Sunday, October 25, 2009

Inaction Against Corruption in South Asia

Under the US Foreign Corrupt Practices Act (FCPA), all American companies are required to provide details of illegal payments made in foreign countries.

Paxar Corporation, a New York listed company recently acquired by Avery, acknowledged paying $30,000 to bribe Pakistani customs officials in 2008 through its local customs broker. Avery, a California-based company, manufactures and markets various office products in several dozen countries around the world.

In a settlement with the SEC, Avery has agreed to pay over $300,000 in fines, and accepted SEC's cease-and-desist order to stop its corrupt practices.

Here is a list of FCPA violations involving Indian entities reported to the Indian Prime Minister by India's US Ambassador Meera Shanker in Washington:

* On January 9, 2009, Mario Covino of Control Companies allegedly pleaded guilty to making illegal payments of over $ 1 million to employees of state-owned entities, including the Maharashtra State Electricity Board.

* On Feb 14, 2008, Westinghouse Air Brake Technologies Corporation’s Indian subsidiary, Pioneer Friction Ltd, settled civil charges in connection with improper payments to employees of Indian Railways. The $137,400-payment was made between 2001 and 2005.

* Subsidiaries of York International Corporation allegedly made improper payments of over $ 7.5 million to secure orders in various countries, including India. Payments were made from 2001 to 2006.

* C Srinivasan, a former president of A T Kearney India Ltd, allegedly made improper payments of $720,000 to senior employees of two partially state owned enterprises in India between 2001 and 2003.

* Textron’s subsidiaries allegedly made improper payments to secure contracts in various countries including India in the 2001-2005 period.

* Dow Chemicals subsidiary, DE-Nocil Crop Protection Ltd, allegedly made improper payments to various officials, including to an official in Central Insecticides Board. Pride International too, may have made third-party payments.

In spite of the well-publicized actions of the US government under FCPA, there appears to have been no government investigations ordered or actions taken against the corrupt officials on the receiving end of the reported bribes from the US companies in India and Pakistan.

It is because of the total impunity for the corrupt politicians and officials in Pakistan that corruption has surged by whopping 400 percent in the last three years, according to the National Corruption Perception Survey 2009 carried out by Transparency International. The return of democracy under a US-sponsored amnesty for the current leadership has not helped in holding the corrupt accountable. On Transparency International survey for 2008, Pakistan fares badly, ranking at 134 on a list of 180 nations surveyed. By comparison, India ranks higher at 85 while Bangladesh ranks lower at 147.

The National Corruption Perception Survey 2009 (NCPS 2009) indicates that the overall Corruption in 2002 has increased from Rs.45 Billion to Rs.195 Billion in 2009. Police and Power maintained their ranking as the top two most corrupt sectors.

There has been remarkable improvement in Judiciary. As compared to 2006 when it was ranked 3rd most corrupt sector, in 2009 Judiciary is ranked 7th, The News reports.

Postscript: According of Professor Mike Koehler of Butler University School of Law, the FCPA does not contain any affirmative disclosure obligation, as the opening paragraph of this post suggests. However, I do believe that there are certain practical benefits of self-disclosure, such as no prosecution for past violations or lighter or suspended sentences etc.

An example is the case involving a Dutch software company, Paradigm, that caters to the oil and gas industry. After the company relocated its principal place of business from Israel to Texas in 2005, it discovered it had either made or promised numerous bribes to officials in five nations. The company pre-emptively confessed to Justice Department prosecutors, instituted remedial compliance measures, and ultimately ended up with an 18-month non-prosecution agreement.

Related Links:

Haq's Musings


Avery Acknowledges Bribing Pakistani Officials

FCPA Violations Involving Indian Entities

The Story of Graft

Anti-Corruption Day, Blagojevich and Zardari

Bhutto Convicted in Switzerland

Corruption in Pakistan

Transparency International Survey 2007

Is Siemens Guilty?

Zardari Corruption Probe


Riaz Haq said...

Kamran Khan of the News sees Zardari's dwindling influence and rising power of PM Gilani:

President Zardari’s political problems are compounding rapidly as the key players, such as the Army, the judiciary and political allies who had facilitated Zardari’s ascent to the presidency despite PPP’s lack of majority in parliament last year are now having second thought that borders on repenting their earlier decision to let Zardari combine the powers of the supreme commander of the armed forces, the president and the PPP chief in one office.

Dwindling faith in President Zardari’s capacity to act as a neutral, corruption-free, nationally respected leader of Pakistan waned further early this month when the Washington-based International Republican Institute (IRI), a pro-democracy group financed by the US government, reported in an in-depth survey that only about two in 10 Pakistanis carry any favourable opinion about President Zardari.

As opposed to President Zardari’s terrible approval rating, the same IRI survey revealed that a big majority of Pakistanis, close to nine out of 10, hold the institution of the Pakistan Army in the highest esteem followed by the judiciary that won the support of seven out of 10 Pakistanis.

Immediate concern facing President Zardari, knowledgeable officials and a personal aide said, is not his sinking public image but the growing unease in relations with an increasingly assertive Prime Minister Yousuf Raza Gilani.

Gilani now wants unhindered authority on matters of government that include foreign relations, meaning no role for president in the external and national security affairs of the state. The prime minister, enjoying full confidence of the military leadership and the cabinet, has set on an independent course, often confronting President Zardari’s closest allies like in November last year when he removed the president’s blue-eyed retired civil servant Salman Faruqi from the important post of deputy chairman Planning Commission.

He followed that by sacking Mahmood Ali Durrani, the president’s handpicked national security adviser in January this year, and reinforced his position by neglecting Zardari’s preference for Dr Shoaib Suddle, a professional police official as the head of Intelligence Bureau, who was replaced by Javed Noor, an equally honourable professional police officer in May this year.

Gilani went on to consolidate his image of an independent and assertive prime minister in August this year when he asked President Zardari’s closest friend and important associate Dr Asim Hussain to resign as the prime minister’s adviser on petroleum and natural resources. And early this month, he sacked Latif Khosa, President Zardari’s nominated attorney general of Pakistan, whose case of allegedly accepting Rs 3 million as bribe was referred to him by the Chief Justice of Pakistan.

“The president fully understands that all critical actors of power play in Pakistan, along with almost full spectrum of political parties, are putting their act together to launch a final salvo against him soon,” conceded a personal friend and a close aide to President Zardari.

Riaz Haq said...

Here's a report about India's judges declaring their assets as part of the transparency campaign:

New Delhi, Nov 2 (IANS) Bowing to the popular demand and after a Delhi High Court ruling, which they have contested, the Supreme Court judges, led by Chief Justice of India K.G. Balakrishnan, Monday declared their assets. The CJI put the value of his assets at around Rs.18 lakh.

The judges’ assets were posted on the apex court’s official website Monday evening.

Though the declaration followed a Delhi High Court ruling in September, the apex court website said the judges were voluntarily making public the assets they held.

About Justice Agrawal’s decision to declare his assets, the apex court said the details of his assets have been “uploaded on the website on his special request”.

The assets declared by Chief Justice K.G. Balakrishnan were around Rs.18 lakhs, including his two-bedroom flat in Ernakulam worth Rs.5.75 lakh, his vacant residential plot in Faridabad measuring 444.44 sq yard valued at 4.50 lakh, and his native house in Thrikkakara South village in Kerala.

The CJI also declared other landed properties in Kerala, worth Rs.3.5 lakh and Rs.4.33 lakh. He said his wife has gold jewellery weighing 20 sovereigns and an old Santro car of 2000. He said he has no investment in shares or fixed deposits.

The apex court’s second senior most judge, Justice S.H. Kapadia, appeared to be richer than the CJI.

Justice Kapadia put the value of his declared assets at over Rs.48 lakh. The declared assets include flats, buildings, shares, mutual funds, fixed deposits, provident funds. He said he owned no vehicle.

The third senior most judge, Justice Tarun Chatterjee, declared cash worth around Rs.3 lakh, but he said that he has other properties like vehicles, gold jewellery of his wife and some ancestral property in Kolkata. Justice Chatterjee’s vehicles include a Chevrolet Tavera and a Honda Seil.

The court’s fourth senor most judge, Justice Altamas Kabir declared assets of around Rs.80 lakh, including ancestral property, besides LIC policies and saving accounts.

The fifth senior most judge, Justice R.V. Raveendran, gave a detailed account of his assets running into five pages with the exact number of his shares, debentures etc.

According to the declaration, he owns shares in about 60 companies, including Reliance Group firms belonging to both Mukesh and Anil Ambani. He is also hearing a case on gas supply disputes between the firms of the two Ambani brothers and the government.

Riaz Haq said...

Here's more on the corrupt politicians and their families abusing power in Pakistan as reported by Daily Dawn today:

ISLAMABAD: Although the wife of Prime Minister Yousuf Raza Gilani had settled her default case with the National Accountability Bureau (NAB), she had been given ‘undue favour’ and asked to pay only Rs45.5 million against total liabilities of Rs570 million, sources in the NAB alleged on Saturday in an interview with Dawn.

A scrutiny of Fauzia Gilani’s case revealed that she had obtained two loans totalling Rs200 million from Zarai Taraqiati Bank Limited (ZTBL), but she settled the case after committing ‘wilful default that prevailed over a decade’.

According to documents, the sources said, the principal of Rs200 million had swelled to Rs570 million as non-payment of instalments spanned a decade. However, she managed to settle the case by paying back Rs45.521 million.

The sources said she had obtained a loan of Rs120 million for Multan Edible Oil Extraction and another loan Rs77 million for Pak Green Fertilisers.

According to the NAB press release, the cases were settled by the ZTBL in pursuance of the Sindh High Court’s order of Oct 2, 2006, and March 17 of last year and a circular of the State Bank.

In consequence, ZTBL forwarded a request to NAB for withdrawal of the cases.

Riaz Haq said...

Here's a BBC report about "ghost worker" costing $43m a year in Delhi city government:

The government of the Indian capital, Delhi, has been paying salaries to 22,853 civic workers who do not exist.

Salaries for the missing Municipal Corporation of Delhi workers add up to nearly $43m a year, City Mayor Kanwar Sain said in a statement.

The "gap" was discovered after the authorities introduced a biometric system of recording attendance.

Correspondents say it shows some civic officials created a list of "ghost workers" to siphon off state funds.

The Municipal Corporation of Delhi (MCD) employs more than 100,000 cleaners, gardeners, teachers and other workers.


City officials became aware there were thousands of "ghost workers" after introducing the biometric system in August last year.

Mr Sain said the civic agency has 104,241 "genuine" employees - while the records show the numbers at 127,094.

A press release issued by Mayor Sain's office said: "There is a gap of 22,853 employees in the Municipal Corporation of Delhi between the data given by drawing and disbursing officers, the head of the department and the number of employees enrolled for biometric attendance."

An "in-depth vigilance inquiry will be conducted into the matter to ascertain the facts," he said.

"Strict disciplinary action will be taken against officials who cooked the books," the mayor said.

It was long suspected that the city was being defrauded by "ghost workers", but the authorities had always denied the charge.

Riaz Haq said...

Here's a World Bank assessment that corruption retards investment in Pakistan:

ISLAMABAD: The World Bank finds corruption a serious and growing obstacle to the investment climate in Pakistan besides expressing dissatisfaction over the issue of governance in the country.

In its 128-page draft report on Pakistan’s Investment Climate dated March 16, 2009, the WB said that corruption is largely associated with business-government interface and reveals that the menace is more widespread here as compared to other countries though the bribe rates here are lower. Referring to a survey conducted for the formulation of the draft report, the Bank says that results show that perceptions about corruption in Pakistan are based on actual experiences with paying bribes by the investing firms. It reveals that the firms making investment in Pakistan have to pay bribes even to get water, telephone and electricity connections.

In view of WB clarification to The News Wednesday’s report on power sector and its observation that this correspondent has drawn inferences from the Bank’s draft report, select portions of the report pertaining to governance and corruption are being reproduced to end any confusion being deliberately created about the findings of WB in its draft report.

On the issue of government, the report in its page 64 and para 135, said, “Consistent interpretation and application of rules and regulations is an important reflection of good governance. Discretion or lack of predictability and consistency in the interpretation of rules and regulations (by government officials) is indeed a severe problem in Pakistan. Only 46 per cent of firms in Pakistan believe that the officials interpret rules consistently, compared with 60 per cent in comparator countries.”

On the issue of corruption, the report’s para 136 states, “Corruption, a serious and growing obstacle to the investment climate, is largely associated with business-government interface. Corruption is considered a severe constraint by more than half of all the firms (57 per cent) in Pakistan, significantly higher than the 40 per cent figure from 2002 and much higher than those of the comparator countries, with the exception of Brazil and Bangladesh. It is common for firms in Pakistan to pay informal payments to government officials to get things done. In 2006, three out of every four firms strongly agreed or tended to agree with the preceding statement.”

Para 137 of the report says, “Results show that perception about corruption in Pakistan are based on actual experiences with paying bribes. In other words, the probability that a firm reported corruption as a serious obstacle rises by 29-percentage point (against 57 per cent in the full sample) if the firm experienced at least one incident of bribe. As with perceptions of corruption, bribe incidence in Pakistan has increased 20 per cent over time-from 40 per cent in 2002 to 48 per cent in 2007.”

Riaz Haq said...

Here is a Christian Science Monitor report about politicians' corruption and violence in India:

New Delhi, India

When Ajay Kumar asked New Delhi authorities last fall why a local politician had authorized the construction of private houses and shops on public land, he didn’t imagine the question would land him in the hospital.

The activist had inquired using India’s 2005 Right to Information (RTI) Act, which allows any citizen to ask for information from any level of government, from village leaders to the office of the prime minister. It presents a cultural sea change in India, where for more than 60 years state bureaucrats have acted more like colonial masters than servants of the people.

Mr. Kumar was stonewalled by the public information officer at the Municipal Corporation of Delhi, so he followed procedure and appealed to a higher-level public information office in the MCD. When he still heard nothing back, he went to the federal authorities, the Central Information Commission, which directed the MCD together with the police to jointly inspect the property.

But when Kumar arrived on site in January, he was attacked by a mob of two dozen that backed the local politician.

“Neither the police nor the people helped me,” says Kumar, who was beaten in the head repeatedly by an iron rod, leaving him unconscious and bleeding profusely. Kumar is now pursuing the matter in court.

Despite the attack, Kumar says, “RTI is the only tool that can bring an end to a corruption in India. Previously there was no point in asking [for information] because the applications were not replied to. At least now, since 2005, these public authorities are in some way compelled to answer queries of the public. It is a starting point.”

Kumar is optimistic that he will one day see justice, but critics say attacks like these are becoming increasingly common. In the past two months two respected information activists have been killed, and reports are emerging of many others who are threatened, bullied, and intimidated to silence their inquiries into government misconduct.
Attacks will likely increase

The RTI Act is among the most robust for information seekers around the world, and its strength is becoming clear in the backlash against people seeking to expose corruption.

"What has happened with the RTI Act is that it is threatening people in power,” says Colin Gonzalves, a Supreme Court lawyer and director of the New Delhi-based Human Rights Law Network. “We cannot underestimate how hostile the administration is to the implementation to this Act – not just the politicians but also the judiciary. RTI empowers people to say that the administration is the servant of the people that you are answerable to us. The physical attacks on the people I think are going to increase over the years."

In rural areas, the act is often utilized to uncover scams involving federal- and state-funded initiatives to provide employment, housing, food, and other services to the poorest segments of society. “You ask for a list of beneficiaries," says prominent New Delhi-based RTI activist Arvind Kejriwal. "Then you check that list and find out that many peope are dead and the list is bogus.”

Riaz Haq said...

Here are some excerpts from a recent by India's piece on the impact in South Asia of Swiss Bank secrecy law change forced by the United States:

SHAKEN BY the Swiss government’s recent announcement that it would reveal the names and account details of Indians who have stashed away an estimated $1.4 trillion ( Rs.62 lakh crore) in Swiss banks, the tax evaders are rushing the greenbacks back home. The Swiss are only waiting for the Indian Parliament to ratify the revised Double Taxation Avoidance Agreement (DTAA) that the two countries signed in August. The revised treaty is also likely to ensure that henceforth global shipping companies will be required to pay tax on their profits only in their country of domicile. Currently, though India has DTAAs with 79 countries, not all of them have provision for exchanging taxation-related information..............
As for the Swiss government, it could soon push its banks to exchange information related to the tax evaders’ bank account details, as per norms set by the Paris-based Organisation for Economic Cooperation and Development. The move is believed to have been prompted by intense pressure from G-20 nations. “This is worrying many Indians who have money stashed away in those banks,” says Jethmalani, adding: “So they are taking out their money and, for the time being at least, investing heavily in the market.”

And this has been happening in Pakistan as well, ever since the Swiss Parliament’s historic move to pass the Return of Illicit Assets Act (RIAA). There, too, the tax evaders have started transferring billions of dollars from their Swiss bank accounts to secret destinations in Europe and Asia. According to recent estimates, roughly $200 billion — four times the external debt of Pakistan — is stashed away in Swiss banks and is now being withdrawn. Top sources in Lahore say they have evidence that Pakistanis are moving their black money to two destinations — London and Islamabad — via PN, and opening sub-accounts with FIIs. “Our problems are similar. They are making everything above board, everything official,” said Ali Mohammed, a broker at the Karachi Stock Exchange.

Earlier this month, Christa Markwalder, president, Foreign Affairs Committee (Presidentin Aussenpolitische Kommission des National Rats) of the Swiss Parliament told Tarun Vijay, MP and national spokesperson of the Bharatiya Janata Party, that she had recently explained to Finance Minister Pranab Mukherjee about how the matter could be resolved to India's satisfaction. Incidentally, Vijay was the first to directly contact the Swiss government in this regard. But Jethmalani feels India is not pressing the Swiss hard enough. “Soon, there will be a crash of an unusual nature in the markets — because even if the Swiss government is keen, the Indian government does not seem to be keen to push the agenda,” says Jethmalani.

Riaz Haq said...

Here's a BBC report about alarm over rising corruption in India:

A group of eminent Indians says they are "alarmed" by the rising corruption which is "corroding the fabric" of the nation.

In an 'open letter', they have expressed concern about "widespread governance deficit almost in every sphere of national activity".

The group includes businessman Azim Premji and ex-central bank governor Bimal Jalan.

A number of corruption scandals have shaken India in recent months.

"Possibly, the biggest issue corroding the fabric of our nation is corruption. This malaise needs to be tackled with a sense of urgency, determination and on a war footing," the group wrote in an 'open letter to our leaders'.

The letter said that independent anti-corruption bodies should be set up "speedily".

The Congress party-led government is battling allegations of corruption over the allocation of telecom licences - why so-called 2G spectrum phone licences were sold in 2008 for a fraction of their value, costing the government $37bn (£23bn) in lost revenue, according to the national auditor.

Another high-profile inquiry is continuing into claims that organisers of the Delhi Commonwealth Games swindled millions of dollars from the October event.


Congress party president Sonia Gandhi said recently that corruption was a disease in India.

The group wrote that it was also "alarmed at the widespread governance deficit most in every sphere of national activity covering government, business and institutions".

"Widespread discretionary decision making have been routinely subjected to extraneous influences.

"The topmost responsibility of those at the helm of the nation's affairs must be to urgently restore the self-confidence and self-belief of Indians in themselves and in the State as well as in Indian business and public institutions which touch the lives of every Indian."

A recent report by US-based group Global Financial Integrity said the illegal flight of capital through tax evasion, crime and corruption had widened inequality in India.

Many also accuse governments and politicians of corruption in India.

Riaz Haq said...

India's corporate mafia is fuelling corruption, says Prashant Bhushan, according to

"The corporate mafia has come to control every institution of power and governance, be it politicians, bureaucracy, police and, to an extent, judiciary also," Bhushan told IANS in an exclusive interview.

"The corporate houses have become monstrously large and a law unto themselves. They get the law and policies made and decision taken including judicial decisions," he said, adding "very often they decide what the media will report or not report".

Bhushan, the son of eminent jurist and former law minister Shanti Bhushan, said any fight against corruption and for redeeming democratic institutions had to commence with transparency.

"The situation today is much worse than what it was in the early 1970s. At that time we did not have the corporate mafia controlling all the institutions. That was a situation when a powerful prime minister temporarily choked off democracy. Today, this corporate mafia is accountable and more dangerous," Bhushan asserted.

"This system is so bad. There is no point in preserving the illusion of functional democracy when it is clear that most institutions of democracy have crumbled or are non-functional. We need to restore proper democracy in the country and not preserve an illusion of democracy."

The lawyer said the only prescription for rescuing Indian governance from "corporate mafia" was "transparency" and people's right to know about the functioning of the state apparatus.

"Unless we wake up and start engaging in public issues and affairs, we are heading towards disaster," said Bhushan, who is facing contempt of court proceedings for highlighting the alleged misconduct of an apex court judge.

It was Bhushan who convinced the Supreme Court to monitor the Central Bureau of Investigation (CBI) probe into the allocation of 2G airwaves to telecom companies. He also spoke on his fight against corruption and allegations against Central Vigilance Commissioner (CVC) P.J. Thomas.

He said India was in a "very serious situation" and the "biggest threat was corruption that had spread in every vital sphere of the state's functioning".

The crumbling democratic institutions could be "repaired and restored" provided there was a "very strong people's movement in the country that would bring pressure on the institutions".

"Though the judiciary can play a useful role in that process", in the final count it needed the backing of a strong people's movement, he said.
"I think all problems have to be dealt with simultaneously. You cannot shut your eye to a problem in one institution in order to highlight it in another institution. This is a shortsighted policy which does not pay in the long run," he said.

Advocating an independent media, he said that the media should not be controlled by corporate houses or those who have a direct or indirect interest in other business.

Riaz Haq said...

Can civil society fight corruption? asks Soutik Biswas of BBC:

Are sections of India's civil society subverting democracy to pressure the government to push through tough anti-corruption laws?

The beleaguered Congress-party led government appears to think so. The senior-most minister Pranab Mukherjee has fired an uncharacteristic broadside at activist Anna Hazare's anti-graft agitation for resorting to hunger strikes, making unreasonable demands like video graphing meetings of a joint panel to discuss an ombudsman law and imposing deadlines on the parliament.

Mr Hazare is a well meaning Gandhian, who has a record of fighting corruption in his home state of Maharashtra. But he also has a predilection for making clumsy statements - he endorses capital punishment for the corrupt, for example. But few Indians deny that Mr Hazare has touched a chord, mostly among the country's fretful, politician-loathing middle classes, by pressuring the government to take a tough stand against corruption. Graft has become a way of Indian life, kept alive by the rulers and ruled alike.

Mr Mukherjee's barb is clearly not aimed at Mr Hazare alone. Last fortnight, Baba Ramdev, a thriving yoga guru with political ambitions, also began a hunger strike in Delhi demanding that the illicit money stashed away in foreign banks by rich Indians be brought back home. After futile negotiations with the guru, the government cracked down on his fast in the middle of the night, baton charged sleeping supporters and evicted him from Delhi. The police action earned the opprobrium of many Indians, and further battered the government's fast-eroding credibility.

Now the government appears to be trying to bottle the genie of Mr Hazare and Baba Ramdev's "movements", both of which it legitimised in the first place through recognition and negotiation. It seems to be also unable to handle the vicissitudes of these agitations, with its leaders blowing hot and cold against the government. Such a civil society movement, Pranab Mukherjee said, amounts to a "sinister move of destroying the fine balance between the three organs of government enshrined in our constitution".

"If someone dictates terms from outside to the government, does it not weaken or subvert democracy? It is a big question... We are all civil society, no one is uncivil."

Clearly, Mr Mukherjee's definition of civil society in the haste of a press conference is literal. The World Bank defines civil society to "refer to a wide array of non-governmental and not-for-profit organisations that have a presence in public life, expressing the interests and values of their members or others, based on ethical, cultural, political, scientific, religious or philanthropic considerations".
India has seen deeper, meaningful civil society movements which have been blithely ignored by most of middle class in the past. Only when a protest comes to Delhi in the full glare of 24/7 news television does it get attention. And more so, when it rallies against corruption - which actually hurts the poor more than the rich and the middle class.

By all means, many believe, an enlarged and more representative civil society - ideally a larger, wider group of people from all over the country, not just a bunch of well meaning lawyers and activists from Delhi - should be putting pressure on a stubborn government to act against corruption. Also, as development expert Rajesh Tandon reminds us, civil society is not intrinsically virtuous. And good graft-free governance does not come from reforming the state alone - it demands the reformation of society and its people. There are no short cuts to a more virtuous India.

Riaz Haq said...

Two former #Pakistan Generals punished in NLC corruption case by Military under Army Act: #ISPR

RAWALPINDI (Staff Report) – Inter-Services Public Relations (ISPR) on Wednesday said the two accused retired General Officers of Pakistan Army have been punished under the Pakistan Army Act in the light of inquiry conducted after violations were observed in NLC in 2009.

According to details the dismissal of Major-General (r) Khalid Zahir Akhter, implies forfeiture of rank, decorations, medals, honours, awards, seizure of pension, recovery of personal gains, cancellation of service benefits and all other allied facilities including medical whereas Lt-General (r) Muhammad Afzal has been awarded “Severe Displeasure” which in essence is a disciplinary award due to an offence of lesser degree.

On the other hand Lt-General (r) Khalid Munir Khan has not been found involved in any financial irregularity or serious misconduct and therefore stands absolved from all charges, ISPR statement said.

The inquiry was initiated by Defense Ministry after National Assembly’s Public Accounts Committee noted irregularities in the audit report of National Logistic Cell (NLC) in 2009.

Riaz Haq said...

Wanted by #US: The Stolen Millions of Despots and Crooked Elites. #Corruption #FCPA

It’s hard to imagine a public official with more toys than Teodoro Nguema Obiang Mangue, who spent $300 million on Ferraris, a Gulfstream jet, a California mansion and even Michael Jackson’s “Thriller” jacket. The buying spree is all the more remarkable since this scion of the ruling family of Equatorial Guinea, one of Africa’s smallest countries, bought all this while on an official salary of $100,000 a year.

But legal action by the Justice Department has brought an end to Mr. Obiang’s spendthrift ways. His $30 million Malibu estate is on the market, as are his luxury cars and six life-size Jackson statues. Proceeds from these sales are earmarked for citizens of Equatorial Guinea, who prosecutors claim are victims of Mr. Obiang’s “relentless embezzlement and extortion.”

The turnabout in Mr. Obiang’s fortunes is part of an effort by the federal government to recover assets it says were stolen by foreign officials — dictators, politicians and ruling elites — and laundered in the United States. Since its start in 2010, the Kleptocracy Asset Recovery Initiative has grown to include a dozen government lawyers and teams from the F.B.I. and Homeland Security.

“We don’t want the United States to be a haven for this money,” said Leslie Caldwell, assistant attorney general and head of the criminal division. “If it comes into this country, we have the ability to reach out and grab it. Kleptocracy undermines the rule of law and breeds crime and terrorism.”

Yet for all this firepower, the Justice Department has found that bringing cases against kleptocrats has been daunting, and seizing their assets even harder still. A total of 25 cases have been brought against 20 foreign officials under the Kleptocracy initiative, and the government is seeking to seize $1.5 billion, mainly in American real estate and bank accounts. But most of that money remains in legal limbo.

The government is stepping up efforts to halt the flow of illicit money into the United States through stronger anti-money-laundering rules, investigations into secret buyers of high-end real estate and measures to identify owners of anonymous shell corporations used to hide financial transactions.

Government prosecutors have taken aim at funds held by officials from Nigeria, Ukraine, Uzbekistan, South Korea, Taiwan, Honduras and even Canada. One case involves $630 million once controlled by the late Sani Abacha, the strong-arm Nigerian general who ran the country in the 1990s and reportedly took billions from it.

Another seeks $250 million said to be embezzled by Pavlo Lazarenko, the former Ukrainian prime minister who spent several years in an American prison on money-laundering charges. Then there is the glamorous Gulnara Karimova, the Harvard-educated daughter of the Uzbek president, who the government says absconded with $300 million from a telecom scheme and parked it in an American bank’s overseas branch.


In violation of a court order, Mr. Obiang whisked some of his holdings out of the United States and put them on display back home — including Michael Jackson’s famous white jewel-encrusted glove and all of his gold and platinum albums.

“Despite the efforts of some Western institutions to prevent these objects from coming to our country, justice has returned them to their authentic owner” an Equatorial Guinea government website says. Gone, too, is the $38.5 million Gulfstream jet — it flew away.

There are concerns that the money might end up in the Obiang family’s pockets. But the United States may have little choice. “No one is confident that this will work perfectly,” said Kenneth Hurwitz, senior legal officer with the Open Society Justice Initiative. “But that’s still better than if the U.S. didn’t try.”

Riaz Haq said...

#US government fines #Boston firm $4 million for bribing #NHAI officials in #India. The FCPA Blog - The FCPA Blog
Privately held CDM Smith Inc. entered into a declination with disgorgement Thursday with the Justice Department to resolve FCPA offenses in India.

The DOJ said employees and agents of CDM Smith and a wholly owned subsidiary in India paid $1.18 million in bribes to government officials. In return, the company won highway construction supervision and design contracts and a water project contract.

The Boston-based company made profits of $4 million from the tainted contracts.

The enforcement action is the seventh under the FCPA Pilot Program since the DOJ adopted it in April 2016. The program gives companies incentives to self-disclose, cooperate, and remediate FCPA violations.

Companies that qualify can receive a 50 percent discount on fines they might face under the U.S. Sentencing Guidelines.

CDM Smith has about 5,000 employees worldwide. Revenues were $1.2 billion in 2015. It provides engineering and construction services.

The DOJ said the bribery in India occurred from 2011 until 2015.

The illegal payments for the highway contracts were generally 2 percent to 4 percent of the contract price. The bribes were paid through "fraudulent subcontractors who provided no actual services and understood that payments were meant to solely benefit the officials," the DOJ said.

The company also paid $25,000 to local officials in the Indian state of Goa for a water project contract.

"All senior management at CDM India . . . were aware of the bribes . . . and approved or participated in the misconduct," the DOJ said.

CDM Smith agreed to disgorge $4.03 million. It "acknowledged" that it can't take a tax deduction for the disgorged funds.

The DOJ said it closed the investigation under the Pilot Program because CDM Smith disgorged its profits, made a timely voluntary self disclosure, did a comprehensive investigation, gave full cooperation, enhanced its compliance program, and fired all executives and employees involved in the FCPA offenses.

The declination with disgorgement from the DOJ to CDM Smith Inc. is here (pdf).

Riaz Haq said...

A gang of #Indian thieves steal bridge in #Bihar, #India. The robbers, posing as #irrigation dept officials, used gas cutters and earthmoving machinery to break down an abandoned bridge in Amiyawar village about 150 km (93 miles) south from #Patna.

The robbers, posing as government officials, used gas cutters and earthmoving machinery to dismantle the 60-feet-long iron bridge
Selling metal scrap can be a lucrative business in India, where cases of theft of metal parts from public property to sell are common

Police in India were seeking to arrest members of a gang who dismantled a 60-feet-long iron bridge and likely sold it off in parts as scrap metal, officials said on Sunday.
The robbers, posing as government officials attached with the irrigation department in the eastern state of Bihar, used gas cutters and earthmoving machinery to break down an abandoned bridge in Amiyawar village, about 150 kilometres (93 miles) south from Patna, the state capital.