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The FT asks: “Has corruption become more common?”

The frequency of exposures and the political impact of corruption scandals appear to be increasing all over the world, says Gideon Rachman in the Financial Times.

Despite their holier-than-thou aura, he notes that bankers, lawyers, real estate agents and PR firms in the US, UK and EU often share in the proceeds of corruption.

As former US vice-president Joe Biden was reported to have said, at a Defend Democracy conference in Copenhagen, globalisation has deepened rifts, divorced productivity from labour and created less demand for low-skilled labour:

“When people see a system dominated by elites and rigged in favour of the powerful they are much less likely to trust democracy can deliver”.

The most recent example of corruption highlighted on this website follows:

After an initial denial (left, Financial Times), Economia confirmed that in an official response to the French government dated 30 March 2017,  a HMRC official noted that Lycamobile is “a large multinational company” with “vast assets at their disposal” and would be “extremely unlikely to agree to having their premises searched”, said the report.

The letter from HMRC to the French government added, “It is of note that they are the biggest corporate donor to the Conservative party led by Prime Minister Theresa May and donated 1.25m Euros to the Prince Charles Trust in 2012”.

This is an ongoing saga: in 2016 Economia noted: “The Tories have come under fire for continuing to accept donations of more than £870,000 from Lycamobile since December, while it was being investigated for tax fraud and money laundering”. 

Many senior British politicians have taken bribes and many ministers and civil servants move to lucrative positions with companies who have benefitted from legislation supported by these new colleagues – through the revolving door.

The unspoken ethic:

Elsewhere:

  • In South Africa president Jacob Zuma was compelled to resign because of corruption scandals.
  • Dilma Rousseff, the President, was impeached in Brazil in 2016.
  • The Atlantic Council, whose largest funders include the United Arab Emirates, the Abu Dhabi National Oil Company, Airbus Group SE, Crescent Petroleum & the Foreign & Commonwealth Office of the United Kingdom describes the ruling United Russia party as the “party of crooks and thieves”.
  • Narendra Modi came to power in India with a pledge to crack down on corruption among the elites. He has since abolished about 80% of the country’s currency, in an effort to ruin the black economy.
  • In China, President Xi Jinping’s anti-corruption drive has seen more than 100,000 officials arrested.
  • Mariano Rajoy has been forced to resign as prime minister of Spain after seven years in office, following a scandal in his political party.
  • Malaysia’s ruling party lost power after allegations that the prime minister, Najib Razak, had embezzled vast sums.

Rachman believes that corruption has become more common and also easier to expose:

“The globalisation of business and finance opened up opportunities to make corrupt profits in fast-growing emerging economies.

“Industries that often need official involvement, such as natural resources and infrastructure, are particularly lucrative targets. There are contracts to be awarded and development projects that need official approval. And the money for bribes can always be deposited offshore.

“But such malpractice can be exposed. Strong, independent prosecutors and judges such as Brazil’s Sérgio Moro and South Africa’s Thulisile Madonsela have done heroic work in driving forward anti-corruption investigations. Press freedom in Brazil and South Africa has also been critical in keeping up the pressure on corrupt politicians. Even when the national media are muzzled, the internet provides an alternative medium for airing corruption allegations. The “Panama Papers”, which detailed the offshore financial affairs of many prominent politicians, was the result of an international journalistic project and based on hacked documents”.

He adds that new forms of international co-operation and transparency have also made would-be crooks more vulnerable to exposure. Changes in the Swiss laws on banking secrecy — made under pressure from the US — were crucial to allowing Brazilian prosecutors to uncover the proceeds of corruption. International investigations by the Swiss and Americans also kept up the pressure on Malaysia’s Mr Razak.

Lasting progress, Rachman writes, requires strong institutions that can survive changes in the political climate:

  • independent courts and prosecutors with training and resources;
  • a press that cannot easily be bought off, jailed or killed;
  • efficient civil servants who cannot be fired at the whim of a corrupt boss.

He points out that if any of those elements are removed, corruption seeps back into the system.

The “clean hands” investigations in Italy in the early 1990s swept away many powerful figures — and were seen as a watershed. But Rachman cites the case of Silvio Berlusconi, tried 22 times on charges ranging from tax evasion and bribery to corruption and association with the Cosa Nostra. He was  convicted of tax fraud in an Italian court and sentenced to four years’ imprisonment – served as community service – but has now been cleared to stand for election as prime minister once again.#

 

 

 

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Admirable politician – 11: working for the common good, Ketumile Masire,1925-2017

Following our tenth entry: MP Andrew Gwynne, who successfully introduced the Debt Relief (Developing Countries) Act and worked long and hard to get justice for those who received contaminated blood through the NHS, we turn to Botswana, after reading an obituary by Emily Langer in the Independent. Her subject was Ketumile Masire – a statesman who described himself as ‘a farmer who has been drawn into politics’. 

A summary with added links and photographs

Masire herded cattle before enrolling in a primary school at 13 and receiving a scholarship to attend a high school in South Africa that trained many leaders of the first government of independent Botswana. When his parents died he supported his siblings, becoming a headmaster. He later earned a Master Farmers Certificate, and having saved enough money to buy a tractor and became a successful farmer.

Botswanan cattle

He served on tribal and regional councils and was a founder and secretary-general of the Botswana Democratic Party, now the country’s leading political party. He once travelled 3,000 miles of the Kalahari Desert to attend two dozen meetings over two weeks.

After serving as minister of finance and development planning and Vice President, Ketumile Masire became President of Botswana (1980-1998): roads and schools were built, healthcare improved, access to clean water expanded, farming techniques advanced and life spans extended.

The discovery of diamond reserves had transformed the country’s prospects and Masire continued to use the revenues for the public good after the death of his predecessor Seretse Khama.  

He became ‘a model leader in a model nation on a continent where poverty, corruption and violence had crushed the hopes of many for stability and prosperity’. 

After leading Botswana through a drought that persisted for much of the 1980s, he shared the Africa Prize for Leadership awarded by the Hunger Project in recognition of the food distribution efforts that helped the country avoid starvation during the crisis.

Though South Africa was Botswana’s major economic partner, Botswana opposed apartheid. “He had to walk a fine line in a really rough neighbourhood,” said Chester Crocker, a former US assistant secretary of state for African affairs. “He had to get along with everybody, without sacrificing his principles.”

After leaving office, in addition to tending the cattle on his ranch, Masire advised other African leaders and chaired an international panel that investigated the Rwandan genocide of 1994. He made important contributions to peace efforts in Congo and, more recently, Mozambique. He established a foundation which seeks to improve agriculture, governance and children’s health in the region.

He once said: “We have a saying in Botswana: A man is never strong until he says what he believes and gives other men the chance to do the same. I am proud to say without a doubt – we are a strong democracy.” 

A more chequered account of his life is given in  Wikipedia..

 

 

 

 

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Broken Britain 5: Martin Wolf annotated. Plus a lesson from Delhi

Extracts with bracketed comments = original text here, may be subject to paywall

In the Financial Times, Wolf asks: “Why has the appeal of populist ideas grown in western countries? Is this a temporary phenomenon?”

He continues: “What, first of all, is a populist?” And answers:

  • The abiding characteristic of populism is its division of the world into a virtuous (powerless) people on the one hand, and corrupt elites . . . on the other.
  • Populists distrust (corrupted) institutions, especially those that constrain the “will of the people”, such as courts, independent media, the bureaucracy and fiscal or monetary rules.
  • Populists reject credentialed experts (funded to serve vested interests). They are also suspicious of free markets and free trade (misnomers – so-called free traders erect tariff barriers whenever they can).
  • Rightwing populists believe certain ethnicities are “the people” and identify foreigners as the enemy. They are economic nationalists (but keen exporters and speculators) and support traditional (discriminatory & inhumane) social values.
  • Populists (left and right) put their trust in charismatic leaders
  • Leftwing populists identify workers as “the people” and (only the uncaring) rich as the enemy. They also believe in state ownership of property (if there were ever to be an honestly run state)

Wolf asks why these sets of ideas have become more potent (because central control, corruption and deprivation is increasing alarmingly). He refers to a Harvard study which considers immigration a cultural shift but argues that it can also be reasonably viewed as an economic one (because it’s cheaper to import subservient low-cost labour than to educate one’s own citizens)

What has changed recently?

“The answer is the financial crisis and consequent economic shocks. These not only had huge costs. They also damaged confidence in — and so the legitimacy of — financial and policymaking elites.

“These emperors turned out to be naked” (Correct).

He thinks that the results of past political follies have still to unfold:

  • The divorce of the UK from the EU remains a process with unfathomable results.
  • So, too, is the election of President Trump. The end of US leadership is a potentially devastating event.
  • Some of the long-term sources of fragility, cultural and economic, including high inequality and low labour force participation of prime-aged workers in the US, are still with us today.
  • The pressures for sustained high immigration continue.
  • The fiscal pressures from ageing are also likely to increase.

Wolf’s remedy the economic anxieties can and must be addressed: we must recognise and address the anger that causes populism. He continues: “populism is an enemy of good government (the status quo) and even of democracy (which has yet to be achieved)”.

Aam Aadmi (the Common Man’s Party) originated in the India Against Corruption (‘anti-graft’) movement. It claimed that the common people of India remain unheard and unseen except when it suits the politicians. It stresses self-governance, community building and decentralisation; advocating government directly accountable to the people instead of higher officials. It was formally launched on 26 November 2012 and won 67 of the 70 seats in the Delhi state assembly elections in 2015.

IMHO, as one correspondent often opens, building a stable democracy will require:

  1. proportional representation in which the votes cast reflect the true support for all participating parties and independent candidates;
  2. the attraction of parliamentary candidates with a track record of public service, offering only the national average wage, supplemented by basic London accommodation where needed and travel/secretarial expenses.
  3. and the clear understanding that after election these MPs (and their families) should acquire no shares or non-executive directorships.

And “self-governance, community building and decentralisation; advocating government directly accountable to the people instead of higher officials”.

 

 

 

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Panama Papers: sad truth voiced by Slavoj Žižek is no surprise to readers of this website

Anne sends a link to the ‘shameful’ news that the 50 biggest US companies have more money stashed offshore than the entire GDP of Spain, Mexico or Australia, collectively keeping about $1.3trn (£0.91trn) in territories where the money does not count towards US tax, according to a new report by Oxfam.

panama papers

Several readers have sent material about the Panama Papers but until now they have not been mentioned on this site – because, as Žižek writes: “The only truly surprising thing about the Panama Papers leak is that there is no surprise in them:

“Didn’t we learn exactly what we expected to learn from them?”

He highlights the ‘shameless cynicism’ of the existing global order and our shame for tolerating their power. In Vox.Com Tara Goshan elaborates:

“Corruption is not a contingent deviation of the global capitalist system, it is part of its basic functioning . . . The papers demonstrate how wealthy people live in a separate world in which different rules apply, in which legal system and police authority are heavily twisted and not only protect the rich, but are even ready to systematically bend the rule of law to accommodate them”.

She points out that, after many years of pressure on Swiss banks to reveal information about rich Americans who hide their money offshore, the U.S. is resisting new global disclosure standards; wealth management experts are now helping the world’s rich move accounts from places like the Bahamas to Nevada, Wyoming, and South Dakota. Goshan quotes Peter A. Cotorceanu, a lawyer at Anaford AG, a Zurich law firm, in a recent legal journal:

“How ironic—no, how perverse—that the USA, which has been so sanctimonious in its condemnation of Swiss banks, has become the banking secrecy jurisdiction du jour. That ‘giant sucking sound’ you hear? It is the sound of money rushing to the USA.”

The Labour Leader Jeremy Corbyn responded to the prime minister’s statement to the House of Commons about his tax affairs:

“I’m honestly not sure Mr Speaker that the Prime Minister fully appreciates the anger that is out there over this injustice.

“How can it be right that street cleaners, teaching assistants and nurses work and pay their taxes yet some of those at the top think the rules simply don’t apply to them.

“The truth is, is that the UK is at the heart of the global tax avoidance industry. It’s a national scandal and it’s got to end”.

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Anne comments on the focus away from this international scandal, sending a link to the news that today the Security Council holds an open debate on counter-terrorism.

Will the attention of the 99% once again be successfully distracted by the political-corporate alliance?


Secret State (10) and another whistleblower

ian foxleyIn 2010 Ian Foxley (Lieutenant Colonel, British Army, retired) became a Saudi-based employee of GPT Special Project Management, a subsidiary of Airbus. GPT provided secure communications systems to the Saudi national guard under an agreement between the MoD and the Saudis.

Arabian Business reported way back in 2011 that a source at the SFO told the paper a preliminary investigation was underway into claims of corruption, noting that the £2bn ($3.2bn) communications contract was one of the largest awarded in recent years by Saudi Arabia.

parl business logo

In a report of evidence given to the Parliamentary Commission on Banking Standards it was recorded that Mr Foxley had discovered documentary evidence of gross irregularities, and attempts to cover them up, within GPT and the SANGCOM Project which he reported to EADS Group Compliance, the UK MoD and the Serious Fraud Office. The Financial Times [April 28th] added that he discovered gifts to Saudi military officials and illicit payments routed through the Cayman Islands and provided evidence of the questionable transactions to an MoD official overseeing the project.

As the MoD informed his bosses at GPT that he had raised concerns, he left Saudi Arabia. In 2012 other MoD/Saudi irregularities were exposed. Though the UK Serious Fraud Office began a corruption investigation in 2012 and arrested and questioned six people in 2014 including current and former GPT employees and former MoD officials, no one has been charged.

MoD

The Ministry of Defence (housed above) decided to hold back parts of the material to be released to Richard Brooks, a journalist at Private Eye magazine, after his freedom of information request. Mr Brooks, who has reported on the alleged corrupt transactions related to a contract to equip Saudi Arabia’s national guard, told the three-judge panel on the tribunal that the refusal to reveal the information amounted to a cover-up.

Ian Foxley (FT May 18th) describes this as a battle between the correct implementation of UK law in exposing and fighting alleged corruption or the continued official concealment of “legacy commercial issues” in order to propagate overseas trade, writing, “It is a real contest between God and Mammon, morality or money, copper or conscience. At question are the values and principles of a number of government departments through a real litmus test of their integrity”.

He asks two questions:

  • Should we allow civil servants to try to use UK law to favour overseas potentates and avoid offence to those who might otherwise offer us contracts, jobs and oil?
  • Why should the law applied to individuals not apply also to corporates and government departments?

And ends: “We cannot, and must not, allow our government departments to be complicit in or wilfully blind to corporate corruption. So, if our new government maintains it is fighting for UK business, that’s great — but let it be honest business not dirty deals mired in a legacy of corruption”.

In 2012, Ian Foxley and Peter Gardiner, who blew the whistle on BAE a decade ago, formed Whistleblowers UK.

‘Selling off NHS for profit’: MPs with links to private healthcare firms

A breathtaking list of seventy MPs are profiting from the private healthcare industry and have a vested interest in its successful expansion.

Following this website’s reference to the director of a chain of private nursing homes buying access to government circles, evidence of extraordinary political investment in this industry has been received. We thank Felicity Arbuthnot, who sent this link to the Mirror’s revelation: http://www.mirror.co.uk/news/uk-news/selling-nhs-profit-full-list-4646154

nhs links mps

Substantial donations made by private healthcare companies to ministers are detailed in an earlier article: http://www.mirror.co.uk/news/uk-news/selling-nhs-profit-tories-liberal-4645961

All MPs named in the dossier voted in favour of the Government’s Health and Social Care Act in 2012, which opened up the NHS to more private firms.

Today there will be a vote on Labour frontbencher Clive Efford’s Private Members’ Bill, when MPs will decide whether to scrap key sections of the Act.

UNITE general secretary Len McCluskey said that this dossier of disgrace exposes the corruption at the heart of our Government’s health reforms.

Politics has been brought into disrepute: MPs should swear to serve the common good

This is the theme of a petition to David Cameron initiated by Barbara Hayes.*

At the G-7 meeting in Brussels in June, the PM urged leaders of the world’s largest economies to “address the real cancer eating away at the world’s economic and political systems: corruption”. His recommendation, “the three Ts: greater transparency, fair tax systems and freer trade”. In 2013 he ‘put Liberia ‘on notice’:

cameron corruption

“You see the speck in your brother’s eye but fail to notice the beam in your own”

Barbara Hayes is more radical, pointing to the need for honest decision-makers dedicated to serving the public good and not their own self-interest, rather than mere structural changes. She writes – in a personal capacity:

“People talk of voter apathy but in fact many voters are frustrated & dismayed by a political elite that appears self serving or serving vested interests. Decisions are made based on ideology, vested interest and the power of the lobby rather than on the interests of the people affected.

“The expenses scandal, bribes for questions, the possibility of a cover up of child abuse and other instances repeatedly bring politics into disrepute so it’s not surprising that people don’t trust politicians and don’t see the point of voting.

“We need to change the whole ethos of our democracy.

“Politicians need to be regularly reminded that they are elected to serve the people rather than just to pursue a political career”.

Barbara Hayes points out that – though MPs’ only formal promise is an oath of allegiance to the Queen and her heirs – their Code of Conduct lists the duties of MPs:

  • To bear true allegiance to the Queen and her successors,
  • To uphold the law,
  • To act in the interests of the nation as a whole, especially their constituents
  • To act with probity and integrity.

She comments: “These duties are pretty minimal. We are all meant to uphold the law, but to encapsulate the Code and to remind us all of the purpose of politics MPs should also swear ‘to serve the common good honestly’ . . . ‘the common good’ could become a test of policy . . . Words are powerful and a public statement of commitment will help MPs and voters to recognise what politics should be about & begin to make that real.

To read the petition, follow the link here.

*Now a freelance consultant, Barbara Hayes worked as an industrial chaplain for twenty years, with people of every faith and none, in all sizes of organisations in the public and private sectors. 

EU: unelected bureaucrats are negotiating in secret – we have lost control of our everyday lives

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“I watched Michael Moore’s Fahrenheit 9/11 again last night and it meant so much more to me this time around. We have corruption via politicians and multi-national corporations,” writes an independent councillor.

“I am quite convinced that by staying in the EU we are compromising our environment and health safety to multi-corporations like Monsanto.

“These unelected bureaucrats are negotiating in secret and we have lost control of our everyday lives because of this.

“The sooner we have a referendum the better and I hope the people will see the benefits of ruling ourselves. (I know we have corruption here but at least it is nearby.)

“We can then trade with whoever we like and enforce good trading standards on safety, health and fair trade with partners”.

As US politics faces a ‘tidal wave of money’, UK gears up for the 2015 elections

New World: After Watergate campaign finance laws were passed to cut out corruption

us supreme court

Now, Justice Clarence Thomas, formerly employed by Monsanto, voted with the majority as the US Supreme Court struck down a cap on political donations, on the grounds that this is a restriction on free speech. Under the new rules, a single individual may now spend $3.6m per election on candidates, their parties’ committees and various political committees.

Justice Thomas also delivered a separate opinion saying all such limits on donations should go.

As Richard McGregor in Washington writes in the FT, overnight this has handed greater power to wealthy political patrons.

Old World

DEFRA minister Owen Paterson using a particle gun used in the testing of GM crops

DEFRA minister Owen Paterson using a particle gun used in the testing of GM crops

Environment secretary Owen Paterson has actively promoted the introduction of GM technology, despite public opposition in Britain and the fact that 50 countries around the world, including Australia, Japan and most countries in Europe have either banned GM crop production outright, or put in place tight restrictions on the production and use of GM products.

 

The Monsanto connection will be continuing to work hard behind the scenes for an outright Conservative victory in Britain, funding an army of lobbyists and PR firms; an overall majority would allow them to introduce GM crops.

A ‘favour culture’ must be restricted to those at the top – shame on anyone from the minority communities who usurps the privilege of their betters

dominic grieve mpThe Attorney General Dominic Grieve is alleged to have said that some minority communities “come from backgrounds where corruption is endemic . . . where they have been brought up to believe you can only get certain things through a favour culture . . . and it’s not acceptable”.

He is said to have continued: “As politicians these are issues we need to pay some attention to”.

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But the tone is set at the top in this country, where:

  • the revolving door regularly and shamefully swings between government and advisors and the corporate word – then vice-versa;
  • politicians, their family members and friends, gain employment in this corporate world;
  • politicians and corporate management are regularly rewarded and even promoted after failure and
  • MPs and noble Lords have been videoed – more than once – offering to take money in return for influencing legislation?

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Broken Britain smaller.

Set an example at the top: dissolve the political-corporate alliance.

Britain: 17th on the Transparency International world corruption index

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