What is there to celebrate and lament in 2017, and have we finally “drained the swamp”? Let’s look at some “corruption news” during the last
few weeks:
• Business
Two former SBM Offshore executives charged: SBM Offshore recently agreed to pay $238 million to settle Foreign Corrupt Practices Act violations in Brazil Angola, Equatorial Guinea, Kazakhstan and Iraq. Yet, the woes of the company are far from over, as former Senior Sales Manager of SBM Offshore Paul Bond and former Vice President Stephen Whiteley—who was also Unaoil’s General Territories manager for Iraq, Kazakhstan and Angola—have been charged by the UK Serious Fraud Office for allegedly using Unaoil to funnel bribes to officials in Iraq.
Sediver SAS debarred due to corrupt misconduct: The World Bank debarred Sediver SAS, a Paris-based manufacturer of power-transmission line insulators, for two years for sanctionable misconduct under the Southern Africa Power Market Project in the Democratic Republic of the Congo (DRC). The debarment period was reached through a negotiated resolution, which also imposed on Sediver SAS the payment of “a financial remedy” of $8 million.
HSBC reached deferred pro-secution agreement with French authorities: France’s first deferred prosecution agreement—also known as convention judiciaire d’intérêt public—under the newly enacted Sapin II law, was recently entered into by the Geneva-based private banking unit of HSBC and the French National Financial Prosecutor. The bank agreed to pay $356 million to resolve violations, which, according to the DPA, included money laundering and the evasion of local taxes by the bank’s French clients.
J.P. Morgan fined for due diligence failures: The Financial Industry Regulatory Authority (Finra) fined J.P. Morgan $1.25 million for failing to conduct proper background checks on 8,600 new employees starting from 2009 until May 2017. According to federal securities laws, broker-dealers are required to fingerprint employees working in a nonregistered capacity to identify whether a person has any past convictions disqualifying them from being associated with a firm. Reportedly, 95 percent of J.P. Morgan’s nonregistered employees were not subjected to adequate due diligence.
Indonesia’s antigraft agency brings indictment against powerful politician: Setya Novanto, one of Indonesia’s most influential politicians, was indicted on December 13 for his alleged role in what investigators say is a $170-million corruption scandal.
• Government
Several settlements reached with Saudi prosecutors: According to the Saudi prosecutor, 320 persons detained in the sweeping anticorruption campaign, led by Crown Prince Mohammed bin Salman, have reached a settlement and are thereby spared prosecution. All settlements were reached after the individuals were subpoenaed to provide information about alleged corruption, kickbacks, extortion and bribery. A remaining 152 people have not agreed on an outcome and could face several months in detention; some of them have been referred for judicial action.
Three men charged in the murder of Maltese anticorruption journalist: Vince Muscat and brothers Alfred and George Degiorgio have been charged by a Maltese magistrate with the murder of anticorruption journalist Daphne Caruana Galizia. Galizia, one of the leading figures in the Panama Papers investigations and eloquent critic of high-level corruption, including Prime Minister Joseph Muscat, was killed in a car-bomb near her home. It was not established whether the three men had acted on their own or were hit men working for others. Her passing sent shock waves through Malta and raised concerns in the European Union about enforcement in the country.
Israelis protest corruption in government: Thousands of demonstrators took to the streets of Tel Aviv to protest government corruption and Prime Minister Benjamin Netanyahu, who has recently been under scrutiny over corruption allegations. The protests were triggered by a draft law that, if passed, could be used to keep the police from disclosing its findings in the investigations targeting Netanyahu. The prime minister has been embroiled in two corruption cases; one involves receiving gifts from powerful businessmen, while the second case is related to a deal Netanyahu allegedly struck with the owner of an Israeli newspaper to curtail a rival daily in return for positive coverage of the prime minister. Netanyahu denies any wrongdoing.
Romanians protest government plans to weaken judiciary: Romanians took to the streets yet again this year to protest a plan introduced by the ruling Social Democrats to overhaul the judicial system, thus placing it under political control and potentially undermining anticorruption efforts. Among the demonstrators was Romania’s former prime minister who opposed the plan which he believed “would serve certain political leaders who have judicial problems.” Earlier this year, demonstrators also took to the streets to protest governmental initiatives to decriminalize official misconduct. The plan was watered down after two weeks of daily demonstrations.
Chinese officials under corruption investigation commit suicide: The Chinese general, Zhang Yang, was under investigation for unspecified corruption charges when he was found dead after allegedly committing suicide at his home. Zhang was questioned over links to two high-ranking army commanders Guo Boxiong and Xu Caihou, also netted in the anticorruption crackdown.
While these setbacks are unfortunate, there are reasons for being optimistic. Let’s focus
on the bigger picture: Despite these setbacks, extractive transparency continues to make
unstoppable progress.
Another step forward for the fight against corruption in 2017, of course, were the Paradise Papers. As often nowadays, a group of investigative journalists blew open the many ways the businesses try to hide how—and where—their money moves.
Another year ends. Some corruption was prevented. Some was discovered. Secretive business lobbies—some might call it the swamp —continue to fight back. And countless more communities, activists, journalists, experts and business and political leaders reject the status quo. They choose to stand on the side of transparency.
We at the Integrity Initiative are proud to stand with them. Nothing can stop the push toward transparency.
Comments are more than welcome—contact me at Schumacher@integrityinitiative.com.
Flashback: On July 11 I wrote about ‘Open Government Partnership – Part of Fighting Corruption’ and made extensive reference to reports prepared by the Independent Reporting Mechanism (IRM) of the local Open Government Partnership implementation group. The reason why I used the IRM source is that the Integrity Initiative is part of the Civil Society Groups supporting the OGP Program and the reporting of the IRM. In fact, the Integrity Initiative has added progress information to the latest IRM report.
Image credits: Kentoh | Dreamstime.com