Russia: Ikea Halts Investment, Cites Corruption

While the company’s Russia director cited the “unpredictability of administrative processes” in the country as the basis for the decision, the announcement came after a series of public complaints. In one, company founder Ingvar Kamprad told Swedish radio that Russian authorities had overcharged Ikea for millions of dollars in electricity because Ikea would not pay bribes in Russia.

Ikea’s decision is the equivalent of two black eyes for Russia, first because Russian President Dmitry Medvedev has made fighting corruption a top priority of his presidency, and second because Ikea – which does business in 36 countries worldwide – is hardly queasy about investing in places outside the Western world.

Russia: New Politkovskaya Chapter

Meanwhile, Russia’s highest court last week ordered a retrial of three men acquitted of involvement in the murder of journalist Anna Politkovskaya, upholding an appeal by prosecutors who had argued that procedural violations may have biased jurors. Politkovskaya, who had made a career out of covering Russia’s Chechen wars and railed against corruption in Russia, was murdered in October 2006. No one has been charged for her murder. Three Chechen men, charged with involvement in the killing, were acquitted in February after a Moscow jury said prosecutors lacked evidence linking them to the crime. Politkovskaya’s adult son and daughter say there’s no basis for overturning the original verdict. They and others believe that Russian authorities have no interest in finding the murderer, who committed the act on then-President Vladimir Putin’s birthday. Politkovskaya’s killing was one of 17 listed by the Committee to Protect Journalists in its testimony on Russia’s climate of impunity before a US commission last week.

In other Russia-related news, Russian businessman and suspected arms dealer Viktor Bout is trying a new tactic to delay his extradition to the US, reports the New York Times. Bout, who was arrested in a DEA sting in Thailand last year, charges that the Americans violated Thai law by arresting him alone without calling in the Thai police, and carried firearms not condoned by Thai law. The new case will be brought on July 13.

Wimbledon Betting Prompts Panel

Alarmed by some irregular betting patterns on matches at this year’s Wimbledon, the UK government has established an expert panel to look at the threat of gambling-related corruption in British sports. The Daily Telegraph reports:

The Government’s panel, to be chaired by former Liverpool chief executive Rick Parry, will address issues concerning the integrity of sport, with particular reference to the rise in new formats of sports betting.

Traditional bookmakers, betting exchanges, the police, supporters groups as well as officials from racing and football are represented on the panel, which will make recommendations to sports minister Gerry Sutcliffe in six months.

It’s hoped that the new panel won’t meet the same fate as a similar unit that monitors tennis only. The Tennis Integrity Unit has only two full-time employees, reported the Guardian last week, which is far and away from the nine employees that the TIU head called for when he was appointed in January. 

Kroll: Stimulus Fraud Could Reach $500 Billion

Fraud losses from government efforts to pump money into beleaguered economies could run as much as $500 billion, according to a new report from risk-consulting company Kroll. The company agreed with financial services firm Deloitte’s earlier reckonings that between 5 and 10 percent of government procurement money disappears into the yawning maw of corruption; its report coincided with the FBI director’s recent remark that fraud related to US government stimulus projects have “the potential to be the next wave” of FBI investigations into public corruption.

Fortunately, countries now have a model to which they can look when trying to recoup stolen public money. China announced last week that it had recovered nearly $4 billion of public money that had been embezzled last year. Reuters, which reported the story, did not say whether any of the 30 people sentenced and 117 additionally punished by the Communist Party were sentenced to death, which is relatively common in China for serious economic crimes.

Italy Confiscates Canadian Mob Financier’s Art

An Italian judge ordered a multi-million dollar art and antiques collection belonging to the Montreal Mob’s financier turned over to the Italian government last week. Among the fine things confiscated were 345 paintings, 220 antique clocks, precious gems, collector’s coins and ancient and antique vases and statues. Investigators have yet to officially appraise the collection that once belonged to Beniamino Zappia. Also known as “Don Tito,” the 71-year-old is imprisoned in Italy for gangsterism and financial crimes after Italian anti-Mafia police went after the European operations of a Montreal-based mafia that the RCMP refers to as “the pinnacle of organized crime” in Canada.

Other Italian Crime and Corruption News

In other global Italian crime news, Venezuela is set to deport an Italian drugs middleman whom his fellow mobsters called the “Mafia’s foreign minister,” reports the AP. Venezuelan and Italian police arrested Salvatore Miceli, who is believed to have trafficked cocaine, heroin and morphine, earlier this month in Caracas.

Miceli was one of Europe's top five drug traffickers, said Capt. Antonello Parasiliti of the Carabinieri police in Trapani, who led the Italian police operation to arrest Miceli in Venezuela.

Parasiliti told The Associated Press by phone interview that Miceli worked as a middleman between Italy's and South America's organized crime groups, leading fellow mobsters to call him the "Mafia's foreign minister" and "the chicken that lays golden eggs."

Besides South America, the mob apparently has other south-of-the-equator locations in its sights. Australia, particularly Melbourne, is a prime location to launder Italian crime groups’ dirty money, Australian MP Jason Wood told Parliament last week. Legislation has been introduced in Parliament to target suspect money that criminals cannot prove they’ve earned lawfully. The legislation would require people to prove they’ve earned their wealth legitimately.

Back in Italy, the Senate is about to pass a new wiretapping law that by all accounts would make prosecutors’ jobs much more difficult. Here’s a legal rundown from the news round-up site the European Tribune:

Whereas wiretaps could be authorized on the basis of "compelling evidence of a crime" it may now only be requested on "compelling evidence of guilt" and only if "absolutely indispensable." A request for wiretaps must be approved by three judges rather than one. This has prompted the wry comment that to condemn a person to life imprisonment one judge is enough while to listen to a mafia boss three are needed.

Italian magistrates are furious. Their national association called the legislation “the death of criminal justice in Italy.” One writer called it “a gift to the mafia.” Journalists are none too pleased, either. This from the European Federation of Journalists, which has called on the Senate to oppose the law:

Article 2 proposes a prohibition for journalists to refer to preliminary police investigations in their reporting until these investigations are complete. Further, it forbids journalists to publish any official investigation documentation until hearings have started. This means that official public documents will not be considered public anymore.

Article 13 of the draft law contains two amendments to the Criminal Code that would increase the punishment for journalists and editors who publish such documents or who publish leaked police wiretaps. Reporters risk three years of prison and editors a fine of up to € 465,000.

Why would lawmakers in a country like Italy be even remotely interested in binding the hands of their crime fighters and journalists? Enter Prime Minister Silvio Berlusconi. The Economist explains:

THE story of Silvio Berlusconi’s lobbying to secure television parts for glamorous actresses is one of the more strange and memorable tales of the Italian prime minister’s colourful history. In 2007 an Italian newspaper published leaked transcripts of telephone calls between Mr Berlusconi, then leader of the opposition, and a senior executive at Italy’s public broadcaster. In one of them Mr Berlusconi, seeking to upset the centre-left government’s narrow majority in the upper house, is quoted as explaining that “I’m trying to get the majority in the Senate”. One voluptuous actress has “been requested from me by someone with whom I am negotiating”.

The inevitable suspicion was that Mr Berlusconi was trying to persuade legislators to defect by using the oldest bait in the book. On February 25th, however, the case was dropped. Prosecutors said there was insufficient evidence of wrongdoing for either Mr Berlusconi or the executive to be tried. On the same day, oddly, Mr Berlusconi’s People of Freedom (PdL) alliance dropped some of the more draconian measures in a bill designed to limit wiretaps and reports of their contents.

The episode illustrates many of the misgivings that surround Mr Berlusconi in his latest effort to overhaul the legal system: is he really seeking to enhance Italy’s poor standards of justice, or is he trying to protect his own interests?

Given that Berlusconi has pushed for at least two other laws, one to freeze trials, including his and one to provide immunity to public officials (this one and this one) that shielded him from corruption trials, that is indeed the question.