Republic, Lost: How Money Corrupts Congress—and a Plan to Stop It

Lawrence Lessig

StAR Database

Launched today by the Stolen Asset Recovery (StAR) Initiative, a joint program of the World Bank Group and the United Nations Office on Drugs and Crime (UNODC), the StAR Asset Recovery Watch is a research project that systematically compiles information on past and current recovery cases involving corruption.  It details 75 cases involving 52 countries of origin of corrupt public officials and 34 jurisdictions from which stolen assets have been recovered since 1980

Wikileaks and the Age of Transparency

Micah Sifry blog

Get a Job in Anti-Corruption

Global Integrity is hiring- deadline August 6, 2010

StAR arrives in Maldives

A report from the Maldives’ national auditor released in 2009 reads like a guidebook on self-enrichment. The president’s spending was “out of control,” it said, as Mr. Gayoom used his power to live a lavish lifestyle and extend largesse to those around him.

An estimated $9.5 million was spent buying and delivering a luxury yacht from Germany for the president; $17 million was spent on renovations of the presidential palace and family houses. Mr. Gayoom built a saltwater swimming pool, a badminton court and a gymnasium, and he bought 11 speed boats and at least 55 cars — including the country’s only Mercedes-Benz, the audit said.

The Maldives, a series of atolls, has a land mass about 1.7 times the size of Washington, including many uninhabited islands. In terms of gross domestic product per capita it ranks 152nd in the world, according to the C.I.A.

And the list goes on, from Loro Piana suits and trousers to watches and hefty bills for medical services in Singapore for “important people” and their families. There was a $70,000 trip to Dubai by the first lady in 2007, a $20,000 bill for a member of the family of the former president to stay a week at the Grand Hyatt in Singapore. On one occasion, diapers were sent to the islands by airfreight from Britain for Mr. Gayoom’s grandson.

Even allocations made to Mr. Gayoom’s office for welfare distribution were spent on the president’s family and their friends, senior government staff members and their friends and members of Parliament, according to the report....

The Maldives government is beginning the paper chase, but it lacks resources to unravel a complex trail that it assumes runs through the British Channel Islands, Singapore and Malaysia.

Help is coming, notably from the Stolen Asset Recovery Initiative, or StAR, run by the World Bank and the United Nations.

The program estimates conservatively that $20 billion to $40 billion is stolen annually from developing countries through bribery, misappropriation and corruption. That figure represents about 15 percent to 30 percent of aid to the developing world...

Ali Hashim, finance minister of the Maldives, added, “The banks and other institutions that came from abroad, they lowered their standards to the standards that were in the country.”

Under the old regime, some foreign bank managers were given free holidays on luxury tourist resorts on the islands, he said, which might have made it “hard for those managers to subsequently turn down risky or inappropriate credit requests.”...

In the Maldives, the government wants its money back to help offset the decline in tourism, which has been hit by the global downturn, and to plug a budget deficit estimated last year at 34 percent of G.D.P. “What we are asking the World Bank is, help us get this back,” Mr. Hashim said. “Then we won’t need to have that much” foreign aid, he said.

-Going After Government Looters

Related:
Can Corruption Adversely Affect Public Finances in Industrialized Countries?

No Safe Havens: A Global Forum on Stolen Asset Recovery and Development, June 8-9, 2010 - Paris, France;

On June 8-9, StAR will partner with the Swiss Government to hold the first high-level global forum dedicated to this issue. The event will be open to the media, and speakers will include: World Bank Managing Director, Ngozi Okonjo-Iweala; Minister of Foreign Affairs, Switzerland, Micheline Calmy-Rey; Minister of Finance, France, Christine Lagarde; Minister of Justice, South Africa, Jeffrey Radebe; Minister of Finance, Republic of Maldives, Ali Hashim; Comptroller General, Brazil, Jorge Hage, and civil society leaders Mo Ibrahim, founder of the Mo Ibrahim Foundation, and Akere Mune, Vice Chair of Transparency International.

Rogue Economics

Honesty Cafes- can it work?

As the New York Times recently reported, the attorney general's office in Indonesia has been opening thousands of "honesty cafes" as part of its anticorruption campaign.

The idea is that these cashier-free cafes will teach people to be honest and curb the country's corruption problem (which pervades business, politics, and education) by inducing residents - especially the young - to get into the habit of practicing honesty. As the Times reports, "...the cafes are meant to force people to think constantly about whether they are being honest and, presumably, make them feel guilty if they are not."

But may be,

'With honesty cafés widespread, residents will have more temptations to cheat, more occasion to cheat, and maybe this will make it such that they will find it easier to cheat again in other contexts.

Maybe these cafes are a good idea, maybe it will not have any effect, but I worry that it might make things worse.

Prisoners Dilemma and Corruption

Peter Eigen on the history of Transparency International

They call it the Revolutionary Tax

The Justice Department memorandum, dated Sept. 4, 2007, and obtained by The New York Times, said the government believes Mr. Obiang’s assets are derived “from extortion, theft of public funds or other corrupt conduct.” From April 2005 to April 2006, the memo said, Mr. Obiang funneled at least $73 million into the United States, using shell corporations and offshore bank accounts to launder the money and ultimately buy his Malibu estate and a luxury jet.

The memo identified several specific wire transfers by Mr. Obiang from 2005 and 2006, beginning with a bank in Equatorial Guinea, then going to the central Banque de France, and landing in American accounts at Wachovia, Bank of America and UBS. In one six-week period alone in 2006, Mr. Obiang transferred $33,799,799.99 to the United States, the memo said, which was used to purchase a Gulfstream V jet.

Part of his wealth, the memo said, comes from a “revolutionary tax” that Mr. Obiang placed on timber. Instead of sending the payments to the coffers of Equatorial Guinea, Mr. Obiang, who is considered likely to be a successor to his father, has “insisted that the payments be made directly to him,” the memo said.

-U.S. Door Stays Open in Face of Swirl of Corruption

Gods of Lending

The World Bank and the Gods of Lending

Table of Contents:
Introduction: Broken Promises and the Gods of Lending; 1) Managing for Mediocrity; 2) The Economist Managers; 3) Confucius and the Bank; 4) Feeding the Beast; 5) Groping in the Dark; 6) And Darkness was Upon the Face of the Implementers; 7) A Very Special Account; 8) Playing with the Books; 9) "C" is for Corruption; 10) As the Train Left the Station; 11) A New Regime; 12) The Potemkin Village; 13) Death by a Thousand Cuts; 14) Alhaji the Car Dealer; 15) Bigger than Wal-Mart; 16) Lamin Tells All; 17) In the Eye of the Beholder; 18) And the Dance Begins; 19) The Fifty Year Dilemma; 20) The Cost of Corruption; 21) So Easy to Steal; 22) The Essence of Knowledge; 23) Reporting the Truth; 24) Money Can’t Buy Happiness; 25) Taming the Gods of Lending

Related;
Zedillo Commission Offers G-20 a Blueprint for Fixing the World Bank
When the Culture of Disbursement Meets the Culture of Corruption

You don't fight corruption by fighting corruption

Daniel Kaufmann and Mushtaq Khan debate the role and importance of tackling corruption as part of a development strategy

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