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Corrupt Britain: The Land of Cover Ups, Whitewashes & Secrecy

This session will look at - and seek to explain - the British obsession with cover-ups and whitewashes, as evidenced in recent years by farcical and less-than-honest inquiries into matters such as phone-hacking, Hillsborough, and Jimmy Savile and a prevailing attitude of 'protect the establishment at all costs'. It will also look at the hypocrisy of British politicians who claim to advocate transparency and integrity, particularly for offshore financial centres, while practicing secrecy and deceit.

How Russian Style Kleptocracy Conquered America

I remember this period. The Americans and European wealthy so envied the New Russians. (the gangsters) "Crime That Pays Is Crime That Stays" (modern proverb) ... ... "But Palmer had seen up close how the world’s growing interconnectedness—and global finance in particular—could be deployed for ill. During the Cold War, the KGB had developed an expert understanding of the banking byways of the West, and spymasters had become adept at dispensing cash to agents abroad. That proficiency facilitated the amassing of new fortunes. In the dying days of the U.S.S.R., Palmer had watched as his old adversaries in Soviet intelligence shoveled billions from the state treasury into private accounts across Europe and the U.S. It was one of history’s greatest heists. Washington told itself a comforting story that minimized the importance of this outbreak of kleptomania: These were criminal outliers and rogue profiteers rushing to exploit the weakness of the new state. This narrative infuriated Palmer. He wanted to shake Congress into recognizing that the thieves were the very elites who presided over every corner of the system. “For the U.S. to be like Russia is today,” he explained to the House committee, “it would be necessary to have massive corruption by the majority of the members at Congress as well as by the Departments of Justice and Treasury, and agents of the FBI, CIA, DIA, IRS, Marshal Service, Border Patrol; state and local police officers; the Federal Reserve Bank; Supreme Court justices …” In his testimony, Palmer even mentioned Russia’s newly installed and little-known prime minister (whom he mistakenly referred to as Boris Putin), accusing him of “helping to loot Russia." "The United States, Palmer made clear, had allowed itself to become an accomplice in this plunder. His assessment was unsparing. The West could have turned away this stolen cash; it could have stanched the outflow to shell companies and tax havens. Instead, Western banks waved Russian loot into their vaults. Palmer’s anger was intended to provoke a bout of introspection—and to fuel anxiety about the risk that rising kleptocracy posed to the West itself. After all, the Russians would have a strong interest in protecting their relocated assets. They would want to shield this wealth from moralizing American politicians who might clamor to seize it. Eighteen years before Special Counsel Robert Mueller began his investigation into foreign interference in a U.S. election, Palmer warned Congress about Russian “political donations to U.S. politicians and political parties to obtain influence.” What was at stake could well be systemic contagion: Russian values might infect and then weaken the moral defense systems of American politics and business. This unillusioned spook was a prophet, and he spoke out at a hinge moment in the history of global corruption. America could not afford to delude itself into assuming that it would serve as the virtuous model, much less emerge as an untainted bystander. Yet when Yegor Gaidar, a reformist Russian prime minister in the earliest postcommunist days, asked the United States for help hunting down the billions that the KGB had carted away, the White House refused. “Capital flight is capital flight” was how one former CIA official summed up the American rationale for idly standing by. But this was capital flight on an unprecedented scale, and mere prologue to an era of rampant theft. When the Berkeley economist Gabriel Zucman studied the problem in 2015, he found that 52 percent of Russia’s wealth resided outside the country. The collapse of communism in the other post-Soviet states, along with China’s turn toward capitalism, only added to the kleptocratic fortunes that were hustled abroad for secret safekeeping. Officials around the world have always looted their countries’ coffers and accumulated bribes. But the globalization of banking made the export of their ill-gotten money far more convenient than it had been—which, of course, inspired more theft. By one estimate, more than $1 trillion now exits the world’s developing countries each year in the forms of laundered money and evaded taxes. As in the Russian case, much of this plundered wealth finds its way to the United States. New York, Los Angeles, and Miami have joined London as the world’s most desired destinations for laundered money. This boom has enriched the American elites who have enabled it—and it has degraded the nation’s political and social mores in the process. While everyone else was heralding an emergent globalist world that would take on the best values of America, Palmer had glimpsed the dire risk of the opposite: that the values of the kleptocrats would become America’s own. This grim vision is now nearing fruition."

Enron's Global Crusade by Jon Nichols

"And Enron’s domestic activities are only a part of the story. To limit discussion of Enron to them is to miss the most dramatic lessons of this burgeoning scandal. “If you want to know where economic globalization along the lines cheered on by the WTO, the IMF, the World Bank, George W. Bush and Tony Blair is headed, look at Enron. Globalization has created an international no man’s land where businesses survive by engaging in financial practices that no responsible nation-state would permit,” says Tony Benn, Britain’s former minister of industry. “When you allow corporations to write their own rules in the global marketplace, which is what has essentially been the case in recent years, you will see unimaginable abuses.” Enron was big on writing the rules. Before its collapse, it held a place on the board of the National Foreign Trade Council, which worked with the WTO to forge trade policy. It sponsored the 1999 World Services Congress in Atlanta, where, Polaris Institute researchers say, the services industry set its agenda for a new round of WTO negotiations. Along with its accounting firm, Arthur Andersen, Enron was at the center of the shadowy US Coalition of Service Industries’ campaign to negotiate General Agreement on Trade in Services (GATS) schemes that remove restrictions on international commerce involving services. The GATS negotiations, which have been going on for two years under the aegis of the WTO, were described at the World Economic Forum by former Clinton Administration Treasury Department official Stuart Eizenstat as a move to “allow [Arthur] Andersen to export its accounting services to the world.” Eizenstat’s attempt at humor was actually a blunt statement of reality. The first rules for a profession developed by the WTO as part of the GATS negotiations were for the accounting sector–and the rules were indeed shaped with a big assist from Arthur Andersen. So what might appropriately be dubbed “Enron accounting” is already in the process of going global. The loosening of rules governing sectors of the global economy in which Enron was involved was a long-term corporate priority. During the go-go years of business expansion in the 1990s, the company scoured the planet in search of opportunities in countries that were embracing–sometimes willingly, often under pressure from the World Bank and the International Monetary Fund–“market-oriented reforms.” These public-policy shifts allowed multinational corporations to buy formerly public utilities and capitalize on the lifting of traditional regulations–moves that opened the door to aggressive global corporations like Enron. Forged in the last years of Ronald Reagan’s presidency by an ambitious former Pentagon economist named Ken Lay, Enron was a corporation designed to shape and then master the new economy of the post-cold war era. Lay preached what Britain’s Independent newspaper described as a “deregulation-happy philosophy” with such passion that The Economist would eventually describe Enron as “an evangelical cult” in which Lay was the messiah. Enron’s crusading globalism extended the corporation’s operations into virtually every sector of every economy worth owning a piece of, using all the tricks in the corporate globalizer’s handbook. “The thing that you have to understand about Enron is this: They have taken advantage of every opportunity globalization has presented them. They have been in the forefront of pushing deregulation and privatization, pushing for access to markets around the world, using pressure from the US government to open trade,” says the Polaris Institute’s Puscas. Once borders opened, once privatized industries were put up for sale and once sectors of economies were deregulated, Enron moved aggressively to gain advantage. Business Week explained that for companies like Enron, “the approach to globalization then was brutally simple: get in fast, strike megadeals with top officials, and watch the profits roll in.” Initially, it seemed, the model was working. Enron was often credited with putting new technologies to work in the service of its rapid expansion. But as much as the corporation benefited from the rise of the Internet, a case can be made that its bottom line gained at least as much from the opening of markets around the planet to swashbuckling corporate adventurers, who brought Texas-style business practice to Australia, Brazil and Croatia. Between 1998 and 2001 Enron’s foreign revenues increased from 7 percent to 23 percent of the company’s total revenues–adding $22.9 billion in 2001 to the coffers of a company that, it turns out, needed every cent it could get its hands on. Enron executives embraced the gospel of globalization with a fervor that portrayed free trade, deregulation, privatization and other planks in the neoliberal platform as the necessary and inevitable face of progress. “We are on the side of the angels,” declared former Enron CEO Jeffrey Skilling. “People want to have open, competitive markets.” That is a debatable point. When officials in the Indian state of Maharashtra took advantage of a recent relaxation of India’s restrictions on foreign investment to invite a joint venture led by Enron to build a power plant south of Bombay, nearby villagers were certainly not clamoring for the “open, competitive markets” Enron was offering. They worried that the Dabhol power-plant project would destroy their livelihoods and their environment. When they launched a movement to stop it, leading activists were dragged from their homes and beaten by Enron-paid “police” in what Human Rights Watch describes as “serious, sometimes brutal human rights violations carried out on behalf of the state’s and the company’s interests.” “Enron is now being widely accused of arrogance and lack of transparency, but the people of Dabhol have known that all along,” says Arvind Ganesan, who directs the group’s business and human rights program. “Enron was complicit in human rights abuse in India for several years.”

State Capture: An Overview

"Why don't our political parties tell us that many (most?) of them are corrupt and only in it for themselves?" Hmm..

Trilemma

The trilemma of hyper-globalization.

The Debts of Corruption by Patricia Adams

A global movement is asking Western nations to forgive 'odious' debt extended to despotic regimes. The cause has merit, but opposition is building. Tomorrow, a coalition of Canadian churches will present the government with one of the largest petitions in Canadian history – 600,000 signatures calling to cancel the foreign debt of heavily indebted Third World countries. Using biblical language, the Jubilee 2000 coalition asks the prime minister to free the oppressed of their debts by the start of the new millennium. So do the Pope, the Dalai Lama, other top religious leaders, and Jubilee 2000 coalitions formed in 155 countries to oversee this groundswell movement, which has collected seven million signatures to date, and still counting. The petitions will be submitted to the G7 leaders at their meeting in Cologne, Germany, this June. Sensing a political nightmare – as well as an opportunity to cleanse their books of embarrassing loans – the G7 governments, the World Bank, and even the International Monetary Fund are scrambling to produce debt relief proposals to appease the activists. The U.K. believes $50-billion in debt forgiveness is feasible (all figures in U.S. dollars); the U.S. proposal, led by Bill Clinton, aims for $100-billion

Odious Debt (IMF)

"Similarly, Anastasio Somoza was reported to have looted $100-500 million from Nicaragua by the time he was overthrown in 1979. Sandinista leader Daniel Ortega told the United Nations General Assembly that his government would repudiate Somoza's debt, but reconsidered when his country's allies in Cuba advised him that doing so would unwisely alienate Nicaragua from Western capitalist countries. Some countries have attempted to confiscate and restitute funds that an ex-ruler salted away abroad, but with mixed results. For example, Nigeria recently recouped money from Sani Abacha's family, but the Philippines has little to show for its protracted campaign to repatriate Ferdinand Marcos's fortune. Moreover, any money that has been squandered is gone forever."

The Value For Money Debt audit: An alternative weapon against state capture

by Mary Serumaga on the CADTM.org anti-debt web site "Many African nations are mired in huge debts arising from foreign loans that have hardly benefitted the people. The citizens need to audit these debts. Odious debts should be repudiated, damn the consequences. Moreover, as Thomas Sankara demonstrated in the four years he was president of Burkina Faso, African nations do not need foreign loans to meet the needs of their people. In the 1990s, post-war Uganda was restructuring the civil service. The country was awash with World Bank funds and donor grants for ‘re-tooling’ public offices, capacity building and rehabilitating infrastructure. At the time, short landings were the order of the day. It is a universal fraudulent practice involving a supplier of goods delivering less than the goods paid for or nothing at all, and then being issued a goods received note by a colluding administrator. The supplier is then paid against the Note. Locally it was called ‘air supply.’"

Causes of the Debt Crisis - Global Issues

"Third world debt has long been recognized as a major obstacle to human development. Many other problems have arisen because of the enormous debt that third world countries owe to rich countries. Debt has impeded sustainable human development, security and political or economic stability. How has this happened?" (Note: it seems this odious and illegitimate "Third World Debt" is cited as one of the reasons for the GATS (???) by the UN in document A/RES/44/232 )

State Capture

The classical definition of state capture refers to the way formal procedures (such as laws and social norms) and government bureaucracy are manipulated by private individuals and firms so as to influence state policies and laws in their favour. State capture seeks to influence the formation of laws to protect and promote influential private interests. In this way it differs from most other forms of corruption which instead seek selective enforcement of already existing laws.[3] State capture may not be illegal, depending on determination by the captured state itself,[4] and might be attempted through private lobbying and influence. The influence may be through a range of state institutions, including the legislature, executive, ministries and the judiciary, or through a corrupt electoral process. It is similar to regulatory capture but differs in the scale and variety of influenced areas and, unlike regulatory capture, the private influence is never overt. The private influences cannot be discovered by lawful processes, since the legislative process, judiciary, electoral process, and/or executive powers have been subverted.