News Archive: May - August 2007

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• US Government Reacts to Latest Iraq Corruption Scandals. Lee Dynamics International, an American-owned company based in Kuwait, has been accused by the US Government of paying thousands of dollars in bribes to win $11 million worth of contracts from American contracting officials, reported The New York Times on August 31, 2007. US Defense Secretary Robert Gates (pictured) has sent the Pentagon Inspector General to Iraq to do a broader investigation of contract fraud. (See EthicsWorld analysis of corruption in Iraq).
  
  
• Merkel Announces New Global Warming Plan. German chancellor Angela Merkel proposed a global warming plan in Japan that she hopes will appeal to both emerging and industrialized countries, reported EUobserver.com on August 31, 2007. She suggested that developing countries should be allowed to increase their emissions per head while industrialized countries should decrease emissions per head until the two sides meet. The proposal is aimed particularly at India and China who are growing at a fierce economic pace and fear their competitiveness will be harmed if they have to adhere to strict green limits.
  
  
• Legislative Assembly Passes First Anti-Corruption Act in Tonga. Tonga-Now reported on August 31, 2007 that the development and passage of this Act, known as the Anti-Corruption Commissioner Act 2007, is amongst the measures that the government has implemented over the past year to improve the “governance environment,” which also includes fighting anti-corruption and institutional strengthening of programs for customs.
  
  
• US Judge Rules in Favor of Noriega Extradition, Despite Controversy. After being captured by US forces in Panama and jailed in the US on drug trafficking charges, a US judge has ruled that Manuel Noriega could be extradited to France to face charges that he allegedly spent some 3.15 million dollars on high-priced real estate in Paris using money stolen from Panamanian coffers, reported IPS.com on August 30, 2007. Noriega’s defense argues that the former general is a prisoner of war and allowing extradition would be a direct violation of the Geneva Convention.
  
  
• Knesset Members Fight to Uphold Corruption Fighter’s Rights. Yaron Zelekha, Israel’s Accountant-General who helped uncover the Bank Leumi affair involving Prime Minister Ehud Olmert and is considered a steadfast fighter against government corruption, was told that his contract would not be extended after his term comes to an end in October, reported Haaretz.com on August 30, 2007. Zelekha has made strong comments that corruption is a threat to the very existence of Israel. Knesset State Control Committee Chairman Zevulun Orlev said he will call upon the comptroller to prevent Zelekha's ousting and give him the protection that corruption fighters deserve by law.  
  
  
• China Punishes Corrupt Officials in Legislature. China removed four officials accused of corruption from its legislature, including Chen Liangyu, a former party boss of Shanghai, who is the highest-level Chinese official to be dismissed in a decade, reported The International Herald Tribune on August 30, 2007. A government investigation has found that Chen abused his power by lending large amounts of money from the Shanghai social security fund, and also allegedly helped private businessmen purchase stakes in state-owned companies, resulting in huge losses, the investigation said.
  
  
• Chilean Supreme Court to Rule Soon on Fujimori Extradition. Alberto Fujimori, the former Peruvian leader who stands accused of human rights abuses and corruption, awaits a Chilean Supreme Court to confirm or reject a previous ruling that he should not be sent back to face charges in Peru, reported Prensa Latina in Santiago on August 29, 2007. The Court Chair thinks the court will take a month to announce its final verdict.
  
  
• Survey Shows Indian Employee Priorities May Be Shifting. When asked to rank their top 20 employers, a survey revealed that most Indian information technology professionals prefer multinational over local companies, reported The Sydney Morning Herald on August 29, 2007. Instead of the “feel good” company culture usually associated with local companies, employees appear to weight organizational culture, job security and corporate governance more heavily.
  
  
• “Ethical Shopping” Gaining Big Business. Just this week the Soil Association, a UK membership organization that sets standards for organic food and farming, revealed that over $4 billion (or £2 billion) is annually spent on organically produced food, clothing and cosmetics, reported The Herald in the UK on August 29, 2007. Until recently, clothing brands were more obsessed with low price than the cost to the environment or the producers. Shoppers are also realizing that ethically produced products can be trendy. 
  
  
• Brazil Top Aide Charged with Political Corruption. Brazil's Supreme Court has indicted former chief of staff to President Luiz Inacio Lula da Silva for involvement in a political bribery scheme to support the ruling Workers Party, reported the International Herald Tribune on August 28, 2007. The court so far has approved charges against 36 of 40 people accused by federal prosecutors of funneling bribes or taking them.
  
  
• South African Water Company Battles Coca Cola. Chantilly Water, a South African water supply company, is suing Atlanta-based Coca Cola for allegedly reneging on a contract to buy 17 million litres of mineral water, reported Independent Online – South Africa on August 27, 2007. The allegations come after Coca Cola announced as part of its CSR plan in early June that it pledges to replace the water it uses in its beverages and their production.
  
  
• Kenya Reacts to Embarrassing Rank on 2007 Bribery Index. Local Government Minister Musikari Kombo has formed an ethics committee to investigate corruption in his ministry following the recent release of Transparency International’s National Bribery Index, which ranked his ministry fifth among the top corrupt institutions in the country, reported the Kenya Broadcasting Corporation on August 27, 2007. Kombo claimed the cause of corruption is due to day-to-day contact with public procurement and employment issues, which were not properly handled. (See EthicsWorld coverage of TI – Kenya’s Bribery 2007 Index)
  
  
• After Months of Controversy, US Attorney General Resigns. US Attorney General Alberto R. Gonzales resigned today, ending a controversial cabinet tenure that included clashes with Congress over ethical issues such as the firing of nine U.S. attorneys and the use of warrantless wiretaps in the war on terror, reported The Washington Post on August 27, 2007. The first Hispanic to hold the job, Gonzales will step down as of Sept. 17.
  
  
• Amidst More Recalls, China Defends Its Position Against Mattel. Australia will impose more stringent tests on Chinese-made textiles alleged to have dangerous levels of a carcinogen after an outcry in New Zealand over children’s clothes were reported to contain the chemical, reported one article in The Financial Times on August 24, 2007. Textiles follow a string of products made in China that have been found to be health hazardous, including an 18 million toy recall from Mattel. However, in another article from The Financial Times, China believes it is receiving the backlash from Mattel’s recent decision to tighten its own safety standards.  
  
  In related news... EU Denies China’s Excuse for Consumer Product Failures. EU trade commissioner Peter Mandelson rejected Beijing’s claims that European companies’ response to safety standard lapses is politically motivated to protect their market, reported the EU Observer on August 21, 2007. "This is not a question of trade, but of health", Mandelson said.
  
  
• Argentina Fed Authority Imposes Higher Environmental Standards. Bridgestone Firestone Argentina was forced to temporarily close by the federal environment authority due to expired permits for the operation of dangerous pressurized heating caldrons on the company site that could potentially harm workers and society at large, reported The Center for Human Rights and Environment in Buenos Aires on August 23, 2007.  Since 2005, 296 injuries and two deaths were reported in the area from the explosion of similar heating cauldrons, a major problem that ranks high on the agenda of the Kirchner administration.
  
  
• US Executive Officials Still Accepting Free Trips. A USA Today review revealed on August 23, 2007 that despite attempts at US Congressional ethics reform, executive branch officials are routinely accepting trips from companies and trade associations with a stake in their agencies' decisions. The report found that more than 200 trips during the 12-month period were paid for by corporations or trade groups that are regulated by, or do business with, the department or agency.
  
  
• Deliberations Begin Over Brazilian Government Scandal. Brazil’s Supreme Court is set to hear deliberations from 40 people accused of participating in actions where the governing party financed election campaigns and bribed legislators from other parties, reported the BBC News on August 23, 2007. Many high-level officials have already been forced to resign over the scandal, and one Brazilian Archbishop fears that “corruption and impunity are leading our people to distrust politics.”
  
  
• Indonesia Bill Would Establish Special Graft Court. In response to the overflow of corruption cases in Jakarta, for which there is only one graft court, a new bill would create a specialized court run by judges who have been carefully selected by a team of academics and members of the public, reported The Jakarta Post on August 22, 2007. One analyst said the current graft court had “rather excessive powers,” and the draft of the new bill would clean up the judiciary.
  
  
• Rampant Corruption Causes EU to Close Gaza’s Only Fuel Company. After a Palestinian official exposed fuel theft in the Palestinian Gaza Electrical Company, the European Union ceased to fund the fuel company leaving 1.5 million residents without power, reported International Middle East Media Center News on August 21, 2007. While criticizing those behind the corrupt activities, Palestinian President Mahmoud Abbas accused his information minister Riad Al Malki of misleading the EU by means of spreading untrue accusations regarding a plan by the Hamas movement to siphon money from the company.
  
  
• “Corruption Fighter” Fired for Financial Impropriety. Executive Director of the Anti-Corruption Coalition Uganda has been accused of taking salary advances as well as awarding contracts unilaterally, both actions against ACCU regulations, reported The Daily Monitor in Kampala on August 20, 2007. Political infighting is damaging the organization as the former ACCU boss claims “criminal elements in the board” are out to get him.
  
  
• Vioxx Cases Remain in Limbo. Of the 45,000 Americans who sued Merck & Company for its painkiller Vioxx, which allegedly caused heart attacks, none have received any payments, reported The New York Times on August 21, 2007. Merck’s strategy consistently discourages plaintiffs to go to trial unless they have overwhelming evidence the drug caused a heart attack. Although some scientists estimated that as many as 100,000 who took Vioxx might have suffered heart attacks, the legal system is not set up to try thousands of cases at once, and nearly all Vioxx lawsuits are caught up in the pretrial process.
  
  
• Malaysia Improves Corporate Governance. A report by the Institute of International Finance said the country’s corporate governance framework now complies with more than three-quarters of the IIF’s guidelines, Business Times, Malaysia, reported on August 17, 2007. While clearly recognizing the progress and positive actions that have been implemented in recent years, the report also points out the scope of efforts needed to further enhance best practices particularly in the capital market regulatory framework, Maybank president and chief executive officer Datuk Amirsham A. Aziz said in a statement. Amirsham is also a member of the IIF board of directors.
  
  
• EU Confronts Opposition Over Voluntary Lobbyist Registration. In the wake of US-imposed controls over lobbying, the European Commission is in the process of establishing a voluntary interest register, which could reveal companies’ clients and fees, The Financial Times reported on August 17, 2007. The European Public Affairs Consultancies Association (Epaca) said it would boycott a voluntary register in favor of mandatory register with a common definition of lobbying that would establish a fairer playing field.
  
  
• Impath Exec Convicted for “Failure to Question.” The former president of American cancer-data company Impath was charged for consciously avoiding an inquiry into questionable accounting practices which eventually bankrupted the company, reported CFO.com on August 17, 2007. Instead of figuring out how those "suspicious results" were achieved, the president waved away queries, dismissed people who asked too many questions, and refused to read documents that detailed the ongoing fraud, the judges asserted.
  
  
• Mattel Grapples with Largest Recall in Company History. Mattel recalled 19 million Chinese-made toys as a result of a lapse in toy safety standards, reported the New York Times on August 15, 2007. The largest toy company in the world is now considering a shift toward company-owned factories and away from Chinese contractors and sub-contractors. However, industry analysts claim Mattel’s standards are no worse than other toy companies,’ but that Mattel is the only one taking any action.
  
  
• Global Water Tool Will Simplify Assessment of Water Usage. World Business Council on Sustainable Development has developed the Global Water Tool (GWT), a free online service that helps companies calculate their water consumption and efficiency. Fuelling the impetus for the development of the GWT, which was launched in Stockholm on August 15, 2007, is the acknowledgement that large companies find it challenging to establish the availability of adequate water and sanitation access in the local areas where their production sites are located. The GWT is meant to help companies minimize certain water risks and impacts in their operations and supply chains by helping to simplify the data gathering and analysis process involved in assessing potential risk for water shortages and draughts that disrupt their business activities.
  
  
• Report Says South Africa Controlling Losses Due to Corruption. A report released by the Public Service Commission in South Africa reveals improvement in the government’s attempt to curb financial misconduct as a result of fraud and theft, reported AllAfrica.com on August 15, 2007. Commission chairman Stan Sangweni said “I suppose one can also say the decrease with regards to the cost ... would seem to speak to the effectiveness with which departments have put in place control measures.” However, there is still much work to be done to strengthen internal controls and supervision.
  
  
• Siemens Alleged Bribes Now Exceed $1.3 Billion. A report in Germany’s respected Süddeutsche Zeitung quoted sources at the top of Siemens as saying, "We are talking about enormous sums." The newspaper suggested that investigators have now found over $1.3 billion of bribes – 60 percent more than the earlier confirmed corporate total, Reuters reported on August 14, 2007.
  
  
• Taiwan Court Clears Opposition Leader of Corruption. "Ma Ying-jeou is not guilty," the Tapei court's chief judge announced in a brief ruling, so ending a very high profile corruption case involving the main opposition's presidential candidate for elections next March. The decisions is expected to boost Ma’s chances in the race, reported AFP on August 14, 2007.  
  
  
• Kurds Pass Energy Law With CSR Principles. The United Nations Global Compact reported that on August 6, 2007 the National Assembly of the Kurdistan Region of Iraq passed a Kurdistan Oil and Gas Law requiring businesses seeking petroleum contracts to "demonstrate a commitment to the Ten Principles of the Global Compact." This is the first time that a piece of legislation explicitly references the Global Compact.
  
  
• Rigases Go To Prison. John Rigas, the 82 year old founder of Adelphia Communications has started a 15 year prison term, while his son John has started his 20 year term – they were found guilty of fraud in a case that together with Enron, WorldCom and Tyco, highlighted a crisis in U.S. white collar crime (AP reported on August 14, 2007).
  
  
• Japan’s Financial Regulator to Tame Hedge Fund Abuses. Amid concern that the influence of hedge funds is encouraging insider trading, the Japanese financial regulator, the Securities and Exchange Surveillance Commission, is planning a crackdown on funds after a new law is implemented next month, reported The Financial Times on August 10, 2007. The law will require more regulation of hedge funds; whereas now there is none. The SESC is also poised to crack down on investment advisers in Japan who act as fund managers without the necessary authorization.
  
  
• American Red Cross Criticized for Katrina Aid Process. The Red Cross is drawing the wrath of many Hurricane Katrina victims claiming their aid-based program, Means To Recovery, is too “secretive and strict,” reported The New York Times on August 10, 2007. The Red Cross only has enough money to cover around 4,000 families and thought the money would be better spent on truly helping a few than handing out small sums to everybody. The NY Times says the flare-up illustrates the tricky nature of deploying limited finances in the face of unlimited need.
  
  
• Indian State Kept in Turmoil Over Government Follies. Government mismanagement and corruption have left thousands of Indians in the state of Bihar displaced after what the UN has called the “worst flooding in living memory,” reported The Hindustan Times on August 9, 2007. As for the customary solution, Bihar governments continue to implement embankments, which have been reported to only exacerbate flooding, ultimately as a way to line the pockets of politicians and contractors. To date, the flooding has killed more than 200 people and displaced nearly 16 million in three states.
  
  
• First Criminal Trial Over Backdating Brings Guilty Verdict. Former Brocade Communications Systems chief executive officer was found guilty of fraud, falsified accounting, conspiracy and filing false financial statements in the first criminal trial over stock-options backdating, reported The Wall Street Journal on August 8, 2007. Around 140 American companies have come under investigation for backdating and about 70 executives have lost their jobs due to internal probes. One prosecutor involved in the trial is in charge of whether to bring charges over backdated options at Apple Inc.
  
  
• US Congress Probes Yahoo’s Role in the Arrest of a Chinese Journalist. The US Internet company has been accused of handing over a journalist’s personal information to Chinese authorities which resulted in his arrest for giving state secrets to foreign entities, reported The Financial Times on August 8, 2007. The journalist posted information on a foreign website about a government crackdown on democracy. Although Yahoo denies knowing what the journalist’s information was being used for, many are criticizing Yahoo for aiding in the squashing of democratic activity.
  
  
• Deloitte Escapes Adelphia Scandal with $167.5M Settlement. Deloitte & Touche agreed to pay $167.5 million to settle a case with a trust formed after its former client, Adelphia, went bankrupt and whose founder and former CFO head to US federal prison, reported CFO.com on August 7, 2007. Deloitte & Touche deny any participation in the massive fraudulent financial activities that landed Adelphia’s executives in jail. The Adelphia Recovery Trust claim it is “among the largest settlements ever reached between a public accounting firm and its audit client.”
  
  
• Indian Court Rejects Novartis' Drug Patent Suit. Asia Times Online reported on August 8, 2007 that non-governmental organizations advocating poor countries' access to affordable medicines applauded an Monday’s Indian court's decision to dismiss challenges against locally made generic drugs brought by Swiss-based drug-maker Novartis. The Swiss firm claimed patent infringement and warned the decision would have severe negative effects on research and development. But, Tido von Schoen-Angerer, head of the Doctors Without Borders/Medecins Sans Frontieres (MSF) Campaign for Access to Essential Medicines, said the decision "is a huge relief for millions of patients and doctors in developing countries who depend on affordable medicines from India".
  
  
• American Bank Fined for Overlooking Money Laundering. American Express Bank International is being fined $65 million after the US Department of Justice charged the company for failing to institute proper anti-money laundering programs, reported The Financial Times on August 7, 2007. According to the justice department, investigators identified AEBI accounts that they believed were used to launder more than $55m in drug proceeds for the “black market peso exchange”, a money laundering system through which South American “money brokers” facilitate the exchange of US dollars for South American currency.
  
  
• Chinese Take Preventative Measures Against Corruption. Chinese school children will now be participating in mandatory anti-corruption lessons, reported The New Zealand Herald on August 7, 2007. The younger children will be encouraged to talk about corruption and cheating in their own lives where the older children will discuss darker case studies involving some executed Chinese officials. The Chinese government is cracking down hard on corruption by trying to stop it before it starts.
  
  
• Research Shows Insider Trading on the Rise. According to the Financial Times’ analysis on August 6, 2007, suspicious trading has increased significantly related to an increase in mergers and acquisitions in the past five years. The analysis reveal that casinos, hotels and banking are most susceptible to suspicious trading activity just before large M&A announcements, and suspicious trading occurred ahead of 49 per cent of all North American deals since 2003.
  
  
• Off-Shore Oil Reserves Could Curse Ordinary Cambodians. Cambodian business transactions over recently discovered off-shore oil reserves have not been revealed to either the parliament nor the public, reported Al Jazeera on August 6, 2007. Since Cambodia has not implemented any anti-corruption laws, there is great fear that the money will be spent irresponsibly. During a recent visit, World Bank president Robert Zoellick warned the government that it could lose millions of dollars in international aid if it did not clean up corruption.
  
  
• Chinese Video Game Takes Corruption Fight to Extremes. An online game released a week ago was created to teach young people about the dangers of graft in China, reported AFP.com on August 2, 2007. The game encourages players to get ahead by killing officials by means of "weapons, magic or torture," which eerily parallels the execution of the former head of China's food and drug watchdog for corruption. The game has become so popular, it is being redesigned to accommodate more players.
  
  
• Admitting to Price Fixing, British Airways Will Pay Largest Civil Fine Ever. After Virgin Atlantic Airways blew the whistle on British Airways, Europe’s third-largest airline is cooperating with the US and UK authorities on grounds that it fixed fuel prices and could be fined at a cost of up to $711 million, reported Reuters on August 1, 2007. The civil fine is the biggest ever imposed by the Office of Fair Trading, the British entity involved in the investigation, which hopes that the action will serve as a deterrent and will encourage businesses to come forward to report illegal activities.
  
  
• Independent Oil Company Chief Quits Due to Kremlin Pressure. In another example of the growing power of the Kremlin, the Russian owner of RussNeft, Russia’s seventh-largest oil company by production, is stepping down due to what he claims is overwhelming harassment from state prosecutors, reported The Wall Street Journal on July 31, 2007. This move illustrates a pattern on the part of the Kremlin to decrease the significance of independent companies in favor of placing those close to government in positions of authority. The Russian media is reporting that the former RussNeft owner got on the Kremlin’s bad side by trying to purchase assets of the bankrupt oil giant OAO Yukos.
  
  
• Raid on US Senator’s Home Furthers Widening Corruption Investigation. US Federal agents searched longest-serving Republican Senator Ted Steven’s Alaskan home for his alleged acceptance of unreported gifts from oil field engineering firm, VECO Corp., reported The Wall Street Journal on July 31, 2007. The ongoing investigation into special-interest spending with the use of public funds also involves Alaskan state legislator, Don Young, and Mr. Stevens' son, former Alaskan state senator Ben Stevens.
  
  
• US Report Says Corruption is “Huge” in Iraqi Government. A US report analyzed corruption in 12 Iraqi government ministries and concluded that "Contract fraud and employee theft of medicines, food, and vehicles are viewed by investigators as the greatest problems," reported NBC News on July 30, 2007. One serious cause in particular is the reinstatement of a Saddam Hussein-era law, which allows the prime minister to exempt Cabinet ministers from prosecution and allows ministers to exempt their employees from prosecution. A top investigator in Iraq said the total amount of missing money involved in his investigations into government misconduct is $11 billion.
  
  
• Former Qwest CEO Jailed for “Crimes of Greed.” A US federal judge sentenced former chief executive officer, Joseph Nacchio, of Qwest Communications International to six years in a minimum-security prison for insider trading, reported The Wall Street Journal on July 28, 2007. Mr. Nacchio was convicted of selling $52 million of stock in the spring of 2001 while knowing that his company's finances were in trouble. He also faces a Securities and Exchange Commission civil-fraud suit
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• Hedge Fund Fined $200m for Ill-Gotten Profit. The US Federal Energy Regulatory Commission penalized failed hedge fund, Amaranth, and its natural gas trader, Brian Hunter, with significant fines for Hunter’s alleged attempt to manipulate the natural gas market, reported The Financial Times on July 26, 2007. It is the first move made by the FERC since receiving authority from Congress two years ago.
  
  
• Senior Executives Charged with Having Hand in Parmalat Implosion. An Italian judge charged Parmalat founder, its former chief financial officer, and two powerful Italian bankers with corrupt practices leading to the largest corporate bankruptcy ever in Europe, reported The New York Times on July 25, 2007. Although no one connected with the case is currently in jail, founder Calisto Tanzi is on trial in Milan for market manipulation.
  
  
• Court Rules in Favor of US Mining Company, Against a US Union. Drummond Ltd, a coal mining company headquartered in Alabama, has been found not guilty by a US jury of allegations that it aided the killing of three union laborers in Columbia reported The Wall Street Journal on July 27, 2007. Lawyers in the case and outside experts said the suit was the first to go to trial against a U.S. corporation under the Alien Tort Claims Act, a 1789 law, passed to fight piracy, that allows foreigners to file suit in Federal court for alleged wrongdoing overseas.
  
  

• ABB Participates in Investigation of Suspect Payments by Employees. ABB, a Swiss-Swedish engineering company, is cooperating with several foreign criminal authorities in investigating the possibility that employees may have bribed potential customers, reported the Financial Times on July 27, 2007. A similar scandal devastated the management at Siemens, a German engineering company that operates in similar areas of business, but analysts said the scale of bribery at ABB was unlikely to match Siemens’.
  
  

• Latest Doping Scandal Tarnishes Tour de France. After the Danish race leader, Michael Rasmussen, was thrown out by his team for lying about his whereabouts during training, many sponsors are fed up, reported The Times on July 26, 2007. Many of France’s leading newspapers are lambasting the sport, and some German firms have threatened to withdraw financial backing for the race.
  
  
• Nigeria’s Decision to Grant Bail Will Test Resolve on Fighting Corruption. The Abuja High Court granted bail to the ex-governor of northeastern Taraba state, who has been charged with looting public funds, reported Reuters on July 26, 2007. Nigeria has a history of governors avoiding trial, since very often once a person is freed on bail, the trial is quietly dropped. Wether or not the trial is carried out successfully will be a test of Nigeria’s strength to fight corruption.
  
  
• NY Governor Accused of Involvement in Political Smear Campaign. As a the former New York attorney general who aggressively fought corruption on Wall Street, Gov. Eliot Spitzer now faces accusations that two of his top aides released records to the media on his political opponent’s use of state drivers and state aircraft for trips that included GOP fundraisers, reported The Wall Street Journal on July 24, 2007. Although no laws were broken, there is concern that the aides violated policies that were meant to protect the safety of political figures.
  
  
• Corruption Hampers Growth in Venezuela’s Oil Industry. Concern over corruption and political infighting within Petróleos de Venezuela is a contributing factor to the inability of the major oil company to finance critical infrastructure necessary for sustaining growth, reported The New York Times on July 23, 2007. Rafael Ramírez, president of the oil company and member of the less radical, technocratic faction of Hugo Chavez’s supporters, has been criticized for allowing illegal deals with oil-services companies.
  
  
• Police Report Reveals Extent of Marbella Corruption. The former chief of urban planning is at the center of a massive web of corruption, which stretched across borders, and is believed to have laundered over 100 million euros, reported The Olive Press on July 23, 2007. During his stint at Marbella town hall, Juan Antonia Roca was reported to have gained “absolute power” while controlling 18 false and illicit companies to conceal his vast fortune.
  
  
• Major Indian Corporation Signs Integrity Pact. GAIL, India’s state-run natural gas company, signed an Integrity Compact with Transparency International, reported The Business Standard on July 23, 2007. Among the first few Indian corporations to introduce a pact, GAIL said the decision “will enable us to be a system-oriented procurement system with set process and timelines that tolerates zero corruption.”
  
  
• Japanese Fund Manager Jailed for Insider Trading. Investment pioneer Yoshiaki Murakami, a self-professed champion of investor rights, was sentenced to two years in jail and fined $9.4 million, reported The AFP on July 19, 2007. Despite the negative impact the verdict has had on investor confidence in the market, the harsh punishment reflects Japan’s crackdown on irresponsible market practices.
  
  
• Chirac Questioned Over Alleged “Fake Jobs” Scam. Jacque Chirac faced questioning from a judge regarding a scandal where members of his party were alleged to have had their salaries paid by City Hall when Chirac was Mayor of Paris, reported The Times on July 19, 2007. The investigation had been delayed because until May 2007, Chirac has had Presidential immunity.
  
  
• Whole Foods Board and SEC Investigate CEO’s Internet Stunt. The Whole Foods Board of Directors announced that it will begin an investigation into the anonymous messages blasting competitor Wild Oats left on Internet stock forums by CEO John Mackey, reported The Wall Street Journal on July 18, 2007. The Securities and Exchange Commission will cooperate in the investigation since Whole Foods is looking to acquire the rival food market.
  
  
• KPMG Executives Win in Tax Shelter Criminal Case: A US federal judge dismissed charges against 13 former executives of KPMG LLP accused in the largest criminal tax-shelter prosecution in US history, Bloomberg News reported on July 17, 2007. The judge ruled the executives had been denied constitutional rights by the prosecutors. Earlier this year, KPMG settled tax-shelter cases by paying a $456 million fine.
  
  
• Three UK Football Clubs Raided by Corruption Police. Newcastle United is reported to be one of three UK soccer clubs to have been searched today by police in a new sports corruption investigation, according to The Daily Telegraph on July 16, 2007. Further details were not disclosed. The police said this inquiry is separate from another investigation relating to alleged corruption in the sale of players in the Premier League.
  
  
• The Democratization of US Business. Veteran Wall Street Journal reporter Alan Murray argues that we are seeing radical change in US corporate governance. He states in an article in USA Today on July 16, 2007 that, “The roots of change could be found in the democratization of stock ownership, the rise of the great pension funds, the flowering of "nongovernmental organizations" and in the shareholder rights battles, takeover fights and corporate governance reforms of earlier decades. In the new century, following the market's collapse and the spate of corporate scandals, the trend became a revolution.” See Murray’s new book, available in the US from Collins publishing: Revolt in the Boardroom: The New Rules of Power in Corporate America.
  
  

• Hollinger CEO Found Guilty in Fraud Case. Conrad Black was convicted on three counts of mail fraud and one count of obstruction of justice after three months of testimony, The Wall Street Journal reported on July 14, 2007. Mr. Black will face up to 35 years in prison and millions of dollars in fines.
  
  
• Senior Chinese Government Official Executed. Former Chinese chief food and drug regulator was executed yesterday for taking bribes to approve medicines, reported The Financial Times on July 11, 2007. The unusually harsh sentence demonstrates China’s aggressive role in tackling corruption and bribery which have been plaguing product quality control.
  
  
• Indonesia Sues Suharto for Grand Corruption. Former Indonesian dictator stands accused of stealing $441 million from state institutions, the Financial Times reported on July 10, 2007. Prosecutors say money that was supposed to go to skilled, but impoverished children through Mr. Suharto’s foundation Supersemar, was actually funneled to other family members and foundations.
  
  
• Government Investigates Illegal Kickbacks at Major US Law Firm. A former partner with Milberg Weiss, one of the largest US class-action law firms, pleaded guilty to fraudulent transactions and agreed to cooperate with prosecutors, reported The New York Times on July 10, 2007. The firm is accused of paying $11 million in illegal kickbacks to named plaintiffs in more than 150 class-action and other shareholder lawsuits, which ended up earning the company $216 million.
  
  
• U.S. Trial Sets Precedent for Business Ethics Overseas. U.S. mining company, Drummond Co., is scheduled for trial this week over the accusation that it violated human rights in Colombia, reported The Wall Street Journal on July 9, 2007. This is the first time a case involving US corporate behavior in another country has reached trial. "There's no doubt that this case is seen as a watershed," says Sandra Colliver at the Open Society Institute in New York. "This'll determine whether companies take these cases seriously."
  
  
• Newly Elected Political Underdog Vows to Clean Up Corruption. The first-ever priest to be elected governor in the Philippines underscores the public’s frustration with traditional politicians who have all failed to lift the average standard of living, ABS-CBN reported on July 9, 2007. The former Roman Catholic priest is embarking on a Herculean crusade to clean up the corrupt provincial bureaucracy and introduce transparency in Pampanga, an agricultural province some 49 miles north of Manila.
  
  

• Russia Tries to Prevent Potential Embezzlement in Sochi. President Putin called for the creation of a new department which will oversee spending for construction projects in Sochi, the site for the 2014 Winter Olympic Games, the AP reported on July 9, 2007. The effort is an attempt to prevent embezzlement. Transparency International ranked Russia near the bottom of its corruption scale in 2006 along with countries such as Rwanda and Burundi.
  
  
• Online Tool Launched to Improve Sustainability in Business. A new online tool to help companies integrate sustainability issues with core business strategy and performance was unveiled at the 2007 Global Compact Leaders Summit on July 5, 2007. The tool was designed by the Global Leadership Network and will help companies identify strategic priorities, assess their performance, and design action plans. To learn more about how to use this tool and to see an online demonstration, click here.
  
  
• Stephen D. Potts Joins White House.  Ethics Resource Center Chairman Steve Potts has retired from the ERC to become Associate Counsel to the United States President, where he will work with Fred Fielding, former ERC Vice Chairman and currently the White House Counsel. Mr. Potts served as Director of the U.S. Office of Government Ethics between 1990 and 2000.  The ERC also announced in June that Paula J. Desio, formerly the Deputy General Counsel to the United States Sentencing Commission, has been named the first holder of the ERC’s Chair for Ethics Policy. This Chair is dedicated to analysis of ethics-related issues in the public and private sectors, analysis of research available through the ERC and other expert sources to inform the public discussion of these issues, and oversight of new research that can enlighten the public debate and policymaking process.
  
  
• Corporate Governance Tracking Strategies Lack Consistency. The general consensus among investors is that good corporate governance does lead to better stock performance; however, the many companies who report these results often use competing tools of measurement, reported The Wall Street Journal on July 2, 2007. Part of the problem is defining exactly what criteria make a “good” corporate citizen.
  
  
• New Siemens CEO takes the helm. Peter Loscher, the first CEO of Siemens to be appointed from outside the company, started his first day on the job, reported The Wall Street Journal on July 2, 2007. Loscher will face many challenges in this role, the first of which relates to criminal probes of corruption at Europe's largest engineering company. The Financial Times reported on June 29 that the anti-corruption head at Siemens resigned early due to the large amount of internal opposition to his investigations.
  
  
• Vietnam launches whistleblower website. As part of its fight against corruption, the government launched a website on June 28, 2007 that will act as a portal for the exchange of legal information related to corruption as well as a mechanism to report corrupt activity, reported EarthTimes.org. A survey in late 2005 showed up to 80 per cent of Vietnamese people believe the government is corrupt and 30 per cent of officials themselves admitted that they would take a bribe if offered.
  
  
• Study Reveals Lag in Singapore Corporate Governance. A study, commissioned by the Monetary Authority of Singapore, was released on June 27, 2007, which suggests that Singapore’s corporate governance standards are lagging behind most developed economies and many emerging economies, reported Dow Jones on June 28. Among its findings, there is a lack of engagement between institutions and listed companies, too many companies use short-term incentives which isn't always consistent with creating long-term shareholder value, and 50% and 60% of audit committee members don't have qualifications in accounting or finance, raising questions about whether some audit committees have the necessary experience and expertise to be "truly effective."
  
  
• British NGO Calls on New Prime Minister to Reopen BAE Inquiry. Campaign Against Arms Trade spokesman Symon Hill stated in a press release June 27, 2007 "Gordon Brown today has a chance to draw a line under the Blair years by reopening the BAE-Saudi corruption inquiry. This would tell the world that the UK Government would no longer be bullied by arms companies." See CAAT website to learn more about its work toward the reduction and ultimate abolition of the international arms trade.
  
  
• US Justice Investigates BAE Corruption. Following allegations of bribery on a massive scale, the US Department of Justice has decided to launch an investigation into Britain's BAE Systems, one of the largest arms contractors in the world, Reuters reported June 26, 2007. This is the latest development in a series involving alleged BAE Systems' bribery in Saudi Arabian contracts.
  
  
  To view past coverage, see the following links.
  6.8.07 New Disclosures on BAE Bribes in Saudi Deal.
  
  5.15.07 Now BAE Systems Face Swiss Investigation.
  
  3.14.07 OECD Working Group on Bribery Examines UK's BAE Decision
  
  
• Experts Say Curb Corruption to Fix Health Crisis, Not Increase Spending.  In the modern Russian healthcare system, many who can't afford to pay or bribe may never receive proper care, reported the AP on June 27, 2007.  According to a summer 2006 study commissioned by Transparency International, 13 percent of 1,502 respondents who had sought medical help during the previous year had to pay an average of $90 under the table. Some reform has taken place; however, critics say these changes are no substitute for radical change. The whole system must be overhauled.
  
  
• Government refuses to regulate corporate salaries. Despite the rising salaries of Indian CEOs, the Ministry of Corporate Affairs announced there would be no move to regulate salaries and other benefits given to directors and CEOs, reported the Economic Times on June 25, 2007. The spokesman for the government agency argued the decision was best left up to senior members of the company, their Board of Directors and shareholders.
  
  
• US Charity Hits Record High. Charitable giving reached a record $295 billion last year, according to a Giving USA Foundation report, released June 25, 2007. Giving by individuals accounted for three-quarters of the total, which surpasses mega-gifts donated by the ultra-rich and foundations. The 4.2 percent rise from 2005 can be attributed to the stock market rise as well as disaster relief
  
  
• Brazil Cracks Down on White Collar Crime. In order to cement Brazil’s economic growth, President Luiz Inacio Lula da Silva has doubled the budget of the Federal Police and added a third more agents, reported Bloomberg on June 21, 2007. These new measures are leading the widest crackdown on white-collar crime in Brazil’s history.
  
  
• Czech Government Wants to Gain Upper-Hand Against Corruption. The Czech government plans to integrate existing legislation into a streamlined bill on corruption control, reported Radio Praha on June 19, 2007.  Enforcement of anti-corruption is seen as weak and currently a plethora of 230 legal measures deal with different aspects of control, something that Interior Minister Ivan Langer said had to be changed. The head of Transparency International’s Prague chapter Adriana Krnacova told Czech Radio that "Vulnerable was any area involving public funds where processes were not transparent enough."
  
  
• European Union Countries Dragging Feet on Implementing Anti-Corruption Laws. Only two of the E.U.'s 27 countries, the U.K. and Belgium, have fully implemented new anti-corruption rules and most European countries have failed to adopt E.U. rules on corporate corruption, the European Commission said, according to Dow Jones on June 19, 2007.
  
  
• Lithuanian Businessmen See Corrupt Media. Half of Lithuania's businessmen see the country's media as corrupt and an overwhelming majority believe that reports in newspapers and on television can destroy their businesses or personal lives, according to a new survey commissioned by the Lithuanian branch of Transparency International. The Baltic Times reported in its June 14-20, 2007 edition that TI Lithuania Director Rytis Juozapavius said there is a lack of transparency in much of the country's business and also in its two major daily newspapers, but he was surprised by the results of the business survey.
  
  
• Trial in Philippines Becomes a Symbol of Fight Against Corruption.  The long-running corruption trial of former Philippine president Joseph Estrada has ended, and the country now awaits a verdict in the high-profile case, reported Voice of America June 15, 2007.  The Chief government prosecutor argues the trial is what he calls the last opportunity for the Philippines to show that corrupt officials are not above the law.  If convicted, Mr. Estrada would be the first former Philippine leader to be found guilty of corruption.
  
  

• Malaysian Human Rights Group Declares “Culture of Impunity is Growing.” Despite the royal commission that was created to reform the Malaysian police force, many of the changes that have taken place are ineffective, the AP reported on June 15, 2007. New details were revealed regarding the progress of implementation, which indicated not enough focus was being placed on police abuse and corruption.
  
  
• Liberian government proclaimed three times more corrupt than predecessor.  The Sirleaf government is putting up a tough front against corruption, but recent allegations against it seem to suggest otherwise, reported the Liberian Times on June 15, 2007. The newly appointed Auditor-General said “the current Government is three times more corrupt than the just ended traditional Government.” In addition, President Sirleaf has rejected several requests to reveal documents surrounding a Nigerian oil deal.
  
  
• Corruption Rising in Russia. Novosti economic commentator Mikhail Khmelev asserted on June 11, 2007 that corruption is rampant in Russia despite its impressive economic progress of the preceding years. Bribery is on the increase in everyday life and in the corridors of power, experts say. He added the situation with bribery is extremely serious. INDEM Foundation, one of Russia's principal corruption fighters, alleges, bribes from companies to officials amount to an annual total of $316 billion. Up to 7% of corporate revenues goes to grease officials' palms.
  
  
• U.N. Demands Action on Afghan Graft, Lawlessness. U.N. Special Representative to Afghanistan, Tom Koenigs, stated in Kabul, “The era of lawlessness and corruption and unprofessional police and an unreliable justice system must end…I am not satisfied with the progress made so far in the last three or five years,” Reuters reported on June 11, 2007.
  
  
• U.S. Probes Human Trafficking Allegations in Iraq. The U.S. Department of Justice is investigating First Kuwaiti General Trading and Contracting Co, the firm hired to build the U.S. Embassy in Baghdad, after former employees alleged that workers at the company were brought to Iraq against their will, The Wall Street Journal reported on June 7, 2007.  Foreign workers claim they were told they were going to be sent to Dubai, but instead were sent to Iraq and had their passports confiscated.
  
  
• Lord Woolf, the former Lord Chief Justice of England and Wales, is to head an independent review of business practices at BAE Systems, the BBC reported on June 11, 2007...New Disclosures on BAE Bribes in Saudi Deal. The Guardian newspaper in the UK and the BBC reported on June 8, 2007, that not only is there new evidence of alleged $2 billion of bribes paid by BAE Systems of the UK to win Saudi arms contracts, but that top UK officials hid key information from the OECD.  It is alleged that the UK firm made illicit payments over 20 years to the former Saudi ambassador to Washington, Prince Bandar bin Sultan, who denies the charges.  UK officials admit that for national security reasons, they did not provide full information to the OECD that investigated UK violations of the Anti-Bribery Convention. (See background on the OECD case at Anti-Bribery Conventions.)
  
  
• Former Top UN Official Convicted in Iraq Oil-for-Food Scandal. Sanjaya Bahel, former top United Nations procurement official, was convicted in New York for fraud and could face up to 20 years in prison, Reuters reported on June 7, 2007. The case relates to investigations into the UN's Iraq Oil-for-Food program that a special commission found to have involved massive bribery by hundreds of companies.
  
  
• Black Trial Highlights Luxuries. The spotlight in the ongoing trial of Canadian media tycoon, Conrad Black, has now turned to details of his lavish lifestyle, allegedly funded by money from Hollinger International, where he served as CEO, reported the Financial Times on June 5, 2007.  Lord Black, along with three former associates, is on trial in Chicago accused of stealing $60 million from Hollinger.
  
  
• Former White House Aide Gets 30 Months Prison. I. Lewis “Scooter” Libby, former chief aide to US Vice President Richard Cheney, received a 30 month prison sentence on June 5, 2007 for perjury in a Central Intelligence Agency (CIA) leak investigation, Fox News reported. He remains free pending an appeal of his conviction. There is media speculation that President Bush will pardon him in due course.
  
  
• US Congressman Accused of Bribery. Rep. William Jefferson, 63, a Democratic Party member of the US House of Representatives from Louisiana, has been indicted for racketeering, soliciting bribes and money-laundering. The Associated Press reported on June 4, 2007 that Jefferson is accused of soliciting bribes and also for bribing a Nigerian official. Almost two years ago investigators raided Jefferson's home in Louisiana and found $90,000 in cash stuffed into a box in his freezer.
  
  

• Uganda Agrees to NEPAD Review. The New Partnership for Africa's Development (an official affiliate of African Union) will carry out a country self-assessment in Uganda in four areas of democracy and political governance, economic governance and management, corporate governance and socio-economic development, reported The Monitor of Kampala on June 2, 2007. The assessment will be carried out in 12 selected districts in the country to determine the measures being taken to comply with the standards in those areas.
  
  

• New Nigerian President Faces Key Challenges. Umaru Yar'Adua took office as President, Reuters reported on May 29, 2007. He inherits a catalogue of crises compounded by doubts over his own legitimacy after a flawed election. The handover is a democratic landmark in Nigeria where one elected president takes over from another who was elected to the presidency, Olusegun Obasanjo, who launched an anti-corruption campaign, that is far from complete and who now assumes the potentially powerful post of head of the ruling political party.
  
  
• Death For Corrupt Drug Czar in China. Reuters reported on May 29, 2007 that China sentenced the former head of its food and drugs agency to death in a surprise judgment as the government sought to contain a wave of scandals over health safety.  Zheng Xiaoyu, former head of the State Food and Drug Administration, was convicted on charges of taking bribes. The sentence, which was unusually harsh, could still be reduced on appeal. But it reflects the weight China's top leaders are giving to the issues of corruption and food safety as they grapple with the fallout overseas after a series of safety breaches involving toxins in food and other products.
  
  
• New Soccer Boss Accused of Racism.  Global soccer, beset by scandals, faced a new crisis as incoming UK Vice President of the ruling soccer association (FIFA),  John McBeth from Scotland, was banned from taking part in a key FIFA meeting today (May 29, 2007) on being accused of racism. He suggested in earlier comments that corruption is routine in soccer in African and Caribbean nations, The Guardian reported.
  
  
• Wal-Mart Ethics Suit Attracts Major US Media Attention. Newspapers across the US on May 25, 2007 reported that a fired Wal-Mart marketing executive, Julie Roehm, has charged that the company’s chief executive Lee Scott violated the company‘s ethics policy and accepted trips and received discounts on yachts and jewelry from a vendor. Roehm is suing the company over her firing and charges that she accepted gifts from suppliers.  An AP story, published in Benton, Arkansas, headquarters’ town of the world’s largest retailer, said that  Wal-Mart‘s ethics policy — considered the strictest among all retailers — forbids company officials from accepting gifts or gratuities from vendors and those that are seeking to do business. Suppliers, who meet with buyers in stark rooms at the no-frills headquarters in Bentonville, Ark., aren‘t even allowed to pay for executives‘ bottled water.
  
  
• Ethics Proposals Approved by US House of Representatives. The Washington Post reported on May 25, 2007 that the new legislation calls for expanded, more frequent and Internet-accessible reporting of lobbyist-paid contributions and sponsorships, and would for the first time impose prison terms for criminal rule-breakers. They would also require strict new disclosure of "bundled" campaign contributions that lobbyists collect and pass on to lawmakers' campaigns.
  
  
• Rigas Finally Faces Prison. The collapse of Adelphia was one of the largest after Enron and WorldCom and now its leaders have lost their appeals and may finally have to go to prison, reported CFO.com on May 25, 2007.  John Rigas, now 82, was sentenced in June 2005 to 15 years in prison, while his son Timothy Rigas, who served as chief financial offer, was sentenced to 20 years. Both have been free on bail while appealing their convictions.
  
  
• Indian PM Slams Corruption. AFP reported on May 23, 2007 that India's Prime Minister Manmohan Singh promised to spend nearly $11 billion to improve rural roads as he slammed corruption in construction. "Corruption in road construction projects has spread like cancer to every corner of our vast country," he said.
  
  
• Worst Ever Ethics. Renowned 81-year old Canadian investor Stephen Jarislowsky told The Financial Times on May 22, 2007 that when it comes to business ethics today: "It's absolutely unbelievable what's going on... We're living in just about the most dishonest time in the history of mankind. It's theft from A to Z."
  
  
• Hopes for Iraq Anti-Corruption. Stuart W. Bowen Jr., US Special Inspector General for Iraq Reconstruction, stated in testimony to the US Congress on May 22, 2007 that, an encouraging note, “is the May 16th signing of the Joint Anti-Corruption Council charter. This body will include the heads of each anti-corruption entity and the Iraqi Higher Juridical Council. It is hoped that the body will bolster coordination and advancement of anti-corruption and Rule of Law efforts which continue to be a critical precursor to success in Iraq.”
  
  
• Corruption Key Issue in Bulgarian Election. Bulgaria's coalition government struggled to hold its ground on May 20, 2007 in the country's first elections to the European Parliament on Sunday, as a low turnout highlighted frustration over corruption and poverty, Reuters reported. More than two thirds of eligible voters stayed at home, many disillusioned by a lack of progress in the two-year-old coalition government's reforms and fight against crime.
  
  
• Hungarian Justice Minister Resigns Amid Police Corruption Scandal. Justice Minister Jozsef Petretei resigned following the surfacing of multiple allegations of police corruption, including a high-profile report involving the alleged rape of a woman by five on-duty police officers in Budapest, the AP reported on May 21, 2007. Public confidence in the Hungarian police has been recently tainted by allegations of widespread corruption.
  
  
• Tyco Record Settlement, Now Auditor May Face Trouble.  Tyco has agreed to pay $3 billion to settle shareholder suits, which dispels a major cloud from the era of L. Dennis Kozlowski, its now imprisoned former CEO. But, reported the Wall Street Journal on May 16, 2007, this could signal problems for its former auditor, PricewaterhouseCoopers. Under terms of the deal -- believed to be the largest securities class-action settlement by a single defendant -- shareholders received the right to pursue, and benefit from, the conglomerate's claims of accounting malpractice against PWC.
  
  
• Bulgaria Loses Billions of Euro Due to Corruption. The Belgrade information agency Tanjug reported on May 14, 2007 that research by the Centre for the Study of Democracy (CSD) revealed that shady public procurement deals, land deals and smuggling cost Bulgaria two billion euro in 2006, 10 per cent of the annual tax revenue. Political corruption is seen as the main problem. The European Commission has warned Bulgaria about the connections between high-profile criminals and corrupt official
  
  
• First Siemens Bribery Verdicts.  Two former Siemens AG executives have been found guilty in a German court of involvement in a multi-million dollar bribery case. At the same time the court ordered Siemens to forfeit $51.4 million in profit from deals with Italian ENEL company. This is the first German verdict in a widening series of criminal investigations reported the Wall Street Journal on May 15, 2007.
  
  
• Now BAE Systems Face Swiss Investigation. The UK’s Tony Blair government quashed bribery investigations into defense contractor BAE System’s dealings with Saudi Arabia, but now Swiss authorities are investigating whether BAE’s foreign dealings involved money laundering through Swiss bank accounts, according to AFX News on May 15, 2007. US regulatory authorities are also weighing whether to investigate BAE Systems.
  
  
• Vast Fine Agreed in US as OxyContin Drug Makers Admit Deception.  The Washington Post reported on May 11, 2007 that the Purdue Frederick Co. and its chief executive, top lawyer, and former medical chief agreed to pay a total of $635 million to resolve charges by US prosecutors for falsely marketing the drug by playing down its addictive properties and leading to scores of people becoming addicted. Purdue knew as early as 1995 that health professionals feared the addictive potential of OxyContin.
  
  
• Conflicts of Interest. Some corproate boards are replacing compensation consultancies that also work for the company's managers, heeding complaints that such arrangements can create conflicts of itnerest. but, is this a rational approach? Norman Auguistine, former Chairman and CEO of Lockheed Martin, for example, proposes a more nuanced approach, in a feature story in the May 14, 2007 edition of the Wall Street Journal.
  
  
• Canadian Defence Minister Embroiled in Scandal. The Globe and Mail reported on May 11, 2007 that J.P. Dorion, a key political organizer for Canadian Defence Minister Gordon O'Connor has quit his post in a mounting corruption scandal. He claims that there has been corruption in the offices of O’Connor.  “This is corruption from the bottom," Mr. Dorion said in an interview. "We brought it up with Mr. O'Connor last month, he said he would look into it, and he didn't."
  
  
• CalPERS Seeks Reform at United Health. America's largest pension fund is seeking greater Board accountability at America's largest healthcare company. The California Public Employees' Retirement System (CalPERS) has written to thousands of shareholders at United Health, seeking support for a motion to secure greater transparency in the selection of Board directors. United Health was embroiled in a stock options scandal last year.
  
  
• Norway's Government Investment Fund Excludes Some Major US Firms on Ethics. The New York Times on May 5, 2007.
  
  
• Indian Government to Establish Corporate Governance Institute. India's Economic Times reported on May 9, 2007 that legislation will soon be presented to parliament to establish the center at Manesar in Haryana to focus on investor relations issues.
  
  
• US Justice Gets Its Act Together to Launch More Lobbying Prosecutions. The Jack Abramoff lobbying scandal may widen as further allegations of public corruption emerge, reports Business Week in its May 14, 2007 issue. A number of politicians have already been prosecuted, but more are on the way because the Justice Dept.'s Public Integrity Section is finally emerging from a prolonged period of staff turnover, and the number of lower-level figures in Washington's largest-ever lobbying scandal who have agreed to cooperate with investigators has reached critical mass.
  
  
• KPMG Criticized in Siemens Probe: Auditing firms have frequently been criticized in major corporate scandals, now KPMG Germany has been highlighted in the Siemens bribery scandal. A May 4, 2007 story in the Wall Street Journal said the role of the auditing firm is under study by German government prosecutors, while being seen as having been insufficiently aggressive in pursuing Siemens wrongdoing by Debevoise & Plimpton LLP, the US law firm overseeing the Siemens internal probe.
  
  

• What Fine for Siemens? The Financial Times reported on May 8 2007 that the US Securities and Exchange Commission has upgraded its Siemens bribery probe to a formal one and, given upwards of $500 million in suspect payments, investors are increasingly worried that Siemens could face one of the largest fines ever handed out if wrongdoing is established. "There is no precedence for this. Normally the level of bribery has been at most $10m for which the company got a fine of $40m. On the basis of the amounts alleged to be involved, it could be billions for Siemens," said one analyst, who declined to be named because of the sensitivity of the matter.
  
  

• Buffett Backs Petro-China: Bloomberg reported on May 8, 2007 that shares of PetroChina Co., China's biggest oil producer, rose after shareholders in Berkshire Hathaway Inc., led by chairman Warren Buffett, voted against a proposal to sell its $3.3 billion stake in the company. The motion was brought by anti-Sudan Government campaigners, who claim that Petro-China's investments in Sudan support the Government's policies in Dafur. Berkshire has no disagreement with what PetroChina is doing, Buffett said at the shareholders meeting. ``If there was a disagreement it would be with what the Chinese government is doing,'' he said.
  
  
• U.S. Business School Cheats. At a time when U.S. business schools are doing more to teach corporate ethics, one of the leading schools has discovered that 34 graduate students participated in exam cheating. CNN noted an AP story on May 1, 2007 that detailed the scandal at the Duke University's Fuqua School of Business in North Carolina.
  
  
• Money Laundering Allegations on UK Stock Exchange Listing. The billionaire owners of a Kazakh mining company preparing to list on the London Stock Exchange have been advised that they might have to leave the board because of outstanding money-laundering allegations against them, according to an exclusive story in the Financial Times on May 1, 2007. The company involved in the planned new listing is Eurasian Natural Resources Corporation (ENRC).

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