Corruption in Public Life – Are we the only ones?
Recently, I came across this news-story in the International Herald Tribune titled, “Another Gilded Age of corruption”, by Frank Rich [International Herald Tribune, Sept 26th, ’05 Op-Ed Page]
In this highly readable article Frank Rich has lambasted the US establishment for the decreasing standards of accountability in public life and the spread of corruption at all levels. Many of his words bear a striking resemblance to the description of political life and venal practices in India that our learned and politically-aware intellectuals never miss an opportunity to criticise.
The point of reproducing these excerpts is simply to demonstrate neither is India unique in having sleazy practices that have permeated politics nor is it alone in suffering from the corroding effects of dropping moral standards in public life.
Talking about how the political establishment still suffers from the Enron-like malaise that marked American businesses, Frank says, “But even as American business has since been purged by prosecutions and reforms, the mutant Enron version of the CEO culture still rules in Washington: uninhibited cronyism, cooked books, special-favors networks, the banishment of whistle-blowers and accountability.”
Many of you are no doubt aware of the disastrous management of the post-hurricane relief efforts by unqualified FEMA chief Michael Brown. It has also been mentioned that Mr Brown’s sole claim to the job was that he was part of the “Friends of Bush” circle (It was also subsequently revealed that he lied about his disaster handling experience on his resume. See e.g. TIME magazine’s report on him at http://www.time.com/time/nation/article/0,8599,1103003,00.html “How Reliable is Brown’s Resume?” by Daren Fonda and Rita Healy posted Sept 8th ’05.).
Less well known, however, is the recent appointment of Julie Myers.
As Frank reports, “Witness the nomination of Julie Myers as the new head of immigration and customs enforcement for homeland security .Myers is the niece of General Richar Myers and has just married the chief of staff for homeland security secretary, Michael Chertoff�Her qualifications for running an agency with more than 20,000 employees and a $4billion budget include serving as associate counsel under Kenneth Starr; in that job, she helped mastermind the costly and doomed prosecution of Susan McDougal, and was outwitted at every turn by the defense lawyer Mark Geragos.”
Here are some more examples of “political appointments” by Bush administration that have more than a whiff of impropriety about them.
“.. errors were compounded when the administration staffed the post-Saddam occupation with the same kind of appointees it would later bring to homeland security: the two heads of “private sector development ” in Iraq were a former Bush fundraiser and a venture capitalist who just happened to be the brother of Ari Fleischer, Bush’s former press secretary. Major roles in the L. Paul Bremer regime were given to 20-somethings with no foreign service experience or knowledge of Arabic simply because they had posted their resumes at the Heritage Foundation, the same conservative think tank where Bremer had chaired a task force.” sounds familiar? Wait, there is more.
As I was reading this, I thought to myself, why is it that we (as in India and Indians) are so often singled out for “corruption in public life and in governance” when the malaise is, in reality, more widespread?
I am not defending corruption “far from it” but we need to have a balanced and objective approach when reporting on these things to paint India (and other developing countries) as hot-spots of corruption, nepotism and cronyism while considering western democracies to be paragons of virtue is wrong on both counts.
As if on cue, less than two weeks later, I stumbled on the following three news items, all from the Sunday Times, Oct 09Â ’05:
“Blunkett may face business pay probe” (Page 4) “The cabinet minister David Blunkett is this weekend under pressure to explain his financial and personal links to a controversial businessman” Blunkett was apparently paid by the company for three months work that which he did not declare to Parliament. To make matters worse, the company is owned by the family of Tariq Siddiqi, “A flamboyant businessman with a chequered past” more at http://www.timesonline.co.uk/article/0,,2087-1817420,00.html (Blunkett has since resigned over the affair)
“Falconer tried to bury report into fixing court job” (Page 5) “Lord Falconer, the Lord Chancellor, has been accused of lobbying against publication of a damning report by a government watchdog that found he had acted “inappropriately” in appointing an acquaintance as a senior judge” (to a 126,000 a year post). More at http://www.timesonline.co.uk/article/0,,2087-1817493,00.html
Kilroy-Silk ‘milks’ Brussels for perks (Page 8) “THE MEP (Member of European Parliament) Robert Kilroy-Silk has taken advantage of the Euro “gravy train” that he had pledged to expose by employing his wife and chauffeur at taxpayers “expense” and further in the article, “At least six other UK MEPs employ their spouses as parliamentary assistants” It is ironic that soon after Kilroy-Silk entered the European parliament last year, he had himself “railed in a newspaper article against the “extravagance and waste” in Brussels, which he had experienced first-hand. “MEPs are met at the airport,” he wrote. “Eased into an air-conditioned chauffeur-driven limo and taken to the parliament buildings where they are given a suite of rooms . . . bigger than many of the homes in which my constituents live…It’s not difficult to believe that each MEP costs the taxpayers more than 1m a year.” more at http://www.timesonline.co.uk/article/0,,2087-1817429,00.html
In case you have not realised this, all these stories were reported in just a single day’s edition of the newspaper (although well shielded on Pages 4 and beyond).
Finally, here’s Andrew Sullivan writing in the Sunday Times, Oct 09, ’05, “Bush picks a pal and feeds a credibility crisis”.
I am quoting verbatim from the first few paragraphs:
“She’s a tiny unassuming lady, with the most modest of public careers as a trial lawyer. Her main claim to fame is that she once managed the Texas lottery and then became the president’s bureaucratic gatekeeper in the White House and his personal legal counsel.She has never been a judge and has never, to anyone’s knowledge, even proffered an opinion about the fundamental constitutional issues with which the Supreme Court grapples daily. But last Monday Harriet Miers was nominated to be one of only nine justices on the Supreme Court of the United States. She was, in President Bush’s words, “the best person I could find”.
The statement is risible on its face. And perhaps the most shocking thing about last week was that conservatives were the ones pointing this out. Here’s Trent Lott, about as hard right as you can find, a man who once publicly regretted the end of racial segregation and ran the Republican Senate: “Is she the most qualified person? Clearly, the answer to that is “no”. Others were less delicate: “Bush may as well appoint his chauffeur head of Nasa as put Miers on the Supreme Court, exploded the right-wing blowhard Ann Coulter. Conservative columnist George Will put the case with more restraint but, in some ways, more viciousness. President Bush, he wrote, has neither the inclination nor the ability to make sophisticated judgments”
Just in case you did not know, the appointments are for life. (Miers has since then withdrawn her nomination)
In case these incidents still look like anomalies and aberrations, here are two final news items.
Days before I write this, House Majority Leader (Republican) Tom DeLay has been charged with electoral malpractices (for funnelling corporate funds into political campaigns, see e.g. story in TIME Magazine of Oct 10, ’05, “Power Outage”) and Senate Republican leader Bill Frist is having a hard time explaining why his “blind trust” unloaded all his holdings in a Frist-family founded company just before its stock dropped. http://www.washingtonpost.com/wp-dyn/content/article/2005/10/12/AR2005101202286.html (“SEC Issues Subpoena To Frist, Sources Say”, By Carrie Johnson and Jeffrey H. Birnbaum, Washington Post , Oct 13, ’05).
Frist claims that he took this step to avoid “conflict of interest”. Impeccable timing is all I can say.
***
Image courtesy: www.unodc.org/unodc/en/corruption/index.html
From a recent issue of TIME,Illinois Corruption:
Read the full story here.
Dear Shantanu,
Please read my earlier mails regarding Dynasty Robert Daley and Richard Daley. Nowhere is it absent. The BJP and the Communist parties are the only ones exempt. Even here the BJP has had a problem which has sorted itself out. The case of Kalyan Singh and his son and his resignatiuon from the party.
May be the BJP may lose a few seats, but let it start with clean slate and a new beginning. The SP is a dead party except for the anti hindu media.
Regards,
vck
Here is news article.
Why this should not be taken very seriously and ask thje govt. to take very strict action.
We should/the govt. should ask for the account holder’s name with the amount
Copy of the Article
THIS IS AMERICA AND AMERICANS
A Swiss Bank Is Set to Open Its Secret Files
In the hush-hush world of Swiss banking, the unthinkable is happening: secrets are spilling into the open.
UBS the largest bank in Switzerland, agreed on Wednesday to divulge the names of well-heeled Americans whom the authorities suspect of using offshore accounts at the bank to evade taxes. The bank admitted conspiring to defraud the INTERNAL REVENUE SERVICES and agreed to pay $780 million to settle a sweeping federal investigation into its activities.
It is unclear how many of its clients’ names UBS will divulge. Federal prosecutors have been examining about 19,000 accounts at the bank, but UBS ultimately may disclose the identities of only a few hundred customers.
But to some, turning over any names at all heralds the end of the secret Swiss bank account, whose traditions date to the Middle Ages.
“The Swiss are saying that this is the end of Swiss banking as they knew it,†said Jack Blum, an offshore tax specialist. “Nobody will trust the security of the Swiss bank account.â€
As part of the settlement, UBS agreed to cooperate with a broad summons issued by the Justice Department to turn over the names. Under the terms of a so-called deferred prosecution agreement, the bank and its executives could be indicted if UBS didn’t identify the customers.
UBS has said it is closing the offshore accounts of its American clients. But under the deal with the United States authorities, the bank must provide periodic written evidence of that to prosecutors. UBS earned $200 million annually from the business.
Prosecutors suspect that from late 2002 to 2007, UBS helped American clients illegally hide $20 billion, letting them evade $300 million a year in taxes.
In a striking admission, UBS said that from 2000 through 2007, some of its private bankers and managers had “participated in a scheme to defraud the United States†and the I.R.S. by helping American clients set up and conceal offshore accounts. The scheme involved falsifying or not properly obtaining or filing certain tax forms required of both the bank and its clients.
UBS’s offshore private banking business once employed some 60 private bankers in Lugano, Zurich and Geneva. Prosecutors claimed UBS referred clients to lawyers and accountants who set up secret offshore entities to conceal assets from the I.R.S.
UBS urged some American clients to destroy records and to stash watches, jewelry and artwork that they had bought with money hidden offshore in safe deposit boxes in Switzerland. The bank also encouraged them to use Swiss credit cards so the I.R.S. could not track purchases. In a statement on Wednesday, Peter Kurer, the chairman of UBS, said that “UBS sincerely regrets the compliance failures in its U.S. cross-border business that have been identified by the various government investigations in Switzerland and the U.S., as well as our own internal review. We accept full responsibility for these improper activities.â€
Marcel Rohner, the group chief executive of UBS, said in a statement that “it is apparent that as an organization we made mistakes and that our control systems were inadequate.â€
In January a senior UBS executive, Raoul Weil, was declared a fugitive, two months after being indicted by a federal judge in connection with the investigation of the bank. Mr. Weil, a Swiss citizen, oversaw the cross-border private banking operations from 2002 to 2007.
UBS had fiercely resisted turning over the names, even after some executives were indicted and implicated in the offshore private banking business. Swiss law distinguishes broadly between tax avoidance, tax evasion and tax fraud. Unlike in the United States, tax evasion is not a criminal offense under Swiss law.
The move by UBS to settle the case, on the eve of a Senate subcommittee hearing next Tuesday on the matter, signals how close the bank came to being indicted for not cooperating with prosecutors. Indictment is a near-certain death knell for corporations.
Of the $780 million that UBS will pay, $380 million represents disgorgement of profits from its cross-border business. The remainder represents United States taxes that UBS failed to withhold on the accounts. The figures include interest, penalties and restitution for unpaid taxes
As part of the deal, UBS also entered into a consent order with the Securities and Exchange Commission in which it agreed to charges of having acted as an unregistered broker-dealer and investment adviser for Americans.
The settlement caps a painful run for UBS, which suffered more than $50 billion in losses in the collapse of the American mortgage market and received a $60 billion bailout from the Swiss government last October.
The bank will not have to pay additional fines and penalties, which could have brought the deal to more than $1 billion. People briefed on the issue said the banking crisis and the recession were factors in this decision by prosecutors.
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THIS IS INDIA AND INDIANS
LOOK WHERE OUR MONEY IS GOING????
Revelation on Swiss Bank Accounts “who can save india no one knows where tax payer money is going ” Revelation on Swiss Bank Accounts
This is so shocking . . . . . wish black money deposits was an Olympics event . . . . . India would have won a gold medal hands down. The second best Russia has 4 times lesser deposit. US is not even there in the counting in top five !!
India has more money in Swiss banks than all the other countries combined !!!!
Recently, due to international pressure, Swiss govt. agreed to disclose the names of the account holders only if the respective govts formally asked for it. Indian govt.. is not asking for the details . . . . no marks for guessing why ????
We need to start a movement to pressurise the govt. to do so !! This is perhaps the only way, and a golden opportunity, to expose the high and mighty and weed out corruption !!
Please read on . . . . . and forward to all the honest Indians to . … . like somebody is forwarding to you . .. . . . and build a ground-swell of support for action !!
Is India poor, who says? Ask Swiss banks With personal account deposit bank of $1500 billion in foreign reserve which have been misappropriated, an amount 13 times larger than the country’s foreign debt, one needs to rethink if India is a poor country?.
DISHONEST INDUSTRIA LISTS, scandalous politicians and corrupt IAS, IRS, IPS officers have deposited in foreign banks in their illegal personal accounts a sum of about $ 1500 billion, which have been misappropriated by them. This amount is about 13 times larger than the country’s foreign debt. With this amount 45 crore poor people can get Rs 1,00,000 each. This huge amount has been appropriated from the people of India by exploiting and betraying them.
Once this huge amount of black money & property comes back to India , the entire foreign debt can be repaid in 24 hours. After paying the entire foreign debt, we will have surplus amount, almost 12 times larger than the foreign debt. If this surplus amount is invested in earning interest, the amount of interest will be more than the annual budget of the Central government. So even if all the taxes are abolished, then also the Central government will be able to maintain the country very comfortably. .
Some 80,000 people trave l to Switzerland every year, of whom 25,000 travel very frequently. ‘Obviously, these people won’t be tourists. They must be travelling there for some other reason,’ believes an official involved in tracking illegal money. And, clearly, he isn’t referring to the commerce ministry bureaucrats who’ve been flitting in and out of Geneva ever since the World Trade Organisation (WTO) negotiations went into a tailspin!
Just read the following details and note how these dishonest industrialists, scandalous politicians, corrupt officers, cricketers, film actors, illegal sex trade and protected wildlife operators, to name just a few, sucked this country’s wealth and prosperity. This may be the picture of deposits in Swiss banks only. What about other international banks?
Black money in Swiss banks — Swiss Banking Association report, 2006 details bank deposits in the territory of Switzerland by nationals of following countries :
Top Five
1. India —- $1,456 billion
2. Russia —$ 470 billion
3. UK ——-$390 billion
4. Ukraine – $100 billion
5. China —–$ 96 billion
Now do the maths – India with $1456 billion or $1.4 trillion has more money in Swiss banks than rest of the world combined.
Public loot since 1947: Can we bring back our money? It is one of the biggest loots witnessed by mankind — the loot of the Aam Aadmi (common man) since 1947, by his
brethren occupying public office. It has been orchestrated by politicians, bureaucrats and some businessmen. The list is almost all-encompassing. No wonder, everyone in India loots with impunity and without any fear. What is even more depressing in that this ill-gotten wealth of ours has been stashed away abroad into secret bank accounts located in some of the world’s best known tax havens. And to that extent the Indian economy has been stripped of its wealth.
Ordinary Indians may not be exactly aware of how such secret accounts operate and what are the rules and regulations that go on to govern such tax havens. However, one may well be aware of ‘Swiss bank accounts,’ the shorthand for murky dealings, secrecy and of course pilferage from developing countries into rich developed ones.
In fact, some finance experts and economists believe taxhavens to be a conspiracy of the western world against the poor countries. By allowing the proliferation of tax havens in the twentieth century, the western world explicitly encourages the movement of scarce capital from the developing countries to the rich.
In March 2005, the Tax Justice Network (TJN) published a research finding demonstrating that $11.5 trillion of personal wealth was held offshore by rich individuals across the globe. The findings estimated that a large proportion of this wealth was managed from some 70 tax havens. Further,aug menting these studies of TJN, Raymond Baker — in his widely celebrated book titled ‘Capitalism’ s Achilles Heel : Dirty Money and How to Renew the Free Market System’ — estimates that at least $5 trillion have been shifted out of poorer countries to the West since the mid-1970.
It is further estimated by experts that 1 % of the world’s population holds more than 57 % of total global wealth, routing it invariably through these tax havens. How much of this is from India is anybody’s guess. What is to be noted here is that most of the wealth of Indians parked in these tax havens is illegitimate money acquired through corrupt means.
Naturally, the secrecy associated with the bank accounts in such places is central to the issue, not their low tax rates as the term ‘tax havens’ suggests. Remember Bofors and how India could not trace the ultimate beneficiary of those transactions because of the secrecy associated with these bank accounts?
IS THERE ANY ONE WHO CAN SAVE INDIA?
@M.P.Jani
What is the source? If its just a forward, it could well be a spoof. I’m sure India must be on the top on corruption but the numbers could be cooked up numbers if you don’t have legitimate source. I’m curious.
From Some choice words for “The Select Few†by Bill Moyers & Michael Winship:
If you want to know what really matters in Washington, don’t go to Capitol Hill for one of those hearings, or pay attention to those staged White House “town meetings.†They’re just for show. What really happens – the serious business of Washington – happens in the shadows, out of sight, off the record. Only occasionally – and usually only because someone high up stumbles – do we get a glimpse of just how pervasive the corruption has become.
Case in point: Katharine Weymouth, the publisher of The Washington Post – one of the most powerful people in DC – invited top officials from the White House, the Cabinet and Congress to her home for an intimate, off-the-record dinner to discuss health care reform with some of her reporters and editors covering the story.
But CEOs and lobbyists from the health care industry were invited, too, provided they forked over $25,000 a head – or up to a quarter of a million if they want to sponsor a whole series of these cozy get-togethers. And what is the inducement offered? Nothing less, the invitation read, than “an exclusive opportunity to participate in the health-care reform debate among the select few who will get it done.â€
The invitation reminds the CEOs and lobbyists that they will be buying access to “those powerful few in business and policy making who are forwarding, legislating and reporting on the issues …
“Spirited? Yes. Confrontational? No.†The invitation promises this private, intimate and off-the-record dinner is an extension “of The Washington Post brand of journalistic inquiry into the issues, a unique opportunity for stakeholders to hear and be heard.â€
Let that sink in. In this case, the “stakeholders†in health care reform do not include the rabble – the folks across the country who actually need quality health care but can’t afford it. If any of them showed up at the kitchen door on the night of this little soiree, the bouncer would drop kick them beyond the Beltway.
Go read in full
From a recent article by Sh Krishen Kak: Perceptions of corruption
…Corruption index parameters reflect the priorities of those proposing them. Transparency International’s Corruption Perceptions Index is reportedly “determined by expert assessments and opinion surveys†and “the degree to which corruption is perceived to exist among public officials and politiciansâ€.
The parameters are changeable…The entire methodology is highly suspect, with a strong pro-Western bias (“nine out of every 10 developing countries†are considered corrupt), yet the index is popularly quoted around the world as an objective ranking.
In the 2008 index, India is listed at 85. The US ties with Belgium and Japan at 18. Certainly India is corrupt, and this is not a defence or exculpation of our corruption. But consider — and why not? — corruption as of the polity as a whole (and not primarily of sarkari naukars), take the amount of money that ‘experts’ assess as involved in the corruption and divide it by the population, and you’ll get the country’s per capita corruption index, ie, a perception of the extent to which the culture as a whole is corrupt — surely as valid a perception as the one Transparency International uses.
Then what would the rankings be?
Standard & Poor announced the global fall-out of Wallgate was $10,000,000,000,000. That is, this was the financial consequence (about a year ago; ‘experts’ estimate much higher now) of America’s Wall Street corruption alone. The US Government’s Department of Interior Inspector-General recently estimated as upwards of $ 24 trillion the cost to American taxpayers of the Wall Street bailouts. The human consequence (if only in terms of homelessness and job losses) is being ‘expertly’ assessed at higher than the ILO’s initial joblessness estimate of 210 million. In this corruption, the complicity of the US Government is undeniable.
Transparency International defines corruption as “the abuse of entrusted power for private gainâ€. Let us see how objectively it can rank the US in its 2009 index. India is corrupt, certainly, but the US must surely head the list.