Russian civil servants will have to make their incomes public as part of a package of decrees handed down last week by President Dmitri Medvedev. Applicants for public office will also have to reveal how much they make.
Medvedev has made stamping out corruption a priority since taking office one year ago. The AP story on this most recent development was less than glowing – it said the push has met with little progress and that:
Last month, Medvedev attempted to lead by example by disclosing his income voluntarily. Since then all government ministers — including Prime Minister Vladimir Putin — have submitted income statements to be made public.
Observers noted that many of the statements appeared incomplete, with expensive acquisitions by often unemployed spouses left unexplained.
Also in Russia, reputed crime boss Semyon Mogilevich and cosmetics retail mogul Vladimir Nekrasov offered last week to post $7.5 million in bail as preliminary hearings opened in their tax evasion trial. That amount is five times the amount they are accused of failing to pay in taxes, according to the Moscow Times. A Moscow district court rejected the offer and announced that the trial will be closed to the public. The Moscow Times has some background on the case:
Nekrasov, founder of Arbat Prestige, once Russia's biggest chain of cosmetics stores, is accused of evading taxes of more than 49.5 million rubles ($1.5 million). Mogilevich, wanted by the FBI on racketeering, wire fraud, mail fraud and money-laundering charges since 2003, is accused of masterminding the tax evasion scheme. Both have denied wrongdoing, and Mogilevich, also known as Sergei Shnaider, has denied any involvement with Arbat Prestige. His lawyer Alexander Pogonchenkov has said he and Nekrasov only share a hobby of collecting paintings.
The trial is slated to begin June 1.
Dooney & Bourke Co-Founder Faces Trial in Bribes
Another trial slated for June 1 will see an American man face trial for helping the so-called “Pirate of Prague” bribe Azerbaijani government leaders in the failed bid to take over that country’s state-owned oil company. Frederic Bourke, a Connecticut-based entrepreneur who co-founded the purse maker Dooney & Bourke, denies knowing of a bribery scheme when he invested $8 million with the Czech-born businessman Viktor Kozeny. Bloomberg has the background:
U.S. prosecutors in 2005 said Kozeny, who had a home in Colorado, paid millions of dollars in bribes to Azeri leaders in attempt to buy a controlling stake in the state oil company in Azerbaijan, known as Socar. Bourke, one of Kozeny’s American investors, is alleged to have conspired with the Czech in violation of the Federal Corrupt Practices Act, the U.S. anti- bribery law, prosecutors said.
Kozeny now lives in the Bahamas and has successfully fought extradition to the U.S. in the case. Kozeny is also wanted by authorities in the Czech Republic, where he’s accused of stripping Czech companies of $1.1 billion.
Like Kozeny’s antics in the Czech Republic that earned him the “Pirate of Prague” nickname from Fortune magazine in 1996, Kozeny’s alleged malfeasance in Azerbaijan rode in on the vehicle of privatization. An earlier Bloomberg story here has the details.
Former Yugoslavia: Corruption, Mafia and Bribes
First it was the BBC’s report on Croatian organized crime that had the Croatian government and media in an uproar. Last week it was a Wall Street Journal opinion piece on Croatian corruption.
The op-ed, written by the co-founders of the Adriatic Institute for Public Policy (a Croatia-based think tank), merely points out what Balkan-watchers have known for a long time: That Croatia is not the gleaming model of Europeanization that the European Commission seems to think it is. The article lists the usual suspects – corrupt politicians, criminals-cum-businessmen – and talks about drugs, weapons and human smuggling along the Balkan Route. It points out that Bulgaria and Romania’s rushed European Union membership, and the problems the EU now has with organized crime and corruption in those countries, should be a lesson learned for the EU when it comes to Croatia and the rest of the region. The article is accurate and logically laid out. Never mind that a local paper referred to the BBC as having “thrown sticks and stones at the Croatian nation,” and refers to the WSJ op-ed as “the sequel.” It only proves the writers’ point:
Zagreb has also little patience for foreign critics. In April, the government protested as "untrue and malicious" a BBC report titled "Croatia: Cursed by Crime and Corruption."
Speaking of corruption, three managers of Croatia’s privatization agency were convicted week before last of fixing sales of state-owned property in exchange for hefty bribes. The former Croatian Privatization Fund vice-president Josip Matanovic was sentenced to 11 years in prison and ordered to pay €270,000 he had received in bribes in exchange for arranging the sales of state-owned property.
In Serbia, meanwhile, a prominent newspaper asserted this past week that the mountain resort town of Zlatibor is a hub for Serbian, Montenegrin and Bosnian Serb criminals. The paper cited a letter from the municipal head to the state authorities, asking for technical support and manpower so that the local police could fight what he called the “construction mafia.”
Also last week, the UN Office on Drugs and Crime signed a memorandum with the Regional Cooperation Council aimed to fight transnational organized crime in southeastern Europe.
Slovakia: Anti-corruption Court Unconstitutional
A high court in Slovakia has ruled that the country’s anti-corruption court, which tries financial and organized crime, is unconstitutional. The ruling last week came after 46 deputies from the prime minister’s party had complained that the judges at the court made nearly 10 times as much money as the average Slovak, and complained that an extraordinary judiciary like this court (which is on its own, outside Slovakia’s other court system) somehow violated separation of powers and judicial independence.
Since the court’s inauguration in 2005, according to the Slovak Spectator, it has
…sentenced one former mayor to five years for receiving bribes, a football referee for three years over corruption, put the boss of the eastern Slovak underworld behind bars for the rest of his life, and heard the case of the acid-bath gang – as its name suggests, one of the country’s most brutal criminal affairs…
The Spectator reported that no serious-thinking observers – particularly potential foreign investors – would celebrate the court’s verdict, which will shut the special court down.
Activists lobby US on Banking Due Diligence
The US government should require banks to identify not only the real owner of money in a bank account, but to have strong evidence that the money is not the proceeds of corruption, the head of a non-profit public policy group told a Congressional committee last week.
Global Witness investigator Anthea Lawson explained GW’s recent findings on how banks help corrupt leaders when they siphon money from their countries’ oil, timber and diamond companies to the House Financial Service Committee. The report named and shamed major banks – including Barclays, Fortis, Citibank and Deutsche Bank – for doing business with corrupt leaders worldwide. The full testimony can be found here.
Worldwide Actions Bring in Italian Mobsters
More than 70 alleged members of the Naples-based Camorra were arrested last week in one of the largest Italian police operations in years. The raids in the Naples area brought in Franco Letizia, who has been on Italy’s top-100 list of the most dangerous fugitives since he went to ground more than a year ago.
Also last week, Brazilian authorities arrested a Sicilian mob boss’s son who had been living in Brazil under an assumed name for 15 years. Brazilian police said that 25 other suspects had been arrested in the same multinational fraud sting in Italy, Spain and Venezuela, but gave no other details. The US deported a Gambino family boss to Italy to answer to charges from 1980 after the man had spent more than 20 years in US prison for drug trafficking. And Calabrian mob-connected Giovanni Strangio, who’s suspected of organizing and leading the 2007 murders of six Italian men in Germany, arrived at his prison in Rome after his extradition from Holland last week. No word on when he could face trial.
In corruption news, Italian Prime Minister Silvio Berlusconi faced calls for his resignation last week after a judge ruled that a British tax lawyer had given false testimony to protect Berlusconi during two separate corruption trials.
…the judges said they had concluded that Mills was guilty because the evidence showed that he had given false testimony in two trials in 1997 and 1998 to shield Mr Berlusconi and his Fininvest company from charges relating to the purchase of US film rights, and to “protect Berlusconi’s economic interests”.
They said that Mills had accepted a bribe of $600,000 (£388,000) to act “as a false witness” and “to allow Silvio Berlusconi and his Fininvest group impunity from the charges or, at least, to keep their huge profits”.
Berlusconi called the verdict “outrageous” and said he would appear before Parliament to clear his name.