The Greatest Show they Couldn’t Afford

by Diana Jean Schemo / Published May 30, 2012 in The Big Sweep | Leave a comment

Madonna performing at Budva. / MADONNALICIOUS FAN PHOTO

The 2008 extravaganza that pop idol Madonna held in the Montenegrin resort of Budka was described by many as an important landmark in the musical history of that Adriatic country. It now appears it was a landmark in the annals of corruption, as well.

A new report by the Organized Crime and Corruption Reporting Project details how taxpayers in Montenegro—who had been promised that no public money would go toward the show–ended up shelling out about $6 million to subsidize the Material Girl’s appearance, without their knowledge.

Moreover, a Montenegrin bank transferred $7.5 million to the singer’s agents ahead of the concert, at the same time that it failed to honor 200 orders for wire transfers from customer accounts, each of them with balances sufficient to cover the transfers.

The report appeared to find no evidence that Madonna knew that her payment was coming from potentially illicit sources.  The “Sticky & Sweet” world tour earned the singer $281.6 million that year, while Montenegro’s Central Bank faced demands that it bail out the bank whose clients unwittingly paid for all that sweetness.

Sweep to Paying for Madonna, Cheating Montenegrins 

Jack Warner, the former FIFA vice-president, will not face criminal charges in his native Trinidad over the alleged bribery scandal that cost him his position at the world soccer body last year.

The public prosecutor announced Monday that he would not be charging Warner and that the case was closed, despite evidence suggesting that Warner was the secret owner a hotel and “center of excellence” built with $22.5 million in aid from FIFA. The Trinidadian investigative website wired868.com published documents showing two companies owned by Warner family members took out an $11 million mortgage on the property.

Warner, deputy prime minister and minister of works in Trinidad, was also accused of handing out bribes to Caribbean delegates at Port-of Spain in May 2011, in an unsuccessful bid to secure the election of Mohamed bin Hammam to lead FIFA.

Warner denies the allegations, saying he is the victim of a vendetta by FIFA President Sepp Blatter.

Sweep to No charge for Warner

While financial analysts may debate the risks and benefits of Wal-Mart’s alleged gamble in Mexico, where the discount chain reportedly paid millions of dollars in bribes to fast-track its vast expansion, shareholders are meting out their own form of boardroom justice.

The Boston Herald writes today that the Massachussetts Pension Reserves Investment Management system, which owns nearly 1 million shares of Wal-Mart, will demand the replacement of seven members of the board.

In addition, Pensions and Investments, an online news site, is reporting that a growing share of major shareholders are publicly vowing to vote against Wal-Mart’s slate of directors at the company’s annual meeting June 1.

The anti-incumbent wave ranges from the California State Teachers Retirement System, which announced plans to vote down all 15 directors, to the California Public Employee Retirement System, which will reject nine directors. The New York and Connecticut employee retirement systems are also calling for a housecleaning, the site reported.

“If the allegations surrounding the Mexican subsidiary are proven true, and the board was unaware of the bribery, then Wal-Mart’s board has badly failed its shareholders and must move swiftly to bolster its oversight mechanisms,” said a letter from Denise Nappier, Connecticut treasurer and overseer of the pension fund, to James Breyer, presiding director of Wal-Mart, that the site quoted. “At a minimum, the board must determine who was responsible for failing to keep the board informed and remove them from the company.”

Sweep to Plans say no to re-election of directors on Wal-Mart board 

Chief Justice in the Dock

by Leslie Wayne / Published May 24, 2012 in The Big Sweep | Leave a comment

Senate security personnel call for silence as Philippine Supreme Court Chief Justice Renato Corona testifies during his impeachment trial at the Senate in Manila. / REUTERS / Erik De Castro

There was plenty of drama, tears and defiance as the chief justice of the Philippines, Renato C. Corona, took on his accusers in his first appearance at his impeachment trial before the Philippine Senate.

“I am certain that I am not at fault, that I have done no wrong,” Chief Justice Corona said, according to The New York Times.  ”I did not steal from government. I have a clear conscience.”

In a three-hour opening statement, complete with a Power Point presentation, Corona said that his wealth had been exaggerated and that he was being unfairly targeted by the government of  President Benigno S. Aquino, who has criticized the integrity of the Supreme Court under Corona’s leadership.

There were several moments of high theater.  At one point, Corona tried walk out of the proceedings, and was prevented from doing so by the Senate president, who ordered the Senate doors closed and gave him a tongue-lashing.  He rolled back in a wheelchair, with an attendant at his side. One of his lawyers said he was suffering from dizziness and could not continue.  The judge adjourned the proceedings, ordering Corona to return to court next Wednesday.

At one point, Corona wept on the stand.  He also waved a document that he said would grant the government access to all of his bank accounts, including foreign currency deposits. But he then said he would not hand over the document until his accusers did the same.

He is accused of hiding assets and issuing biased rulings in favor of Mr. Aquino’s predecessor, Gloria Macapagal Arroyo, who appointed the chief justice. If convicted, he faces removal from office. Prosecutors say that he had deposited $12 million into scores of bank accounts while serving on the Supreme Court.

Corona claims he does not have that amount of money, nor the number of bank accounts claimed by the prosecution.

Sweep to Philippines Chief Justice denies corruption charges

In spite of all the attention to foreign business corruption, more executives are increasingly willing to pay bribes to win overseas business, according to the 12th annual fraud survey from Ernst & Young.

The survey polled more than 1700 business leaders in 43 countries and found that 15 percent said they would pay bribes to land business. This compares to 9 percent in the previous survey.

In a statement, the accounting firm says that a declining economy is contributing to the problem as businesses that have already cut costs to the bone seek to expand in rapidly-growing developing economies. The firm termed this “a further cause for concern” and added that the findings “suggest that bribery, corruption and fraud remain widespread.”

This comes even though the United States has increased its enforcement of foreign bribery cases and other countries, like the United Kingdom, have strengthened their anti-bribery laws.

“Executives, especially those in many mature markets, must overcome a certain degree of institutional fatigue about anti-corruption compliance initiatives,” David Stulb, global leader of Ernst & Young’s fraud investigation & disputes services practice, wrote in the survey, which was reported in The Wall Street Journal.

Corruption is still a common business practice in the developing world.  According to the survey, it was considered a widespread practice by 84 percent of the respondents in Brazil, 72 percent in Indonesia, 60 percent in Mexico and 70 percent in India. Overall, nearly 40 percent of the respondents said bribery occurred frequently in their country.

Sweep to Survey finds unethical business practices on the rise

The British police, already rocked by a corruption scandal, have found yet more dirty laundry to air.  A Scotland Yard anti-corruption detective and three former Metropolitan Police officers were arrested, amid claims that they were pocketing bribes in return for providing information into an inquiry into a corrupt Nigerian official.

The Daily Mail reports that the three are accused of providing information about Nigerian fraudster James Ibori in return for cash.  Ibori, former governor of Nigeria’s Delta State, was ordered jailed for 13 years last month after he admitted to embezzling money to fund a lavish lifestyle for himself and his family.  The article said that the arrests “raise serious questions about links between police and private investigators who want to obtain information to undermine the criminal justice system.”

The alleged payments were made for information given to a London law firm and a private investigation company headed by a former Scotland Yard detective.  They total nearly $30,000.  Both the law firm and the private investigation company were hired to work for Ibori in 2007, after he was charged with fraud.

Sweep to Anti-corruption detective and 3 ex-officers arrested

His Holiness v. “His Holiness”

by Diana Jean Schemo / Published May 21, 2012 in The Big Sweep | 1 Comment

The College of Cardinals. / REUTERS

Vatican officials are threatening to sue an author, publisher and others over a new book on Vatican secrets and scandals that is based on leaked documents, the Associated Press reports.

The book, His Holiness by Gianluigi Nuzzi, exposes internal power struggles, communications with the powerful and well-connected in Italy and emails between Pope Benedict VI and the Vatican bank. It also reports on the Vatican’s response to scandals such as those surrounding the Legion of Christ. The order has gained notoriety in recent years with reports of a culture of pedophilia and sexual abuse set by its founder.

Earlier this year, the Pope created a task force of cardinals to track down the source of leaked emails exposing alleged corruption in the Vatican contracting office and mismanagement. He had threatened Nuzzi with legal action following previous articles that drew on leaked emails and letters to report on the efforts of a Vatican whistleblower to avoid assignment to Washington.

That whistleblower, Monsignor Carlo Maria Vigano, is the Vatican’s ambassador to the United States.

Sweep to Vatican: New book of leaked documents “criminal”

In what appears to be a growing scandal over property tax assessments in some of California’s wealthiest communities, a former assessor for Los Angeles County was taken into custody Monday.

The assessor, Steven Schenter, had previously admitted to the Los Angeles Times that he had lowered the tax assessments on some 150 residential and commercial properties under pressure from his boss, County Assessor John Noguez.

In exchange for the reduced tax bill, he said, property owners showered Noguez with campaign contributions, and helped lower his post-election campaign debt. Noguez reportedly raised $1 million for his election bid, while his opponent raised only $50,000. Still, Noguez ended his campaign in debt.

He now faces 60 charges of falsifying public records.

“The magnitude or Schenter’s suspected betrayal of public trust is almost inconceivable,” the Times quoted Los Angeles County District Attorney Steve Cooley as saying. “We believe his actions are not isolated.”

Noguez has admitted to asking Schenter to “check the status” of certain properties and to help fundraise for his campaign, but he denies explicitly asking him to lower tax assessments.

Sweep to Ex-official arrested in L.A. County assessor corruption probe

The singer Jack White is keen to set an unusual record at his next show: the most metaphors in a single concert.

But Pennsylvania’s Supreme Court Justice Joan Orie-Melvin might set an altogether less enviable record. She became the third sister in a single family to be charged with corruption as a public servant.

A grand jury in Allegheny County recommended Orie-Melvin face nine criminal counts Friday, in connection with charges she used her official staff to work on her election campaigns in 2003 and 2009. She was also charged with conspiracy to tamper with or fabricate evidence and theft of services.

Orie-Melvin’s sister, Pennsylvania State Senator Jane Orie, is awaiting sentencing for using her legislative staff to work on her campaigns. A third sister, Janine Orie, is also awaiting sentencing for her involvement in misusing official staff for her sisters’ campaigns.

Orie-Melvin was immediately removed from the bench, though she continues to collect her salary of nearly $200,000 a year.

Sweep to Justice Joan Orie-Melvin to step away from state Supreme Court to fight charges

This time, the message came through loud and clear.

A federal judge in Miami sentenced Jean Rene Duperval, a former official at Telecommunications D’Haiti, to nine years in prison for laundering some $500,000 in bribes he collected from U.S. companies, as part of a mushrooming investigation into bribery in Haiti’s telecom sector.

The investigation under the U.S. Foreign Corrupt Practices Act has already netted a record prison sentence for another former official of Haiti Teleco, Joel Esquenazi, who faces some 15 years in prison, the Miami Herald reports.

In exchange for the money, Duperval sold out the people of Haiti: He lowered the contract price for U.S. businesses and allowed them to charge higher rates. Assistant U.S. Attorney James Koukios noted that Duperval came from a wealthy family, and did not need the bribes. Testifying in his own behalf, Duperval contended the payments were not bribes at all, but “tokens of appreciation” for a job well done.

Now, it appears, Duperval is the one who is well done.

Sweep to Ex-Haiti official, 9 years in Telecom bribery case

A Park for India’s Lowest Caste, Swindled by Pols

by Leslie Wayne / Published May 17, 2012 in The Big Sweep | Leave a comment

Waiting to vote in Uttar Pradesh, India, February 2012. REUTERS/Adnan Abidi

The idea was to develop a series of parks filled with statues and monuments to herald the contribution of daits, the lowest Hindu caste, in the poverty-stricken northern state of Uttar Pradesh in India.

Instead, it has turned into yet another symbol of the massive corruption scandals that have rocked India in the last few years. In this case, the corruption took place in one of India’s poorest states, where malnutrition, suffering and disease are rampant.

Associated Press reports that Indian authorities are looking into whether the billion-dollar project was just another plot to line the pockets of the elites. Authorities allege that millions of dollars that were supposed to pay for new statues and monuments to the contributions of the poor instead were misappropriated by the region’s former Chief Minister Mayawati, who goes by only one name.

Dozens of larger-than-life statues of elephants cost $15 million, or more than $115,000 each. Meanwhile, the artisans were only paid about one-tenth of that, according to police quoted by the Associated Press. Buildings and walls were repeatedly built, torn down and rebuilt. Trees were planted, uprooted and then thrown away. This all points to the possible misappropriation of funds.

Then there is the larger question:  Why, in such a poor region, where the human needs are so obvious, was such a project undertaken in the first place?

Sweep to India state to probe corruption in low-caste parks

It was a nice life while he had it.

The public has finally gotten a glimpse of the lavish life of former Cuyahoga County Commissioner Jimmy Dimora, who was convicted last large on 37 different corruption counts and is now being held in federal prison while he awaits sentencing.

A federal judge released more than 3,000 documents — some but not all of the evidence against Dimora. Photos show Dimora living large in Las Vegas casinos, including hanging out at the Mirage Hotel Bare Pool and dining at the Prime Steakhouse, courtesy of a local contractor.

Money that prosecutors said Dimora took in bribes paid for granite countertops, landscaping and an elaborate covered backyard patio at his home.

Let’s not also forget about a $1,100 refrigerator, a Rolex watch and multiple limousine trips that were all part of the released evidence.  Since he is headed to prison, Dimora will now be housed courtesy of the government — another form of using “other people’s money.” It’s hard to imagine, however, that his new housing will come with such lush amenities.

Sweep to Corruption Trial Evidence Shows Dimora’s Lavish Lifestyle

So what does Donald Trump, never one to mince words, say about American anti-bribery laws?

In a morning appearance on CNBC’s Squawk Box this week, Trump called the law “crazy” and said the United States has no business being the “policeman of the world.”

Trump, colorful, opinionated and full of self-promotion, weighed in on the recent scandal involving alleged secret payments by Wal-Mart to Mexican officials and a subsequent cover-up.

While human rights watchers and corporate governance experts have been praising the U.S. Foreign Corrupt Practices Act, which bars companies doing business in the United States from bribing foreign officials, Trump came out with a full-throated attack. He said that the U.S. should not be prosecuting Americans doing business abroad who adopt the local practices, which can often include bribery and under-the-table payments.

“This country is absolutely crazy,” said Trump.  ”They prosecute people for going over to China and Mexico and other countries and getting business and creating jobs in this country.”

“We are like the policeman for the world,” he said. “It’s ridiculous.”

Trump even went so far as to call for the FCPA law to be repealed. “Let Mexico or let China or let these other countries prosecute. Why are we prosecuting to keep China honest?”

“Every other country goes to these places and they do what they have to do,” he added.

Sweep to Trump Slams FCPA Law

Public Service as Self-Service

by Diana Jean Schemo / Published May 15, 2012 in The Big Sweep | Leave a comment

Former state Senator Pedro Espada Jr., convicted Monday of stealing more than $500,000 from a Bronx health clinic. / REUTERS

He dined on lobster, splurged on spa treatments and ordered up a luxury sport-utility vehicle. On Monday, the bill came due for former State Senate Majority Leader Pedro Espada Jr.: guilty on four counts.

Espada, an Albany power-broker, was convicted of embezzling more than $500,000 from Soundview Health Center, a not-for-profit health clinic he founded in 1978, that grew into a network of clinics. The money went for everything from that $60,000 SUV to a $1.09 pack of chewing gum, the New York Daily News reported. (The New York Times tallies Espada’s haul on the charges for which he was convicted at $448,000.)

The News nicknamed Espada the “piggy pol,” noting that under the terms of his agreement with Soundview, Espada continues to collect his $300,000-a-year salary. He also stands to enjoy a golden parachute that could top $10 million. Patients at the clinic expressed outrage.

The jury deliberated for 11 days, with reported outbursts of bickering and name-calling. The panel deadlocked on four more counts of theft, fraud and conspiracy against the former senator, and on a raft of similar charges against his son, Pedro Gautier Espada. The judge declared a mistrial on those counts.

Sweep to Ex-state Sen. Pedro Espada convicted of stealing from Bronx health clinic

Will the last honest person in Columbus, New Mexico, turn out the lights?

This small town on the border with Mexico, population 2,000, has seen its mayor, police chief, a city trustee and nine other public officials arrested in a conspiracy to sell weapons to drug cartels over the border.

And it is not alone. The Los Angeles Times reports that towns on the U.S. side of the border appear to be a lifeline supplying illicit weapons to the drug gangs that terrorize much of northern Mexico. A dozen public officials are under investigation in Sunland Park, New Mexico, in connection with gun running or drug trafficking over the border, and some 130 U.S. Border Patrol agents have been arrested since 2004. Another 600 are under investigation.

“Unfortunately, the border is just one vast conspiracy,” the Times quotes the attorney for Columbus’s former mayor, Eddie Espinoza, as saying.

Sweep to Corruption flows freely along U.S.-Mexico border 

Some 100 properties at home and abroad, an airline that turned with $15,000 in capital into $1.6 million in a single year: these are some of the alleged spoils that Adolphe Muzito, the former prime minister of the Democratic Republic of Congo, is accused of having amassed at public expense.

Investigators in Kinshasa have confirmed that they are looking into the source of Muzito’s wealth, following accusations from a former fellow lawmaker, Gerard Gecoco Mulumba, the Voice of America is reporting.

Mulumba had given up his own seat in Parliament, saying he could not bear to sit with a man who had so ravaged his country. He contended that the airline, Technafrique, became a conduit for money laundering.

This is not the first time that Muzito’s management has prompted scrutiny, the VOA reports. In 2009, he lost the right to authorize government purchases, after he was caught buying a fleet of SUVs at public expense for his personal use.

Sweep to Congo Police Investigate Former PM for Corruption

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