As tremors of distrust resonate throughout Russia due to widely-believed allegations of fraud in Sunday’s Parliamentary elections, new research reveals that US$501.3 billion in illicit money has left the country in the ten years (2000-2009) following Vladimir Putin’s rise to power. The forthcoming report, Illicit Financial Flows from Developing Countries over the Decade Ending 2009, is to be published next week by Global Financial Integrity (GFI). To make matters worse, The Wall Street Journal reports that Finance Minister Anton Siluanov has predicted net capital flight upwards of US$85 billion for this year, further adding to the illicit component of GFI’s estimates.
A statement released by the Organization for Security and Cooperation in Europe (OSCE) described the contest as “slanted in favor of the ruling party,” pointing to “several serious indications of ballot box stuffing.” By Tuesday, police arrested around 800 protesters across Russia, including those defying the rally ban in Moscow, and were bracing for a potential protest of 14,000 this coming Saturday in what could be the decade’s largest opposition demonstration in Moscow.
It is appropriate that the United Nations officially recognizes Anti-Corruption (9 December) and Human Rights (10 December) on two consecutive days as the two issues are inextricably linked. Article 25 of the Universal Declaration on Human Rights states that “Everyone has the right to a standard of living adequate for the health and well-being of himself and of his family, including food, clothing, housing and medical care and necessary social services…” Corruption undermines a society’s ability to attain these basic standards. When corrupt individuals and institutions steal aid money, or a Multinational Corporation exploits a country’s resources or shifts profits to evade taxes, it is the average citizen that suffers lack of food, education, medical care, and more.
This year the Task Force has been joined by member organizations and Global Financial Integrity Advisory Board member Dr. Thomas Pogge in showing our support of anti-corruption and human rights. In a piece written for the Task Force, Dr. Pogge examines how corruption contributes to the continued under-fulfillment of basic socioeconomic rights and rising global inequality. Task Force Members have joined together to discuss how the work of each of their organizations helps promote and defend human rights. It is important to recognize that we are all in this together. For this years’ Anti-Corruption and Human Rights days let’s reflect on how greater transparency and accountability in governments, business, and other institutions will help ensure basic human rights and standards of living.
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In this video, Integrity Watch Afghanistan monitors infrastructure projects in Afghanistan. They go out into the field through community monitoring to make sure that projects are done right, and aid money is well spent. At one point, they even directly confront contractors for shoddy work.
Civil society development in Afghanistan is enormously important for the future of the impoverished, war-torn nation, and this video does an excellent job of showing how concerned Afghanis and NGOs are working to build accountable institutions from the ground up.
Socioeconomic rights, such as that “to a standard of living adequate for the health and well-being of oneself and one’s family, including food, clothing, housing, and medical care” (UDHR, Article 25), are currently, and by far, the most frequently unfulfilled human rights. Their widespread underfulfillment also plays a major role in explaining global deficits in civil and political human rights demanding democracy, due process, and the rule of law. Extremely poor people — often physically and mentally stunted due to malnutrition in infancy, illiterate due to lack of schooling, and much preoccupied with their family’s survival — can cause little harm or benefit to the politicians and civil servants who rule them. Such officials therefore pay much less attention to the interests of the poor than to the interests of agents more capable of reciprocation, including foreign governments, companies, and tourists.
Contrary to much official rhetoric, these problems are not being overcome. The number of chronically undernourished people, for instance, has risen since the 1996 World Food Summit in Rome where the world’s governments promised to halve it by 2015. Reported at 788 million in 1996, this number has in 2009 broken above 1 billion for the first time in human history.
A key driver of the persistence of severe poverty is rising global inequality. While the top five percent of the world’s population increased its share of global household income from 42.9 to 46.4 percent in the 1988–2005 period, the share of the poorest quarter declined by a third from 1.16 to 0.78 percent — despite all the development assistance. Clearly, and unsurprisingly, the rules of the world economy are better aligned with the interests of the world’s affluent than with those of the poor.
In November of this year, more than 30,000 people, most of them from China, donated about $1.4 million to one man. The donations flowed in all shapes and sizes—wrapped around fruit and thrown into his lawn, folded into paper airplanes, and one even wired in from the German government’s human rights commissioner. The man wasn’t a spiritual leader. He wasn’t ill and he wasn’t going to donate any of it to charity. In fact, he deposited nearly the entire sum into a government account—as a guarantee on his tax evasion charges. The man—not a leader or a humanitarian—is an artist.
His name is Ai Weiwei and the Chinese government claims his design firm, Beijing Fake Cultural Development Ltd, owes it nearly $2.4 million in back taxes and fines. Ai has responded he doesn’t even own the company.
It is likely Ai Weiwei’s true crime is not tax evasion, but dissent. Ai’s art, most of it exhibited abroad, is called “social sculpture” by most of those in the West, but labeled “political protest” at home. For much of his art he uses Twitter and a blog as a platform to reach and interact. His installations include a piece in Germany made of 9,000 children’s backpacks, in memory of the students who died in the poorly built schools in Sichuan that collapsed during the earthquake in 2008.
Insight: African leader’s son tests U.S. anti-corruption push
Reuters, December 2, 2011
Imperative For Values-Based Leadership In Nigeria, Africa
Nigeria Masterweb Daily News, December 3, 2011
Public outcry “set to topple banking secrecy”
Swiss Info, December 5, 2011
Christian Aid group meets with MP
The Watford Observer, December 5, 2011
How multinationals conduct big rip-offs
The Citizen (Tanzania), December 4, 2011
An upcoming report by Global Financial Integrity finds that Ethiopia, which has a per-capita GDP of just US$365,lost US$11.7 billion to illicit financial outflows between 2000 and 2009. More worrying is that the study shows Ethiopia’s losses due to illicit capital flows are on the rise. In 2009, illicit money leaving the economy totaled US$3.26 billion, which is double the amount in each of the two previous years.
The report, titled Illicit Financial Flows from Developing Countries over the Decade Ending 2009, shows that the vast majority of the rise in illicit financial flows is a result of increased corruption, kickbacks, and bribery while the remainder stems from trade mispricing.
WisdomTree Local Debt ETF And Emerging Markets’ Bearish Short-Term Outlook: Part 1
Seeking Alpha, December 1, 2011
Corruption index 2011 from Transparency International: find out how countries compare
DataBlog, December 1, 2011
Global corruption index reflects Arab Spring unrest
Reuters, November 30, 2011
Norway’s wise ways on aid
The Guardian (blog), December 1, 2011
Shadow economy costing $7 billion in lost tax
TV New Zealand, December 1, 2011
Syria’s regime, led by President Bashar al-Asad, is on the ropes. Protests began in January, following uprisings across the Arab world, and have continued despite the regime’s efforts to stop them. These actions, according to Reuters, included having the Syrian Navy shell protesters in the city of Latakia, killing 36.
Even after the crackdown, Syrian officials have not succeeded in quelling the protests. In a sign that the regime may be failing, the Financial Times reported that capital flight from Syria into Lebanon is accelerating, despite strict new capital controls implemented in August. Any sharp increase in financial outflows signals that individuals inside Syria are losing faith in al-Asad’s ability to govern. Members of the regime may attempt to move their money into any number of international secrecy jurisdictions to protect it from seizure were al-Asad to fall.
Illicit outflows are not new to Syria. An upcoming report by Global Financial Integrity estimates that from 2000-2009, Syria lost $23.6 billion from corruption, trade mispricing, bribery, and other illicit activity. In a country with a per capita GDP of just US$2,891 in 2010, these outflows represent a loss of US$1,048 for every Syrian citizen. GFI’s study also finds evidence that bribery, kickbacks, and corruption increased dramatically from 2005-2009. It’s no wonder that Syrians are discontent.
How a Chinese cave got listed on the U.S. stock market
Reuters, November 30, 2011
Developing Nations Lose Billions to Multinational Tax Dodging
IPS, November 28, 2011
France Strengthens Fight Against Tax Fraud
Tax-News.com, November 30, 2011
Judge Tentatively Tosses Lindsey Case, First Foreign Bribery Trial Conviction
Wall Street Journal, November 29, 2011
Russia’s Shrinking Bribery Problem?
Wall Street Journal, November 29, 2011
By now, I’m sure you’ve heard Google’s informal and now iconic motto “Don’t be Evil.” Google describes this slogan as twofold. To the company, the motto is first about providing its “users unbiased access to information, focusing on their needs and giving them the best products and services.” Second, it is more generally about “doing the right thing,” including “following the law, acting honorably and treating each other with respect.” While some on this blog (and even Steve Jobs once) have accurately pointed out ways in which Google has failed to act by this code, in many other ways, the company also strives to live up to this motto.
Google’s motto, whether or not it is sincere, invites two responses. First, and perhaps most obviously, it attracts intense scrutiny from individuals, advocacy organizations, and the media. When it fails to live up to a particular moral standard—from tax evasion to children’s doodles—it garners intense criticism. But second, it invites a constant stream of requests from the public on how it might follow its motto. The most prominent examples currently are net neutrality and government censorship.
This constant stream is not a bad thing. The public should engage with corporations to encourage them to be more socially, environmentally, and politically responsible. Google’s concise motto might invite an onslaught of requests, but it also opens a dialogue. Particularly when Google is willing to respond. At the very least, it encourages the public to think about communication with corporations as a two way street.
How to Calculate How Much the Bribe was Worth
The Wall Street Journal, November 28, 2011
Bribery Scandal Involving Cayman Premier Still Brewing
Caribbean 360, November 24, 2011
Banks Resist Rougher Rules for Tracking Shady Accounts
The Sydney Morning Herald, November 28, 2011
Anti-Money Laundering Experts Inspect Vatican
The Associated Press, November 29, 2011
U.S. blacklisting seems to have little consequence in Mexico
The Los Angeles Times, November 28, 2011
December 18, 2014·
Developing countries are losing twice as much money as they earn because of issues like tax evasion, profits taken out by foreign ...
December 17, 2014·
WASHINGTON D.C.—The Financial Transparency Coalition congratulates two members of its Coordinating Committee who were named to the International Tax Review’s “Global ...
December 17, 2014·
BRUSSELS — In a deal reached last night, parliamentarians and campaigners have succeeded in making company ownership a fundamental topic. While EU ...