News Archive: September - December 2007

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• Dec. 31 - Norwegian Corporate Boards Rush To Elect Women. Norwegian public companies are scrambling to comply with a 2003 amendment to the companies act that public companies must fill 40 percent of board seats with women or risk being shut down, reported The Financial Times.  In 2003, less than nine percent of corporate board seats were filled by women, which has since prompted a strong campaign to recruit female directors.
  
  
• Dec. 29 - Pharma Giants Probed for Bribery in UK. Britain’s Serious Fraud Office has ordered drug-making giants GlaxoSmithKline and AstraZeneca to hand over documents that could contain evidence the companies allegedly paid bribes to Saddam Hussein's Iraqi regime, reported the Sunday Telegraph.  The demand was made on behalf of the SFO’s ongoing investigation into the 2005 United Nations oil-for-food scandal.
  
  
• Dec. 19 - U.S. Government Cracks Down on Anti-Bribery Laws. The Justice Department has filed a record 14 overseas-bribery cases so far this year - more than in the previous two years combined - and has 77 investigations under way, according to the Federal Bureau of Investigation, reported The International Herald Tribune.  Some business leaders said prosecutors did not seem to be showing leniency for companies that came forward when they discovered questionable conduct, a policy which a U.S. Justice Department official defended.
  
  
• Exec Pay Climbs at Lower Rate. The Corporate Library released a report showing corporate executive compensation rose three percentage points less than the previous 12 months, reported Bloomberg News on December 19, 2007.  Raises are possibly being tempered by greater "pay sensitivity" at companies and their boards, said report author Paul Hodgson, and also to the higher profile it is receiving in the US Congress.
  
  
• British MPs Push for Ethics Reform. There has been a strong call for British Prime Minister Gordon Brown (pictured) to introduce a complete change in the appointment of peerages, a new corruption act and fresh powers for party funding watchdogs to take tougher action against parties breaking the law, reported The Guardian on December 18, 2007.  Powerful members of parliament stress that Brown can and should introduce these reforms immediately, without the approval of parliament.
  
  
• UN Report Estimates $25M Wasted in Fraud Cases.  The U.S. ambassador to the United Nations has called for a full investigation into alleged corruption in contracts worth some $610 million linked to U.N. peacekeeping missions, reported Reuters on December 18, 2007.  "The Task Force identified multiple instances of fraud, corruption, waste and mismanagement at United Nations headquarters and peacekeeping missions, including 10 significant instances of fraud and corruption in cases with an aggregate value in excess of $610 million," said the report.
  
  
• New Third-Party Hotline First Approved by US Guidelines. EthicsVault, a whistleblower system created by Ethical Advocate, has been approved as the first system to fulfill US federal guidelines on third-party hotlines, reported MarketWire.com on December 18, 2007.  The Federal Information Security Management Act (FISMA) certification addresses access control, physical and environmental protection, incident response and authentication, and all U.S. government federal agencies and contracted organizations must conform to FISMA's mandatory processes.
  
  
• Fraud Allegations Shake S. Korea's Election. South Korea’s front-runner in the upcoming presidential elections has been crippled by renewed allegations of possible fraud and stock price manipulation, reported Voice of America on December 17, 2007.  The investigation centers around a stolen tape that political opponents say proves he shared complicity in the illicit activities of a Korean-American business partner, who has been indicted in the United States, and is unfit to serve as president.
  
  
• Former Canadian PM Busted for Illicit Payments. Brian Mulroney, Canada's former Conservative prime minister, said that he made the biggest mistakes of his life by meeting and then accepting C$225,000 ($220,000) in cash from Karlheinz Schreiber, a German arms industry lobbyist, reported The Financial Times on December 14, 2007.  The current investigation has postponed Mr. Schreiber’s extradition to Germany on fraud and tax evasion charges.
  
  
• Website Started to Shame Corporate Polluters in China. One of China’s leading environmental activists has launched a blacklisting website to shame corporate polluters in China to fix their environmental policies or hire outside auditors, reported The Financial Times on December 14, 2007.  Ma Jun, founder of the Beijing-based Institute of Public and Environmental Affairs, has named 40 foreign companies on the Air Pollution Map, including the French company Michelin and the German company BASF. Subsidiaries of large Chinese enterprises such as Sinopec and PetroChina oil companies are also on the list.
  UPDATE Website Overload Causes Crash. The website of China's new anti-graft bureau crashed shortly after going online due to the huge volume of messages from the public complaining about rampant corruption, reported AFP on December 19, 2007.
  
  
• California Considering Tougher Disclosure on Campaign Spending. The state of California’s political ethics authority recently moved to force politicians to publicly justify how meals, gifts and travel paid for with campaign funds are tied to official business, reported The Los Angeles Times on December 13, 2007.  Since 1990, state law has required politicians to use campaign funds only for legislative, political or governmental activity, but it has not required that substantial detail be provided.
  
  
• TI Integrity Awards Announced. Transparency International, the international corruption fighting organization, has honored a 75-year-old Vietnamese woman and a criminal law and criminology professor at the University of Basel with its annual Integrity Award, according to TI's website on December 13, 2007. Both have been honored for their outstanding work in fighting corruption internationally.
  
  
• Probe Threatens Siemens Norway Division.  In an ongoing investigation of Germany’s Siemens AG, police have now moved to search the offices of top military personnel in Siemens’ Norwegian division over allegations the group knowingly overcharged the military 36.8 million kroner ($6.7 million) between 2000 and 2004, The Wall Street Journal reported on December 13, 2007.  As a result, the division announced a shake-up of its board and the Siemens Norway chairman will step down completely.
  
  
• Fujimori Gets Six Years in Prison. Alberto Fujimori, former President of Peru, was sentenced to six years in prison for sending an aide to steal documents from his spy chief, the first ruling against him since being extradited to Peru from Chile, reported The Financial Times on December 12, 2007. Fujimori still faces four trials for allegedly ordering massacres, wiretapping political opponents, paying bribes to congressmen and broadcasters, and for allegedly paying $15m in apparent hush money.
  
  
• Fujimori Trial Has Dramatic Start. Alberto Fujimori, made a fiery outburst in court the first day of his murder and kidnapping trial, reported BBC News on December 10, 2007. Mr Fujimori shouted angrily: "I reject the charges entirely. I'm innocent." The former president, who could receive up to 30 years in prison if convicted, was told by a judge to calm down. He is accused of authorising two death squad massacres in the early 1990s in which 25 people were killed.
  
  
• Black Sentenced. BBC News also reported former media tycoon Conrad Black has been jailed for six-and-a-half years by a Chicago court after stealing millions of dollars from shareholders. He has been told to report to prison in 12 weeks, but will remain free until then on payment of $21m (£10.3m) bail. The ex-Daily Telegraph owner was also fined $125,000 (£61,000) by the court, but professes his innocence and plans to appeal. Black was convicted of three counts of fraud another of obstructing justice.
  
  
• Former Bangladeshi PMs Caught in Illegal Canadian Business Deals. Bangladesh’s anti-corruption agency filed charges against two former prime ministers accused of making corrupt contracts with Canadian firm, Niko Resources, Ltd., reported The Globe and Mail on December 10, 2007.  According to Reuters, the Anti-Corruption Commission filed separate cases against Sheikh Hasina, prime minister between 1996 and 2001, and Khaleda Zia, who held the position from 2001 to 2006, claiming Bangladesh lost millions of dollars because of their "illegal deals" with Niko.
  
  
• Little Hope for Change in Kenyan Elections. After a British minister expressed doubts about the credibility of political candidates to fight graft in Kenya, the Kenyan Justice Minister responded, “we are not their colony nor do we depend on them for survival,” reported BBC News on December 10, 2007. Critics of the current Kenyan government believe little has changed under the prime minister who campaigned on a promise to fight graft.
  
  
• Embattled Romanian PM Resigns. Romania’s prime minister will resign in the midst of an investigation over allegations that he abused his position in a real estate deal, which gave unfair advantage to a private company reported linked to the PM’s political party, reported The Associated Press on December 9, 2007.  The PM has already been criticized for firing significant anti-corruption officials in Romania, and the European Union is putting heavy pressure on the country to clean up its government.
  
  
• Payback Time for United Health CEO. Dr William McGuire, who built America’s largest healthcare company UnitedHealth, will return stock options and other compensation with a total value of around $620 million for stock-option backdating, the largest sum in history, reported The Wall Street Journal on December 7, 2007.  The payback settles a U.S. Securities and Exchange Commission investigation, but Dr. McGuire will still face securities litigation led by pension fund California Public Employees’ Retirement System.
  
  
• Dr. Ana Cecilia Magallanes Cortez Dies - Won 2006 Transparency International  Integrity Award – Peruvian Prosecutor.  Dr. Ana Cecilia Magallanes Cortez, who had been seriously ill for a long time, has died in Peru. She was one of her country’s most respected prosecutors, having been the leading force in the prosecution of some 1,500 members of the criminal organisation headed by Vladimiro Montesinos and associated with the Fujimori regime. Her work led to the arrest of the highest profile figures in organised crime (and the indictment of Fujimori himself), 14 generals from the armed forces and police, the former president of congress, the former federal public prosecutor, supreme court justices, judges and prosecutors at various levels along with media magnates, among others. Her efforts also helped initiate the recovery of more than US $250 million stolen by the corrupt network.
  
  
• Legal Opposition Posed Against Bhutto, Sharif. A Benazir Bhutto rival from Pakistan’s ruling party has filed objections with election officials alleging that the PPP leader had been convicted in several corruption cases and is therefore ineligible to run for office, reported The Times of India on December 7, 2007.  He also urged the Election Commission to reject the nomination papers of former prime minister Nawaz Sharif on the grounds that he was convicted and given a life imprisonment term on charges of hijacking and terrorism.
  
  
• Sierra Leone’s Anti-Graft Chief “Not Afraid” of Top Officials. Sierra Leone’s new anti-corruption chief has asked for broader powers in order to have the capacity to prosecute all cases effectively, reported Reuters South Africa on December 6, 2007.  "The big men of Africa are not immune. I am not afraid to take on anybody, the chief said.
  
  
• Sharif May Escape Corruption Allegations. It is unclear whether the government of Pakistan will carry through with the prosecution of former prime minister Mian Nawaz Sharif and his family over allegations money laundering, reported The International News in Pakistan on December 6, 2007.  A hearing was postponed until January 12, 2008 without any court summons or arrest warrants issued.
  
  
• Latvian PM Resigns Over Unpopular Actions. The Prime Minister of Latvia, Aigars Kalvitis, has officially resigned, due in large part to the unpopular move to suspend the chief of the powerful anti-corruption bureau for faulty bookkeeping, reported The Associated Press on December 5, 2007.  His actions sparked huge protests as many believed the move as politically motivated. The anti-corruption chief had been investigating possible campaign finance violations by the People's Party, which Kalvitis leads.
  
  
• Unilever Launches Sustainability Plan for Tea Business. Unilever, a British company that is the world’s largest producer of tea, has pledged to to have all of its Lipton Yellow Label and PG Tips bags sold in Western Europe certified by 2010, and all Lipton tea bags sold globally certified by 2015, reported The Independent on December 5, 2007.  The company has chosen the Rainforest Alliance to certify its products rather than the more well-known FairTrade brand, as it encompasses three key areas – profit, planet, and people – rather than just focusing solely on the workers.
  
  
• Another Brazilian Legislator Brought Down Over Corruption. The President of Brazil’s Senate, Renan Calheiros, has resigned over allegations of financial misconduct before his fellow Senator’s could boot him out, reported The New York Times on December 5, 2007.  The Calheiros scandal has been the most salacious yet in a series of corruption cases that have plagued President Lula’s administration.
  
  
• South Koreans May Be Hesitant to Reprimand Samsung.  An International Herald Tribune article reported on December 4, 2007 that prosecution of Samsung officials over allegations of money laundering is slow because many South Koreans are not ready to bring down one of the few conglomerates in the country for fear of hurting their own economic standing.  The president of a Korean management consultancy said "The scary thing about this is that people generally recognize Samsung is one of the best managed corporations in South Korea. So if that's the case with Samsung, it makes one wonder what degree of corruption we might find elsewhere." 
  
  
• Discrimination in Indian Economy Threatens Minorities. According to a new study, job discrimination based on caste is rife in the most dynamic sectors of the Indian economy, reported The Financial Times on December 3, 2007.  Appropriately qualified applicants with a dalit name (formerly untouchables) or Muslim background have less chance at progressing to the next stage of the recruitment process than an equivalently qualified candidate with a high caste Hindu name.
  
  
• Theft and Bribery in Iraq Has Reached ‘New Depths.’ The front page of the New York Times on December 2, 2007 declared “even as security has improved, Iraq has slipped to new depths of lawlessness.” Some American officials estimate that as much as a third of what they spend on Iraqi contracts and grants ends up unaccounted for or stolen and $18 billion in Iraqi government money had been lost to various stealing schemes since 2004, the Times reported.
  
• Intimidation at Work Meant to Rig Russian Election. Russian public sector workers are being called into work on their day off and forced to vote for United Russia in an attempt to create an inflated victory for President Vladimir Putin (pictured) and his party, reported The Guardian on November 30, 2007.  “We are seeing a new phenomenon where voters are forced to get absentee ballots under threat of being sacked or being denied bonuses," said a spokeswoman for an independent election monitoring organization.
  
  
• Zambia’s Anti-Drug Chief Finally Arrested.  According to Transparency International in Zambia, the arrest of Zambia’s Drug Enforcement Commission chief for stealing about $93,000 of government funds is welcomed, but late in coming, reported Voice of America on November 29, 2007.  The international corruption fighting organization claims the arrests made by Zambia’s president have been skewed toward his political opponents, despite his claims to be tough on graft.
  
  
• Wyatt Gets Jail for Bribes. The Wall Street Journal reported on November 29, 2007 that Texas oil trader Oscar S. Wyatt Jr. (pictured) was sentenced to more than a year in prison after pleading guilty to a conspiracy charge and admitting he approved the payment of a $200,000 surcharge to the Iraqi government in violation of the United Nations' oil-for-food program.
  
  
• Starbucks Attempts to Keep Its Strong CSR Reputation. Starbucks has agreed to open a center in Ethiopia to help local coffee growers improve the profitability of their crops, reported the New York Times on November 29, 2007.  The move comes after Starbucks was accused of trying to block an Ethiopian measure to trademark Ethiopian coffee so farmers would receive more of the retail dollar, actions which hurt Starbucks' credibility as a leader in corporate social responsibility.
  
  
• Campaign Scandal Taints Labor Party Leaders. The British Labor Party donation scandal is engulfing more party leaders as details were uncovered as to who knew about the large donations being given to the Labor party through several intermediaries - a practice that violates campaign rules, reported BBC News on November 28, 2007.  Peter Watt, former general secretary of Labor, resigned over the affair, and now there is strong speculation that the head of fundraising and deputy Labor leader also knew about the illegal activity.
  
  
• Red Cross CEO Fired Over Unethical Relationship. The American Red Cross dismissed its President and Chief Executive, Mark Everson, after learning of his relationship with a subordinate employee, reported the New York Times on November 28, 2007. The board “concluded that the situation reflected poor judgment on Mr. Everson’s part and diminished his ability to lead the organization in the future,” the Red Cross statement said.
  
  
• Opaque Selection Process for Indonesian Anti-Graft Agency Troubles Many. As the Indonesian Parliament appointed ten new officers to serve on the country’s upstart, but powerful Corruption Eradication Commission, many are questioning the legitimacy of the selection process, reported the International Herald Tribune on November 28, 2007.  The agency, created in 2003, was given broad powers in fighting systemic graft and corruption in the country, and many are wondering whether it still continues to be prone to the dubious politics that infect Parliament.
  
  
• Samsung Group Will Accept Probe Over Alleged Slush Fund. The former legal affairs chief of the Samsung Group announced that the Korean National Assembly will go forward with a special audit of an alleged slush fund worth over $2 million, reported The Korea Times on November 27, 2007.  He said that Samsung Corp. and other key units fabricated books to raise the money, which he claimed was used to bribe prosecutors and government officials.
  
  
• Volkswagen Bribery Trial Puts Former CEO in Question. German prosecutors are investigating whether or not former CEO of Volkswagen, Ferdinand Piëch, may have known about improper payments that upper management made to labor leaders in the years prior to 2002, reported The Wall Street Journal in November 27, 2007.  A trial is underway of two top Volkswagen executives and the former personnel chief has already been fined $854,700.
  
  
• Canadian Companies Show Improvement in Governance Practices.  A study shows more Canadian companies are giving shareholders a growing volume of information about their executive compensation and their boards of directors, reported The Globe and Mail on November 26, 2007.  This year 40 per cent of companies published the dollar value of all compensation elements earned by the CEO in the past year – including the estimated value of stock options, share grants and accrued pension plan service, compared with 16 per cent last year.
  
  
• High Revenues Due to Kenya’s ‘Clean-Up,’ Authority Says. Kenya’s tax agency is predicting significant increases in its annual income next year, which according to the commissioner-general, are primarily a result of sacking crooked employees and installing security cameras to monitor illicit office deal-making, reported the Financial Times on November 22, 2007.  Although corruption is still a major problem in Kenya, the Kenya Revenue Authority has this year dropped out of Transparency International’s list of most corrupt organizations.
  
  
• West Bengal Govn’t Uses Violence Against Village Protests. The Communist government of West Bengal lost control of Nandigram village after failing to persuade villagers to vacate their land to make way for the chemicals complex and have now returned to wreak havoc among dissenting villagers, reported the Financial Times on November 21, 2007. The state has seen some of the worst clashes between authorities seeking to secure land for industry to attract investment and communities skeptical of promises of fair compensation for the loss of their livelihoods and property rights.
  
  
• Chirac Questioned Over “Fake Jobs.” A French judge has placed former President Jacques Chirac (pictured) under formal investigation for suspected embezzlement of public funds during his time as mayor of Paris, Reuters reported on November 21, 2007.  The case is one of a number hanging over Chirac and revolves around jobs allegedly handed out to centre-right sympathizers by Paris city hall.
  
  
• World Bank Still Unsure Over Corruption. The World Bank’s governing board blocked a loan for a road construction project planned for the Philippines due to corruption concerns.  The Wall Street Journal said on November 19, 2007 that “Although the World Bank’s new president, Robert Zoellick, has pledged to make rooting out corruption a priority, the institution continues to flail over the issue.”
  
  
• Oil Companies Suspected of Making Corrupt Payments. British and Nigerian anti-corruption authorities are probing alleged “suspect” payments made by Chevron and Shell to a Nigerian company, owned by a Nigerian politician who is being investigated for money laundering, reported the Financial Times on November 16, 2007.  Nuhu Ribadu, chairman of Nigeria’s Economic and Financial Crimes Commission, which has worked closely with the British investigators, siad he was “investigating huge payments made by Shell and Chevron to MER Engineering” over the hiring of houseboats for oil workers.
  
  
• Wal-Mart Report Draws Criticism from Environmentalists. Wal-Mart recently released its latest sustainability report in which it attempted to show progress made on its promise to improve its environmental standards since its last report in October 2005, reported The New York Times on November 16, 2007.  But the report did not appease Wal-mart’s critics, the Times said. A coalition of 23 nonprofit groups immediately issued their own “Civil Society Critique,” which said Wal-Mart was doing too little too late.
  
  
• Thaksin’s Assets Now Public, Reveal Increases. Thailand's National Counter Corruption Commission on Thursday released details of assets declarations of ministers under former Thaksin Shinawatra regime, Xinhua reported on November 15, 2007. Thaksin reportedly has assets of 614 million baht ($18.6 million) and his wife Potjaman has assets of 8.6 billion baht ($260.6 million), which are huge increases in what was originally reported. 
  
  
• Chevron Pays Largest Sum to Emerge from Oil-for-Food Scandal. Chevron agreed to pay a $30 million in settlement after acknowledging bribers were paid for oil it obtained under the United Nations oil-for-food program to Iraq, reported the Financial Times on November 15, 2007.  An investigation that included FBI agents, the New York police and the US treasury department revealed that Chevron bought crude from third parties who paid bribes and secret surcharges that ended up in the pockets of the Iraqi regime.
  
  
• Former Volkswagon Labor Reps on Trial for Taking Bribes.  Klaus Volkert, who represented Volkswagen employees on a company board, and Klaus-Joachim Gebauer, a former manager, are accused of taking bribes of up $3.9 million at the trial in Braunschweig, Germany, reported Bloomberg on November 15, 2007.  Prosecutors said at the start of a trial that company managers used trips and prostitutes to secure favorable votes from employee representatives.
  
  
• Report Shows Hard Truth about Corruption in Sierra Leone. President of Sierra Leone, Ernest Bai Koroma, issued a confidential audit that exposes grave inadequacies in key areas such as health care, tax collection and the security services, reported the BBC on November 14, 2007. Financial accounts are reported to have gone missing from many ministries and the culture of record-keeping is said to be "in a miserable state".  The BBC reports what is unusual is to have the problems set out so clearly - and in a way that may ultimately put the credibility of the presidency at stake.
  
  
• Russian Telecom Industry Under Fire for Alleged Money Laundering. The government of the British Virgin Islands told the U.S. Justice Department there is "overwhelming evidence" Russian Telecommunications Minister Leonid Reiman secretly owns a large chunk of Russia's telecom industry through an offshore fund, the Wall Street Journal reported on November 14, 2007.  The Royal Virgin Islands Police investigation, part of a series of international inquiries into alleged high-level corruption in the Russian telecommunications industry, could also spur the interest of U.S. prosecutors.
  
  
• Whistleblowing Rising In Japan. A Japanese food safety official said that reports to the government, nearly all from insiders, of suspicious food manufacturing, such as mislabelling products, have skyrocketed from some 100 a month last year to 697 last month, reported the Associated Press on November 13, 2007. Whistleblowers have been rare because Japanese companies, even major ones, are run like families, and individual workers don't see themselves as hired by contract as do American workers, said a Japanese business administration professor. Japan is changing as individuals see themselves more as consumers and investors, he said.
  
  
• McDonald’s Manager in Hong Kong on Trial for Bribery. The managing director of the McDonald's restaurant chain in Hong Kong, Lau Si-sing, has been charged with two counts of accepting kickbacks from the food company and one count of trying to pervert the course of justice, reported the Canadian Press on November 13, 2007.  Between May 2005 and April 2007, Lau allegedly conspired with the director of a corn supplier, receiving kickbacks in return for approving orders.
  
  
• Despite ‘State of Emergency,’ Bhutto Not an Obvious Solution. Hopes for a third term for Benazir Bhutto (pictured) could be stymied by the eight counts against her of taking tens of millions of dollars in illegal kickbacks, reported The Guardian on November 12, 2007.  The controversy surrounding Bhutto's financial affairs has been compounded by reports showing she and her family have worldwide assets worth about $1.5 billion.
  
  
• Swedish Exploitation of Welfare State Costs Govn’t $3.2Bln. A two-year study by the Delegation Against Benefit Fraud and Errors said 95 per cent of Swedes condemn cheating but up to a third have no problem either bending the rules, keeping unearned payments or defrauding the system, reported the Financial Times on November 10, 2007.  The report said that, as well as fraud, Swedes indulged in softer forms of cheating, such as working while claiming sick benefits and exploiting loopholes, which has cost the government around $3.2 billion.
  
  
• Corruption Allegations Hit Upper Ranks of Australian Police Force. Assistant Commissioner of the Victoria Police is facing possible criminal prosecution for conspiracy to pervert the course of justice, perjury, unlawful release of confidential information and breaches of the Telecommunications Interceptions Act, reported The Age in Australia on November 9, 2007.  Secretly tapped phone conversations were recently released which contradict evidence he gave under oath at a private hearing last month.
  
  
• Merck Agrees to Settlement Over Vioxx Drug. Merck & Co. announced that it agreed to pay $4.85 billion to settle a significant portion of the claims over injuries allegedly linked to its Vioxx painkiller after insisting for years that it would fight all cases filed rather than compromise, reported the Wall Street Journal on November 9, 2007.  Under the agreement, Merck will set up two funds, a $4 billion one for claims of myocardial infarction and a $850 million one for ischemic stroke claims. The amount awarded to individual plaintiffs will vary. The company said it does not know the number of plaintiffs covered by the agreement.
  
  
• Czech Prime Minister Resigns.  After the Czech supreme state attorney decided to reopen a previous corruption case involving Jiri Cunek, Czech Prime Minister, answered the call of many Czechs to step down, reported IPS on November 8, 2007.  Earlier this year the minister was accused of accepting a $25,000 dollar bribe from a real estate company in 2002 when he headed a town northeast of Prague. Neither the state attorney nor Cunek provided a credible explanation for the origin of the money, or how the minister had amassed his fortune.
  
  
• U.S. House Bill Would Make Workplace Discrimination Against Gays Illegal. The House approved a bill granting broad protections for gay, lesbian, and bisexuals in the workplace as part of the Employment Nondiscrimination Act, reported the New York Times on November 8, 2007.  The House bill would make it illegal for an employer “to fail or refuse to hire or to discharge any individual, or otherwise discriminate against any individual with respect to the compensation, terms, conditions or privileges of employment of the individual, because of such individual’s actual or perceived sexual orientation.”
  
  
• Siemens Corruption Scandal Runs Deeper than Expected. Siemens revealed that an internal probe had uncovered questionable transactions totaling $1.9 billion -- nearly three times the amount previously estimated, reported Deutsche-Welle on November 8, 2007.  Most of the money is reported to have disappeared into secret bank accounts for use as bribes in securing contracts outside Germany, the Munich-based conglomerate said.
  
  
• Norwegian Investment Fund Drops Vedanta on Ethical Grounds. The Norwegian government global pension fund has dropped British mining and metals group Vedanta Resources PLC due to concern about its environmental and human rights record, the finance minister announced Wednesday, reported the Associated Press on November 7, 2007.  "The allegations leveled at the company regarding environmental damage and complicity in human rights violations, including abuse and forced eviction of tribal peoples, are well founded," a statement from the finance council said.
  
  
• Asian Logging Companies Accused of Costing $200BN in Environmental Damage. Fourteen logging companies, subsidiaries or joint venture partners of two of Indonesia’s largest pulp companies, are cited as having cost the Indonesian province of Riau $200 billion in ecological and economic damage, reported The Financial Times on November 7, 2007.  “It will take hundreds of years to restore the areas, and that’s if the peat and forests are not disturbed,” a government official said.
  
  
• Samsung Chairman Under Investigation for Major Corruption Allegations. Prosecutors opened a formal investigation into allegations that Samsung Group’s chairman masterminded a massive scheme of bribery and illegal transactions, reported the International Herald Tribune on November 6, 2007. Prosecutors are investigating three major allegations of criminal behavior and an effort by the chairman, Lee Kun Hee, and his aide to illegally help his son take over control of Samsung.
  
  
• Executive Pay at Telstra Criticized by Shareholders. A shareholder revolt at Telstra’s annual meeting threatened to derail its pay plan which one shareholder said is “not sufficiently aligned between executive and shareholder interests," The Age in Australia on November 5, 2007.  The generous salary of the company’s top boss was also cited to be "considerably higher" than counterparts at other companies of similar market value.
  
  
• Public Trial Will Examine Widespread Corruption in Macau. The biggest public corruption trial to hit Macau, the world’s largest gambling hub, will commence today, reported Reuters on November 5, 2007. Macau's former secretary for transport and public works, Ao Man-long, faces 76 counts of corruption including alleged bribe-taking, money laundering and abuse of power. Macau's opaque land zoning system in particular has been widely criticized, with regular cases of developers being given land cheaply and arbitrarily, often without open bidding.
  
  
• Gap Defends Itself Against Labor Violations. Despite reports that children in India were found to be embroidering garments for Gap Inc., Marka Hansen, president of Gap North America insists the fashion chain has one of the most comprehensive programs to protect workers’ rights internationally, reported The Daily Telegraph on November 2, 2007. Problems far down the supply chain have plagued Gap in the past, and many other companies are having to find ways to better monitor their contractors.
  
  
• Officials Accepted “Gift Travel” Totaling Nearly $60,000. The Washington Post wrote on November 2, 2007 that the chief of the U.S. Consumer Product Safety Commission and her predecessor have taken dozens of trips at the expense of the toy, appliance and children's furniture industries and others they regulate, according to internal records obtained by The Post. Some of the trips were sponsored by lobbying groups and lawyers representing the makers of products linked to consumer hazards.
  
  
• Corruption Inhibiting Trial of Khmer Rouges Leaders. The Cambodian war crimes tribunal, which has taken ten years just to start pre-trial hearings, faces considerable setbacks due to corruption, reported The Daily Telegraph on November 1, 2007.  The tribunal, financed by the UN Development Program, was found to have 52 “excess” positions, salaries that exceed comparable jobs elsewhere in Cambodia by around threefold and in a majority of cases, recruits who are under-qualified.  Leaders are getting old and the two most influential leaders, Pol Pot and Ta Mok, have already died.
  
  
• EU Membership for Most Balkan Countries “Unlikely.” Corruption, organised crime and ethnic tensions are slowing reforms in the western Balkans, the European Commission says in a report that indicates near-term EU membership is unlikely for most countries in the region, reported the Financial Times on October 30, 2007.  The report is more positive about some economic trends, but it says: “Civil society remains weak in the region. Wars and ethnic strife have done major damage to the social fabric.”
  
  
• Unregulated Chinese Drug Companies Still Selling Products. At one of the biggest trade shows for pharmaceutical ingredients, held in Milan, at least 82 Chinese companies attending the show said they made and exported pharmaceutical ingredients, but the New York Times found not one was certified by the Chinese Food and Drug Administration.  Many of the Chinese companies selling their products at the show had been under fire for exporting unregulated drugs to the U.S., mislabeling poisonous drugs that killed nearly 200 people in Haiti and Panama, and selling counterfeit medicine for serious diseases, the Times reported on October 31, 2007.
  
  
• Dubai Criticized by Human Rights Groups for Poor Labor Standards. A rare labor strike broke out at one of Dubai’s largest engineering companies in a dispute over pay and working conditions, reported the Financial Times on October 30, 2007.  Dubai has responded by threatening to deport south Asian laborers who refuse to return to work. At the same time, Dubai launched a government reform drive to tackle the issue of workers’ rights, raising the number of labor inspectors to uncover malpractice and clamping down on those that fail to meet standards – but human rights organizations say the efforts are insufficient.
  
  
• Kuwaiti Parliament in Flux over Corrupt Ministers. Legislators slammed the prime minister, Sheik Nasser Al Mohammed Al Sabah, for aborting the questioning of his finance minister by giving him another portfolio in a Cabinet reshuffle, reported The International Herald Tribune on October 30, 2007. The prime minister has been accused of protecting Cabinet ministers from Parliamentary probes, which has put him and legislators at serious odds.
  
  
• UN Agrees to Implement Universal Ethics Code. United Nations Secretary-General, Ban Ki-Moon, and the executive heads of all UN specialized agencies, funds and programs agreed on the need for a system-wide approach on ethics and for the disclosure of information to render the entire system more effective and coherent in its business practices, reported the UN News Center on October 29, 2007.  Among its decisions, the Board decided to establish a mechanism for evaluating pilot projects, a strategic approach to address climate change, and a comprehensive approach to business practices.
  
  
• Mangled Russian Prompts Protest Against Corrupt Police. A New York Times article on October 28, 2007, profiled a Russian dissenter acting out against police corruption, a growing problem with which many Russians are fed up. The fact that this particular dissenter, Kirill Formanchuk, was brutally beaten while being held in prison for confronting officers over seemingly trumped up traffic infractions instead of paying a bribe has fomented widespread resentment in Russia against corruption in the police force.
  
  
• American Military Lawyer Denounces Guantanamo Detention Policies. Among the more serious testimony given on the interrogation and detention policies at the US-run naval base in Guantanamo Bay, an American military lawyer with extensive experience at Guantanamo decried that “detainees were not represented by a lawyer and had no access to evidence. The only witnesses they could call were other so-called ‘enemy combatants,’” reported The Independent on October 27, 2007. The whistleblower acknowledged the general sentiment that inconsistent results in interrogation were "good for the system ... and would show that the system was working correctly."
  
  
• BP Pays Largest Fine Ever for Violation of US Laws. British energy giant, BP, paid $373 million in fines to settle US criminal probes, the largest fines ever paid by a British company for violations of US laws, reported AFP on October 26, 2007.  BP was being investigated for environmental violations relating to a Texas refinery blast in 2005 and crude oil pipeline leaks in Alaska.
• Top Albanian Prosecutor Under Fire. The Albanian parliament voted to investigate the country’s top prosecutor for failing to crack down on organized crime and corruption, reported the International Herald Tribune on October 26, 2007.  Organized crime and corruption are major issues in Albania, one of Europe's poorest countries, which is struggling to integrate with international institutions.
  
  
• Estrada Receives Official Pardon of Corruption Ruling. When former Philippine President Joseph Estrada was convicted of corruption charges last month, many Filipinos welcomed the ruling, but now Estrada has been officially pardoned by sitting President Arroyo, reported The Wall Street Journal on October 26, 2007.  In Ms. Arroyo's statement, she said she was pardoning Mr. Estrada because of her government's policy of releasing convicts who have reached the age of 70. She also noted that he had spent six and a half years under house arrest during his trial for receiving kickbacks and bribes while president. 
  
  
• Italian PM Acquitted of Corruption Charges. Former Italian Prime Minister Silvio Berlusconi was acquitted by the Roman Supreme Court of allegations that he influenced judges' decision by bribing them in the 1980s, reported BBC News on October 26, 2007. Berlusconi has repeated fought off corruption allegations during and after his time in office.
  
  
• British CEO Gets Jail Time After Major Corporate Cover-up. Michael Bright, the corporate executive officer of Independent Insurance, the British company that collapsed in 2001 in one of the biggest corporate cover-ups in recent times, is now facing jail after being found guilty of corporate fraud, reported The Guardian on October 24, 2007.  The company's employees not only lost their jobs when the business went bust, but in many cases also their savings, which were wrapped up in company share schemes. The case has seen more than £366m ($750m) paid out in compensation by the Financial Services Authority and the bill for taxpayers has continued to grow, making the case one of the most complex ever mounted by the Serious Fraud Office.
  
  
• Vintage Memo Shows British Defense Knew About Saudi Deals. A memo from the 1970s, written by the official body that promotes the British defense industry, discusses fees associated with two major contracts between Britain and Saudi Arabia, The Daily Telegraph reported on October 23, 2007. The main supplier was British Aircraft Corporation (BAC), which became BAE Systems, a British defense contracting company currently facing allegations that it has been paying Saudis huge sums of money to win contracts. The draft memo said Saudi officials "would certainly not officially approve the payment of fees, although they undoubtedly expect appropriately discreet arrangements to be made."
  
  
• East Africa Suffers Huge Losses at Transit Points, Survey Says. According to figures from a research firm, the East African region loses more than $57,730 to corruption for every 100 transactions in tax revenue to corruption along the Northern Corridor, AllAfrica reported on October 23, 2007.  Clearing agents are paying customs officials between $100 and $150 depending on the value of the imported goods to expedite clearance and avoid high taxation. Uganda tops the list as the biggest money loser in customs transactions.
  
  
• Latvian Minister Resigns Fueling Debate Over Anti-Corruption Chief Dismissal. The Latvian Foreign Minister stepped down in an act of protest against the Prime Minsiter’s dismissal of the state’s anti-corruption chief, reported Forbes on October 19, 2007.  The chief was fired after having been suspended in September following a probe by state auditors, which exposed purported misuse of funds by his staff.  The sacking has sparked a storm of protest in Latvia against the Prime Minister, who has been accused of crossing a political 'red line'.
  
  
• Philippine Adviser Calls Corruption “National Security Threat.” National Security Adviser Norberto Gonzalez said he has begun a study of loopholes in government systems that allow graft, and has called on bureaucrats to help him, the Associated Press reported on October 18, 2007. "I'm raising corruption as a national security threat," Gonzalez said. "It has become the system in the country." President Arroyo's (pictured) government has been hit by a series of scandals in recent weeks, prompting opposition lawmakers to renew calls for her to resign.
  
  
• US Increases Aid to Retrain Afghan Police Force. Amidst the start of an American initiative to carry out a sweeping $2.5 billion overhaul of Afghanistan’s police force, some current and former American and Afghan officials warn that corruption, drug trafficking and rising lawlessness pose graver threats to the government than even the Taliban, The New York Times reported on October 18, 2007.  After leaving police training to Germany for the first two years after the fall of the Taliban, the United States has steadily increased what it spends on the task. However, the international effort to train a new police force has been beset by infighting, inconsistency and a slow pace.
  
  
• U.S. Proposing Harder Line Against Burmese Access to U.S. Banks. A proposal was unveiled in the U.S. House of Representatives that would further sanction the Burmese military junta, responsible for violent crackdowns in recent weeks, which would include a measure blocking critical access to US financial institutions via third countries, reported Forbes on October 17, 2007.  Amid reports that Myanmar largely used third countries to access the US banking system, House Committee Chair Tom Lantos said, “These overseas banks process accounts in and through the United States for Burma's rulers, providing the regime with much-needed hard currency.”
  
  
• US Corruption Front: House Votes to Rebuke State Dept., Another Probe Investigates US Food Suppliers. The US House of Representatives overwhelmingly approved a resolution to criticize State Department officials for withholding information from Congress on corruption in the Iraqi government, reported Voice of America on October 16, 2007.  The resolution came from recent hearings on the same subject in which the State Department refused to discuss government corruption in Iraq outside a classified setting (see Ethicsworld report).  The Wall Street Journal reported on October 17 that the US has also began an inquiry into whether US food companies set excessively high prices when they sold their goods to the Army's primary food contractor in Kuwait for the Iraq war zone.
  
  
• BAE Chief Announces Surprise Resignation. The CEO of BAE Systems announced unexpectedly that he will step down next August, reported The Guardian on October 17, 2007.  CEO Mike Turner said he was going out on a high note, as he had met all the goals he planned for the company when he came on.  However, BAE continues to be dogged by a series of investigations in the UK and the US.
  
  
• Arroyo Orders Investigation Into Alleged Bribery. In the latest corruption scandal, Philippine President Arroyo has ordered an investigation into allegations that two provincial governors received bags of cash, amounting to around $11,000, from an unidentified official, reported The Wall Street Journal on October 17, 2007. Newspapers and pundits have speculated the money was meant to secure support for Ms. Arroyo in the House of Representatives, where she faced a third impeachment bid in as many years on allegations of corruption stemming from an allegedly overpriced contract with a Chinese telecommunications company.   
  
  
• Survey Shows Israeli Companies Less Involved in CSR than Global Counterparts. A survey conducted by two major accounting firms has found that Israeli managers’ investment still encompasses mainly traditional corporate philanthropy and limited community involvement when compared with global peers, The Jerusalem Post reported on October 16, 2007.  The results show that only 10 percent of the 300 largest Israeli companies questioned played an important part in shaping corporate social responsibility policy compared with 22% for their global peers.
  
  
• Toronto Company Settles with SEC. Nortel has agreed to pay $35 million to end a U.S. Securities and Exchange Commission probe, Bloomberg reported on October 15, 2007.  Nortel, the largest maker of telecommunications equipment in North America, was accused of manipulating its earnings to show stability in the midst of an economic downturn between 2000 and 2003 and had already admitted to inflating its revenue $3.4 billion.
  
  
• Pakistan Website Withdraws Corruption Case Details After Bhutto Agreement. Key details have been removed from Pakistan’s corruption watchdog website apparently because of a deal made between the government and opposition party chairwoman, Benazir Bhutto (pictured), to withdrawal all cases instituted between 1986 and 1999 against politicians and bureaucrats, reported Earthtimes on October 11, 2007. 
  
  UPDATE: Supreme Court Deliberates on Amnesty. The Pakistan Supreme Court will soon rule on whether amnesty granted to Bhutto by the government is legal under the constitution, BBC News reported on October 12, 2007.  The court's Chief Justice said he would hear five petitions against the amnesty, which opens the possibility of the court declaring that Bhutto must face trial in cases dating back nearly 20 years.
  
  
• Thai Court Pushing for Thaksin Extradition. Prosecutors from Thailand are in London to press for the extradition of the ousted billionaire prime minister Thaksin Shinawatra on corruption charges, The Guardian reported on October 12, 2007. In a related development this week, the Thai anti-corruption body, the Assets Scrutiny Committee, said it would file criminal charges against Thaksin's 25-year-old daughter Pinthongta over her refusal to answer questions about the family's share dealings.
  
  
• Corruption Charges Provoke Romanian Minister’s Resignation. The Romanian agriculture minister resigned Thursday, three days after Romanian prosecutors said he was being investigated for allegedly taking a bribe in exchange for promising to favor a company in a public auction, the Associated Press reported on October 11, 2007. Prosecutors have accused Remes of taking a bribe of $21,000 and the promise of $640 in goods — including homemade sausages and plum brandy — from former Agriculture Minister Ioan Muresan.
  
  
• Australian Police Watchdog Uncovers Corrupt Police Cells. The Australian director of the Office of Police Integrity released an annual report uncovering hierarchical cells of corrupt former and serving officers operating in small syndicates tied to organized criminals, The Age reported on October 10, 2007.  The Age has recently discovered alleged links between corruption and unsolved underworld murders, and ties between crime figures and former and serving police.
  
  
• Former Jordanian Lawmaker Convicted for ‘Blowing the Whistle.’ Jordan’s military court sentenced a former lawmaker to two years in prison for “harming the government’s reputation” after he allegedly sent an e-mail to U.S. Senate majority leader Harry Reid about an increase in government corruption, reported the International Herald Tribune on October 9, 2007.  He accused the government of clamping down on public freedoms, including the media, and blamed the declining levels of health care and education on government corruption.
  
  
• Possible Reinstatement of Corrupt Afghan Governor Raises Fears. A former Afghan governor was dismissed on charges of corruption and drug dealing as a precondition for having British troops in the province, but may now be returning to his post, reported The Independent on October 9, 2007. The possibility raises British fears of further dysfunction in the region and doubts about President Hamid Karzai’s ability to deal with corrupt officials.
  
  
• Bulgaria Adopts New Corporate Governance Code. A new National Code for Corporate Governance was presented in Sophia, Bulgaria on October 9, 2007, replacing the current code which only applied to some companies listed on the Bulgarian Stock Exchange, reported the Sophia Echo.  The code is only advisable, but all companies are encouraged to adopt its principles.
  
  
• Pinochet’s Family Arrested on Corruption Charges. The wife and five children of the late Chilean dictator, Augusto Pinochet, have been arrested on corruption charges, The Guardian reported on October 5, 2007.  The charges appear to be related to an official inquiry instigated before Pinochet's death into multimillion-dollar secret foreign bank accounts held by the former leader.
  
  
• Socially Responsible Companies Influencing Consumption Behavior in Finland. A Gallup survey, released in Helsinki, shows 35 percent of Finns said a company’s commitment to social responsibility will affect their decision to buy its products, and three-quarters said that companies should be more transparent about their activities, IPS News reported on October 5, 2007.  Dairy products company Valio was selected as the first among 10 large companies most engaged in socially responsible behavior. The global mobile phone giant Nokia figured fourth.  
  
  

In other news...

• Siemens Fined $284M As Other Investigations Continue. The Munich District Court reached a multi-million dollar settlement with Siemens, which will end one investigation into Siemens former communications unit on the basis of illegal conduct and tax violations, reported The Wall Street Journal on October 4, 2007.  Other investigations of the German engineering company by the European law enforcement agency, the U.S. Department of Justice and the Securities and Exchange Commission are still underway.   
  
  
• London Is World Capital of Dirty Money, Says TI. Although London may rank relatively high on Transparency International’s (TI) Corruption Perceptions Index, TI said “The City of London has become the number-one home for the fruits of corruption,” reported The New Statesman on October 4, 2007. "One prosecution in the UK would help because, until it happens, a lot of business will say that corruption doesn't matter,” said the director of GoodCorporation, an advocacy company for good management based in London.
  
  
• French Investigation Disclosures Raise Alarm Over Insider Trading at EADS. In an unexpected move, the French financial market regulator turned over its initial investigation of potential insider trading within EADS, the Franco-German aerospace company, to French courts, reported the Financial Times on October 3, 2007. The regulator confirmed to Le Figaro, a French daily newspaper, “simultaneous and massive” share sales by executives as far back as November 2005. The regulator launched an inquiry into 1,200 share transactions but limited it into dealings by Daimler and Lagardère and the most senior executives.
  
  
• Recent Crackdowns on Chinese Dissidents Undermine Efforts to Curb Corruption. A Chinese lawyer said he was attacked with fists and electric batons and held for about five hours for representing clients complaining of official corruption and police abuse, reported The Associated Press on October 3, 2007.  The alleged attack came the same day a dissident in eastern China who wrote about local corruption was arrested on charges of subverting state power, the AP reported. Police also detained the son and brother of a Beijing resident serving a four-year prison sentence for disturbing the social order after he applied for a permit to hold a protest against forced evictions.
  
  
• Mayhem Erupts in Bengal Over Corrupt Food Ration System. Villagers in West Bengal resorted to violence, burning ration shops and attacking the houses of ration dealers, in an act of protest against corruption in food distribution, reported IANS India, on October 2, 2007.  A “free-for-all” broke out in the district after a man protesting the public distribution system was killed by police fire.
  
  UPDATE Oct. 4: Violence in West Bengal Spreads, Inquiry Demanded. As the protests against the food rations system have become increasingly more violent, the government has demanded an inquiry by the Central Bureau of Investigation as to why food rations have not been adequately distributed to the villagers, reported The Hindu. So far, two people have been reported dead from police fire.
  
  
• Wyatt Pleads Guilty in Oil-for-Food Scandal. Texas oilman Oscar Wyatt pleaded guilty to conspiracy yesterday in the U.N. oil-for-food scandal in which millions of dollars in kickbacks were paid to Saddam Hussein's government to win oil contracts from Iraq, Reuters reported on October 2, 2007.  Under terms of the deal, the other charges will be dropped and he will be sentenced to 18 to 24 months in prison. He also agreed to forfeit $11 million.
  
  
• U.S. Firm Develops Network for ‘Green Marketing.’ In an effort to effectively reach socially conscious consumers, the U.S. firm, Brand Connections, has compiled a network of 500 ad venues near national parks and mountain resorts which it will promote to marketers, reported The Wall Street Journal on October 2, 2007.  Until recently, a big advertiser wanting to buy space at resorts had to deal with a series of small firms that had exclusive rights to sell space at the venues. According to market research firm Mintel International Group, U.S. spending on cause-related marketing jumped 24 percent in 2006, in large part because of initiatives launched by big brands.
  
  
• African Foundation to Establish Governance Criteria. The African Mo Ibrahim Foundation, funded by successful African business and supported by world leaders including Nelson Mandela, Alpha Konaré, Bill Clinton and Tony Blair, is launching a rigorous new index of governance in sub-Saharan Africa, reported the Mail and Guardian in South Africa on October 1, 2007.  With the help of Harvard University, the Foundation is ranking all sub-Saharan Africa’s 48 countries against each other, the first undertaking of its kind, and a grand prize will be awarded on October 22, 2007.
  
  
• Series of Corruption Investigations Raises Doubts About Israeli PM. Israeli Prime Minister Ehud Olmert is the subject of a growing number of corruption allegations, reported Gulf News.com on October 1, 2007. The latest investigation involves allegations that Olmert purchased a house in Jerusalem at a reduced price in exchange for influencing infrastructure projects, while another explores his alleged manipulation of a Leomi Bank tender to help his Australian business friend. "These recent developments propelled significant members of Kadima Party to prepare for the probability of losing their leader,” an Israeli analyst said.
  
  

• Bill Limiting Corruption Probes Shot Down by Kenyan President. President Mwai Kibaki rejected a Parliamentary bill that would have blocked the country’s anti-corruption commission from pursuing major corruption investigations from the previous administration, reported Reuters on September 28, 2007.  The move comes after the United States, European Union, Canada, Norway and Switzerland said the action represented a major step backward in the fight against graft.
  
  
• Britain Plays Key Role in Repatriation of Stolen Funds. The British government issued $234,400 of refunded money to Nigeria after it was seized from former Nigerian governor, Joshua Dariye, who is “wanted” in Britain for money laundering and corruption, reported AllAfrica.com on September 28, 2007.  The British High Commissioner stated “the refunded loot was just a tip of the iceberg as more was still on the way.” 
  
  
• Ethics Group Slams Google for Hosting Pirated Materials. The U.S. National Legal and Policy Center, a nonprofit ethics group, condemned Google, Inc. on the basis of a study which found over 300 illegally copied videos Google is hosting, reported Business Week on September 26, 2007.  "We are hoping to shame Google into doing something," the chairman of the ethics group said. "What they are doing is inexcusable corporate behavior.”
  
  
• Bangladesh’s Heir Apparent Charged with Corruption. Businessman Tarique Rahman, the ex-PM’s son and joint secretary general of the Bangladesh Nationalist Party, has been charged with amassing $711,530 that did not match his legally declared income, reported BBC News on September 26, 2007.  The ex-PM and another son are currently in jail pending trial on corruption charges. 
  
  
• Accountant General Charges Corruption in Israeli Interior Ministry. The Israeli Accountant General, Yaron Zelekha, who’s contract will run out in October, has accused the Interior Ministry when it was run by Roni Bar-On, now the finance minister, of giving preferential treatment to local governments run by ruling party officials, reported Haaretz on September 25, 2007. Zelekha charged that one local authority, led by a person identified with the ruling party, was granted 11 times the support it should have. No decision has been made as to whether a formal investigation will follow.
  
  
• Civil Suit Filed Against Suharto Will Seek $1.4B. The government of Indonesia has filed a civil suit against ex-leader Suharto in an effort to recover $1.4 billion in stolen assets and damages, reported the AFP on September 24, 2007. Suharto and his family allegedly stole the funds, which were supposed to be distributed as educational scholarships, from a family charitable foundation. “If that money can be recovered, there will be more than a thousand people who could obtain scholarships,” the state prosecutor said.
  
  
• Army Procurement Officer Accused of Hiding $10M in Bribes. A U.S. Army major and his wife are being accused of the largest single bribery scheme since the start of the Iraq war, reported The New York Times on September 24, 2007.  Due to the tremendous increase in procurement, the Times reports not enough oversight was instituted to check up on massive contract spending and normally mandatory ethics training was foregone.
  
  
• Fujimori Returns To Face Corruption Charges. Peru’s former President, Alberto Fujimori (pictured), flew back to Peru after being extradited by the Chilean Supreme Court to face criminal charges in violation of human rights and for corruption, reported the Associated Press on September 24, 2007.  Activists contend this is a major victory that shows heads of state that they will be held accountable for their actions.   
  
  
• Taiwanese Vice President Indicted on Fraud Charges. Prosecutors in Taiwan have indicted Vice President Annette Lu, along with two other top Democratic Progressive Party officials, saying Lu gave official orders to falsify receipts and claimed more than $170,000, reported Voice of America on September 22, 2007.  It is standard practice for top government officials at the local and national levels in Taiwan to be given discretionary funds for expenditures related to their offices. There have been several indictments and prosecutions lately dealing with the alleged misuse of these funds, VOA reported.  
  
  
• Top Class Action Lawyers Indicted on Alleged Kickback Scheme. A US Federal jury indicted Melvyn Weiss, and his law firm Milberg Weiss, one of America's largest, for alleged involvement in kickback schemes, reported The Wall Street Journal on September 21, 2007. Former partner, William Lerach (pictured), pleaded guilty yesterday for providing kickbacks to witnesses in class action suits, reported The Los Angeles Times. The deal Lerach made could send him to prison for a one-to-two-year term, a fine of $8 million and disbarrment.
  
  
• Tanzania Exepcts To Bring Criminal Charges "Within Weeks" Against BAE. The scandals surrounding BAE Systems, Europe's biggest defense company, are growing larger as the Tanzanian anti-corruption bureau is set to file criminal charges against the company for bribery in connection with a radar system deal, reported the Financial Times on September 21, 2007. The British Serious Fraud Office is also conducting its own investigation in conjunction with Tanzania.
  
  
• Thailand Steps Up Corporate Governance Standards on Stock Exchange. The Stock Exchange of Thailand and the Securities and Exchange Commission set new standards for their corporate governance practices which were employed from the OECD Principles of Corporate Governance, reported the Bangkok Post on September 20, 2007.  After disappointing ratings in the 2006 Corporate Governance Report, all listed companies will have one year to prepare their CG practices to meet the new standards in hopes of significant improvement.
  
  
• New National Chinese Bureau Will Target Corruption in Commercial Sector. The new National Bureau of Corruption Prevention has been established in China to address the lack of preventive policies against corruption in private companies and non-governmental agencies, reported Xinhua on September 19, 2007.  The Bureau is expected to fill a much needed gap as a coordinator among relevant departments and professional think tanks to collect information, analyze policy risks and work out targeted preventive measures.
  
  
• Chiquita Company Caught in Ethical Dilemma, Forced to Pay Fine.  Cincinnati-based Chiquita Brands International, Inc. is being forced by a U.S. court to pay $25 million for paying off terrorists in Colombia, reported Reuters on September 17, 2007.  General counsel James Thompson said “this was a difficult situation for the company,” since it had to pay terrorists to protect employees and their families from danger.
  
  
• Korea Established As Official Branch of UN Global Compact. South Korea launched its initiative to implementing the 10 principles of the UN Global Compact and is expected to emerge as a model for other nations, reported The Korea Times on September 17, 2007.   The UNGC Korea Network plans to hold a range of events to publicize the agreement and offer educational programs on corporate responsibility to both companies and the public.
  
  
• Study Rates Some Publicly-Traded Chinese Companies “Very Poor.” A report released on September 17, 2007 by RateFinancials, Inc., a New York research firm, rates the ten largest NYSE-listed Chinese companies as “Poor,” or “Very Poor,” for their accounting, quality of earnings, and governance. Forbes also reported on September 14, 2007 that Standard & Poor's Ratings Services lowered its long-term corporate credit rating on Xinhua Finance Ltd to 'B' from 'B+' concerning corporate governance issues.
  
  
• Irish PM Questioned Over Shady Bank Records. Irish Prime Minister Bertie Ahern (pictured) is testifying against allegations that he accepted payments from businessman Owen O'Callaghan to assist with the construction of a shopping mall in Dublin in the early 1990s, reported Bloomberg on September 14, 2007.  Some suspicious bank transactions worth around $317,000 are being scrutinized in connection with the trial.
  
  
• New Law Is Huge Blow to Kenya’s Fight Against Corruption. The Kenyan Parliament passed a new law that effectively bars the anti-corruption body from investigating cases before May 2003, when notorious scandals broke out over massive state-sponsored looting, reported The Guardian on September 14, 2007.  Civil society organizations described the new law as "the formal end of the war on graft."
  
  
• Eco-Friendly Businesswoman Dies at 64, Hailed as Pioneer. Anita Roddick, founder of the British environmentally-friendly cosmetic chain, the Body Shop, is considered a visionary who took corporate social responsibility seriously before it became a mainstream issue, reported the Associated Press on September 11, 2007.  Roddick said her environmental business ethics were inspired in part by women's beauty rituals that she discovered while traveling in developing countries and lessons from closer to home that her mother passed on from life during World War II.
  
  
• South African Workshop Acknowledges Management Cannot Be “Business as Usual.” Heads of state and representatives from the public and private sector met at the South African national workshop, Program of Action, in Pretoria to discuss broad strategies the program could implement in order to alleviate violence against women and children, racism, joblessness, and to practice better corporate governance, reported Africa News on September 11, 2007.  The POA was approved by the heads of state of the African Union, following the formal tabling of South Africa's country review report last July in Accra, Ghana.
  
  
• Pakistan Leadership Turmoil: Pakistan's former Prime Minister Nawaz Sharif was deported to Saudi Arabia after being arrested by police on his arrival at Islamabad International Airport from exile in the UK, Bloomberg reported on September 10, 2007. His tenure as PM was marred by multiple allegation of grand corruption, but that was also true of his rival, former PM Benazir Bhutto, also in exile in the UK, who told Reuters that she plans to return home soon to participate in national elections.
  
  
• Sri Lankan Central Bank Plans to Enforce Tough Corporate Governance Standards. The Sri Lankan banking regulator has released the draft of the Mandatory Code of Corporate Governance for Licensed Banks, to come into effect on January 1, 2008, seeking comments from the industry and the public, reported Lanka Business Online. The new code will enforce rules which encourage whistleblowers, better link executive pay to performance and discourage the practice of inter-locking directorates.
  
  
• Russia Drafts New Anti-Corruption Measures. Russia is considering establishing a new state anti-corruption body, which would oblige officials to relinquish undeclared property belonging to their families, according to a draft for anti-corruption measures to be reviewed by the Russian Security Council in October 2007, reported RBC Daily on September 10, 2007.  Russia’s anti-corruption obligations will be more scrutinized by international inspection groups, who will visit Moscow to observe its progress starting at the end of 2007 or the beginning of 2008.
  
  
• World Bank Anti-Corruption Unit Under Fire from Whistleblowers.  A whistle-blower protection group, the Government for Accountability Project, released a report slamming the World Bank Department of Institutional Integrity after several Bank staff approached them with serious concerns about the unit’s capabilities, Reuters reported on September 7, 2007. "They contend that breaches of confidentiality, lack of consultation with staff or affected government counterparts, a presumption of guilt in some cases and suppression of evidence in others ... all combined to undermine the confidence staff might have had in the department's capabilities," the report said. (See EthicsWorld analysis.)
  
  
• Iraqi PM Appoints New Anti-Corruption Head.  Iraqi Prime Minister Nouri al-Maliki’s appointment will replace the former head who has been accused of corruption, reported the Associated Press on September 7, 2007.  The accusations of corruption come as officials at the U.S. Embassy in Baghdad are reviewing a draft report by the Office of Accountability and Transparency which includes allegations that the al-Maliki government has sought to derail or prevent investigations into alleged graft by Shiite-controlled agencies or allied officials, according to two U.S. officials familiar with the findings.
  
  
• Investigation Launched into Nigerian Speaker’s Spending Spree. Strong allegations are being made against the Nigerian speaker (pictured) of the House of Representatives for spending $5 million on a nearly new house and new cars, Reuters reported on September 6, 2007. Awarding inflated government contracts and pocketing the excess is one of the most common forms of corruption in Nigeria. After coming to office on the platform of rooting out corruption, President Umaru Yar'Adua faces pressure to follow through on the investigation.
  
  
• APEC Ministers Approve Codes of Conduct Against Corruption.  The International Herald Tribune reported on September 6, 2007 that under the new edict, government officials are urged not to use their positions to gain favors or use government resources for personal activities, guidelines are provided for business people to avoid bribery, and the ministers called for international legal cooperation to allow more rapid extradition of corruption suspects and recovery and return of proceeds of corruption.
  
  
• APEC Summit Considers Corruption Codes. APEC leaders will this week sign up to codes of conduct for business and government in a crackdown on the rampant corruption undermining trade and investment across the region, the Australian reported on September 4, 2007.  It said the initiative is one of the key economic results Australian PM John Howard hoped to achieve from the summit. Two codes of conduct are expected - one for government and one for the private sector.
  
  
• Former PM in Bangladesh Jailed. AFP reported on September 3 2007 that police arrested former prime minister Khaleda Zia and her son as part of a major campaign against corruption launched by the country's army-backed government.

 

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