tag:blogger.com,1999:blog-5848640164815342479.post8731009976441159883..comments2024-03-27T15:36:44.737-07:00Comments on Haq's Musings: SEC Fines US Gunmaker For Bribing Pakistani OfficialsRiaz Haqhttp://www.blogger.com/profile/00522781692886598586noreply@blogger.comBlogger4125tag:blogger.com,1999:blog-5848640164815342479.post-29654374198190717512017-07-10T22:25:11.088-07:002017-07-10T22:25:11.088-07:00#US government fines #Boston firm $4 million for b...#US government fines #Boston firm $4 million for bribing #NHAI officials in #India. The FCPA Blog - The FCPA Blog https://shar.es/1BP2Cd <br />Privately held CDM Smith Inc. entered into a declination with disgorgement Thursday with the Justice Department to resolve FCPA offenses in India.<br /><br />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.<br /><br />The Boston-based company made profits of $4 million from the tainted contracts.<br /><br />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.<br /><br />Companies that qualify can receive a 50 percent discount on fines they might face under the U.S. Sentencing Guidelines.<br /><br />CDM Smith has about 5,000 employees worldwide. Revenues were $1.2 billion in 2015. It provides engineering and construction services.<br /><br />The DOJ said the bribery in India occurred from 2011 until 2015.<br /><br />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.<br /><br />The company also paid $25,000 to local officials in the Indian state of Goa for a water project contract.<br /><br />"All senior management at CDM India . . . were aware of the bribes . . . and approved or participated in the misconduct," the DOJ said.<br /><br />CDM Smith agreed to disgorge $4.03 million. It "acknowledged" that it can't take a tax deduction for the disgorged funds.<br /><br />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.<br /><br />The declination with disgorgement from the DOJ to CDM Smith Inc. is here (pdf).<br /><br /><br />https://www.justice.gov/criminal-fraud/page/file/976976/download<br /><br /><br />http://timesofindia.indiatimes.com/india/us-firm-admits-to-paying-1-1m-bribe-to-nhai/articleshow/59535930.cmsRiaz Haqhttps://www.blogger.com/profile/00522781692886598586noreply@blogger.comtag:blogger.com,1999:blog-5848640164815342479.post-21257140576803415542017-01-15T20:09:30.732-08:002017-01-15T20:09:30.732-08:00#Aid in reverse: Net flow of $2 trillion from poor...#Aid in reverse: Net flow of $2 trillion from poor to rich nations recorded in 2012. #Trade #Investment #Interest<br /><br />https://www.theguardian.com/global-development-professionals-network/2017/jan/14/aid-in-reverse-how-poor-countries-develop-rich-countries<br /><br />...for every $1 of aid that developing countries receive, they lose $24 in net outflows. These outflows strip developing countries of an important source of revenue and finance for development. The GFI report finds that increasingly large net outflows have caused economic growth rates in developing countries to decline, and are directly responsible for falling living standards.<br /><br /><br />In 2012, the last year of recorded data, developing countries received a total of $1.3tn, including all aid, investment, and income from abroad. But that same year some $3.3tn flowed out of them. In other words, developing countries sent $2tn more to the rest of the world than they received. If we look at all years since 1980, these net outflows add up to an eye-popping total of $16.3tn – that’s how much money has been drained out of the global south over the past few decades. To get a sense for the scale of this, $16.3tn is roughly the GDP of the United States<br /><br />What this means is that the usual development narrative has it backwards. Aid is effectively flowing in reverse. Rich countries aren’t developing poor countries; poor countries are developing rich ones.<br /><br />What do these large outflows consist of? Well, some of it is payments on debt. Developing countries have forked out over $4.2tn in interest payments alone since 1980 – a direct cash transfer to big banks in New York and London, on a scale that dwarfs the aid that they received during the same period. Another big contributor is the income that foreigners make on their investments in developing countries and then repatriate back home. Think of all the profits that BP extracts from Nigeria’s oil reserves, for example, or that Anglo-American pulls out of South Africa’s gold mines.<br /><br />But by far the biggest chunk of outflows has to do with unrecorded – and usually illicit – capital flight. GFI calculates that developing countries have lost a total of $13.4tn through unrecorded capital flight since 1980.<br /><br />Most of these unrecorded outflows take place through the international trade system. Basically, corporations – foreign and domestic alike – report false prices on their trade invoices in order to spirit money out of developing countries directly into tax havens and secrecy jurisdictions, a practice known as “trade misinvoicing”. Usually the goal is to evade taxes, but sometimes this practice is used to launder money or circumvent capital controls. In 2012, developing countries lost $700bn through trade misinvoicing, which outstripped aid receipts that year by a factor of five.<br /><br />Multinational companies also steal money from developing countries through “same-invoice faking”, shifting profits illegally between their own subsidiaries by mutually faking trade invoice prices on both sides. For example, a subsidiary in Nigeria might dodge local taxes by shifting money to a related subsidiary in the British Virgin Islands, where the tax rate is effectively zero and where stolen funds can’t be traced.<br /><br />GFI doesn’t include same-invoice faking in its headline figures because it is very difficult to detect, but they estimate that it amounts to another $700bn per year. And these figures only cover theft through trade in goods. If we add theft through trade in services to the mix, it brings total net resource outflows to about $3tn per year.<br /><br />That’s 24 times more than the aid budget. In other words, for every $1 of aid that developing countries receive, they lose $24 in net outflows. These outflows strip developing countries of an important source of revenue and finance for development. The GFI report finds that increasingly large net outflows have caused economic growth rates in developing countries to decline, and are directly responsible for falling living standards.<br /><br /><br />Riaz Haqhttps://www.blogger.com/profile/00522781692886598586noreply@blogger.comtag:blogger.com,1999:blog-5848640164815342479.post-40505713979048805492014-08-29T23:08:04.086-07:002014-08-29T23:08:04.086-07:00Grave financial irregularities, undue favouritism,...Grave financial irregularities, undue favouritism, misuse of official authority and corruption to the tune of billions of rupees have surfaced in the Punjab government’s laptop scheme launched in their previous term, Pakistan Today has learnt.<br /><br />The Punjab government distributed 110,000 laptops to university students across the province allegedly to counter the rising popularity of Pakistan Tehreek-e-Insaf (PTI) Chairman Imran Khan among the youth just one year before the 2013 General Elections.<br /><br />However, a special audit conducted by the government’s own wing – the Auditor General’s Office – pointed out serious corruption in the scheme.<br /><br />The laptop distribution scheme was themed as, “Advancement of information technology amongst students through provision of laptop computers,” for the year 2011-12.<br /><br />Documents available with Pakistan Today reveal that the price of one laptop was shown as Rs 20,000 as approved by the Provincial Development Working Party (PDWP) in October 2011 for a dual-core Dell machine. However, two months later, the PC-I of that scheme was revised and the laptop price was increased from Rs 20,000 to Rs 37,950 per piece without changing the original specifications.<br /><br />Hence, the prices were jacked up without any justification, causing a direct loss of Rs 2 billion to the public exchequer.<br /><br />Moreover, the project to enhance IT labs in Punjab schools – a project of the School Education Department – was rolled up and Rs 2 billion finances were diverted to the Higher Education Department (HED) for the laptop scheme without any provision under the rules.<br /><br />http://www.pakistantoday.com.pk/2014/08/30/national/audit-exposes-mega-scam-in-pml-n-laptop-scheme/Riaz Haqhttps://www.blogger.com/profile/00522781692886598586noreply@blogger.comtag:blogger.com,1999:blog-5848640164815342479.post-51603018853479694132014-07-29T22:15:37.077-07:002014-07-29T22:15:37.077-07:00Last week former New Orleans Mayor Ray Nagin becam...Last week former New Orleans Mayor Ray Nagin became the latest American politician to be sent to jail for abuse of power, following in the footsteps of former Detroit Mayor Kwame Kilpatrick and onetime Illinois Congressman Jesse Jackson Jr. Despite such high-profile convictions, most Americans see political corruption as a problem that plagues the developing world far more than the U.S. The truth is more complex: It’s certainly the case that paying bribes is a lot less common in the U.S. than in Nigeria or Bolivia, for example. But when citizens are asked if corruption is prevalent in their country, they’re thinking about a lot more than bribes. They’re more concerned about whether government and the political system is fair or stacked against them. And on those grounds, there are good reasons to think the difference between the U.S. and developing countries isn’t very big at all.<br />It doesn’t take a detailed look at Transparency International’s Corruption Perceptions Index to work out which types of countries are viewed to be particularly corrupt by the political risk analysts, aid agency economists, and think-tank staff whose opinions the index reflects. At the (virtuous) top of the ranking are rich countries: Sweden is No. 3, the U.K., 14; and the U.S., 19. At the (villainous) bottom are poor countries: Ivory Coast is No. 136, Vietnam, 116; and Tanzania, 111. It’s an unquestioned truth among Western politicians, businesspeople, and aid agency employees that corruption is rife in the developing world and that’s a big and, perhaps, even the main reason why poor countries are poor.<br />When surveys ask companies around the world about how often they make side payments for anything from avoiding taxes to winning a government contract, there’s a strong pattern: the poorer the country, the more likely companies are to make such payments. Ask individuals if they have ever paid a bribe and it’s the same story: According to Transparency International surveys, only 10 percent of Americans say they have ever been asked to pay a bribe, and 6 percent of people in the U.K. have. Compare that with 22 percent in Turkey, 33 percent in Pakistan, or more than half of the populations in countries such as Senegal, Ghana, or the Democratic Republic of the Congo.<br />Nagin wasn’t convicted of taking a bribe. His big crimes were related to steering business to his family’s kitchen countertop company. That underscores a vital truth: There are lots of different ways to be corrupt. And when you survey people around the world about the problem of corruption in their country, most have a definition of “corruption” that’s broader than bribery. Ask the same people, “Have you paid a bribe,” and then ask, “Is corruption a problem in this country?” and the relationship between the two answers is weak. Again, ask the same companies, “How much do you pay in bribes?” and “Is corruption a major constraint to doing business,” and many who say bribery in their industry is common also don’t see corruption as a problem—while many who don’t pay bribes are convinced corruption is holding them back.<br />People in poor countries are more likely to say the police and the judiciary are corrupt than respondents in rich countries. Less than a third of people in the U.K. and about two in five in the U.S. think police are corrupt, compared with 82 percent in Pakistan and 92 percent in Ghana. But there’s pretty much no relationship between national income and views of how corrupt business is. And people in richer countries are slightly more likely than are citizens of poorer countries to say political parties and the media are corrupt or very corrupt. In the U.S., 76 percent of the public thinks political parties are corrupt—the same proportion as in Romania, Ghana, Pakistan, or the Democratic Republic of the Congo.....<br /><br />http://mobile.businessweek.com/articles/2014-07-14/corruption-is-perceived-as-greater-where-income-gaps-are-bigRiaz Haqhttps://www.blogger.com/profile/00522781692886598586noreply@blogger.com