Guess Who Leads the Bribery World?
The USA is the most corrupt country in the world and I have 10,000 posts that point heavily to that fact…

Cuban prosecutors seek 15 years for Canadian accused of bribery July 7, 2014

By Daniel Trotta

HAVANA (Reuters) – Cuban prosecutors are seeking a 15-year prison term for a Canadian businessman who has been tried on bribery charges, and 20 years for Cuba’s former deputy sugar minister who is accused in the same case, official media reported on Monday.

Prosecutors are also seeking a total of $91 million in fines or forfeitures from three Canadians and 14 Cubans in a case that has been closely watched by potential investors wary of how Cuba treats foreign executives.

Lead Canadian defendant Cy Tokmakjian, 74, was held for nearly 2-1/2 years before being charged.

Cuba has been touting a new foreign investment law that took effect Saturday, saying it was crucial for attracting foreign direct investment that’s needed for development.

The main feature of the law is to lower taxes. But many foreign companies have said they are more interested in the general business climate, transparency and the rule of law, especially in light of this case.

Cuban authorities publicly revealed details of the trial for the first time with an account in Monday’s edition of the Communist Party daily Granma, which said the evidence phase of the trial lasted from June 9 to 21 at a criminal court in Havana.

The court has yet to reach a verdict, which is normally rendered within a few weeks of trial.

Diplomats with knowledge of the case have previously said that prosecutors were seeking 15 years for Tokmakjian and 12-year sentences for his top managers, fellow Canadians Claudio Vetere and Marco Puche.

All three Canadians from the Tokmakjian Group, a transportation and trading company, say they are innocent, but its vice president of finance, Lee Hacker, has previously said in a statement he feared the outcome of the case, which has strained Canada’s relations with Cuba, may be predetermined.

Cuba shuttered the Canadian company in September 2011, arrested Tokmakjian and took the passports of the other managers. The charges include bribery, fraud, tax evasion, falsifying bank documents and other economic offenses.

Granma said prosecutors were asking for 15 years for Tokmakjian and 20 years for Nelson Labrada, former deputy minister of the defunct Sugar Ministry, which has since been replaced by a state sugar enterprise.

Prosecutors requested sentences of 8 to 12 years for the remaining defendants.

Among the Cuban defendants is Ernesto Gomez, former director of the state nickel company Ferroniquel Minera S.A.

The Ontario-based Tokmakjian Group did an estimated $80 million in business annually with Cuba, mainly selling transportation, mining and construction equipment. It was the exclusive Cuba distributor of Hyundai, among other brands, and a partner in two joint ventures replacing the motors of Soviet-era transportation equipment.

The company was caught up in an investigation of Cuba’s international trading sector, part of a crackdown on corruption by President Raul Castro.

(Editing by Bernadette Baum)

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Retired Navy officer pleads guilty in bribery scandal

A retired U.S. Navy officer pleaded guilty Thursday to federal charges of arranging kickbacks on behalf of an Asian defense contractor, marking an escalation of a long-running bribery scandal that has shaken the ranks of the Navy.

Edmond A. Aruffo, who retired as a lieutenant commander in 2007 after serving 20 years in the Navy, pleaded guilty to one count of conspiracy to defraud the U.S. government as part of a deal with federal prosecutors in San Diego.

After leaving the Navy, Aruffo worked for three years as an executive with Glenn Defense Marine Asia, a Singapore-based contractor that supplied and serviced Navy ships at ports across Asia until the bribery investigation became public in September.

Aruffo is the fourth person to plead guilty in the case, along with a Navy petty officer, a senior agent with the Naval Criminal Investigative Service and another executive with Glenn Defense Marine.

Three others are awaiting trial, including two Navy officers and the company’s president, Leonard Glenn Francis, a large and wealthy man known in Navy circles as “Fat Leonard.”

In addition, the Navy has said that two admirals and two captains are under investigation, although those individuals have not been charged with a crime.

According to a copy of the plea agreement filed Thursday in federal court in San Diego, Aruffo arranged an elaborate kickback scheme in Japan that defrauded the Navy of between $1 million and $2.5 million between July 2009 and September 2010.

During that time, Aruffo worked as the country manager in Japan for Glenn Defense Marine. The court papers state that he conspired with Japanese subcontractors to overbill the Navy for basic services virtually every time one of its ships docked in a Japanese port, naming 19 different vessels that did so.

Aruffo and Glenn Defense Marine used some of their ill-gotten gains to provide meals, drinks and gifts to Navy officers, according to the plea agreement, although the document did not divulge specific amounts.

“This corruption scandal continues to lead us in new directions, and we continue to marvel at the extent of it,” Laura E. Duffy, the U.S. attorney for the Southern District of California, said in a statement.

The kickback scheme in Japan is a new angle in the bribery scandal. Prosecutors have previously charged Francis and others in his company with overbilling the Navy for more than $20 million in scams that took place in Malaysia, Thailand and other locales.

Francis was a familiar face for decades among Navy admirals and commanders serving in the Pacific. Prosecutors have accused him and his employees of doling out cash, luxury travel and prostitutes to Navy officials in exchange for inside information that he used to win contracts and bilk the government.

Francis has pleaded not guilty. But Aruffo is the second person who worked for him to admit committing crimes and to cooperate with prosecutors.

Aruffo’s involvement in the case was not previously known, although prosecutors filed court records last fall that made reference to a retired Navy officer with the same initials who held the same position with Glenn Defense Marine.

Gary Bruckner, a San Diego attorney who is listed as Aruffo’s defense lawyer, did not respond to an e-mail seeking comment. Federal officials said Aruffo was in federal custody and a judge set bond at $40,000. He is scheduled to be sentenced in October.

Aruffo formerly served as an officer on the USS Blue Ridge, the flagship of the 7th Fleet, which is responsible for Navy operations across most of Asia and the Pacific. Prosecutors have charged three other Navy officials who served on the Blue Ridge with accepting bribes from Francis.

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Oklahoma ranks 11th in US corruption

CHICKASHA —

Researchers at Indiana University and the University of Hong Kong ranked Oklahoma the 11th most corrupt state in America.

John L. Mikesell, of Indiana, and Cheol Liu of Hong Kong, studied 25,000 convictions of public officials for violations of federal anti-corruption laws nationwide between 1976 and 2008.

Mississippi topped the most corrupt list, followed by Louisiana, Tennessee, Illinois, Pennsylvania, Alabama, Alaska, South Dakota, Kentucky, and Florida.

Oregon ranked as the least corrupt state, followed by Washington, Minnesota, New Hampshire, Utah, Iowa, Nebraska, Colorado, Vermont, and Wisconsin.

“I don’t think anyone who has studied Oklahoma’s political history and culture will be surprised by this study’s findings,” said Andrew C. Spiropoulos, director of State Constitutional Law and Government at Oklahoma City University. “We have suffered from a historically high level of political corruption because of several factors. We are a relatively poor state, with limited economic opportunity in the private sector, making public money and jobs more important.”

The study includes the early 1980s, when Oklahoma courts convicted, or took guilty pleas, in a massive county commissioner scandal.

“We are also a state with a strong populist culture, in which politicians who, legitimately or not, use public power and resources to help out the little guy,” Spiropoulos said. “For a century, with few exceptions, we lived under one party rule, which provided few checks on those inclined to feed at the public trough.”

While some state analysts say things have improved in recent years, former Senate President Pro Temp Mike Morgan, Auditor and Inspector Jeff McMahan, state Sen. Debbe Leftwich, all Democrats, and Republican state Rep. Randy Terrill, have been convicted of bribery since 2008.

“Given recent events in Oklahoma, it appears that parts of this corruption are still with us today,” said R. Keith Gadde, chairman of the political science department at the University Oklahoma.

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How Bitcoin Could Help Stem Political Corruption in the US

When the United States Supreme Court ruled in the late 1970′s that corporations are people, they opened up a can of worms and now Americans have to figure out how to get them back into the can. But sometimes, it can really go from bad to worse and in January of 2010, the Court ruled (Citizens United) that not only were corporations people but that money was speech and donations can therefore be essentially unlimited and anonymous. The result is what we see on the news every day: A legislative body that has to worry more about raising money than legislating and a completely partisan court.

The money now flowing into political campaign coffers has completely warped the political system. In response several organizations have sprung up to fight the corruption in an attempt to get money out of politics. One such group is MayDay Political Action Committee (PAC). PACs have been the main vehicle for wealthy donors with special interests to spread around “anonymous” donations and it seems only fitting that a PAC is now trying to fight money with money.

MayDay PAC is not the only organization trying to reduce the influence of big money. The internet news show “The Young Turks” has formed a PAC called Wolf Pack and is attempting to get a Constitutional Convention and lobby for an Amendment. But the difference with MayDay is that they are completely crowd-funded and, more importantly, they are now accepting Bitcoin for donations. Unlike many of the PACs and Super PACs in the United States, however, MayDay donors will have to play by the rules for contributions:

  • I am a United States citizen or a permanent resident alien.
  • This contribution is made from my own funds, and funds are not being provided to me by another person or entity for the purpose of making this contribution.
  • I am making this contribution with my own personal credit card and not with a corporate or business credit card or a card issued to another person.
  • I am at least eighteen years old.
  • I am not a foreign national (permanent resident aliens excepted), federal contractor, national bank, or corporation chartered by an act of Congress
  • The MayDay PAC is also not accepting anonymous donations and none of the donations are tax deductible.

Opening up to Bitcoin could prove to be a very smart move, especially if the PAC supports candidates who are in favor of an open internet and privacy. Hopefully, other like minded groups will also open their doors in the near future and take advantage of the faster and easier way to donate funds to your party or politician.

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Retired U.S. Navy commander pleads guilty in bribery scandal

By Marty Graham

SAN DIEGO (Reuters) – A retired U.S. Navy commander pleaded guilty to federal conspiracy charges on Thursday in connection with a wide-ranging corruption investigation of a Singapore-based defense contractor.

Edmond Aruffo, the 45-year-old former manager of Glenn Defense Marine Asia’s operations in Japan, pleaded guilty in U.S. District Court in San Diego to a single count of conspiracy to commit bribery as part of a plea agreement with prosecutors.

He is the seventh defendant charged in the bribery scandal and the fourth to plead guilty in the high-profile case.

“There is an old navy saying: Not self but country,” U.S. Justice Department Assistant Attorney General Leslie Caldwell said. “Edmond Aruffo instead put self before country when he stole from the U.S. Navy as part of a massive fraud and bribery scheme that cost the U.S. Navy more than $20 million.”

Prosecutors accuse the maritime services firm, led by Malaysian businessman Leonard Glenn Francis, of bribing Navy officials to get information on ship movements and competing contracts and filed inflated invoices in contracts worth millions of dollars at ports across Asia.

The investigation has led to charges against two navy commanders and a logistics officer, a Navy Criminal Investigative Services agent, along with Francis and his cousin, who was a senior manager.

Since the case was filed in October 2013, the NCIS investigator, a second company official, the NCIS agent and the navy logistics officer have pleaded guilty to conspiracy to commit bribery.

Francis, who prosecutors say is at the heart of the conspiracy, remains in federal custody in San Diego.

The scandal is one of several that have rocked the military in recent months, prompting Defense Secretary Chuck Hagel to appoint a senior officer to report directly to him on ethics matters.

Aruffo retired from the navy in 2007 at the rank of lieutenant commander. He went to work for GDMA in 2009, according to court records.

According to the plea agreement, Aruffo worked with GDMA subcontractors to have them inflate their invoices for port services including tugboats, transportation and other services while the navy ships were docked in Japan. When the subcontractors were paid, they then gave GDMA kickbacks for as much as $205,000 per contract in 2010.

He faces a maximum sentence of five years in prison when he is sentenced in October.

(Editing by Dan Whitcomb)

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Gallup: Americans say personal freedom ebbing, government corruption on the …

Land of the free? Not necessarily.

A massive new Gallup poll released Tuesday has confirmed what tea partyers and other grass-roots folk have warned about in recent years. The sense of freedom appears to be diminished in America, and the nation ranks well down on a list of countries based on how residents report how “satisfied” they are with the amount of freedom they enjoy.

The U.S. ranks 36th on the roster — behind such countries as Uzbekistan, the United Arab Emirates and Canada.

“Gallup asks people in more than 120 countries each year whether they are satisfied or dissatisfied with the freedom to choose what they do with their lives. In 2006, the U.S. ranked among the highest in the world for people reporting satisfaction with their level of freedom. After seven years and a 12-point decline, the U.S. no longer makes the top quartile worldwide,” the research stated.

New Zealand was at the top of the list, with 94 percent of its residents satisfied with their freedom quotient. Australia, Cambodia and Sweden followed, all ranked at 93 percent satisfied with their freedom to do what they pleased.

Among Americans, the number now stands at 79 percent, down from 91 percent in 2006 when Gallup last measured the trend. The pollster cites economic concerns as one driving force for the decline, along with another disquieting factor.

“Another possible explanation for the decline in freedom is how Americans feel about their government,” the research stated. “Among Americans, perceptions of widespread corruption in their government have been generally increasing over the past seven years.”

Gallup found that eight out of 10 U.S. respondents complained about basic entrenched corruption in the very heart of the nation and its management.

In 2006, the number was 59 percent.

“Perceived widespread corruption in the U.S. government could be on the rise for several reasons, including the significant media attention on issues such as the IRS targeting of conservative groups and National Security Agency leaks,” said Gallup analyst Jon Clifton.

“Americans not only feel that the U.S. government is performing poorly, as demonstrated by record-low congressional approval ratings, but they also report that the U.S. government itself as one of the biggest problems facing the country today,” he said.

The poll itself was massive. Gallup conducted 1,000 face-to-face interviews with respondents in each of the more than 120 polled nations.

“Americans will no doubt be celebrating their freedom this Fourth of July,” said Mr. Clifton. “However, leaders in the U.S. should be aware of a growing number of Americans who are dissatisfied with the freedom in their own lives. While freedom means many things to different people, one underlying cause for this sentiment seems to be how people feel about their national government.”

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Your corruption doesn’t make us all guilty: Karnataka CM to Kumaraswamy

Karnataka Chief Minister Siddaramaiah today hit out at JD(S) leader HD Kumaraswamy, who is caught in a row over an audio CD allegedly discussing about money to be paid to his party MLAs by an aspirant for an MLC seat, saying he could not defend himself claiming other parties were also indulging in corruption.

“I haven’t seen the conversation in the CD. I will not comment on it. Let people of the state take a decision on it,” Siddaramaiah told reporters on the sidelines of a function.

Karnataka MLA KumaraswamyKarnataka MLA Kumaraswamy

Karnataka MLA Kumaraswamy

Kumaraswamy is at the centre of a controversy after yesterday’s release of an audio CD about him purportedly telling the supporters of MLC seat aspirant Vijugowda Patil, a JD(S) leader from Bijapur district, about the demand for money from his party MLAs.

Asked about Kumaraswamy’s allegations that all parties are involved in such scandals, Siddaramaiah said, “If a cat drinks its milk closing its eyes, it doesn’t mean that the entire world is not watching it drink the milk.”

“Whoever has done.. mistake is a mistake. Corruption is corruption. If he (Kumaraswamy) says other parties are also doing it, is not a defence at all,” he said.

In the CD which surfaced mysteriously with all the Kannada TV channels playing the audio clip, Kumaraswamy was purportedly heard telling the supporters of Patil “Each MLA (of JDS) is asking for one crore. They are saying you make anybody the MLC…”

At another point, Kumaraswamy was heard saying “40 people (JDS MLAs) are asking for 40 crore… This is my fate.”

Reacting to it, Kumaraswamy did not disown the authenticity of the conversation but said he had only discussed the direction in which the current politics was moving and it was not proper to portray him as a villain when he only discussed in general the harsh reality of politics.

PTI

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GSK accused of playing down bribery allegations

Mr Humphrey said the company had assured him the allegations were false, but
that his own inquiries suggested that wrongdoing had taken place.

In a note from prison, seen by the newspaper, he said: “Only after we
completed our background investigation on the whistleblower did they reveal
the details to us. I realised we had been cheated because the allegations
looked real to us.”

GSK’s bribery scandal in China took on a fresh twist this week after the
company admitted that in addition to bribery allegations, its bosses had
been sent a covert video of Mr Reilly in bed with his Chinese girlfriend.

Mr Humphrey’s investigation centred on Vivian Shi, a Chinese executive who had
left GSK in December 2012, though he failed to establish whether she was
behind the video.

Months after Mr Humphrey began his inquiry, four of GSK’s Chinese sales
executives were arrested by Beijing authorities accused of acting like
“criminal godfathers”.

The company subsequently admitted that it had uncovered evidence that appeared
to support the bribery allegations.

Mr Reilly, who left China last July shortly before the scandal broke, has
returned to the country to “help” police with their inquiries and is
currently under a travel ban. He was later accused of ordering his sales
executives to carry out the alleged bribery, and authorities continue to
investigate the company.

GSK has said it hired Mr Humphrey’s firm “to conduct an investigation
following a serious breach of privacy and security related to the company’s
China general manager…and not to investigate the substance of the
allegations of misconduct made by the whistleblower.”

It said its investigations into the allegations made in early 2013 “did not
find evidence to substantiate the specific allegations made in the
whistleblower emails”.

It added that it had “committed significant resources to find out what
happened in China”, including an independent legal review. The company is
also co-operating fully with the ongoing bribery investigation by Chinese
authorities.

A spokesman said: “We have zero tolerance for any kind of corruption in our
business and … we take action against any breaches.”

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Sex video new twist in GSK China bribery scandal July 2, 2014

By John Ruwitch, Adam Jourdan and Ben Hirschler

SHANGHAI/LONDON (Reuters) – GlaxoSmithKline Plc’s tangled web of problems in China, including a sex video of its former China chief and anonymous emails alleging corruption, are highlighted in a lengthy draft report prepared for the British drugs firm and seen by Reuters.

The report into the origin of the video and emails was compiled at the request of GSK by ChinaWhys, a Shanghai-based company founded by British investigator Peter Humphrey and his American wife Yu Yingzeng. Presented to GSK on June 6, 2013, it did not reach a conclusion as to who was behind the actions.

On July 10, 2013, authorities detained Humphrey and Yu for illegally buying and selling private information. The couple were subsequently arrested, which typically means the police believe they have enough evidence for the case to be brought to trial.

Five days after their detention, police accused GSK of funneling up to 3 billion yuan ($482 million) through travel agencies to bribe doctors and officials in China.

A GSK spokesman in London confirmed the video existed but did not comment on how it related to the alleged bribery scandal. He also said GSK, Britain’s biggest pharmaceutical firm, had hired ChinaWhys to investigate the video.

Reuters was not independently able to verify any link between the video and the bribery case.

The British newspaper the Sunday Times first reported the existence of the video on Sunday.

ChinaWhys was employed in April 2013 to investigate an ex-employee suspected of sending anonymous emails of an intimate video of GSK’s then China chief Mark Reilly with his Chinese girlfriend as well as allegations of widespread bribery at the firm.

Chinese authorities charged Mark Reilly and other colleagues with corruption last month, after a government investigation found the firm made billions of yuan from elaborate schemes to bribe doctors. The Briton, who has been barred from leaving China, could face decades in prison.

Reilly has not been reachable for comment and his lawyer has declined to talk to the media. Sources close to Reilly have said that he was still in Shanghai but had not been detained.

Humphrey and Yu have not commented. They are expected to go on trial late next month, a source familiar with the case told Reuters.

GRAPHIC BEDROOM VIDEO

On March 16, 2013, an anonymous person sent an email to GSK senior executives, including the company’s chief executive officer Andrew Witty, alleging the firm had used travel agent partners to funnel kickbacks to medical staff, the draft report said. The email also included the graphic bedroom video involving Reilly.

The recording was shot without Reilly’s knowledge or consent at his Shanghai flat and showed the Briton, who is separated from his wife, with another woman, the draft report said. It was not clear who shot the video or with what motivation.

In total, at least 23 emails making allegations of widespread bribery at GSK’s China operations were sent to government bodies, including China’s State Administration of Industry and Commerce, the watchdog that leads probes against corporate bribery, the draft report said.

The GSK investigation was sparked by at least one high-ranking whistleblower, a person with direct knowledge of that investigation previously told Reuters. The person declined to be identified because of the sensitivity of the case.

WIDER RIPPLES

China’s investigation into GSK and its scrutiny of numerous other foreign and local drugs companies have frightened foreign pharmaceutical executives so much that some fear they could be jailed and have asked their lawyers if they should temporarily leave the country, legal and industry sources have said.

GSK, which described the bribery allegations as “shameful” when they came to light last year, said it was continuing to cooperate fully with Chinese authorities on the ongoing investigation.

“The issues relating to our China business are very difficult and complicated,” it added in a statement.

The bribery case has hit GSK’s sales in China, according to the company’s quarterly results, as buyers have shied away from doing business with the company and GSK itself has revamped its sales and marketing model.

Bribery allegations involving GSK have come to light since then in other countries and GSK is now investigating claims that bribes were also paid to doctors in Poland, Iraq, Jordan and Lebanon.

Last month, Britain’s Serious Fraud Office (SFO) launched a formal criminal investigation into the commercial practices of GSK and its subsidiaries. GSK said it was cooperating fully with the SFO.

(Additional reporting by Kazunori Takada in Shanghai; Editing by Jane Barrett, Diane Craft, Dean Yates and David Evans)

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Paralegal admits fake bribery scheme linked to former St. Louis County prosecutor

ST. LOUIS • A local paralegal whose case was linked to the downfall of a St. Louis County prosecutor pleaded guilty to federal charges Tuesday and admitted operating a fake bribery scheme.

Jillian Nichols, 26, admitted promising a criminal defendant that she could win him a break if he paid $10,000.

Nichols falsely claimed that the prosecutor had asked for the bribe. She also claimed that she’d had favorable evidence planted on the defendant’s cellphone and paid a forensic expert to vouch for that evidence, Assistant U.S. Attorney Hal Goldsmith said in court.

Neither the prosecutor or the defendant in the St. Louis County case were identified in court or in court documents, but the Post-Dispatch has confirmed both names.

The prosecutor is John Quarenghi, who was one of three “team leaders” in prosecuting attorney Robert McCulloch’s office. He resigned in December after learning that federal investigators were examining “intimate” texts, voicemail and pictures he had exchanged with Nichols. He is now working as a prosecutor in Warren County.

The defendant is Ziyaa Umarov, who was charged in 2012 with sexual assault and deviate sexual assault. Umarov cooperated with federal investigators.

Nichols had worked for Umarov lawyer Robert Herman as an assistant since April 2011, and had worked on Umarov’s case.

Nichols hatched the scheme before September 2013, when she left to work at another firm, Goldsmith said. After she left, she continued to meet with Umarov, and promised him on Nov. 9 that Quarenghi was going to give him a deal, “something like probation,” according to her plea.

Umarov, who was by that time working with the FBI, finally agreed to pay $5,000 up front and $5,000 after his case received “favorable” treatment.

Umarov and Nichols met at a Clayton restaurant on Dec. 10, and he handed her $5,000 cash.

FBI agents were waiting. Nichols told them that she didn’t know Umarov was bringing money, that they’d never discussed amounts and that she didn’t know that there was money in the envelope, her plea says.

On Tuesday, Nichols pleaded guilty in U.S. District Court here to one count of wire fraud and one count of lying to the FBI. She faces probation or up to 18 months in prison at her Sept. 19 sentencing hearing. Prosecutors say she should be punished more harshly because she abused a position of trust, obstructed justice during the investigation and took advantage of a vulnerable victim.

Both U.S. Attorney Richard Callahan and Quarenghi’s lawyer, Neil Bruntrager, have insisted that the prosecutor had no knowledge of the bribery scheme.

Callahan told the Post-Dispatch in February that, “The assistant prosecutor, whoever he or she was, did not solicit any bribe and was completely innocent with regard to the bribery issue.”

At the time, Bruntrager said Quarenghi was not a target or subject of any investigation and “never did anything wrong, either illegal or unethical.”

A Nichols lawyer declined to comment after Tuesday’s hearing. Quarenghi and his lawyer couldn’t be reached for comment.

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Illict Sex Tape at the Center of GlaxoSmithKline's Chinese Bribery Scandal

GlaxoSmithKline (GSK) is currently under investigation in China for a massive bribery network built to inflate drug prices. The operation successfully generated $150 in illegal sales and involved doctors, hospital employees, and industry officials in Beijing and Shanghai. Three executives — Mark Reilly, Zhao Hongya, and Zhang Guowei — were the kingpins of the operation, however, it seems Reilly is really the standout suspect in this case.

On top of his role in this scheme, it appears that Reilly was the star of a sex tape that was sent to executives at GSK. The tape was recorded without Reilly’s knowledge or consent and it is of him and his girlfriend (Reilly has an estranged wife.) Right now, it is unclear if his girlfriend recorded the tape, or if it was the doing of a third party. After the tape was recorded, it was retrieved and emailed to GSK executives. GSK has allowed Reilly to hire Peter Humphrey, a private investigator, to look into how this tape was made and distributed

RELATED: Singapore Airlines Bans Shark Fins from Their Cargo Flights

The Sunday Times claims it was the sending of this tape, in the spring of 2013, kicked off the investigation into Reilly’s crime ring. GSK would not comment as to the relationship between the tape and the investigation. Reuters was unable to confirm the exact link either. Arguably, someone was looking for some harsh payback on the mob boss. 

The bribery investigation has caused buyers to avoid GSK. The company already called the investigation and Reilly’s actions “shameful.” The case just reached a whole new level of shame, however: the Kim Kardashian kind. 

Right now, Reilly’s location is unknown though he was banned from leaving China. His lawyer has not commented on the tape. Reilly is facing a maximum sentence of life in prison, as China takes cases of bribery extremely seriously. He is also facing a lifetime of embarrassment, as co-workers have now seen him in the ultimate compromising position. 

This article was originally published at http://www.thewire.com/business/2014/06/illict-sex-tape-now-at-the-center-of-chinese-bribery-scandal/373718/

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Liberal welfare state’s corruption is an opening for conservatives

Among the findings of a recent Gallup poll was this: Since 2006, the percentage of Americans who think corruption in government is widespread has soared from 59 percent to 79 percent. As Gallup notes, “Perceived widespread corruption in the U.S. government could be on the rise for several reasons, including the significant media attention on issues such as the IRS targeting of conservative groups and National Security Agency leaks. Americans not only feel that the U.S. government is performing poorly, as demonstrated by record-low congressional approval ratings, but they also report that the U.S. government itself [is] one of the biggest [problems] facing the country today.”


Internal Revenue Service Commissioner John Koskinen testifies during a hearing before the House Ways and Means Committee on June 20 on Capitol Hill. (Alex Wong/Getty Images)

In some sense, it is reassuring to see that the public hasn’t bought the Obama administration’s line that every scandal – from the Department of Veterans Affairs to the Internal Revenue Service – is “phony.” The poll also suggests that Americans have also clued into the day-to-day cronyism that afflicts government and creates a decidedly un-level playing field (e.g. too-big-to-fail bank bailouts, green job scams, unqualified fundraisers appointed as ambassadors, elite green activists repaid for campaign largess with anti-jobs moves against coal and the Keystone XL pipeline).

For Republicans, this is an opportunity, if they can take advantage of it. Sen. Mike Lee (R-Utah) has made anti-cronyism a central focus of his agenda, as have other reform conservatives.

For conservatives, this entails not merely reforming the tax code, rooting out entrenched favoritism (e.g. the Davis-Bacon protection for union wage rates in contracting) and punishing wrongdoing (whether by the VA or the IRS). It means making the case that limited, energetic government focused on fewer items and more willing to send funds to the states than to micromanage the country from Washington would go a long way toward diminishing “rent seeking” and the built-in advantages for the rich, well-connected donors and industries.

Truth be told, we need government to be better at what it does, not be disqualified from performing essential functions that Americans expect (e.g. border security, national defense, maintenance of a safety net ). And that, conservatives should argue, is virtually impossible when you create huge centralized bureaucracies and mountains of regulations for far-flung areas of life, many of which can be handled by other levels of government or eliminated altogether. There is a danger here that recognition of government corruption will drift into wild conspiracy-mongering, anti-government bloodlust (e.g. the shutdown) and unrealistic demands that the federal government return to the pre-New Deal era when it did relatively few things and therefore got into less mischief. There is little sign that Americans want paralyzed government. Rather, they are demanding that politicians do their jobs without feathering their own nests.

In “Room to Grow,” the reform conservative’s guidebook,  Yuval Levin writes:

The fundamentally prescriptive, technocratic approach to American society inherent in the logic of the Left’s policy thinking is a poor fit for American life at any scale. The liberal welfare state ultimately cannot be had at an affordable price. It is not the architecture of one or another particular program that makes it unsustainable. It is unsustainable because the system as a whole must feed off of the innovative, decentralized vitality of American life, yet it undermines both the moral and the economic foundations of that vitality. (For him and other reformers, the key is to in effect clear out the underbrush, rebalance the relationship between the federal and state governments, help nurture essential elements in civil society and then clean up what is left — e.g. entitlement reform.)  . . .

In practice, the conservative approach to public policy therefore points toward putting in place programs that enable a kind of bottom-up, incremental, continuous learning process, rather than imposing wholesale solutions from above. Generally speaking, this is an approach to problem-solving that involves three steps: experimentation (allowing service providers to try different ways of solving a problem), evaluation (enabling recipients or consumers of those services to decide which approaches work for them and which do not), and evolution (keeping those that work and dumping those that fail).

When this occurs, not only is government smaller, more effective and more conducive to a thriving free society, but it also is, not coincidentally, less corrupt.

Conservatives therefore should not cheer all that much for a poll that shows nearly 80 percent of Americans think government is a corruption racket. They should take it as a challenge to present a vision of a federal government that is more effective at what it does and more deserving of the public’s trust. In essence, a finding like this is not a “success” for conservatism but a conversation opener. It’s up to thoughtful conservatives to set out an agenda that is attractive to ordinary Americans and restores their faith in a government that is leaner, less overbearing and more supportive of their personal and communal aspirations.

 

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France’s Sarkozy faces corruption probe in blow to comeback hopes


PARIS (Reuters) – Former French President Nicolas Sarkozy was placed under formal investigation on Wednesday on suspicions he tried to use his influence to thwart an investigation of his 2007 election campaign, the prosecutor’s office said.

The step, which often but not always leads to trial, is a major setback to Sarkozy’s hopes of a comeback after his 2012 defeat by Socialist rival Francois Hollande.

The conservative politician denies wrongdoing in a string of investigations where his direct or indirect implication has cast doubt on his viability as a candidate in the 2017 elections.

He is due to give a television interview at 1800 GMT.

Magistrates are looking at whether Sarkozy used his influence to secure leaked details of a inquiry into alleged irregularities in his victorious 2007 campaign. He is suspected of influence-peddling, corrupting officials, and benefiting from breach of professional secrets, the prosecutor’s office said.

The first former president to spend time in police custody, Sarkozy, 59, was detained for 15 hours on Tuesday before being transferred to appear before investigating magistrates who will run the inquiry. He was then released without bail.

Sarkozy “has gone through other ordeals of this nature, he has always known how to fight,” said Paul-Albert Iweins, the attorney for Sarkozy’s own attorney, Thierry Herzog, who is also being investigated for influence-peddling along with a judge involved in the affair.

Iweins said the inquiry was weak as it relied on legally questionable phone taps of conversations between Sarkozy and Herzog as well as between Herzog and the president of the French Bar.

Sarkozy’s allies cast doubts over the impartiality of one of the investigating magistrates, with Christian Estrosi, the mayor of Nice, telling France Info state radio that Hollande’s government had whipped up “an atmosphere of hate”.

Prime Minister Manuel Valls dismissed accusations of a plot.

Investigating magistrates have a unique and powerful role under French law, both gathering evidence and determining whether it is solid enough for a trial. After the inquiry, the magistrate can drop the case for lack of proof or “charge” the accused, sending the case to trial.

Influence-peddling can be punished by up to five years in prison and corrupting officials can trigger a sentence of up to 10 years.

It was the second time the ex-president, who lost immunity from legal prosecution a month after he left office in June 2012, has been placed under such a judicial probe. The first was in 2013 but magistrates later dropped the case against him.

WEB OF INQUIRIES

Six legal cases, including this one, hang over the ex-president’s head, a shadow that many in his fractured UMP party believe compromises his ability to lead a comeback in 2017.

“This legal saga is disastrous,” wrote the influential Le Monde daily in a front-page editorial. “Each of these episodes … demonstrate that for its actors and the leading one in particular, the end justifies all the means.” In the current affair, Sarkozy is accused of using his influence to get information on a troublesome legal inquiry into funding irregularities in his victorious 2007 election campaign.

Specifically, magistrates are looking to see whether Sarkozy tried to get a judge promoted to the bench in Monaco in exchange for information on that campaign funding inquiry, in which he was accused of exploiting the mental frailty of France’s richest woman, L’Oreal heiress Liliane Bettencourt, for campaign funds.

Those accusations against Sarkozy were dismissed in October.

But as investigators last year used phone-taps to examine separate allegations that late Libyan leader Muammar Gaddafi funded the same campaign, they began to suspect that Sarkozy had kept tabs on the Bettencourt case, before he was dropped from it, through a network of informants.

Those suspicions prompted police to launch an inquiry in February, which led to Wednesday’s events. Under French law, a suspect is not formally charged with a crime unless he is sent to trial.

(Writing by Alexandria Sage; Editing by Mark John, Toby Chopra and Anna Willard)

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Illicit Sex Tape at the Center of GlaxoSmithKline's Chinese Bribery Scandal

GlaxoSmithKline (GSK) is currently under investigation in China for a massive bribery network built to inflate drug prices. The operation successfully generated $150 million in illegal sales and involved doctors, hospital employees, and industry officials in Beijing and Shanghai. Three executives — Mark Reilly, Zhao Hongya, and Zhang Guowei — were the kingpins of the operation, however, it seems Reilly is really the standout suspect in this case.

On top of his role in this scheme, it appears that Reilly was the star of a sex tape that was sent to executives at GSK. The tape was recorded without Reilly’s knowledge or consent and it is of him and his girlfriend (Reilly has an estranged wife.) Right now, it is unclear if his girlfriend recorded the tape, or if it was the doing of a third party. After the tape was recorded, it was retrieved and emailed to GSK executives. GSK has allowed Reilly to hire Peter Humphrey, a private investigator, to look into how this tape was made and distributed

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The Sunday Times claims it was the sending of this tape, in the spring of 2013, kicked off the investigation into Reilly’s crime ring. GSK would not comment as to the relationship between the tape and the investigation. Reuters was unable to confirm the exact link either. Arguably, someone was looking for some harsh payback on the mob boss. 

The bribery investigation has caused buyers to avoid GSK. The company already called the investigation and Reilly’s actions “shameful.” The case just reached a whole new level of shame, however: the Kim Kardashian kind. 

Right now, Reilly’s location is unknown though he was banned from leaving China. His lawyer has not commented on the tape. Reilly is facing a maximum sentence of life in prison, as China takes cases of bribery extremely seriously. He is also facing a lifetime of embarrassment, as co-workers have now seen him in the ultimate compromising position. 

This article was originally published at http://www.thewire.com/business/2014/06/illicit-sex-tape-now-at-the-center-of-chinese-bribery-scandal/373718/

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Sarkozy faces charges in French corruption probe

PARIS (AP) — Former French President Nicolas Sarkozy, his lawyer and a magistrate are facing preliminary charges in a corruption investigation linked to allegations that he took 50 million euros ($67 million) in illegal campaign funds from Libya’s Moammar Gadhafi, after a night of questioning by judicial officials.

French Prime Minister Manuel Valls said the judicial investigation is being carried out independently of the Socialist government, which defeated Sarkozy in elections in 2012.

“This situation is serious, the facts are serious,” Valls told BFM television Wednesday. “The indictment concerns magistrates — high level magistrates — a lawyer, a former president of France. But as head of the government, I’m asking that we recall the independence of the justice system, which must carry out its work serenely. No one is above the law, is the second principle. And thirdly, and it is important to remind it, there is the presumption of innocence which applies to everybody.”

Lawyers for Thierry Herzog, Sarkozy’s attorney, and the magistrate, Gilbert Azibert, said the men were handed preliminary charges of influence trafficking. The French daily Le Monde says the questioning centers around whether Sarkozy and his lawyer were kept informed about the investigation into the Libyan allegations by Azibert in exchange for promises of a post in Monaco.

Azibert did not receive a job in Monaco.

Sarkozy has vigorously denied wrongdoing.

After further investigation, judges will determine whether to bring the case to trial.

Suspicions are based at least in part on taped phone conversations between Sarkozy and his lawyer, Thierry Herzog.

Herzog’s lawyer, Paul-Albert Iweins, sharply criticized the decision to take the men into custody for questioning, which lasted into the early hours of Wednesday.

“None of these men is going to flee, they are not going to ignore a summons,” Iweins told France Info. “The only reason to detain them is to apply psychological pressure.”

Copyright 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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Sex video is new twist in GSK China bribery scandal

LONDON (Reuters) – GlaxoSmithKline GSK.L on Sunday confirmed the existence of an intimate video recording of its former China head, Mark Reilly, which the Sunday Times reported kicked off a bribery investigation that has damaged the drugmaker’s business in China.

The Sunday Times said the recording was shot without Reilly’s knowledge or consent at his Shanghai flat and showed the Briton, who is separated from his wife, with his Chinese girlfriend.

It was not clear who shot the video or with what motivation. The video was emailed to top GSK executives in March 2013, the newspaper said.

A GSK spokesman confirmed the tape existed but did not comment on how it related to the alleged bribery scandal.

In July 2013, Chinese police accused Britain’s biggest drugmaker of transferring as much as 3 billion yuan ($482 million) through travel agencies to bribe doctors and officials.

Reuters was not independently able to verify the link between the tape and the bribery case.

Chinese police filed corruption charges against Reilly last month. The Briton, who has been barred from leaving China, could face decades in prison. (Full Story)

Reilly has not been reachable for comment while his lawyer has declined to talk to the media. Reilly’s whereabouts are unknown.

China’s investigation into GSK and its scrutiny of numerous other foreign and local drugs companies have frightened foreign pharmaceutical executives so much that some fear they could be jailed and have asked their lawyers if they should temporarily leave the country. (Full Story)

GSK, which described the bribery allegations as “shameful” when they came to light last year, said on Sunday that it was continuing to cooperate fully with Chinese authorities on the ongoing investigation.

“The issues relating to our China business are very difficult and complicated,” it added in a statement.

The bribery case has hit GSK’s sales in China, as buyers have shied away from doing business with the company and GSK itself has revamped its sales and marketing model.

Bribery allegations involving GSK have come to light since then in other countries and GSK is now investigating claims that bribes were also paid to doctors in Poland, Iraq, Jordan and Lebanon.

Last month, Britain’s Serious Fraud Office launched a formal criminal investigation into GSK.

(Reporting by Ben Hirschler; Editing by Jane Barrett, Diane Craft and Dean Yates)

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Larry Lessig explains how Mayday.US can win the fight on corruption










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Rebekah Brooks Found Not Guilty of Hacking, Bribery Charges June 28, 2014

Rebekah Brooks, the former head of News Corp. (NWSA)’s U.K. publishing unit, was found not guilty of phone hacking, bribery and perverting the course of justice by a London jury after an eight-month trial.

Andy Coulson, a former editor of News Corp.’s News of the World who went on to become a media adviser to U.K. Prime Minister David Cameron, was found guilty of one count of phone hacking. Brooks’s husband Charlie and her former personal assistant, Cheryl Carter, were also cleared of charges they destroyed evidence at the height of the phone-hacking scandal in 2011.

Brooks, 46, who previously edited the News of the World and News Corp.’s daily Sun tabloid, was one of seven people on trial for phone hacking and bribing public officials by journalists at the newspapers. News Corp. Chairman Rupert Murdoch closed the News of the World in 2011 in a bid to temper public outrage over the hacking of the phone of Milly Dowler, a murdered schoolgirl.

The jury is continuing to deliberate on other charges against Coulson, 46, and Clive Goodman, a former reporter at the News of the World.

Stuart Kuttner, 74, the former managing editor of the News of the World, was found not guilty of phone hacking. Mark Hanna, a News Corp. security guard, was also cleared of hiding evidence.






Photographer: Rob Stothard/Getty Images

Former editor of News Corp.’s News of the World Andy Coulson arrives at Old Bailey on June 23, in London. Coulson was found guilty of one count of phone hacking. Close

Former editor of News Corp.’s News of the World Andy Coulson arrives at Old Bailey on… Read More

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Photographer: Rob Stothard/Getty Images

Former editor of News Corp.’s News of the World Andy Coulson arrives at Old Bailey on June 23, in London. Coulson was found guilty of one count of phone hacking.

To contact the reporter on this story: Jeremy Hodges in London at jhodges17@bloomberg.net

To contact the editors responsible for this story: Anthony Aarons at aaarons@bloomberg.net Jeremy Hodges

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Legislation has sought to tackle corruption.

LAST April, a United States grand jury indicted six persons, including K.V.P. Rama­chandra Rao, MP and a close adviser to the former Andhra Pradesh Chief Minister Y.S. Rajasekhar Reddy in a $18.5 million titanium mining scam.

The allegations related to charges of conspiracy involving bribes to state and central government officials to allow the mining of titanium minerals; a violation of the US Foreign Corrupt Practices Act 1977 (FCPA). Involved was a truly international cast. A Ukrainian industrialist, a Hungarian businessman; an Indian national and permanent resident of the US, and a Sri Lankan national.

This is of a piece, with the conviction in 1978 by an English court of two persons for bribing Iranian officials for the supply of Chieftain tanks worth $4m to the Shah’s regime. The judge told the convicted accused “Corruption strikes at society’s stability. Each of you, in doing what you did, helped secure an important contract which benefited financially society as a whole; but the ends never justify the means.”


Legislation has sought to tackle corruption.


The US FCPA was enacted in response to revelations of widespread bribery of foreign officials by US companies. Since then national as well as international legislation have sought to tackle the vice of corruption. Additionally, NGOs and activists have striven in the same cause.

The FPCA’s anti-bribery provisions prohibit US persons and business concerns, US and foreign public companies and certain foreign persons and business, acting while in the US, from making corrupt payments to foreign officials to obtain or retain business. Its accounting provisions require them to make and keep accurate books and records and to devise and maintain an adequate system of internal accounting controls. They prohibit individuals and businesses from falsifying books and records.

In 1988, Congress requested the president to negotiate an international treaty with members of the Organisation for Economic Cooperation and Development to prohibit bribery in international business transactions by many of the US’s major trading partners. Negotiations culminated in the Convention on Combating Bribery of Foreign Officials in International Business Transactions.

On Oct 31, 2003, the United Nations General Assembly adopted the Convention Against Corruption. It enjoins state parties to the convention to adopt a host of measures, civil, criminal and administrative, to combat the vice.

Unlike an assembly resolution, which is purely recommendatory, a convention is a binding international treaty. But all that this convention did was to exhort its signatories to adopt virtuous measures. The only “mechanism for implementation” was a “conference” of the parties to the convention “to promote and review” its implementation.

The exhortations covered preventive and punitive measures, in the public as well as the private sectors; codes of conduct for officials, honest accounting, etc. The harness was bigger than the horse.

More promising as models for emulation are the European Union’s convention of 1997 “on the fight against corruption including officials of the European communities or officials of member states of the European Union” and the Council Framework Decision of July 22, 2003 on combating “corruption in the private sector”. The exhortations are broadly similar. How­ever, given the economic integration of the EU the provisions for adjudicating disputes do introduce an element of compulsion. The Frame­work Deci­sion of 2003 further fortifies that element.

What is more encouraging is the increase in public awareness. Inter­national public opinion has become far more alert and assertive and organisations have been set up to keep vigil on major cases of corruption, nationally and internationally. The internet helps to highlight instances of low-level corruption as well. Investigative reporting can do more.

As well as Transparency International there exists a network of similar bodies. A working group set up in 2010 by the G20 has drawn up rules on seizure of corrupt assets and denial of visas to corrupt officials. The Paris-based Financial Action Task Force monitors member states’ effectiveness in implementing anti-money laundering laws.

Market pressure is growing too. The Inter­national Corporate Governance Network brings together institutional investors with $18 trillion under management. It scrutinises companies for compliance with anti-corruption principles.

Not In My Country, a web-based campaign in Uganda, encourages students to report ins­tances of corruption. The Economist re­ported: “Similar websites operate in Pakistan, Kenya, Liberia and Indonesia. They help even the humble to fight back. Given the scale of the problem, nobody is claiming victory. Laws are one thing, enforcement quite another.”

The harsh truth is that for all their efforts to tighten up their laws domestically and punish national wrongdoers so far as international cooperation is concerned, the states will make international law on the subject more effective only when they feel that their national interest will be served by it.

The writer is an author and lawyer.

Published in Dawn, June 28th , 2014

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