Tag Archive for Corruption

Special Inspector General Strategic Plan for Tracking Anti-Corruption Progress in Afghanistan

SIGAR-AntiCorruption

Reducing corruption and increasing accountability are important components of the U.S. reconstruction strategy in Afghanistan. Since 2002, the United States has appropriated over $96 billion for reconstruction assistance in Afghanistan and, as part of that assistance, has designated numerous programs or activities to directly or indirectly help strengthen the ability of Afghan government institutions to combat corruption. In 2010, in line with a commitment to provide more assistance directly to the Afghan government, the United States and other donors committed, in part, to providing technical assistance to develop the Afghan government’s capacity to reduce corruption. The ability of the Afghan government to deliver services to its citizens without the illicit diversion of resources is crucial to the country’s development and the government’s standing as a legitimate, sovereign authority. Further, as Afghanistan subsequently enters a transformation phase during which it will need to rely on progressively smaller amounts of funding from international donors, it must work to ensure that the revenue it generates is not susceptible to graft and corruption.

UNODC Bribery and Corruption in Afghanistan Report

The large-scale population survey on the extent of bribery and four sector-specific integrity surveys of public officials undertaken by UNODC and the Government of Afghanistan in 2011/2012 reveal that the delivery of public services remains severely affected by bribery in Afghanistan and that bribery has a major impact on the country’s economy. In 2012, half of Afghan citizens paid a bribe while requesting a public service and the total cost of bribes paid to public officials amounted to US$ 3.9 billion. This corresponds to an increase of 40 per cent in real terms between 2009 and 2012, while the ratio of bribery cost to GDP remained relatively constant (23 per cent in 2009; 20 per cent in 2012).

Afghanistan Independent Anti-Corruption Monitoring Report on the Kabul Bank Crisis

Kabul Bank’s controlling shareholders, key supervisors and managers led a sophisticated operation of fraudulent lending and embezzlement predominantly through a loan-book scheme. This resulted in Kabul Bank being deprived of approximately $935 million funded mostly from customer’s deposits. The loan-book scheme provided funds through proxy borrowers without repayment; fabricated company documents and financial statements; and used information technology systems that allowed Kabul Bank to maintain one set of financial records to satisfy regulators, and another to keep track of the real distribution of bank funds. Shareholders, related individuals and companies, and politically exposed people were the ultimate beneficiaries of this arrangement. Over 92 percent of Kabul Bank’s loan-book – or approximately $861 million – was for the benefit of 19 related parties (companies and individuals).

(U//FOUO) ISAF CJIATF-Shafafiyat Afghan Corruption Information Paper

The level of corruption across Afghanistan’s public and private sectors represents a threat to the success of ISAF’s mission and the viability of the Afghan state. Corruption undermines the legitimacy and effectiveness of Afghanistan’s government, fuels discontent among the population, and generates active and passive support for the insurgency. Corruption and organized crime also serve as a barrier to Afghanistan’s economic growth by robbing the state of revenue and preventing the development of a strong licit economy, thus perpetuating Afghan dependence on international assistance. Corruption also threatens the process of security transition, as institutions weakened by criminality will be unable to accept the transfer of responsibility for security and governance.

DHS Project Shield Program Completely Wasted $45 Million in Illinois

Project Shield was supposed to make citizens safer. But in the end, the $45-million Homeland Security program more resembled a disaster, wasting taxpayers’ dollars and failing to make a single citizen more secure. The failed Cook County initiative was replete with equipment that failed to work, missing records and untrained first responders according to a report by the inspector general of the U.S. Department of Homeland Security. The report, to be released Monday but obtained by The Sun-Times and NBC5 News, found “millions of tax dollars may have been wasted.”

Study Finds 40% of South Asians Have Paid a Bribe in the Past Year

If the Lokpal Bill ever gets cleared by the Indian Parliament, episodes of everyday corruption, widely perceived as endemic, may finally start to decline. At the moment, the figures are not encouraging, according to a new study by the Berlin-based anticorruption group Transparency International. The report, “Daily Lives and Corruption,” offers fresh data on bribery in South Asia based on a survey of 7,500 people taken over the past two years. The results are alarming: they suggests that 39% of South Asians who had to deal with public services in the previous year admitted to paying a bribe.

Former Detective Testifies NYPD Routinely Plants Evidence, Frames People to Reach Arrest Quotas

A corrupt ex-undercover cop says NYPD supervisors paid detectives extra overtime for hard-drug busts, creating a covert reward system for cocaine and heroin arrests. Undercovers taking down smack or crack suspects routinely got two or three hours of overtime as payback, ex-cop Stephen Anderson testified in a Brooklyn courtroom. “So giving you overtime for a crack cocaine arrest is a reward for the nature of the crime … would that be a fair statement?” asked Justice Gustin Reichbach. “Yes, that’s fair to say,” Anderson testified last week at the corruption trial of Brooklyn South narcotics Detective Jason Arbeeny.

Wall Street Regulator Says Complaints About Market Manipulation and “Suspicious Trading” Significantly Increased This Year

A Wall Street regulator said industry complaints about market manipulation and trade reporting have spiked this year, raising questions about the adequacy of banks’ internal controls over their traders. Gene DeMaio, of Financial Industry Regulatory Authority (FINRA), said on Wednesday that his group is still investigating these complaints. On Thursday, UBS AG said a rogue trader, who was later charged in London with fraud, will cost it $2 billion in the third quarter. The loss highlights the extent to which some banks still cannot police their traders. FINRA has received complaints this year about banks’ audit systems, canceled orders, and brokers misrepresenting whether orders were on behalf of customers, DeMaio said.

Quebec Anti-Corruption Unit Report on Criminal Collusion in the Road Construction Industry

Le ministère des Transports du Québec signe de plus en plus de contrats puisque le volume de ses travaux est en pleine croissance. Sa planification quinquennale fait état de plus de 4 000 projets routiers qui en sont à différentes étapes de préparation. En moyenne, seulement pour les travaux de construction, plus de 700 nouveaux contrats sont octroyés annuellement’. Or dans ce contexte d’externalisation croissante des dépenses de l’État dans ce secteur d’activités, on craint que des entreprises concluent entre elles des ententes secrètes à leur bénéfice, mais qui sont préjudiciables au bien public. On parle ici de collusion entre quelques joueurs majeurs de l’industrie, ce qui permet une prise de contrôle occulte du processus d’attribution des contrats de sous-traitance, réservés alors à quelques initiés. Et si la collusion prend une telle importance dans le domaine particulier de la construction routière, c’est sans contredit en raison du caractère massif et continu des investissements qui y sont faits et qu’on nous annonce encore pour les années à venir.

Mafia, Biker Gang Criminal Cartels Conspire to Control Road Construction Contracts in Quebec

It’s been whispered about for years, but now the government’s anti-corruption squad says it has proof that organized crime has infiltrated the construction industry and influenced political parties. The report by former Montreal police chief Jacques Duchesneau and Quebec’s anti-corruption squad and obtained by Radio-Canada and La Presse comes after a year-and-a-half-long investigation. The UPAC (Unité permanente anticorruption) report, which does not name any firms or individuals, found that prices are regularly hiked by engineering consulting companies and that contractors regularly overrun their costs.

Colombia’s Former Intelligence Chief Sentenced to 25 Years in Prison For Conspiring to Murder Activists

Colombia’s Supreme Court Wednesday sentenced a former secret service chief who served under ex-president Alvaro Uribe to 25 years in prison on charges including the murder of a university professor. The court declared Jorge Noguera, the former director of the DAS — a domestic intelligence agency that reports directly to the president — guilty of aggravated conspiracy and homicide in the death of Alfredo Correa de Andreis, a professor and activist at the Universidad del Norte in Barranquilla. Assailants aboard a motorcycle gunned down Correa and his bodyguard on September 17, 2004 in the northern Caribbean coast city.

Accenture to Pay $64 Million in Fines After Rigging Bids for Government IT Contracts

The Justice Department announced Monday it reached a $63.7 million settlement with Accenture LLP in a whistleblower lawsuit that accused the technology services company of rigging bids, taking kickbacks and inflating prices the government paid for computers and services. New York-based Accenture said in a statement that it “vigorously” denies the accusations and that the settlement did not constitute an admission of guilt. The lawsuit was originally filed in the Eastern District of Arkansas by Norman Rille and Neal Roberts under whistleblower provisions of the federal False Claims Act. The government in 2007 joined the suit, as it did in similar lawsuits against Hewlett-Packard Co. and Sun Microsystems Inc.

U.S. Department of Justice Civil Rights Division Investigation of Puerto Rican Police Abuses

We recognize that PRPD faces significant challenges as Puerto Rico’s primary law enforcement agency. The unconstitutional acts that we have identified arise at a time of crisis in public safety. Contrary to national trends, violent crime increased overall in Puerto Rico by 17% from 2007 to 2009. In 2010, Puerto Rico saw the second highest number of murders in its history, a trend that is escalating in 2011. The clearance rate for murders remains below the national average. Some Puerto Rico officials maintain that drug trafficking and social deterioration are fueling the wave of violent crime. However, increasing crime cannot be used to justify continued civil rights violations or the failure to implement meaningful reforms. Constitutional policing and effective law enforcement are inextricably bound. Public safety depends on the trust and cooperation of the community, which in turn depends on constitutional police practices that respect civil rights. Our previous efforts in working with large police departments strongly suggest that by addressing the civil rights concerns we raise in this report, the Commonwealth will not only meet its constitutional duty, but also reduce crime, improve public safety, and increase community confidence.

DoD Employee Arrested for Taking $95,000 Bribe From Military Contractor

A high-ranking Department of Defense employee was charged Thursday with taking a bribe at an international conference in Atlanta to steer lucrative federal contracts for work in Afghanistan to a contractor. Desi Deandre Wade, the department’s Chief of Fire and Emergency Services in Afghanistan, was arrested Wednesday at the Fire-Rescue International Conference in downtown Atlanta after he took $95,000 in cash from a contractor, U.S. Attorney Sally Quillian Yates said. “While he was supposed to be working to support our troops, he was lining his pockets,” she said. Wade’s attorney Allison Dawson said at an initial hearing Thursday that her client, a military veteran, intended to plead not guilty.

U.S. House of Representatives Report: Warlords Provide Security for U.S. Supply Chain in Afghanistan

Security for the U.S. Supply Chain Is Principally Provided by Warlords. The principal private security subcontractors on the HNT contract are warlords, strongmen, commanders, and militia leaders who compete with the Afghan central government for power and authority. Providing “protection” services for the U.S. supply chain empowers these warlords with money, legitimacy, and a raison d’etre for their private armies. Although many of these warlords nominally operate under private security companies licensed by the Afghan Ministry of Interior, they thrive in a vacuum of government authority and their interests are in fundamental conflict with U.S. aims to build a strong Afghan government.

New IMF Chief Under Investigation for Aiding Embezzlement and Fraud in $500 Million Deal

Christine Lagarde, the French politician entrusted with restoring the reputation of the International Monetary Fund after the resignation of Dominique Strauss-Kahn, is to face a criminal inquiry over corruption claims. The decision by a French court to investigate Ms Lagarde, 55, for allegedly aiding and abetting embezzlement and fraud – offences that carry a maximum sentence of 10 years in prison – represents a fresh embarrassment to the IMF just a month after it appointed her as managing director. She is accused of wrongdoing over her role in a €403 million ($543m) payment to businessman Bernard Tapie when she was the French finance minister.

Indian Karnataka Lokayukta (People’s Commissioner) Report on Mining Industry Corruption

A 466-page summary of a more than 25,000-page report compiled by the Indian government’s Karnataka Lokayukta or People’s Commissioner who investigated years of illegal activities in the Indian mining sector, including widespread corruption, bribery and the exportation of illicit iron ore worth more than $3 billion. The report has met with widespread controversy due to its singling out of a number of prominent billionaires in the Indian mining industry.

Ahmed Wali Karzai’s Assassin Motivated by Drugs and Money, Not Terror

The assassination of Ahmad Wali Karzai, Afghan President Hamid Karzai’s half-brother and one of the country’s most feared men, necessitates a careful reflection on the abiding power of its country’s warlords and what their influence portends, as the United States begins scaling down its forces. Long cultivated by the Central Intelligence Agency (CIA), Mr. Karzai used his connections to build an empire in Kandahar: an empire that is alleged to have been paid for with cash harvested from the drugs trade as well as business interests that extended from land to transportation and infrastructure projects. Even though the U.S. was well aware of his corruption, leaked diplomatic cables suggest it feared losing a powerful partner in the war against the Taliban.

TSA Agent Stole $50,000 Worth of Electronics From Passengers to Sell on Craigslist

Police have arrested a TSA employee suspected of a string of thefts over the past several months. Thirty-year-old Nelson Santiago was arrested Thursday after stealing electronics from passengers’ checked luggage and then selling them online. “He had this down to a science. He’d take an item, then he would photograph it with his cell phone, post it on Craigslist, and most often it, was sold by the time his shift had ended,” said Broward Sheriff’s Office spokesperson Dani Moschella. According to the BSO, Santiago was allegedly caught by a Continental Airlines employee slipping an iPad out of a suitcase and into his pants.

USAID Kabul Bank Fraud Report Classified/Unclassified Version Comparison

In May 2011, the USAID Office of the Inspector General published a report on the agency’s supervision and oversight of assistance activities in Afghanistan and the Kabul Bank crisis. This report was quickly withdrawn and the Federation of American Scientists’ Steven Aftergood quoted a USAID official as saying that “At the time our report was issued, it was written utilizing information from non-classified sources. After our report had been issued, USAID subsequently classified two documents that were cited in our report. This action resulted in the report becoming classified and we removed it from the web site.” Now that an “Unclassified” version of the report has been released, a comparison of the two versions reveals the “classified” portions of the report that were concealed by USAID. These sections of the report indicate that a material loss review was commissioned by USAID/Afghanistan and completed in May 2010 indicating that $850 million, or 94 percent of the value of the bank’s outstanding loans, had been fraudulently diverted to “insiders” connected with the bank. The concealed sections also indicate that Deloitte and Da Afghanistan Bank failed to provide this report to USAID for nearly six months.

Corrupt Chinese Officials Steal Billions and Flee to the U.S.

China’s rulers say corrupt cadres are the nation’s worst enemy. Now, according to a report that was given widespread coverage this week in local media, Beijing says that enemy resides overseas, particularly in the U.S. The 67-page report from China’s central bank looks at where corrupt officials go and how they get their money out. A favored method is to squirrel cash away with the help of loved ones emigrating abroad, schemes that often depend on fake documents. News of the study got prominent notice this week in Chinese media. A sample headline from page one of the Shanghai Daily on Thursday: “Destination America For China’s Corrupt Officials.” The reports said the study was posted to the website of China’s central bank. While the PDF document remains widely available in Chinese cyberspace, the report – dated June 2008 and identified as “confidential” – no longer appears on the People’s Bank of China website.

World Bank Fraud, Corruption, and Collusion in the Roads Sector Report

Because an extensive, well maintained network of roads is essential for economic development, road construction and maintenance projects have been a mainstay of the World Bank’s lending portfolio since its founding. This long experience in the roads sector is reflected in favorable project evaluations. The Bank’s Independent Evaluation Group reports that roads and other transport projects consistently score higher on measures of outcomes, institutional development, and sustainability than non-transport projects and the Bank’s Quality Assurance Group has found that roads projects are well-supervised. At the same time, roads projects around the globe remain plagued by fraud, corruption, and collusion. A Transparency International poll ranked construction as the industry most prone to corruption and a survey of international firms revealed that companies in the construction industry were more likely than firms in any other sector to have lost a contract because of bribery. World Bank-financed projects are not immune. Roughly one-fourth of the 500 plus projects with a Bank-funded roads component approved over the past decade drew one or more allegations of fraud, corruption, or collusion; to date, the Bank’s Integrity Vice Presidency (INT) has confirmed allegations in 25 projects resulting in 29 cases of misconduct under Bank rules.