World News

Spain's prime minister says sorry for corruption

Spain's Prime Minister Mariano Rajoy (photo: Reuters)Spanish Prime Minister Mariano Rajoy apologized on Tuesday for the first time for corruption scandals affecting members of his ruling People's Party and pledged to do more to clean up Spanish politics.

It was the first time the prime minister had explicitly apologized despite judicial investigations continuing against party members during the last three years since the PP won general elections.

"I apologize in the name of the PP to all Spaniards for having appointed people to positions who weren't worthy of them and who seem to have taken advantage of them," Rajoy told Spain's upper parliamentary house, the Senate.

His apology came the day Angel Acebes, a former interior minister and secretary general of the PP, appeared in the High Court over allegations the PP ran a slushfund.

Rajoy was criticized for not quickly dismissing Luis Barcenas, a former PP treasurer who is being held in custody in relation to the slushfund allegations.

On Monday, 51 people were arrested over alleged backhanders to secure public contracts, including several PP mayors and Francisco Granados, a former conservative deputy president of the Madrid region who resigned in February after it was revealed he had millions of euros in a Swiss bank account.

Rajoy told senators his party had already introduced measures to tackle corruption and would introduce further legislation.

"We are going to continue increasing the range of anti-corruption measures until we ensure that anyone in a public post in this country thinks twice before being tempted to become corrupt," said Rajoy.

Reuters       October 28, 2014

Spanish police arrest dozens in $300 million corruption case

Spanish police arrest dozens in $300 million corruption case (photo: Reuters)Madrid - Spanish police have arrested 51 people as part of a graft investigation involving local government construction contracts, the anti-corruption prosecutor's office said on Monday.

The investigation, "Operation Punica" -- centred around town halls mainly in the regions of Madrid, Murcia, Leon and Valencia -- is one of numerous corruption scandals that have hit Spain's mainstream political parties and many bankers in recent months.

"The collusion between local councillors and civil servants, with builders and energy service companies, and the corruption of middle-men and key companies, has helped them to secure contracts worth around 250 million euros ($300 million) in the last two years alone," the prosecutor said in a statement.

A judicial source said one of those arrested was Francisco Granados, a former conservative deputy president of the Madrid region who resigned in February after it was revealed he had millions of euros in a Swiss bank account.

Information from Switzerland has helped Operation Punica, and investigators have issued search warrants on 259 properties, 400 banks, companies and insurers, blocked current accounts and assets and embargoed 30 vehicles.

Reuters          October 27, 2014

German ex-CEO of BayernLB bank guilty of bribery

German ex-CEO of BayernLB bank guilty of bribery (photo: EPA)A German court has given a suspended jail term to the ex-boss of BayernLB bank for having bribed Austrian far-right politician Joerg Haider in 2007.

Werner Schmidt was given an 18 month suspended sentence and a 100,000-euro (£79,000) fine by the court in Munich.

Haider - who died in 2008 - was governor of Austria's Carinthia state at the time. The bribe was linked to BayernLB's purchase of a troubled Carinthian bank, Hypo Alpe Adria.

BayernLB was bailed out in late 2008.

Schmidt pleaded guilty to the bribery charge. Seven of his senior colleagues charged with embezzlement were acquitted.

The Bavarian state has a majority stake in BayernLB. The bank was among several German Landesbanken (state banks) which got into trouble in the sub-prime mortgage crisis in 2008.

Hypo Alpe Adria, the bank that was purchased by BayernLB, was nationalised by the Austrian government in 2009 to prevent it collapsing.

The bribery involved a 2.5m-euro football sponsorship deal channelled through a BayernLB subsidiary, Deutsche Kreditbank (DKB), Austrian media reported.

BBC News         October 27, 2014

Former Boeing Procurement Officer and Two Sub-Contractors Sentenced on Federal Fraud Charges

Former Boeing Procurement Officer and Two Sub-Contractors Sentenced on Federal Fraud Charges (photo: Bloomberg News)ST. LOUIS, MO—Former Boeing Procurement Officer Deon Anderson was sentenced to 20 months in prison in connection with a bribery/kickback scheme involving Boeing military aircraft parts, as well as structuring currency transactions to conceal his receipt of the cash bribes. Co-defendants William P. Boozer, Hacienda Heights, CA, was sentenced to 18 months in prison, a fine of $10,000; and Robert Diaz, Jr., Alta Loma, CA, was sentenced to 15 months in prison and a fine of $2000.

Boeing Company Defense Space and Security Division is a defense contractor providing military style aircraft to the United States Department of Defense and the United States armed services with offices and procurement operations located in St. Louis. Deon Anderson was a Procurement Officer for Boeing, residing in the St. Louis area.

J. L. Manufacturing of Everett, Washington, is an aerospace job machine shop specializing in hard metals, with the capability of producing small to medium sized complex parts of ferrous and non-ferrous materials, and was a sub-contractor to Boeing on numerous United States government contracts. Jeffrey Lavelle, owner and operator of J. L. Manufacturing, directed the day to day operations of the company, and oversaw all financial aspects of the company.

Inland Empire and Associates, Inc., Las Vegas, Nevada, is engaged in consulting to defense aircraft manufacturers and parts suppliers, including consulting for J. L. Manufacturing. Robert Diaz, Jr. was the owner and operator of Inland Empire, and personally consulted to J. L. Manufacturing and Jeffrey Lavelle relative to numerous Boeing sub-contracts.

Globe Dynamics International, Inc., Santa Ana, California is a leader in producing small to large, close tolerance precision machined parts and the assembly of complex components. Globe Dynamics was a sub-contractor to Boeing on numerous United States government contracts. William Boozer, owner and operator of Globe Dynamics, directed the day to day operations of the company, including the submission of contract bids.

According to court documents and statements made in court, between November 2009 and February 2013, Boozer requested the Procurement Officer for Boeing, Deon Anderson, provide him with non-public competitor bid information and historical price information in connection with Boeing military aircraft part purchase order requests for quotes. They communicated by telephone and e-mail between California and St. Louis in code on a regular basis, Boozer frequently requesting “Isle 5”, a coded reference to a “price check on aisle 5”, understood by Anderson to be a request for historical price information and competitor bid information. Anderson gave the information to Boozer to be used in preparing and submitting bids on behalf of Globe Dynamics in response to approximately sixteen different Boeing requests for quotes relative to those various purchase orders, in exchange for cash payments. Of the sixteen bids Globe Dynamics was awarded seven purchase orders to supply United States military aircraft parts to Boeing totaling in excess of $1,500,000. The net benefit to Globe Dynamics on those seven purchase orders was approximately $116,339

Beginning in May 2011 and continuing through April 2013, Deon Anderson provided J.L. Manufacturing, through Lavelle and Diaz, non-public competitor bid information and historical price information in connection with one and more Boeing military aircraft part purchase order requests for quotes. Lavelle used that information in preparing and submitting bids on behalf of J.L. Manufacturing to Boeing for approximately nine different Boeing requests for quotes relative to those various purchase orders. Of the those nine, J.L. Manufacturing was awarded seven purchase orders to supply United States military aircraft parts to Boeing totaling in excess of orders totaled approximately $2,052,746. In exchange for that information they made cash payments to Anderson in St. Louis and in California.

Relative to the cash bribe payments he received, on more than one occasion Deon Anderson structured cash deposits into his personal checking account to conceal his bribe scheme.

Deon Anderson, 48, St. Louis pled guilty to three felony counts of mail fraud, one felony count of wire fraud, and one felony count of currency structuring in June.

Co-defendants William P. Boozer, 60, Hacienda Heights, CA, and Robert Diaz, Jr., 55, Alta Loma, CA, also previously pled guilty to related charges. The defendants appeared today for sentencing before United States District Judge Henry Autrey, in St. Louis. Co-defendant Jeffrey Lavelle, 53, Mukilteo, WA is scheduled for sentencing November 17, 2014.

This case was investigated by Defense Criminal Investigative Service, Federal Bureau of Investigation, NASA-Office of Inspector General, Air Force Office of Special Investigations, Navy Criminal Investigative Service, and Internal Revenue Service, Criminal Investigations. Assistant United States Attorney Hal Goldsmith handled the case for the U.S. Attorney’s Office.

The FBI        October 27, 2014

Petrobras corruption case overshadows Brazil presidential campaign

Petrobras corruption case overshadows Brazil presidential campaign (photo: challenger Aecio Neves took the podium at a yacht club in Copacabana this week for a rapid-fire news conference at which he took aim at incumbent Dilma Rousseff for a corruption scandal involving Petrobras, the state-owned oil company.

The president, he charged, had failed to respond to testimony by a former Petrobras director "that a chunk of money went to her party's coffers."

Soon after, Neves flew to Sao Paulo to take part in the latest in a series of debates with Rousseff, who proceeded to attack Neves' Social Democracy Party for being implicated in the same scandal, which has been dogging Brazil's largest company.

For good measure, she accused Neves personally of nepotism and corruption.

As the two candidates lurch neck-and-neck into a runoff election Sunday, corruption allegations are at the center of the free-swinging debate in South America's largest country, as they have been in every presidential campaign since 2006. Analysts and insiders say rising election costs have ratcheted up the pressure on campaigns to raise money, creating an environment that is ripe for corruption.

The total cost of Brazil's presidential, congressional and state elections in 2014 may exceed $3 billion, up from less than $2 billion in 2010 and just $321 million in 2002, according to government figures and a congressional report verified by academics.

Elections here are among the most expensive in the world, and loosely regulated campaigns are overwhelmingly paid for by corporations, in particular construction companies, food producers and banks.

Political and legal forces are pushing for spending limits or effective regulation, but face an uphill battle.

"Brazil didn't reinvent the wheel in terms of the way campaign finance affects politics. But … campaigns are extremely expensive, due to the size of the country and the format of elections, and that increases the incentive for corruption," said Joao Augusto de Castro Neves, a political analyst at Eurasia Group in Washington.

Candidates are given free TV time every night to air ads during the "political hour," but they have to create the content to fill it. Social networks and websites are furiously updated. And candidates must crisscross a country that is nearly twice the size of the European Union and often difficult to traverse.

"It's one of the most expensive places in the world to have an election, and costs have increased at a remarkable pace for the last 20 years," said Mauro Macedo Campos, a professor of public policy specializing in political campaigns at Norte Fluminense University in Rio de Janeiro state.

Brazil's campaign spending still pales compared with that of the United States, where the presidential and congressional elections in 2012 cost $6.3 billion, according to the Center for Responsive Politics. Brazil's $3-billion figure includes state races, which aren't included in the U.S. calculation.

Still, Brazil is a smaller and much poorer country, with a gross domestic product that is one-fifth that of the United States.

An investigation of alleged corruption at Petrobras is the largest and most recent to involve huge companies funneling money into political party coffers. The so-called mensalao vote-buying scandal in 2003, which threatened to bring down the government of Rousseff's predecessor, Luiz Inacio Lula da Silva, involved advertising companies and is the only case that has led to major convictions.

The Petrobras case stems from the testimony of the company's former executive Paulo Roberto Costa, now in jail in a corruption investigation. He agreed to talk in exchange for a plea deal, and Brazilian news media have been leaking details of his testimony in recent months. He reportedly said he was accepting bribes on inflated contracts in the company's refinery division and passing along some of the money to Rousseff's Workers' Party and its allies.

However, he also reportedly said he bribed the leader of Neves' Social Democratic Party. The investigation has not been concluded, but both candidates have used the reports to attack the other.

Across the country, accusations of campaign finance malfeasance are so common that they barely get attention unless they involve ruling parties.

Campos said major companies have continued to play an outsized role in the political process. "There are legal and moral ways they can do it, technically legal but obviously immoral ways … and illegal ways."

Campaign finance reports for the presidential election were last updated Sept. 9, nearly a month before Neves and Rousseff advanced to the second round. Several of the largest donors to both campaigns have been implicated in news reports as playing roles in the Petrobras scandal, although all have denied breaking the law.

"Obviously the donating companies have interests in how the elected government runs things, which in my opinion is very unhealthy," said Henrique Fontana, a lawmaker from the Workers' Party who supports public campaign financing and cost limits.

The major candidates, including now-defeated environmentalist Marina Silva, support some kind of major political reform, although analysts think it unlikely that Congress will vote to undermine the machine that has given lawmakers power.

If the politicians remain deadlocked, Marcus Vinicius Furtado Coelho, president of Brazil's Bar Assn., said there may be a legal case for imposing rules.

"The actual system is, in reality, a business investment strategy, in which large economic groups establish an extremely unhealthy relationship with democracy," said Furtado, noting that more than 95% of the funding is supplied by companies, leading the Bar Assn. to file a motion in court to declare the system unconstitutional.

"The vote of the owner of a construction company should not be worth any more than his worker."

Los Angeles Times         October 24, 2014

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