Ahmadinejad Could Face Charges for Corruption

(Reuters) – In late January, a former deputy of conservative ex-president Mahmoud Ahmadinejad who has been jailed for embezzlement raised explosive allegations which have now spurred speculation Ahmadinejad himself could face charges.
They were made in a private letter that was published by the Iranian Labour News Agency, giving a rare insight into splits at the top at a time when the former president, a fierce critic of the West, was showing signs of preparing a political comeback.
Ahmadinejad has denied the allegations, which linked him to the case, and his supporters say they are politically motivated. Senior officials have since expressed concern public splits within Iran’s factionalized elite might undermine negotiations with major world powers on its disputed nuclear program.
In a speech in late March for example, Iran’s Supreme Leader Ayatollah Ali Khamenei urged any critics of the government leading the negotiations, led by Ahmadinejad’s successor, centrist Hassan Rouhani, not to use insults.
Against this background, pursuing the allegations against Ahmadinejad would be sensitive; some analysts say too sensitive. Others say statements by some MPs, officials and media close to the authorities suggest the judiciary is inching towards a case.
Ahmadinejad’s former vice president Mohammed Reza Rahimi became the most senior official to be convicted of graft since the 1979 Islamic Revolution when he was sentenced to five years in jail and fined 38.5 billion rials (about $1.3 million).
State media said he had taken bribes in connection with corruption at the state Iran Insurance Company.
Rahimi wrote to Ahmadinejad complaining he should have supported him over the case and alleging that he, Rahimi, had helped the government pay 12 billion rials ($400,000) in bribes to about 170 conservative parliamentary candidates in 2008.
“Were you not informed that this is what the whole story was about?” Rahimi wrote.
He did not spell out what the candidates were supposed to have done for the alleged payments, but implied the MPs would be expected to cooperate with Ahmadinejad’s government. Rahimi became vice president from 2009-1013.
    Before the letter was published, Ahmadinejad had denied in a statement that the corruption charges against Rahimi were linked to his government, noting they related to a time before Rahimi became his deputy.
Days afterwards, he launched a new website in a hint that he could mount a comeback in parliamentary elections next year.
Last year, a billionaire tycoon with alleged links to aides to Ahmadinejad was hanged for involvement in a $2.7 billion fraud and money-laundering affair involving 14 state-owned and private banks. All four defendants denied wrongdoing.
It came to light as Iranians were being hard hit by the sanctions and severely damaged the reputation of Ahmadinejad and his entourage at the end of his second term.
Ahmadinejad’s supporters accused his political enemies of using that case to ensure the outgoing president’s allies had no chance in the 2013 presidential election.
That vote was won by Rouhani by a landslide on pledges to relieve the international isolation and repair economic damage from sanctions over the disputed nuclear program as well as what Rouhani said was financial mismanagement under Ahmadinejad.
Rahimi’s letter prompted a group of MPs to write to the heads of the judiciary and parliament urging them to reveal which candidates were alleged to have received bribes.
“This was not clean money. We have to get this money back by any means possible and put it at the disposal of the people,” Kamaluddin Pirmoazen, one of the letter’s authors, told Reuters.
A fiery orator who denied the Holocaust and often condemned the West, Ahmadinejad also clashed with parliament, where he was accused of mismanaging the economy and snubbing Khamenei.
Ahmad Tavakoli, a conservative MP long critical of Ahmadinejad, said charges should be brought against him.
“Any person who breaks the law must be tried. And in my view Ahmadinejad has been a law-breaker,” Tavakoli said in early February, according to the Islamic Republic News Agency (IRNA).
A Facebook and Instagram campaign were started shortly after the letter was published called “Demand for Trial of Mahmoud Ahmadinejad”. The creators of the Facebook page declined an interview request.
A spokesman for Iran’s Guardian Council, a powerful body which can vet parliamentary candidates and has legislative and judicial authority, said it could step in to investigate the allegations in Rahimi’s letter if the parliament began investigating the matter or if the judiciary opened a new file.
Asked about the wider implications of Rahimi’s sentencing, judiciary spokesman Gholamhossein Mohseni-Ejei told a news conference: “The judiciary has had and continues to have the serious intent to confront all people who are economically corrupt at whatever level or whatever position they are in.”
Attempts to reach former senior Ahmadinejad advisers by phone for further comment were unsuccessful.
Ahmadinejad already faces a handful of charges from his time in office which, according to local media, are mostly linked to government procedures that were not followed properly. He was summoned to court in late 2013 but did not show up.
Asked about Ahmadinejad’s legal file, judiciary spokesman Mohseni-Ejei said this month: “At the moment this matter is being followed up and the duration will depend on the prosecutor.”
Some doubt Ahmadinejad will be prosecuted regardless of the validity of the charges as this could tarnish Khamenei, whose support was key to Ahmadinejad’s grip on power, especially after his 2009 re-election when popular unrest over alleged vote fraud were crushed by security forces.
“If they act against Ahmadinejad not only are there more documents he might reveal, as he’s often threatened to do, but eventually people will start to ask, ‘Who was behind him?’” said Abbas Milani, director of the Iranian Studies program at Stanford University.
“And we all know the answer to that question – it’s Ayatollah Khamenei and the IRGC’s top command,” he said, referring to Iran’s most powerful military force, the Revolutionary Guards. “I think it (prosecution of Ahmadinejad) is a political liability they just can’t afford at this time.”
Ahmadinejad was asked by local media in February about the corruption allegations. The Iranian Students’ News Agency quoted him as saying: “There are answers but now is not the time.”

UN investigation finds corruption in Afghan police oversight division

(Reuters) – A United Nations sponsored report has found that Afghanistan government officials who headed oversight of the police suppressed complaints of corruption against the force and has recommended their dismissal, according to a copy of the document seen by Reuters.

The United Nations Development Programme is also investigating why its own division, the Law and Order Trust Fund of Afghanistan (LOTFA), which commissioned the report, did not show it to senior U.N. officials after it was submitted in January.

It is the latest in a series of questions about LOTFA, which has received around $3.6 billion from international donors since 2002 to pay Afghan police force salaries and other expenses.

LOTFA commissioned the report late last year to find out why the main system for filing complaints about police misconduct, a 24-hour phone line, rarely led to prosecutions.

It found that only nine out of more than 2,000 complaints referred to the inspector general’s office in the Afghan interior ministry over a year were forwarded for prosecution. It concluded the chief of the agency, Hakim Nejrabi, and his senior staff were ignoring or blocking complaints.

“Systemic corruption is endemic to the organisation because the leadership has not only tolerated corruption, they have facilitated it and, in many instances, participated in it,” the report said, recommending the removal of Nejrabi and all of his senior staff.

Nejrabi denied all allegations made in the report, calling the findings “a political character assassination”. He said more than 50 interior ministry officials had been investigated since he took office 13 months ago, and 22 cases had been forwarded for prosecution.

The UNDP said it learned of the report only when Reuters asked about it earlier this month and is now conducting a review of internal processes “to improve efficiency, oversight and accountability to prevent this from happening again.”

It also said a copy was then immediately provided to Afghanistan’s anti-corruption body, the Independent Joint Monitoring and Evaluation Committee (MEC). Officials at the committee confirmed they had received the report.

UNDP did not say why submission of the report was delayed and LOTFA’s manager, Basil Massey, declined to comment.

Last year, the U.S. special inspector general for Afghanistan reconstruction criticised LOTFA for allegedly losing track of millions of dollars in payments to ghost employees. In 2012, it was investigated for procurement fraud.

Yama Torabi, a member of the MEC, said the report “shows that for years they’ve done nothing to solve the problem – not LOTFA, the Afghan government, or previous ministers.”

Corruption ‘impoverishes and kills millions’

An estimated $1tn (£600bn) a year is being taken out of poor countries and millions of lives are lost because of corruption, according to campaigners.

A report by the anti-poverty organisation One says much of the progress made over the past two decades in tackling extreme poverty has been put at risk by corruption and crime.

Corrupt activities include the use of phantom firms and money laundering.

The report blames corruption for 3.6 million deaths every year.

If action were taken to end secrecy that allows corruption to thrive – and if the recovered revenues were invested in health – the group calculates that many deaths could be prevented in low-income countries.

Corruption is overshadowing natural disasters and disease as the scourge of poor countries, the report says

One describes its findings as a “trillion dollar scandal”.

“Corruption inhibits private investment, reduces economic growth, increases the cost of doing business and can lead to political instability,” the report says.

“But in developing countries, corruption is a killer. When governments are deprived of their own resources to invest in health care, food security or essential infrastructure, it costs lives and the biggest toll is on children.”

The report says that if corruption was eradicated in sub-Saharan Africa:

  • Education      would be provided to an additional 10 million children per year
  • Money      would be available to pay for an additional 500,000 primary school      teachers
  • Antiretroviral      drugs for more than 11 million people with HIV/Aids would be provided

One is urging G-20 leaders meeting in Australia in November to take various measures to tackle the problem including making information public about who owns companies and trusts to prevent them being used to launder money and conceal the identity of criminals.

It is advocating the introduction of mandatory reporting laws for the oil, gas and mining sectors so that countries’ natural resources “are not effectively stolen from the people living above them”.

It is recommending action against tax evaders “so that developing countries have the information they need to collect the taxes they are due” and more open government so that people can hold authorities accountable for the delivery of essential services.


Widespread Corruption Most Serious Threat to Rebuilding Afghanistan – IG

Pervasive corruption deprives Afghanistan of funds sorely needed to rebuild the country after a decade of war and poses the most serious threat to the success of a massive reconstruction effort, a U.S. inspector said on Tuesday.

The problem is set to worsen as U.S. troops withdraw and security deteriorates, leaving civilians able to travel safely and check on projects in only about 20 percent of the country by December 2014, and even that may be optimistic, Special Inspector General for Afghanistan Reconstruction John Sopko told a congressional committee.

In his frank assessment of the $103.17 billion that the United States has poured into Afghanistan over the past 13 years building modern hospitals, power plants, roads, police stations, schools and more, Sopko painted a picture of ambitious investments thrown into a country on such a massive scale that it has overwhelmed its capacity to cope.

Moreover, U.S. policies bear part of the blame for the crippling levels of graft that undermine the efficacy of programmes. Citing a recent U.S. Joint Staff report, Sopko said that the initial U.S. strategy in Afghanistan fostered a climate conducive to corruption, which remains deeply embedded within the structure of its government.

The rot began by cutting deals with warlords mostly from the Northern Alliance who worked alongside the U.S. as a proxy force to drive the Taliban and al-Qaeda from power in 2001.

“These warlords often used U.S. support to operate with impunity to increase their political power and improve their economic positions,” Sopko said. “Afghan political leaders have built allegiances by cutting political deals that put powerful figures in key government positions and allowed them to behave with impunity.”

Some of these figures have used their government positions to expand their patronage networks, which in some cases have morphed into criminal networks involved in extrajudicial land seizures, extortion, drug trafficking and money laundering, he said.


Worsening the situation is that the U.S. has no clearly defined strategy for dealing with the corruption it has helped to embed within the Afghan government, he said.

“U.S. anti-corruption activities in Afghanistan are not guided by a comprehensive U.S. strategy or related guidance that defines clear goals and objectives for U.S. efforts to strengthen the Afghan government’s capability to combat corruption and increase accountability,” Sopko said in testimony prepared for the U.S. House Foreign Affairs subcommittee.

Corruption directly undermines key assistance programmes run by the U.S. Agency for International Development and U.S. State Department, he said.

For example, U.S. government officials who are advising and mentoring border police and customs officers to develop the capacity of the government to collect customs revenues report that criminal networks, used to smuggling commodities freely, are kidnapping and intimidating Afghan employees if they cooperate with the training on how to properly collect customs duties.

Kathleen Campbell, USAID’s deputy assistant on Afghanistan and Pakistan affairs, however said in in a statement that the U.S. has built a foundation for success in Afghanistan.  The size of its investment, at 3 percent of the total cost of the war, and its “robust oversight have contributed to Afghanistan experiencing greater improvement in human development, a measure of health, education and standard of living than any other country in the world since 2000,” she said.

But Sopko in testifying before the subcommittee questioned the sustainability of those programmes, especially given widespread corruption and a lack of performance metrics to measure programmes.

According to a World Bank assessment, Afghanistan in 2012 collected only 60.1 percent of the revenues needed to cover its costs, down from 66.5 percent a year earlier.  The budget gap is expected to continue widening as more projects are handed over to the Afghan government to run, leaving it increasingly dependent on foreign aid and less able to collect revenues.

In fact, the U.S. reconstruction effort is so huge that it has “placed unmanageable financial and operational burden on the Afghan government,” Sopko said.

Each new development project increases the operational and maintenance costs and contributes to Afghanistan’s growing budgetary gap, capturing it in a cycle of failure.

“Each day, it becomes clearer that the reconstruction effort has provided too much, too fast for the Afghans to absorb,” he said.

WASHINGTON (Thomson Reuters Foundation)

Iranian Billionaire Executed for Corruption

TEHRAN, Iran (AP) — A billionaire businessman at the heart of a $2.6 billion state bank scam, the largest fraud case since the country’s 1979 Islamic Revolution, was executed Saturday, state television reported.
Authorities put Mahafarid Amir Khosravi, also known as Amir Mansour Aria, to death at Evin prison, just north of the capital, Tehran, the station reported. The report said the execution came after Iran’s Supreme Court upheld his death sentence.
Khosravi’s lawyer, Gholam Ali Riahi, was quoted by news website khabaronline.ir as saying that his client was put to death without any notice.
“I had not been informed about execution of my client,” Riahi said. “All the assets of my client are at the disposal of the prosecutor’s office.”
State officials did not immediately comment on Riahi’s claim.
The fraud involved using forged documents to get credit at one of Iran’s top financial institutions, Bank Saderat, to purchase assets including state-owned companies like major steel producer Khuzestan Steel Co.
Khosravi’s business empire included more than 35 companies from mineral water production to a football club and meat imports from Brazil. According to Iranian media reports, the bank fraud began in 2007.
A total of 39 defendants were convicted in the case. Four received death sentences, two got life sentences and the rest received sentences of up to 25 years in prison.
The trials raised questions about corruption at senior levels in Iran’s tightly controlled economy during the administration of former President Mahmoud Ahmadinejad.
Mahmoud Reza Khavari, a former head of Bank Melli, another major Iranian bank, escaped to Canada in 2011 after he resigned over the case. He faces charges over the case in Iran and remains on the Islamic Republic’s wanted list. Khavari previously admitted that his bank partially was involved in the fraud, but has maintained his innocence.

China Corruption Purge Claims Top General

China has court-martialed a senior former army officer in the biggest corruption scandal to engulf the People’s Liberation Army, a move that could foreshadow the unprecedented criminal prosecutions of other leading military and Communist Party officials.

Gu Junshan was formally charged with bribery, embezzlement, misuse of state funds and abuse of power, official news agency Xinhua announced on Monday, two years after he was quietly removed as the deputy chief of the PLA’s general logistics department.

In that role, General Gu was able to amass extensive influence over the procurement of housing, infrastructure and supply contracts for China’s 2.3 million-strong armed forces, the world’s largest.

“For corruption to appear in an army is not scary in itself,” said Liu Mingfu, a senior colonel at the PLA’s National Defence University. “What will be scary is if the fight against corruption is not deep, thorough and resolute.”

The prosecution of General Gu runs parallel to a sweeping anti-graft campaign within the Communist Party, with President Xi Jinping vowing to target corrupt officials at all levels – ranging from powerful “tigers” to lowly “flies”.

Mr Xi is directly challenging military elders by aiming to dismantle entrenched patronage networks which, people with knowledge of the investigation say, have threatened to limit the operational capabilities of one of the world’s best-funded but most secretive armies.

“One of the reasons the PLA has extensive corruption is because of its lack of transparency,” said Zhang Ming, a political science professor at Renmin University. “You have no choice to fight corruption, but fighting corruption doesn’t automatically fix the problems.”

The value and range of assets allegedly involved in General Gu’s case are said to be staggering, with reports of a vast family real estate portfolio, gold bullion and a secret basement full of expensive liquor, artwork and luxury goods ”just the tip of the iceberg”, according to a source with ties to senior military figures.

Investigators raided a storage chamber General Gu kept in his home village in Henan province, seizing four truckloads of items, including 20 crates of liquor and a pure gold statue of  Mao Zedong, Chinese magazine Caixin reported in January.

“Everything has been very clear a long time ago,” the source said, adding that because the case would be heard in front of a military court, it was not clear the extent of General Gu’s alleged corruption would be aired in public. “I don’t think it will be as transparent as the Bo Xilai trial.”

Close watchers of elite Chinese politics consider the progress of General Gu’s case as a key signal for the potential official prosecution of another “tiger”, former security chief and Politburo Standing Committee member Zhou Yongkang.

Reuters reported last week that Chinese authorities have seized assets worth at least 90 billion yuan ($15.6 billion) from family members and associates of Mr Zhou.

Previously considered effectively immune because of old age and reports of poor health, the retired vice-chairman of the Central Military Commission, Xu Caihou, has reportedly been held under virtual house arrest.

Any formal move against General Xu would make him the most senior military leader ever targeted for corruption.

“A person of Gu’s stature being investigated of course will implicate other [senior] people,” Professor Zhang said.

A World Corruption Police – NY Times OP-ED

Whenever government representatives from around the world meet, they’re often able to make progress in many areas of common interest: combating climate change, poverty, the drug trade, Islamic extremism, human trafficking and modern-day slavery, even cybercrime — the list is long. What these officials often fail to dwell upon is corruption. All of their nations suffer from it; they agree it’s a cancer of our age and should be stamped out. But they do precious little about it.

This is bizarre, when you consider the scale of the problem. What is corruption? The Oxford English Dictionary defines it as “dishonest or fraudulent conduct by those in power.” And “by those in power” I would include those working for corporations and institutions that are part of the ruling elite.

According to the Tax Justice Network, an independent group promoting efforts to curb tax avoidance, crooked business people, working with corrupt officials, have embezzled $30 trillion over the last 15 years — or half of the world’s annual gross domestic product.

From China, nearly $4 trillion is thought to have disappeared between 2000 and 2011, much of it the profits of corruption, channeled into secret offshore financial havens. From Russia, the figure is close to $1 trillion. In the European Union, the total is put at $1.2 trillion.

In the West, the best-known figures linked to high-level fraud include Bernie Madoff, Allen Stanford, Jérôme Kerviel of Société Générale, Kweku Adoboli of UBS. And everyone knows of the subprime debt scandal and the criminal rigging of the Libor rate. In my country, Russia, there have been similar scams: the theft of $5 billion from Bank of Moscow; $4 billion from BTA Bank and AMT Bank; $4 billion from Rosukrenergo; $3 billion from Globex and Sviaz Bank; $2 billion from Russian Agricultural Bank; $1 billion from Rosagroleasing; and $1 billion from VEFK Bank.

Many of the perpetrators of these scams have been able to move abroad, where they draw upon the expertise of what I term the “financial services oligarchy” of international banks, law firms and accountants to ensure they can continue to live off the proceeds of their crimes. Some, like Andrei Borodin, former chief executive of Bank of Moscow, have been granted political asylum (Mr. Borodin, in Britain).

Sergei Pugachev, owner of the bankrupt Mezhprombank; Viktor Khrapunov, former mayor of Almaty, Kazakhstan; and the wife of Yuri Luzhkov, former mayor of Moscow, have all settled freely in the European Union or Switzerland, where they enjoy super-rich lifestyles. They contend that in their home countries they would be persecuted for their political views — though not much was known about their politics until they moved overseas; even if they were involved in politics at all, they tended to align themselves with the ruling powers.

Various nations have launched initiatives to tackle corruption. But these moves ignore the international, cross-border nature of the problem: Recovering stolen assets inevitably involves some degree of cooperation with another jurisdiction. But countering this is an entire industry devoted to helping people hide their wealth overseas, far from the prying eyes of the authorities. If governments want to have any chance of recovering what has been lost, they must join together to create an international anticorruption force, along the lines of Interpol, to defeat these financial oligarchs.

The new organization should have wide powers. It would not, however, be expensive to run (my estimate is about $70 million a year). Its remit would be to raise awareness about corruption; explain why it matters; and cross national borders to seize suspects and assets.

To lead the force, I would appoint a person of global credibility and stature. (Former Prime Minister Gordon Brown would be an excellent choice.) The leader’s mandate would be straightforward: to tackle corruption in the hopes that those planning to deceive their countrymen, to purloin valuable funds, would desist.

Without such a body, it is difficult to see how the battle against corruption can be won. Ranged against national police forces and investigators is an entire corps of professional advisory firms well-versed in assisting those who want to put their wealth beyond the authorities’ reach. Aiding and abetting those who have committed fraud are offshore tax havens that structure their laws to help those seeking total secrecy and security. This oligarchy can be broken only if governments fight like with like — by creating a well-equipped sleuthing agency that is not afraid of anybody or aligned with any particular nation.

Unlike the United Nations and European Bank for Reconstruction and Development, an international anticorruption body would move fast and be flexible. At present, if someone steals $1 billion and heads for an offshore haven, it is practically impossible to take legal action against him or her. Recovery of the funds is even more unlikely; it would take years and cost a fortune.

We have to take the fight to the criminals and their well-paid, well-connected helpers. When a major corruption scandal erupts, there are predictable howls of rage. But ask yourself: How many of the perpetrators are ever caught, how much of the profits are ever recovered?

We’ve seen a slew of these cases in recent years. As transferring money and communications get quicker and easier, there’s no doubt such fraud is on the increase. The sums of money involved are also growing just as fast.

We need to put a stop to this. Governments around the world are struggling to raise funds to counter the global downturn, but they can’t simply keep increasing taxes on the middle- and higher-income brackets. Rather, they must pursue cash anywhere they can — and one source has to be the proceeds of corruption. (After all, in many cases, it’s government money that was spirited away in the first place.)

I propose a relatively cheap, effective solution to one of the world’s most pressing issues: an international body to police corruption. And we must have it now, not at some date far into the future. It’s our money — and we want it back.

Alexander Lebedev, a businessman and former senior officer in the K.G.B., is an owner of the Moscow newspaper Novaya Gazeta and publisher of The London Evening Standard and The Independent.


Iraq Violence Doubles in 2013

Although political violence has been a fact of life for Iraqis since the US-led invasion that toppled Saddam Hussein in 2003, it had declined substantially since 2008. But the death rate for civilians more than doubled this year, raising the troubling prospect of Iraq possibly slipping once more into outright chaos.
How bad is it? This year has been by far the deadliest for civilians since at least 2008, with well over 7,000 killed in roadside bombings and attacks on markets, homes, and mosques.
When the US and other foreign militaries left the country at the end of 2011, there were warnings that violence could spike again. That didn’t happen immediately, as United Nation’s data shows, but Iraq is once more one of the two or three hottest wars in the world.
These are the totals of civilians killed in Iraq since 2008, based on data compiled by the United Nations Assistance Mission to Iraq:
  • 2008: 6,787
  • 2009: 3,056
  • 2010: 2,953
  • 2011: 2,771
  • 2012: 3,238
  • 2013: 7,157

Anti-Corruption Department to be Established in Kremlin

An anti-corruption department will be established in the Russian president’s administration by the end of the year, the Izvestia newspaper reported on Thursday citing a source close to the Kremlin.

The order to establish the department is being prepared and could be signed by the president presumably on December 1, the newspaper reported citing the source. According to the information of the daily, the department will be headed by the presidential aide Yevgeny Shkolov.

“The anti-corruption functions are not very distinct between a number of departments in the Kremlin. The control department and state legal department dealt with it partially and the interior policy department dealt with it to some extent. It has been decided now to establish a specialized department,” the newspaper quoted the source as saying.

On April 2 Russian President Vladimir Putin signed two decrees tightening anti-corruption measures, the newspaper reported. Back then Shkolov was given functions of a special commissioner of the Kremlin administration to check income and expense declarations of state officials – Presidential Administration Head Sergei Ivanov signed a relevant order, Izvestia reported.