New SEC bribery unit boss appointed

The US Securities and Exchange Commission (SEC) has appointed veteran anti-corruption agent Kara Brockmeyer as head of its international anti-bribery team, the Foreign Corrupt Practices Act (FPCA) unit.

The FPCA forbids US firms from engaging in corrupt practices abroad, and Brockmeyer, as assistant director in the SEC's enforcement division since 2005, has spearheaded the agency's investigations of a number of US companies operating overseas.

One of the biggest investigations was into Halliburton, KBR, ENI and Technip SA in their Nigerian operations. The probe uncovered a decade-long bribery scheme connected to the construction of a Nigerian gas plant. The investigation finished in 2009 and resulted in the recovery of US$1.2 billion of funds and criminal penalties.

Brockmeyer also served as co-head of the enforcement division's Cross Border Working Group, described as a “proactive risk-based initiative focusing on U.S. companies with substantial foreign operations”. The group is an indication of the SEC's increasingly aggressive attitude towards US companies operating in foreign jurisdictions.

Starting her career in private practice, Brockmeyer joined the SEC in 2000. She began supervising investigations in 2002 before becoming assistant director in 2005. Given her record of active and aggressive investigation, it seems likely that she will continue the SEC's current strategy.

With expanded sanctions against Iran being discussed in Congress, a volatile situation in the Middle East creating investment uncertainty, and ongoing questions being asked into the activities of US firms in Africa, Brockmeyer will have plenty to investigate.

Sources: SEC, Wall Street Journal

Corruption rampant in Liberia’s nascent oil industry, says watchdog

Despite the fact that oil has yet to flow, Liberia's energy sector is already beset by corruption, a lack of oversight and a poor regulatory framework, according to campaign group Global Witness.

Working with a local group, the Liberia Oil and Gas Initiative, Global Witness has produced a report detailing the opacity and graft which runs through Liberia's oil sector. With the country due to go to the polls in October, reforming the sector “must be a priority for any new government”.

The role of the National Oil Company (NOCAL) comes under sustained criticism in the report. As well as acting as regulator of the sector, NOCAL is a profit-making enterprise which does business with the companies it regulates. In order to pass oil contracts, NOCAL paid $120,400 to the legislature between 2006 and 2008, an act regarded as bribery under Liberian law.

Chevron also comes under fire in the report, for buying a 70 per cent stake in Liberian blocks owned by the Nigerian firm Oranto, which had made a payment to the legislature – information publicly available when Chevron purchased its stake.

The legal framework governing the oil sector is, according to Global Witness, deeply anachronistic and unsuitable for the current state of activities there. Much of the legislation was drawn up in the years during and immediately after the country's brutal civil war. The institutions responsible for oversight have weak capacity and mandate, and are beset by conflicts of interest. As a result, “Liberia's oil sector is already beset by corruption and illegality”.

The Environmental Protection Agency (EPA), for instance, has extremely limited capacity to carry out the environmental assessments necessary, and a top EPA official told Global Witness that the agency was entirely unprepared for the challenges of an offshore oil and gas industry.

The report urges the Liberian government, and the government elected later this year, to begin immediate reform of the sector. In particular, it calls for a reformed oil and gas law, strengthened environmental and social assessments, and more active efforts to root out corruption and abuse of power within the sector.

Sources: Global Witness

Zambian anti-corruption candidate wins presidential election

Zambia's longstanding opposition leader, Michael Sata, is being sworn in as the country's president after a hotly contested election which he fought largely on an anti-corruption platform.

Sata, 74, won 43 per cent of the vote against the 36 per cent secured by incumbent Rupiah Banda. A tearful Banda congratulated his rival but counseled humility, warning that a term of government is temporary and that “the next election will judge you also”.

The election was generally peaceful and fair, according to monitors, although there were scattered outbreaks of violence in the capital and a number of mining towns. Some of the unrest was prompted by a media blackout, imposed after hackers posted false results showing a landslide win for Sata on the Election Commission of Zambia's website.

Sata took advantage of widespread dissatisfaction with the reign of Banda, whose Movement for Multiparty Democracy (MMD) had run Zambia for 20 years. Despite ample mineral wealth and a rising economy, material gains have not reached the majority of Zambians. Sata linked the country's poverty with government corruption, accusing the MMD of failing to deliver social and economic progress while pocketing the country's mining revenues.

MMD figures who have defected recently have also taken aim at the government's record on corruption, with one saying that “a lot of plunder” takes place. Banda's abolition of an anti-corruption watchdog in 2009, on the basis that it had failed to achieve sufficient results, also came in for widespread criticism.

Allegations of MMD patronage were used by Sata's Patriotic Front as an election tactic. The party adopted a slogan of “Don't Kubeba”, meaning “Don't tell them” – essentially encouraging Zambians to accept any bribes which the MMD offered them, but to still vote for the Patriotic Front.

Sata himself is not viewed as completely incorruptible, having served as a senior official in the MMD under late president Frederick Chiluba during an era of notorious graft. His election may give hope, however, to ordinary Zambians who have felt held back by corruption and inefficiency in their government.

Sources; BBC, Africa Confidential, Voice of America

Corruption scandal grips Kuwait

An unfolding corruption scandal has rocked Kuwaiti politics, leading to popular protests and calls for the prime minister to resign.

On 21st September, more than 5,000 demonstrators rallied in the capital Kuwait City. Led by opposition MPs and surrounded by hundreds of riot police and special forces, the protestors demanded that Prime Minister Sheikh Nasser Mohammad al-Ahmad Al-Sabah resign. “If the era of Sheikh Nasser does not end, corruption will grow bigger”, one Islamist opposition MP leading the rally declared.

The rare display of public discontent follows an investigation by Kuwait's public prosecutor into shady payments to several members of Parliament. When $92 million was transferred into the accounts of two MPs, the National Bank of Kuwait and the Kuwait Finance House went to the public prosecutor, who opened an investigation into the finances of nine MPs, almost a fifth of the total number. Local media have reported that between 15 and 20 MPs, as well as former ministers, may be investigated by the parliament.

The payments were believed to be linked to political events and testimonies, suggesting that they were intended to buy the support of lawmakers.

Although the scandal itself is significant enough – the total money involved is estimated to be as high as $350 million – it has also triggered much wider discontent against corruption in the government, and even the fundamental structure of Kuwait's political system. Youth groups have demonstrated for far-reaching reform, including the establishment of a constitutional monarchy.

The government's silence over the inquiry has fuelled public anger. Opposition figures, drawn from a broad coalition including liberals and Islamists, are now pressing for the resignation of the government as well as the establishment of a front to push for greater action against corruption.

They have also demanded that the legislature reconvenes for an emergency session on 22nd September to debate the issue. Opposition MP Jamaan al-Harbash has warned of “serious political consequences” if the government blocks the emergency session.

Sources: Kuwait Times, New York Times, AFP

Arms executives offer resignation in Italy bribery probe

Two senior executives from the Italian arms firm Finmeccanica have offered their resignations, amid corruption allegations linked to an ongoing investigation into Italian prime minister Silvio Berlusconi.

Commercial director Paolo Pozzessere announced his resignation on 16th September, followed shortly by Salvatore Metrangolo, president of a Finmeccanica subsidiary. The firm, which is 32 per cent owned by the Italian government, produces AgustaWestland helicopters and owns a raft of assets in Italy from defence to transport. Poor results and unprofitable arms have battered its share price this year, even before the latest allegations.

The corruption rumours emerged from court documents relating to investigations into Berlusconi, under pressure over his private life and allegedly corrupt dealings with shady figures from the Italian underworld. In the course of wiretapping individuals connected with the investigation, Italian police recorded Finmeccanica executives referring to paying off foreign officials in order to win tenders and contracts.

The investigations have also drawn attention to some unusual Finmeccanica agents, including Valter Lavitola, named in connection with an attempt to blackmail Berlusconi. Lavitola, who is currently on the run, served as an agent for Finmeccanica and had “frequent contact” with Pozzessere.

Neither the company nor any of its executives been charged; the resignations were advertised as an effort to safeguard Finmeccanica's reputation. If it is believed to have made bribes overseas, however, its UK subsidiaries will come under serious pressure. Paying off foreign officials is a crime under the UK Bribery Act, so Finmeccanica could soon find itself in hot water on multiple fronts.

Sources: Guardian, Wall Street Journal

Colombian oil agency boss rejects corruption claims

Armando Zamora, who resigned as head of Colombia's National Hydrocarbons Agency (ANH) last week, has denied allegations of corruption made by the country's inspector general.

Zamora, who had been director of the oil-licencing agency since 2003, was accused of using agency money for scholarships of ANH officials and their children, as well as keeping back money owed to multinational investors. He denied the charges, accusing politicians in Congress of “distorting reality” and insisting that he was going to step down anyway to focus on his academic work.

The Inspector General, meanwhile, ordered the agency to reimburse US$551 million of royalties which it had collected since 2007 to beneficiaries.

Zamora's resignation highlights the ongoing battle which the government of President Juan Manuel Santos is waging against corruption, which is still a serious problem in Colombia's political circles. He is the latest in a string of high-profile figures to resign as a result of alleged graft, including the mayor of Bogota Samuel Moreno (suspended in May) and former agriculture minister Andres Felipe Arias (jailed in July pending trial).

The ANH under Zamora has presided over a dramatic improvement in Colombia's oil and gas sector, which has attracted billions of dollars of foreign investment in recent years. Successful government offensives against the guerrillas of the FARC have been a major factor; an increasingly open and transparent investment climate, which Zamora helped to engineer, has been another.

Zamora is insistent that he and the ANH always stayed within the law. His rapid resignation and the lack of a successor to replace him, however, seems to suggest that there was some merit to the inspector general's claims.

Sources: Reuters, Colombia Reports

Egyptian steel magnate jailed for corruption

Former Egyptian steel magnate Ahmed Ezz, who was closely associated with deposed President Hosni Mubarak, has been sentenced to ten years in jail for corruption, alongside two other senior figures associated with the former regime.

Ezz built up a huge fortune in pre-revolutionary Egypt and was seen as the embodiment of the nexus between business and politics under Mubarak. In 2006, it was reported that he controlled around 70 per cent of the country’s steel and iron production, and 50 per cent of its ceramics; he is also believed to have bankrolled Mubarak’s effortless election victory in 2005 in exchange for political power.

Having secured the post of secretary for organisational affairs for Mubarak’s National Democratic Party (NDP), Ezz was critical to maintaining party discipline and to the NDP’s landslide in the 2010 parliamentary elections.

Ezz was arrested on 17th February, several days after Mubarak stepped down in the face of popular pressure, and subsequently faced public humiliation and the torching of his headquarters by protestors.

He was detained on charges of wasting public fund, and has now been convicted for granting licences without payment of fees - alongside former Trade and Industry Minister Rachid Mohamed Rachid (convicted in absentia to 15 years) and the ex-industrial development chief Amr Assal (jailed for ten years). Ezz and Assal must also jointly pay a fine of US$110 million.

The convictions represent another blow by Egypt’s revolutionaries against the country’s former business and political elite. Widespread anger at the corruption and cronyism of Mubarak’s Egypt has led to an aggressive legal campaign against former tycoons, most of whom were connected to the president’s circle. Corruption and abuse of public funds are the most common charges levelled against business figures.

The post-revolutionary anger against powerful elites has led to considerable apprehension among Egyptian businessmen, who fear being accused of conniving with the former regime and – if charged – hold out little hope of a fair trial in the current climate.

Sources: AP, BBC, Reuters

Top Iraqi corruption investigator resigns

Iraqi Prime Minister Nouri Al-Maliki has accepted the resignation of Judge Rahim Hassan Al-Uqailee, the man leading Iraq's fight against corruption, in a blow to efforts to clean up the country's government and parliament.

Al-Uqaliee, the head of the country's Integrity Commission, submitted his resignation on 8th September, citing “pressure from political parties” to cover up corruption and a lack of political support for his agency.

Despite al-Uqaliee's public frustrations with stonewalling politicians, other explanations for his resignation are already circulating in Iraq's febrile political atmosphere. One of the members of the parliamentary committee on integrity, Sabah Saadi, claimed that the ruling party was pushing al-Uqaliee to launch “false and fabricated” corruption probes against political figures including Ahmad Chalabi, the US's former protégé in Iraq.

One of Saadi's fellow committee members, however, said that al-Uqaliee's resignation was a result of his failure to produce results in tackling Iraq's rampant corruption, ranked as the fourth worst in the world by Transparency International.

A third MP, Shakir Kitab claimed that the resignation “sheds light on complicated political relations and lack of transparency and stability in the government” rather than on the activities of one or another political bloc.

On 12th September, al-Uqaliee reiterated his reasons for resigning in a public letter to the integrity committee. In it, he declared that “the fight over stealing the money of the state and its property is the unspoken part of the struggle for power in Iraq today”. Despite such obstacles, however, in 2010 the Integrity Commission issued 4,082 arrest warrants for government officials, including 197 high-level figures.

According to Iraqi MPs, al-Maliki is planning to replace al-Uqaliee with a fellow member of his Dawa Party, Ala' al-Sa'idi. It remains to be seen whether the new head of the Integrity Commission will be able to ignore the pressures and obfuscations of shady officials.

Sources: AFP, Los Angeles Times, Aswat Al Iraq

Public pressure mounting over corruption in Brazil

Across Brazil on 7th September, the country's Independence Day, thousands demonstrated against corruption in the government, which organisers called a “pandemic which threatens the credibility of institutions and the entire democratic system”.

The demonstrations come in the midst of an anti-corruption drive by President Dilma Rousseff. Since she took office in January, four ministers have resigned under pressure over corruption; several others have also been accused of graft, while dozens of lower-ranking officials have been fired or arrested.

Rousseff's campaign has begun to spin out of her control. What began as a series of low-key internal investigations to root out graft in government agencies was picked up by the Brazilian press, and has since snowballed into a nationwide campaign against what is perceived to be a widespread culture of corruption.

The drive is now threatening Rousseff's political position, as well as sparking a growing civic campaign which could leave her vulnerable before the end of her first year in office. Media reports suggest that the effects of the purge are creating speculation that Rousseff's predecessor, Luiz Inacio Lula da Silva, could return in 2014 to replace her again as president.

Since June, Agriculture Minister Wagner Rossi, Chief of Staff Antonio Palocci, Transportation Minister Alfredo Nascimento, and Defence Minister Nelson Jobim have left their posts. The president has been criticised for allowing Tourism Minister Pedro Novais to remain, despite the arrest of many of his senior aides for a scheme to embezzle ministry funds.

The cycle of accusations and counter-accusations – many made anonymously through the media - is threatening the cohesion of Rousseff's governing coalition, with some viewing it as a fratricidal campaign of personal score-settling. Many now believe that Rousseff's Worker's Party will struggle to keep the coalition intact.

The Independence Day marches represent a new phase in the anti-corruption campaign, which has previously been largely confined to the political class. It suggests that the public is no longer prepared to tolerate the patronage-based cliques which have dominated Brazilian politics for years.


The protests place Rousseff in a difficult position. Although many of the demonstrators expressed support for the president's campaign, others were angry at the entire political system – suggesting that she must maintain the momentum or face becoming a target of public anger for not going far enough.

Sources: Financial Times, BBC, UPI, Christian Science Monitor

South Sudan announces anti-corruption drive

South Sudan, the world's newest country, has pledged to tackle the culture of corruption and prosecute corrupt public officials. On 7th September the National Legislative Assembly adopted a report submitted by the country's Anti-Corruption Commission (ACC) which revealed the misuse of millions of Sudanese pounds by government agencies.

The government of President Salva Kiir has made rooting out corruption one of the new nation's top priorities, although opposition figures have accused his new Cabinet of being symptomatic of the problem.

In its report, the ACC announced that it had investigated cases pertaining to 12 million Sudanese pounds (US$4.49 million) which were embezzled or misused by government ministries, which it did not name. Cases pertaining to another 6 million Sudanese pounds were referred to other anti-corruption agencies.

These are significant sums in a country in which 51 per cent live below the poverty line. The ACC has its work cut out. The commission's chair, Pauline Riak, also set out the challenges facing the agency – chiefly a lack of adequate funding. Kiir acknowledged in August that the ACC and related anti-corruption agencies did not have sufficient qualified personnel or technical capabilities.

It seems that Kiir is serious about tackling what he refers to as the “cancer of corruption”. He has repeatedly said that theft of much-needed funds had inhibited the country's fragile development, and has encouraged his ministries to fight graft.

In particular the Interior Ministry under Alison Magaya Manoni has made tackling corruption within the police force one of its top priorities. On 6th September Manoni said that much greater attention would be devoted to investigating officers who extort money from citizens, as part of a wider process of reforming and improving the country's nascent police force.

However critics have suggested that Kiir should look closer to home in his battle against misuse of funds. His new Cabinet, approved on 31st August, comprises 29 ministers and 27 deputy ministers, each of whom receives a generous salary and expenses. Opposition leaders have complained that this is inappropriate for such a poor state.

An additional challenge, highlighted by Riak in her remarks to the legislature, is enforcing a requirement for government officials to declare their assets. To date, many have failed to do so. Without first cleaning his own house, Kiir may find it difficult to begin tackling the wider problem of corruption in the public sphere.

Sources: AFP, allAfrica, Sudan Tribune