Business leaders around the world called on the UN last week to strengthen its anti-corruption convention, which is currently the only international agreement on corruption.
CEOs of India’s Tata Sons, Sweden’s Ikea, the US’s General Electric, Switzerland’s Novartis and others told UN Secretary-General Ban Ki Moon in a letter that the economic crisis will mean more competition, and they fear that some companies won’t play fair. They recommended that the UN begin what they called a “review mechanism” of the convention in November.
The mechanism is basically a way for the UN to begin implementing its Convention against Corruption, which was adopted in 2003 and ratified by 136 countries. The convention defines corruption as a crime, and requires signatory countries to help each other in tracking offenders. Annual reviews to check the convention’s progress were apparently part of the original idea behind the convention, but it appears that those were neglected.
Business leaders last week suggested that the review process should have long-term funding, include country visits with peer reviewers from other countries and should publish reports on the findings. They noted that
The UN Convention is a complex legal instrument and requires careful follow-up of its implementation to achieve its objectives. Political will and determined action by governments are necessary to put into place effective prevention and enforcement measures, as well as new processes for international cooperation. Hoping that the Convention’s provisions will work, without follow-up reviews, would be a dangerous mistake.
Official: Corruption Bulgaria’s Biggest Problem
Corruption is the biggest problem that Bulgaria’s economy faces, said the US official who drafted Bulgaria’s currency board agreement.
He made his remarks last week.
"My recommendations on flat tax, fiscal control and economic deregulation have all been implemented. Corruption and organised crime, however, remain the Achilles' heel of Bulgaria's economy," (Steve) Hanke said.
Hanke, who was a senior economist on the council of economic advisors to US president Ronald Reagan, drafted the currency board agreement Bulgaria adopted in 1997, after a banking crisis wiped out billions in savings and shattered the country's financial services sector. Under the currency board agreement, the Bulgarian lev was pegged to the German mark and then the euro.
Meanwhile, police in Bulgaria’s western neighbor Macedonia, were part of an OSCE training on organized crime last week. The Interior Ministry’s organized crime department learned about European strategies to counter organized crime threats in Macedonia and the Balkans in general.
US Conference: Crime, Other Threats Converging
Cities could be destroyed and governments subverted if a growing wave of crime and other international illicit activities aren’t checked, said the director of anti-crime programs at the US State Department’s drugs and police bureau.
Speaking at a George Mason University lecture series, the Bureau of International Narcotics and Law Enforcement’s David Luna outlined the threats.
We are under a threat from a growing wave of crime and transnational illicit activities that, if not contained, has the potential to destroy our cities and subvert governments. For example, drug cartels that have long been a key security threat in the Western Hemisphere, are now brazenly expanding their illicit operations beyond traditional areas and sectors of operation. Multi-ton shipments of cocaine from Latin America now flow through West Africa as a transit/staging area for moving the product to Europe and Asia and other regions. In Europe, we are seeing synergies among various Eurasian mafias and criminal syndicates from Africa and from other regions that, if left unmitigated, will continue to harm the collective interests of governments committed to democracy and the rule of law.
Transnational crime was merely the first item on Luna’s bleak laundry list. Terrorist groups using organized-crime methods to raise money, crime groups’ use of sophisticated technology to steal identities and commit financial fraud, and maritime piracy also made appearances on the relatively detailed list. Where Luna lapsed into generalities, though, was the section on what the new US administration is doing about the threats. After mentioning summits and conferences with the G-8, NATO and the International Anti-Corruption Conference, Luna said:
Together, the United States, working with our partners, can combat these threats decisively by combining our joint efforts against terrorism, transnational crime and corruption across the international community, developing strong law enforcement and dynamic multi-disciplinary threat mitigation approaches, and enhancing our cooperation through public-private partnerships.
No word yet on whether criminals, terrorists and pirates are scrambling to go into hiding because they fear that “dynamic threat mitigation approaches” and “enhanced cooperation through public-private partnerships” might shut them down and land them in jail.
Italy: Toxic Waste Mountain Missing
A mound of illegally trafficked toxic waste as high as Mount Etna (nearly 11,000 feet or 3,300 meters) has apparently gone missing, reported an Italian environmental group last week.
Italy last year produced more than 30 million tons of waste that couldn’t be accounted for, stated Legambiente in its annual report on waste trafficking by Italian organized crime. He used a hypotethical mound of garbage to illustrate his point.
At some seven billion euros in 2008, waste trafficking was confirmed as the Mafia's highest earner among so-called 'eco-crimes'. This was ''significantly higher than in 2007, when the traffickers shared around four and a half billion,'' Legambiente said.
The Campania region around Naples led the way with almost 600 waste violations, 15% of the nationwide total, followed by Puglia and Calabria with some 300 each.
After waste trafficking, the other biggest eco-crimes are illegal construction, ''attacks on the cultural heritage,'', animal trafficking and Mafia involvement in environmentally unsafe farming and food fraud - the so-called agro-Mafia.
Though the world economy saw dark days in 2008, the so-called eco-Mafia saw €20 billion in turnover last year, according to Legambiente.
More Italy/Sicily News
In other Italian environmental news, Sicilian anti-Mafia magistrates have opened a massive investigation into crooked wind farm projects in Sicily. Crime fighters suspects that local officials, entrepreneurs and criminal gangs have been colluding to build lucrative wind farms that can later be sold to larger corporations. The FT had the story, quoting Palermo-based anti-mafia prosecutor Roberto Scarpinato:
Italian and EU subsidies for the building of wind farms and the world’s highest guaranteed rates, €180 ($240, £160) per kwh, for the electricity they produce have turned southern Italy into a highly attractive market exploited by organised crime.
…
Prosecutors suspect the hand of the Mafia in fixing permits and building wind farms that are then sold on to Italian and eventually foreign companies. In an effort to assert its control over the sector, the Mafia is suspected of destroying two wind towers that were in storage in the port of Trapani after their delivery by ship from northern Europe, local officials told the FT.
“It is a refined system of connections to business and politicians. A handful of people control the wind sector. Many companies exist but it is the same people behind them,” said Mr Scarpinato, whose investigations have focused on the evolution of the Mafia into a modern business organisation.
Sicily’s Cosa Nostrais evolving and finding new business opportunities, including the renewable energy sector, by exploiting its historic grip over territory, construction and ability to corrupt local officials.
Several wind farms built by companies suspected of being linked to the Mafia have not functioned for one or two years, in some cases because of shoddy construction. “This is the amazing thing, that developers got public money to build wind farms which did not produce electricity,” the prosecutor said.
In law enforcement news, police seized €10 million worth of assets – including several companies and 25 vehicles – from a suspected Calabrian mob boss, and arrested another who’d been on the run since 2005.
Israel report OC Fight’s Approach Flawed
Israeli police are largely failing to aim for the wallets of organized crime groups, according to the state comptroller’s annual report on police efforts to fight the mob in Israel.
While police have made arrests of senior figures and mapped out who does what in each group, the police have not charted or moved against the assets of organized crime bosses or groups. Other problems are the lack of a witness protection program, and plans that have not materialized, such as the plan to create an organized crime task force and plans to boost cooperation among the police, the Israel Tax Authority, the Israel Money Laundering Prohibition Authority and the Justice Ministry.
Public Security Minister Yitzhak Aharanovitch was blunt after the report was released:
"The Tax Authority is the weak link. This isn't the way to fight organized crime," he said. "Arrests [of senior members] look good in the media, but when you take care of some problems and not others, the [main] problem remains."
So it came as no surprise when Aharanovitch later announced that he would set up a new organization that could check suspected mobsters, an operation independent of the Israel Tax Authority (ITA). The Jerusalem Post also had the story:
"We hoped that we could find a solution involving the tax authority, but things are stuck and cooperation is not forthcoming," the source said. "The economic war is the central component in the struggle against organized crime, and we need a solution."
The ITA has not been fully cooperating with police efforts to seize the assets of criminal organizations and break up their businesses, because of a dispute over hazard payments.