General Analysis on Corruption and Money Laundering

Picture Credit: greekshares.com

Articles | Financial Action Task Force | Corruption Perception Index

Articles

2011 | 2009 | 2008 | 2007 | 2006 | 2005
2004 | 2003 | 2002 | Archived Articles

2011

Mubarak Family Fortune Could Reach $70bn, Say Experts (February 4, 2011)

Further fuel has been added to the fire of protest in Egypt, following expert revelations that President Hosni Mubarak's personal wealth could be as much as $70bn. This is an extremely large amount of money and even if exaggerated would make him one of the world's richest people. Mubarak's fortune represents proceeds from years of corrupt dealings on a grand scale. Even if he is finally forced to step down as President, much of Mubarak's fortune is held outside of Egypt, which could make it difficult for Egyptian authorities to recover. (The Guardian)

2009

Corruption and The Global Financial Crisis (January 27, 2009)

Among the reasons for the financial crisis, corruption played a substantive role argues Daniel Kaufmann of the Brookings Institution. Corruption is not limited to developing countries; in developed countries it is more sophisticated and looks legal. The author explains how influential companies sway the legal institutions of the nation for their private gain when they lobby, obscure their accounts, switch regulators, and relax regulation. As a remedy, US and international institutions should implement transparency policy such as “effective disclosure and improved audit, accounting and risk-rating standards”? to restore public confidence in the financial system. (Forbes)

2008

Russia Presses US Bank Over Money Laundering (July 4, 2008)

The Russian government is bringing the Bank of New York Mellon to trial in a Russian court over charges of money laundering. In the late 1990s, the US-owned bank contributed to the Russian economic crisis by improperly transferring $7.5 billion out of Russia into the US. Now, the Russian court is trying to apply the US statute of Racketeer Influenced and Corrupt Organizations (RICO) act against the bank. It would be the first time a country invoked RICO against the US in a foreign court. (New York Times)

2007

Recommendations for Review Mechanism for UN Convention Against Corruption (August 15, 2007)

Transparency International calls on governments to assess whether countries are taking adequate action to fulfill their obligations under the UN Convention Against Corruption (UNCAC). This report discusses recommendations for setting up a review mechanism for the UNCAC. Propositions include opening the process to “civil society and the private sector”? and funding the review through the UN regular budget.

In the Fight Against Developing Country Corruption, Don't Ignore the Role of the Rich Countries (June 25, 2007)

The former Finance Minister and Minister of Foreign Affairs of Nigeria, Ngozi Okonjo-Iweala argues that developing countries need a plan to fight corruption and that rich countries have to pay greater attention to how they share respnsibility for this matter. The plan consists of four steps; first, the fight against corruption should target political corruption before economic corruption. Second, it should track stolen, laundered and hidden funds and third, prevent bribery. Finally, in the fight against developing countries’ corruption, rich countries have to set the example. (Center for Global Development)

2006

Corrupting the Fight Against Corruption (October 27, 2006)

Having himself been one of the main forces in putting corruption on the World Bank’s agenda, Joseph E. Stiglitz in this piece makes recommendations for improving the bank’s approach to combating corruption. Pointing out that bribe payments often come from Western based corporations, Stiglitz further calls on rich governments to tie tax deductibility for corporations to transparency in all dealings with foreign governments. Stiglitz also voices the concern of some critics that the corruption agenda is “itself corrupted”? with rich governments using it to cut aid to countries that don’t please them. (Project Syndicate)

Nigerian Leaders 'Stole' $380bn (October 20, 2006)

National and regional government officials in Nigeria stole US$380 billion in the decades following the country’s independence in 1960 says the chief Nigerian corruption investigator, Nuhu Ribadu. Government corruption peaked during the 1980’s but, it remains rampant among government leaders in the 21st century. According to Ribadu many officials are under investigation for corruption and Vice President Atiku Abubakar was indicted on corruption charges in September 2006. (BBC)

2005

The Perils of Bribery Meet the Open Palm (May 17, 2005)

Bribery and other "illegal transactions" cost the world economy an estimated US $1 trillion a year. But while the US and EU have recently started to crack down on companies making illegal payments to foreign officials, petty corruption is endemic in many countries. And though the US Foreign Corrupt Practices Act and the more recent Organization for Economic Cooperation and Development (OECD) Antibribery Convention prohibit "questionable and illegal" payments to foreign officials, laws tolerate small "facilitating payments for routine government actions." (New York Times)

Tunnel Vision on Corruption (February 20, 2005)

"Corruption has too easily become the universal diagnosis for a nation's ills," writes Moisés Naím, editor of Foreign Policy. He argues that corruption and prosperity can coexist, as evidenced by countries like Italy, Poland, and China. He also suggests that the "corruption obsession" crowds out debate on other crucial problems that afflict countries. (Washington Post)

2004

Paying Aid to Corrupt Regimes No Use to Poor (December 9, 2004)

According to this article in Irish Times, the greatest barrier to development is corruption, namely, corrupt politicians who keep funds intended to help the poor for their own use. All too often states cease to aid the poorest countries because funds fail to reach those in need.

Challenging Corruption (October 26, 2004)

In its Corruption Perceptions Index 2004 Transparency International has found little improvement in the area of international corruption. Oil producing countries such as Iraq and Cameroon have the highest level of corruption while Scandinavian countries, which have traditions of transparency in business and government, have the lowest.

Northern Laundromats for Southern Fat Cats (August 20, 2004)

Poor countries and small islands do not hold the monopoly on money laundering, as is often assumed. According to Inter Press Service, “More money is laundered in New York and London than anywhere else in the world.”? Large banks in wealthy countries often use their branches, subsidiaries or affiliates in smaller countries to do the transactions.

Kenya Bribes are Growing Bigger (May 17, 2004)

Under President Kibaki's predecessor, Daniel Arap Moi, corruption was endemic and had become a way of life for many Kenyans. Corruption watchdog Transparency International argues that government initiatives, such as the Public Offices Ethics Act and the Anti Corruption and Economic Crimes Act, have helped reduce the number of officials demanding bribes in 2003. (BBC)

World Bank Corruption May Top $100 Billion (May 13, 2004)

Experts have calculated that since 1946, the World Bank has fraudulently used between US $26 and $130 billion of its funds. Damian Milverton, a Bank spokesperson, disputed the estimate, asserting that it had "no basis in fact," and argued that the Bank’s anti-corruption efforts, such as banning particular companies from Bank contracts, were showing results. However, the Bank still fails to conduct independent audits of its ongoing projects. (Reuters)

G8 Ministers Call for Stronger Measures to Combat Corruption and Terrorism (May 12, 2004)

The Group of Eight (G8) insists that member countries adopt measures to recover corruption proceeds and identify "wire transfer originators." G8 ministers argue that large-scale corruption by senior public officials is a serious global problem with “grave consequences for poor countries.”? (Money Laundering)

Germany is First Foreign Government to Hold Money Laundering, Terrorist Financing Conference on US Soil (May 5, 2004)

The German government will become the first foreign government to hold a money laundering conference in the US. The conference will conduct panels on international guidelines, private sector approaches to terrorist financing, government oversight and law enforcement. (Money Laundering)

Corruption's Threat to Democracy (April 12, 2004)

In late 2003, the UN General Assembly produced a UN Convention against Corruption, which requires the ratification of 30 countries to bring it into force. International organizations demand that signatories to this Convention demonstrate genuine action and not just promises. (UN Wire)

2003

Tackling Corruption Realistically (December 2003)

International organizations present lesser developed countries with a set of traditional recommendations on how to tackle corruption. This id21 article provides five less ambitious but more easily applicable remedies.

UN Countries Reveal Costs of Corruption (December 10, 2003)

This Associated Press article gives examples of the damaging effects of corruption on local economies. It also spells out the importance of the anti-corruption treaty for poor countries.

New UN Pact Aims to Stop Leaders Looting Coffers (December 10, 2003)

Countries around the world sign the international anti-corruption treaty at the UN Convention against Corruption in Mexico. The treaty aims to prevent corruption, but does not bind signatory states to “create new anti-corruption laws or punish countries that fail to enforce them.”? (Reuters)

UN General Assembly Approves First Global Treaty against Corruption (October 31, 2003)

The UN General Assembly unanimously adopted an international anti-corruption treaty. The treaty comes at a time when the UN Office on Drugs and Crime faces fierce corruption allegations. (Associated Press)

United Nations Convention against Corruption (October 31, 2003)

Adopted October 31, 2003 and entered into force on December 14, 2005, the United Nations Convention against Corruption requires countries to establish criminal offences against corruption, implement policies to promote transparency and accountability, and cooperate internationally to prevent, investigate, and prosecute offenders.

UN Convention Signing Should Be Celebrated as International Anti-Corruption Day (October 1, 2003)

Transparency International welcomes the conclusion of talks on the UN Convention against Corruption. This first global anti-corruption instrument will facilitate international cooperation to track and recover money stolen by corrupt leaders. To efficiently fight corruption, though, Transparency International calls for more political will and bolder steps, such as outlawing bribery in the private sector.

The Prosecution of Presidents (August 1, 2003)

The prosecution of corrupt presidents and their deputies is almost impossible. Presidential immunity motivates corrupt presidents to stay in power as long as possible, and allows the most corrupt officials to leave their countries without having to pay for their crimes. (Mail&Guardian)

World Bank Focused on Fighting Corruption (July 4, 2003)

Responding to the fact that corruption is one of the largest threats to the economic development, the World Bank halted loans to corrupt companies and governments. The question remains how to crack down on corruption without abandoning the poorest and most corrupt countries. (Washington Post)

Nations Unite to Combat Corruption (May 26, 2003)

The 11th International Anti-Corruption Conference started on May 25 in Seoul. Under the theme of "Different Cultures, Common Values," the participants will focus their discussion on corporate governance, corruption in health services, pharmaceutical companies and the expanding role of e-governance. (The Korean Herald)

Transparent Corruption (February 2003)

Multinational oil corporations try to abdicate responsibility for widespread corruption in the countries in which they operate, but they would benefit from ensuring that their payments to governments are not misappropriated, argues George Soros. Soros proposes that corporations be required to make all government payments transparent to the public. (DebtChannel)

Progress and Setbacks in Combating Corruption (January 22, 2003)

Transparency International’s Global Corruption Report 2003 commends civil society and independent journalists for helping to expose and rout out official corruption, especially since reporters often risk their lives to report corruption. The report also warns that post-9/11 restrictions on freedom of information may hinder the fight against corruption. (Inter Press Service)

The Free Rider Principle: How Privilege Is Subsidized (January 15, 2003)

Transnational corporations go to great lengths to avoid paying taxes, hording billions of dollars that could be spent on social services and infrastructure development. This article reveals the “perverse”? ways in which ordinary citizens in both rich and poor countries subsidize the world’s corporate elite. (ATTAC)

2002

Capitalism Must Put Its House in Order (November 24, 2002)

“Every aspect”? of the sunken Prestige oil tanker “was calculated to avoid tax, ownership obligations and regulatory scrutiny.”? The disaster, and the general confusion over who should pay for it, brings to the forefront the pressing need for broader and binding corporate regulation. (Observer)

EU Alleges Mob Ties to Tobacco (October 31, 2002)

The European Union accuses the tobacco giant R.J. Reynolds of selling cigarettes through organized criminal networks around the world to evade taxes. Among other allegations, the EU says R.J. Reynolds colluded with corrupt officials in the Balkans, Colombian drug cartels, and Uday Hussein of Iraq to circulate contraband tobacco products. (Los Angeles Times)

OECD Releases Model Agreement on Exchange of Information in Tax Matters (April 4, 2002)

The Model Agreement on Exchange of Information in Tax Matters continues the work of the OECD concerning harmful tax practices, including tax havens and preferential tax regimes.

Enron, the FCPA and the OECD Convention (April 9, 2002)

The Enron scandal exposed the close ties between multi-national corporations, politicians and those meant to ensure corporate accountability. This report examines the implications of Enron for anti-bribery legislation, including the US Foreign Corrupt Practices Act. (Public Services International)

IRS Says Offshore Tax Evasion Is Widespread (March 26, 2002)

Average workers in the US find it hard to avoid paying taxes without the IRS tracking them down. However, certain groups, including business owners and investors with earnings often in the top 1%, can cut their tax payments with relative ease by opening offshore accounts. (New York Times)

Money Laundering By US Banks (March 25, 2002)

Correspondent banking, the provision of banking services by one bank to another “enables overseas banks to “¦ provide services for their customers - including drug dealers and others engaged in criminal activity - in jurisdictions like the US where the banks have no physical presence.”? (Dawn)

UN Takes Swing at Crooks Who Steal Aid for the Poor (March 19, 2002)

Corruption by government officials, although not the sole cause of poverty in developing countries, certainly helps to perpetuate the situation. Delegates to the Monterrey conference warn turning “a blind eye to corruption”? undermines the effectiveness of aid. (New York Times)

Explosive Revelations (March 15, 2002)

Clearstream, a small company based in Luxembourg, acts as a clearinghouse for stock and bond transfers running into trillions of dollars a year. Révélation$, a book published in Europe but relatively unknown in the US, explains how the company’s “secret bookkeeping”? aids money launderers and tax evasion schemes.

(In These Times)

System Failure Deregulation, Political Corruption, Corporate Fraud and the Enron Debacle (Jan/Feb 2002)

Facts such as “71 percent of US senators and 43 percent of House members took Enron money”? between 1998 and 2000, and, Enron has been named as “the single largest patron of [George W.] Bush’s entire political career,”? serve to illustrate the claim that Enron’s influence in Washington verges on corruption.

(Multinational Monitor)

Corruption and Good Governance (February 25, 2002)

In some countries, bribery becomes a way of life: why go through the bureaucratic channels when you can simply ask for a favor? When corruption becomes embedded in the norms and values of society, leaders need to provide an example for others to follow. (The Kathmandu Post)

Enron Footprints Revive Old Image of Caymans (January 28, 2002)

Offshore tax havens have come under renewed criticism, sparked by the Enron case. The government of the Cayman Islands seeks to defend the island’s financial services sector. (New York Times)

The Missing Main Course at This Week's Conferences ““ Corruption (January 29, 2002)

Corruption threatens democracy, undermines environmental agreements and aids terrorist organizations. Governments, business leaders and members of civil society repeatedly fail to discuss the issue at global meetings, rendering debates on globalization futile. (Earth Times)

Enron 'Cash for Access' Hits Labour (January 29, 2002)

As the effects of Enron’s collapse spread, the British Labour Party vociferously denies any wrongdoing in its relations with the scandal-hit energy giant. The Opposition, however, wants to see a full inquiry. (Telegraph)

The Scandal That Has Left the Credibility of American Politics in Shreds (January 25, 2002)

The fall-out from the Enron scandal has just begun: The Independent assesses how far corruption has spread through politics, business, and the judiciary.

First Meeting to Discuss Draft International Convention Against Corruption (January 21, 2002)

Corruption is increasing across the globe. The Ad Hoc Committee meeting to draft an International Convention Against Corruption must find common ground on the issue between a wide variety of states, international institutions such as the World Bank, and civil society. (UN Information Service)

How Offshore Havens Helped Enron Escape Taxes (January 18, 2002)

A recent study by Citizens for Tax Justice shows that “a small but growing percentage”? of US companies pay no income taxes. The Enron case highlights how firms can create hundreds of overseas subsidiaries and avoid the tax burden. (New York Times)

A System Corrupted (January 18, 2002)

The collapse of Enron reflects the failure, not just of one multi-national, but of modern capitalism as a whole. As more information emerges, it becomes clear that the regulatory apparatus set up to “limit the potential for insider abuse”? has itself been corrupted. (New York Times)

Annan Urges Third World to Fight Corruption to Attract More Aid (January 15, 2002)

Rich nations see corruption in developing countries as a major disincentive when allocating overseas aid. A comprehensive international convention on the issue would ease their fears. (Agence France-Presse)

Greed is the Creed (January 13, 2002)

This article warns that the “money buys influence”? nature of US politics, highlighted by the recent Enron scandal, could easily seep into British politics in the absence of sufficient regulatory intervention. (The Observer)

2001

Tiny Pacific Island Is Facing Money-Laundering Sanctions (December 6, 2001)

The Independent Financial Task Force on Money Laundering will take action against Nauru, which has been accused of being a center for the Russian mafia and has not made the appropriate legislative amendments.(Agence France Presse)

Swiss Probe Illustrates Difficulties in Tracking Al Qaeda's Cash (November 12, 2001)

After the US published a list of groups and individuals suspected of having links with terrorist groups, the Swiss government froze various bank accounts. Tracking down such activities is not an easy task, as it requires new laws on money laundering. (Washington Post)

Moscow Gets New Tool for Money Monitoring (November 5, 2001)

Following the September 11, Vladimir Putin created a Financial Intelligence Agency to fight money laundering. This initiative is likely to improve Putin’s relations with the West and remove Russia from the Organization for Economic Cooperation and Development's black list on money laundering. (Stratfor)

Terrorism, Organized Crime, Money Laundering (October 30, 2001)

The executive director of Transparency International asks the Financial Action Task Force on Money Laundering to revise its recommendations so as to cover all serious crimes, including corruption and terrorism. Only global actions can increase the pressure on poorly regulated countries.(International Herald Tribune)

Slow Progress in War on Corruption (October 15, 2001)

The Global Corruption Report 2001 depicts an alarming situation. Public outrage has pressured governments to bring corrupt leaders to account and forced them out of office, but more needs to be done. (BBC)

Follow the Money and Follow It Fast (October 15, 2001)

The present international financial institutions lack powers to act and need common standards to address money laundering as a crime. Freezing assets will prevent the development of terrorism. (Jurist)

EU Slams Nauru over Money Laundering, still Wary on Philippines (October 16, 2001)

The EU's Financial Action Task Force will implement counter-measures against Nauru unless it adopts laws that effectively tackle money laundering. (Agence France Press)

Nauru Defends Pacific Tax Havens (August 17, 2001)

Developing countries often have no other resource for development than offshore banking. While this criminal practice should be curbed, industrialized countries have to acknowledge their own share of responsibility. Furthermore, they should help countries with tax havens to find alternative resources for development. (Associated Press)

Money Laundering (May/June 2001)

Nigel Morris-Cotterill questions common myths about money laundering and concludes that only a global set of rules on international financial flows can prevent it. (Foreign Policy)

Steps to Tackle International Fraud Discussed at OECD Summit (May 18, 2001)

In a campaign against illicit offshore bank, money laundering and financial havens, the OECD Council of Ministers adopted a report on what countries should do to pierce shell company secrecy. (Earth Times)

International Standards and Cooperation in the Fight Against Money Laundering (May 2001)

US Treasury official Joseph Myers describes money-laundering as a “cat-and-mouse game,”? forcing the Financial Action Task Force and member countries to consistently strive to formulate new tactics in the fight against financial crime. (Economic Perspectives)

Archived Articles

Financial Action Task Force

G7 to Combat Terrorism with Airline Cash Inspections (April 27, 2004)
G7 officials are discussing ways to tackle cross-border cash movements as part of the "war on terror." According to the Financial Action Task Force, the proposal includes making international travelers file currency declarations and X-ray scan for cash, as well as weapons at airports. Will these attempts really help preventing terrorist attacks? (International Relations and Security Network)

Global Anti-Corruption NGO Blasts Rich and Poor Alike (August 28, 2002)
“Corrupt political elites in the developing world, working hand-in-hand with greedy business people and unscrupulous investors, are putting private gain before the welfare of citizens and the economic development of their countries,”? says Peter Eigen, chairman of NGO Transparency International. (Inter Press Service)

How The Rich Elude The Tax Man: The Devastating Results Of Offshore Tax Evasion (May 28, 2002)
The Internet and debit cards have made offshore banking an attractive option for the rich. Lawyers, accountants, and bankers make this option ever easier. Multinational corporations benefiting from offshore banking, and tacit US government support of tax heavens, guarantee a prosperous future for offshore banks. (Americans for Democratic Action)

EU Agrees to Step Up Dirty Money Fight (February 8, 2002)
In a declaration adopted at a European Union conference on money laundering, member states identified “global and coordinated action”? as a necessary pre-requisite in the fight to improve transparency in international financial transactions. (Reuters)

Corruption Perceptions Index

To Fight Corruption, One African Offers Presidents Cash (November 24, 2006)
The annual Corruption Perceptions Index published by Transparency International has repeatedly ranked African countries as some of the most corrupt in the world. However, this New York Times article argues that a catalyst for change now exists in Africa with the announcement by Sudanese billionaire Mo Ibrahim that he will award an annual prize of US$5 million to African leaders - upon retirement from office - who eschew corruption and instead promote democratic processes and good governance.

New EU Members Score Badly in Corruption Ranking (November 6, 2006)
Romania and Bulgaria face criticism from Transparency International (TI) with the release of its annual Corruption Perceptions Index (CPI), which ranks Romania 84th and Bulgaria 57th out of 163 countries due to the rampant corruption in both states. Many EU countries occupy the top places in the CPI, and with both Romania and Bulgaria set to join the EU in 2007 such a report could jeopardize relations with the regional bloc argues this Der Spiegel article. The EU Commission has already created “safeguards”? that allow for the termination of EU subsidies if evidence of corruption is found. TI states that these “safeguards”? benefit Romania and Bulgaria by pressuring the countries to quickly implement reforms.

Corporate Bribery on the Rise Worldwide (May 14, 2002)
Developing countries criticize Transparency International’s (TI) Corruption Perceptions Index for failing to address the role of multinational corporations in bribery scandals. In response, TI has produced a Bribe Payer’s Index, to identify the external sources of corruption. (Inter Press Service)

Curbing the Corrupt (June 29, 2001)
The Christian Science Monitor has another take on the Corruption Perceptions Index, emphasizing that the reduction of corruption is one of the positive effects of globalization.