On September 7th, 1822 Prince Pedro, the Portuguese Prince of Brazil who represented the monarchy in the Brazilian colony, received a letter. It was from the Princess Maria Leopoldina, his wife, and it advised him to give the county its independence after nearly two years of rebellion. Prince Pedro heeded his wife’s advice [always the right move]. Later that day, standing on the shores of the Ipiranga River in Sao Paolo, Pedro declared Brazil’s independence, ending 322 years of colonial rule.
According to legend (and artistic recreations of the event) a very refined looking Pedro, dressed in a military suit, brandishing a sword, and mounted on a horse, announced to a cheering crowd: “Armbands off, soldiers. Hail to the independence, to freedom and to the separation ofBrazil. For my blood, my honor, my God, I swear to give Brazil freedom. Independence or death!”
On Wednesday, exactly 189 years after this moment, tens of thousands of Brazilians demonstrated in the nation’s capital, rallying against endemic corruption that now plagues their country. On external appearances, the movement wasn’t nearly as refined. These protesters wore face paint and large red clown noses, some chanted slogans, and others gathered outside government ministries with mops and buckets in a symbolic gesture to “wash away” corruption.
Corruption costs China’s economy a pretty penny. A report from China’s own central bank estimates that “up to 18,000 corrupt officials and employees of state-owned enterprises” have absconded with 800 billion yuan, or $123 billion, of state money since the 1990s. In a recent speech given to celebrate China’s Communist Party’s nineteenth anniversary, President Hu Jintao specifically addressed the importance of “rampant corruption” and the impetus to create a “clean government.” And Minxin Pei, a former scholar for the Carnegie Endowment for Peace, estimates that China’s government loses as much as 10% of government spending in kickbacks and corruption, calling it “one of the most serious threats to the nation’s future economic and political stability.”
I’ve written before about one of China’s (wrongheaded) approaches to tackling corruption: the death penalty. The country frequently—and publicly—executes high-level and mid-level officials for convictions of corruption; sentences that are often met with public cheers. Recently, Chinahas executed the Chief of the State Food and Drug Administration; the head of the Municipal Judicial Bureau of Chongqing City; and the vice chairman of the Standing Committee of the National People’s Congress. All of the officials had one crime in common: taking bribes.
Green MEP Sven Giegold tabled a question to the European Commission in July asking about the EU’s position on the IASB’s revision to its constitution that has downgraded its obligation to anyone but those people who use accounts to make investment decisions. I discussed that issue here.
Now the Commission has replied as follows:
Answer given by Mr Barnier on behalf of the Commission
The Commission shares the view of the Honourable Member regarding the importance of properly taking into account the public interest in the IFRS standards setting.
HBR Case Study: Culture Clash in the Boardroom
Harvard Business Review, September 2011
Swiss agreement: the international ramifications
AccountancyAge, September 1, 2011
EU Criticizes Italy Budget Plan On Tax Evasion
Dow Jones, September 2, 2011
Restaurants in Greece refuse to pay VAT rise
Financial Times, September 1, 2011
Taxes: How To Turn In Your Neighbor to the IRS
Wall Street Journal, September 3, 2011
For any act of corruption, there is a demand—that is, a venal official who is willing to accept a bribe—but there is also a supply—an individual or business willing to supply it. The dualistic nature of corruption is a headache, particularly for public individuals and institutions interested in stemming the harmful practice. For example, India’s environment minister, Jairam Ramesh has commented on the difficulty for environmental regulators inIndia to check violations of green controls. He noted “I can control the demand for corruption but someone has to control the supply of corruption too. I cannot stop that.”
Fortunately, as a result of efforts by organizations like the Center for International Private Enterprise, international aid and development organizations have increasingly understood the importance of addressing both the supply and the demand of corruption.
U.S. aims to track ‘untraceable’ prepaid cash cards
MSNBC, September 1, 2011
UK Announces First Bribery Act Charges
Wall Street Journal, August 31, 2011
UAE begins enforcing cash declaration law
Emirates 24/7, September 1, 2011
Transnational Organized Crime and Mass-Marketing Fraud: A Call for a Swift and Collaborated Response
Brookings Institution, August 31, 2011
PFI shareholders are using tax havens, MPs find
AccountancyAge, September 1, 2011
The European Commission will make a proposal for introducing country-by-country reporting (CBC) for extractives industries and possibly forestry companies at some point this autumn. This comes following an EU Council request earlier in 2011 that called upon
“the Commission to come forward with initiatives on the disclosure of financial information by companies working in the extractive industry, including the possible adoption of a country-by-country reporting requirement, International Financial Reporting Standards (IFRS) for the extractive industry, and the monitoring of third-country legislation.”
This will then be submitted to the European Parliament. The European Council will consider the changes if they pass through the parliament, so legislation might be passed, most probably next year. There has been a particular focus on extractives because of the prominence of concerns about energy security, environmental destruction, corruption, and the resource curse—recently exemplified by events in Libya. To address these problems, greater transparency is needed about resource concessions and the revenues they create.
Some companies pay their CEOs more than Uncle Sam, study says
Washington Post, August 31, 2011
Uganda: URA Studying Transfer Pricing Regulations
AllAfrica.com, August 30, 2011
U.S. Probes Oracle Dealings
Wall Street Journal, August 31, 2011
Junkets ‘encourage money laundering’: Wiki cables
Macau Daily Times, August 30, 2011
World Bank Should Refocus Its Anti-Corruption Fight, Audit Says
Bloomberg, August 31, 2011
Companies often act charitably for reasons of self-interest. Most often they donate to charities for the public-image benefit. The perfect example is Product(Red), which has partnered with major corporations including American Express, Gap, Converse, Starbucks, Apple, Dell and Hallmark. These companies donate a portion of their profits from their sales of RED products to the Global Fund. In return they get a feeling of accomplishment and satisfaction for their good deed. Or…they get a lot of good press, which (hopefully, for them at least) translates into a bigger bottom line.
In fact, as theories go, the evidence supports the latter over the former. Companies participating in Product(Red) have embarked a costly advertising campaign, eager to notify the public of their charity. In 2007, estimates placed the collective marketing costs of Product(Red) as high as $100 million, yet the products generated only $18 million in charitable contributions. Also, many retailers either inflate or are ambiguous about how much of the sale price of RED products is actually donated to the Global Fund. For example Apple’s website declares that “proceeds from every [RED] iPod Nano sold go directly to the Global Fund to fight AIDS in Africa.” How much exactly? About $10 of the $149 – $179 of the price of a Nano. For that kind of slim margin, a prudent consumer might as well buy one on eBay for $125 and donate the remainder themselves.
But does it really matter? In the absence of good press, many of these companies likely would not have donated any money at all to the Global Fund. So, hypothetically, whether Product(Red) generates $1 million or $100 million for charity is irrelevant—any increase at all is an increase that might not occurred without public demand and therefore is positive. On the other hand, the campaign might mislead consumers if they believe their purchases have a larger charitable impact than is true.
Murdoch expands internal inquiry of UK papers
Reuters, August 30, 2011
Archer Daniels Midland in US fines alert
Financial Times, August 30, 2011
Drilling Firm Fires Unit President in FCPA Probe
Main Justice, August 30, 2011
Michael Mukasey pushes to alter bribery law
Politico, August 27, 2011
Greece to name tax dodgers on Internet in bid to boost weak revenues
AP, August 30, 2011
Since the forces of the Libyan Transitional Council entered Tripoli last week, Muammar Qaddafi has not been seen, presumably hiding or on the run from the revolution aimed at ending his 42-year rule. But as pointed out on ABC News last Wednesday, much of the money he looted from the country over the past 4 decades is still at large as well.
Citing Global Financial Integrity (GFI) research, ABC notes that at least $33 billion dollars left the country through illicit means in the past decade. Explaining the figure, GFI’s Monique Danziger noted:
Libya has the “spottiest” data reporting of the 162 countries that report financial figures to the IMF and World Bank.
This, No Middle-Class, Weekend Revolution
International Business Times, August 29, 2011
Anna Hazare Ends Hunger Strike as Indian Parliament Agrees to His Demands
New York Times, August 28, 2011
Glencore To Declare Support For Ethical Mining To Spruce Up Its Image
This is Money, August 29, 2011
Royal Canadian Mounted Police Raid Calgary Miner over Bribery Allegations
Globe and Mail, August 29, 2011
George Osborne warns tax cheats: ‘I will find you and your money’
The Guardian, August 28, 2011
February 20, 2014·
Joint NGO media reaction Financial Transparency Coalition – Eurodad - Global Witness - Oxfam A cross political party agreement in the European Parliament ...
December 5, 2013·
The FACT (Financial Accountability and Corporate Transparency) Coalition today praised Representative Lloyd Doggett (D-TX) and Representative Rosa DeLauro (D-CT) for the introduction ...
December 3, 2013·
Transparency International’s Corruption Perceptions Index 2013 offers a warning that the abuse of power, secret dealings and bribery continue to ravage societies ...