Report on Corrupt Money Flows Shows the Need for Increased Corporate Transparency

The Stolen Asset Recovery Initiative (StAR) from the World Bank and the United Nations Office on Drugs and Crime published on Monday the report The Puppet Masters: How the Corrupt Use Legal Structures to Hide Stolen Assets and What to Do About It. The study is based on an analysis of 150 grand corruption cases from the last 30 years, complemented by an assessment of company registration procedures in 40 jurisdictions and the contributions of almost 80 experts.

The evidence provided by those sources shows that corrupt government officials involved in the selected cases consistently made use of institutional loopholes allowing the creation of intransparent organizations that help them cover up traces of illegal transactions.

Among the policy recommendations discussed in the report, there is emphasis on the need to increase corporate transparency by developing registries with more detailed ownership and control information. The report also mentions that the capacity of law enforcement institutions to investigate complex legal and financial structures must improve, in order to match the challenges imposed by such corrupt practices.

Read the full press release Corrupt Money Concealed in Shell Companies and Other Opaque Legal Entities, Finds New StAR Study. Emile van der Does de Willebois, senior Financial Sector specialist at the World Bank and one of the report’s author, also posted about it on Transparency International’s blog. The full report can be accessed on StAR’s website.

Activists Call on Uncac Parties to Pressure Morocco

The pro-democracy organization Mamfakinch sent this Tuesday an open letter to representatives of State Parties to the UN Convention against Corruptin (UNCAC), who are gathered in Marrakesh for the 4th UNCAC State Parties meeting until October 28th. In the letter, the organization emphasizes that Morocco has not been fulfilling its promises to improve control of corruption and that other State Parties to the convention should put pressure on the Moroccan government to strenghten anti-corruption policies.

According to the document, posted on Mamfakinch’s website, corruption is widespread in the country as has become worse in the last decade. Its authors highlight particularly that measures such as the creation of an anti-corruption body and the adoption of some anti-corruption laws have not been effective in tackling corruption.

Moreover, they criticize the government for its lack of transparency and reluctance to consult with civil society organizations during the UNCAC review process.

Read the article Activists urge Morocco to clean up its act on corruption on trust.org. The pictured shown above is also featured in the article and is credited to Reuters. The full version of the open letter is available on mamfakinch.com.

TI Sri Lanka Releases Reports on Country’s Governance

Transparency International’s national chapter in Sri Lanka releases this week two new reports analyzing the country’s governance structures and anti-corruption institutional framework: the National Integrity System (NIS) assessment and the Governance Report for 2010.

The National Integrity System (NIS) assessment is based on a methodology implemented by Transparency International and evaluates 13 institutions considered to be the main pillars to the country’s integrity system. Apart from basic institutions such as the three government branches and the electoral commission, the study also takes into account the Human Rights Commission and the Commission Investigating Allegations Against Bribery and Corruption active in Sri Lanka. Important actors such as political parties, media, civil society and the business sector are also integrated to the assessment.

The study takes as reference the period between December 2009 and December 2010 and it is the first ever published for Sri Lanka. The main findings are that the business sector is the pillar with the best capacity to fight corruption, whereas the media, the Bribery Commission and law enforcement agencies, among others, are relatively weak in that respect. Some of factors that explain these institutions’ defficiencies are insufficient financial and human resources, a weak culture of public accountability and the absence of whistleblower protection legislation.

The Governance Report, differently than the NIS assessment, is published annually by TI Sri Lanka in partnership with other authors and seeks to foster public debate on specific issues. The 2010 edition focuses on Centralization of Power as a topic.

Read the full article published on TI Sri Lanka’s website. The full versions of the NIS Study 2010 and the Governance Report 2010 are also available online.

TI Slovakia and Fair-Play Alliance Launch Open Contracts Portal

Transparency International’s national chapter in Slovakia and the civil society organization Fair-Play Alliance have launched on Monday the portal Open Contracts, which brings together all available information on public contracts on one single platform accessible to citizens.

According to TI Slovakia, the organization has pressured the government to publish data on state contracts, and although public agencies have been improving transparency about public spending, the information is scattered across thousands of individual websites. The Open Contracts portal aims at addressing that problem by aggregating the data and allowing users to find the information they are looking for more easily.

More information is available on TI Slovakia’s website (in Slovak only). The Open Contracts website is also available in Slovak only, but a translated version can be accessed here.

Us Accuses Equatorial Guinea’s Minister of Corruption

The government of the United States has filed civil complaints requesting the forfeiture of $70 million in assets owned by Teodorin Nguema Obiang Mangue (pictured here), a minister in Equatorial Guinea and son of the country’s President.

According to the forfeiture complaints, filed in Los Angeles and Washington, D.C., Teodorin Obiang’s assets originate from misappropriation and theft of public resources from his country. They are founded on lenghty investigations that have found evidence of bank transfers from Mr. Obiang to US banks amounting to $75 million between 2005 and 2007.

This action by the US administration follows a similar one taken by France last month, when it decided to seize 11 luxury cars belonging to Mr. Obiang. Another request for asset forfeiture is under analysis by a court judge in Spain.

Read the full article US government seeks $70M from African official on hosted.ap.org. The pictured featured above is from bbc.co.uk and is credited to Global Witness.

Report Stresses Civil Society’s Role in Fighting Corruption

The non-governmental organization Tearfund launched this week the report Better together: evidence of the crucial role that citizens play in fighting corruption, during the conference of state parties to the UN Convention against Corruption (UNCAC) in Marrakesh, Morocco. The report argues that anti-corruption efforts by governments could be more effective if they would focus on the involvement of citizens at the local level.

The document highlights that UNCAC has much potential to significantly reduce corruption, but its implementation still needs improvement. As evidence for UNCAC’s limited efficacy, the study mentions the fact that the majority of the 25 countries perceived to be the most corrupt in the world, according to Transparency International’s Corruption Perceptions Index, have been parties to UNCAC since five years or more.

Examples of civil society anti-corruption initiatives are also discussed in the report to show that involvement at the local level is crucial to curbing corruption effectively, as citizens are in a better position to monitor officials in their communities than central governments are.

Read the full article Fight against corruption needs grassroots support to have bite – report on trust.org. The picture shown above is also featured in the article and is credited to Reuters.

TI Georgia Releases National Integrity System Assessment

Transparency International’s national chapter in Georgia has released earlier this week a new National Integrity System country assessment based on the period between 2009 and 2011. The report shows that the government’s drive to fight corruption in the past years has brought positive results on some fronts, but important weaknesses remain.

The National Integrity System (NIS) assessment is based on a methodology implemented by Transparency International. The study analyzes 12 institutions considered to be the core of Georgia’s integrity system. The main findings point to improvements in the Executive’s and law enforcement agencies’ capacity to fight corruption. At the same time, however, the Executive has grown stronger than the other government branches, which raises concerns about the potential for abuse of power in the government.

Additionally, the study found evidence that political parties, civil society and the media are still weak and have limited capacity to contribute to the fight against corruption.

Read the press release on TI Georgia’s website. The full report is also available on the website.

British Mps Concerned About More Aid Money Lost to Corruption

The British Parliament’s Public Accounts Committee has published a report warning the government against focusing development aid on high-risk countries, suggesting that it would lead to more aid resources being lost to corruption.

The report was a response to the announcement by the United Kingdom’s Department for International Development (DFID) regarding its plans to direct aid flows more strongly towards fragile countries such as Somalia and Pakistan.

The document also argued that the decision to direct a larger share of aid through multilateral institutions would make aid flows more vulnerable to fraud, as this means that the British government would have reduced control over how the money is spent and how funded projects are monitored.

International Development Secretary Andrew Mitchell responded to the report highlighting that the current government has a great concern about corruption related to development, and that it has taken measures to minimize it by conditioning aid spending on project results and by stablishing an independent aid watchdog to monitor finances in the development assistance department.

International civil society organizations such as Save the Children, Mango and Transparency International UK have also reacted critically to the report and expressed concern about the risk that it would keep the government from targeting aid to the countries most in need.

Read the full article UK overseas aid lost to fraud ‘could rise’ on bbc.co.uk. A press release about Mango’s and Transparency International UK’s opinion on the report is available on transparency.org.uk. The picture shown above is also featured in the article by BBC.

Uncac Coalition Publishes Civil Society Review Reports

The UNCAC Coalition has published on its website a series of reports prepared by civil society organizations to assess their country’s performance with regards to compliance to the UN Convention against Corruption and to the review process initiated in 2010. Reports from the first review cycle already cover 15 countries.

The reports have been made available shortly before the beginning of the 4th United Nations Conference of State Parties to the the UNCAC, to take place in Marrakesh, Morocco between the 24th and 28th of October. During the event, more civil society reports will be made available to the public on the website.

The documents can be accessed here.

Study Shows Sharp Increase in Media Coverage of Corruption

The Centre for Media Studies (CMS) (logo pictured here) has released a new report about media coverage of corruption between 2005 and 2011. The study shows significant increase of coverage in those six years, especially in the case of television news channels, where coverage has increased eleven fold.

According to CMS director PN Vasanti, an important part of this dynamic took place between 2010 and 2011, when coverage by news outlets doubled. Particularly noteworthy was the impact of Anna Hazare’s anti-corruption campaigns and hunger strike on the overall coverage of corruption-related topics. During the period between July and September, when this story developed, coverage by TV news channels more than tripled.

For the full article on rapidtvnews.com, please click here. The picture above is from indiatvnews.com.

First Conviction Under Uk’s Bribery Act

The United Kindgom’s new anti-bribery legislation, which came into force last July, is being enforced for the first time against a London court official, who pleaded guilty today to resquesting and receiving a bribe and to a count of misconduct in public office.

Munir Patel admitted asking for a £500 bribe to remove a driving offense from an individual’s record at the courthouse where he worked. He shall be sentenced at another hearing scheduled in November.

The Bribery Act drew much attention at the time of its adoption, due to its being one of the world’s strictest anti-bribery legislation, as it foresees that companies are obligated to ensure internal controls to prevent bribery on their behalf in other countries.

Read the full article London Court Clerk Pleads Guilty in First Bribery Act Case on bloomberg.com. The picture above is from trust.org and is credited to Reuters/Sukree Sukplang.

2011 Financial Secrecy Index Is Published

The second edition of the Financial Secrecy Index was published yesterday by the Tax Justice Network. The index scores and ranks 73 jurisdictions according to their level of banking secrecy. This year’s ranking shows that some OECD and EU members are among the most secretive jurisdictions.

Studies accompanying the index also show that recent efforts to reduce secrecy in the so-called tax havens have been unsuccessful in effectively fighting secrecy. Recent initiatives have focused in creating incentives for those countries to sign information-exchange agreements, but pitfalls to these approach include inedequate standards applied to the agreements and also room for secrecy jurisdictions to circumvent their commitment with new secrecy arrangements.

For the full article on the release of the index, please click here. The picture shown above is from cnbc.com.

Brazilians Are Becoming Less Tolerant With Corruption

In the last months Brazil has shown signs that its society is no longer willing to accept corruption as it did in the past. At the same time, the current administration’s readiness in letting go high-level government officials accused of corruption demonstrates that it shares the population’s view.

Since the beginning of Dilma Rousseff’s term last January, the President already fired four ministers and many other top-level government employees. This anti-corruption surge is uncommon when compared to previous governments. Ms. Rousseff’s timely reaction to the scandals has even helped increase voters’ satisfaction with the government.

In the meantime, the number of anti-corruption demonstrations in major Brazilian cities has been increasing. Independence Day celebrations on September 7th were marked by protests in six cities, and on October 12th, a holiday dedicated to the country’s Patroness Saint, the pictured repeated itself in 18 cities.

According to Marcos Fernandes, an economist from the think thank Getulio Vargas foundation, the flourishing of anti-corruption activism reflects a new-found concern in the country’s growing middle class about how public resources are being used. He emphasized that this group is motivated mostly by their interest in practical issues such as the efficient provision of public services, and that they are becoming aware of their right to demand that from governments.

Gil Castello Branco, founder of a civil society watchdog group focused on transparency about government expenditures, also highlighted how recent brazilians’ realization that they are entitled to accountability from their representatives. He added that this civil society engagement is needed for concrete results in anti-corruption.

Read the full article Brazil takes hard line on corruption on hosted.ap.org. The picture shown above is from riotimesonline.com and is credited to Agencia Brasil/José Cruz.

Ugandan Ministers Indicted for Graft

Three Ugandan ministers were charged with corruption yesterday, accused of fraud in contracting procedures for a $4.9 million infrastructure project executed for the 2007 Commonwealth Heads of Government Meeting in Kampala. Their indictment follows the arrest of former Vice President Gilbert Bukenya earlier this week, investigated for profiting from a $3.3 million contract for the procurement of limousines also related to the event.

The indictments were received with praise by the anti-corruption community in the country, considering the officials’ high level positions and their close connection to President Yoweri Museveni. Nevertheless, negative reactions to the case were also seen in the capital, particularly from the Buganda ethnic group, to which Mr. Bukenya belongs. They argued that the investigation against him is politically motivated.

For the full article on globalpost.com, please click here. The picture shown above is also featured in the article and is credited to Roberto Schmidt, AFP and Getty Images.

Editorial Calls on Uk Prime Minister to Strengthen Lobbying Regulations

An editorial published in The Observer called on United Kingdom’s Prime Minister David Cameron (pictured here) to fulfill a previous promise to fight corruption in lobbying through increased transparency about this activity, following the recent scandal that led to former Defense Secretary Liam Fox’s resignation.

According to the article, Cameron had already raised attention to corruption in the spurious deals between lobbyists and government officials 20 months ago, when he was still a Member of Parliament. Later on, in a speech as Prime Minister, he vowed to implement a compulsory registry system to function as a public record for all lobbying activities, including identity of clients and contact with officials.

The editorial makes use of the recent case of ex-Defense Secretary Liam Fox, who resigned after it became public that a close friend of his had been financed by companies with interest in the defense sector, to argue for the need to tighten regulation on lobbyism.

It also mentions that, in addition to corrupt deals that may emerge from the lobbying industry, increased transparency is needed to avoid that lobbying activities undermine democracy and the public interest.

Read the full article Honour the pledge to clean up lobbying, Mr Cameron on guardian.co.uk. The picture of Mr. Cameron featured above is from telegraph.co.uk and is credited to Getty.

Local Italian Tv Channel Raises a Voice Against the Mafia

An article by Dany Mitzman takes a closer look into Telejato, a small Sicilian TV channel that has emerged as a single voice against the mafia in the region. Located in Partinico village close to Palermo, the TV station focuses on anti-mafia and corruption-related stories on its daily news bulletin.

Telejato’s success can be attributed to Pino Maniaci, the journalist in charge of the news program. He claims that all local residents, including mafia members, watch the bulletin. Mr. Maniaci is seen as a pioneer for courageously reporting about mafiosi and being the first to publicly disclose their identities. Such boldness has already costed him several life threats and a murder attempt, but he is proud to keep making an effort to counter the mafia power in Southern Italy.

For the full article on bbc.co.uk, please click here. The picture shown above is also featured in the article.

Cuban Government Investigates British Company on Corruption Allegations

Cuba’s recent anti-corruption investigations into relations between state businesses and foreign companies now hit the British investment fund Coral Capital and led to the arrest of its chief executive last week. The government has not yet disclosed the accusations against the companies.

The move against Coral Capital resembles measures to shut down two Canadian trading firms in the last couple of months. In their case, the arrest of Vice Minister for sugar Nelson Labrada suggested that the investigations were related to purchases from the Canadian companies, but the specific accusations were not made public.

Efforts to fight corruption in Cuba have been a priority in Raul Castro’s government since he took power in 2008. In 2009, he established a Comptroller-General’s Office to assist the government in its anti-corruption policies.

Read the full article Cuba probes British fund, arrests top executive on reuters.com. The picture featured above is from trust.org and is credited to Reuters/Enrique de la Osa.

Colombian Government Adopts Zero Tolerance Against Corruption

Colombia’s current administration is taking measures to fulfill its pledge to turn the fight against corruption into a main priority. However, for Miguel Francisco Prado, head of the government’s anti-corruption body, efforts to better monitor state funds and contracting procedures are needed to combat graft more effectivelly.

The government has so far focused on targeting high-profile corruption cases through investigations conducted by a special taskforce with top-level officials from enforcement agencies. According to Prado, coordination between different agencies has been working much better than expected.

This strategy appears to be successful as the number of politicians and government officials arrested on corruption charges increases. Recent examples are the conviction of a former intelligence chief for involvement with paramilitary groups and the recent arrest of Bogota’s mayor for fraud in public work contracts during his administration.

Nevertheless, Prado highlights that the government must focus more strongly on vulnerable areas, such as public contracting. He emphasizes the need to increase transparency and allow the public to better monitor the government’s procurement decisions. He also raises attention to the importance of monitoring the use of state resources, particularly in the oil and mining sector, which is similarly much vulnerable to corruption.

For the full article on trust.org, please click here.

Former Chief of Navy Appointed As Chair to Pakistan’s Anti-Corruption Agency

President Asif Ali Zardari has appointed Admiral Fasih Bokhari, the former chief of Pakistan’s Navy, as the new chairman of the National Accountability Bureau (NAB), the country’s anti-corruption body. The post had been vacant since March and the NAB had been inactive during the past three months.

The appointment raised a controversy from the opposition party PML-N, which claimed that the legal process for the nomination as established in the Constitution was not observed. According to opposition leader Chaudhry Nisar Ali Khan, the PML-N raised objections to the appointment of Admiral Bokhari when first consulted by President Zardari, and replied requesting broader consultations with the opposition in order to find a more suitable candidate. Nevertheless, the President failed to give the opposition a reply about their request. The PML-N further threatened to challenge the appointment before the Supreme Court.

Admiral Bokhari is the fifth NAB chairman to come from the military. Since its inception in 1999, the NAB has had only two civilian chairmen.

Read the full article Pakistan: Former head of navy assumes helm of anti-corruption agency at adnkronos.com.

the Relationship Between Gender and Corruption

An article by Farzana Nawaz posted on Transparency International’s blog discusses the connection between corruption and gender-related issues. Some of the questions that the article addresses relate to whether women perceive corruption differently than men, and whether they are less susceptible to corruption as well.

Ms. Nawaz mentions that academic research has explored this topic only very recently, and that two main lines of research may be identified, one focusing on a potential positive anti-corruption effect of promoting women’s involvement in public administration, and the other on the specific impact of corruption on women and other vulnerable groups.

Some studies, for instance, have shown evidence that higher representation of women in government is associated with lower levels of corruption. Nevertheless, there are scholars who argue that this conclusion masks another mechanism, namely that the imbalance in gender relations determines women’s limited access to corruption networks.

For the full article on blog.transparency.org, please click here. The picture shown above is also featured in the article. The discussion continues on a longer article available here.

Kosovo Democratic Institute Releases New Report on Corruption and Organized Crime

The Kosovo Democratic Institute (logo pictured here) published last week a new report entitled Illegal Millions, which discusses the implications of a Law against Organized Crime and a Law on Confiscation of Property Acquired Illegally for the fight against corruption and organized crime in the country.

The report was launched at an event held on October 12th at AAB-riinvest, where students and representatives of several organizations participated in a roundtable on the subject Organized crime and illegally acquired property, an obstacle for the development of Kosovo.

During the discussion, some arguments were made in favor of the passing of further legislation to address those problems in Kosovo, and also of strengthening implementation of existing laws. The event was organized as part of the project Advocacy for the completion of the package of anti-corruption laws in Kosovo, supported by the British Embassy.

Read the full text Illegal millions – destroying the future on KDI’s website. The report Illegal millions is available in Albanian, English and Serbian.

Police Raids Former Indian Minister’s Home

The homes of ex-minister Dayanidhi Maran (pictured here) have been searched by the Indian police as part of an investigation into his alleged involvement in the 2G license corruption scandal. Mr. Maran was Minister of Communications and Information Technology until 2007 and later occupied the position of Minister of Textiles, from which he resigned in July after being connected to the scandal.

Mr. Maran is accused of coercing the founder of Aircel mobile company to sell his share to the Malaysian firm Maxis. According to the investigators, Maxis would have paid kickbacks to Maran’s brother, Kalanidhi Maran, through his SUN TV network. A case against both of them has already been filed under the Prevention of Corruption law.

Read the full article Indian ex-minister Dayanidhi Maran’s homes raided over graft on bbc.co.uk. The picture of Mr. Maran shown above is also featured in the article and is credited to AFP.

New Resolutions Adopted at TI Annual Meeting

Transparency International held last week its Annual Membership Meeting, where representatives of National Chapters and members from a total of 106 countries attended to discuss the Movement’s present and future strategies. The participants adopted five resolutions that will orient the organization’s advocacy work in the next year.

One of the resolutions addressed the need for accountability and anti-corruption issues to be incorporated into the discussions about increasing aid effectiveness. A second resolution focused on the importance of initiatives to strengthen accountability and good governance in the Middle East and North Africa region.

A document demanding the implementation of anti-corruption mechanisms in climate governance structures was also part of the outcome of the Annual Meeting. Another resolution listed seven priority areas which must be addressed by the G20 countries in order to increase financial transparency, tackle foreign bribery and make stolen asset recovery measures more effective.

Finally, the participants of the meeting came to an agreement about six points that shall be submitted to the next session of the Conference of States Parties to the UN Convention against Corruption (UNCAC), with a special focus on demands to open up the UNCAC review process to civil society participation.

A full summary of the results from the Annual Membership Meeting is available in the text Working together towards change, published on TI’s website. Some of the resolutions are already available on the same webpage.

Mass Investigation Against Police Officers in Mexico

The northern Mexican city of Linares has begun to investigate its entire police force for corruption and connections to criminal groups. The decision to conduct the investigation was triggered by an increase in kidnapping and extortion occurrences in the city.

According to the town’s mayor, Francisco Quintanilla, over 100 city police officers were transported by bus to another town, where they will be held in custody while the investigation is running. In the meantime, Linares will be patrolled by soldiers and state police officers.

Read the full article Mexico city’s police force held for investigation on hosted.ap.org. The picture shown above is from mexico.cnn.com.

TI Bosnia & Herzegovina Comments on Eu Report

Transparency International’s National Chapter in Bosnia & Herzegovina published last week a press release commenting on a report on the country’s progress in anti-corruption, published by the European Commission. The report showed a disappointing picture about anti-corruption measures in Bosnia & Herzegovina, and pointed out in particular that political will to improve control of corruption is lacking.

According to the report, insufficient enforcement of anti-corruption legislation is one of the main obstacles to fighting corruption more effectively. Additionally, the anti-corruption legal framework still lacks harmonization across levels of government. The assessment for 2011 reiterated some problems already identified in the reports published in previous years, such as inefficiencies in the Judiciary that contribute to delay the prosecution of corruption cases.

Among the report’s recommendations was the need for a more precise and thorough regulatory framework for political party financing and stricter enforcement of the legislation in this area.

Read the full text Step backward in fight against corruption available on TI-Bosnia & Herzegovina’s website.