Corruption In Iraq & World

Former AOL Time Warner Execs Charged in Cooking Books bigtime

Reuters and other news sources are full of articles about EIGHT AOL - Time Warner Execs who have been indicted by the SEC for hyping online advertising revenue numbers by over a BILLION dollars from mid-2000 to mid-2002.

Whenever I hear of hyped sales reporting, I always expect the guilty to be in sales, since I have seen it twice. Sales staffs in less disciplined firms always look for a way to manipulate reported sales revenues so they can earn more commissions. There are a whole list of ways to do it.

But, in this case, the Eight execs are mostly ex CFO's and Controllers - so apparently they cooked the numbers to achieve bonuses or stock increases.

Lessons Learned: 1) Why doesn't the article mention who the audit firm was that let this happen? Expect to see them named in shareholder lawsuits soon. 2) For once, I would like to see these financial guys lose their professional certifications - I am sure several are CPAs.
vj

Barack Obama's Stand on Foreign Aid & Corruption

Presidential Barack Obama is considered to be a Kenyan-American. This article popped up on a website with lots of details related to Barack Obama's stand on foreign policy, foreign aid, and some comments about corruption related to US foreign aid. You have to go near the end of the article to find the info on corruption.

The interesting quotes on corruption are:

"Mr Obama’s international policy proposals are not limited to feel-good appeals to help poor nations.

The Kenyan-American candidate also calls for intensified US efforts to combat corruption in the developing world. The aim should be not only to prevent waste of American taxpayers’ money but to alleviate the injustices experienced by bribe-payers, Mr Obama says. His policy paper cites the graft routinely demanded in “police encounters, school admissions processes and housing accessibility.”

The senator promises to add a section on corruption to the State Department’s annual country reports on human rights.

Mr Obama makes clear that he will take a hard line on international terrorism. Calling for a $5 billion global offensive, he pledges to “take down terrorist networks from the remote islands of Indonesia to the sprawling cities of Africa.”"

My Comments:
- It seems that Obama has enough ties to Kenya (which has a VERY low ranking on the Transparency International Corruption Index) that he seems more sensitive to foreign aid issues, and the effects of corruption and bribes in African nations.
- Caveat - I don't know who the "special correspondent" is, so some information might be incorrect.
vj
=================================================
from the East African news section of Nationmedia.com
http://www.nationmedia.com/eastafrican/current/News/news1712200710.htm

How a President Obama would fix Africa

By KEVIN J KELLEY
Special Correspondent

Citing his status as “the son of a Kenyan goat herder [with] family in Kenya,” Senator Barack Obama is arguing that his life experience makes him “uniquely suited to show the world a new face of America.”

Should he be elected president of the United States, Mr Obama adds in a campaign paper on global development, he will encourage a more favourable view of the US by engaging with “all nations — foe and friend.”

This inclusive approach will reverse a widespread perception of “American arrogance and obstrutionism,” the candidate declares.

Mr Obama also pledges to double US assistance to developing countries, bringing the total amount of American aid to $50 billion a year by 2012. Such an investment would pay dividends, he says, because “the security and wellbeing of each and every American is tied to the security and wellbeing of those who live beyond our borders.”

US relations with African nations are given emphasis in Mr Obama’s set of international policy proposals.

He promises, for example, to launch an Add Value to Agriculture Initiative aimed at triggering a Green Revolution in Africa. This programme would forge US government partnerships with charities, universities and businesses to spur research on “improved seeds, irrigation methods and affordable and safe fertilisers.”

Mr Obama would also commit the US to helping African nations achieve the Millennium Development Goals. He promises to use new US aid to “build healthy and educated communities, reduce poverty, develop markets, and generate wealth.”

The paper’s focus on issues of high concern to Africa reflects the influence of Susan Rice, a former assistant secretary of state for African affairs. Ms Rice ranks as one of Senator Obama’s top foreign policy advisors. She worked in the administration of President Bill Clinton, as did former National Security Advisor Tony Lake, another key figure in the Obama campaign.

These Clinton administration officials’ alignment with Mr Obama indicates that they view him as potentially more effective than Senator Hillary Clinton.

The London-based Economist magazine recently described Mrs Clinton’s global vision as “mostly dull but sensible.” The former first lady has offered proposals similar to Mr Obama’s in some respects and likely to be viewed by many Africans as superior to the policies pursued by President George W. Bush.

But among the leading Democratic presidential candidates, “Barack Obama has probably thought the hardest about foreign policy,” the Economist observed. “When replying to questions, he tries to answer them, rather than simply shooting out scripted sound-bites.”

Sarah Jane Hise, a Washington-based researcher with the non-governmental Centre for Global Development, agrees that Senator Obama’s global policy proposals stand out among those offered by the Democratic candidates.

“Obama has so far been the most complete in covering a range of global development issues beyond just aid, including agricultural development, trade, climate change, investment and security,” Ms Hise says.

She also gives Ms Clinton a positive evaluation. The New York senator “does a good job of focusing on specific policies related to health and education, including a proposal to spur innovation and the development of drugs to treat diseases that primarily affect poor countries, such as malaria and pneumococcal disease, through an advance market commitment for vaccines,” Ms Hise observes.

But the two leading Democratic candidates can be sharply critical of one another’s views and records.

In a testy exchange two weeks ago, Senator Clinton derided Senator Obama’s claim that the four childhood years he spent in Indonesia helps him understand the world better than his rivals. The Obama campaign shot back by linking Mrs Clinton to the disastrous war in Iraq.

Voters will judge whether living in a foreign country at the age of 10 prepares one to face the big, complex international challenges that the next president will face,’’ Mrs Clinton said. “I think we need a president with more experience than that.’’

As the race for the Democratic Party’s presidential nomination tightens, the frontrunning Senator Clinton, 60, has been suggesting that the 46-year-old Senator Obama cannot match the knowledge she has acquired by living in the White House for eight years and by visiting Iraq, Russia and African countries.

Referring to the US vice president and to the former Pentagon chief, an Obama campaign spokesman said in response to Mrs Clinton’s criticisms: ‘’Dick Cheney and Don Rumsfeld have spent time in the White House and travelled to many countries as well. But along with Hillary Clinton, they led us into the worst foreign policy disaster in a generation.’’

As a US senator, Mrs Clinton voted to authorise the invasion of Iraq. Senator Obama, then a member of the Illinois state legislature, strongly opposed the 2003 US invasion.

Mr Obama’s international policy proposals are not limited to feel-good appeals to help poor nations.

The Kenyan-American candidate also calls for intensified US efforts to combat corruption in the developing world. The aim should be not only to prevent waste of American taxpayers’ money but to alleviate the injustices experienced by bribe-payers, Mr Obama says. His policy paper cites the graft routinely demanded in “police encounters, school admissions processes and housing accessibility.”

The senator promises to add a section on corruption to the State Department’s annual country reports on human rights.

Mr Obama makes clear that he will take a hard line on international terrorism. Calling for a $5 billion global offensive, he pledges to “take down terrorist networks from the remote islands of Indonesia to the sprawling cities of Africa.”

Kenyans campaigning for their country’s inclusion in World Bank and International Monetary Fund debt-forgiveness initiatives will be disappointed by this section of Senator Obama’s policy paper. It urges full funding for the IMF’s Heavily Indebted Poor Countries programme (HIPC) but does not call for countries such as Kenya to be made eligible for HIPC debt relief.

Senator Obama also makes only vague references to the reforms of the World Bank and IMF that he says he would seek as president.

The US Agency for International Development, which underwent significant downsizing during the Bush years, would be “restructured and empowered” by an Obama administration, the paper says. An expanded global Aids relief programme and the Millennium Challenge aid initiative would be consolidated within USAid along with other international assistance efforts now housed in more than 20 US government agencies.

OXFAM Report on WASTED Aghanistan Foreign Aid

OXFAM is a British "charity" focused on foreign aid located near Oxford University. They just issued a report on Aghanistan foreign aide spending criticizing where the funds were allocated. A big problem is that America's USAID blows about half their funds on consulting firms instead of direct spending in Afghanistan.

I saw the same thing in Iraq - they would hire US based contractors which paid big sums to US citizens, including "US level" food and accomodations (USAID staff had the best digs in the Green Zone, with private kitchens, etc.), rather than having programs to hire locals to do work. That later changed in 2005 and later as the US Army figured that hiring locals would drastically cut the cost of security, plus the locals bought stuff in nearby Jordan, and had lower wages, so costs to rebuild a water line, etc. were much less. However, we were hampered by requirements to buy through the US purchasing system, which mostly listed US based firms and products, so that still cost a lot more. Even if the locals were hired and siphoned off 10+% in bribes and corruption payments, they figured the local costs were still much less. The US Army, not State or USAID, was the driver to that process.

vj
=========================================================
The main Oxfam website is at:
http://www.oxfam.org/en/
However, I could not find the referenced Afghanistan Report - probably because the news article below was published before the report was added to the website. So, check on reports issued just after Nov. 21, 2007 and you might find it later.

This was a Reuters article from
http://www.commondreams.org/archive/2007/11/20/5346/

Published on Tuesday, November 20, 2007 by Reuters

Too Much Aid to Afghanistan Wasted, Oxfam Says

by Jon Hemming

KABUL - Too much aid to Afghanistan is wasted — soaked up in contractors’ profits, spent on expensive expatriate consultants or squandered on small-scale, quick-fix projects, a leading British charity said on Tuesday.1120 05

Despite more than $15 billion of aid pumped into Afghanistan since U.S.-led and Afghan forces toppled the Taliban in 2001, many Afghans still suffer levels of poverty rarely seen outside sub-Saharan Africa.

“The development process has to date been too centralised, top-heavy and insufficient,” said a report by Oxfam.

By far the biggest donor, the United States approved a further $6.4 billion in Afghan aid this year, but the funds are spent in ways that are “ineffective or inefficient”, Oxfam said.

The U.S. Agency for International Development (USAID) allocates close to half its funds to the five largest U.S. contractors in Afghanistan.

“Too much aid is absorbed by profits of companies and sub-contractors, on non-Afghan resources and on high expatriate salaries and living costs,” the report said.

A full-time expatriate consultant can cost up to $500,000 a year, Oxfam said.

More money needed to be channelled through the Afghan government, strengthening its influence and institutions.

Aid also needed to be better coordinated to avoid duplication, it said.

Only 10 percent of technical assistance to Afghanistan is coordinated either with the government or among donors.

SECURITY DETERIORATES

Spending on development is dwarfed by that spent on fighting the Taliban. The U.S. military is spending $65,000 a minute in Afghanistan, Oxfam said.

The report called for the 25 provincial reconstruction teams (PRTs) run by the armies of 13 different nations across the country to withdraw where the security situation is stable enough and carry out relief work only where there is a critical need.

The PRTs, Oxfam said, “being nation-led are often driven more by available funding or the political interests of the nation involved rather than development considerations”. The result was “a large number of small-scale, short-term projects”.

“Given the historic suspicion of foreign intervention, such efforts to win ‘hearts and minds’ are naive. It is unsurprising that the huge expansion of PRT activities has not prevented the deterioration of security.”

Violent incidents are up at least 20 percent since last year, according to U.N. estimates, and have spread northwards to many areas previously considered safe.

More than 200 civilians have been killed in at least 130 Taliban suicide bombs and at least 1,200 civilians have been killed overall this year — about half of them in operations by Afghan and international troops.

Oxfam called on the 50,000 foreign troops in Afghanistan to take greater care not to hurt civilians, particularly in air strikes. The lower number of troops in Afghanistan than in Iraq — less than a third as many in a much bigger country with a larger population — leads to a greater reliance on air power.

There are four times as many air strikes in Afghanistan as in Iraq, Oxfam said.

The NATO-led force in Afghanistan says it takes every effort to avoid civilian casualties and has already modified procedures for launching air strikes resulting in fewer civilian deaths.

(Editing by Richard Meares)

Bribe payers in Puerto Rico caught getting boosted scores on medical exams.

The article below provides an example of people recently getting busted for paying bribes in Puerto Rico to obtain illegal doctor licenses, which is the same problem that Iraq has.   It was very common in Iraq for students to be forced to pay bribes to get into classes, or graduate from college.  Additionally, workers in government agencies could only get increased salary through seniority, or by increased education.  That existed because they used the communist socialist system where there was no merit pay system, or variable promotion system.  So it was common to provide falsified certificates for doctorate degrees to get higher pay and move up in government agencies.  While I was there, the Iraqi Anti-corruption agency, CPI,  reviewed the legitimacy of degrees of a sample of higher paid professionals and  found about 200 that had provided false degrees to qualify for wage increases.

In the 1970's when I was working as an internal auditor at the County of Los Angeles, I sat on interview boards for people applying for the internal audit department.  We must have interviewed 400 applicants, and many provided certificates for accounting degrees from Egypt or the Phillipines, but yet when I asked them simple accounting related questions, they couldn't answer.  Almost all the degrees from Egypt looked the same.  Additionally, many did not speak english.  Our interviews were in person, so we could pick up on language problems.  However, many accounting related jobs in the County were filled based upon written only exams where the hiring manager could only hire one of the top 3 candidates.  We heard many comments that none of the top 3 actually knew the subject, but the manager was forced by County civil service to pick from the 3 - he couldn't drop down further in the list.  In some cases, we believed that candidates with high scores on the written tests must have had someone else take the test for them, but never could prove it.  As a consequence, there were entire departments in the Health department, as well as the Public Guardian (they handle the estates of people who die without any heirs) where hardly anyone spoke english.  I personally went to review some records at the Public Guardian, and there were maybe 40 accountants, ALL from Egypt, and many could not speak english.  We had to go to Egyptian managers to get translations. 

So, don't you feel better if you have medical coverage from an HMO and you get a medical doctor that doesn't speak english well??   And, what happens if a government agency does NOT require excellent writing and speaking skills in english for job candidates.  In California, the City of Los Angeles HR department resisted disqualification of candidates for accounting jobs when I sat on interview boards BECAUSE the job description did not specifically require english skills.  Thus if you work in a government agency, you might want to ensure ALL the job descriptions require english speaking and writing skills or the HR department might fill your next interview lists with non-english speakers.

VJ

================================================================

From
http://www.townhall.com/news/world/2007/08/02/fraud_probe_targets_puerto_rico_doctors

Fraud Probe Targets Puerto Rico Doctors
By DANICA COTO    
Thursday, August 2, 2007

U.S. federal agents arrested dozens of doctors accused of obtaining medical licenses through fraud or bribery, carrying out sweeping raids across Puerto Rico Thursday.

A federal grand jury indicted 88 doctors following an investigation into members of the U.S. Caribbean territory's medical licensing board, who allegedly altered low-scoring tests to certify unqualified candidates.

The doctors, mostly Puerto Ricans who studied medicine in the Dominican Republic, Mexico or Cuba, paid board members bribes of as much as $10,000, according to the indictment. At least 75 were practicing medicine in Puerto Rico, including some at hospitals or emergency rooms, authorities said.

The arrests began near dawn. Some suspects _ including Pablo Valentin, a former executive director of the licensing board _ were seen on television being led away by local police and agents of the U.S. Food and Drug Administration.

The Drug Enforcement Administration also is checking pharmacy records to determine whether the suspects prescribed medications, which could prompt felony charges as violations of the Controlled Substances Act, spokesman Waldo Santiago said.

Most of the suspects failed the licensing exam multiple times. One man who earned a medical degree in Spain failed the exam 16 times between 1974 and 2001 before he was granted a medical license in 2002, according to the indictment.

"We cannot allow doctors who obtained their license in an irregular way to practice medicine," said Rosa Perez Perdomo, Puerto Rico's Health Department secretary. "The health of Puerto Ricans has to be protected at all costs."

She called it "a very unfortunate situation," but said the fraudulent doctors' patients would have no shortage of alternatives among legitimate health care providers in Puerto Rico, where about 10,000 doctors serve a population of 4 million.

At least five U.S. states recognize Puerto Rican medical licenses _ Arizona, Florida, New York, Texas and Virginia _ but Perdomo said none of the suspects were known to have practiced medicine on the U.S. mainland, according to Puerto Rico's medical licensing board. The Arizona Medical Board said it requires all physicians to pass a U.S. licensing exam before they are issued a state license.

In many of the alleged fraud cases, an intermediary would approach a candidate who received a failing test by mail and offer to connect them with board officials who could help, authorities said.

Yolanda Rodriguez, a former board secretary who also was indicted, allegedly received the exams from the intermediaries, cut-and-pasted passages from passing exams, and photocopied the doctored exams for submission as authentic versions, according to court documents.

The defendants face charges including mail fraud and making false statements to Medicare. If convicted, most face prison sentences of five to 20 years, said interim U.S. Attorney Rosa Emilia Rodriguez.

The Puerto Rican legislature has been questioning members of the board as part of a fraud investigation that began in May.

The board's president, Milton Carrero, said the federal indictments have persuaded the board to expand an internal probe as well, scrutinizing licenses issued before 2001.

"There were people inside who defrauded the confidence of everyone," said Carrero, who was chosen as president after Puerto Rico's governor began removing four members for negligence. He said new security measures have been taken, including the installation of cameras in the room where medical licenses are kept.

"There is no doubt that changes at the licensing board are happening and will continue to happen," Carrero said.

       
       

        Copyright © 2006 Salem Web Network. All Rights Reserved.

2004 G8 Anti-Corruption Transparency Pact

On July 17, 2006 there was a G8 meeting going on in Europe.  They usually issue some statements on corruption, and here is a White House press release from 2004 which we can learn from.

Below is the press release issued June 10, 2004 after a G8 meeting (not the recent one):

from:

http://www.whitehouse.gov/news/releases/2004/06/20040610-31.html 

Fighting Corruption Fact Sheet
Fact Sheet: Fighting Corruption and Improving Transparency

Presidential Action

President Bush and the Other G-8 Leaders Launched Four Transparency compacts with the Republic of Georgia, Nicaragua, Nigeria, and Peru to provide assistance in achieving high standards of transparency in public financial management, procurement, the letting of public concessions, and the granting of licenses.

G-8 Action: The World Bank has identified corruption as "the single greatest obstacle to economic and social development." The G-8 are determined to roll back corruption. Building on the G-8 Anti-Corruption and Transparency Action Plan, the G-8 Leaders agreed to four transparency compacts through which G-8 participants will:

• Provide technical assistance to partner countries and support their efforts to combat corruption and increase transparency;
• Work with countries to develop action plans to achieve measurable results in fighting corruption;
• Work with these four governments to meet the specific needs and priorities of each country; and
• Enlist the support of private companies, civil society, and international institutions, such as the World Bank, to enhance public financial management and accounting.

U.S. Actions: The U.S. has taken the lead in the global fight against corruption. On January 12, 2004, President Bush issued a proclamation to deny entry into the United States of corrupt foreign officials, their dependents, and those who corrupt them. The U.S. also led international efforts to gain agreement on the U.N. Convention Against Corruption.

Other G-8 Initiatives: The G-8 recently has taken additional actions to promote transparency. Specifically, the G-8:

• Launched a new initiative to help states detect, recover and return the assets stolen by corrupt official;
• Strengthened OECD monitoring of the Anti-Bribery Convention; and
• Remains committed to the Financial Action Task Force (FATF) and is working to implement the U.N. Transnational Organized Crime Convention (TOC).

=====================================================

2006-07-28 - Corruption in Malawi

2006-07-28 - Corruption in Malawi

This old article below describes how Denmark cut off foreign aid to Malawi because of corruption and a "misuse of Danish and other donor money...".

In 2005 donors cutoff support to an African country due to the same problem.  In each case, it wasn't the US taking action, but other countries.  In a GAO report on Bosnia in about 2003 (or perhaps earlier - it is probably still on the GAO website), they said that about $400-million was siphoned out of the country due to corruption, which was just about the amount the US gave them in foreign aid.  We can give foreign aid to a country and the leaders siphon the funds out, and the US just keeps giving and doesn't implement ground rules or strengthen internal systems BEFORE providing the aid.    Until the funding sources like NGO's are subject to a Deputy of anti-corruption reporting directly to the Sec State, I don't think there will be any improvement.  In the case of Iraq, I sat in meetings which resulted in all talk and no action.  I don't have confidence that many funding NGO's even understand anti-corruption, or how to stop it, much less have the "strength" to cut off funding to corrupt countries.

Additionally, today, the BBC news said that the anti-corruption chief in Malawi was fired after he arrested the past President for corruption.  Not enough details exist to know the basis for it, but there are a tremendous number of articles if you google "Malawi corruption".

========================================================
Here is the old 2002 article:

Thursday, 31 January, 2002, 21:29 GMT
'Malawi corruption' halts Danish aid
from:
http://news.bbc.co.uk/1/hi/world/africa/1794730.stm

The Danish embassy in the Malawi capital, Lilongwe, has said Copenhagen's decision to withdraw all its development aid to Malawi with immediate effect has been prompted by Malawi's corruption and political intolerance.

No new Danish development or environmental programmes or projects will be initiated in Malawi

In a strongly-worded statement issued in the capital, Lilongwe, Danish Charge D'Affaires Finn Skadkaer Pedersen said "a weak administration" in Malawi since 1995 has made it difficult to implement development programmes.

Mr Pedersen said corruption and misuse of Danish and other donor money has become a "markedly increased issue".

He also said political intolerance by the ruling United Democratic Front (UDF) of President Bakili Muluzi as witnessed by politically-motivated violence and what he termed as "systematic intimidation of the opposition" has made it difficult for Denmark to continue assisting Malawi.

Intimidation

Recent ruling UDF-initiated attempts to intimidate judges in Parliament did not help matters, he said.

"On this background, the Danish government has decided no longer to include Malawi in its list of programme countries and to phase out DANIDA's support to development and environment programmes in Malawi," Mr Pedersen said.

"This means no new Danish development or environmental programmes or projects will be initiated in Malawi."

The Malawi Government is yet to officially comment on the withdrawal of the Danish aid but already hundreds of jobs are on the line.

Mr Ted Nandolo, executive director of Council for Non-Governmental Organisations - an umbrella group for NGOs in Malawi, says Malawi NGOs will suffer.

Malawian NGOs, including environmental and good governance projects, get a chunk of its operating funds from Denmark.

Mr Nandolo said that all civil society groups in Malawi have petitioned Copenhagen to reverse the decision.

Sympathisers

Sympathy for Malawians has been expressed by other Danish quarters.

We are poor yes, but we are a sovereign state and nobody should teach me how to run this country

Ms Elsebeth Krogh, secretary general of NGO Churches Emergency Aid in Denmark, told Danish press it was shocking for Copenhagen to cut aid to Malawi, one of the poorest countries in the world.

"It's shocking and undue to cut development aid this drastically," she said.

Denmark's move comes just a week after President Bakili Muluzi lashed out at donors, accusing them of meddling in African politics by using their aid money to influence political trends on the continent.

Recently, at a public he told Malawians that western nations have no right to tell African governments how to govern their countries.

"We are poor yes but we are a sovereign state and nobody should teach me how to run this country," he told Malawians at a recent public rally.

Relations between Denmark and Malawi soured late last year when Copenhagen was forced to recall its outspoken Danish ambassador to the country Orla Bakdal after an audit report he instituted, on how Danish money was being spent, revealed some anomalies.

In 1999 Denmark gave $18 million in aid to Malawi, a poor southern African nation of 10 million people. $87 million had been earmarked for the four-year period ending in 2004.

==============================================
This blog focuses on corruption in Iraq and worldwide and can be reached at:

http://webworks.typepad.com/corruption_in_iraq/

Corruption in Canada

‘2005-02-16  Corruption Article:  Canadian Corruption – government money funneled to liberal party

The first article on Corruption in Canada came out Feb. 8^th, 2005 and I wrote about it on Feb. 16th - but then issued this follow up series of articles on April 7th.  It is a good example of how your local political party can get corrupt and topple the entire party.   So, losing the power of your party in government is one reason why you don't want corruption to exist.   This article also provides substantiation that freedom of the press is a powerfull tool in exposing corruption - in this case the Canadian judge clamped a lid on the press, but that didn't stop internet postings outside of Canada.

2005-04-07a  Corruption Gazette -

Canada

's Corruption Scandal Breaks Wide Open

So you think only Kofi Anan is on the hotseat about corruption?  Wrong!

This report is about a big time, ongoing Canadian Government Corruption pre-trial hearing and scandal which could cause the collapse of the existing Canadian Liberal Party (it did - later articles reported they lost elections - ed).  A search on Google for “

Canada

corruption trial” found 195 hits today.  As a result of the internet leaking of testimony, the trial was postponed TODAY until June 6^th because of claims that the leaks would “taint” the jury pool.  Basically, inside liberal party bureaucrats in Canada were siphoning off government advertising funds to subsidize campaign activities for the Liberal Party which is now in power.

Facts were first reported in a 2003 audit report of the Auditor General of

Canada

.  See:

http://www.oag-bvg.gc.ca/domino/oag-bvg.nsf/html/menue.html

A special investigation group, called the “Gomery Commission” has been set up to investigate the matter.  See:

http://www.gomery.ca/en/termsofreference/

This issue is growing on the internet and blogs because part of the testimony in the court trial about this Canadian Corruption investigation was subject to the Judge's publication ban.  The problem is that his order doesn't have jurisdiction outside

Canada

, so insiders are leaking information from the trial testimony to American bloggers and websites.  So the juicy details are being let out of the bag and may crash the existing Canadian Liberal government.

I also include another blog report and an article from

Canada

’s National Post newspaper.

Quotes from the American Blog below that published the “banned” Canadian testimony:

- A political scandal involving the Public Works Ministry, a government effort called the Sponsorship Program, and allegations of corruption in the ruling Liberal Party has

Canada

abuzz with rumors of payoffs, Mob ties, and snap elections. For the last two years, Canadian politics has been gripped by the so-called “sponsorship scandal” – tens of millions of dollars in government contracts which were funneled into advertizing firms closely connected with the Liberal government for little or no work, but with shadowy rumours that much of the money found its way back into Liberal coffers

Quotes From the Auditor General’s 2003 Report

- From 1997 until 31 August 2001, the federal government ran the Sponsorship Program in a way that showed little regard for Parliament, the Financial Administration Act, contracting rules and regulations, transparency, and value for money:

Lessons Learned:

-          Another example where politicians think they can commit or ignore corruption in an open society and hide it.  When it is found out and publicized first by websites and blogs, followed by the main stream press, the scandal can cause the ouster of politicians and the entire party they represent.  This is happening this year to several governments.

-          In this case, unlike the UN Oil for Food program, the Canadian Internal Auditors ferreted out the problems and reported them for action by the Canadian Parliament.  Thus professional internal auditing CAN catch the bad guys IF the reports are made public (they are on the Auditors website).

Note:  These are internet blogs, and contain the opinions of the writers, so they might not be totally complete, objective or accurate, but since I am from Los Angeles, neither is the main stream press like the LA Times…

Vj

from

http://www.captainsquartersblog.com/mt/archives/004221.php

April 02, 2005

Canada

's Corruption Scandal Breaks Wide Open

A political scandal involving the Public Works Ministry, a government effort called the Sponsorship Program, and allegations of corruption in the ruling Liberal Party has

Canada

abuzz with rumors of payoffs, Mob ties, and snap elections. For the last two years, Canadian politics has been gripped by the so-called “sponsorship scandal” – tens of millions of dollars in government contracts which were funneled into advertizing firms closely connected with the Liberal government for little or no work, but with shadowy rumours that much of the money found its way back into Liberal coffers. Prime Minister Paul Martin, himself a Liberal, appointed the Gomery Commission to investigate these charges and determine whether to bring charges against government officials for corruption and malfeasance. (See the blog Small Dead Animals for some excellent background on the case.)

Most of the testimony heard by the Commission has been public, but Judge Gomery has decided to create a publication ban on the testimony of three key witnesses: Jean Brault, president of the ad agency Groupaction, Charles Guité, an officer of the Public Works ministry who worked on the Sponsorship Program, and Paul Coffin, president of the ad agency Coffin Communications. The potential damage of their testimony has so unnerved the Liberal Party that they have reportedly started working towards a snap election so that they will not have to face the voters once the facts surface from the record.

And well they might, if Brault's testimony gives any indication of what they will face. Thanks to a friend of mine, CQ readers can get a taste of what Brault has already told the Gomery Commission. For obvious reasons, I cannot reveal this person's name or position, but this person is in a position to have the information. Bear in mind that this comes from a single source, so while I have confidence in the information, you should consider the sourcing carefully.

Payoffs And Kickbacks

On Thursday, Jean Brault began his testimony, subject to the publication ban, and revealed a massive pattern of corruption going to the highest levels of the Liberal party and government. Brault testified to hundreds of thousands of dollars of bogus transactions designed to benefit the Liberal Party of Canada over a period from 1994 to 2002.

Most of the illegal campaign contributions involved Brault either hiring “employees” -- who were in fact working full time on Liberal Party activities -- or paying invoices for Liberal Party campaign expenses (which were never declared as such) or making untraceable cash donations to Liberal officials. In exchange for helping the federal Liberals in

Quebec

, Brault received millions of dollars in federal advertising contracts.

Brault said he met with Jean Carle, a key aide to then Prime Minister Jean Chretien to propose a more direct way of ensuring that Groupaction got a large share of federal advertising dollars in

Quebec

. Carle referred Brault to federal bureaucrat Charles (“Chuck”) Guité and told him that “there was room for everybody.” Guité later put together the sponsorship program, in which five Liberal connected firms -- including Groupaction -- were guaranteed a monopoly on government “sponsorship” advertising (e.g. federal advertising at sporting or cultural events) and related work. The sponsorship program eventually became a huge slush fund into which over $250 million was poured, over $100 million of which was paid in fees and commissions to these five advertising firms, with little or any evidence of work done or value for money.

In exchange for these large contracts for little or no work, Brault kicked back generously to the Liberal Party, putting Liberal organizers on his payroll while they continued to perform party work (including, at one point, Prime Minister Jean Chrétien’s brother, Gaby Chrétien), paying invoices to other companies for work actually done for the Liberal Party, and giving large donations -- in cash -- to the Liberal Party through Renaud or Liberal Party organizer (and close associate of Public Works Minister Alfonso Gagliano) Joe Morselli.

Protection Racket?

Towards the later part of the sponsorship program, the friends and associates of Public Works Minister and former ambassador to Denmark Alfonso Gagliano, some of whom have been linked to organized crime, played a larger role in the schemes.

At one point, Gagliano associate Tony Mignacca told Brault that if he didn’t rehire Renaud (who had left Groupaction to start a new company), he would lose his newly acquired contract with Via Rail --

Canada

’s state-run passenger rail service. Brault broke down in tears after he recounted this testimony. At a meeting in 2001 with Joe Morselli, Brault said that he arranged to have the meeting in an overheated room in a restaurant -- so that Brault could ask Morselli to take off his coat and ensure that he wasn’t carrying a body pack.

This is just the beginning of Brault's testimony. If the Gomery Commission can corroborate Brault, then the reek of corruption goes through all levels of the Liberal party and may explain their ability to out-campaign the Conservatives. After all, they've siphoned off hundreds of millions of government dollars to promote their own party and to guarantee their monopoly on power. They hijacked the Canadian tax base to fund their own campaigns and hide the financial trail.

More will be forthcoming, but it isn't difficult to understand why Liberal politicians have begun to panic already.

==================================================

more below -

This report is from Michelle Malkin, another well known internet blogger and TV "guest" giving an overview of all the sources of background information on the Canadian Corruption scandal.   Kind of makes you think that a 3rd world dicatator who controls the press can still be exposed for corruption by bloggers and websites worldwide.

vj

Source:

http://michellemalkin.com/archives/001994.htm

SOMETHING ROTTEN IN

CANADA

By Michelle Malkin   ·   April 04, 2005 06:24 PM

[Bumping to the top with lots of updates. Make sure to catch up on all the latest below. This is one of the biggest stories on the 'Net and of vital interest to bloggers and whistleblowers on both sides of the border. Stay informed.]

Captain Ed, always ahead of the curve, is all over an explosive corruption scandal in

Canada

, where citizens are hungering for news because of a government publication ban related to the story. Go visit and keep scrolling down.

Here's the CBC's story on how American weblogs scooped our neighbors to the north. Globe and Mail article here. Captain Ed notes that a Canadian site that simply linked to his blog may be under threat of legal action. Unbelievable.

See also Joe Katzman at Winds of Change, Small Dead Animals (keep scrolling), Stephen Taylor and Greg Staples for background.

Bound for Gravity has a top-notch link round-up. (Update: He's taken his posts down out of fear of government retribution.) Wizbang's on it, too.

Reader John M. says there will be a live webcast here on CPAC (

Canada

's version of C-SPAN) related to the scandal.

Update: Tim Worstall's analysis of the thorny legal questions this case raises is must-read for every blogger. Here's the nub:

Are we liable for what we write where we write it? Or where people read it?

At the moment we are liable where people read it and it might just be that the

US

courts won’t like the long term implications of that and will refuse to implement it.

I’m not sure if Captain Ed is going to like the medium term implications of that, but he might find himself at the centre of the first Supreme Court case involving blogging.

Update II: More from Colby Cosh on the blogger-related consequences of

Canada

's publication ban on Jean Brault's testimony published by Captain Ed:

Any action taken against a webmaster who posted the content of Brault's testimony, or linked to it, or linked to a page that linked to it, would presumably be subject to a later judicial review with an unforeseeable outcome. I believe that this entry complies with the ban--but does it? On Saturday Instapundit linked to "Captain" Ed Morrissey's posting (which is the top hit returned by a Google search for "brault liberal") about the Brault testimony. Is it legal for me to tell you that if I don't link to Morrissey's site itself?

What about my three-year-old link to Instapundit.com--am I now obliged by the ban to remove it from my sidebar? If so, for how long? Must I monitor every site on the sidebar for content whose publication by me would constitute contempt of court? I don't believe any legally solid answer is available to these questions; the nature of a hyperlink as a "publication" just hasn't been nailed down.

Cosh has a request for bloggers outside

Canada

:

With due respect to the ban, which I consider myself to have observed herein, it would actively help free the hands of Canadian webloggers and reporters if our foreign cousins were to be aggressive about "publishing" the substance of the Brault testimony outside the reach of Canadian law.

More legal analysis at Mader Blog on whether and how the ban will affect the Canadian site, NealeNews, which first linked to Captain's Ed post.

More Canadian blogger commentary: Mike Brock, Norman's Spectator

Slashdot is covering the story, with some commenters defending the ban.

The Politicker and The Interocitor discuss the potential of blogs to bring down the Canadian government. Says Kevin Murphy at The Interocitor:

When the dam breaks, and it will, the Canadian Government may fall as completely as the Mulroney Conservatives did. Maybe worse, if the

Quebec

nationalists have their way --

Canada

without

Quebec

would be a far different place.

The pen is mightier than the sword.

Ditto that.

Angry in the Great White North steps up and defies the ban.

Meanwhile, Captain Ed's original post reporting Brault's testimony is currently (as of 601pm EST) the top politics link on Technorati and the second-ranked link on BlogsNow (behind a quite related story on

San Francisco

's attempt to regulate blogging).

More coming from Ed tonight, he says. Stay tuned.

Update III: Just a quick thought. Remember when Jeff Jarvis noted during the Eason Jordan debacle that the "off the record" gate has fallen? Looks like the blogosphere might be threatening

Canada

's publication ban in the very same way.

Trenchant as always, Wretchard at The Belmont Club weighs in:

Like the Rathergate and Swiftvets story, the scene seems set for an invisible and unacknowledged meme to exert a powerful influence on mainstream news. One poster at Free Dominion said

Canada

was about to experience the power of the American blogosphere.

The idea of an 'American blogosphere' is a curious concept. One Canadian poster, who balked at relating what he knew about the Liberal Party scandal on the Free Dominion because of the publication ban, suggested he and his buddies continue their conversation at the FreeRepublic, like they were crossing the border and going from Windsor to Detroit. Whether that made it all nice and legal I'll leave to the lawyers but a certain amount of absurdity suggested itself in the situation.

This highlights the impact that Internet self-publishing has had in breaking down political systems, whether peaceably (as in the case of

Canada

and the

US

) or not-so-peaceably as exemplified by

Iran

. Because the exercise of authority consists largely of information control (rather than physical control) by the State, Internet self-publishing has effectively weakened large areas of state power by weakening those controls. As a practical matter, there is not a judge in the world that can realistically enforce a gag order unless he can a) prevent the source leak or b) force compliance on all continents and seas of the planet earth.

===========================================

from

http://www.canada.com/national/nationalpost/news/story.html?id=99aed42e-ee28-4614-8f73-3c3456463b32

	Thursday » April 7 » 2005
Sponsorship trial set for June Donald McKenzie Canadian Press Wednesday, April 06, 2005 Chuck Guite, the public works official who ran the federal sponsorship program until 1999, waits to testify before the public accounts committee in this file photo. (CP/Jonathan Hayward ) MONTREAL -- The criminal trial of two key sponsorship figures was put back a month Wednesday, a move that muddies the waters in terms of when Canadians will be able to learn about devastating testimony at the Gomery inquiry that has sparked election talk in Ottawa . Delaying the trial only a month means the testimony may be ordered to be kept under wraps longer so that an unbiased jury pool remains for the joint fraud trial of Jean Brault and Chuck Guite. The publication ban is intended to ensure there are unbiased jurors available to try the two men. However, it's unclear whether other arguments or developments will cause the release of the testimony, which has already leaked out on the Internet. If the trial had been put off several months, as had been proposed, arguments for releasing the testimony immediately could have been made on the basis the trial is far off and the publicity around the testimony would die down, leaving a better chance at unbiased jurors. But Justice Lise Cote of Quebec Superior Court ruled Wednesday that jury selection in the trial of Brault, an advertising executive, and Guite, the bureaucrat who ran the sponsorship program in the 1990s, will be delayed until June 6. Brault has been testifying under a publication ban at the sponsorship inquiry after presiding judge John Gomery ruled May 2 was too near his testimony and jeopardized his right to a fair trial. The ban also covers Guite's upcoming testimony. A lawyer for several media challenging the ban appeared in court later Wednesday to ask Gomery to allow Brault's testimony to be made public. If Gomery overturns the ban, the contents of Brault's testimony might be enough to trigger a federal election if the Liberals' opponents decide they can capitalize on any political fallout. Brault is the former owner of Groupaction, one of the advertising firms at the heart of the $250-million sponsorship program that saw $100 million go to Liberal-friendly agencies that did little or no work for the money. The criminal charges allege he and Guite defrauded the federal government of nearly $2 million. Brault's lawyer, Harvey Yarosky, wanted Cote to delay the trial until September, saying he didn't have enough time to prepare for the criminal case because of the Gomery commission's schedule. But Cote noted the men were charged last May and that their trial date has been known since last November. Cote also said the two men have been sent straight to trial without a preliminary hearing, a legal procedure that is used to ensure a speedy trial. Meanwhile, Gomery granted Brault's lawyers full standing at the inquiry Wednesday, meaning they can cross-examine witnesses who follow his client on the witness stand. Yarosky sought the status after the federal Liberal party was granted similar status so it could cross-examine Brault and other witnesses. "Mr. Brault requires full standing to have his interests and his rights fully protected,'' Yarosky told reporters. "The counsel of the Liberal Party of Canada is, as we speak, cross-examing Mr. Brault in a rather pressing, if not aggressive, manner. That in itself is a change that requires that Mr. Brault's status be changed.'' Yarosky asked for a September trial after noting the testimony of other witnesses who will follow Brault at the inquiry will not be subject to a publication ban. That, he argued, could have hurt his client if jury selection had begun next month. Yarosky said he was disappointed with the June 6 date but said it cannot be appealed. In another development at the inquiry Wednesday, Gomery rejected a bid by the Bloc Quebecois to get full standing at the hearings. But Gomery agreed to recommend to the federal Treasury Board that the party receive more funds to ensure a lawyer for the party can continue monitoring the inquiry. Gomery is expected to file a preliminary report in November and another one in December.

Corruption in Iraq's Port of Umm Qasr

Today I will jump right into commenting on today's article (below) in the NY Times about corruption in an Iraqi port, Umm Qasr.   

The writer describes several types of corruption, but not any actions to reduce it.  One of the main things that you learn after reading many articles about corruption is that reduction of corruption is not dependent just upon expanded investigators (i.e. attorneys), but a) an education program of locals so they will report corruption attempts, b) an education of the press so they know how to investigate and report on corruption when the government does not (a very positive result of freedom of the press) c) an implementation of an aggressive anti-corruption agency like CPI to take corruption complaints from the public (using a hotline) and research and submit cases to a focused and protected judiciary (legal system), d) a results oriented court system that DOES process corruption cases, and issues objective decisions in a timely manner.  Finally, you need cooperation of the government and press to publicize proper and equitable prison sentences for corruption and assurance that full sentences are carried out and publicized. 

In early 2006, Iraq had many corruption cases pending, but the courts were holding back on actual prosecution.  Articles about other countries' corruption problems usually either blame an ineffective anti-corruption commission, or the courts for lack of prosecutions, so it is a common indicator of countries weak on anti-corruption. 

Other contributors are trained NGO's (non-governmental agencies) that pay for localized courses of government, the press and citizens to understand corruption and how to report it.  Some programs funded in Iraq did that in "education" campaigns, but it was so poorly described that most people thought they were just teaching bland courses.  I happened to get some information that indicates that the courses did track resulting press articles and public demonstrations about local corruption.  However, it seems that a tougher ability to have an accurate, external results reporting system is needed.  The quality of the substantiating data I saw would never be accepted, for instance, in a corporation asking for tracking results on a marketing campaign.

In the case of foreign aid providers (like the US through USAID, NGO's and the UK through DFID, etc.), they also need the gumption to hold back funds for any purpose from a receiving country until they implement anti-corruption systems and procedures that are clearly defined.  We will explore all these issues as we go forward.

Below is the NY Times article - to see the original article, you may need to register:

http://www.nytimes.com/2006/07/01/world/middleeast/01port.html?_r=1&oref=slogin&pagewanted=print

July 1, 2006

Iraq's Big Port Has Commerce, Crime — Even Camels

By JAMES GLANZ

UMM QASR, Iraq — In this Persian Gulf port, by far Iraq's largest and most important, the misshapen realities of life and commerce in Iraq mix with the refreshingly ordinary ones that govern much of the rest of the world.

Commodore Thamir Nasser and the Iraqi naval forces he leads, for instance, carry out the routine law enforcement chores of intercepting smugglers who try to make away with boatloads of diesel fuel, crude oil, televisions, sheep and even troupes of Iraqi camels, which he believes are prized because they are not only especially patient but also remarkably cheap. He chases down small-time pirates and has killed them in shootouts.

But as Commodore Thamir, as he is known, bounced across the port in one of the little aluminum boats that make up most of this man's navy, he said one of his toughest tasks was dealing with the Iraqi Coast Guard. Like the Iraqi police, the coast guard is controlled by the Interior Ministry and is widely considered to be infiltrated by local militias with little interest in halting smuggling.

"They are a separate operation," Commodore Thamir said, gesturing helplessly toward the inland waters where his authority ends and the coast guard's begins.

So separate, said Lt. Cmdr. Bryan White, an American officer who advises the Iraqi Navy, that he has found it easier to arrange joint operations with maritime forces from Kuwait, just south of here, than with the Iraqi Coast Guard. "It baffles me," Commander White said.

So it goes in the port that was supposed to fall in the first hours of the 2003 invasion, but held its own through days of gun battles before it succumbed, becoming the country's most important entry point for humanitarian supplies like rice and wheat. The port, located roughly 30 miles up a sinuous inlet from the gulf, remains crucial for supplying both Iraqi markets and the American-led reconstruction effort.

Umm Qasr's ambiguous image was cemented early in the conflict when Britain's defense secretary, Geoff Hoon, likened the city to the relatively upscale British port town of Southampton. To which an unidentified British soldier replied, "There's no beer, no prostitutes and people are shooting at us. It's more like Portsmouth."

Now, after months of relative calm, sophisticated roadside bombs and assassinations of Iraqis who work with Westerners have increased across the entire south, while the port itself has become a place of danger, corruption, commercial bustle and intrigue.

In many ways Umm Qasr looks a lot like any deepwater port in the world. A long row of giant gantry cranes unloads cargo from freighters painted with unremarkable names like Tatyana, Marblue and Explorer I.

Uneven stretches of asphalt, tall grain elevators and long rows of warehouses flank the docks, which are dotted with piles of burlap sacks filled with imported cement, boxed refrigerators, microwave ovens, DVD players and television sets. Arab truck drivers doze or squat in the shade of flatbed trucks as they wait their turn to pick up the cargo and head north.

But in Umm Qasr, much of the cargo would not move an inch without bribes to crane operators and other dockworkers, said Najm Sager, a liaison between the Iraqi Port Authority and the United States Embassy who thinks that, for now, corruption is all but guaranteed at the port.

Because of the low wages paid to a typical dockworker, Mr. Sager said, "You are telling him, 'Go steal.' "

"That is why they ask for 'tips,' " Mr. Sager said, a bit euphemistically. He added that typical salaries range from $150 to $250 a month, but that a crane operator can expect to collect a standard 'tip' of $50 per job.

Crime on the docks goes beyond graft. Iraqi police reports for 2006 show at least half a dozen murders of workers at Iraq's southern ports.

Like Commodore Thamir, Mr. Sager was on the boat trip that was arranged by the United States Army Corps of Engineers to showcase $45 million in rebuilding projects, including a new cargo berth and work on two of the big cranes.

The bustle along the waterfront is no match for the ports in New York or San Francisco in their heydays, and in spite of the commercial activity it seems a little sleepy for the lifeline of a nation at war. The Marblue, carrying cement, looks so rusted it could be derelict. Railroad tracks crisscrossing the asphalt are empty because saboteurs to the north constantly cut the rail link to Baghdad, making the trains useless for cargo.

Still, for anyone looking for signs of normalcy in Iraq, the numbers are likely to impress. Between 16 and 18 freighters enter the port each week, unloading around 45,000 metric tons of wheat, 11,000 tons of rice, 55,000 tons of cement and 30,000 tons of general cargo.

It takes 4,000 to 5,000 trucks to move all of those goods out of the port each week and spread them around Iraq. As a consequence of all that traffic, port fees collected at Umm Qasr have shot up from around $600,000 a month in late 2004 to more than $2.5 million now.

But those fees are mostly absorbed in salaries, meager as they are. In a custom that may sound familiar to Americans, the Iraqi Port Authority carries thousands of unnecessary workers, Mr. Sager said, so dredging and rebuilding the port still depends on American cash. An official at the dock who asked to remain anonymous denied there were extra workers on the payroll.

And then there are the pirates and smugglers. Commodore Thamir, 44, whose official title is Iraqi operations commander, does not have a lot to work with, considering that his entire functioning navy consists of 10 of the fast aluminum boats, each 15 feet long; five Chinese-made patrol boats, each 40 feet long; and 10 dinghy-style boats.

But Commodore Thamir, a native of the southern city of Basra who graduated from the Britannia Royal Naval College in Dartmouth, England, and served in Saddam Hussein's navy, says that with the fast boats, he has everything he needs when a tip or a distress call comes in.

"Fifty knots," he said of the speed of the fast boats, which were a present from the United Arab Emirates. "It is fast enough to catch anybody."

Catch them he has. Three times his sailors and marines have chased down and killed the pirates who board ships here and often beat crew members until they reveal where their cash and valuables are stashed. His marines have grabbed suspected terrorists off the local ferry.

He has surprised small boats at sea as they transferred smuggled diesel onto larger vessels bound for points south along the Persian Gulf coast. In a series of e-mail communications, Commander White, who is the executive officer for a British-American mentoring and rebuilding program called the Naval Transition Team, confirmed the commodore's recollections.

Commander White said that the naval security forces, which fall under the Ministry of Defense, face the same challenges of training and equipment as the Iraqi Army does. "But if we pulled out today, the Iraqi Navy could run itself," he said.

Whether or not that prediction will ever be tested, Commodore Thamir and his friend Mr. Sager appeared most interested in bantering about the load of smuggled camels the navy had intercepted.

"The Arabs like camels," the commodore said, trying to keep a straight face when asked why any smuggler would attempt such a thing.

"Iraqi camels and sheep are the most desirable," Mr. Sager said, as they both began to laugh. "And cheap."

Sabrina Tavernise contributed reporting from Baghdad for this article, and Iraqi employees of The New York Times from Basra.