Corruption

Written by  //  February 7, 2013  //  Government & Governance  //  2 Comments

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

Transparency International

Corruption Economist illustration

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)

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 15th 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?

2 Comments on "Corruption"

  1. Antal (Tony) Deutsch November 25, 2012 at 5:10 pm · Reply

    Corruption has probably been with us longer than recorded history. I am not sure that taxonomy provides a very useful policy instrument in this case. Suppose we treat corruption, to take a common version, bribe taking by an official empowered to issue a license, as a crime. The usual formula is
    Payoff = Gain from crime—(Penalty of apprehended offender X ex ante probability of detection)
    Obviously the payoff can be made to vary as to sign and magnitude by changing the other variables. Here you might hit exogenous constraints. If you want to reduce the theft of apples, you may be tempted to impose the death penalty, only to discover that there will be no social support for the measure. Alternatively, you might consider putting each apple tree under 24 hour guard, to discover that the proposed measure is not cost effective.
    In the case of bribery, the job-loss on apprehension has to be painful enough to deter.(You do not hear much about corrupt postal clerks in Canada. In post-colonial Congo they routinely removed stamps from letters, and resold them to the next customer.) Within living memory, the secret of succeeding on the Quebec drivers test was to “forget” a large box of cigarettes on the bench-seat of the test car. This is gone: civil servants have well-paid union jobs, and a lot fewer cigarettes are smoked.
    We do have the means to deal with corruption in many cases, but where it is needed, we lack the political will to act.

  2. SK December 6, 2012 at 7:32 pm · Reply

    Two things: Hughette Labelle,currently head of Transparency International, used to be CEO of CIDA
    Secondly, I would like to see a graph indicating the degree of corruption according to TI’s scale in relation to the amount of foreign aid per capita in various countries.
    I think the correlation would be fascinating.
    I have always found Transparency International an “interesting” group.
    The contention of TI with respect to Haiti supports the Canadian government view that aid to Haiti must be controlled by the donors, not by the government of Haiti, in spite of what M Denis Coderre would apparently like to see. Stephen

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