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Transparency urges Turkey 'illegal enrichment' should be considered as crime

Transparency urges Turkey ‘illegal enrichment should be considered as crime (photo:

Illegal enrichment is the shady process by which businessmen or politicians set up shill companies in order to launder money from any number of sources, disclosed as an enormous problem in Turkey’s 2014 European Union (EU) Progress Report.

Transparency International stated that as an organization they have been aware of illegal enrichment in Turkey for a long time, and informed that a campaign launched on internet.

"We initiated a campaign with #TemizSiyaset (clean politics) tag at the website, demanding ministers and legislators to file income and asset declarations after the local election on March 30th. The campaign reached over 25,000 signatories and the request was forwarded," the statement said.

The latest EU report urged Turkey to take action against illegal enrichment according to UN Convention against Corruption (Article 20) which encourages state parties to criminalize illegal enrichment as part of efforts to combat corruption, money laundering and organized criminal networks.

Amendments weaken independence of judiciary

The EU report states that no changes were made to the immunity of Members of Parliament and certain public officials regarding corruption offences. The Council of Ethics for Public Servants had no power to enforce their decisions with disciplinary measures. Codes of ethics do not exist for military personnel or academics.

Legal shortcomings hampered budgetary auditing of the Law on the Court of Accounts and associated parliamentary scrutiny.

Corruption scandal on report

Corruption was a significant part of political debate in Turkey, due in particular to the anti-corruption investigations launched in December 2013. Four ministers, relatives of Cabinet members and various other public officials and businessmen were targeted by allegations of corruption.

According to developing reports, legislative amendments weakening the independence of the judiciary (subsequently partially struck down by the Constitutional Court and Council of State) and changes to the criminal legislation reducing the efficiency of the criminal justice system are currently under consideration.

“Financial declaration control is insufficient”

The report drew attention to the 2010-14 national anti-corruption strategy set up by numerous working groups to consider various corruption-related issues, and then send those concerns to an inter-ministerial committee overseeing implementation.

Some practical policy suggestions were made by the working groups, such as conducting annual country-wide corruption perception surveys and establishing comprehensive tracking of data on corruption.

The report reminds that Group of States Against Corruption’s (GRECO) suggestion on financing political parties is not taken into consideration by Turkey.

These have not been implemented. The legal mandate, institutional capacity and functional Independence of the Prime Ministry Inspection Board has remained unclear. It is currently entitled only to oversee work related to the strategy and has a mandate for coordination via bylaw alone. Turkey has not responded to GRECO’s recommendations.

BGN News      October 17, 2014

China to strengthen auditing of military in battle on graft

China to strengthen auditing of military in battle on graft (photo: Reuters)China will toughen audits of its military and target older officers to ensure that corrupt individuals are denied promotion and cannot get away with their crimes, the Defense Ministry said on Thursday.

President Xi Jinping has made rooting out deep-seated graft a key plank of his administration, and China's armed forces, at 2.3 million strong the world's largest, have been in the spotlight after several scandals.

In June, the ruling Communist Party announced it would court-martial Xu Caihou, one of its most senior former military officers, on charges of corruption.

Xu retired last year from the post of vice chairman of the powerful Central Military Commission, which controls the armed forces, and is headed by Xi. In 2012, Xu retired from the Communist Party's decision-making Politburo.

The new auditing rules are designed to "strengthen the ability to investigate, and banish, the phenomenon of corruption", the Defense Ministry said on its website.

Officers with responsibility for funds will fall squarely within the scope of the audits, with particular attention paid to older officers, it added, to ensure they cannot simply leave and take along their ill-gotten gains.

The buying and selling of military positions has long been a problem for China's armed forces. Officers who paid bribes to be promoted see corruption as a way to earn a return on the investment.

The ministry said it would not allow promotions or retirements without a prior audit, to make sure appointees do not bring any "sickness" to the job.

China stepped up a crackdown on rampant corruption in the military in the late 1990s, banning the PLA from business. But critics say a lack of checks and balances has allowed the military to engage in commercial activities in recent years.

Reuters      October 16, 2014

China whistleblower exposes ‘bribery list’ naming 40 officials

China whistleblower exposes ‘bribery list’ naming 40 officials (photo: authorities at Jingbian County of northwestern China’s Shaanxi province have launched investigations into more than 40 local government officials who have been implicated in an alleged “bribery list” scandal.

A gift list which surfaced online recently claimed that the owner of a local karaoke room, Wang Hong, had bribed local officials with gifts worth over 100,000 yuan ($16,300).

The list from whistleblower Jiang Yanhong contained detailed information of the alleged bribe givers, value of gifts, and names of over 40 recipients.

Jiang, a local teacher, confirmed with Beijing News that she had summited the whistleblowing materials to local police and discipline authorities, who are conducting the investigations.

Jiang said her husband Li Wen used to partner with Wang and a local official to run a local karaoke room, which went bankrupt after two years due to disputes among the owners.

Wang told Beijing News that he had never offered any gifts to local officials.

Wang Xinwei, a local police officer on the recipient list, called the online exposure groundless.

The FCPA Blog     October 16, 2014
Oracle slapped with bribery charge in India

Oracle slapped with bribery charge in India (photo: Oracle India looks to be in the middle of yet another bribery issue, and multiple sources told TOI that Sandeep Mathur's sudden exit as managing director of the company is linked to this.

Mathur quit soon after returning from an Oracle conference in San Francisco earlier this month. Shailender Kumar, group VP of key accounts for Oracle India, has taken over as interim MD.

This is the second such episode for Oracle in India. Two years ago, the US Securities and Exchange Commission (SEC) had filed a complaint against Oracle alleging that the company's Indian subsidiary had possibly indulged in bribery or embezzlement. Oracle agreed to pay a $2 million penalty to settle the SEC's charges.

The latest concerns have allegedly been triggered by compliance issues arising from a database contract that Oracle had won from the Andhra Pradesh police department a few years back. TOI has learnt that the issue came to light when an anonymous whistleblower wrote an email to Oracle alleging that one of its channel partners violated its contract norms to win the contract. Sources said that action may be taken against several Oracle India officials.

TOI sent a mail to Oracle detailing the charges being made, but the company said it would not comment on the matter.

Mathur was responsible for multiple lines of business: technology, applications, systems and Fusion Middleware as well as driving growth across public sector and key accounts. Prior to his role as MD, he was VP of technology at Oracle India. Mathur joined Oracle in 2003 as director of Oracle Direct, North America sales.

In the previous SEC investigation, it was found that Oracle India secretly parked with distributors a portion of the proceeds from certain sales to the Indian government and put the money to unauthorized use, creating the potential for bribery or embezzlement. Oracle India's distributors allegedly held approximately $2.2 million of the proceeds in unauthorized side funds.

The SEC alleged that Oracle India employees would then direct its distributors to disburse payments out of the unauthorized side funds to purported local "vendors." "Several of the 'vendors' were merely storefronts that did not provide any services. Oracle failed to accurately record these side funds on the company's books and records, and failed to implement or maintain a system of effective internal accounting controls to prevent improper side funds in violation of the FCPA, which requires public companies to keep books and records that accurately reflect their operations," SEC said.

Several MNCs operating in India have over the years been investigated for violation of the Foreign Corrupt Practices Act (FCPA) of the US that bars bribing officials of foreign governments. Following such an investigation of Walmart in Mexico, the retailer initiated an investigation in 2012 into allegations of bribery in its India unit. Several executives in the India unit were suspended and some quit.

The Times of India              October 15, 2014

Corruption scandals prompt overhaul of NSW election funding laws

Mike Baird (photo: South Wales politicians who funnel illegal donations through a slush fund could be jailed for up to 10 years under measures announced by the state premier, Mike Baird.

The changes, announced Tuesday, would see penalties for breaking most election funding laws doubled, and the statute of limitations for most offences increased from three to 10 years.

Baird said the changes would “clean up politics in this state”, after a series of corruption inquiries that have seen 10 state Liberal MPs move to the crossbenches and cost the state’s former leader, Barry O’Farrell, his premiership.

O’Farrell resigned after insisting under oath that he never received a 1959 bottle of Penfolds Grange from a Liberal fundraiser, only to have a thank-you note for the wine in his handwriting surface the following day.

The most recent inquiry heard that Liberal candidates on the NSW central coast allegedly used a slush fund named Eightbyfive to channel money from banned donors to their 2011 election campaigns.

Baird’s reform package will also require parties to disclose any donations they receive from July this year to February 2015 before the state election next March.

In a move believed to be aimed at Labor’s union base, registered third-party campaigners will only be able to spend $250,000 instead of $1.2m.

Caps on political donations will revert to the 2011 limits of $5,000 per party and $2,000 per candidate.

Public funding would also increase and be determined by a dollar-per-vote model similar to that used for elections in Queensland and South Australia, which the premier said would curb “the corrosive influence of donations in the political system”.

The announcement follows the release last week of an interim report outlining long-term reforms to the system, authored by an expert panel led by Dr Kerry Schott, who was herself a victim of corrupt politics after allegedly being targeted by former Labor powerbroker Eddie Obeid.

The panel strongly backed donations being disclosed online “as soon as possible” after they were made. But Schott indicated that she would not back full taxpayer funding of elections, saying the idea would “undoubtedly raise constitutional issues” and be “practically difficult”.

Baird said the measures reflected what was “achievable prior to the 2015 election”, but has flagged more substantive changes after the release of Schott’s full report, due at the end of the year.

Jamie Parker, a NSW Greens MP, said the changes were “a step in the right direction” but said donations made in the “high-spending” two-month period before the March state election should be disclosed prior to the poll.

“People that are wanting to make donations will just do it after 1 February, because it’ll be secret until well after the election,” he said.

The opposition leader, John Robertson, said the laws should apply retrospectively to cover politicians currently under scrutiny by the corruption watchdog.

“Mike Baird and the Liberal party are giving a get out of jail free card to any MP found guilty of breaking the law at the last election,” he said.

The Guardian          October 14, 2014

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