A sprawling, multi-billion dollar graft scandal in Brazil cemented it as one worst performers in a just-released annual global corruption index, while other countries, like Ghana, Guatemala and Sri Lanka, mustered pockets of resistance in overall recalcitrant regimes by taking to the streets.
The scale of corruption internationally is huge, according to London-based Transparency International (TI) in its 2015 Corruption Perceptions Index. Poor countries lose an estimated $1 trillion a year to corruption.
As well, nearly 70 percent of countries worldwide have what TI considers a serious corruption problem. Half of the G20 are among them. More specifically, that equates to two-thirds of the 168 countries on the 2015 index scoring below 50, on a scale going from zero, which is perceived to be highly corrupt, to 100, which is considered to be very clean.
Even so, major economies, such as the United States, the United Kingdom and smaller regions all over the world are doing more to fight corruption, chiefly by devoting more investigative resources and focus to kleptocrats of the highest order. On the compliance side, banks are also creating and training compliance teams to understand the red flags of corrupt individuals and transactions.
“The 2015 Corruption Perceptions Index clearly shows that corruption remains a blight around the world,” said José Ugaz, Chair of Transparency International, in a statement. “But 2015 was also a year when people again took to the streets to protest corruption. People across the globe sent a strong signal to those in power: it is time to tackle grand corruption.”
The group noted that in places like Guatemala, Sri Lanka and Ghana, citizen activists in groups and on their own worked hard to drive out the corrupt, sending a strong message that should encourage others to take decisive action in 2016.
“Corruption can be beaten if we work together,” Ugaz said. “To stamp out the abuse of power, bribery and shed light on secret deals, citizens must together tell their governments they have had enough.
The big decliners in the past four years of the index include Libya, Australia, Brazil, Spain and Turkey. The big improvers include Greece, Senegal and the United Kingdom.
Brazil was the biggest decliner in the index, falling 5 points and dropping 7 positions to a rank of 76. The unfolding Petrobras scandal brought people into the streets in 2015 and the start of the judicial in Brazil and other countries may help Brazil make more meaningful inroads against corruption.
Denmark took the top spot for the 2nd year running, with North Korea and Somalia the worst performers, scoring just 8 points each.
The United States scored in the top 20 at rank 16, better than Hong Kong, Ireland, and many countries in Europe, Asia and the Middle East, but worse than Sweden, Switzerland and the United Kingdom.
New units form to tackle corruption
- In August, the United Kingdom’s National Crime Agency (NCA), stated it had formed a new unit to tackle “serious bribery, corruption and money laundering around the world,” called the International Corruption Unit. The unit will reportedly be going after more than 20 of the world’s most corrupt politicians involved in grand corruption, looting and money laundering.
- The new unit will be adopting tactics historically used against drug smuggling gangs – including undercover operations and covert surveillance – to uncover corrupt acts and money laundering, and do so in conjunction with key allies, including the US and Switzerland, unit head Joe Benton told The Independent last month.
- The FBI, in conjunction with the Department of Justice’s (DOJ) Fraud Section, recently announced the creation of special, focused teams to go after foreign bribery and kleptocracy-related criminal activity: three dedicated international corruption squads, based in New York City, Los Angeles, and Washington, D.C.
Top corruption fighters share key traits
Top performing countries in the fight against corruption share key characteristics, including high levels of press freedom, budget transparency so the public knows where money comes from and how it is spent, political leaders with integrity and truly independent, impartial judiciaries that don’t differentiate between the rich and poor.
Conversely, those countries considered the most corrupt also have a startling number of toxic patterns in common, including regions being rocked by conflict and war, poor governance, weak public institutions, like police, the judiciary and watchdog groups, and a lack of independence, power and protections for those in the media.
The Corruption Perceptions Index, according to TI, is based on expert opinions of public sector corruption.
Open government, where the public can hold leaders accountable, and strong oversight bodies are some of the key factors that can help countries’ scores, while a poor score is a sign of “prevalent bribery, lack of punishment for corruption and public institutions that don’t respond to citizens’ needs,” according to TI.
Grand corruption, according to TI, is the abuse of high-level power that benefits the few at the expense of the many, and causes serious and widespread harm to individuals and society. The report also reveals that even corruption on such an expansive scale also often goes unpunished.
This year Transparency International is calling on all people to take action by voting at unmaskthecorrupt.org, so the group can better bring to light which cases the public most believe merit urgent attention to send a message that the group, in unison with countries around the world, will take a more forceful stand against grand corruption.
The latest actions by the US against corruption include some firsts across a variety of at risk sectors, including:
- August: The Bank of New York Mellon paid nearly $15 million to settle charges by the US Securities Exchange Commission it violated federal bribery laws by selectively awarding internships to the family members of officials with ties to a Middle Eastern sovereign wealth fund with more than $50 billion in assets. The regulator stated the bank didn’t adequately evaluate the family members for its internship program, typically a highly competitive and stringent process. The bank, instead, chose family members to corruptly sway government officials to gain or keep contracts associated with the fund.
- May: The FBI and IRS indicted more than a dozen individuals tied to the soccer governing body FIFA on wire fraud, racketeering and money laundering charges tied to collusion with sports marketing executives.
- March:The US Justice Department announced settlement and civil forfeiture cases against $1.2 million in assets tied to corruption proceeds from former Korean president Chun Doo Hwan.
- 2014: French power and transportation company Alstom plead guilty in US federal court to engaging in a widespread bribery scheme involving tens of millions of dollars and paid a record-setting $772 million for violating the FCPA.
- 2014: The US Justice Department forfeited more than $480 million in corruption proceeds hidden in bank accounts around the world by former Nigerian dictator Sani Abacha and his associates, the largest forfeiture ever related to a kleptocracy action.
Mexico still mired in grip of graft
The report also noted that corruption is still a massive problem in Mexico, which made no improvement in the index, despite leaders vociferously stating otherwise, again achieving a score of 35, ranking as the 95th most corrupt country out of the 168 countries in the Corruption Perceptions Index, released Wednesday.
Mexico had several high-profile setbacks during the year when grappling with graft, including powerful cartel leader “El Chapo” Guzman being able to bribe guards and others to escape a maximum security prison through an elaborate tunnel under his shower, his second successful escape from authorities, and a real estate scandal and related investigation of the president.
The group also reiterates that there are smaller battles won in more diminutive jurisdictions, but they should be considered still-important successes from TI’s network of more than 100 chapters.
“We’ve witnessed two remarkable trends in the Americas in 2015: the uncovering of grand corruption networks and the mass mobilization of citizens against corruption,” says Alejandro Salas, Transparency International Director for the Americas. “The Petrobras and La Línea [a customs corruption ring] scandals are testament to these trends in the two biggest regional decliners: Brazil and Guatemala. The challenge now is to tackle the underlying causes and reduce impunity for corruption.”