Swallow and Mark Shurtleff were arrested and charged Tuesday on allegations ranging from accepting bribes to destroying evidence.
Both were arrested at their Sandy homes by members of the FBI and the Utah Department of Public Safety, and they arrived at the Salt Lake County Jail shortly after 8 a.m.
The state's former top law enforcement officials were charged in 3rd District Court with pattern of unlawful activity, a second-degree felony; and three counts of receiving or soliciting bribes by a public official, a third-degree felony.
In addition, Shurtleff was charged with illegally accepting gifts or loans, a second-degree felony; two counts of receiving bribes by a public official, a third-degree felony; witness tampering, a third-degree felony; tampering with evidence, a class A misdemeanor; and obstruction of justice, a class A misdemeanor.
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USDOJ: Justice Department, Federal and State Partners Secure Record $7 Billion Global Settlement with Citigroup for Misleading Investors About Securities Containing Toxic Mortgages

USDOJ: Justice Department, Federal and State Partners Secure Record $7 Billion Global Settlement with Citigroup for Misleading Investors About Securities Containing Toxic Mortgages | Global Corruption | Scoop.it
From www.justice.gov - July 14, 8:26 PM
The Justice Department, along with federal and state partners, today announced a $7 billion settlement with Citigroup Inc. to resolve federal and state civil claims related to Citigroup’s conduct in the packaging, securitization, marketing, sale and issuance of residential mortgage-backed securities (RMBS) prior to Jan. 1, 2009.  The resolution includes a $4 billion civil penalty – the largest penalty to date under the Financial Institutions Reform, Recovery and Enforcement Act (FIRREA).  As part of the settlement, Citigroup acknowledged it made serious misrepresentations to the public – including the investing public – about the mortgage loans it securitized in RMBS.  The resolution also requires Citigroup to provide relief to underwater homeowners, distressed borrowers and affected communities through a variety of means including financing affordable rental housing developments for low-income families in high-cost areas.  The settlement does not absolve Citigroup or its employees from facing any possible criminal charges.

This settlement is part of the ongoing efforts of President Obama’s Financial Fraud Enforcement Task Force’s RMBS Working Group, which has recovered $20 billion to date for American consumers and investors.

“This historic penalty is appropriate given the strength of the evidence of the wrongdoing committed by Citi,” said Attorney General Eric Holder.  “The bank's activities contributed mightily to the financial crisis that devastated our economy in 2008.  Taken together, we believe the size and scope of this resolution goes beyond what could be considered the mere cost of doing business.  Citi is not the first financial institution to be held accountable by this Justice Department, and it will certainly not be the last.”
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Is the U.S. as Corrupt as the Third World?

Is the U.S. as Corrupt as the Third World? | Global Corruption | Scoop.it
From www.businessweek.com - July 14, 12:54 PM
Last week former New Orleans Mayor Ray Nagin became the latest American politician to be sent to jail for abuse of power, following in the footsteps of former Detroit Mayor Kwame Kilpatrick and onetime Illinois Congressman Jesse Jackson Jr. Despite such high-profile convictions, most Americans see political corruption as a problem that plagues the developing world far more than the U.S. The truth is more complex: It’s certainly the case that paying bribes is a lot less common in the U.S. than in Nigeria or Bolivia, for example. But when citizens are asked if corruption is prevalent in their country, they’re thinking about a lot more than bribes. They’re more concerned about whether government and the political system is fair or stacked against them. And on those grounds, there are good reasons to think the difference between the U.S. and developing countries isn’t very big at all.
It doesn’t take a detailed look at Transparency International’s Corruption Perceptions Index to work out which types of countries are viewed to be particularly corrupt by the political risk analysts, aid agency economists, and think-tank staff whose opinions the index reflects...
Nagin wasn’t convicted of taking a bribe. His big crimes were related to steering business to his family’s kitchen countertop company.  That underscores a vital truth: There are lots of different ways to be corrupt. And when you survey people around the world about the problem of corruption in their country, most have a definition of “corruption” that’s broader than bribery. Ask the same people, “Have you paid a bribe,” and then ask, “Is corruption a problem in this country?” and the relationship between the two answers is weak. Again, ask the same companies, “How much do you pay in bribes?” and “Is corruption a major constraint to doing business,” and many who say bribery in their industry is common also don’t see corruption as a problem—while many who don’t pay bribes are convinced corruption is holding them back.
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Philippine leader's approval down on doubt over corruption effort

Philippine leader's approval down on doubt over corruption effort | Global Corruption | Scoop.it
From www.reuters.com - July 14, 12:49 PM
MANILA (Reuters) - Philippine President Benigno Aquino's performance ratings have plunged to their lowest ever, two independent pollsters said on Monday, as a perception grew that he is not serious enough...

"This is the largest decline in both approval and trust and it's also his lowest performance thus far," Ana Maria Tabunda, Pulse Asia research director, said in a television interview.
People were disillusioned by widespread corruption in government, she said, adding that her poll was taken at the same time that the government arrested three senators on plunder charges for misuse of congressional funds and rising cost of rice and other food.
Tabunda said the survey was largely complete by the time the Supreme Court rejected an Aquino creation of a discretionary fund, called the Disbursement Acceleration Program (DAB), which has become the administration's worst crisis in four years.
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Georgia ranks in middle in new corruption study

Georgia ranks in middle in new corruption study | Global Corruption | Scoop.it
From www.daltondailycitizen.com - July 14, 12:40 PM
Georgia doesn't rank among the most corrupt states in the nation, according to a recent study. But it doesn't rank among the least corrupt either...


“I haven’t been able to access the full study, but I’m not sure this is the best methodology,” said Matthew Hipps, assistant professor of political science at Dalton State College.

“I’m not sure that the number of convictions really tells us how much corruption there is in an area,” he added. “It’s a measure, but it’s not a very nuanced measure.”
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Former CEO of CalPERS pleads guilty to fraud, corruption charge

Former CEO of CalPERS pleads guilty to fraud, corruption charge | Global Corruption | Scoop.it
From www.latimes.com - July 12, 2:30 PM
A former chief executive of the country's biggest public pension fund admitted that he took more than $250,000 in bribes and other valuable gifts from a friend and co-defendant in an influence-peddling scandal that rocked the pension investment world five years ago.
Federico R. Buenrostro Jr. pleaded guilty Friday to one federal charge of conspiracy to commit corruption and fraud in funneling deals through his friend, Alfred J.R. Villalobos, for outside firms to manage funds for the California Public Employees' Retirement System.
We condemn the misconduct and ethical breaches admitted today by Mr. Buenrostro.- CalPERS' statement  "It's a good day for justice, and was time for Mr. Buenrostro to admit his wrongdoing," said Philip Khinda, a Washington lawyer who led an 18-month internal investigation into a scandal that led to a slew of changes in CalPERS operations and state law.
CalPERS, which manages about $300 billion in investments, said that it has taken "aggressive steps" to put into place new policies and reforms to ensure that its 1.6 million members — state and local government workers, retirees and their families — are not victims of future criminal fraud by insiders.

"We condemn the misconduct and ethical breaches admitted today by Mr. Buenrostro," the fund said in an email. "CalPERS looks forward to justice being served in this case and for the individuals involved to be held accountable for their actions."
Buenrostro, CalPERS' top official from 2002 until he was fired in 2008, said in his plea agreement that Villalobos personally delivered $200,000 in cash bribes in paper bags and shoe boxes, which were handed over at a Hyatt Hotel across from the state Capitol.
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Heat Rises on Corruption Allegations in Qatar World Cup Bid

Heat Rises on Corruption Allegations in Qatar World Cup Bid | Global Corruption | Scoop.it
From abcnews.go.com - July 12, 2:25 PM
As soccer fans flock to their televisions for the World Cup final this weekend, the FBI and international investigators are looking ahead to allegations of corruption and abuse halfway around the world in Qatar, where the 2022 games are scheduled to take place in one of the hottest places on earth -- where daytime temperatures regularly reach 124 degrees.
During the World Cup this year in Brazil officials declared the first-of-its-kind water breakduring a match when the temperature hit the mid-80s, fearing for the health of the players.
Before Qatar won their bid for the 2022 World Cup, soccer federation officials were warned in advanced about the potentially dangerous heat in Qatar that makes its capital of Doha look like a ghost town during the day – some 40 degrees hotter than during the pause in Brazil.
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Whistleblower blasts union's own corruption probe

Whistleblower blasts union's own corruption probe | Global Corruption | Scoop.it
From www.smh.com.au - July 12, 9:27 AM
A construction union whistleblower has blasted an ‘‘independent’’ investigation into the allegations of corruption he raised.
The Construction, Forestry, Mining and Energy Union on Friday released its review into a string of allegations about misconduct by senior officials and links to crime figure George Alex. The claims were raised by whistleblowers who complained to CFMEU national secretary Michael O’Connor late in 2013.
The allegations will be heard when the Heydon royal commission into union corruption sits in Sydney on Tuesday.
The complaints spurred the union to ask its law firm, Slater & Gordon, to organise an investigation. It chose Sydney barrister Tony Slevin, whose report, released on Friday, exonerates the union’s leadership but suggests changes to the union’s rules dealing with whistleblowers and complaints.
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How not to address political corruption –

How not to address political corruption – | Global Corruption | Scoop.it
From blogs.crikey.com.au - July 11, 11:06 AM
Thirty years on, public funding of Australian election campaigns has recorded a striking lack of success at stopping corruption. As should have been expected all along.
Among your weekend reading, don’t miss Mike Steketee’s piece in the Drumthis morning on public funding of elections. He gets it, much better than most people who write about this popular but misunderstood topic:
In the words of the report of a parliamentary inquiry, getting taxpayers to pick up the tab “removes the necessity or temptation to seek funds that may come with conditions imposed or implied” and “it may relieve parties from the constant round of fundraising so that they can concentrate on policy problems and solutions”.
As it turned out, less true words have seldom been spoken. Thanks particularly to the Independent Commission Against Corruption in NSW, where the Wran government was the first to introduce public funding in 1981, we now know just how successfully politics has been cleaned up.
It’s remarkable that anyone could ever have believed this rationale, much less continue to believe it with the weight of 30 years of evidence against it. Expecting public funding to reduce corruption is a bit like setting up a welfare system for gangsters in the hope that they will feel less need to rob banks.
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Root out and punish corruption

Root out and punish corruption | Global Corruption | Scoop.it
From www.houmatoday.com - July 11, 11:04 AM
It happens with disturbing regularity.
A high-profile Louisiana politician gets caught with his or her hands in the cookie jar, and there is the inevitable public outrage and embarrassment.
Unfortunately, incidents such as this reinforce an ugly and somewhat unfair political stereotype of Louisiana.
Thanks to our shameful political history, there is a widespread perception that we have more political corruption here than in many other places.
Anything that battles that image is welcome.
So, when former New Orleans Mayor Ray Nagin was convicted of fraud, bribery and other corruption-related charges, it provided yet another chance for federal prosecutors to serve notice that corruption will be discovered and punished.
Earlier this week, when federal Judge Ginger Berrigan sentenced Nagin to 10 years in prison, some observers worried aloud that the sentence was too lenient.
The larger point, though, is that Nagin was caught, prosecuted, convicted and sentenced.
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World Bank Report 2007-2013

From siteresources.worldbank.org - July 9, 6:27 PM
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World Bank Report 2007-2013
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Whistleblower suit says health plan cheated government out of more than $1 billion

Whistleblower suit says health plan cheated government out of more than $1 billion | Global Corruption | Scoop.it
From www.publicintegrity.org - July 9, 6:23 PM
Valdez accuses the health plans of “rampant fraud,” alleging they overcharged Medicare $300 million to $350 million a year from 2007 through 2010. He claims that Aveta Chief Executive Officer Richard Shinto fired him “in retaliation for his outspoken opposition to these illegal practices.” Valdez filed the lawsuit in Santa Ana, California, in April 2011, but it remained under court seal until February of this year. The case is pending.
In a May 23 statement to the Center for Public Integrity, the health plans called Valdez a “former disgruntled employee” and added that the company “categorically denies the allegations in the former employee’s lawsuit and is highly confident that it will prevail in the case.”
Valdez is a veteran health care executive and consultant who headed the California regional office of the U.S. Department of Health and Human Services from 2001 through 2003 under President George W. Bush. He also was a health policy adviser to Republican Mitt Romney during the 2012 presidential race.
Valdez said in court papers that he served as president of MSO of Puerto Rico, also owned by a subsidiary of Aveta, for eight months until his dismissal in December 2010. MSO worked with local doctors to coordinate coverage for some 230,000 elderly and disabled people then enrolled in those two Aveta-related Medicare Advantage health plans. In a press release touting his hire, Aveta said Valdez would enhance medical care while “effectively managing healthcare costs.”
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Ex-CalPERS CEO admits he's a crook

Ex-CalPERS CEO admits he's a crook | Global Corruption | Scoop.it
From fortune.com - Today, 5:55 PM
A kickback scandal at America’s largest public pension included $200,000 of cash stuffed into shoeboxes and paper bags.
When former CalPERS CEO Fred Buenrostro was charged more than a year ago by both federal and state officials with fraud and obstruction of justice charges, something didn’t seem right. The allegations focused on how Buenrostro had forged documents to help placement agent pal Alfred Villalobos get paid by some of his private equity clients, but there was no mention of Buenrostro personally benefiting (beyond a $300k per year job with Villalobos upon retirement from CalPERS). Not was there any evidence that Buenrostro improperly influenced investment decisions at CalPERS.
But it seems he did both things, according to his guilty plea last Friday in a San Francisco courthouse.
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Does Bribery Pay? For Whom? And How Much?

Does Bribery Pay? For Whom? And How Much? | Global Corruption | Scoop.it
From globalanticorruptionblog.com - Today, 8:26 AM
Anticorruption advocates—including those in the private sector who have taken the fight against corruption seriously—insist that bribery is bad for business. That’s likely true in the aggregate, and perhaps it’s true for some individual firms. But it’s probably not true for all firms—otherwise, why would so many of them pay bribes? But it’s hard to know how much firms benefit from bribery. Likewise, while would be useful to know more about the factors that affect the size and probability of bribery, figuring this out is a challenge because of the secrecy of corrupt transactions.
In a recent working paper, Yan Leung Cheung, P. Raghavendra Rau, andAris Stouraitis try to get at these questions by looking at enforcement data for anti-bribery laws–both laws that apply domestically and those (like the U.S. FCPA and the UK Bribery Act) that prohibit foreign bribery. In particular, the study examines a subset of reported cases where (1) a bribe was (allegedly) paid for a particular, identifiable public contract, announced on a specific date, (2) there is stock and financial data for the firm, available on a day-to-day basis, and (3) the enforcement data contains information on the size of the bribe paid to secure the contract. Armed with that information, the authors reason that we can use the abnormal increase in firm market capitalization that coincides with the announcement of the contract as a measure of the gross benefit of the bribe to the firm (the authors assume that bribe-paying firms would not have gotten the contract without paying the bribe). We can then subtract the size of the bribe from that gross benefit to get the net benefit of bribery for the firm. On top of that, the authors reason that we can learn something about how the total gains from the bribe transaction are allocated between the firm and the corrupt public official by dividing the size of the bribe payment by the sum of the bribe payment plus the gross benefit of the bribe. The higher this ratio, the more the benefits of bribery go to the public official; the lower this ratio, the more the benefits of bribery accrue to the bribe-paying firm.
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Tax evasion sting recovers Sh25bn from multinationals

Tax evasion sting recovers Sh25bn from multinationals | Global Corruption | Scoop.it
From www.businessdailyafrica.com - July 14, 2:36 PM
A Kenya Revenue Authority (KRA) audit has forced a number multinationals to rewrite their financial statements, turning losses into profits in a review that has yielded Sh25 billion in tax revenues...

Several multinationals had used the transfer pricing mechanism to declare losses, which effectively disqualified them from paying income tax.But a KRA audit of 40 conglomerates discovered widespread abuse of transfer pricing – which refers to prices charged when one unit of a multinational group buys or sells product from another part of the same group but in a different country.The culprits are expected to agree with KRA on a payment schedule that will enable them to clear the tax.
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Citigroup settles subprime mortgage case - The Boston Globe

Citigroup settles subprime mortgage case - The Boston Globe | Global Corruption | Scoop.it
From www.bostonglobe.com - July 14, 12:52 PM
Citigroup announced Monday that it will pay roughly $7 billion to settle a federal investigation into risky subprime mortgages, the type that helped bring on the financial crisis.
The bank, one of America’s largest, revealed the deal as part of its quarterly earnings report. At a news conference later, Attorney General Eric Holder said the bank’s behavior had ‘‘shattered lives and livelihoods throughout the country and around the world.’’
The settlement stems from the sale of securities made up of subprime mortgages, which led to both the housing boom and bust that triggered the Great Recession at the end of 2007.
Citigroup and other banks downplayed the risks of subprime mortgages when packaging and selling them to mutual funds, investment trusts, pensions, as well as other banks and investors.  The securities, which contained so-called residential mortgage-backed securities and collateralized debt obligations, plunged in value when the housing market collapsed in 2006 and 2007. Those losses triggered a financial crisis that pushed the economy into the worst recession since the 1930s.
The bank separately agreed in April to pay $1.13 billion to settle claims by investors seeking that the lender buy back billions of dollars in residential mortgage-backed securities.
In the deal announced Monday, Citigroup will make a $4 billion civil monetary payment to the Justice Department, and another $500 million in compensatory payments to state attorneys general and the Federal Deposit Insurance Corporation.
The bank will provide $2.5 billion in consumer relief, which will include financing for construction and preservation of affordable housing, as well as principal reduction and forbearance for residential loans.
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BANGLADESH: Corruption all the way

BANGLADESH: Corruption all the way | Global Corruption | Scoop.it
From www.thedailystar.net - July 14, 12:47 PM
Private universities are involved in transactions of "illegal money" at different stages -- from taking approvals for setting up a university to awarding certificates to students, says a study of Transparency International Bangladesh.
Around Tk 1 crore to Tk 3 crore are exchanged for the approval for launching a private university and Tk 50,000 to Tk 2 lakh for getting nods for appointing vice chancellors, pro-vice chancellors and treasurers, it says.
A university pays up to Tk 30,000 for getting approval for opening a faculty and Tk 20,000 for a department.
A section of officials at the education ministry, University Grants Commission (UGC) and the universities are linked to these transactions, said the TIB.
The graft watchdog yesterday launched the study "Private Universities: Challenges of good governance and way out” at a press conference at Brac Inn in the capital yesterday.
The study was conducted on 22 universities in Dhaka, Chittagong and Sylhet between June 2012 and May this year.
Some universities give fake certificates in exchange for Tk 50,000 to Tk 3 lakh, it added.
"The amount varies from university to university," said Mohammad Rafiq Hasan, director of research and policy department at the TIB..
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Fraud suspect cheated Medicaid before, now charged in alleged $8M scheme - News - NorthJersey.com

Fraud suspect cheated Medicaid before, now charged in alleged $8M scheme - News - NorthJersey.com | Global Corruption | Scoop.it
From www.northjersey.com - July 13, 8:42 AM
The owner of a chain of medical imaging centers in North and Central Jersey has been charged with running a scheme that bilked N.J.'s Medicaid program of $8 million. Rehan Zuberi allegedly paid hundreds of thousands of dollars to doctors and chiropractors to refer patients for MRIs and other diagnostic services at imaging centers in Hackensack, Englewood, Wayne and other locations.
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How and Why Lofty Ideologies Cohabit With Rampant Corruption

How and Why Lofty Ideologies Cohabit With Rampant Corruption | Global Corruption | Scoop.it
From www.businessinsider.com - July 12, 2:28 PM
In a way, Mr Putin's messianic Russian nationalism, Mr Erdogan's Islamism and Chinese leaders' exhortations of sacrifice take the edge off the sleaze. It is degrading to live in a venal polity, but the idea of a special national mission or destiny can be consoling. Lilia Shevtsova of the Carnegie Moscow Centre, a think-tank, says "Russians have been seduced to forget, temporarily, about Putin's corruption by the offer of compensation for their complexes and lost dreams"--in particular by the annexation of Crimea, a key part of Mr Putin's bid to restore Russian greatness.
Mr Erdogan's critics think his religious rhetoric serves a similar purpose. Analysts of Chinese politics note that its top brass sometimes undertake public shows of humility (visiting peasant hovels and so on) in deference to old notions of virtuous leadership. Thus, while they appear contradictory, moralising ideologies can provide useful cover for corruption.


Read more: http://www.businessinsider.com/how-and-why-lofty-ideologies-cohabit-with-rampant-corruption-2014-7#ixzz37HQyWSOs
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Because we’re worth it

Because we’re worth it | Global Corruption | Scoop.it
From www.economist.com - July 12, 9:30 AM
Russia’s government is not unique in combining lofty rhetoric with greasy palms. Recep Tayyip Erdogan, Turkey’s prime minister, wants to restore the country’s lost Ottoman grandeur and burnish public morality. He has restricted the sale of alcohol and tried to ban adultery. Yet confronted with evidence of ministers on the take, he purged the police and prosecutors instead of the government: not an obviously moral response.
China’s Communist bosses rely on Maoist notions of ethical leadership and, implicitly, on a Confucian mandate supposedly bestowed by heaven for their righteousness. They pose as guarantors of order and stability—while their families amass Croesan wealth. A recent anti-corruption drive is snaring some big names without seriously disrupting the cash-flow. As Minxin Pei of Claremont McKenna College in California puts it, Chinese leaders manage to “move effortlessly between universes of extreme moralism and extreme corruption”.
Every country has its charlatans and rogues, be they light-fingered British MPs or pork-happy American congressmen. Many, whether Latin American strongmen or African kleptocrats, claim to serve their people. Hardly any admit to thieving. But there is something especially grating about leaders who push moralistic causes, thus inviting judgment of their own behaviour, while overseeing scams. Casual observers may wonder why citizens put up with the hypocrisy—and how their rulers look at themselves in the mirror.
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China’s Central Bank Investigates Report of a Bank’s Money Laundering

China’s Central Bank Investigates Report of a Bank’s Money Laundering | Global Corruption | Scoop.it
From www.nytimes.com - July 12, 9:26 AM
China’s central bank is investigating a report by state television that a major Chinese bank is helping clients transfer large amounts of money overseas in a program that violates currency controls, Xinhua, the state-run news agency, said Friday.
The station, China Central Television, or CCTV, caused a scandal when it broadcast a program on Wednesday accusing the Bank of China of money laundering on a large scale.
“We have noticed the media report about a commercial bank’s cross-border renminbi business, and are verifying related facts,” Xinhua quoted a spokesman for the central bank, the People’s Bank of China, as saying. The spokesman did not identify the commercial bank.
In recent years, there has been rapid growth in the cross-border renminbi business in response to global market developments, the spokesman said. The People’s Bank of China did not return calls Friday afternoon.
“Reports of ‘underground money farms’ and ‘money laundering’ have no basis in fact,” the Bank of China said in a statement late Wednesday.
The Bank of China said its Youhuitong service, which began in 2011 and means preferential remittances, was experimental but legal.
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China's Communist Party Admits It Has a Big Corruption Problem

China's Communist Party Admits It Has a Big Corruption Problem | Global Corruption | Scoop.it
From www.businessweek.com - July 11, 11:05 AM
Here comes a perhaps less-than-surprising conclusion from China’s Communist Party: When it comes to choosing and promoting its nearly 87 million members, it doesn’t do a very good job, the CCP’s organization department has admitted.
Nepotism and corruption are commonplace and meritocracy often absent when selecting cadres, concludes a survey published in the People’s Daily on July 6. More than 3,000 local cadres in 16 provinces responded to the survey questionnaires distributed by the party department responsible for personnel.
The investigation showed that, when multiple candidates vie for a spot, top party leaders use their influence to ensure those they favor win promotion. Buying and selling positions in the party is also commonplace, the survey noted.
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Serious Fraud Office Annual Report 2013-14

From www.sfo.gov.uk - July 9, 6:29 PM
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New Data on World Bank Sanctions: The Office of Suspension and Debarment releases its first report

New Data on World Bank Sanctions: The Office of Suspension and Debarment releases its first report | Global Corruption | Scoop.it
From fcpamericas.com - July 9, 6:25 PM
OSD’s new report covers the first six fiscal years of its operation. It has several key findings: In 95% of sanctions cases, OSD determined that there was sufficient evidence to support at least one of the claims made by INT. It rejected 5% of cases in their entirety. OSD referred 38% of cases back to INT based on a determination that there was insufficient evidence to support one or more of the accusations made. OSD found insufficient evidence on all claims related to 13% of Respondents included in cases (some cases involve multiple Respondents, which accounts for apparent discrepancies in the numbers above). On average, OSD takes 60 days to make an evidentiary determination in a case. OSD renders a new determination, on average, once every ten days. In 40% of cases, Respondents appeal the case to the Sanctions Board. Settlements account for a considerable percentage of cases – almost 30% in FY 2011, 22% in FY 2012, and 23% in FY 2013. While INT investigations require significant time to complete, they have steadily grown shorter. In FY 2008 and 2009, they commonly lasted up to three years, or longer. In FY 2011 and 2012, it was more common to see investigations completed in less than two years. 86% of cases and settlements received by OSD are based on fraud, 14% on corruption, and 9% on collusion (some cases include more than one type of sanctionable practice). When considering the types of fraud at issue in sanctions cases, there are about the same amount of cases involving forged third party documents, like bank guarantees, manufacturer’s certificates, and performance or experience documentation (105 cases), as there are of other forms of fraud, like false invoices or payment certifications, misrepresentation or omission regarding a conflict or an agent, or misrepresentation regarding past performance (99 cases). - See more at: http://fcpamericas.com/english/enforcement/data-world-bank-sanctions-office-suspension-debarment-releases-report/#sthash.ACzhiBnN.dpuf
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Center Township CFO's spending history examined after his arrest - Indianapolis Star

Center Township CFO's spending history examined after his arrest - Indianapolis Star | Global Corruption | Scoop.it
From www.indystar.com - July 9, 12:35 PM
Before Alan S. Mizen was accused of embezzling taxpayer money, his job was to sniff out embezzlers.
The former Center Township chief financial officer who was arrested July 1 worked years earlier for the Indiana State Board of Accounts. His job? Audit government agencies to ensure that public officials are not misusing the people's money. In 2000, he was instrumental in exposing a Madison County clerk who stole about $235,000 in taxpayer money.
The 56-year-old Zionsville resident now finds himself on the opposite end of the equation. Federal prosecutors say he embezzled a little more than $340,000 from Center Township, much of the money earmarked to help the township's poor.
In June 2010, Mizen set up a PNC bank account and deposited a check for $343,541.08 drawn from the township's federal program funds, a criminal complaint says. He used the accounting system at the Center Township trustee's office to create a false invoice indicating that he had written the check to the "Treasurer of the State," the complaint says.
He then moved the money into several personal accounts and spent it over the next two years on items such as a car, tuition, cruises and jewelry, prosecutors allege.
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 http://www.scoop.it/t/corruption-1/p/4012541834/2013/12/11/global-financial-integrity-reports-illicit-financial-flows-from-developing-countries-2002-2011-overview

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