Corruption In Iraq & World

Tanzanian Prime Minister Resigns Due to Corruption Scandal

Here is another example of government procurement processes gone bad ("gone wild"?).

The Tanzanian Prime Minister and other government officials are accused of meddling in standard procurement processes to give a contract to a Texas company for backup electrical supply systems that cost the government $140,000 per day.

Lesson learned: Public officials can get canned if they try to influence standard procurement procedures.
vj

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from
http://asia.news.yahoo.com/080207/afp/080207084633int.html

Thursday February 7, 4:52 PM
Tanzanian PM tenders resignation over corruption accusations

DAR ES-SALAAM (AFP) - Tanzania's Prime Minister Edward Lowassa told parliament Thursday he had tendered his resignation to the president after being implicated in a corruption scandal over an energy deal.

"Because I have been linked to this scandal, I have decided to write to the president asking to be relieved of my duties," the premier told lawmakers, during a session of the Dodoma-based parliament broadcast live on television.

The speaker adjourned the session and explained he was awaiting a decision by President Jakaya Kikwete on Lowassa's resignation letter.

The premier's decision came after a report was submitted to parliament over a deal signed between the government and the Texas-based firm Richmond for emergency power supply.

According to a probe into the contract, the prime minister as well as two other government ministers and several other officials allegedly meddled in the tender to favour the US company.

The emergency power supply deal aims at providing electricity to the east African nation in case of drought.

According to the report, the deal contravened laws and rules on procurement and costs the country 140,000 dollars a day.

Overview of Prior Corruption Charges against Assassinated Benazir Bhutto

After the tragedy of Benazir Bhutto's assassination yesterday, I was reading that she was re-admitted to Pakistan by President Pervez Musharraf after he approved a waiver of outstanding corruption charges filed against her in earlier years. Her husband was also involved in corruption charges and did spend time in prison.

I am not using this to make any political statement other than our interest in reviewing corruption activities anywhere in the world.

Below is an extract from Wikipedia, which has a detailed description of the earlier corruption charges. And, Wikipedia also contained statements where Bhutto claimed that the charges were trumped up by an earlier Pakistani government to push her out of a Ministerial position she held in the past.

Thus, as we have seen in Iraq, an existing government can trump up charges of corruption to get rid of the opposition. In Iraq's case, as discussed in prior postings, the Commissioner of Public Integrity was accused of corruption by the existing government, and replaced.

(Note: Just today, news notices appeared saying that Kenya, one of the most corrupt countries, put their anti-corruption chief on leave for a year - details to follow.)

Here is my favorite quote about France from the article below. When I was in Iraq, the machinery we saw in Saddam's palaces were made by German or French companies.

At the time (1998), French corruption laws forbade bribery of French officials but permitted payoffs to foreign officials, and even made the payoffs tax-deductible in France. However, France changed this law in 2000.[31]

vj

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The extract below is from the Dec. 27, 2007 Wikipedia entries on Benazir Bhutto, and only contains the info on corruption charges - see the link for all the details. Remember, Wikipedia is written by volunteers, and any of the info below can be biased. Also, the Wikipedia site contains links to citations (the footnote numbers in brackets) for some of the details.
http://en.wikipedia.org/wiki/Benazir_Bhutto

Charges of corruption

French, Polish, Spanish, and Swiss documents have fueled the charges of corruption against Bhutto and her husband. Bhutto and her husband faced a number of legal proceedings, including a charge of laundering money through Swiss banks. Her husband, Asif Ali Zardari, spent eight years in prison on similar corruption charges. Zardari, released from jail in 2004, has suggested that his time in prison involved torture; human rights groups have supported his claim that his rights were violated.[11]

A 1998 New York Times investigative report[12] indicates that Pakistani investigators have documents that uncover a network of bank accounts, all linked to the family's lawyer in Switzerland, with Asif Zardari as the principal shareholder. According to the article, documents released by the French authorities indicated that Zardari offered exclusive rights to Dassault, a French aircraft manufacturer, to replace the air force's fighter jets in exchange for a 5% commission to be paid to a Swiss corporation controlled by Zardari. The article also said a Dubai company received an exclusive license to import gold into Pakistan for which Asif Zardari received payments of more than $10M into his Dubai-based Citibank accounts. The owner of the company denied that he had made payments to Zardari and claims the documents were forged.

Bhutto maintained that the charges leveled against her and her husband were purely political.[13][14] "Most of those documents are fabricated," she said, "and the stories that have been spun around them are absolutely wrong." An Auditor General of Pakistan (AGP) report supports Bhutto's claim. It presents information suggesting that Benazir Bhutto was ousted from power in 1990 as a result of a witch hunt approved by then-president Ghulam Ishaq Khan. The AGP report says Khan illegally paid legal advisers 28 million Rupees to file 19 corruption cases against Bhutto and her husband in 1990-92.[15]

The assets held by Bhutto and her husband have been scrutinized. The prosecutors have alleged that their Swiss bank accounts contain £740 million.[16] Zardari also bought a neo-Tudor mansion and estate worth over £4 million in Surrey, England, UK.[17][18] The Pakistani investigations have tied other overseas properties to Zardari's family. These include a $2.5 million manor in Normandy owned by Zardari's parents, who had modest assets at the time of his marriage.[12] Bhutto denied holding substantive overseas assets.

Bhutto and her husband until recently continued to face wide-ranging charges of official corruption in connection with hundreds of millions of dollars of "commissions" on government contracts and tenders. But because of a power-sharing deal brokered in October 2007 between Bhutto and Musharraf, she and her husband had been granted amnesty.[16] If it stood, this development could have triggered a number of Swiss banks to "unlock" accounts that were frozen in the late 1990s.[12][16] The executive order could in principle have been challenged by the judiciary, although the judiciary's future was uncertain due to the same developments. However, the death of Bhutto has now prevented any such accounts from being unlocked, and it is now up to the discretion of the Swiss banks as to where the funds ought to be placed.

Switzerland

On 23 July 1998, the Swiss Government handed over documents to the government of Pakistan which relate to corruption allegations against Benazir Bhutto and her husband.[19] The documents included a formal charge of money laundering by Swiss authorities against Zardari. The Pakistani government had been conducting a wide-ranging inquiry to account for more than $13.7 million frozen by Swiss authorities in 1997 that was allegedly stashed in banks by Bhutto and her husband. The Pakistani government recently filed criminal charges against Bhutto in an effort to track down an estimated $1.5 billion she and her husband are alleged to have received in a variety of criminal enterprises.[20] The documents suggest that the money Zardari was alleged to have laundered was accessible to Benazir Bhutto and had been used to buy a diamond necklace for over $175,000.[21]

The PPP has responded by flatly denying the charges, suggesting that Swiss authorities have been misled by false evidence provided by Islamabad.

On 6 August 2003, Swiss magistrates found Bhutto and her husband guilty of money laundering.[22] They were given six-month suspended jail terms, fined $50,000 each and were ordered to pay $11 million to the Pakistani government. The six-year trial concluded that Bhutto and Zardari deposited in Swiss accounts $10 million given to them by a Swiss company in exchange for a contract in Pakistan. The couple said they would appeal. The Pakistani investigators say Zardari opened a Citibank account in Geneva in 1995 through which they say he passed some $40 million of the $100 million he received in payoffs from foreign companies doing business in Pakistan.[23]

In October 2007, Daniel Zappelli, chief prosecutor of the canton of Geneva, said he received the conclusions of a money laundering investigation against former Pakistani Prime Minister Benazir Bhutto on Monday, October 29, but it was unclear whether there would be any further legal action against her in Switzerland.[24]

Poland

The Polish Government has given Pakistan 500 pages of documentation relating to corruption allegations against Benazir Bhutto and her husband. These charges are in regard to the purchase of 8,000 tractors in a 1997 deal.[25][26] According to Pakistani officials, the Polish papers contain details of illegal commissions paid by the tractor company in return for agreeing to their contract.[27] It was alleged that the arrangement "skimmed" Rs 103 mn rupees ($2 million) in kickbacks.[28] "The documentary evidence received from Poland confirms the scheme of kickbacks laid out by Asif Zardari and Benazir Bhutto in the name of (the) launching of Awami tractor scheme," APP said. Bhutto and Asif Ali Zardari allegedly received a 7.15% commission on the purchase through their front men, Jens Schlegelmilch and Didier Plantin of Dargal S.A., who received about $1.969 million for supplying 5,900 Ursus tractors.[29]

France

Potentially the most lucrative deal alleged in the documents involved the effort by Dassault Aviation, a French military contractor. French authorities indicated in 1998 that Bhutto's husband, Zardari, offered exclusive rights to Dassault to replace the air force’s fighter jets in exchange for a five percent commission to be paid to a corporation in Switzerland controlled by Zardari.[30]

At the time, French corruption laws forbade bribery of French officials but permitted payoffs to foreign officials, and even made the payoffs tax-deductible in France. However, France changed this law in 2000.[31]

Western Asia

In the largest single payment investigators have discovered, a gold bullion dealer in the Western Asia was alleged to have deposited at least $10 million into one of Zardari's accounts after the Bhutto government gave him a monopoly on gold imports that sustained Pakistan's jewellery industry. The money was allegedly deposited into Zardari's Citibank account in Dubai.

Pakistan's Arabian Sea coast, stretching from Karachi to the border with Iran, has long been a gold smugglers' haven. Until the beginning of Bhutto's second term, the trade, running into hundreds of millions of dollars a year, was unregulated, with slivers of gold called biscuits, and larger weights in bullion, carried on planes and boats that travel between the Persian Gulf and the largely unguarded Pakistani coast.

Shortly after Bhutto returned as prime minister in 1993, a Pakistani bullion trader in Dubai, Abdul Razzak Yaqub, proposed a deal: in return for the exclusive right to import gold, Razzak would help the government regularize the trade. In November 1994, Pakistan's Commerce Ministry wrote to Razzak informing him that he had been granted a license that made him, for at least the next two years, Pakistan's sole authorized gold importer. In an interview in his office in Dubai, Razzak acknowledged that he had used the license to import more than $500 million in gold into Pakistan, and that he had travelled to Islamabad several times to meet with Bhutto and Zardari. But he denied that there had been any corruption or secret deals. "I have not paid a single cent to Zardari," he said.

Razzak claims that someone in Pakistan who wished to destroy his reputation had contrived to have his company wrongly identified as the depositor. "Somebody in the bank has cooperated with my enemies to make false documents," he said.

Corruption House - Republicans Accused, but really aren't guilty

This is a great blog article on corruption in a specific country. At first, it appears to be about the US government, but really isn't - you have to read the ENTIRE article for the surprise ending!
vj

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from
http://www.thoughtleader.co.za/thespike/2007/12/04/corruption-house/

Corruption House
by Ivo Vegter
Dec. 4, 2007

US Vice-President Dick Cheney, before entering office, resigned from oil services company Halliburton and ring-fenced any remaining shareholding interests he has in the firm to ensure that he could in no way personally benefit from (or be financially hit by) the company’s performance.

The company has since won services contracts worth at least $1,7-billion from the US Department of Defence. Most of them involve the reconstruction of post-invasion Iraq. Calls for impeaching Cheney or Bush or both haven’t got far, mostly because it couldn’t be shown that anybody in the Bush administration stood to gain by the contracts in any way.

But this isn’t the end of the story. It has now emerged that members of the Republican party, including its treasurer, play an active role in managing a company that owns a 25% stake in Halliburton. Worse, senior Republican Party officials have admitted that the sole purpose of this vehicle is to fund the GOP itself. So, the Grand Old Party has grandly profited from the reconstruction contracts awarded after the invasion of Iraq.

This, surely, will put the final nail in the coffin of the Bush administration? Surely, in any civilised democracy, such a government must fall?

Except … none of this is true. At least, this picture isn’t true unless you change a few names.

Meet Mendi “Money Man” Msimang (photo courtesy M&G)Substitute ANC for GOP. Change Halliburton to Hitachi Africa. Let state-owned utility Eskom play the role of the Department of Defence. Replace reconstructing Iraq with upgrading South Africa’s neglected and decrepit power-generation infrastructure. For the Republican party treasurer, insert the name of ANC treasurer Mendi Msimang, and for the senior Republican party officials, substitute the name of Kgalema Motlanthe, the ANC’s secretary general.

The value of $1,7-billion, however, is just about right. That’s roughly equivalent to the 60% share of the R20-billion contract that Hitachi Africa will handle to build six utility steam generators for the Medupi power station. Medupi, in the Limpopo province, is the first new base-load station to be built in two decades. The contract in question is the largest slice of the R80-billion project and the largest contract Eskom has ever awarded. By comparison, the largest arms-deal component, for the Gripen jet fighters and Hawk trainers, was worth less: a trifling R16-billion and change.

And to match the final detail in the picture sketched earlier, Hitachi Africa has a 25% shareholder in the form of Chancellor House, which has been described by none other than Motlanthe as funding vehicle for the ANC. This is according to the Mail & Guardian’s exposé on the deal, written by veteran corruption-busters Stefaans Brümmer and Sam Sole. The paper also wrote an editorial explaining why the use of public money to fund the private political ambitions of the ruling party is a problem.

This, surely, will put the final nail in the coffin of the Mbeki administration? Surely, in any civilised democracy, such a government must fall?

The growth of state corporatism and the corrupt cronyism it breeds is a very troubling development in South Africa. I’ve argued before why the notion that it’s OK for politicians to own interests in media companies needs revisiting. Perhaps it goes too far to argue that they shouldn’t have any private interests at all, but if they are permitted to own and operate private businesses, surely they should not benefit from juicy government contracts paid for by taxpayers? Even when such deals are not intrinsically corrupt, the scope for embezzlement and political gain bought at the public’s expense should be cause for alarm.

I’m surprised this case has received so little media coverage in the 10 days since the M&G first broke the story. But the silence of the usually strident media may be a blessing in disguise. The ANC could take the moral high ground and hand out leaflets to its members at its national congress explaining the difference between outright corruption and mere crony capitalism. It could even stage an informative public debate: Jacob Zuma and Thabo Mbeki could each take a side, and explain why their version is the more honest and defensible way of spending taxpayers’ hard-earned money.

Samsung Bribery "Slush Fund" of $215-million Disclosed

Who would have thought a Korean firm like Samsung would pay bribes? Well, their former company attorney said they set up a huge slush fund to pay bribes, because that is what they do in Asia. And, they are being investigated now.

Bribes are common in Asia to get contracts of all types. In this case, the whistleblower said the slush fund was to "bribe prosecutors, judges and lawmakers."

I once worked at a US based international firm where we found they had to compete with such international firms, but the US has the Foreign Corrupt Practices Act to prosecute US firms that pay bribes. So, we suspected (but could not prove) they set up a "culture" office and bought paintings from foreign dignitaries at very high, inflated prices, and hung them on the walls. Thus, a $300 painting might be bought for $300,000 and the influential art owner got a facilitation payment.

Note: I wrote the above before reading further in the article below, where Samsung family members were said to spend $65-million to buy "expensive" art work. Its a small world.

But, remember the Asian saying "Bribes are nothing but the replacement of legal contracting and negotiation fees - why pay an attorney for each side to negotiate contracts, when a single bribe will get the same result..., and much faster?"
vj

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from
orlandosentinel.com/business/orl-skorea2707nov27,0,6707623.story
OrlandoSentinel.com
Samsung said to have slush fund
A former company lawyer says the firm bribed prosecutors and lawmakers.

Hyung-jin Kim

The Associated Press
November 27, 2007
SEOUL, South Korea

Samsung Group created a $215 million slush fund to bribe influential figures, a former company attorney said Monday, adding details to previous allegations of corruption at South Korea's biggest conglomerate.

Samsung immediately denied claims by Kim Yong-chul, who held the company's top legal-affairs position from 1997 to 2004. Samsung said it is considering legal action against Kim.

"It's nothing but a repeat of false, distorted and exaggerated claims," Samsung said in a statement.

Kim went public earlier this month with allegations that Samsung raised a slush fund to bribe prosecutors, judges and lawmakers. His claims Monday were the first to detail the amount of the alleged fund and details of how it was created.

A former prosecutor himself, Kim told reporters Monday that Samsung used Samsung Corp. -- its trading arm -- to create the pool of money through intricate contracts with other group affiliates.

He said family members of Samsung Group Chairman Lee Kun-hee used $65 million from the fund to buy expensive artwork.

Kim also disclosed the names of Samsung executives he says managed the slush fund with their bank accounts.

The National Assembly approved legislation Friday to open an independent investigation into Kim's allegations, saying a probe already launched by prosecutors is compromised by Kim's claims that some -- including the nation's new top prosecutor -- took bribes.

The bill goes to President Roh Moo-hyun for approval, but his office has said he may veto it because of the existing probe by state prosecutors.

Prosecutors, meanwhile, have banned eight or nine Samsung officials, including Vice Chairman Lee Hak-soo, from leaving the country, Yonhap news agency reported, citing senior prosecution officials it did not identify. Huge South Korean industrial groups such as Samsung have regularly been accused of wielding influence using dubious dealings between subsidiaries to help controlling families evade taxes and transfer wealth to heirs.

Samsung Group includes dozens of companies, including global technology giant Samsung Electronics Co.

Copyright © 2007, Orlando Sentinel

Muckraker blog has posts on Iraq and Corruption

I found this blog www.tpmmuckraker.com to cover mostly Federal muckraking issues, including corruption and corruption in Iraq. He has a category on Iraq corruption at:
http://www.tpmmuckraker.com/archives/cats/iraq/iraq_corruption/

So, if you want more info, check it out. He is also covering the Waxman hearings on the State Dept IG.

VJ

USAID allows Corruption to siphon off American funds

My belief is that many countries have "foreign aid" agencies like USAID (US Agency for International Development - an arm of the US State Department that handles most US foreign aid spending).  They don't know what they are doing when giving funds and goods for "foreign aid" and thus much of the donated funds and goods are siphoned off by corrupt officials in the foreign country receiving the funds.  Once either money or goods are given to foreign governments or intermediate organizations, little fiscal control is exercised to make sure the funds or services get to people they are intended for. 

Here are TWO articles that appeared today in my local paper about USAID funding being mismanaged.  One is about spending on a $15-billion AIDS fighting program, and another article is about such a case in Thailand... at least several countries got together and sent a "letter".   

In the corporate world, you inspect internal systems of vendors or "business partners" before you give them funds, and you retain audit rights.  The emphasis is on ensuring the systems exist BEFORE giving money, not just sending a letter after money has been given. 

In my experience, watching USAID in Iraq, they control money well UNTIL they give it to an agency of the Iraqi government or a local contractor, then just blame that agency if the work isn't done.  They should have inspected and monitored the processes before and during the spending phases, and they don't.   I personally would evaluate both the internal controls of the receiving agency as well as their audit agencies and plans before giving them funds.  You HAVE to do that in 3rd world countries because the temptations are too great.   USAID, which is run by former Peace Corps members, had very little respect among other reconstruction program managers I worked with in Iraq.

Normally, USAID is an arm of the US State Dept., and controls all "foreign aid" programs.  They should have been in charge of ALL reconstruction in Iraq, but it was common knowledge they screwed up so bad in earlier Afghanistan spending that President Bush issued National Security Presidential Directive 38 ( google NSPD 38) which created the SEPARATE Iraq Reconstruction Management Office (IRMO) to be created from scratch and manage reconstruction spending in Iraq.  I worked in IRMO, which was made up of about 250 "subject matter" experts and Sr. Advisors who managed much of the construction.  Unfortunately, we had State Dept. Directors who didn't understand construction, and had to use US Army procurement systems which caused many of the reported problems with contractors (the US Army, and the earlier Dept. of Defense purchasing arm of the Coalition Provisional Authority selected most big contractors and wrote the contracts).  But, it was IRMO advisors who always went into the red zone to work with the Iraqi administrators, and visit the different Iraqi ministers and their operations, not USAID or State Dept.

Ok, one other aspect of bad fiscal management by USAID, then I quit:   In Iraq, USAID would issue an initial contract for a project like rebuild 50 schools.   Then, when overspending started because of poor estimating, USAID would CHANGE the "scope" of the project and not admit bad management.  Thus, I attended management meetings where USAID would list original project counts, and then a "revision" of much lower numbers for the same budget.  Thus an original project like rebuilding 150 schools for $120-million would be "re-scoped" without penalty to spend the same amount on rebuilding 50 schools.  There would be no penalty for USAID officials, or for the contractor signing the original contract.  Imagine if you contracted to build a 150 room apartment building with a contractor, then after startup, they came back and said they could only build 50 rooms for the money, and YOU allowed them to get away with that.  That is how USAID "manages" tax payer funds.

vj

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Faulty records hobble U.S. AIDS program
$15 billion aimed at poor countries

Rita Beamish, The Associated Press

WASHINGTON - President Bush's ambitious AIDS-fighting program in poor countries has pushed so hard for fast results that basic record keeping and accountability often went by the wayside, making it hard to judge the true success, according to government audits and officials.

The Bush administration says it has worked to fix the problems in the the three-year-old, $15 billion program.

"It's not good enough for the auditors to hear from the mission that we did A, B and C, but we can't prove it to you, or there's no documentation to prove that we did it," said Joe Farinella, a top watchdog inside the U.S. Agency for International Development.

Farinella is the assistant inspector general who oversaw the investigations into how U.S. AIDS money was spent overseas in 2004 and 2005. He said many recipients failed to keep records that would provide "reasonable assurance that what they say was done was in fact carried out."

The administration acknowledges the lapses and says it has imposed tighter reporting systems that have improved the accuracy of information. Officials blame the shoddy record keeping on an eagerness to get money into the field to help AIDS victims.

"You could've waited for three years to get all these systems in place, and an awful lot of people would have died," said Ambassador Mark Dybul, the administration's global AIDS coordinator. " ... In many of the cases where they say we can't find documentation, that doesn't mean people aren't getting services; that just means the reporting systems are not in place."

He voiced "extraordinary" confidence in the overall numbers.

For at least one country, Guyana, incorrect numbers made it into this year's annual report to Congress. It cited services to 5,200 AIDS orphans, but auditors documented fewer than 300, many not even affected by AIDS.

The opposite occurred in South Africa. Some provincial governments withheld information on AIDS tests and counseling, causing "severe underreporting" in the number of victims helped with U.S. money, an audit dated Aug. 11 concluded.

The numbers are important because Congress and others closely track administration strategies for a program that is pumping unprecedented sums into AIDS-stricken nations in Africa. The administration demands that programs make progress toward specific targets each year and report tallies in dozens of categories.

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

Comment about the above article: 

It talks about "Joe Farinella, a top watchdog inside the U.S. Agency for International Development".   His discussion follows a pattern I saw when reading USAID internal audit reports related to Afghanistan and Iraq.  They NEVER, EVER put responsiblity for fraud or funding losses on the USAID managers over the programs, and ALWAYS blame the "recipients" of the funding.   That would never fly in the corporate world.  If a project manager allowed a contractor to skim lots of funds, there would be a change in both the manager and the project accountant, and the contractor would be sued and never receive any future funding.  Whenever I wrote audit reports, we described the exact work process that failed, and senior management would respond with how they change their systems to prevent repetition.  In many cases, corporate auditors would walk through the work processes of vendors or contractors receiving funds.  However, I never saw where USAID would improve oversight by walking through "recipient" systems or evaluated their internal controls or audit functions.   Thus I consider USAID "fiscal oversight" of foreign aid spending (including the $4-billion of construction they "managed" in Iraq) to be sub-par compared to the business world.  USAID needs to demand stronger oversight skills among their program managers, and publicly fire a few of the USAID permanent managers (not just hired consultants) when spending by foreign aid recipients gets out of control.

vj

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Dec. 25, 2006, 8:33AM
Foreign donors call for audit of tsunami funds
U.S., six other nations ask for investigation of donations sent to help identify victims

By MICHAEL CASEY
Associated Press

BANGKOK, Thailand — The United States and six other Western nations say hundreds of thousands of dollars in donations meant to help identify victims of the 2004 tsunami may have been misused, a U.S. official said today.

In a letter to Thai police, the countries called for an audit and also asked authorities to speed up the analysis of DNA samples from bones, teeth and hair which the donors said could lead to the identification of 400 bodies from the Dec. 26, 2004 tsunami.

The Nation newspaper, quoting an unnamed diplomat, said there are concerns that as much as 60 percent of the $1.6 million meant for the Thai Tsunami Victim Identification Center may have gone for travel and other miscellaneous costs.

"There may have been some misuse of funds given by our respective governments given to support the disaster victims identification process," said the letter, signed by ambassadors from the United States, Britain, Finland, Germany, France, Sweden and the Netherlands and dated Nov. 22.

"To ensure that these suspicions are cleared up definitively, we request that the financial records of the (center) be professionally audited," the letter said.

A U.S. Embassy official, who requested anonymity in accordance with policy, confirmed the letter had been sent to police.  (Note from Editor:  These funds had to be processed through USAID - they really try to avoid publishing their name in negative articles like this - otherwise "and Embassy official" would not have been involved in the letter. VJ)

Police Gen. Ajirawit Suphanaphesat, the chairman of the victim identification center, acknowledged concerns about the misuse of money, but he blamed foreign committees that jointly managed the funds until May of this year, when the remaining $800,000 was turned over to police management.

"We have managed to spend the money transparently and carefully," Ajirawit said, adding that police have asked for an audit of the money spent before May 2006.

The tsunami, triggered by a powerful earthquake off Indonesia on Dec. 26, 2004, killed more than 5,400 people along Thailand's Andaman Sea coast. Another 349 Thais and dozens of foreigners were reported missing and have not been accounted for.

The identification center, staffed by international forensic experts and overseen by the Thai police, has spent the past two years identifying bodies of people who died in the tsunami. While hundreds of bodies were identified, critics complained that some bodies were misidentified and authorities have been slow to identify the remaining ones.

Anti-Corruption - 2006 Bribe Payer's Index issued by Transparency International

2006 Bribe Payer's Index issued by Anti-Corruption Agency Transparency International (TI)

TI has issued their annual Bribe Payer's Index of the countries least and most likely to allow corruption via Bribes.   Below is a typical article.  Or, go directly to TI's webpage on the Index at:

http://www.transparency.org/news_room/in_focus/bpi_2006

Comments: 

This "BPI" (Bribe Payer's Index) only covers the 30 largest exporting countries, thus Iraq is not covered, but Saudi Arabia is.  One of the problems with many of these reports is they list arabic and muslim countries as high bribery centers, but never issue Arabic versions of the reports or press releases.  Without translations and distribution to the arabic speaking (and Iraqi) press, the results of these studies aren't know by the Arabic speaking public. 

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

Here is an excerpt from TI's Press Release about the report, followed by the list of 30 exporting countries and their place on the index.   It would be more meaningful if they showed a 3 and 5 year trend of rankings to isolate which countries were improving over time.

Foreign bribery by emerging export powers disconcertingly high

Overseas bribery by companies from the world’s export giants is still common, despite the existence of international anti-bribery laws criminalising this practice, according to the Transparency International 2006 Bribe Payers Index (BPI), the most comprehensive survey of its kind to date.

The BPI looks at the propensity of companies from 30 leading exporting countries to bribe abroad. Companies from the wealthiest countries generally rank in the top half of the Index, but still routinely pay bribes, particularly in developing economies. Companies from emerging export powers India, China and Russia rank among the worst. In the case of China and other emerging export powers, efforts to strengthen domestic anti-corruption activities have failed to extend abroad.

“Bribing companies are actively undermining the best efforts of governments in developing nations to improve governance, and thereby driving the vicious cycle of poverty,” said Transparency International Chair Huguette Labelle.

Respondents from lower income countries in Africa, for example, identified French and Italian companies as among the worst perpetrators.

“It is hypocritical that OECD-based companies continue to bribe across the globe, while their governments pay lip-service to enforcing the law. TI’s Bribe Payers Index indicates that they are not doing enough to clamp down on overseas bribery,” said David Nussbaum, Chief Executive of Transparency International. “The enforcement record on international anti-bribery laws makes for short and disheartening reading.”

“The rules and tools for governments and companies do exist,” said Nussbaum. ”Domestic legislation has been introduced in many countries following the adoption of the UN and OECD anti-corruption conventions, but there are still major problems of implementation and enforcement.”

This article from Boston Online

http://www.boston.com/news/world/asia/articles/2006/10/05/india_china_and_russia_lead_in_a_corporate_corruption_list/

India, China, and Russia lead in a corporate corruption list

Report advises strong oversight

By Steven Ross Johnson, Associated Press  |  October 5, 2006

BRUSSELS -- Anticorruption advocates called yesterday on the governments of India, China, and Russia to do more to stop their multinational companies from bribing when doing business abroad.

A survey of 30 leading exporting countries ranked the three countries at the bottom; India was called the worst offender. Switzerland, where the fewest bribes were reported, led the ranking of the Bribe Payers Index 2006.

Officials from the anticorruption group Transparency International urged India, China, and Russia to take a more active role in cleaning up the business practices of their companies.

``Our advice to these countries is to give themselves the legislation that would allow them to prosecute their own state-owned enterprises or their own companies," said Huguette Labelle, head of Transparency International.

``But also that we work with these enterprises and companies to help them to ensure that they do not bribe, to help them develop their own codes of conduct, their own practices,' Labelle said.

Behind Switzerland, the survey ranked Sweden, Australia, Austria, and Canada as most effective in preventing companies from bribing.

Even countries such as the United States, which ranked ninth, came in for criticism.

``Since the US was one of the first countries to really have legislation . . . we look to the US in this respect to be a leading country," Labelle said.

Transparency International ranked countries according to their effectiveness in preventing companies from bribing when they do business abroad. Its ``Bribe Payers Index 2006" limited itself to the world's 30 largest exporting countries.

On a scale ranging from 10 for no corruption to 1 for rampant corruption, the best score went to Switzerland with 7.81. The lowest score was given to India, at 4.62.

The results found companies bribing more often in developing countries, where the means to combat corruption are weak.

``Bribing companies are actively undermining the best efforts of governments in developing nations to improve governance, and thereby driving the vicious cycle of poverty," Labelle said.

The results were based on interviews with more than 11,000 business people in 125 countries.

2006-08-02 - Washington Times: "Rampant corruption 'threatens' Iraqi Democracy

Here is another article from the Washington Times on the SIGIR reports I discussed yesterday...

Rampant corruption 'threatens' Iraqi democracy

By Rowan Scarborough
THE WASHINGTON TIMES
Published August 2, 2006
Corruption is permeating Iraq's government and its day-to-day life, according to a U.S. investigative report that also details how constant violence is delaying health, water and oil projects.
    "Corruption threatens to undermine Iraq's democracy," said the report, released yesterday by Stuart W. Bowen, the special inspector general for Iraq reconstruction.

    He also reported some good news for the Iraqi people: Production of electricity and oil climbed for the first time in more than a year above prewar levels.

    Mr. Bowen said Iraq's "endemic" corruption is costing the country $4 billion a year. The Iraq Commission on Public Integrity, set up after the 2003 fall of Saddam Hussein to root out corrupt government officials, reports that it has more than 1,400 criminal cases involving $5 billion in suspected thefts.

    Mr. Bowen's staff has helped the Iraqis establish several anti-corruption units, which include the commission, a criminal courts system and inspectors general for each ministry.

    But the tide still seems to favor the corrupt -- a trend that began when the old U.S.-created Coalition Provisional Authority distributed huge sums of cash from Iraqi oil money to get the country going again. Billions of dollars were stolen, and some key figures, such as the former Iraqi defense minister, are wanted on arrest warrants.
    Mr. Bowen said a poll of Iraqis this summer found that one-third reported paying bribes for products or services this year.
    Added to the corruption is insurgent violence that targets reconstruction projects and Iraqi workers in an effort to defeat the U.S.-led coalition and the fledgling democratic government of Prime Minister Nouri al-Maliki.
    "Recurring violence in Iraq continues to impede reconstruction efforts, slowing progress on projects, restricting the movement of personnel and diverting dwindling resources," the Bowen report said.
    Mr. Bowen said the "lethal environment" is thwarting the provincial reconstruction teams set up by the State Department to modernize each region.
    "Iraq's new unity government now faces many daunting tasks, including improving security, sustaining the infrastructure and fighting corruption," Mr. Bowen said.
    "We're talking about the Defense Ministry missing over $1 billion," said James P. Mitchell, Mr. Bowen's spokesman. "It's corrupt public officials."
    Congress has approved about $19 billion in direct reconstruction funds, of which about $14 billion has been spent.
    Mr. Bowen also released a report on "lessons learned" regarding how the Bush administration planned for postwar Iraq and awarded reconstruction contracts since 2003.
    The report detailed a litany of errors, from a lack of prewar planning for any significant reconstruction to creation of program offices on the fly to distribute billions of dollars once officials realized Iraq's infrastructure was in bad shape. The report also noted that there were only three contracting officers at the start of the effort and that administrators stayed too long with sole-source contracts, creating suspicion.
    "Things are getting done," said Mr. Mitchell, but he noted: "We don't think the U.S. should have to invent these systems on the ground again."
    The Defense Department originally oversaw the reconstruction effort but gave way to the State Department, which made U.S. Ambassador to Iraq Zalmay Khalilzad the rebuilding czar.
   

SIGIR's reports can be located at www.SIGIR.mil.

2006-08-01 SIGIR issues July 06 Qtrly Report

Here is what the AP in the San Jose Mercury News said today about SIGIR's 200+ page quarterly report (Special Inspector General Iraq Reconstruction"):

Audit: Corruption in Iraq a 'pandemic'

PAULINE JELINEK

Associated Press

WASHINGTON - Corruption is "a virtual pandemic in Iraq," threatening rebuilding efforts, international aid and citizen confidence needed for a fledgling democracy, a government report said Tuesday.

One Iraqi official has estimated that corruption costs the country $4 billion annually. A recent survey indicated a third of Iraqis polled had paid a bribe to get products or services in the past 12 months and that they had a "core mistrust" of the army and police.

The details are cited in the quarterly report by the Special Inspector General for Iraq Reconstruction.

"Unless reforms are put in place, corruption may jeopardize the political stability of the new government," said an audit included in the report.

"Successfully addressing corruption in Iraq is indubitably a multigenerational process, but the severity of the current problem begs for a better-resources effort," Inspector General Stuart W. Bowen Jr. said in the report, recommending greater spending on anti-corruption programs.

His office was created by Congress and reports administratively to the departments of State and Defense as well as Congress.

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You can get SIGIR's 200+ page Quarterly Report at:

http://www.sigir.mil/reports/quarterlyreports/Jul06.aspx

I will post more after reading it.

vj