Confronting Corruption in Brazil

by Chad Bouchard / Published August 6, 2012 in Corruption, The Big Sweep | Leave a comment

Cutouts of politicians dressed as prisoners are pictured in a cage as a part of a protest against corruption in front of the Supreme Court during the “mensalao” trial in Brasilia August 3, 2012. /REUTERS/Ueslei Marcelino

The legacy of former Brazilian president Luis Inacio Lula da Silva is on trial at home, as dozens of former government officials face charges of vote-buying in the country’s highest court.

Thirty-eight officials, including senior members of Lula’s Workers Party, are facing more than 1,000 allegations of embezzlement, money laundering, misuse of public funds, corruption and conspiracy, the Associated Press reports.

The largest graft case in the country’s history has been brewing since Lula’s first term in 2005, when allegations surfaced that members of his center-left party had parliamentary members for votes.
Lula is not facing charges, but the case could stain the reputation of his presidency, which is known for popular achievements in social welfare and poverty relief.

Prosecutors allege that from 2003 to 2005, officials in his administration took bribes for votes were taken from advertising budgets of state-owned companies and laundered through a private firm.

Lula has issued public apologies on behalf of his party but maintains that he was betrayed. Party officials have denied the vote-buying charges.

The trial is expected to last about a month.

Sweep to Corruption trial hailed as good sign for Brazil

Afghan President Hamid Karzai has agreed to dismiss his top army and police ministers after the country’s parliament voted to remove them. Legislators announced that sacking Defense Minister Abdul Rahim Wardak and Interior Minister Bismillah Mohammadi was part of a hardline sweep against corruption and nepotism in the government.

Karzai accepted the vote, but said the two would retain their posts until he could name replacements.

Lawmakers said the two ministers had failed to protect the country’s borders from recent rocket attacks from Pakistan, and to prevent the recent assassinations of top officials.

The sacking of the nation’s two highest security ministers comes at a tricky time, as U.S.-led military forces pare down operations and prepare to leave by the end of 2014.

The political rift could undermine cohesion in the country’s anti-graft efforts. Karzai is under pressure to demonstrate progress in order to secure $16 billion in international aid, according to the Reuters News Agency.

On the same day as the vote against ministers in Parliament, the country’s anti-corruption head announced the start of an investigation into allegations that Karzai’s finance minister has squirreled $1 million in overseas bank accounts.

Sweep to MPs Vote to Afghanistan’s Karzai Accepts Dismissal of Top Security Ministers

European Union prosecutors have made some strides against corruption in Kosovo over the last month as eight judges in Kosovo face embezzlement charges and one former anti-corruption chief was charged with extortion and illegal possession of weapons.

The European Union Rule of Law Mission, or EULEX, is the EU’s largest civilian mission and serves as a test case to demonstrate the body’s ability to implement a cohesive foreign policy.

Special prosecutors with EULEX allege that the eight municipal and district court judges, as well as two lawyers, profited from court rulings involving dozens of acres of land. The defendants were sitting judges on the cases, according to Balkan Insight, a publication of the Balkan Investigative Reporting Network (BIRN).

Kosovo state television indicated the judges bilked €60 million from the state, the European Voice website reported.

The 15 civil cases related to ownership claims on the land, EULEX prosecutors said.

Separately, EULEX prosecutors indicted Kosovo’s anti-corruption task force chief Nazmi Mustafi for extorting money from people under investigation for graft. He served as head of the country’s task force from 2010 until his arrest in April.

In early July, EULEX also indicted Kosovo Deputy Prime Minister Bujar Bukoshi and ten other officials for corruption. Bukoshi was accused of abusing his authority, tax evasion, and obstructing evidence while serving as health minister in 2010. He denied the charges but resigned.

The latest wave of prosecutions could boost confidence in EULEX’s ability to enforce the rule of law.

EULEX costs an estimated €100 million a year and last year came under fire for achieving too little since the mission was launched under the umbrella of the United Nations Interim Administration Mission in Kosovo, or UNMIK, in 2008.

Sweep to EULEX Charges Eight Kosovo Judges with Corruption

Going for the Gold on Corruption

by Aaron Kessler / Published August 1, 2012 in The Big Sweep | Leave a comment

Former Secretary General of the Austrian Olympic Committee Heinz Jungwirth (R) in May. Jungwirth was sentenced to 5 years in prison for embezzling nearly $4 million from the Austrian Olympic Committee.  / REUTERS

The world may be riveted to the Olympics in London these days, but Austria’s former top Olympics official probably isn’t sharing in the joy.

The only place 61-year-old Heinz Jungwirth will be working out is in the prison yard – he received a five-year sentence Tuesday on corruption charges. He was convicted of embezzling nearly $4 million from the country’s Olympic committee.

Jungwirth headed Austria’s Olympics efforts for 26 years, but resigned in 2009 after concerns were raised about his misdeeds, Reuters reports.  The judge in the case didn’t mince words in sentencing Jungwirth – calling his behavior evidence of a “revolting old Austrian functionary mentality.”

Sweep to Former Austrian Olympics Chief Jailed for Corruption

With the U.S. presidential election in its final hundred days, a newly released USA Today/Gallup poll suggests American voters consider government corruption to be a top issue for the next president to tackle.

When asked to rate 12 issues as priorities for the winning candidate to address, reducing corruption ranked second only to job creation. Eighty-seven percent of respondents said reducing corruption in the federal government was either extremely or very important.

That compares to “creating good jobs,” which 92 percent of those surveyed cited as extremely or very important.  Other top concerns included reducing the debt, terrorism threats and the long-term stability of Social Security and Medicare.

The poll’s results suggest that outrage over corruption is not a partisan issue: While supporters of President Barack Obama and Republican challenger Mitt Romney differed on several key issues, corruption concerns were a shared priority. Forty-six percent of Obama supporters said reducing corruption was “extremely important,” while 45 percent of Romney supporters felt similarly.

Sweep to Americans want next president to prioritize jobs, corruption

An Indian television channel is crying foul over what it alleges are corrupt practices by rating agency Nielsen dating back nearly a decade.

The Indian channel NDTV is suing Nielsen in a U.S. court, seeking a minimum of $810 million for fraud and $580 million for negligence over claims the rating agency skewed its numbers to favor channels that bribed the company.

As the Times of India reports, NDTV alleges that a joint venture between Nielsen and Kantar Media Research manipulated its ratings and colluded with certain channels to falsely boost their numbers. That included giving “plasma TVs to homes where their ‘people meter’ was installed” and leaking lists of metered homes to channels in exchange for bribes. (Normally, the identities of people selected as Nielson homes are kept strictly confidential.)

Sweep to NDTV sues Nielsen for fraud, negligence

From Forced March to Freedom

by Alexa Rogers / Published July 17, 2012 in The Big Sweep | Leave a comment

South Sudanese President Salva Kiir has called offered amnesty to corrupt government officials, whom he called upon recently to return some $4 billion in stolen assets of the world’s youngest nation. / REUTERS

A South Sudanese anti-corruption activist, kidnapped for two days and beaten over his work, fled to freedom when his captors tried to move him and found themselves uncomfortably close to government forces.

Deng Athuai Mawiir, the chairman of the South Sudan Civil Society Alliance was abducted on July 4thoutside of a hotel in the capital Juba. He was taken to an unknown location where he was tied to a chair, beaten, and deprived of food and water.

Mawiir’s captors demanded to know who was sponsoring the group’s campaign to expose 75 officials suspected of stealing $4 billion of government funds.

Mawiir escaped after his captors forced him to march him through a forest, and were approached by a group of soldiers. The kidnappers fled, leaving Mawiir behind. Gagged, and with his hands bound, the activist made his way to the nearest police station.

The world’s youngest nation, South Sudan celebrated its first birthday earlier this month, after two decades of war with Sudan.

The country is plagued with corruption, tension with the north over oil rights, rising food prices, and dwindling government funds. According to the human rights group Global Witness, South Sudan’s government has “embezzled or squandered” 30 percent of its oil revenues since the region broke off from the Sudan in 2005.

After the abduction, members of the South Sudan Civil Society Alliance said they had received phone calls and text messages threatening death if they did not stop speaking out about corruption.

Mawiir has since been treated at a hospital in Juba and was assigned a government bodyguard.

Sweep to Anti-graft activist kidnapped for 2 days in South Sudan 

Two sheriff’s deputies in Southern Texas face charges of taking bribes from an underground casino owner near the Mexican border.

Nazario Solis III, deputy sheriff of Starr County in Southern Texas, appeared in federal court on Friday to face six counts of bribery, extortion, and drug charges. The other deputy has yet to be arrested and remains unnamed in court documents, The Monitor of the Rio Grande Valley reports.

Federal investigators claim that the two accepted more than $10,000 in cash and valuables for protecting the casino by alerting of any upcoming law enforcement raids. The information allowed the casino owner, who also remains unnamed, to remove money and employees before a law enforcement raid in March 2011.

Federal authorities recorded the tip exchanged between Solis and the owner. The two deputies also attempted to work out a deal in April 2011 to send automatic weapons to Mexico in exchange for marijuana and cocaine.

According to the prosecution, Solis attempted to obtain 6.6 pounds of cocaine in exchange for semi-automatic and fully automatic guns to be sent to Mexico. In an interview recorded by federal agents, Solis named the .308-caliber, M-4 and .223-caliber assault rifles.

At one point in the recording, Solis was heard saying he was waiting for the “green light” from his boss to go ahead with the deal.  The boss was not named.

Solis faces five to 40 years in prison if convicted on the cocaine charges. The other serious charges carry maximum sentences of 20 years in prison and a fine of $250,000.

The Sheriff of Starr County, Rene Fuentes, stated in an interview that he was “surprised, of course” with the arrest of his deputy.

Sweep to Starr deputies accused of bribes, guns-for-drugs deal

Former president of the Philippines Gloria Macapagal Arroyo, already in a hospital prison over corruption, faces new accusations of illicit enrichment.

The new charge accuses Arroyo and nine other former government officials of misusing $8.7 million of state lottery funds from 2008 to 2010.

According to Representative Teddy Casino, one of the complainants named in the charge, Arroyo and officials of the Commission of Audit and the Philippines Charity Sweepstakes Office moved the lottery money into an untraceable intelligence fund, The Washington Post reports.

Arroyo could be forced to return any stolen funds, and disqualification from public office for life. If convicted, she faces a maximum sentence of life in prison.

The charge does not allow for release on bail, which both Arroyo and her lawyer, Anacleto Diaz, believe is an attempt to keep her confined while she fights for bail on separate corruption charge.

Diaz also believes it is an attempt by current President Benigno Aquino III to sully the former president ahead of Mr. Aquino’s state of the union address next week. Last year, Arroyo was arrested for allegedly tampering with the 2007 elections.

Arroyo has denied these charges and asked to be released on bail—unlikely, since bail is ruled out on her original set of charges. Arroyo is currently being treated for a bone aliment at the military hospital where she is being held.

Sweep to Philippine prosecutors file new graft case against former president to keep her in detention 

Killer Sales

by Alexa Rogers / Published July 13, 2012 in The Big Sweep | Leave a comment

A suicide car bomb in Iraq in 2008. / REUTERS

The British businessman sold his product as a miracle tool for security forces the world over: a bomb detector equally capable of tracking down everything from diamonds to human remains.

At nearly $62,000 each, the businessman, Jim McCormick, made a killing, literally so.

The devices, it turns out, were “worthless” and “totally useless,”  a British prosecutor told a London court Thursday. McCormick faces six counts of fraud charges.

He sold the bogus detectors to more than 20 countries, from Iraq to Afghanistan, from Georgia to Lebanon, raking in an estimated $70 million to $80 million from sales to Iraq alone. McCormick denies the charges, and continues to insist his products are effective.

The bomb-detecting devices named in the charged include the ADE-651, ADE-650 and ADE-101.

Five other people were also charged on Thursday in related cases, including Gary Bolton; Samuel Tree; Joan Tree; Simon Sharrard and Anthony Williamson.

McCormick was originally arrested on charges of fraud in 2010, but remained free while authorities evaluated the detectors. During the investigation, the government moved to ban the sale and export of the devices to Iraq and Afghanistan.

According to BBC News, the Iraqi government used the phony detectors at checkpoints in Baghdad, presumably allowing cars bearing explosives to reach their targets. The British medical journal The Lancet has reported that 12,000 Iraqis died from suicide bombs between the American invasion in March 2003 and December 2010.

Sweep to Five more charged over “bogus” bomb detectors

South Korea’s ruling family is under continued fire this week, eggs included.

Lee Sang-deuk, the brother of the South Korean president, was arrested Wednesday on bribery allegations.

The former lawmaker is accused of taking half a million dollars in bribes from two bankers to protect certain banks from a financial crackdown in Korea. According to The Washington Post, the bankers were from the Solomon and Mirae savings bank, where Korean banking authorities had suspended operations in 2011 for oversight and capital shortages. In exchange for the money, Lee was to use his influence to keep the bank from shutting down.

Protestors awaited Lee outside the courthouse on Tuesday, where they planned to pelt the disgraced politician with eggs.. The Washington Post reported that many of them claimed they had lost money after the government suspended the Solomon and Mirae banks.

The arrest is seen as an embarrassment for President Lee Myung-bak whose five-year term will end early next year. Elections for the next president are being held in December.

Until April of this year, the president’s brother had been a six-term lawmaker for the ruling party in South Korea.

Sweep to  South Korean president’s brother arrested over bribery allegations

Orthofix International, a Texas-based medical device manufacturer, will pay $5.2 million to settle charges that its Mexican subsidiary, Promeca, bribed government officials.

According to the U.S. Securities and Exchange Commission (SEC), the bribes went to acquire sales contracts with hospitals. They are said to have produced over $5 million in profits for the company.

The bribes, which company officials spoke of as “chocolates,” came in the form of cash, computers, televisions, and appliances. The subsidiary had reportedly spent $300,000 on the bribes from 2003 to 2010.

Promeca began reporting the bribes as cash advances and allegedly falsified invoices to support the company. As the monetary amounts increased, they were cited as “promotional and training costs.” The Promeca executives that were involved in the scheme have been fired by Orthofix.

In addition to the current settlement, Orthofix had earlier agreed to a $2.22 million penalty under an earlier settlement with the Justice Department in a related action. The parent company also fired the Promeca executives involved in the scheme.

The settlement must still be approved by the court. In addition to the monetary compensation, Orthofix must pledge its books and records would maintain safeguards demanded under the Foreign Corrupt Practices Act (FCPA), and report to the SEC every two years.

This is not the first time Orthofix has had to settle financial disputes. In June, the company paid $34 million to end an investigation into the marketing of their bone growth stimulation products.

Sweep to SEC charges Orthofix International with FCPA violations

 

 

Rot at the Heart of FIFA

by Diana Jean Schemo and Alexa Rogers / Published July 11, 2012 in The Big Sweep | Leave a comment

João Havelange, the former president of FIFA, and his ex-son-in-law, Ricardo Teixera, pocketed millions of dollars in bribes, which FIFA argued they should not be made to pay back. / REUTERS

João Havelange, the former president of the world soccer body FIFA, and Ricardo Teixera, his former son-in-law, took millions of dollars in bribes from a company that won marketing rights for the 2002 and 2006 World Cup , according to documents unsealed by a Swiss court today.

The Guardian reports that the documents, whose release the men had strenuously fought, show that Havelange accepted at least $1 million in bribes, while Teixera took at least $13 million from International Sports Media and Marketing, a now-defunct company. Together, the two took in some $22 million in bribes, according to the documents.

The documents include a court order detailing the terms of an eventual legal settlement of the charges.

They suggest that FIFA officials—including the organization’s current president, Sepp Blatter, knew of the bribes, but did nothing to stop them. “The finding that FIFA had knowledge of the bribery payments to persons within its organs is not questioned,” the documents said.  Astonishingly, the soccer body was aware that a $1 million bribe meant for Havelange mistakenly ended up in FIFA’s official accounts.

Just the same, the documents show, FIFA made every effort to stop the Swiss prosecution of Havelange and Teixera, arguing that FIFA did not have to see bribes the two men had “pocketed” for their “personal enrichment” to be repaid.

Havelange ran FIFA for 24 years until he stepped down in 1998, when Blatter, his loyal lieutenant, succeeded him.

Earlier, Havelange and Teixera had publicly denied the allegations, though under the terms of the court order, they repaid a small portion of the bribes. They did not immediately respond to requests for comment.

Sweep to Former FIFA president Joao Havelange received “millions in bribes”–report

The District of Columbia has not seen the end of corruption, with revelations this week of an illicit “shadow campaign” surrounding the 2010 mayoral election.

Jeanne Clark Harris, a public relations consultant, pleaded guilty to conspiracy, fraud and filing a false statement in the U.S. District Court Tuesday. Harris admitted to distributing and concealing a $653,000 donation to Mayor Vincent C. Gray’s campaign in 2010.

The money, which was never reported to the campaign finance authorities or the public, came from a prominent businessman, Jeffery E. Thompson. Harris said Thompson funneled the donations secretly to avoid damaging his ties to the then incumbent mayor Adrian Fenty.

Harris testified that Thompson, though involved in the “shadow campaigning,” did not create the plot.

According The Washington Post, one-third of the $653,800 went to paying staff, $130,000 paid for campaign materials, $58,000 paid for field worker supplies, and the rest for miscellaneous expenses.

Among the campaign items purchased were yard signs, t-shirts, banners, and posters bearing Gray’s campaign logos. The “shadow campaign” was focused east of the Anacostia River, where voting totals were unexpectedly higher.

Questions surrounding the 2010 mayoral campaign first surfaced shortly after Gray’s election, when a losing candidate, Sulaimon Brown, disclosed that Gray aides had offered him cash and a post-election position in the Gray administration to relentlessly criticize Fenty during the race.

In May, two of Gray’s campaign aides pleaded guilty to paying Brown.

Prosecutors have not disclosed whether or not they believe Gray was actively involved in the cover-up, and the mayor has denied any knowledge of the illegal payments. An attorney for Thompson declined to comment.

Sweep to Vast shadow campaign said to have aided Gray in 2010 

Two more British journalists were arrested Wednesday, under charges of having bribed police to obtain stories.

Notably, the two did not work for Rupert Murdoch’s News Corp, which has been at the center of a growing scandal involving accusations it hacked emails, tapped phones and bribed officials to get news.

The reporters, identified as Justin Penrose of the Sunday Mirror and Tom Savage of the Daily Star Sunday, were picked up at their homes in Kent and in Southeast London early this morning.

Their arrests bring to 40 the number of British journalists arrested for making illegal payoffs to public officials.

Sweep to British journalists arrested over police bribe allegations

 

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