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…

HP Fined $58.7M for Bribery of Russian Government September 12, 2014

Associated Press

Hewlett-Packard Co. pleaded guilty Thursday to felony charges that former employees bribed Russian government officials for a contract, and the company has been fined $58.7 million.

Hewlett-Packard’s Russian subsidiary admitted violating the Foreign Corrupt Practices Act in a Northern California court Thursday, the U.S. Department of Justice said in a statement.

The U.S. alleged that the HP division paid $2 million to retain a technology contract with Russian prosecutors.

“In a brazen violation of the FCPA, Hewlett-Packard’s Russia subsidiary used millions of dollars in bribes from a secret slush fund to secure a lucrative government contract,” said Principal Deputy Assistant Attorney General Marshall L. Miller. “Even more troubling was that the government contract up for sale was with Russia’s top prosecutor’s office.”

The plea and sentence are part of a larger agreement reached in April with the Justice Department and the Securities and Exchange Commission. HP agreed to pay a total of $108 million in criminal and civil penalties for bribing officials in Russia, Mexico and Poland.

Representatives of the Palo Alto, California, company did not immediately reply to after-hours phone and email messages seeking comment.

HP’s general counsel, John Schultz, said when the settlement was reached in April that the misconduct was limited to a small number of people who are no longer with the company.

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Corruption? Follow the money!

There are some people who are convinced that corruption will be a key issue in the 2016 election. They are convinced that it will be a basic consideration of people when they select the man or woman who will be president after PNoy.

I hope they are right, but I doubt it. Talking about corruption in this country is like talking about the weather. Everyone talks about it in the full knowledge that they can or will do nothing about it. And when they vote, they vote for a kababayan, kamaganak or some celebrity regardless of reputation for corruption.

I have also covered government long enough to know that corruption is like the traffic jams… we have accepted some amount of it and we seem resigned about being helpless to change the system. 

We get genuine citizen shock now and then, like when the Napoles pork barrel kickbacks first came to light. I am even surprised things progressed as far as getting three sitting senators in jail. But that too seems destined to become background noise sooner than necessary to produce change.

Corruption is not inherently Filipino. It plagues nations all over the world. It came as a package deal when the Americans introduced their brand of democracy to us. And we have improved on it since then. American politicians steal 10 or maybe 20 percent of a project budget. In the Napoles cases, 100 percent is being stolen.

For us Filipinos, we cannot think of government without thinking about corruption. From the lowly MMDA or barangay traffic aides to members of Congress and Cabinet members, we automatically assume they want something extra when we deal with them. And we have found convenient social conventions to make everything look less detestable.

So that when PNoy suggested that a new regime of Matuwid na Daan is upon us, most of us could hardly avoid rolling our eyes or snicker. Of course we all know better. Now, four years into his watch, we are sad to say that even if PNoy himself seems to still be lily pure, Matuwid na Daan itself is a joke.

Take that controversy over the supposed attempt to extort some millions of dollars from Czech rail car suppliers. I found it strange that even if there was a need to protect the reputation of PNoy’s oldest sister who was implicated in it by the culprits seeking cover, Malacañang didn’t lift a finger. 

Indeed, Malacañang spokesmen even sounded like lawyers for the government bureaucrat accused by the Czech Ambassador. I suspect that the attempt was part of a fund raising scheme of the Liberal Party.

The way it works… Aquino officials can continue to deny everything with a straight face because in truth, they were not getting anything. If at all, contributions would be made by grateful private parties to the Liberal Party.

That’s also what I suspect was behind the garlic cartel… and the anomalies in NFA rice importations. These are fund raising schemes to benefit the Liberal Party that would keep the hands of party members involved seem clean. We can expect more such schemes will be tried, and some will be successfully executed, as 2016 draws near.

As for investigations, it is easy to see that we don’t really want to get to the bottom of corruption allegations. We find it enough to talk about these… and sound outraged. Opposition politicians will even use the corruption allegations to serve their interests.

That’s what’s going on with the Senate hearings on the gold plated Makati parking building. The objective seems to be short term and not really to expose how the entire scheme was done and clean up the system.

It is easy to suspect that no one really wants to uncover everything publicly. The politicians exposing today’s incumbent politicians would want to use the same strategy of accumulating and hiding spoils of corruption once they get into power.

If we want to really know the full story, the Senate must follow the money. COA is only helpful up to a point because COA auditors, resident or head office based, become part of the scheme or are too intimidated to do a good job. I even doubt if there are any Filipino forensic accountants ready to put career and life on the line to expose the real story.

There may be a need to hire foreign forensic accounting experts to trace the flow of money in suspect deals. There is a need to go beyond the obvious.

For example, favored contractors of government buildings may be guilty not only of overpricing. The bigger story is in possibly actually safekeeping the politician’s share of the loot.

A big construction company is the perfect place to hide such large amounts of money in plain sight… since the construction business involves large amounts of money anyway. Usual audit procedures are not likely to uncover such things easily. The BIR may even find it difficult to do an honest audit because of the strong political links of the big construction firms.

And in the case of that parking building, it would require a foreign expert to put a value on the structure on an as built basis. If they are not doing this yet, then we know they are not serious about that corruption investigation.

We also need to give our Ombudsman more teeth. Ombudsman Conchita Carpio Morales told an audience of Filipinos in London this week that she needs more powers to be effective. Among others, she wants the power to freeze accounts of public officials about to be subjected to investigation. She said it makes no sense to alert them by seeking a court order to do it.

Justice Morales is right. The anti-corruption agency of Indonesia had been effective because they had real powers. But don’t expect our Congress to pass such a law. Indeed, the SALN should have a paragraph declaring that the public official is waiving his or her rights under the bank secrecy law.

Still, I wonder if there is hope for a better Philippines, one where corruption is not a way of life. Mayo Lopez, a professor at the AIM posted his thoughts on that big topic on one of my e-groups:

I suspect we are living in at least two mind worlds and several real world contexts in our exchanges.

One mind world comes from our past – the mind world of the idealistic college student of the 1950s to 1960s, schooled in the best thought traditions of the Anglo-American mind.

But we also have a sub-conscious mind world, one we prefer not to think about, but which has always affected us especially when the real world context is here in the Philippines.

Our real world context in the Philippines is a society that hasn’t quite jelled into a nation – strictly defined, not just a geo-political reality enforced by a colonial master who wanted to leave hastily. We are an agglomeration of “tribes” that have not learned to fully trust each other. And even within these “tribes”, the group we truly trust are those we consider “kapamilya at kaibigan” – marahil puede ng isama ang isa pa, “ka-uri”.

Unfortunately, some quiet, subtle changes – not for the better – have happened in the way our children and grandchildren have been formally educated. And the formal thoughts they have been schooled in are no longer, in a real sense, the thought traditions we were schooled in.

Take the concepts of civics and citizenship. Very different. Take the knowledge of country and peoples. We had a subject called “Philippine Geography”. They do not, and as I looked at the materials on the country my boys received in the elementary and high school, I was appalled.

Then I find out that putative presidential candidates giving vehicles to provincial governors and town mayors when he pays them a visit is not considered vote buying. It is mandatory “gift giving”, that quaint practice in feudal society when one overlord visits the domain of another overlord. It is only vote buying when money, not goods and services, changes hands.

But this is just the tip of the iceberg. It gets worse. I think many of our exchanges are centered on addressing symptoms.

Cheers!

Going back to all our corruption talk, if we really want to go to the bottom of things, we should just follow the money flow. In today’s Big Data world, that is easily done. 

There aren’t any real hiding places left. Mining Big Data is how to uncover the roots of corruption that has so plagued us all these years. But we won’t dare to really know.

Boo Chanco’s e-mail address is bchanco@gmail.com. Follow him on Twitter @boochanco

                                    

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SEC probed GSK in 2012 September 10, 2014

A UNITED States anti-bribery probe into GlaxoSmithKline Plc touched on the firm’s Chinese consumer healthcare business in 2012, internal documents show, suggesting the drugmaker’s compliance problems in China could go wider than previously revealed.

GSK confirmed it had conducted an investigation into procurement practices in consumer healthcare in China, but said it did not find any “unethical conduct”.

It said the inquiry was unrelated to a Chinese criminal investigation into corruption in its pharmaceuticals division that was made public last year.

Three “preservation notices” seen by Reuters show GSK was conducting a focused investigation into specific people and suppliers in China at least as far back as 2012.

The investigation was related to a Department of Justice (DoJ) and Securities and Exchange Commission (SEC) inquiry into possible violations of the anti-bribery Foreign Corrupt Practices Act.

“The preservation notices issued in 2012 relate to allegations around adherence to procurement policies within our Chinese consumer healthcare business,” said Simon Steel, a British-based spokesman for GSK, in a statement.

“We investigated using resources inside and outside the company and did not find evidence of unethical conduct, but did identify some non-compliance with our procurement procedures and remedial action was taken as a result.”

GSK has previously flagged that it has been part of a wider global investigation by the DoJ and SEC into pharmaceutical corruption, including in China, since 2010, but few details of the scope of that investigation have been disclosed.

The documents do not amount to evidence of wrongdoing by GSK or its partners, but show scrutiny falling on a part of its China business that had not previously been identified as under the spotlight.

Legal experts said the more far-reaching the US probe, the greater the risk to GSK that it could ultimately face a multi-million dollar settlement payment or fine.

GSK’s consumer healthcare segment, which spans products from Panadol painkillers to its Horlicks nutritional malted milk drink, raked in £5.2 billion (RM27.4 billion) last year, making up one-fifth of the firm’s global turnover.

The drugmaker is also facing bribery allegations in Syria, Iraq, Jordan, Lebanon and Poland.

Chinese police have separately proposed corruption charges against GSK executives after alleging widespread bribery at the firm in July last year. Reuters

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Corruption Currents: From Mooncake to Dumpster Dives


Mike Lucas

China’s corruption crackdown is taking a bite out of the nation’s mooncake economy. The money laundering probe of a former U.S. ambassador started with a dumpster dive.

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Conviction of Ex-Virginia Governor Highlights US Anti-Corruption Strategies

The corruption convictions of Virginia’s former governor and his wife represent an aggressive strategy by the FBI and the Department of Justice to identify and punish official misconduct while in office.

In a Richmond, Virginia, federal courtroom Thursday, Republican Robert McDonnell, 60, was convicted of 11 counts, including charges of conspiracy, bribery, and extortion. His wife, Maureen was found  guilty on nine of 14 charges.

Improper actions

The McDonnell case, which has been in motion since 2013, centered on whether the governor and his first lady acted improperly in accepting at least $50,000 in gifts and $120,000 in loans from Richmond businessman Jonnie Williams.

Williams, the founder and CEO of a company called Star Scientific, wanted the governor to promote his products, especially a dietary supplement.

Williams, the prosecution’s star witness during the trial, was given full immunity in exchange for his testimony.

McDonnell and his lawyers argued that it was the duty of a governor to promote the state’s businesses and that there was no “quid pro quo” between Williams’ gifts and favors and official endorsement of Star Scientific.

Former Virginia Gov. Bob McDonnell, right, and his wife Maureen, center, leave Federal court after a motions hearing in Richmond, Va., May 19, 2014.Former Virginia Gov. Bob McDonnell, right, and his wife Maureen, center, leave Federal court after a motions hearing in Richmond, Va., May 19, 2014.

The ex-governor’s lawyers also tried—and failed—to pin any improper behavior on McDonnell’s wife.

“The jury did not believe Bob McDonnell’s testimony,” said University of Richmond Law Professor Henry Chambers. “They appear to believe that he took official actions in exchange for gifts and loans. In addition, they appear to believe that Bob and Maureen were in cahoots [conspired] in doing so.”

No immunity for public officials

Though the indictment against the couple wasn’t announced until 10 days after McDonnell left office, charges could have been filed while he was still governor.

Unlike many countries, the United States as a whole, and the individual states, do not afford elected officials immunity during their time in office. There have been plenty of instances over the years where sitting U.S. officials at various levels of government have been arrested and tried while still holding their posts.

Letting the case go to trial was a failed gambit for the McDonnells. Months ago they were offered a deal by federal authorities: if the governor agreed to plead guilty to one count of bank fraud—making false statements—the federal government would go no further. Under that deal, Maureen McDonnell would not have been prosecuted.

“McDonnell may have rejected the plea based on a belief that he was not guilty of the bank fraud and false statement charges,” said Chambers. “That may have fed into a belief that the government likely had even less evidence to support a conviction for the public corruption charges. If that was his mindset, rejecting the plea deal made sense.”

Wake-up call

Some McDonnell trial observers say this case should send a wake up call to politicians in the United States.

“I really cannot stress strongly enough how badly people are missing the boat if they think this is limited to Richmond,” Richmond attorney Chuck James told the Politico newspaper. “If politicians don’t look in the mirror and question their actions after this, they do so at their own peril.”













Related report by VOA’s Arash Arabasadi

Historically, Virginia has had rather weak laws governing official behavior. There has been a romantic tradition in the state, called “The Virginia Way,” under which officials are deemed to be honorable people who act properly until proven otherwise.

But in the United States, the federal government’s regulations ultimately trump such rules, and expose them to prosecution if violated.

McDonnell’s successor as governor, Democrat Terry McAuliffe, has pushed for ethics reforms since taking office in January. But McAuliffe faces a Republican-controlled legislature, and to some observers, that partisanship could make new laws and regulations difficult to pass.

Rise of populism

But that not may be the case, according to University of Richmond political science professor Dan Palazzolo. He said the jury’s verdict in the McDonnell case may be a reflection of a social phenomenonpopulismthat has grown in recent years.

“[There has been] a general rise of populism in response to public affairs since the 2008 bank scandal,” he said. “Jurors bring perceptions of what is right and wrong with them to a trial, and the public has become much more sensitive to actions taken by powerful elite decision makers. This case exposed to the public and the jury an extreme case of what is wrong with public leadership in America today.”

Sentencing for Bob and Maureen McDonnell is set for January 6. Ahead of that, their separate legal teams say they plan to appeal the convictions. If all convictions stand, both face up to 30 years in prison.

But, as is often the case, some of the convictions may be reversed on appeal. But rarely are all convictions dismissed.

“The McDonnells are likely facing guideline sentencing ranges of 10 years or even longer based on the offense facts described here,” said Ohio State University Law Professor Douglas Berman in his “Sentencing Law and Policy” blog.

“I presume they should be able to get some top-flight attorneys to make some top-flight arguments for below-guideline sentences,” he wrote. “But, at least for now, I am inclined to urge former Gov. McDonnell to expect to be celebrating his 65thand maybe also his 70thbirthday in the ‘Graybar Hotel’ [prison].”

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