Global Integrity Commons

World Bank Pilots Transparency Evaluation

2008-05-16T00:35:00.014-04:00

Disclosure: the World Bank is a funder of Global Integrity.

Freedom of information (FOI) laws are a good thing, but it's difficult to tell how well they work (see this ongoing project that aims meerly to catalog the FOI evaluation work being done). But the World Bank's Doing Business project is poised to make a major dent in this information gap, with a pilot project that tests transparency around asset disclosure measures, using peer-reviewed, in-country research teams.

Global Integrity has argued for this approach for some time now, so we're happy to have the Doing Business project's considerable international reach thrown behind it.

A predecessor of this effort is the work of Dr. Monica Dorhoi, a World Bank researcher who conducted rigorous reviews of the legal codes addressing asset disclosure, FOI and conflicts-of-interest regulations about two years ago.

The Doing Business project's official transparency page is here, however they offered more detail about the methodology at a seminar in Washington today. Global Integrity's Afroza Chowdhury was there.

Afroza reports:

The Doing Business project's Transparency assessment methodology is very similar to Global Integrity's approach. Their assessments are based on the presence/absence of asset disclosure laws; they also try to gauge how effective they are in practice. Their assessments, like Global Integrity's, go into a great deal of detail, hence being more 'actionable' and enabling people to identify entry points to strengthen the system.

Instead of relying on outside sources for their information they will use in-country team members to carry out the research themselves -- making the data "original" and more reliable. Local field teams research the constitution and laws to see if there is a legal framework that mandates the disclosure of assets, liabilities, gifts etc for members of parliament. The data is collected on this questionnaire (PDF).

Once the data is collected, the Doing Business Transparency team seeks the help of government agencies, NGOs and law firms, in respective countries, to double check that they have the correct information and to make sure they have not missed anything.

A different questionnaire is prepared to assess how easy/difficult it is in practice to attain asset disclosure documents. The questionnaire takes into account how long citizens have to wait to access the documents and other barriers they may face during this process. Again, in-country team members attempt to access such asset disclosure documents. Their experiences inform the questionnaire results.

They have gone one step ahead of the de jure & de facto methodology of assessing transparency, by looking at whether specific information about the value of assets and other identifying information (such as location and source of income, assets, gifts etc) is available. They try to map out whether disclosure of such information is legally required, and who the disclosure is made to: a national registrar, the public, or both; they also assess how effective such legalities are.

We're looking forward to seeing the results of this work.

Pakistan Launches Info Hotline for Journalists

2008-05-14T20:22:00.005-04:00

Pakistan's Minister of Information announces a phone hotline to encourage information sharing between government and journalists. While not a radical step, this a welcome warming sign in a country that banned the broadcast of information "against the armed forces and judiciary" under its previous government. Minister Sherry Rehman says those days are over.

Daily Times:

Talking about the Pakistan Electronic Media Regulatory Authority (PEMRA), Sherry said the government would not use this body to control the private TV channels.

She said soon after assuming her office as information minister she had deleted the code of conduct mentioned in the PEMRA Ordinance. However, she asked journalists to devise a code of conduct for themselves.

She said the government would legislate on issues related to the media only after consulting journalists and media stakeholders since it wanted all aboard in the decision-making process.

Nigeria: Asset Disclosures? No Worries.

2008-05-14T12:30:00.005-04:00

The Vanguard newspaper in Lagos highlights a discouraging trend of Nigerian lawmakers declaring greater personal assets than they currently posses in order to build in a cushion that accounts for corrupt gains while in office. When those asset disclosures are finally reviewed years later, the inflated numbers sadly match reality.

The article mentions how the lack of a Freedom of Information bill in Nigeria hinders public access to asset disclosures, a situation further compounded by the Official Secrets Act. Official Secrets Acts across many Commonwealth nations are an unfortunate legacy of the British colonial period that provide officials with an easy excuse to withhold information from the public. We have seen this time and again in our work in Commonwealth countries around the world as well as in the UK itself, where the Act continues to undermine public access to government information.

A related tidbit picked up in Global Integrity's 2007 assessment of Nigeria: part of the problem with the Nigerian asset disclosure system has to do with classic bureaucratic inertia: the Code of Conduct Bureau claims that the National Assembly has the power to enact legislation making such disclosures regularly public, but the Assembly has never taken action to implement this authority. I can't imagine why.

As more organizations (including the World Bank's Doing Business initiative) begin to focus on tracking asset disclosure mechanisms around the world, we can only hope that some additional attention paid to this issue raises awareness over the need to focus on implementation, auditing of, and citizen access to asset disclosures, not just pretty laws on the books.

Doing Business plans to present some initial findings at a brownbag at the World Bank on Thursday May 15 for anyone interested (Room MC 9-100, 12:30-2:00 PM).

Update: The Doing Business Transparency questionaire (PDF).

Was the APRM process in Kenya a waste of time?

2008-05-13T17:25:00.007-04:00

A new paper analyzes the performance of the African Peer Review Mechanism, as experienced in Kenya.

From the NED email newsletter:

In a recent position paper on the current political crisis in Kenya, Bronwen Manby, Senior Programme Advisor with AfriMap at the Open Society Institute, discusses what can be learned from both the successes and failures of the African Peer Review Mechanism (APRM) country review report on Kenya presented during the July 2006 African Summit. The author argues that observations made at the time regarding the political climate are just as valid today as they were then. Areas of concern noted by the APRM in 2006 include the role of prominent members of the ruling party and high ranking government officials in fuelling ethnic clashes, corruption regarding land allocation, economic and social inequality, and an implementation gap between policy and action. According to the paper, a major weakness of the APRM report was an inability to formulate a concrete program of action. The author also blames failures of the APRM on a lack of subsequent monitoring mechanisms, sanctions, and, in general, political will.

Was the APRM process in Kenya a waste of time? (PDF)

Tanzania: The Influence Grid

2008-05-13T14:55:00.008-04:00

Global Integrity's Sebastian Sanga writes from Tanzania with a review of last year's electrical power crisis, and the political powers that let it happen. The report, in the words of a peer reviewer, "gives a vivid picture of the gravity of the corruption cankerworm in Tanzania."

Tanzania: The Influence Grid

By Sebastian Sanga
Image: Dar Es Salaam (Julienne/Flickr)

My mind reels whenever I think of the electricity crisis that plagues Tanzania. The nights are the worst: Frequent outages enable thieves and bandits to ply their trade, terrorizing the citizens. The risk of deadly fires is high as people opt for candles and oil lamps to light their houses.

Rolling blackouts are now the rule rather than the exception. In the process, many industrial and domestic appliances are damaged. Fires are rampant in many areas of the city. And there is little hope of lasting change — because of the problem of corruption.

Across the country, the air is thick with fumes from generators. The hum of their motors is heard everywhere in the cities and towns. The pollution is compounded by the smoke that emanates from thousands and thousands of chimneys and windows, as firewood and charcoal have replaced electricity for domestic use. And 99 percent of the rural population — nearly 28 million people — have no access to electricity at all.

This causes unprecedented deforestation rates, with over 91,000 acres of forests vanishing annually due to the voracious demand for firewood. Wood biomass accounts for 90 percent of total energy consumption. Meanwhile, the imposition of strict rules on charcoal businesses — originally put in place for environmental reasons — prove nearly impossible to enforce, due to the lack of alternative sources of power. Instead, the price of charcoal keeps rising, affecting the standard of living of the majority of ordinary Tanzanians. A bag of charcoal now sells for 25,000 shillings (US$20.04) — a considerable burden on low income earners.

Power outages have a variety of spillover effects. For instance, water crises in Dar es Salaam are endemic due to the electricity required to keep the city's water pumps operating. Residents often are forced to drink water from unhygienic sources, leading to deadly cases of diarrhea and other diseases.

The poor are hardest hit. Meanwhile, the powerful are capitalizing on the tragedy to accumulate wealth with which to contract defective and controversial power projects. Meanwhile, the lack of rainfall reduced electricity production at the hydroelectric plants from their installed capacity of 650 megawatts to as low as 200.

To counter the crisis, the government tried various strategies, including signing contracts to lease gas turbines from, among others, the U.S.-based Richmond Development Co. (RDC). The government planned to lease a 100-megawatt power plant, for US$172 million. Construction was planned for December of 2006 at the latest. The contract, unfortunately, was a scam. RDC turned out to be a "mailbox company" that had no record of credentials in the United States. Mohammed Hugue, an economist from Pakistan, and a Tanzanian-born businessman, Mohamed Gire, were behind the project.

Investigations revealed that RDC had links to a number of powerful local interests but had no experience or capacity in the energy sector. Furthermore, there were other allegations that Mohamed Gire had improperly leveraged connections with a number of friends who were ministers and other government elites.

The project approval process was also questionable: big shots wielded undue influence on procurement projects on behalf of RDC, despite a previous evaluation report by a technical team of the Tanzania Electric Supply Co. (TANESCO). The report found that RDC was incapable of executing the project. Other informants linked ministers to the firm. The prime minister, Edward Lowassa, who personally formed the committee to negotiate the power deal with RDC, contrary to the position of the technical team, was at the center of the talks about the controversial project.

Production was to start within 60 days, between Sept. 18 and Nov. 18, 2006. But the deadlines passed with nothing but excuses. While RDC's country manager, Naeem Gire, claimed his firm had difficulty shipping the turbine from North Carolina, TANESCO said RDC was trying, in vain, to raise US$10 million from the local sources to pay for lease and air freight charges.

Guarantee was a problem: RDC had lately transferred the offer to a third party, Dowans Holdings of the United Arab Emirates, for an undisclosed amount. Dowans Holdings, for its part, had managed to pocket US$102 million from the government, despite complaints by the public to stop the deal so as to launch an independent parliamentary committee to carry out investigations.

Opposition legislators pressed for an independent parliamentary committee to investigate widespread allegations of corruption in the deal,within the executive branch. In April 2007, ministers blocked the matter to be discussed in the House and passed the issue to the Prevention and Combating of Corruption Bureau (PCCB), a pro-state anti-corruption agency.

A tug-of-war emerged between PCCB and Parliament. The PCCB criticized the legislators for their demands to probe into the power deal, saying the issue was under its jurisdiction. This assertion was challenged by the speaker of Parliament, but he was unable to bring the topic to the floor — which forced Parliament to drop the whole issue, following the negative reaction from the executive and from a cross-section of legislators from the ruling party, which occupied over 85 percent of the seats. The prime minister is alleged to have summoned parliamentarians from the ruling Chama Cha Mapinduzi (CCM) party and instructed them to abandon the RDC issue for the sake of party solidarity. The PCCB prepared its own investigative report, which conveniently cleared the executive in the scam. PCCB is accountable to the president, and the bureau's director is a presidential appointee. Efforts to make PCCB an entity independent from the executive proved futile in April 2007, when the government opposed the idea.

In July 2007, members of Parliament raised fresh concerns over the scandals in the power sector, including the PCCB report on the RDC deal. Parliament wanted to gain access to other contracts pertaining to other questionable projects. But their efforts hit a snag for the second time as ministers, including the new minister for energy and minerals, Nazir Karamagi, were adamant that the contracts were the exclusive preserve of the executive branch.

Corruption in the energy sector is making life difficult not only for Tanzania's poor, but also for its investment community. Households and industries connected to the national grid face exorbitant tariffs coupled with an unreliable power supply. Viable power sources like coal and other new hydropower sources are neglected. They include the Kiwira coal plant, with the capacity to produce up to 200 megawatts and the Mchuchuma coal plant, with a 400-megawatt capacity. Hopes that the new government would be able to curb corruption are evaporating as disputed projects continue to gain approval from the executive.

Existing Independent Power Projects (IPPs), including Independent Power Tanzania Ltd. (IPTL) and Songas, are but a burden to the taxpayers. IPTL costs Tanzanians dearly. Studies have found IPTL to be more expensive than 16 similar diesel projects in developing countries. In 2005, charges to TANESCO by IPPs averaged US$13 million per month, equivalent to 68 percent of utility revenue. By 2006, charges reached US$17.5 million per month, more than 95 percent of total utility revenue, making it impossible for TANESCO to be a sustainable venture to finance investment as part of improving reliability or expanding electrification.

The power sector drama is just the tip of the iceberg of corruption in Tanzania. The Bank of Tanzania (BoT) is now embroiled in financial scandals. BoT has lately paid some US$30.8 million to a suspicious company, Kagoda Agriculture Ltd. (KAL) which claimed to have been "assigned" to collect debts owed to twelve foreign creditors from Europe, Japan, and the U.S. The money was paid to KAL, which presented deeds of assignment "signed" between Sept. 10 and Nov. 3, 2005. The company managed to raise this huge amount in a very short time after its registration. The foreign creditors have denied that they appointed KAL to collect the funds on their behalf.

Furthermore, a document circulating on Internet message boards fans the flames of the BoT scandals. The unconfirmed report claims that an organized crime network involving Indians, law firms and Tanzanian civil service employees continues to embezzle resources from the central bank. The International Monetary Fund (IMF) has instructed the government to appoint an accredited firm to audit the Bank of Tanzania's accounts. Parliament has demanded a parliamentary probe of the allegations, but the Ministry of Finance has rejected the idea.

The KAL drama and the alleged formation of an organized crime network is just the beginning. Other scandals involve the construction of the Bank of Tanzania Twin Towers, whose overall cost is said to have been so inflated that it now stands at a staggering US$340 million. Experts say one could construct four similar buildings in London or Tokyo with the same amount of money. Other reports of poor governance have emerged in the mining, hunting and timber export industries. Some reports estimate that 96 percent of logging revenue is lost due to corruption.

A lack of checks and balances in the system is partly to blame. Abuse of power continues to thwart efforts to promote sound governance, while Parliament has proven nearly useless in its oversight role and as a check on executive power. Democratic governance is elusive as powerful and self-interested economic actors gain control over the executive branch and wield its powers to their own advantage. Annual auditing of public funds by the Controller and Auditor General, capacity building for the PCCB, awareness campaigns on corruption, donor-supported governance initiatives as well as the formation of the sector Parliamentary Committee are not effective enough.

This is partly due to state capture, a process in which powerful elites from the private sector buy off politicians and bureaucrats to twist laws, budgets, projects, policies and regulatory environments in their own interest. The majority of parliamentarians are little more than rubber-stamp legislators, who approve defective plans from the executive branch with little due diligence or scrutiny. Political patronage dilutes governance-building initiatives.

Thanks to political stability, there have been no riots to date. But unless a comprehensive effort is made across all branches of government to promote sound governance and integrity in government, Tanzania's infrastructure and resource challenges will be here to stay.

Read critical peer review of this report.

South Africa: Gov't Sacks Media Chief

2008-05-12T16:14:00.002-04:00

Media independence takes a knock in South Africa, with an apparently retaliatory sacking. While publicly-supported broadcasters are often quite good (the BBC comes to mind), there is a built in risk of government interference, and here it is.

RSF press release, via AllAfrica.

Reporters sans Frontières (Paris)

PRESS RELEASE
7 May 2008
Posted to the web 7 May 2008

The board of the South African Broadcasting Corporation (SABC) announced today that it has suspended the public broadcaster's CEO, Dali Mpofu, with immediate effect pending an investigation and possible disciplinary measures for "insubordination."

The announcement came just hours after Mpofu suspended SABC's head of news Snuki Zikalala for "divulging confidential information." Zikalala had often been accused of bias in favour of President Thabo Mbeki and an internal report last October accused him of preventing certain government critics from voicing their views as commentators.

Reporters Without Borders

USA: Pentagon Who?

2008-05-08T15:59:00.006-04:00

Last week, we asked if American television networks were going to cover the story that the Pentagon coordinated pro-government statements in secret meetings with the news networks' on-air employees. In a word: No. They aren't going to cover that.

Politico: 'Deafening' silence on analyst story

USA: Whistleblower Protection Office Raided

2008-05-07T11:51:00.013-04:00

LA Times: "Federal agents Tuesday swarmed the home and office of the Bush administration official responsible for protecting government whistle-blowers, part of an investigation into whether the official retaliated against his employees and obstructed justice."

Washington Post:

More than a dozen agents participated in the daylong raid, temporarily shutting down the e-mail and computer systems of the Office of Special Counsel and confiscating several desktop computers, including that of Scott J. Bloch, the agency head. Bloch's home in suburban Virginia also was raided, and agents from the FBI and the Office of Inspector General for the White House Office of Personnel Management were seen carting off boxes of documents in unmarked government sedans.

As Global Integrity has previously reported, according to the watchdog group Government Accountability Project (GAP), "the Whistleblower Protection Act (WPA) has been eroded to the point that federal workers have virtually no protections from agency retaliation."

Bottom line: if the head of the whistleblower protection agency is retaliating against employees, we have problems.

Kenya: Linking Violence & Corruption

2008-05-05T14:18:00.004-04:00

An analysis of recent political violence in Kenya posits that corruption and failures of the democratic process, not ethnicity, are driving the conflict. While few readers here will be shocked by this conclusion, the authors do a fine job of assembling the supporting evidence.

Authors Rachel Itwaru and Sarah J. Johnson:

Indeed, though the killing has been mostly between members of different tribes, this tragedy is not simply a story of longstanding ethnic divisions. Instead, the conflict is a product of two political factors: Kenya’s historically corrupt government, and the willingness of some politicians to exploit the anger following the elections by encouraging violence.

Full analysis at the Harvard Political Review.

Global Integrity's take: Global Integrity Report: Kenya.

"Koun Bonega Crorepati?" in Bangladesh

2008-05-05T14:05:00.004-04:00

Global Integrity's Mohammed Syful Islam writes in from Bangladesh with his take on the future of corruption in his government. Corruption is everywhere, he says, but change may be coming.

"Koun Bonega Crorepati?" in Bangladesh

By Mohammed Syful Islam

On "Koun Bonega Crorepati" ("Who Will Be The Owner of Crore of Taka"), a popular game show on India's Zee TV, participants answer general knowledge questions to win one crore taka [one crore is equal to 10 million taka (US$145,571)].

But Bangladeshi politicians -- regardless of name or seniority -- do not need a TV game show to quickly earn several crores of taka. Thanks to a recent anti-corruption drive by the interim government that has revealed hundreds of cases of corruption, the Bangladeshi people now know that politicians and government officials have deceived them and earned crores of taka by abusing power.

Public opinion surveys from 2001 through 2006 show that people perceive Bangladesh as one of the most corrupt countries in the world, much to the denial of political leaders.

"Under the political governments of two ladies-Sheikh Hasina and Begum Khaleda Zia-corruption was made a way of life at all levels, particularly at the corridors of power," says Golam Haider, a senior journalist at The New Nation newspaper . "It was openly patronized and practiced across the table.

Despite the interim government's anti-corruption efforts, corruption still exists; now it's happening under the table. The anti-corruption drive is not running on the right track. Corrupt people cannot fight corruption, Haider says.

Jasmin Rahman, a master's student at a government university, says corruption begins at the school level. "A student who fails in school-level examinations still becomes eligible to sit for examinations under the education board, after she or he or their parents pay some bribe to the school authorities in the name of donation," Rahman says. "What can you expect from a student but corruption in professional life, whose school life is full of corrupt practices?" Rahman says she had to pay a bribe to board officials to gain admission to college.

At the very least, the interim government's anti-corruption drive has exposed several cases of government officials corruptly receiving money and property.

One example is the modern prince of Bangladesh, Tarique Rahman, and his younger brother, Arafat Rahman. The brothers are the sons of former President Ziaur Rahman and former Prime Minister Begum Khaleda Zia, and they reportedly amassed vast resources worth many crores of taka at home and abroad, thanks to power politics and their nexus with corruption, as perceived by many Bangladeshis.

Tarique and Arafat have known corruption most of their lives. In 1977, Ziaur Rahman, a former chief of army staff, became president of Bangladesh by overthrowing Justice Abu Sadat Mohammad Sayem. But in the early hours of May 30, 1981, a group of army officers assassinated Zia, along with six bodyguards and two aides. During the assassination, family members struggled to survive. The then-government allotted a house in Dhaka, the capital, to Zia's wife, Begum Khaleda Zia, and their sons, Tarique and Arafat.

In 1991 and later in 2001, Begum Khaleda Zia's Bangladesh Nationalist Party (BNP) came into power, and her two sons reportedly began committing massive acts of corruption through misuse of their mother's office.

An investigation of Warid Telecom, a cell phone company that entered the Bangladesh market, revealed that Arafat Rahman purchased property in Dubai and put US$2 million in two Hong Kong banks-his kickbacks for assisting Warid Telecom in obtaining a licence, newspaper reports say.

The two brothers also failed to legalize their undeclared and questionable 1.68 crore taka (US$244,559) under an amnesty by paying 44 lakh taka (US$0.64) as a fine. After the National Board of Revenue (NBR) rejected their plea, it began the process of filing a tax evasion case against the two brothers under the Tax Ordinance of 1984. Their mother, Khaleda Zia, and a former finance minister in her cabinet, M Saifur Rahman, also failed to what is popularly called "whiten their black (untaxed) money" of 1 crore taka (US$145,571) and 1.30 crore taka (US$189,242) respectively.

Tarique Rahman is now in prison on several charges, while Arafat Rahman is free after being interrogated by the army-led joint forces. In his wealth statement to the Anti-Corruption Commission, Tarique Rahman said he owns a house in the capital, 2.01 acres of land worth 345,000 taka (US$5,022) in Bogra, savings certificates worth 20,000 taka (US$291) and 134,000 taka (US$1,951) in different banks, shares of different companies worth 7,170,000 taka (US$104,374) and five tolas (US 58 grams) of gold. His wife and daughter own assets valued around 1.40 crore taka (US$203,799). The common people believe that is only a small portion of what they actually own.

On July 16, 2007, also under the pretext of the war against corruption, police arrested Sheikh Hasina Wazed, former prime minister and president of the Bangladesh Awami League. Hasina Wazed—one of the two key leaders of the two main political parties-faces extortion charges. She is accused of extorting about 3 crore taka (US$436,713) from a businessman in return for allowing his company to set up a power plant during her tenure between 1996 and 2001. She is being held in a special jail as she awaits prosecution.

Several ministers of the Khaleda Zia cabinet have been sentenced to various prison terms in the last few weeks, while most of the senior ministers and politicians of the country are awaiting verdicts in corruption cases. The present interim government now detains hundreds of politicians, former ministers, government officials and businessmen on different corruption charges.

Amanullah Aman, a former state minister, was handed 10 years of rigorous imprisonment and three years of simple imprisonment and asked to pay a fine of 10 lakh taka (US$0.15) in a corruption case for earning huge money through illegal means. His wife, Sabera Aman, also was sentenced to suffer three years in jail, as the court found her guilty of assisting her husband in unlawfully obtaining money.

Another official, Mir Mohammad Nasiruddin, the ex-junior minister for civil aviation and tourism, was sentenced to suffer 13 years in prison for committing rampant corruption. The minister was found guilty of amassing wealth through misuse of power and illegal means. In the same case, his son, barrister Mir Mohammad Helaluddin, was given three years of imprisonment.

In yet another judgement, the court sentenced former lawmaker Wadud Bhuian to 20 years in jail for acquiring land and property worth 6 crore taka (US$873,426) through corruption and abuse of power. The court also ordered Bhuiyan to deposit his illegally obtained assets with the national exchequer.

Considering these examples, it's no wonder that Bangladeshi people widely believe that files in government offices never move from one table to another without fuel (a bribe or speed money). Through this means, scores of class-III and class-IV government employees "earn" crores of taka. For example, the anti-crime division found a Land Ministry petty officer possessing three multi-story buildings in Dhaka and huge tracts of land throughout the country. He obtained this wealth by misusing power and maintaining close relationships with ministers and political bigwigs.

There are many examples in this impoverished country of government leaders living as tenants in the houses of their class-III or class-IV employee subordinates.

Police unearthed 1 crore taka (US$145,571) in cash from the house of the chief forest officer, breaking all records of corruption. This government official earned a salary of only 20,000 taka (US$291) a month. The joint forces later found more than 1,000 acres of government land occupied by him and his family members. His wife changed cars twice a year and possessed 400 bhoris (US 4,000 grams) of gold ornaments.

Recently, I have been following the story of a corrupt businessman who has a long history of evading taxes and power tariffs. Customs authorities suspended his license for paying a fine with a fake treasury note. Some of my journalist colleagues, who benefit from the unscrupulous businessman, are pressuring me to not publish reports against him.

Yes corruption still exists, but since the interim government has declared a crusade against it, the situation in Bangladesh is beginning to change. People are very hopeful that the country will be able to break free from corruption's grip.

More local reporting on Bangladesh in the Global Integrity Report: Bangladesh

Organized Crime in the Balkans

2008-05-02T17:17:00.007-04:00

Global Integrity's friends at The Center for Investigative Reporting - Bosnia-Herzegovina, have launched a news portal addressing organized crime in the Balkans, in partnership with a host of local muckrakers. The URL is www.reportingproject.net, or read below for background.

CIR/BiH's Drew Sullivan writes from Sarajevo:

Hello friends:

Very quietly we have put up our regional organized crime website. This is part of a joint project of a number of different organizations including the Center for Investigative Reporting in Sarajevo, the Romanian Center for Investigative Reporting, the Bulgarian Investigative Journalism Center, the Caucasus Media Investigative Center, Novaya Gazeta in Moscow, Media Focus in Serbia and reporters and news outlets in another half dozen countries.

http://www.reportingproject.net

It also includes our latest tobacco project which is now mostly online.

It is funded by the UN Democacy Fund but individual projects have been funded and supported by the good folks at SCOOP and Open Society.

We hope to have a one stop site for organized crime and corruption stories and resources for journalists. We hope to expand in the near future and pump out more stories and more resources. Any thoughts or comments are appreciated.

Thanks.

^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
Drew Sullivan
Center for Investigative Reporting - Bosnia-Herzegovina

To contact Drew's team, you can leave comments on this post and we'll see that they're forwarded to him.

Talking Corruption in Timor-Leste

2008-05-01T16:24:00.015-04:00

In the last month, Global Integrity's Nathaniel Heller and I have been traveling in the South Pacific, talking with local experts about the results of the Global Integrity Report: 2007. In Timor-Leste and Vanuatu, we convened government officials, civil society activists, foreign donors and journalists to talk about corruption and governance. This is what we learned.

Our first stop was Timor-Leste, a country that is very nearly starting from zero in its efforts to create the institutions necessary for democracy. Despite this, and despite the many tragedies of its history, both recent and past, I was left with a sense of cautious optimism for the future of the new nation. I spoke to so many people in Timor-Leste who had a sense of purpose and determination about the work they were doing.

Still, there is so much work to be done. Infrastructure is poor; we planned our workshop by candlelight after the power cut out during a heavy rain. Internally displaced persons (IDP) camps are an inescapable feature of the capital -- muddy, crowded lots of big tents with aid agency logos on them. In a very real way, Timor-Leste is starting over.

To give some context, consider this vignette: the justice system has recently been converted from speaking Tetum (the local dialect) to Portuguese (the language favored by the resistance movement). However, only some 5 percent of the population speaks Portuguese, causing a shortage of qualified lawyers and judges. An informal tally lists the total number of judges, prosecutors and defense attorneys working in the country at under 30 people. There is only one functioning court house outside of the capital of Dili. And of the eight or so prosecutors available to try cases in Timor-Leste, three of them were still living in IDP camps. Not exactly an ideal working environment.

But work goes on. Earlier this month, Global Integrity and AusAID convened a workshop of government officials, advocates, donors and journalists to discuss corruption and governance in Timor-Leste and to plot a course for the future of anti-corruption policy. Global Integrity's role in this discussion is not to provide answers or recommendations. Instead, we bring a process of structured reflection and an evidence-based dialogue that enables local stakeholders to identify areas for improvement and establish their own priorities for reform.

The results of this process are published here:
Timor Leste Workshop conclusions

Pictures from our trip are here.

Photos: (cc) Jonathan Werve

Zimbabwe Government Arrests Opposition

2008-04-25T12:50:00.005-04:00

Grim headlines from Zimbabwe, as the government moves openly against the opposition Movement for Democratic Change and independent election monitors.

IRIN: Zimbabwe: Police Swoop On Injured MDC Supporters

IHT: Zimbabwe police raid opposition party office

USA: Military Ran Media Manipulation Campaign

2008-04-23T15:54:00.014-04:00

Global Integrity considers press freedom to be a key driver of accountability in any country. Most Western nations offer a largely unrestricted press environment -- intimidation of journalists is almost unheard of, with some notable exceptions. However, press freedom is a necessary condition, not the whole story.

The press has to use this freedom to full effect, as watchdogs of government and corporate power. An uncritical press that parrots government talking points isn't advancing the cause of accountable government. In this area, the Western media has rather less enthusiasm than they could.

The latest drama comes in two parts.

1) A hard hitting story by the New York Times, published Sunday, exposes a coordinated effort from within the Pentagon to manipulate US television networks' and newspapers' coverage of the wars in Iraq and Afghanistan, using retired military officers who frequently appear on news programs as "independent" analysts to counter growing criticism of then-Secretary of Defense Donald Rumsfeld.

NYTimes:

Kenneth Allard, a former NBC military analyst who has taught information warfare at the National Defense University, said the campaign amounted to a sophisticated information operation. “This was a coherent, active policy,” he said.

2) Despite the impressive legwork done by the Times, the US television networks have apparently taken a pass on this story. While coverage critical to the government may be welcome, coverage critical of the media itself is exiled to overseas and small town papers. The Times, to its credit, points out the numerous times the paper has published Pentagon-groomed material as supposedly independent op-eds. Will the cable news networks do the same?

South Africa: Corruption & Governance Archive

2008-04-18T18:14:00.007-04:00

Global Integrity's International Director, Marianne Camerer, shares a link to an archive of coverage and papers addressing corruption in South Africa. All together, the collection spans 11,000 pages assembled in the course of Marianne's PhD dissertation.

Marianne writes:

This collection of research material from South Africa, a new democracy, covers the period from 1994-2006 and includes a range of policy documents on governance and corruption. These include political cartoons; newspaper articles; parliamentary records; Auditor General and Public Protector reports; conference proceedings; policy and strategy documents; corruption surveys and court records of high-profile corruption trials, pertaining to the South African arms deal. The material was collected for my PhD dissertation in Political Studies from the University of the Witwatersrand on "Corruption and Reform in Democratic South Africa". It includes my own published research in this field from 1996 as an applied policy researcher at the Institute for Security Studies, a leading think tank in South Africa and will be a useful resource for scholars and practitioners both in Africa and more widely interested in how new democracies set out to tackle the corruption issue.

The link: Corruption and Governance in Democratic South Africa

God: 91%, Government: 74%, Corruption: 29%

2008-04-18T12:36:00.005-04:00

Via Chris Blattman's Blog, the latest polling from Liberia. Blattman observes, "Why, I wonder, is the War on Corruption in the same headline as God? Is God some sort of baseline for maximum possible support?"

And here is our own (less amusing) coverage of corruption in Liberia.

USA: $50M Air Force Contract Was Rigged

2008-04-17T16:37:00.018-04:00

The Department of Defense's Inspector General has investigated a relatively small US$50 million Air Force contract, painting a vivid picture of how conflicts of interest play out at the highest levels of government.

Despite the distress of employees involved in the contracting, the weight of rank pressed the deal forward, which awarded a contract for entertainment at the Air Force's Thunderbirds air shows to retired military officers with ties to the Thunderbirds. After complaints from an opposing bidder (one of which bid to do the work at half the price), the contract was canceled, but no criminal charges were filed.

Washington Post:

The report offers a searing, blow-by-blow account of how a relatively mundane Air Force contract spun out of control, highlighting serious conflicts of interest in the selection process, officers stacking the deck in favor of friends, and others influencing a system designed to eliminate such favoritism in spending taxpayer dollars.

Washington Post coverage here.

Our previous coverage of the funding struggles of the Inspectors General.

Image: (cc) Elaine Mesker-Garcia

The Ugly Death of an Empire

2008-04-10T12:07:00.004-04:00

Kalkali El-Hadi tells the story of the fall of Algeria's largest private bank, and the corporate shell game that hid the truth of its shaky finances from its investors, regulators and its customers. In the end, it was all too good to be true.

The Ugly Death of an Empire
By Kalkali El-Hadi

In early 2007, Algeria opened its "trial of the century," a three-month spectacle that followed the biggest financial corruption scandal in the history of the country: the stunning collapse of Khalifa Bank, the country's largest private bank.

The trial was the result of a three-year investigation that ensnared 4,000 people. Eventually 118 people, including executives, were arrested, but the man at the top, Abdelmoumen Rafik El Khalifa, was not one of them. He fled to Britain in 2003 when the scandal broke. The Algerian court tried him in absentia, along with 103 others. Khalifa and dozens of others were convicted. Khalifa was sentenced to life in prison and in late 2007 was awaiting extradition to Algeria.

The Khalifa trial came at a time when President Abdelaziz Bouteflika was trying to crack down on corruption. A tough law enacted in February 2006 provides that anyone charged with corruption, regardless of their official rank, would lose the traditional immunity from prosecution enjoyed by public officials.

Despite such measures, corruption remains a basic part of life for Algerians. Financial corruption remains almost daily front-page news in the Algerian press, dealing blows to the government efforts. Among the scandals:

* The Agricultural and Rural Development Bank (BADR — Banque de l'Agriculture et du Développement Rural), a state bank that reaches into many sectors of Algeria's economy, misappropriated more than two billion dinars (US$30 million) in a series of banking scams.
* In the wilaya (province) of El Tarf, a financial scandal ended with El Tarf's governor, Djillali Arar, in prison.

These affairs had so shaken the Algerian society that corruption had become the key domestic issue. But none of the scandals — indeed, no corruption scandal since the country's independence in 1962 — was as big as the Khalifa affair.

The trial opened on Jan. 7, 2007, in a court in Blida, 30 miles west of Algiers. The 104 defendants were accused of more than 30 serious charges, among them theft, fraud, forging official and bank documents, bribery and abuse of power. However, the star defendant, the Khalifa business empire's founder Abdelmoumen Rafik Khalifa, was in Britain, jailed on immigration and money laundering charges. An extradition agreement between the two countries was worked out just too late for Khalifa to be sent back to face justice in Algeria. Six other key defendants were also tried in absentia, after they fled to various European countries.

Khalifa, 40, is the son of a Cabinet minister in the administration of Algeria's first president, Ahmed Ben Bella. Rafik Khalifa worked as a small-time chemist in Cheraga district before rapidly and mysteriously ascending to lead an empire of 10 companies. Between 1998 and 2003, Khalifa's companies hired some 20,000 employees; the collapsed Khalifa Bank - the only Khalifa unit charged with wrongdoing — had 7,000 workers. It was a meteoric rise, and in hindsight, it was too good to be true.

The scandal began in 2003 with the arrest of three Khalifa Bank executives who were allegedly trying to smuggle two million euros (US$2.9 million) in a suitcase through Houari Boumediene Airport in Algiers. By June 2003, Khalifa Bank, the largest in Algeria, was bankrupt.

The collapse of Khalifa tore a hole in the public treasury. Hundred of thousands of Algerians lost their Khalifa accounts — accounts which were offering interest rates of up to 17 percent before the bank's seemingly inevitable collapse. The government has insured the accounts, but only up to 9,200 euro (US$13,495). The majority of Khalifa Bank accounts were held by public institutions and state-owned companies. Thus the financial collapse reached not only Khalifa Bank customers, but all Algerian taxpayers.

The money is believed to have been siphoned from the Khalifa Bank accounts to fund the crumbling Khalifa business empire, which a leaked French intellegence report estimated was losing 500 million euro (US$733 million) a year. After suspicious Algerian regulators restricted money transfers from Khalifa Bank, Khalifa executives were left with less reliable methods of illegally moving money to their European subsidiaries, setting the stage for the dramatic airport arrest.

In April 2003, the authorities began their investigation. Of the 4,000 people who were investigated in some way, only 104 were officially charged. Two of those defendants — Abdelwaheb Keramane, former governor of Khalifa Bank, and his brother, Abdenour Keramane, former Algerian Industry minister — refused to stand before the court in the trial, saying the charges against them were politically motivated.

Even the lesser defendants in the case had relatively high profiles. Among them were executives of state-owned real estate agencies, general and national secretaries in the Algerian general labor union, officials from the national welfare office, employment-benefit and national-security organizations and celebrities from the arts and sports worlds.

The testimony was star-studded, with a parade of previous and acting ministers in the Algerian government called to the stand. The most prominent witnesses were Mourad Meddilsi, former Financial minister and the acting Foreign Affairs minister and Karim Djoudi, acting Financial minister. Two high-power witnesses who were called by the court but did not testify were former Housing Minister Abdelmadjid Taboune and Aboudoujora Sultani, leader of the political party Movement of Society for Peace.

After more than three months of very complicated proceedings, the court issued a sentence of life in prison for Khalifa and sentences ranging from one year to 20 years for others.

Afterward, the court was criticized for neglecting to charge enough of the key players in the construction of Khalifa's financial empire — dubbed the "big fish" by the Algerian press. Among those critics was Algerian lawyer Saad Djebbar. "It is certain that big fishes escaped the net of Algerian justice," he said. "Consequently, these sentences aren't the end in this affair. Other prominent people were behind Khalifa's cartoon empire, among them generals in the intelligence community."

At the same time, relatives of the defendants expressed their disappointment in the sentences and in the lack of transparency of the trial, drawing a parallel to the trial of deposed Iraqi President Saddam Hussein. "Our relatives were tried quickly and in a less-than-open way. We don't know about the progress of the trial. In this way, ours will go... as was done for President Saddam." One of the defense attorneys criticized the court for breaking judicial procedure laws by opening the case in the Blida court and by limiting the window for appeal to three months.

The Khalifa trial became known as the "trial of the century" in Algeria. Considering the results, it has been a real test for the Algerian justice system and the rule of law, as well as a revealing look at the corruption reform begun four years ago.

Read more about Algeria...

Global Integrity Relocates to New Office

2008-04-08T19:51:00.005-04:00

Another happy milestone as our organization grows: Global Integrity has outgrown our old 17th Street office in Washington D.C., and has now taken up residence a few blocks away on the corner of Vermont Ave. and L St. With this much larger space, we can expand our staff capacity considerably as well as enjoy exciting new luxuries like a conference room and the occasional window.

Our new address is:

Global Integrity
1029 Vermont Ave NW
Suite 600
Washington DC 20005 USA

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Reporter's Notebook: Vanuatu

2008-04-01T18:39:00.002-04:00

By Bob Makin

Vanuatu is a very small country (pop. 200,000), and the capital city is tiny (30,000). Yet bad news travels as fast as the trade wind — which frequently carries with it the smell of corruption.

In 2006, a resident of an area adjacent to the spring supplying water to the capital, Port Vila, noticed that a farmer down below had constructed a dwelling of some permanence. Believing this building to be inside an area protected by law to prevent contamination of the city's drinking water, the resident made further inquiries. Indeed, the farmer had built where no structure was allowed, and where he had permission to farm only crops unlikely to present a hazard to the aquifer.

The observant resident notified the authorities, but he found out that the matter was not all that straightforward...

Read More at the Global Integrity Report...

New Addition to Global Integrity Office

2008-03-24T20:52:00.003-04:00

Global Integrity welcomes Mohamed Abdelaziz to our Washington office as a visiting fellow. Mohamed is here as part of a Freedom House fellowship program called "The New Generation of Advocates."

When not visiting other NGOs, Mohamed works as project manager at the Arab Office for Law, where he coordinates a USAID funded project entitled “Towards a Stronger Civil Society for the Promotion of Transparency and Good Governance.” He assists in identifying targeted NGO’s and the writing and the submitting or all periodical reports due to donor organizations, as well as fund raising efforts.

Mr. Abdelaziz received his B.A in political science and is currently working on a Masters in Professional Development from the American University in Cairo.

We're certainly lucky to have Mohamed joining us for the next few weeks.

Reporter's Notebook: Russia

2008-03-14T16:32:00.008-04:00

By Galina Stolyarova

One day in April 2007, human rights lawyer Olga Tseitlina got a sudden call to a St. Petersburg police station. She had been asked to represent a client detained and fined for allegedly swearing in public. She soon discovered that police had used similar evidence against nearly 100 others.

They had all been rounded up during an April 15 demonstration called by an opposition group, The Other Russia Coalition. In theory, the right to protest is guaranteed by the Constitution of the Russian Federation, but Tseitlina alleges that Russian police use any means they have to suppress such events.

"One police statement ordering a person's detention for swearing in a public place may not look suspicious. But if we collect more than 50 identical statements… then it becomes clear that the evidence was contrived," Tseitlina said.

Read more in the Global Integrity Report: Russia...

Image: Street protest in Moscow, April 2007, by Dave Pyle.

Call for Experts: Global Integrity Is Hiring Anti-Corruption Experts & Journalists

2008-03-13T16:35:00.011-04:00

Global Integrity, an award-winning international non-profit organization dedicated to tracking governance and corruption trends around the world, is seeking interested journalists, researchers, social scientists, and other experts with a background in governance and corruption issues to prepare its Global Integrity Report: 2008.

To apply, send a CV or resume with full contact information to info@globalintegrity.org as soon as possible, and no later than May 15, 2008. You can support Global Integrity's search by emailing this message to your professional network or mailing lists or by linking to this post.

The Global Integrity Report is a compilation of in-depth country assessments prepared by local experts that combines qualitative journalistic reporting with quantitative data gathering to produce a powerful "snapshot" of the strengths and weaknesses of national anti-corruption mechanisms.The Report is widely used by development experts and donors; reform-minded governments; private sector investors; and grassroots journalists and advocates to prioritize governance challenges and promote anti-corruption reform efforts.

In January 2008 Global Integrity released its Global Integrity Report: 2007, covering 55 diverse countries around the world.Our goal for 2008 is to evaluate roughly 70 countries. Final country selection has not yet been determined and is influenced by the interest expressed by qualified country experts, all of whom are compensated for their efforts.

To learn more about collaborating with us on the Global Integrity Report: 2008, please visit:
http://www.globalintegrity.org/inviteletter.cfm

Additional information is available on the Global Integrity website. We look forward to working with you to produce a truly groundbreaking report in 2008.

To send this message to a colleague, click here.

Africa: Why Public Health Programs Are Failing

2008-03-11T18:08:00.012-04:00

Global Integrity contributor Thompson Ayodele writes in with an analysis of aid, public health campaigns, and the corruption that prevents medical care from reaching the people who need it most.

Health, Africa’s struggle
Foreign aid is flowing in in large amounts, but it’s not reaching the people

By Thompson Ayodele

After decades of neglect the provision of effective health care is becoming one of the biggest concerns in Africa.

Both foreign donors and African governments are keen to make this their priority and, consequently, the money taps have been opened.

Foreign aid in the form of hard currency is flowing in unprecedented quantities into the ministries of health of many African countries.

But despite this generosity things are not improving : medical staff are demoralized, access to essential medicines remains low and corruption remains a serious problem.

Development assistance for health has increased from about R20billion in 1990 to more than R104billion in 2005. Overall, about 10 percent of Africa’s health care expenditure is now financed directly by donor aid.

Nevertheless, the majority of African countries are way off track with progress towards the health-related Millennium Development Goals.

Access to essential medicines remains low in the poorest parts of the world. According to the World Health Organization (WHO), more than 50 percent of Africans lack access to essential medicines.

Around the world more than 10million children in developing countries die unnecessarily from diseases that are easily preventable and cheap to treat, such as diarrhoea, measles and malaria.

Furthermore, up to 80 percent of Africans have to pay for treatment straight from their own pockets. In short, public health systems are failing to deliver.

A major factor behind this failure of foreign aid to improve health care is the fact that nearly all of it first passes through health ministries before it reaches patients.

According to studies undertaken by the WHO and the Centre for Global Development in Washington DC, bureaucrats have little idea of what actually happens to the money after it is handed over to governments.

As a result of these lax controls, a great deal of this money is subverted by health officials for private gain, particularly in countries that have a problem with corruption. This can occur in the ministry itself, or further down the line in the hospital.

A study by Maureen Lewis of the World Bank shows that corruption in the healthcare sector of developing countries is so bad that it severely undermines the effectiveness of donor funding.

The leakage of drugs from the supply chain is a particular problem, mainly since publicly funded drugs can fetch a high price if stolen and resold on the black market.

Recent surveys in Nigeria show that 28 public health centres had received no drugs from the federal government in two years.

Meanwhile, a 2001 study by the World Bank showed that fewer than half of government health facilities in Lagos and Kogi states had received drugs from the federal government.

Last year National Agency for Food and Drug Administration and Control boss Dora Akunyili disclosed that it is commonplace for donated drugs such as vitamin A capsules, Mectizan and Coartem tablets and oral rehydration salt to be pilfered and resold on the open market.

In the same vein it was reported that the Global Fund was considering suspending two of Nigeria’s five-year grants totaling R640million because of concerns over grant management, transparency of fund allocation and grant implementation and the ability of the Nigerian government to achieve the goals of the grants.

The Global Fund has already terminated grants to Uganda and Chad.

And this is not counting the dozens of other forms of corruption that plague the health system in Nigeria, including mismanagement of funds at the ministry and hospital level; absenteeism; staff extracting payments from patients for services that are supposed to be free; and the abuse of procurement contracts for supplies.

According to the NGO Human Rights Watch “the government’s failure to tackle local-level corruption violates Nigeria’s obligation to provide basic health and education services to its citizens”.

Add to this the chronic mismanagement that has left health workers owed months’ pay and hospitals with obsolete equipment, and it seems hardly surprising that donor funding is not making much of a difference to patients’ health.

Healthcare delivery in Africa is never going to improve while it remains under the control of the public sector.

Government ministries have very few incentives to deliver care to patients other than the goodwill of their staff.

As any manager of a private company will tell you, relying on this alone is not going to keep your customers. Unless there is a significant change in the way we manage the health sector, there will be few improvements – no matter how much money donors spend.

Bearing in mind the historic failure of African public health systems to provide citizens with the care they deserve, we should shift towards a situation in which governments no longer provide and manage all health care. The private sector should be given a far bigger role as well.

Thompson Ayodele is executive director of Initiative for Public Policy Analysis, a Lagos-based think tank.

Image 1: Doctor examines infant at PMI hospital; a hospital for women and children. Cote d'Ivoire. Photo: Ami Vitale / World Bank.(CC)

Image 2: An HIV awareness poster in Kenya. Treveno/Flickr (CC)

Colombia: FARC Involved in Campaign Financing

2008-03-10T21:00:00.006-04:00

Colombian news magazine Semana reports that rebel group FARC was deeply involved in politics in Ecuador and Venezuela, citing documents (confirmed by the AP) detailing correspondence between FARC leaders and politicians of Venezuela and Ecuador. Among the allegations: that FARC considered funding Ecuadorian President Rafael Correa's 2006 campaign. Oversight and regulation of political financing in Ecuador is poor, earning a very weak rating in the latest Global Integrity Report: Ecuador.

Quoting the UPI:

BOGOTA, March 10 (UPI) -- Colombian leftist rebels reportedly discussed contributing up to $100,000 to the campaign of Ecuadorian President Rafael Correa.

The popular magazine Semana said documents discovered on the laptop computer of slain Colombian rebel leader Raul Reyes showed his Revolutionary Armed Forces of Colombia, or FARC, considered donating the money ahead of Correa's 2006 election, The Miami Herald reported Monday. It was not clear if any money was indeed sent to the Ecuadorian leader's campaign on behalf of FARC.

The rebel group and Reyes were at the center of a diplomatic firestorm last week when Colombian forces entered Ecuadorian territory to kill the leader and 16 other FARC members.