Posts Tagged ‘corruption’

02
January 2013

The biggest anti-corruption story of 2012

The FCPA Blog

President Obama signed into law earlier this month the Magnitsky Act. It targets travel and economic sanctions against those responsible for the jailing and death of Russian lawyer Sergei Magnitsky. But the importance of the law extends far beyond that.

For decades (and with more urgency since 9/11), the United States has been looking for a legal way to punish foreign kleptocrats. The Magnitsky Act is the answer.

The immediate aim is to hold people in Russia accountable for what happened to Magnitsky. After he uncovered a $230 million tax fraud apparently orchestrated by mobsters and government officials, he was detained without trial. After a year in custody, he died in jail.

No one in Russia has been arrested or tried for his 2009 death or the crimes he discovered.

Without the Magnitsky Act, there were obstacles for the U.S. to punish Russians implicated in the case. The FCPA only reaches bribe payers and not bribe takers. A newer law, Presidential Proclamation 7750, enacted by George W. Bush in 2004, allows the State Department to deny U.S. visas to kleptocrats and their cronies — but only in secret, never naming those targeted. And the DOJ’s more recent Kleptocracy Asset Recovery Initiative uses cumbersome asset forfeitures against crooked foreign leaders but doesn’t impose any punishment on the individuals themselves.

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20
December 2012

Why Putin’s Russia Is Dissolving

The Moscow Times

In Moscow at a conference for young Russian journalists last week, I met Eduard Mochalov, who differed from most of the participants in having spent much of his working life as a farmer. He retains the ruddy countenance and the strong, chapped hands of the outdoor worker in a hard climate — in his case, that of the Chuvash Republic, about 700 kilometers east of Moscow.

Mochalov’s story is that when thieves stole some of his cattle and pigs, he protested to the authorities, only to find himself in jail for eight months based on a wrongful accusation. Maddened by what he considered the result of corruption behind the scenes, he protested all the way up to President Vladimir Putin, going so far as to appear in Red Square with a placard telling his story. As he pursued justice, his farm went untended.

And so he turned to journalism. “I had no choice. The whole administration was corrupt, nothing to be done but fight them with words,” he told me. Four years ago he founded a newspaper that he boldly named Vzyatka, which in Russian means bribe. It comes out nearly every month and is replete with investigations and denunciations of corruption in his locality. He prints some 20,000 copies and gives them away. Demand, he says, hugely outpaces supply.

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18
November 2012

Russians Look Askance at Anticorruption Drive Even as New Scandals Arise

The New York Times

In the past, President Vladimir V. Putin has always been reluctant to expel or prosecute high-level officials, despite widespread complaints about corruption. So the mushrooming scandals are unusual, raising questions about what has changed.

There is little doubt that the Kremlin has been battered by opposition campaigns highlighting official corruption. Political strategists, searching for ideas powerful enough to consolidate the country around Mr. Putin, may seize on fighting corruption as a Kremlin effort, and recent steps hint at a populist push to expose and punish guilty officials.

“A tough, uncompromising battle with corruption has begun,” announced Arkady Mamontov, a pro-government television host, in a much-hyped documentary titled “Corruption” that, though it was broadcast close to midnight on Tuesday, attracted nearly 20 percent of the television audience. “In the course of the next months, we will see many interesting things. The main thing is that we should not stand aside and watch what is happening, but take an active part in it.”

Political observers have watched the anticorruption drive curiously, debating where it might be headed, and especially whether, for the first time since Mr. Putin came to power, high-ranking officials would face prosecution. On Monday, the newspaper Vedomosti declared that Moscow was witnessing the beginning of a “cleansing of the elite” — a flushing out of a political system that lacks other mechanisms of renewal, like competitive elections. Others were skeptical that the effort would reach beyond midlevel officials.

“It cannot become an overall ideology, because Putin’s system is dependent on corruption — on corruption as a form of management and a guarantee of loyalty from officials,” said Aleksei Navalny, a blogger and anticorruption activist. “They will not kick out from under themselves the stool that they are standing on.”

Last week, it seemed the Kremlin had not decided how far to take its anticorruption drive. On Wednesday, Russian news agencies reported that the highest-level official to be implicated — the former defense minister Anatoly E. Serdyukov — had been offered a comfortable new job as an adviser to the director of Rostekhnologii, a company that produces and exports high-tech equipment.

The news prompted waves of angry commentary from those who had hoped Mr. Serdyukov would be prosecuted, including Adm. Vladimir Komoyedov, who heads the Defense Committee in the lower house of Parliament.

“There is a signal in the navy that means ‘man overboard,’ ” he said. “We all thought the former minister had fallen overboard, and his fate would be sorrowful. But it turned out he was still inside the submarine.”

Others said it was more evidence that Mr. Putin does not give up his own. By way of commentary, the newspaper Kommersant posted a still from “The Godfather” in which the Mafia don embraced one of his lieutenants, along with a quotation: “Friendship is everything.”

Officials the next day denied that Mr. Serdyukov had been offered the job. Asked about the case at a news conference, Mr. Putin confirmed that, but said it would not be a problem if Mr. Serdyukov was given a new position, since he has not been formally accused of wrongdoing.

“There is a generally accepted practice that a person is innocent as long as a court has not proven his guilt,” he said. “If he wants to gain work anywhere, I don’t think that we should prevent that. He has the right to work.”

The Kremlin faces a dilemma in resolving Mr. Serdyukov’s case. Russians largely supported Mr. Serdyukov’s dismissal, and some speculated that the anticorruption effort was bolstering Mr. Putin’s approval ratings. The firing was particularly popular among prosperous urban males — a population that has turned away from Mr. Putin in recent years, and which he is no doubt eager to win back. But a prosecution would shine light on a deep and pervasive flaw of Mr. Putin’s system, with unpredictable consequences.

Mr. Navalny said he was “cautiously optimistic” that information about corruption had begun to emerge into public view, even if high-level officials were not punished.

As they broadened the investigation into the Defense Ministry, federal investigators have reopened an embezzlement investigation singling out a Moscow tax official close to Mr. Serdyukov, Vedomosti reported Wednesday, citing unnamed law enforcement officials.

The tax official, Olga Stepanova, was also at the center of a notorious case: the lawyer Sergei L. Magnitsky accused her of embezzling $230 million from the Russian Treasury by filing false corporate tax returns. Shortly thereafter, Mr. Magnitsky was detained on tax evasion charges. He died in pretrial detention in 2009, at the age of 37, and the authorities have consistently denied that Mr. Magnitsky’s allegations had any merit.

“Factually, this looks like an acknowledgment of relatively obvious things,” Mr. Navalny said. “I am happy that these facts are coming out, and that it will now be harder to escape from accusations, including ours.”

There will almost certainly be more corruption cases in the coming months. One especially eager official is the deputy prime minister, Dmitri O. Rogozin, who wrote on Twitter: “I will insist that corruption in defense procurement will be equivalent to treason! Have they lost their fear? We will find them!”

Sergei V. Stepashin, the chairman of the federal accounting chamber, Russia’s main auditing body, told the news service Interfax on Wednesday that a trillion rubles a year, or around $31.5 billion, is being siphoned from Russia’s budget in the course of state procurement — about one-fourteenth of the entire budget, he estimated.

Mr. Mamontov’s documentary sketched out one scheme that made this possible: go-betweens at the Defense Ministry, he said, would buy low-quality coal at rock-bottom prices, then resell it through shell companies back to the ministry at a tenfold markup.

He then swung his focus to one person suspected of being a culprit: Yevgeniya Vasilieva, a 33-year-old lawyer at the ministry who was shown in photographs carousing in a silver sequined dress. The camera lingered over Ms. Vasilieva’s 13-room, $10 million Moscow apartment and five boxes that held $3 million worth of jewelry.

After the show was broadcast, Igor Bunin, the director of the Center for Political Technologies in Moscow, said he believed fighting corruption would “become one of the elements of the regime’s ideology,” and that more films — and more prosecutions — were on the way.

“You need to understand that when you start such a battle with corruption, it touches the whole political class and, of course, leads to direct political consequences, a new political system,” Mr. Bunin said in an interview with the radio station Kommersant FM. микрозайм онлайн займы на карту без отказа https://zp-pdl.com/get-quick-online-payday-loan-now.php https://zp-pdl.com/get-a-next-business-day-payday-loan.php займ на карту

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29
October 2012

Anti-Corruption Views – The rallying cry of an anti-corruption warrior

Trust Law

Launching a global anti-corruption movement is no mean achievement. When a band of evangelists founded Transparency International in 1993, Frank Vogl recalls they were scoffed at. The Economist magazine drew a cartoon depicting them as vainglorious Don Quixotes tilting at windmills. Bribery, like death and taxes, was viewed as unfortunate but a sin to largely tolerate.

Almost 20 years later, anti-corruption has moved to the centre of global policymaking. It was a driving force behind the Arab Spring, when protesters angered by poverty, lack of opportunity and pillaged national wealth overthrew dictatorial governments. It is discussed at meetings of G20 world leaders, enshrined in international conventions and in national legislation. Today there is a thriving lobby of specialists putting the squeeze on kleptocrats by exposing illicit money flows, revealing the revenues they pocket from oil, gas and mineral contracts and scrutinising how foreign direct aid is managed.

In this highly readable primer “Waging War on Corruption”, Frank Vogl, a former journalist and World Bank communications manager, describes how a band of former World Bank officials and lawyers angered by seeing development aid line the pockets of government and business elites, decided to do something about it. They rejected the idea that corruption is embedded in certain cultures and believed change can come from mobilising individuals. Today Transparency International has grown from its headquarters in Berlin to chapters in 90 countries around the world and is the leading voice in fighting corruption, its scoring of countries’ public sector in its Corruptions Perceptions Index followed as a benchmark. The simple but powerful idea was to hold government officials accountable, so that sunshine might have a sanitizing effect on behaviour.

The strength of Vogl’s book is in making clear the linkages between corruption and thwarted economic, political and social development; and between corruption and weakened international security. He tells a sweeping narrative of how the fall of the Berlin Wall inspired a new generation to rise up, and how the spread of communications technologies has further empowered the movement.

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29
June 2012

Russia’s growth stifled by corruption

BBC News

President Vladimir Putin has said he wants to make Russia the fifth-biggest economy in the world.

It currently stands at number 11.

He wants to boost foreign investment as part of his new economic plan.

But some foreign investors are worried about Mr Putin’s return as head of state for another term of six years after allegations of vote-rigging and protests both before and following his re-election.

Furthermore, despite Russia’s rich resources and its place among the world’s fastest-growing economies, there remains a general feeling that the country is underperforming and falling far short of its potential.

According to Angus Roxburgh, former BBC Moscow correspondent and later a public-relations adviser to the Kremlin, there is one overriding reason why Russia is failing to achieve its economic potential and failing to attract outside investors: corruption.

Worsening scenario

“It is something the government acknowledges but seems powerless to combat, despite a regular stream of anti-corruption decrees and initiatives,” he says.

“In fact, it gets worse year by year. According to official figures, the average bribe in Russia is more than $10,000,” he notes.

Transparency International, which ranks countries according to perceived levels of corruption, says Russia has slumped from 46th place in 1996 to 143rd in 2011 .

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27
June 2012

The FCO’s human rights work in 2011

The FCO’s human rights work in 2011

Written evidence from Hermitage Capital Management

May 2012

Specifically addressing the cross-Government strategy on business and human rights, expected to be published later in 2012, and how it should define the relationship between the FCO’s human rights work and the promotion of UK economic and commercial interests in UK foreign policy.

Short summary:

· British businesses should be able to invest in all countries knowing that they are fully supported by the UK government should they experience business and human rights problems.

· At present there is an apparent conflict between the British government’s promotion of business and its professed support for human rights. Based on our experience, the desire to promote British business takes precedence at the expense of any serious practical promotion of human rights. While this may appear to be the rational strategy at a time of economic recession, upholding human rights actually protects British businesses operating abroad as the Hermitage Capital case demonstrates.

There are a number of measures which the British government could take which would give it the leverage to protect international commerce and at the same time promote human rights:

· The British government should impose visa bans and asset freezes on all individuals involved in human rights abuses and high level corruption affecting British businesses.

· It should conspicuously publish a list ‘naming and shaming’ those individuals banned from entering the UK based on their involvement in such activities.

· UK businesses should be warned against investing in countries with dubious human rights records and with a history of economic aggression – such as Russia – in the same way that the FCO offers travel warnings to British tourists.

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15
June 2012

Living with Putin, again

The Economist

On the margin of the G20 summit later this month Russia’s new (but also old) president, Vladimir Putin, will meet America’s Barack Obama for the first time since his election in March. The atmosphere is likely to be chilly. That is as it should be, for since his decision last autumn to return to the Kremlin, Mr Putin has been stridently negative and anti-Western, most recently over Syria (see article). Such behaviour demands a stiff response from the West.

When Mr Obama came to power, his administration talked of a “reset” in relations with Russia. This new, friendlier approach had some useful consequences. It enabled America to negotiate and ratify a strategic arms-reduction treaty. It helped to bring about a slightly more constructive Russian attitude to Iran’s nuclear ambitions. And it secured Russia’s imminent entry into the World Trade Organisation (WTO). Just as with China a decade ago, WTO membership should press Russia to compete more openly and fairly in world markets and to abide more closely by international trade rules.

But the reset was based in part on two misplaced hopes: that Dmitry Medvedev, who had been lent the presidency for one term by Mr Putin in 2008, would genuinely take charge of the country, and that some in his government had sound liberalising, pro-Western instincts. Those hopes were dashed by Mr Putin’s swatting aside of Mr Medvedev last September to allow his own return to the Kremlin, the rigging of elections, his crackdown on Moscow’s protesters and his new Nyet posture.

This should not lead to a total rupture with Russia. Constructive engagement should continue on the economic front. With the oil price falling, stronger economic ties to the West could help to create a business constituency inside Russia that sees the need for greater liberalisation to keep the economy growing. The West should certainly look at introducing reasonable visa rules for Russian businesspeople (Britain’s are absurdly tough). Other cold-war relics, such as America’s Jackson-Vanik trade restrictions, should also go. And why not dangle in front of the bauble-loving Mr Putin the prospect of Russian membership of the OECD rich-country club? Or a free-trade agreement with the European Union?

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03
April 2012

Navalny Presses for Inquiry Into Putin Deputy

New York Times

Aleksei Navalny, Russia’s most prominent anticorruption activist, added to the pressure on the Russian government to investigate allegations of what he called corrupt financial practices by a senior deputy to Prime Minister Vladimir V. Putin.

The accusations against the deputy, Igor I. Shuvalov, were initially brought to the attention of Russian prosecutors months ago, but on Friday, Mr. Navalny publicly posted the documents that form the basis of the allegations on his Web site.

At issue in the case is not their authenticity – a Moscow law firm has already confirmed they are real – but whether what is described violated laws or might be considered unacceptable, even in Russia’s political system.

Mr. Navalny said he still did not expect law enforcement to act against such a senior official. He said the publication was intended to reinforce the opposition’s message that corruption is pervasive in the Russian government.

“This is not a case of somebody in Siberia stealing pipes,” Mr. Navalny said. “It occurred within the oligarchy that lives abroad and with a Western-oriented official. It will be remembered. Now, every time the fight against corruption comes up, so will Shuvalov’s name.”

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01
March 2012

INSIGHT-In Russia, a graft-buster’s mission impossible

Reuters

Wounded in Afghanistan and an 18-year veteran of Russia’s elite Alfa counter-terrorist forces, Sergei Vasilenko considers himself a patriot.

Which is why, when his bosses at the Federal Security Service – successor to the Soviet KGB – asked him in 2010 to investigate corruption, he jumped at the chance.

The problem, Vasilenko now says, was that his new chiefs at the Federal Tax Service didn’t want him to do his job properly. Vasilenko’s experience opens a window into what even Prime Minister Vladimir Putin, bidding for a third Kremlin term, calls Russia’s “systemic” corruption. It’s a malaise that Putin’s political opponents say has flourished during the prime minister and former president’s 12 years as Russia’s most powerful leader.

Vasilenko says his probe, into suspected fraud involving tax officials in Moscow, met a wall of silence and he was soon out of a job. The Federal Tax Office said it had investigated Vasilenko’s allegations but declined further comment.

Now the former soldier works with Analysis and Security, a local anti-corruption campaign group run by former tax officials, security professionals and managers of firms that have been on the wrong end of the kind of shakedowns the group seeks to expose.

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