InvestIdeas

Long arm of US law battles corruption overseas by Alexander Osipovich

Envelopes stuffed with cash and lavish gifts for foreign officials were once standard practice for companies chasing profits in the red-hot markets of Asia, Africa and Latin America, but now US authorities have cracked down stepping up enforcement of the Foreign Corrupt Practices Act (FCPA), a 1977 law rarely enforced until recently.

On Thursday, Japanese rubber giant Bridgestone agreed to plead guilty to charges that its US employees bribed officials of Mexico's state oil firm Pemex to win deals, sometimes writing "Read and Destroy" on sensitive fax messages about the illicit payments.

And in July, US regulators charged London-based liquor company Diageo with FCPA violations that included taking South Korean officials on a junket to Prague and Budapest in return for favorable tax treatment.

Diageo also paid a senior Thai official to lobby for lower sales taxes on its Johnnie Walker whiskey and bribed employees of state-owned liquor stores in India to stock its brands, the US Securities and Exchange Commission (SEC) alleged.

Diageo did not admit wrongdoing but paid $16 million to settle the charges.

Other countries are following suit: Germany has stepped up use of its Anti-Corruption Act and Britain brought its Bribery Act into effect in July.

This year, Australian prosecutors applied a decade-old foreign bribery law, for the first time when they charged Securency, a banknote-printing company, with bribing officials in Indonesia, Malaysia and Vietnam.

"Corrupt government officials continue to ask and if companies operating under the FCPA won't pay, they'll find other companies that will.

"It's not a secret that Russian and Chinese companies behave in a manner that reflects the absence of a similar statute."


Source: AFP Global Edition

http://www.newsmeat.com/news/meat.php?a ... &buid=3281

Read this from The Straits Times

By Gwynne Dyer, January 1, 2012
It’s getting harder for freelance journalists to make a decent living, so recently I’ve had to branch out into the advice-column business. The people who write in seem pretty flaky, on the whole, but sometimes their letters cast a useful light on larger issues. For example:

Dear Aunt Gwynne:

People say I am beautiful and my men friends tell me that I am very accomplished, but I have a problem. I married my high-school sweetheart, but he was in the construction business and he went bankrupt in the crash. We are now divorced and I have lots of new boyfriends, but I really want security this time and it’s so hard to choose.

My Chinese boyfriend comes from a rich family who are also in the construction industry. That means they have to give a lot of bribes, but I’m used to that. The problem is that he is not a Communist party member, and nobody in his family is a senior regime official. What if they execute him for bribery?

I don’t really know what my Russian boyfriend does for a living, but I think it’s not exactly legal. He has tons of money, but his bodyguards never leave his side, so the bed is quite crowded. He bribes all the right people, he says, but sometimes he talks about politics and that scares me. What if the government decides he is an enemy?

The other guy is an Indian, and his family is in the construction business too. He’s really sweet and I like him best, but nothing works in India. Also, I just read that they’ve passed a law in India that would make it dangerous to bribe people, and then the whole family would go out of business. I don’t know what to do. Please help.

–Perplexed of Beverly Hills

Dear Perplexed:

You have my sympathy: anguish can strike at every socioeconomic level. Let’s take this one piece at a time. I agree that the Russian boyfriend is problematic.

Criminality is no obstacle in itself, but if your boyfriend is thinking of dabbling in Russian politics, he will soon be neither free nor rich. You should move on.

Your Chinese boyfriend sounds better, but his lack of connections really is a potential problem. Bribery is as common as spitting in the street in China, but the regime does jail or execute somebody once in a while to show it cares. The chances are no more than one in 50, but to be really safe one should be a Communist party member. Only one in a thousand of them ever get punished. Can your boyfriend get a party card?

If not, you really should consider the Indian boyfriend. Poor infrastructure is not a problem that affects the rich in India, and bribery is a perfectly normal part of life for everybody. I wouldn’t worry about the new law that the Indian parliament passed.

The lower house did vote in favour of a tough anti-corruption law, but they made sure that the new anti-bribery ombudsman would have no control over the Central Bureau of Investigation, which actually carries out the corruption investigations (when it feels like it). Besides, the upper house of Parliament failed to vote on the new law last week, so it’s probably not going to happen at all.

Eight similar anti-corruption bills have failed to make it onto the books in India in the past 43 years, so why should this one be different? And why do you feel that you have to outsource your husband anyway?

You seem to be American, from your address, and there are plenty of rich Americans. In the United States bribery is called “political contributions” and it’s perfectly legal. And if Americans are rich enough, they don’t pay any taxes at all. So head up, chest out, stomach in, and get on with it. Corruption is only a problem for the little people.

–Aunt Gwynne

Putting my journalist’s hat back on, I must admit that I was cutting a few corners in that answer. In Transparency International’s “Corruption Perceptions Index”, Russia is actually ranked as much more corrupt than China or India. It ranks at 143 (higher numbers means worse corruption) out of 183 countries, tied with Nigeria, East Timor, and Togo.

India and China do much better, coming in at 95 and 75 respectively. And the United States, with a rank of 25, is only a little more corrupt than Chile, Qatar, and the Bahamas.

Indeed, corruption in the United States is mainly a political problem. The petty corruption that make daily life so wearing in most developing countries barely exists there. Why don’t most Americans take bribes? Because they earn enough that they do not feel compelled to demand bribes to do their jobs.

Anti-corruption commissions and the like can make dents in the problem, but the only long-term solution is to pay people a living wage, which generally happens only when you give them a democratic voice. There is no moral gulf between New Zealand (ranked number one on the scale) and Uzbekistan (ranked 177), just a huge difference in politics and in living standards.

ST = tabloid papers... good lah... carry more of such nonsense articles and see it crumbling as a mouth piece of pap

Presenting 2011's Top 10 Most Corrupt American Politicians by Tyler Durden

When it comes to corruption, cronyism and general muppetry in Washington D.C., the only real question is 'where does one start?'

Yet one has to start somewhere to conclude with a list of the ten most corrupt and despicable marionettes in D.C.

Which is precisely what JudicialWatch has done in its annual compilation of the "Top 10 Most Corrupt Politicians in Washington D.C." for 2011.

And confirming what everyone knows, that both the left and right are merely irrelevant names for the same general social affliction, or should we call it by its true name - wealth pillage - the split is even between democrats and republicans.

In no particular order, the winners of 2011 are...
Rep. Spencer Bachus (R-AL)
Former Senator John Ensign (R-NV)
Rep. Alcee Hastings (D-FL)
Rep. Laura Richardson (D-CA)
Rep. David Rivera (R-FL)
Rep. Maxine Waters (D-CA)
Rep. Don Young (R-AK)
Rep. Jesse Jackson, Jr. (D-IL)

And of course:
Attorney General Eric Holder
President Barack Obama

While a detailed look is really not necessary as we are quite familiar with everyone on ths list, here it is nonetheless?

http://www.zerohedge.com/news/presentin ... oliticians

Macau casino boom fuelled by illicit cash By Enid Tsui, FT.com

(Financial Times) -- When Macau unveiled record gambling revenues on Tuesday, the government was silent about the source of much of the cash fuelling the territory's boom: illegal money transfers from mainland China.

From pawn shops offering money withdrawal services, to underground banks using human mules to transport cash across the border, Macau tolerates the illicit methods that mainland punters use to bring money into the former Portuguese colony, which reverted to Chinese control in 1999.

Mainland tourists, who have made Macau the world's largest gambling centre, can legally bring only Rmb20,000 ($3,175) when crossing into the Chinese territory. But many gamblers bring more cash to the casino tables by using their Unionpay debit card to withdraw money -- for a fee.

"There is no risk. We pretend to sell the customer an expensive watch or a piece of jewellery, charge the amount in renminbi to the debit card, and then give him the equivalent amount in Macau patacas or Hong Kong dollars as if the customer had decided to return the object for an immediate cash refund," says the manager of a pawnshop up the street from the Grand Lisboa casino, Macau's oldest casino owned by Stanley Ho, the gambling tycoon.

The manager says the cardholder's records will register the transaction as a purchase. Unionpay, which was formed by China's big banks, says it bans such transactions, but the company declined to comment on the fact that the practice remained widespread. The company said it no longer released data on how much cardholders spent in Macau.

People familiar with the industry say the Macau government cannot afford to shut down the illegal services, which hundreds of pawn shops advertise publicly on neon signs.

"The Macau government's hands are tied," says one veteran Macau policeman. "It is not going to initiate a crackdown, because over 75 per cent of its revenue comes from gaming taxes."

About 16m mainland Chinese visited Macau in 2011, an increase of more than 20 per cent on the previous year, and 60 per cent more than the 10m who visited in 2006. Analysts estimate that up to 30 per cent of Macau's gaming revenue could be channelled through illegal channels.

"Banking restrictions make it very difficult to transfer funds to Macau legitimately, but it is easy for people to find ways [around the rules]," says a senior Chinese bank manager who gambles in Macau.

While the debit card cashback service is the most visible source of money for the less well-heeled punters, those with deeper pockets have found different ways to avoid the restrictions.

VIP punters -- whom analysts estimate generate 70 per cent of Macau's gaming revenues -- gamble on credit provided by so-called junket operators who seek out wealthy mainland gamblers.

The junket operators receive commissions from the casinos or get a share of the profits. They, or their agents, sometimes use underground banks to return the money they have collected as debt on the mainland to Macau.

The lenders use criminal gangs from Fujian and Guangdong provinces who in turn pay human mules as little as $5 -- compared with Guangdong's average daily wage of $7 -- to smuggle cash across the border.

While the underground banks are part of what is known as the shadow banking system in China, providing credit to cash-strapped companies, their Macau-related business is limited to transferring money from other sources.

One former junket operator and a Hong Kong owner of a mainland factory in Guangdong province, just across the border from Macau, described how operators also use Hong Kong business people who own companies on the mainland to transfer money illegally.

He said operators handed over renminbi debts collected on the mainland to the factory owner, who used the money to pay his staff wages. Then, the owner sent the equivalent in Hong Kong dollars from his Hong Kong bank account to the operator's account in Macau. Both sides profited by agreeing a mutually beneficial exchange rate.

There is no public data available to indicate exactly how much of Macau's gaming revenue comes from illegal channels, and casino operators and government officials refuse to speak about the issue. Macau's Gaming Inspection and Co-ordination Bureau refused to comment.

"Neither the Macau government nor Beijing wishes to damage the Macau economy. There's good reason to keep the scale of illegal transactions a closely guarded secret so nobody needs to take action," says the police officer.

While Beijing does not condone gambling on the mainland, it has so far not cracked down on the illegal transfers. Analysts say it is unlikely to take action as the Chinese Communist party does not want to destabilise Macau just 13 years after the city returned to Chinese rule.

"Beijing is unlikely to take measures such as tightening visa restrictions or clamping down on debit card cashback services, as long as Macau is seen as a safe and enjoyable place to visit and casino operators refrain from activities or comments that might portray the city in a bad light," says Grant Govertsen, the Macau-based managing partner at Union Gaming Research, a US research group.

http://edition.cnn.com/2012/01/03/busin ... index.html

Environment officer gets jail for corruption

http://www.straitstimes.com/BreakingNew ... 52592.html

We shd pay this env officer millions too, so that he does not corrupt..

NSP wrote this : "a man must be upright, and not be kept upright", in response to dis-grace fu's recent bitching abt her salary cut

Four top chefs charged with corruption

Four top chefs from luxury hotels in S’pore were charged with corruption on Friday close to a S$1 million kickback case involving the former boss of a seafood supplier.

Tan Ah Teng from Goodwood Park Hotel's Min Jiang restaurant, Chik Ka Chung from Marriott Hotel's Wan Hao Chinese Restaurant, Yang Lai Fatt from Meritus Mandarin Hotel and Goh Wooi Cheat from Regent Hotel's Summer Palace were charged for accepting money from Tay Ee Tiong, the former boss of Wealthy Seafood Product and Enterprise, reported local media.

The four are among 19 chefs alleged to have accepted bribes from the 57-year-old Tay to ensure their restaurants would continue buying seafood products from his company.

Tay was sentenced to 18 months' jail in September last year after pleading guilty to giving nearly S$1 million in bribes to various chefs from top hotels across Singapore.

It was revealed in court last year that he had approached the chefs and promised them commissions based on 5 to 10 per cent of the total value of seafood products purchased. He would then hand the money in cash to the chefs every few months.

http://sg.news.yahoo.com/four-top-chefs ... ption.html

DJ MARKET TALK: Corruption And Luxury Spending Linked - Macquarie

1454 [Dow Jones] Macquarie analyst Emil Wolter draws a link between corruption and luxury spending; it says Transparency International found that public works and construction are the two sectors most susceptible to corruption, and he therefore thinks China's 2008/09 stimulus package focused on public works, real estate and utilities likely gave a large additional injection of cash that was likely spent on luxury goods.

The house adds that another analyst Gary Pinge agrees with this view and has been arguing the risks to growth in Macau gaming are underestimated, and he recommends to sell Wynn Macau (1128 HK) given it has the highest exposure to VIP.


Source: Dow Jones Newswire