Saudi anti-corruption body aims high

Saudi Arabia's new anti-corruption body has said that it “will not hesitate to strike at corruption wherever it is”.

The National Authority for Combating Corruption has been tasked by King Abdullah with cracking down on financial abuses in government departments, following increasing reports that corruption was growing in the Kingdom.

It was created last year, largely as a result of the flood which hit the port of Jeddah in 2010. The aftermath of this, according to Commission head Mohammed bin Abdullah Al Sharif, “clearly illustrated the poor performance of government departments because of bribery and widespread corruption”.

The Commission will work to complement the Kingdom's General Auditing Bureau, which said recently that public institutions are performing poorly and are viewed with distrust due to graft.

The King, perhaps fearing public anger over corruption as in other Arab countries, has been vocal in ordering the Commission to tackle corruption. He insisted that there should be “no exceptions” to the investigations, suggesting a willingness to tackle entrenched power structures within the government.

A number of these have apparently already been resisting the work of the Commission. Al Sharif said that several authorities had been uncooperative, and said that the Commission would be publishing the names of these authorities in a bid to shame them into compliance.

Given the overlap between public and private corruption in Saudi Arabia (as elsewhere), it remains to be seen whether the Commission's public remit will be a hindrance to its work. The apparent vigour with which it is operating, and with which the King is supporting it, suggests that it will start actively rooting out corruption in the Kingdom.

Sources: Arab News, Wall Street Journal

Nexen denies Yemen bribery claims

Canadian oil and gas explorer Nexen has denied claims that it sought to bribe officials in Yemen over oil and gas contracts.

The rumours surfaced last week in theYemen Post, which alleged that officials from Nexen attempted to pay Yemeni officials within the Petroleum Exploration & Production Authority and the Oil Ministryin order to secure continued access to Block 14. The company has operated the block for almost twenty years, but was forced to hand over control in December to PetroMasila, a new national oil company.

Nexen lobbied hard to renew its licence, which was in doubt for some time; however, the decline in Yemen's security and political situation led to doubts that it could sustain its operations. The Cabinet decided in November that it could secure more desperately-needed revenue through a national oil company than through Nexen.

Yemeni employees at Nexen claimed to media that bribery was commonly used as a way to secure contracts and proposals with the government. According to the allegations on the Block 14 extension, the company offered millions of dollars as well as a share of profits in exchange for a renewal of its licence.

The company strenuously denies the allegations. “We have one of the most robust integrity monitoring processes in the industry”, said spokesman Pierre Alvarez. “We operate by international standards as well as ours, that exceed any industry-wide standards out there.” Nexen is generally considered to have extremely robust anti-corruption standards.

A global anti-corruption watchdog, TRACE International, has pointed out that it is unusual that the allegations have been made from inside Yemen, where anti-corruption efforts are weak and investigative journalism under-developed. TRACE president Alexandra Wrage suggested that Nexen may have been named as a scapegoat by the media, which has close ties with the government, in order to advance domestic political goals.

Sources: Yemen Post, Wall Street Journal, Calgary Herald

Japanese conglomerate pays to settle Nigerian corruption case

Marubeni , the Japanese conglomerate, has paid $54.6 million to settle a bribery and corruption case related to liquefied natural gas in Nigeria, according to the US Department of Justice.

The DOJ alleges that the company was hired as an agent by TSKJ, a four-company joint venture, to secure contracts for building LNG facilities in Nigeria, and that Marubeni bribed Nigerian officials to get the contracts. The overall cost of the LNG facilities, for which TSKJ won four contracts between 1995 and 2004, was estimated at US$6 billion.

Strictly speaking, Marubeni was allegedly hired for bribing lower-level Nigerian officials; Jeffrey Tesler, a UK solicitor, was employed by the joint venture to bribe more senior officials. Marubeni received US$51 million whilst Tesler, who operated using a Gibraltar-based investment vehicle, received US$132 million – the money was used to bribe officials and as payment for facilitating the bribes.

The investigation, under the Foreign Corrupt Practices Act, has already snared many of the other companies and individuals involved. Tesler agreed to forfeit US$148 million after pleading guilty in March last year, and the joint venture partners (Kellogg Brown & Root, Technip, Snamprogetti and JCG Corporation) have paid a combined total of US$1.1 billion in fines over the past few years.

Under the deferred-prosecution agreement filed by the DOJ, Marubeni is bound to retain a consultant for two years to review and assess its compliance programme and to cooperate with further investigative work by the US authorities. Provided that Marubeni abides by the agreement, the DOJ will drop the criminal charges after two years.

Sources: AFP, Wall Street Journal

Former US Army Major sentenced in corruption case

A former US Army major has been sentenced to twelve years in prison for a scheme involving money laundering and bribery for Iraq reconstruction contracts.

Eddie Pressley , along with his wife, was convicted of 22 counts of fraud, bribery, conspiracy and money laundering back in March – the couple had accepted $2.9 million in bribes between 2004 and 2006.

Assistant Attorney General Lanny Breuer said that Pressley “participated in a wide-ranging scheme to steer U.S. Army contracts to particular providers in exchange for personal, illegal profit”. The case resulted from an investigation into contracts from Camp Arifjan, a US base in Kuwait.

The illicit contracts did not generally involve high-end military equipment but everyday items such as bottled water and gravel, which were huge business during the height of the US involvement in Iraq.

The FBI, which led the investigation, insists that the wrongdoing “is in no way representative of the vast majority of public officials and government contractors who work hard to serve our military.” However, the conviction of 15 other people also involved in the scheme suggests that it was a wide-ranging conspiracy.

Many reports have strongly criticised waste and corruption in government contracting related to the wars in Iraq and Afghanistan. The Special Inspector General for Iraq Reconstruction, and its Afghanistan-focused counterpart, have investigated dozens of cases in which contracts were given without proper oversight. In most cases the issue was simply one of negligence, but the huge amounts of money involved also gave easy pickings for those such as Pressley who actively engaged in corrupt practices.

With the war in Iraq now over and the final accounting efforts underway, more investigations into bad contracting will probably begin to get results.

Sources: Wall Street Journal, UPI

Failed Indian anti-corruption bill will return, insists Congress

India's ruling Congress party has insisted that the Lokpal Bill, which would have created an anti-corruption ombudsman, is not dead and “will be back soon”. This is despite the bill's chaotic failure in parliament, which has led to strong criticism of all the players involved.

The bill is the brainchild of civil society activist Anna Hazare, who became a potent force last year when his anti-corruption movement gathered hundreds of thousands of supporters and put serious pressure on the government to clean up India's notoriously corrupt politics.

The legislation, which was largely driven by Hazare, would have instituted an independent body to register and investigate complaints of corruption against politicians, as well as protecting whistleblowers. The process was marked by tension between activists and the government, which had proposed its own version of the bill which campaigners said was insufficient.

Hazare's movement began to fracture at the end of last year, with erstwhile supporters accusing him of a naïve approach to corruption and warning that the proposed ombudsman would be undemocratic and unaccountable. The shift in Hazare's public fortunes decreased momentum for the legislation, and it got bogged down in parliament.

Although it was approved by the lower house on 27th December, the bill failed to be passed to the Senate before the end of the parliamentary season at midnight on 29th December. In chaotic scenes in Parliament, MPs filibustered and argued for hours.

Congress and the opposition BJP have begun a war of words over responsibility, with Congress accusing the BJP of tabling dozens of last-minute amendments in order to torpedo the bill and the BJP calling on the government to resign for its failure to pass the legislation.

Although the government is adamant that the bill will be resuscitated in the next season of parliament, its chaotic failure suggests that politicians are not fully committed to tackling corruption.

Sources: BBC, The Hindu