Congress clears the way for corruption

Payments to foreign governments belong in the public eye

Twenty years ago a mentor of mine in Kenya described how he mistakenly opened a closet door in the presidential palace and found dozens of miscellaneous briefcases stacked to the ceiling.

Back then business people needed something to carry the gold bouillon and U.S. hundred dollar bills they used to win government contracts, and President Daniel arap Moi's staff didn't know what to do with them once the loot was removed.

When President Donald Trump signed a Republican-backed bill that rolled back disclosure requirements for energy and mining companies operating in poor countries, I could only think about the Mercedes Benz sedans that rush through African capitals.

Government corruption eats away at a country's social fabric and hobbles a nation's economy. A sure sign of a corrupt country is when a government job is most people's highest aspiration.

Poor countries are particularly vulnerable to corruption. When the primary source of revenue for a government is a natural resource extracted by a foreign company, corruption often leads to civil war, a phenomenon known as the resource curse. read more »

Austria's defense ministry to sue Airbus over alleged corruption and bribery

The Austrian defense ministry has said that it will sue the European aircraft manufacturer Airbus over alleged corruption and bribery.

A spokesman for the country’s defence ministry, speaking to AFP, said that the findings into an investigation of a 2003 deal under which Airbus sold 15 fighter jets worth €2bn to the government, would be presented later in the day.

The Austrian Press Agency said that the probe had found that Airbus had falsely inflated prices.

Prosecutors in Vienna and Munich have also been investigating whether officials were paid millions of euros through advisory firms to secure the contract. read more »

U.S. investment banker gets 11 years in prison for stock scam

A former Los Angeles investment banker was sentenced to more than 11 years in prison by a federal judge on Wednesday for his role in a stock manipulation scheme, resolving one of two criminal cases facing the man once dubbed "Porn's New King."

Jason Galanis, 46, admitted last year to securities fraud, investment adviser fraud and two conspiracy charges in connection with the scheme to manipulate shares in the now defunct reinsurer, Gerova Financial Group Ltd.

The case is one of two against Galanis, who was nicknamed "Porn's New King" by Forbes magazine in 2004 after buying the nation's largest processor of credit card payments for internet pornography. read more »

U.S. takes pastor, software developer to trial over bitcoin exchange

A Florida software engineer and a New Jersey pastor engaged in lies and corruption to facilitate an illegal bitcoin exchange business whose operators wanted to take over a small credit union to evade scrutiny, a federal prosecutor said on Wednesday.

At the start of a trial in Manhattan federal court, Assistant U.S. Attorney Won Shin told jurors that programmer Yuri Lebedev schemed with others to bribe Trevor Gross, the pastor and head of a Jackson, New Jersey-based credit union housed in his church.

Shin said Gross accepted bribes including a $150,000 church donation in exchange for helping unlicensed bitcoin exchange Coin.mx's operator take over Helping Other People Excel Federal Credit Union. read more »

Two Managers of a Brooklyn Medical Clinic Indicted for Roles in $2.1 Million Fraud Scheme

Two managers of a Brooklyn, New York medical clinic were charged in an indictment unsealed today related to their alleged participation in a $2.1 million fraud scheme involving medically unnecessary occupational therapy services. read more »

Och-Ziff Capital Management Suffers $13B in Redemptions In Past 13 Months

Investors pulled some $13 billion from beleaguered Och-Ziff Capital Management over the past 13 months as the hedge fund manager dealt with the fallout of a five-year bribery investigation and very expensive settlements with the U.S. Justice Department and the SEC.

Redemptions totaled around $8 billion last year and more than half that amount in January 2017 alone, according to a Bloomberg article. The settlements, which were announced in September 2016, totaled more than $400 million and also included a three-year deferred prosecution agreement.

Och-Ziff was accused of violating the U.S. Foreign Corrupt Practices Act by paying bribes to officials in various African countries, including Libya and Congo, through a subsidiary, and authorities charged two former Och-Ziff executives with violations of the FCPA in January of this year. The U.S. Foreign Corrupt Practices Act bars the payment of money or provision of gifts by U.S. companies to foreign officials in exchange for business, directly or otherwise. 

Nigeria's whistleblower initiative yields recovery of over $176m

The Nigerian government reported over the weekend that its whistleblower policy announced last December has began yielding fruits.

A statement from the Ministry of Information and Culture disclosed that so far looted funds amounting to $151m and 8bn naira ($25.4m) had been recovered. read more »