Folding on Corruption


U.S. General John Allen shakes hands with Afghan Defense Minister Abdul Rahim Wardak, after signing an agreement for Afghan takeover of U.S.-run detention center Friday. / REUTERS
Corruption, estimated to have already claimed tens of billions of dollars in American aid to Kabul, is shaping up to significantly complicate the American exit from Afghanistan.

The New York Times reports that President Hamid Karzai has failed to follow through on pledges to prosecute high-level corruption cases, and the U.S.’s top general on the scene, John Allen, appears unwilling to press him on the matter as the NATO combat mission prepares for a 2014 drawdown.

American officials fear that pressing the fight against Afghan corruption could alienate members of the Karzai administration that Washington is increasingly relying on as it begins to withdraw from the country.  Part of the problem is one of Washington’s own making: The United States has pumped billions of dollars in aid and logistical support into the country, that have represented a boon to dishonest government officials and their cronies.

That has only led to anti-American sentiment against the business and political elites who have profited from the American intervention, and who are despised by most Afghans. According to an August 2011 report by the bipartisan Commission on Wartime Contracting, some 15 to 29 percent of the $206 billion spent in both Iraq and Afghanistan has been lost to waste and fraud.

One major scandal that has rocked the country involves the near-collapse of the Kabul Bank.  Many of the players at the center of that scandal are members of President Karzai’s inner circle.  In spite of the linking of anti-corruption and anti-American sentiment, neither Washington nor the Karzai regime appear to be interested in doing much about it.

Sweep to Intractable Afghan graft hampering U.S. strategy

Siemens President and CEO Eric Spiegel. /REUTERS

In economically downtrodden Greece, past corporate misdeeds may actually turn out to provide some much-needed cash to the country.

The Greek government and Siemens announced they had reached a settlement into allegations of bribery that took place several years ago.  Siemens, the engineering giant, has been at the center of a widespread global investigation over incidents of bribery that took place in many countries where it did business. So far, the company has paid $1.6 billion to settle charges brought by the United States and Germany.

Now it is Greece’s turn.  The settlement comes over charges that Siemens paid bribes to Greek politicians and telecom officials in order to land contracts in the country.

Under terms of the deal, which were reported by Bloomberg, Siemens will invest $133 million in its Greek operations and will look to build a $90 million production plant that could create 700 new jobs.

Rarely is there a silver lining to charges of corruption.  For Greece, this might be the rare exception.

Sweep to Greece, Siemens reach corruption deal

Not guilty on all counts. That was the verdict in Alabama, where federal prosecutors, for the second time, failed to convince jurors of its case against a prominent casino owner and a number of current and former state senators.

Milton McGregor and five other defendants were acquitted after seven-days of jury deliberations over charges that they had bribed state lawmakers to get their votes on pro-gambling legislation.  For two years, and two trials, prosecutors tried to get the charges to stick, and could not.  Prosecutors brought nine witnesses to court. The defense did not call any witnesses, saying that the Government did not prove its case.    The jury agreed.

“I’m going to have a lot to say, but not today,” McGregor said in a brief statement outside the courthouse. He also thanked his family, friends and supporters.  His defense attorney, however, told the Montgomery Advertiser that his hardest job and probably biggest accomplishment was keeping the voluble McGregor quiet.

Sweep to Not guilty: Former defendant says “jury got it right”


Leslie Wayne

Leslie Wayne

Leslie Wayne, former senior editor at 100Reporters, is an award-winning business reporter, formerly at The New York Times. Ms. Wayne joined The Times in 1981 and has covered Wall Street, banking industry regulatory reform, municipal finance scandals and, most recently, the aerospace and military industries. Ms. Wayne has an M.B.A. in finance from Columbia Business School and was also a Knight-Bagehot Fellow in Business and Economic Journalism.