straight to the point – from different points of view

Corrupt politicians beware by David Walker

Corrupt politicians beware by David Walker

A number of recent reports in the international media caught my eye. Firstly we had this:

US authorities are investigating whether Petrobras or its employees were paid bribes, adding to the mounting domestic corruption probes facing the Brazilian state-controlled oil company, people familiar with the matter say.

The US Department of Justice has opened a criminal investigation into the company, whose American depositary receipts trade in New York, while the Securities and Exchange Commission is pursuing a civil investigation, these people say.”

 

The subject of home nations investigating the alleged corrupt activities in developing nations, mostly resource rich ones, is something I had commented on previously. I take the position that home countries to companies engaging in corrupt activities anywhere should take the lead in pursuing the wrongdoers. So I welcome the report quoted above.

 

We also had the Greek phenomenon. For those of you not in the know, if there is a country where it was even more unthinkable than sweet T&T where a senior politician or business person could be jailed, it would have to be Greece. Yet we have the following:

“(Reuters) – A Greek court sentenced a former defense minister to eight years in prison on Monday for failing to disclose the source of lavish wealth that made him a symbol of the corruption that has plagued the country.

Once a powerful Socialist politician who almost became prime minister in the 1990s, Akis Tsohatzopoulos has been in jail pending trial since April last year as prosecutors probed allegations of fraudulently acquired wealth.

In the highest-profile conviction of a politician in decades, the Athens appeal court found his income statements between 2006 and 2009 were false and he failed to declare a neo-classical mansion at the foot of the ancient Acropolis when he bought it in 2009.

 

Then there is Nigeria where we have the following:

Andrew Mitchell, the UK international development secretary, said: “James Ibori’s sentence sends a strong and important message to those who seek to use Britain as a refuge for their crimes.

“Corruption is a cancer in developing countries and the [UK] coalition government has a zero-tolerance approach to it. We are committed to rooting out corruption wherever it is undermining development, and will help bring its perpetrators like Ibori to justice and return stolen funds to help the world’s poorest.”

 

These have not been the only countries where within recent months we have seen corrupt politicians brought to justice. I can think of a former President of Israel for example and he is by no means alone. This sudden upsurge in the pursuit and prosecution of corrupt politicians would have been unthinkable just a few years ago.

 

There are a few possible reasons for the sudden change. I personally believe that it is a change of heart, or is it strategic interest, on the part of the leaders of the major economies, whose companies are a necessary part of large scale corruption especially in the energy sector. I believe that it is analogous to their desire to tackle the scourge of tax avoidance, a subject I have also written on previously and shall address anon.

 

The leaders of these major economies previously felt that they benefitted when their companies won major contracts regardless of corrupt activities. As long as those countries benefitted on balance, then they had no incentive to tackle the corruption. Developing nations in turn did not have the capacity to trace the transactions and perform the necessary investigative work.

 

The balance has now changed though. The home countries to these major corporations are seeing their tax revenue and their jobs being exported to other nations. They no longer see a net benefit to these corrupt practices. The result is that they are much more inclined now to cooperate with other countries who wish to pursue wrongdoers. Stand by therefore for many more corrupt politicians internationally to be caught in the net.

 

And everyone knows that we do not like to be left out of whatever is in fashion. To corrupt politicians the message is –“enjoy it while it lasts, powerful forces are now against you”.

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