Corruption’s Second Slap

by Leslie Wayne / Published April 18, 2012 in The Big Sweep | Leave a comment

Former Bell city employees at a bail reduction hearing in September 2010, from left are Robert Rizzo, former city manager, Angela Spaccia, former assistant city manager, Victor Bello, former council member and Oscar Hernandez, former mayor. / REUTERS

If having corrupt city officials isn’t enough, there’s a double whammy waiting for municipalities trying to root out corruption. It comes in the form of high legal bills.

The Los Angeles Times reports that stolen money isn’t only the only woe that municipalities with corrupt officials face.  It costs money to fight corruption – a lot of it, which leaves many cities reeling with new costs as they try to turn over a new leaf.

Take Bell, California, a celebrated case where former city administrators and other officials faced charges of allegedly stealing millions of dollars by giving themselves exorbitant salaries and benefits. The cost to clean up the mess?  An additional $1 million a year in legal bills faced by the cash-strapped town.

And, the city attorney predicts that these high bills could continue for another two to five years.  This is money, say Bell officials, that could have helped pay for a much-needed upgrade to the city’s  poorly-functioning sewage system.  That will have to wait.

A chart  accompanying the LA Times story lays out the legal costs in stark detail, city by city.  In Lynwood, California, legal bills have risen to an average of $1.5 million a year following corruption charges against various city officials, including the former mayor.

However painful, it may be money well spent.  Corruption is one form of ripping off average citizens. It takes guts, transparency and cash to put an end to it.

Sweep to Corruption can leave cities with enormous legal bills

Two powerful women leaders of global standing meet and what do they talk about?  Rooting out corruption.

Secretary of State Hillary Clinton met with Brazil’s president  Dilma Rousseff in the capital of Brasilia and gave a shout out for open governments and transparency as they best way to fight corruption.   The statement came before representatives of 55 nations gathered at the first high-level meeting of the Open Government Partnership, started last year by Rousseff and President Barack Obama.

The Associated Press quoted Clinton as saying “The cure against corruption is openness. We believe that countries with open governments, open economies and open societies will increasingly flourish, they will be more prosperous and they will strengthen their democracies.”

Rousseff, who had never held public office before being elected president, has become popular for her anti-corruption efforts.   For this, she was praised by Clinton, who said that Rousseff was setting a “global standard” for openness and transparency.

Sweep to Clinton: Transparency combats corruption

Another tale of how the mighty have fallen, in this case in Louisiana, where corruption and bribery is so prevalent it often fails to shock.

This one, however, is a shocker. An investigative report from The Times-Picayune, says that  Robert Isakson, a former FBI agent and an anti-corruption crusader,  is now under investigation by the public corruption squad he once headed.

Iskason had the reputation of a straight-arrow. After leaving the bureau thirty years ago,  he became a government contractor,   and one dedicated to staying on the right side of the law and exposing those who did not.  Among his targets where war-profiteers in Iraq and bribe-seekers in post-Hurricane Mitch Honduras.

Now, according to the newspaper, the FBI is looking at payments made by Iskason’s construction companies to the former Plaquemines Parish sheriff and his driver. The payments came just before  Iskason’s companies got $3 million in contracts from the sheriff’s office.

And what does the sheriff, Jiff Hingle  have to say about all this?  Hard to tell. He resigned last year after pleading guilty in an unrelated bribery scheme and is awaiting sentencing.

Just another day in Louisiana.

Sweep to Corruption investigation of disaster-recovery firm  takes aim at former FBI supervisor

Ibori Sentenced for Swindling Nigerians of Millions

by Diana Jean Schemo / Published April 17, 2012 in The Big Sweep | Leave a comment

Former governor of Delta state in Nigeria, James Ibori. / REUTERS

The long and larcenous journey of James Ibori, the former governor of Delta state in Nigeria, will be taking an extended detour through prison.

Two years after Ibori’s arrest on a British warrant in Dubai, a British judge sentenced Ibori to 13 years in prison on Tuesday for money laundering. The judge, Anthony Pitts, dismissed the $79 million that Ibori had confessed to stealing in his guilty plea as “ludicrously low.”  Scotland Yard estimates that Ibori had swindled the Nigerian people of some $250 million.

Officially, Ibori earned a salary of $5,300 a year as governor of Delta state, The Guardian reports. But he managed to surround himself with luxury. He built up a portfolio of exclusive properties in London, South Africa and Texas, and rang up credit card bills totaling  $200,000 a month. He carried an American Express Centurion card, available only to the super-rich, on which he had charged more than $1.2 million in three years.

In 2005, Ibori had ordered his London attorney to purchase $20 million private jet for him.

Non-profit organizations are using the occasion of Ibori’s sentencing to urge British and American authorities to exercise tougher oversight of banks in their countries. “We now need an investigation into how Ibori was able to move so much money through these British banks for so long, and whether or not sufficient checks were carried out,” said Robert Palmer of the non-profit Global Witness.

Sweep to Former Nigeria state governor James Ibori receives 13-year sentence

With the public clamoring for a crackdown on corruption, Greece appears set to make an example of its former defense minister, Akis Tsochatzopoulos.

Tsochatzopoulos, 72, is at the center of Greece’s first high-profile prosecution on corruption-related charges in decades. He is accused of money laundering to cover-up millions of euros in bribes tied to Greece’s purchase of submarines from the German arms company Ferrostaal.

On Monday, Tsochatzopoulos testified before an Athens magistrate for eight hours, after which he was summarily dispatched to jail. His trial date has not been set. He faces a minimum of 10 years in prison if convicted.

Once seen as a possible contender for the prime minster’s post, Tsochatzopoulos was expelled from the Socialist PASOK party last year over bribery allegations. In addition to the money laundering allegations, he faces charges of filing false income reports to tax authorities.

Authorities have impounded his house, a mansion in one of Athens’ most expensive neighborhoods, that he failed to include in declaring his assets to authorities.

The Greek public is becoming increasingly focused on corruption, surveys show, as it grapples with austerity measures imposed by the European Union and the International Monetary Fund as part of the country’s bailout.

Sweep to Former Greek defense minister testifies on corruption allegations

Yet more suspicion of corruption among the rich and famous in Hong Kong. Following on the heels of the arrests of billionaire Kwok brothers last month, Hong Kong’s fifth richest person, Joseph Lau, and Steven Lo, chairman of the South China Football Club and of BMA Investment, are being tied to a bribery investigation in nearby Macau.

The two were named in an ongoing trial of a former government official in Macau, Ao Man-long.  Ao, Macau’s former secretary for transport and public works, is accused of pocketing some $2.6 in bribes from Lau and Lo, allegedly in exchange for land opposite Macau’s airport. The land is being developed for apartments, which are already being sold. The project will eventually count nine towers.

Ao is neck deep in corruption, serving 28.5 years after dozens of convictions on charges including bribery, money laundering and abuse of power. He still faces six more corruption charges and three allegations of money laundering.

Forbes reports that Lau is “a longtime fixture on the Hong Kong Rich List,” his wealth estimated at $6.5 billion.

Last month, Raymond and Thomas Kwok, the chairmen of Sun Hug Kai Properties in Hong Kong, were arrested in connection with a bribery investigation.

Sweep to Hong Kong Tycoons Linked to Macau Bribery Case

Tough Medicine for Johnson & Johnson

by Aaroon Kessler / Published April 13, 2012 in The Big Sweep | Leave a comment

Johnson & Johnson faces a $1.2 billion fine over its marketing of the anti-psychotic drug Risperdal. / REUTERS

An Arkansas judge has ordered U.S. drug company Johnson & Johnson to pay more than $1.1 billion in fines as punishment for misleading doctors and patients about the risks of its antipsychotic drug Risperdal.

As Bloomberg News reports, the fines are based on “more than 238,000 violations of the state’s Medicaid fraud laws” by J&J for “illegally marketing Risperdal over an almost four-year period starting in 2002.” With the judge finding that each violation carried a $5,000 fine, the total levied topped $1.1 billion.

J&J was sued by 11 state attorneys general over the drug, and two other state cases have already resulted in fines – though not as large as the one in Arkansas. According to Bloomberg, the U.S. Justice Department is also involved, and is demanding that the company “pay about $1.8 billion to resolve the civil claims by federal regulators and some state attorneys general.”

Sweep to J&J Fined $1.1 Billion for Misleading Doctors on Drug

Federal investigators in India are moving forward with a formal bribery investigation in the wake of a startling accusation from the country’s top army official.

General Vijay Kumar Singh recently rocked India’s political and military establishment when he said a defense lobbyist offered him a $2.8 million bribe if he would purchase of nearly 600 sub-standard trucks.

India’s Central Bureau of Investigation, or CBI, has now “registered a preliminary enquiry” into the complaint. According to the BBC, “a preliminary investigation is the formal beginning of a probe but during this phase the investigators do not have powers to question, search or arrest.”

The lobbyist accused of offering the bribe – himself a retired general – has so far denied the charges.

Sweep to India launches army bribe probe

Richard Michael Parks, the former administrator for Salt Lake County’s AmeriCorps program in Utah, pleaded not guilty Thursday in federal court to a slew of fraud and theft charges.

As the Salt Lake Tribune reports, Parks is charged with “mishandling funds during an 8-year tenure, in which he allegedly paid employees for hours not worked and awarded questionable bonuses.”

Parks’ jobs “included managing, controlling and reconciling AmeriCorps contracts, accounts, funds and grants for the AmeriCorps program in Utah.” AmeriCorps is a U.S. public service program that sends mostly young adults to work for a year or more in underprivileged American neighborhoods.

Parks allegedly made improper payments totaling nearly $100,000 to five AmeriCorps workers.

Sweep to Former AmeriCorps manager pleads not guilty in $95K fraud case

After Settlement, Sweet Reward

by Diana Jean Schemo / Published April 11, 2012 in The Big Sweep | Leave a comment

Count Siemens in on Athens metro extension. / REUTERS

Four weeks ago, a bribery case that had dragged on for years between the German engineering giant Siemens and the Greek government came to an end, with the company agreeing to pay a $336 million fine to settle the charges.

This week, Siemens is back doing business with Athens.

The company won a $54 million contract for the Athens subway on favorable terms. The contract covers signals and components for a 12-mile extension of the Athens’ subway system, which is going ahead amid a raft of austerity measures tied to the European bailout of Greek’s struggling economy.

Despite the Greek government’s financial woes, Siemens won’t have to worry about getting paid: The European Union is on board to fund more than 70 percent its cost.

Siemens is no stranger to corruption charges: it has had to pay over $1.3 billion in fines in the U.S. and Germany over bribery allegations.

Sweep to Siemens gets Athens contract after bribery fine

Next stop for Leona Beldini, former deputy mayor of Jersey City, NJ: Carswell Prison in Fort Worth, Texas.

A federal judge has upheld his earlier conviction of Beldini for bribery. After many delays, Beldini is now due to report to Carswell by Sunday.

Beldini, who was arrested in a famous FBI corruption sting that brought down some 40 politicians and government officials in New Jersey in 2009, has repeatedly sought to avoid reporting to serve a three-year sentence.

A jury convicted Beldini in February 2010 of accepting two $10,000 contributions from an FBI informant, Solomon Dwek, in exchange for promising swift government approval of his real estate deals.

In her last, and final, attempt to avoid prison, Beldini’s lawyer argued that Dwek had used the words “corrupt” and “corruption” some 48 times, and the word  “bribery” 37 times, during his testimony at Beldini’s trial, poisoning the minds of jurors weighing her guilt or innocence. The words were subsequently barred from testimony in the trials of other defendants nabbed in the FBI sting.

But Judge Jose Linares ruled that Beldini’s attorney at the time had failed to raise any objection to Dwek’s language, and that it was not up to the judge to police witness testimony.

Sweep to Federal judge says former Jersey City deputy mayor Leona Beldini, 76, must start serving 3-year term for bribery

No, it’s not advance p.r. for the upcoming Three Stooges film.

But the bosses of three of Slovenia’s largest construction firms apparently fell over each other bribing a former civil servant, in their bids to win a $26 million public contract for a new air traffic control tower at Ljubljana Airport.

Ivan Zidar, Dusan Crnigoj and Hilda Tovsak, the construction bosses, were recorded in telephone conversations attempting to bribe the civil servant in charge of the public bidding process. The three offered to give a relative of Tomaz Zibert, the official, a cut of the contract along with other special favors.

Zibert, now serving 30 months in prison for corruption, had apparently promised each of the three that they would get the contract.

The construction bosses face fines of $13,000 to $15,000, and 17 months in prison. They have vowed to appeal.

Sweep to Guilty verdict in Ljubljana bribery case

One Small Step Against Corruption in Russia

by Leslie Wayne / Published April 9, 2012 in The Big Sweep | Leave a comment

Election monitors at a call center in Yaroslavl, where opposition candidate Yevgeny Urlashov won the race for mayor in a stunning defeat for the candidate of Vladimir Putin's United Russia party. / REUTERS

He used to stand with Vladimir Putin. But on Sunday, anti-corruption crusader Yevgeny Urlashov won a landslide victory against Putin’s party, to become the next mayor of Yarslavl, a city of just under 600,000 some 155 miles east of Moscow.

Yevgeny Urlashov. / REUTERS

Taking more than 70 percent of the vote, Urlashov defeated the acting mayor, a candidate of Vladimir Putin’s United Russia party, in what was seen as a blow to Putin and his political allies.

Urlashov, a 45-year old lawyer, has promised to fight graft by providing better oversight of the city’sspending.  His victory is seen as providing hope to Russia’s opposition following the election of Putin to a third term in office.

It wasn’t an easy campaign.  Local television provided only positive coverage of his rival and local police raided Urlashov’s campaign headquarters.

What does Urlashov have to say about his election upset? The “People of Yaroslavl have grown tired of corruption and nepotism,” the victor told a local radio station. “They want changes.”

Sweep to Anti-corruption crusader wins mayoral election in victory for opposition

Corruption and Louisiana.  The words seem to fit together, perhaps a little too neatly.

A New Orleans-based corruption watchdog organization wants to set up shop in Baton Rouge, the state capital, as well.  It would be the second attempt by this group to open a Baton Rouge branch – the first effort got derailed when Hurricane Katrina struck in 2005.

Now, the Metropolitan Crime Commission, headed by Rafael Goyeneche III, is trying to line up support among businessmen in the capital using the argument that public officials might be coming after them for bribes and other back-room deals.

The Commission has been fighting crime since 1952 by investigating tips from the public. Some of its investigations have lead to the arrest of high-level Louisiana politicians.   Goyeneche said he’d like to start the Baton Rouge effort by examining the criminal justice system.

There is one person who would welcome the Commission’s presence, the local district attorney. Hillar Moore, the prosecutor who represents East Baton Rouge, said: “We would welcome any help he (Goyeneche) can give us.”

Sweep to Corruption watchdog interested in B.R.

In Uganda, General Elly Tumwine has worn many hats: former army commander, chairman of the military high command, senior presidential advisor and painter, musician and sculptor.  Now he’s putting on yet another hat — .anti-corruption crusader.

In a wide-ranging interview with the Sunday Monitor in Uganda, General Tumwine expanded on his views.

Here are a few highlights:

  • There is greater freedom now in Uganda to talk about corruption and more ways to expose it – before there was not radio, mobile phones or independent media;
  • The Government is overly focused on dealing with what has gone wrong and not focused enough on preventing corruption in the first place;
  • With greater freedom, has come a greater temptation for corruption;
  • A rising economy brings greater availability of things to steel;
  • With impunity comes a culture that even glorifies corruption;
  • Those in power may be in the worst position to root out corruption.  Instead, the anti-corruption effort may have to spring from ordinary citizens.

In other words, according to Gen. Tumwine; “ You cannot expect those who are at the table and being tempted by the puddings and the sweet things to be the ones to say take away the food. It must be the hungry, those who need that food.´”

Sweep to Corruption taking us back to the dark days

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