Karzai Sings to the Choir in $16 Billion Concert

by Leslie Wayne / Published July 10, 2012 in The Big Sweep | Leave a comment

German Foreign Minister Guido Westerwelle, U.S. Secretary of State Hillary Clinton, Japanese Foreign Minister Koichiro Gemba and Afghan President Hamid Karzai (L-R) leave after a photo session at the Tokyo Conference on the Reconstruction of Afghanistan. REUTERS/Kim Kyung-Hoon

Afghan President Hamid Karzai is saying yes to a flood of new foreign aid for his country, and calling on donor nations to do a better job insuring the new money pouring in is not lost to corruption.

At a conference in Tokyo, Karzai welcomed some $16 billion in pledges of new assistance. The amount pledged surpassed his government’s wildest expectations, given widespread concerns about entrenched corruption, and the failure of the Kabul government to prosecute such cases.

In Tokyo, Karzai switched gears to lead the anti-corruption charge. He argued that Afghanistan is not solely responsible for corruption, and said that donors (who beefed-up oversight as a condition of new aid) must monitor the billions of dollars that flow into his troubled nation. When money flows in, he noted, influence peddling and corruption inevitably follow in his poverty-stricken and war-torn nation. This has made corruption one of the biggest obstacles to progress in Afghanistan.

Still, he acknowledged that there is plenty of blame to go around.  The Karzai Administration is widely seen as a patronage network, and only a handful of people have been prosecuted for corruption on his watch. Some $60 billion in civilian aid has gone to Afghanistan since 2002, much of it siphoned off through corruption.

Under new rules foreign donors imposed as a condition of new aid, most of the money will now be channeled through National Priority Programs established Afghan government, with mechanisms to insure transparency, the Associated Press reports.

Karzai told the group that the way in which projects are selected for financial support and the way in which they are funded are all “issues that we have to address.”  He added that,  “On corruption, two hands must clap.”

Sweep to Afghan President Hamid Karzai says donors must help his country fight corruption

The five-year saga of corruption that has captured a nation’s attention and ensnared former Israeli Prime Minister Ehud Olmert may be soon coming to an end.

An Israeli court will soon deliver a verdict in the trial of Olmert,  in which he is charged in three separate cases of illegally accepting funds from an American supporter, double-billing Jewish groups for trips abroad and giving jobs to unqualified political cronies.  Olmert was charged in September 2009 and stepped down under Israeli law, which requires top officials to leave office if indicted for a serious crime.

The Associated Press reports that Olmert could be the first Israeli prime minister sent to prison over a serious crime. Or, he could be acquitted amid questions whether an overzealous prosecution hounded him from office.

Olmert has denied any wrongdoing.  At his trial, an American supporter testified he had given Olmert hundreds of thousands of dollars, some in envelopes stuffed with cash.  Some Israeli legal observers say the Olmert trial shows that no one is above the law.

If acquitted, Olmert’s travails are not over.   He is facing a separate trial over charges he accepted bribes for a building project in Jerusalem when he was that city’s mayor and later in the Israeli cabinet.

Sweep to Verdict near in unprecedented trial of former Israeli premier on corruption charges

It’s back in the dock for Alaa and Gamal Mubarak, sons of  ex-Egyptian President Hosni Mubarak.  This is the sons’ second appearance in court on the same charge: corruption.

The two had been acquitted in an earlier case.  This time, the two Mubaraks, and seven others, are accused of insider trading in a trial that has just begun.   In the previous trial, charges were dropped against the two because the statute of limitations had expired.  In this case, the two are charged with illegally obtaining millions of dollars form the al-Watany Bank of Egypt through stock market manipulation.

The two sons are no longer living in the style to which they had grown accustomed to in when their family held grip on the nation’s coffers.  They have been in prison while the new charges were investigated.

If convicted, the two face up to 15 years in prison.  Both sons denied any wrongdoing.  The Egypt Independent said that some anti-corruption activists fear that even if convicted, the two might avoid a lengthy prison term due to loopholes in Egyptian law.

Sweep to Mubarak sons insider trading case begins, but is justice elusive?

 

Bogus Science at Glaxo

by Aaron Kessler / Published July 6, 2012 in The Big Sweep | Leave a comment

GlaxoSmithKline Plc has agreed to plead guilty to criminal charges and pay $3 billion to settle the largest case of healthcare fraud in U.S. history. REUTERS/Toby Melville/Files

The U.S. government is imposing the largest fine ever levied against a drug company, after British pharmaceutical giant GlaxoSmithKline agreed to a $3 billion settlement over its use of illegal marketing schemes and fraudulent medical studies to boost drug sales.

Glaxo will pay $1 billion to settle the criminal case and $2 billion for civil charges – covering wrongdoing dating back to the late-1990s and through the mid-2000s.

As Time reports, the corruption at Glaxo came to light thanks to four whistleblowers within the company, who detailed the drug giant’s campaign to get doctors to prescribe its drugs for unapproved uses by paying for opulent trips and lavishing them with spa treatments, sailing excursions – even balloon rides.

What’s more, the U.S. government concluded Glaxo took steps to hide its antidepressant drug Paxil’s potential link to teen suicide, by hiring a company to concoct a bogus medical study touting the drug and then publishing the “results” – which claimed Paxil was actually a good treatment for depression in children.

The company also faced charges related to two other drugs, including another antidepressant, Wellburtrin, and its diabetes drug Avandia. And as Time writes, $3 billion “sounds large, but it is only a portion of the drug maker’s profits from the drugs involved.”

Sweep to Breaking Down GlaxoSmithKline’s Billion-Dollar Wrongdoing

An investigation into banking corruption in Korea has now reached the brother of President Lee Myung-bak.

As the Korea Herald reports, the president’s brother – himself a former top lawmaker – was questioned by prosecutors this week over bribery allegations. Lee Sang-deuk is suspected of receiving nearly $600,000 from businessmen – sums allegedly paid to keep certain banks protected during a crackdown on failing Korean financial institutions.

Authorities also suspect Lee may have used some of the money to help his younger brother’s presidential campaign.  According to the Herald, the prosecution “is expected to file for his detention soon after the interrogation wraps up,” and they have now shifted their description of Lee from a “witness” to a “suspect.”

Sweep to President’s brother grilled over bribery

Alibaba, China’s largest e-commerce group, said Thursday that one of its former executives has been arrested by Chinese police over bribery allegations.

Yan Limin is the former general manager of Alibaba’s Juhuasuan website, the BBC reports, and he had been fired earlier this year for misconduct. Alibaba has seen numerous corruption problems in recent years, and last year, two executives resigned after “a rise in fraudulent sales.”

The company’s own internal investigations found hundreds of fraud cases, and a number of people connected to Alibaba have already been arrested by Chinese police. Part of the Alibaba corruption centers on businesses colluding with the online company to falsely inflate their ratings and wipe bad feedback from the popular e-commerce website.

Sweep to Alibaba: Former executive detained amid bribe probe

 

Exposing the Joumaa Network

by Aaron Kessler / Published June 29, 2012 in The Big Sweep | Leave a comment

U.S. Treasury Department names new targets of crackdown on Ayman Joumaa, whose money laundering and drug-running operations support Hezbollah, designated a terrorist group by the U.S. State Department. Here, Hezbollah soldiers with a picture of Imad Mughniyeh in 2011, when the group was believed to have threatened to assassinate Israeli diplomats in retaliation for Mughniyeh’s death in a 2008 car bombing. / REUTERS

U.S. officials announced a series of moves Wednesday aimed at stifling the flow of money through several groups accused of laundering funds for a major drug trafficking operation known as the Joumma network.

That network is in turn allegedly linked to Hezbollah, and the American government has accused it of using proceeds from cocaine trafficking in Columbia, in partnership with a Mexican cartel, to finance the Lebanese-based Hezbollah. The U.S. State Department counts Hezbollah, which is backed by Syria, as a terrorist organization.

Ayman Joumaa was indicted last year by a federal grand jury on numerous money laundering and drug trafficking charges tied to cocaine shipments from Columbia aimed at the U.S. market.

According to the Treasury Department, Joumaa’s organization allegedly “laundered proceeds from their illicit activities – as much as $200 million per month – through various channels, including bulk cash smuggling operations and Lebanese exchange houses.”

Sweep to Treasury Targets Major Money Laundering Network

One of the most prestigious public universities in the U.S. has reinstated its president after weeks of turmoil were sparked by her sudden, suspicious ouster.

Scores of faculty, students and alumni at the University of Virginia expressed outrage after the head of the school’s governing board engaged in secret, back-room dealings aimed at abruptly replacing the first-ever female president with someone considered more business-friendly. The university, as a public institution, is normally subject to the same open meeting requirements as other state agencies.

Star faculty members threatened to resign, and one, computer scientist William Wulf, actually did. The governor threatened to fire all 15 members of U-Va.’s entire board of visitors.  After two weeks, the U-Va. board voted Tuesday to bring back Teresa Sullivan as president.

As the Washington Post reports, the vote “completed a cycle of events that plunged the university into chaos, with 16 days of protests, no-confidence votes and talk of mass faculty defections.”

Sweep to U-Va. board unanimously reinstates Teresa Sullivan as president

Montreal mayor Gérald Tremblay doesn’t like being called crooked, and now he’s lashing out at the whistleblower who fingered him to a government inquiry investigating corruption in Quebec.

Tremblay is fuming over the whistleblower’s recent testimony and subsequent comments this week saying the mayor “can go to hell,” the Montreal Gazette reports.

Tremblay is demanding an apology from Jacques Duchesneau – a former city police chief who testified about wide-ranging corruption in Quebec. But Duchesneau appears to have no intention of backing down after his comments this week in the Canadian media criticizing the mayor.

In his sweeping testimony before the provincial inquiry, Duchesneau reportedly said that more than two-thirds of the money raised by Quebec’s political parties was obtained illegally.

Sweep to Tremblay will not seek legal redress

Opening the Floodgates on Corporate Influence

by Leslie Wayne / Published June 26, 2012 in The Big Sweep | Leave a comment

The Supreme Court reaffirmed its earlier decision in Citizens United, this time ruling that it overrides state campaign finance laws. / REUTERS

Montana has tried to keep its politics clean, and that effort was struck down by the U.S. Supreme Court.

By a 5-to-4 decision, the Supreme Court blocked an effort by the Montana Supreme Court to uphold a centuries-old law barring corporations from getting involved in state elections.

The high court ruled that Montana’s effort violated the court’s ruling in the Citizens United case. That highly controversial decision equated campaign contributions to the right to free speech, saying neither could be squelched. It opened the way for vastly higher corporate spending in political contests.

The Montana law in question was enacted in 1912 when “copper kings” and other mining barons largely controlled state politics. For a century, the law stood. When the Montana law was challenged in that state recently, the Montana Supreme Court upheld it.

But a group of Montana business interests decided to take their challenge to the U.S Supreme Court, and the high court agreed with the group.  In doing so, the high court said that the Citizens United decision trumps anything taking place on the state level and re-affirmed that all states are bound by it.  The Citizens United decision has resulted in a flood of unregulated and often undisclosed money into the presidential race that may well reach the $1 billion mark.

Fred Wertheimer, president of Democracy 21, has long decried the vast money pouring into politics.  He told The Washington Post that the Supreme Court decision “allows our government to be auctioned off to billionaires, millionaires, corporate funders and other special interests.”

In Montana, Gov. Brian Schweitzer said the Supreme Court is now endorsing “dirty, secret, corporate, foreign money.”

Sweep to Supreme Court reaffirms Citizens United

No one said that bringing a lawsuit against Alcoa over its alleged involvement in international bribes would be easy.

The complications, however, do boggle the mind.  The case was brought four years ago in federal court in Pittsburgh by Aluminum Bahrain BSC, also known as Alba. It accuses Alcoa of inducing Alba to buy the raw material alumina at inflated prices as a result of bribes that went through a middleman.

At a status conference, it was learned that 23 of the people named in the court filings are located outside of the United States and only two are current Alba employees.  Even more, many are government officials in a country currently rocked by unrest and street demonstrations, making it hard to depose them.

U.S, District Judge Donetta W. Ambrose, however, has said that the case will move forward, while acknowledging the logistical difficulties.

“I think it’s going to be a problem,” said Judge Ambrose, in a report in the Pittsburgh Post-Gazette.  “I don’t know how to solve it at this point.”

She suggested that the parties try mediation before a trial date is set.  She also disclosed that her father was an Alcoa laborer, that she was offered but did not accept an Alcoa scholarship to college and that her son works for the Securities and Exchange Commission, which, along with the Department of Justice, is involved in a criminal probe of the bribery allegations. Her son, however, does not work in the enforcement division.

Sweep to Judge: Alcoa bribery lawsuit complicated but can proceed

Two U.S. Border Patrol agents, and brothers as well, will stand trial in San Diego next month in one of the highest-profile cases the agency faces.   Raul Villarreal and his older brother, Fidel, are accused of smuggling hundreds of migrants into the country.

The Associated Press reports that this is the biggest case since the Border Patrol went on a hiring spree around a decade ago.  The brothers were arrested in Tijuana in October 2008, two years after they abruptly quit the patrol, and are charged with human smuggling, witness tampering and bribery.  They even used Border Patrol vehicles to transport their human cargo, the indictment said.  The brothers have pleaded not guilty.

Criminal indictments against Border Patrol agents and other border security officials have increased over the last four years.  There have been 232 indictments since October 2007 through last April.

In this case, Raul Villarreal appeared frequently on television as a spokesman for the agency.  He also played the role of a dangerous human smuggler in a public service announcement to warn Mexicans about the pitfalls of entering the United States illegally, A.P. reported.

Perhaps he knew his part all too well.

Sweep to Border patrol agents set for corruption trial

 

 

 

Dirty Buyers in Potato Scam

by Aaron Kessler / Published June 23, 2012 in The Big Sweep | Leave a comment

Potatoes at the bottom of grocery bribery scandal. / REUTERS

I say potato, you say pota…uh, oh.

Three men are now headed for the big house after being sentenced in Britain for their roles in a potato corruption scam involving supermarket chain Sainsbury’s.

As the Daily Mail reports, the case involves a potato buyer – a company called Greenvale – that paid millions of dollars’ worth of lavish bribes to officials at Sainbury’s in exchange for contracts to supply the grocery chain with their spuds.

The bribes included “cash, gifts and luxury hospitality” totaling nearly $8 million. Some of the most blatant instances include a six-figure luxury hotel bill, a 12-day vacation to the Monaco Grand Prix, and high-end sports cars, the Mail reports.

What’s more, Greenvale actually came out on top financially. That’s because part of the scam centered on overcharging Sainbury’s for the potatoes, to the tune of about $14 million – enough to cover the bribes, and then some.

Sweep to Corrupt Sainsbury’s buyer jailed

Two former employees of Montreal-based SNC-Lavalin will appear in a Canadian court Monday to face corruption charges stemming from a bridge project in Bangladesh.

As the Canadian Press reports, Ramesh Shah and Mohammad Ismail were arrested and charged several months ago in relation to alleged bribes offered to Bangladeshi officials to win a large bridge contract, but Canadian law enforcement did not disclose the charges at the time. They formally did so only after a Bangladeshi newspaper broke the news earlier this week.

SNC-Lavalin is Canada’s largest engineering and construction company. Canadian police raided one of the company’s offices last year seeking evidence associated with the bridge contract, and the World Bank has suspended a $1.2 billion loan and barred the company from bidding on contracts in Bangladesh, according to the Canadian Press.

Sweep to Two former SNC-Lavalin employees charged with corruption

Three city officials in the Southern California city of Cudahy – including the mayor – have been charged with federal bribery, the Los Angeles Times reports.

Federal prosecutors charged the three officials with “soliciting and accepting $17,000 in bribes from someone who wanted to open a medical marijuana dispensary,” the Times reports.

Also, FBI agents showed up at Cudahy’s city hall this week, seeking documents related to two recent city council elections.

The working-class, largely Latino city of 24,000 is adjacent to Bell, the small L.A.-area municipality that became infamous in 2010 after rampant corruption was exposed – including Bell officials who were paying themselves outsize six-figure salaries.

Sweep to Three Cudahy city officials face federal bribery charges

 

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