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  • Mittal Faces Dutch Corruption Probe. Anti-corruption police in the Netherlands are investigating the circumstances surrounding the awarding of a Liberian iron ore contract to Mittal Steel, the world's largest steel maker. According to The Australian the company, which won the rights to exploit an estimated 1 billion tons of Liberian iron ore in return for a promised $US900 million investment, is undergoing a similar probe in Liberia. Liberian president Ellen Johnson Sirleaf, while maintaining that no conclusions have been made, has expressed reservations about the fairness of the contract, particularly in relation to the structure of the equity arrangement. According to the article, complaints from a trade union have alleged that two former legislators were bribed in return for supporting Mittal. Mittal denies any wrongdoing.

  • Blair's Chief Fundraiser Arrested in "Cash For Honours" Scandal. Lord Michael Levy, the chief fundraiser for British Prime Minister, Tony Blair’s, Labour Party has been arrested by British police in connection with a “cash for honours” inquiry that has rocked Blair’s government and undermined his legitimacy reported the Guardian on July 13, 2006. The Labour party came under fire after it reported that it had received loans worth 14 million pounds from 12 businessmen, some of whom were nominated for seats in the House of Lords, which is considered a “state honour.” A 1925 law made it illegal to sell seats in the House of Lords. Lord Levy denies any wrong-doing.

  • Air France Chairman and Chief Executive Questioned in Money Laundering Probe. Jean-Cyril Spinetta, Chairman and Chief Executive of the French-Dutch airline, Air France-KLM, is to be questioned by a French magistrate in an investigation into suspected money laundering and labor-code violations in the company’s dealings with the collapsed Pretory SA, a company that supplied private security guards to travel undercover on commercial flights in the wake of the Sept. 11, 2001, terrorist attacks, reported The Wall Street Journal on July 13, 2006. Four Pretory SA officials, including its former Chief Executive, are now under formal investigation.

  • Toyota Faces Criminal Charges For Allegedly Postponing Safety Recall. Toyota Motor is undergoing a criminal investigation in Japan over accusations that officials postponed for eight years a safety recall for the best-selling Hilux Surf SUV model, which acquired a steering defect, reported Mainichi Daily News on July 12, 2006. In 2005 and 2004 the company recalled over 1.5m of the cars in Japan and other countries. Toyota, which said that it first learned of the problems in 1996, waited until after a second investigation to issue a recall in 2004. The company, which denies any wrongdoing, defended its 1996 decision by saying the steering problems transpired only in "unusual and extreme" conditions and did not merit a recall at the time.

  • New Anti-Corruption Bodies in Eastern Europe:

    Poland to Establish New Anti-Corruption Bureau. The Polish government will establish a new Anti-Corruption Bureau of approximately 500 employees which will monitor the performance of the administration and other services dealing with corruption, focusing on possible corrupt practices between the the private sector and politics (Radio Polonia, July 7, 2006)

    Turkey Creates Anti-Corruption Super Comittee.
    In an effort to speed up its anti-corruption activities,

    the Turkish government is establishing an anti-corruption super-committee, which will oversee the public bodies and institutions involved in monitoring corruption. The committee is intended to overtake the anti-corruption coordination mission now in place among Turkey's anti-corruption institutions (Zaman, July 8, 2006).

  • BOJ to Set New Internal Rules on Officials' Trading. On July 7, 2006 Bloomberg reported that the Bank of Japan (BOJ) will set new internal rules on senior officials' financial trading and assets by the end of July, responding to a public outcry over Governor Toshihiko Fukui's admission that he invested 10 million yen ($87,000) in a fund founded by Yoshiaki Murakami, who was later indicted for insider trading. The proposed reforms include prohibiting senior officials from trading stocks, most kinds of bonds and real estate for investment.

  • UPDATE, July 7, 2006: Hollinger Announces Intention to Sue Black for Fraud for $700M (Calgary Sun)

    UPDATE, June 27, 2006: J
    udge Declines to Revoke Black's Bail but said she may require him to put up more collateral. Prosecutors have reported that Black provided them with false and misleading statements about the extent of his assets (Bloomberg).

    Black Faces Jail as Judge Asked to Reconsider Bail. US federal prosecutors requested that the judge currently overseeing the 2007 fraud trial of Conrad Black, the former Hollinger International Inc. chairman accused of helping steal $51.8 million from the company, reconsider Black's bail, reported the Financial Times on June 20, 2006.


    Former Hollinger Chairman, Conrad Black

  • Kenneth Lay, Convicted Former Enron Chairman, Dies. Enron's founder and chairman, Kenneth L. Lay, died of a heart attack at his vacation home in Colorado, reported The New York Times on June 5, 2006. In May, Mr. Lay was found guilty on six counts of fraud and conspiracy and four counts of bank fraud. The former chief executive, Jeffrey K. Skilling, was convicted of 18 counts of fraud and conspiracy and one count of insider trading.

  • 53 Bulgarian State Officials Sacked for Corruption. 53 Bulgarian state employees and 22 servicemen of the Interior Ministry have been sacked over corrupt practices in the first six months of the year, reported Sofia News Agency on June 5, 2006. This was announced by Interior Minister Rumen Petkov when presenting the results from the work of the Council of Ministers Inspectorate and the Commission for Corruption Fight and Prevention. Bulgaria, which has faced criticism for corruption, awaits possible entry into the European Union.

  • Thai Parties Indicted Over Alleged Election Fraud, Face Disbandment. Thailand's Attorney General's Office formally indicted the ruling Thai Rak Thai party as well as the opposition Democrat Party for alleged electoral violations, announcing it would ask the Constitutional Court to dissolve the parties, reported the Associated Press on June 28, 2006. The April 2 elections were held following after a series of corruption charges against Prime Minister Thaksin Shinawatra triggered massive protests against his leadership. See past News.


Thai Prime Minister, Thaksin Shinawatra

  • Morgan Stanley Fined $10m By SEC for Lack of Insider Trading Safeguards. Morgan Stanley, the third-largest U.S. securities firm, was fined $10 million by the Securities and Exchange Commission (SEC) for failing to protect against insider trading by adequately checking employee accounts for at least eight years, reported Bloomberg on June 27, 2006. According to the article, earlier this year the firm agreed to pay $15 million to resolve an SEC inquiry into its failure to preserve e-mails, the largest fine ever paid for that type of infraction.

  • AT&T To Pay $2.9m to Settle Fraud Suit. On June 28, 2006 Reuters reported that AT&T Communications-East Inc.has agreed to pay $2.9 million to settle charges brought by a whistle-blower that it defrauded the U.S. government over certain fees the company charged between 1998 and 2001.

  • Merck Faces New Vioxx Blow. The New England Journal of Medicine published a correction to a critical study of Merck & Co.'s painkiller Vioxx, contradicting the company's position, based on statistics, that the drug doesn't increase risk of heart attacks and strokes to people who took it for less than 18 months reported The Wall Street Journal on June 27, 2006. Merck, which faces over 11,500 Vioxx-related lawsuits, admitted it misidentified the statistical methodology that it used in its study but it contests the argument of journal editors and other scientists that the new analysis alters the study's initial conclusion.

  • Buffet to Donate Most of Wealth to Charity. Warren E. Buffett, chairman and chief executive of Berkshire Hathaway and considered the world's second richest person, is to start in July giving away 85 percent of his stock in his company, approximately worth U.S. $37 billion, to five foundations, with most of it to go to the Bill and Melinda Gates Foundation, reported the New York Times on June 26, 2006. According to the article, Mr. Buffet owns 474,998 A shares in the company, a stake close to 31 percent that is worth nearly $44 billion.


    Berkshire Hathaway Chairman and Chief Executive, Warren Buffet

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