An OCCRP reporter has been invited back to the NATO Parliamentary Assembly's Rose-Roth seminar in Montenegro after last week being disinvited at the behest of the Montenegrin Parliament. Reporter Miranda Patrucic was slated to speak on fighting corruption before being asked not to attend.

Patrucic received a personal invitation today from a high-level representative of the NATO Parliamentary Assembly. The representative gave no official explanation for going back on the ban.

Patrucic appreciates the re-invitation, and remains committed to uncovering corruption.

“Organized crime is the biggest problem in Montenegro today,” Patrucic said. “By trying to hide it under the carpet, the problem is not going to go away. The only way things are going to get better is with true and open discussion, and I’m happy to share my insight at the conference.”

OCCRP editor Drew Sullivan said the important thing was an open and frank discussion.

“There are serious questions that have been raised and Miranda and other reporters in Montenegro have been doing that with their reporting.  Now we need to get answers and greater transparency from the Montenegrin government,” Sullivan said.

South East Europe Media Organisation (SEEMO), an affiliate of the International Press Institute (IPI), announced on Friday its condemnation of the Montenegrin government's attempt to silence journalists critical of its behavior.

As Mexican drug cartels look to expand their operations and increase profits, Ecuador could become a war zone, InSight Crime reports.  Colombian criminal groups have long held a virtual monopoly over trafficking corridors in  and out of Ecuador, but now Mexicans want a piece of the pie. Their intent, according to regional experts, is to move further down the drug chain and cut out Colombian middlemen.

The newspaper El Comercio reports that Mexican groups now likely have the capacity to transport their own drug shipments and that turf wars could ensue over control of departure points and routes.

At present, the conflict is still in its preliminary, non-violent stages.  El Comercio reports that Gangs are trying to damage their rivals by tipping off authorities to the location of cocaine shipments. This summer, police seized 1.9 tons of cocaine in the coastal province of Manabi alone. And El Comercio says that most of those seizures resulted from gang members’ information, at a cost of $20,000-$40,000 per tipoff.

Colombian gangs are well-established wholesalers, reports researcher Edward Fox at InSight Crime, and they are “unlikely to to give up their position without a fight.”

If that’s the case, violence is almost certainly in Ecuador’s future, and the question becomes whether or not the country’s police and security forces are up to the task.

An internal military report in Ecuador earlier this year “vastly underestimated” the organized crime threat, reports InsightCrime. Since then, the government has announced a plan to train 4,000 troops specifically for combating organized crime, but InsightCrime fears that may be insufficient if Colombian and Mexican groups are in open war.

Interpol arrested 80 people and confiscated $10.5 million worth of illegal pharmaceuticals during an annual week-long global operation.

A psychiatric hospital director in Armenia has been arrested and is facing charges of patient abuse, OCCRP partner Hetq reports. The arrest follows a story by Hetq last month which reported that Nver Hovhannisyan, director of the Vardenis Psychiatric Hospital, was forcing his patients to graze his private livestock.

The Armenia Prosecutor General’s office verified the Hetq story, and discovered that Hovhannisyan was indeed making his patients work, calling the labor a form of therapy. Forced labor wasn’t’ the only abuse either. One patient in Hetq’s story recounted being beaten. Another said that they were given nothing to eat for lunch.

Vardenis is a final stop for those deemed to be untreatable, Hetq reported. The patients there need heavy medication and lots of supervision. But reporters found that the only people looking after the patients were Hovyhannisyan’s friends.

International rules requiring shell companies to collect proof of customers’ identities are ignored and flaunted, a study shows. A research team affiliated with the Griffith University Centre for Governance and Public Policy in Australia impersonated customers and solicited more than 3,700 Corporate Service Providers that create and sell shell companies all over the world.

Shell companies are those which have the legal identity of actual companies – they can sue and be sued, hold bank accounts, own and sell property – but none of the personnel or active business. They can be created online quickly and at low-cost in dozens of countries, and they assume the national jurisdiction of the country in which they were created.

They’re popular among organized crime groups because, among other things, ownership is easy to conceal. They’re convenient tools and key resources for those engaged in money laundering, sanctions busting, tax evasion, and the financing of terrorism.

The Griffith University study wanted to determine how easy it was to obtain a shell company and whether or not providers were following the rules. The aim, ultimately, was to improve policy devoted to countering shell companies’ illicit uses.

The study’s findings were stark:

• International rules which govern shell companies are ineffective, especially those which require them to collect proof of customer identity. Nearly half of all replies (conducted entirely over email) did not ask for the proper identification. Twenty-two percent required no identification at all.
• To the researchers’ surprise, providers in poorer, developing countries were more compliant with global standards than those in wealthy nations.
• In general, providers were “remarkably insensitive” to even obvious criminal risks, though they were less likely to respond to high-risk customers with links to terror.
• Informing providers of the rules they ought to be following made them no more likely to do so; offering to pay providers a premium not to follow rules was effective. Demand for certified documents fell “precipitously” in those cases.

Though the study doesn’t expressly offer solutions to the ineffectiveness of these international rules, it does shine a spotlight on the problem. Because organized crime and terrorism depends heavily on financial secrecy, the study insists that governments need to increase their efforts to enforce corporate transparency.

Jason Sharman, the Director of the Griffith University Centre for Governance and Public Policy, says the study is crucial because it tells a side of the story that governments haven't seen yet. It "provides the most systematic and rigorous picture available of what actually happens in practice when it comes to the shell company industry, not just the laws on the books." 

OCCRP reporter Miranda Patrucic has been uninvited at the demand of Montenegrin officials from the 81^st annual Rose-Roth seminar, where she was scheduled to speak on fighting corruption. OCCRP editor Drew Sullivan was also denied access, as an attendee.

 The seminar was organized by NATO in cooperation with the Parliament of Montenegro, which was the subject of a recent OCCRP investigation by Patrucic and colleagues. That investigation found that a bank owned by family members of the ruling party leader Milo Djukanovic got large deposits from state institutions which it then loaned out in often illegal, sweetheart deals to family members and friends of the first family.  When many of those loans went sour, the government bailed out Djukanovic’s family bank with Montenegrin taxpayer money.

Patrucic found out last week that she had been uninvited from the seminar, when a NATO representative told her the Montenegrin Parliament Speaker Ranko Krivokapic had insisted she not attend. According to the NATO rep, Krivokapic gave as a reason his concern for the sensitivity of the timing, due to upcoming elections in Montenegro. In fact, Montenegro's elections will be over by the time the seminar begins, on October 15th.

"It has to do with the articles that I published, obviously," said Patrucic, who added that the Montenegrin State Prosecutor's reaction to the OCCRP investigation has been to investigate document leaks rather than to prosecute the crimes the investigation revealed. "The Prosecutor's primary and only job should be to prosecute crimes and investigate crimes, not cover up crimes," Patrucic said.

Patrucic was scheduled to speak on a panel with that State Prosecutor, Ranka Carapic.

Upon hearing of the ban, a fellow scheduled speaker reacted in protest. Dragana Zarkovic Obradovic, manager of the Serbia chapter of the Balkan Investigative Reporting Network (BIRN), withdrew from the seminar, where she was scheduled to speak, along with Patrucic and Carapic, on the importance of fighting corruption.

"It's really silly to talk about integrity at a conference when somebody was disinvited just for being critical of the government," Obradovic said. "Dropping out of the conference is a small, symbolic step, but for me, this is a matter of personal and professional integrity."

"It is sad that so many dignitaries will not hear the full truth about corruption in Montenegro," said Drew Sullivan, OCCRP editor.  "Apparently the government believes that it can manage corruption not through law enforcement but through public relations."

Elvis Kelmendi has been sentenced to one month detention in advance of his trial in Kosovo for the attempted murder of Elvis Hodzic in 2010, according to local media reports.

Mexican federal police who opened fire on an armored U.S. embassy vehicle and wounded two CIA agents in August may have been working for organized crime, the AP reports. A senior U.S. official said that there is strong circumstantial evidence to suggest that the Mexican officers were carrying out a targeted assassination attempt.

The shooting took place on a rural road south of Mexico City, which the AP calls “known territory” of what was once the Beltran Leyva cartel. Smaller splinter groups are now warring for the area.  A Mexican official said that members of Beltran Leyva may have been interested in attacking the vehicle because some lookouts had seen them passing through and presumed they were investigating the cartel.

A carload of gunmen fired on the Toyota SUV and gave chase. Three other cars joined the original vehicle and occupants of all four vehicles fired, the AP reports. The U.S. official said that these were automatic weapons, fired “with the intention of penetrating the armor and presumably killing those who are inside.”

The Mexican official said only federal police fired on the SUV. Twelve officers have been detained.

Multiple lines of investigation are still being pursued, but according to one security expert in Mexico, the attack was a calculated ambush. “The objective was to annihilate the three passengers in the car,” he said.

Mexican law enforcement and military personnel have long been known to work for various drug cartels, often acting as hit squads. More than 50,000 people have died over the past decade in drug-related violence in Mexico.

Nearly 5.6 million people in Latin America were living in displacement in 2011, the Internal Displacement Monitoring Centre reports. That’s an increase of 400,000 from the same statistic in 2010, and the rise can be partly attributed to organized crime in the region.

Displacements in Colombia accounted for the vast majority.  The government reported a total of 3.9 million displaced persons while the Observatory on Human Rights and Displacement estimated that the total reached as high as 5.3 million. (These are cumulative figures, not displacements in 2011 alone.)

Mass displacements occurred across the country when former military groups, now operating as drug-trafficking gangs, fought amongst themselves, forcefully took over territory for smuggling, recruited children, or simply forced people out of their homes to flex their muscles, the Christian Science Monitor reports.

The situation was similar in Mexico, albeit on a much smaller scale. The IDMC reports 160,000 displaced persons, many of whom fled their homes in the wake (or threat) of violent drug cartels.

In Guatemala and Peru, the situation was less clear, but the IDMC states that the displaced persons were primarily a result of their nations’ internal conflicts, 13 and 10 years ago, respectively.

The Christian Science Monitor reports that in Guatemala, violent criminal organizations like the Zetas are causing new displacement of residents and that palm oil companies are taking over massive land tracts for their plantations through the intimidation of farmers.

Government responses have been mild and insufficient, concluded the IDMC report. Colombia passed a “Victim’s Law” in 2010 to provide remedies and land restitution to those displaced by the armed conflict. But justice is hard won in the land of drug smugglers: 21 people were killed in association with that law.

In Mexico, the government drafted a bill on internal displacement in support of aid agencies and civil society organizations. If passed, it will be the first legislation on displacement in the country.