The trial of disgraced former FTX CEO Sam Bankman-Fried started today in New York City. SBF is accused of fraud and conspiracy to commit fraud. According to a report by CNN, prosecutors claim that SBF stole billions of dollars in customer deposits at FTX to cover enormous losses at Alameda Research, a crypto-driven hedge fund run by his then-girlfriend Caroline Ellison, who pleaded guilty to similar offenses in December of last year. Before its infamous collapse, FTX had developed a well-known reputation by featuring celebrity endorsers such as Tom Brady in Super Bowl commercials. According to an article in Politico, SBF’s trial could have significant ramifications on future legislation regarding the regulation of the industry. Michael Lewis will be smiling somewhere as his book on SBF comes out today; nothing beats a bit of free publicity.
Category: Corruption
Head of China Life Insurance Sentenced to Death on Corruption Charges.
The former Chairman of China’s most prominent life insurance firm Wang Bin today was sentenced to death with a two year reprieve after being found guilty on corruption charges. This is the latest conviction of a well-known figure in China’s financial services industry, as President Xi clamps down on corruption. According to a report from CNN, Mr. Wang had taken $44 million in bribes and had stashed $7 million away in a bank account in Hong Kong. It is unclear who could have bribed Mr. Wang; it could be anyone within the Chinese business community or someone from abroad. According to a report in the Independent, when Wang was arrested in 2022, China’s anti-corruption body stated he failed to institute policies within his company that would mitigate financial risks. Likely, this will not be the last time a prominent figure in the Chinese financial industry will be charged with corruption.
Ukraine’s ongoing crusade against Corruption.
This week, the Ukrainian government under President Zelensky has been making further efforts to eradicate societal Corruption in Ukraine. Several outlets, including Reuters, have reported that a delegation of Ukrainian officials has met with Jake Sullivan, the U.S. national security advisor, about improving anti-corruption efforts. Along with that is a report from the BBC that Ihor Kolomoisky, a well-known Ukrainian oligarch, is to be held in custody for two months on fraud and money laundering charges. Arguably, the most critical corruption story to come out of Ukraine is that President Zelensky has fired his defense minister, Oleskii Reznikov, because of allegations of Corruption. A report by the Washington Post suggests that Rustem Umerov, the former head of the State Property Fund of Ukraine, will take over. While there is a long way to go, it is clear that the Ukrainian government is making strides in stamping out governmental malfeasance.
Bongo Deposed in Gabon.
This week, the president of Gabon, Ali Bongo, was deposed in a military-led coup. According to an article from the BBC, the military stepped in after Bongo had been announced as the recent election winner. Bongo had been in power for nine years after taking over from his father, who had been in power since the 1960s. Gabon has had a long history of corruption primarily due to its numerous natural resources, such as oil, being exploited by the Bongo family. According to the Washington Post, Gabon is the seventh country in Africa that has experienced a military coup in the last two years. Another report by the BBC suggests that Brice Nguema is an unlikely coup leader because he is reported to have close links to the Bongos. I fear Gabon will go the way of Niger and Mali, where the military coups have not led to meaningful change but more political instability.
Guatemala Plagued by Continuing Instability.
Last week, I wrote a piece on Bernardo Arevalo, the newly elected president of Guatemala, and his Anti-Corruption credentials. Since then, there have been several worrying developments about how effectively Guatemala can fight corruption and the future of its democracy. On Monday, Guatemalan prosecutors arrested Claudia Gonzalez, a representative of Guatemala’s anti-corruption commission, better known as CICIG. According to a report by the AP, Gonzalez was arrested on charges of abuse of authority by a public servant, even though, at the time, she was not officially a government member. According to another report by Yahoo, at the time of her arrest, Gonzalez had been acting as a representative for the numerous other Anti-Corruption officials arrested by the Guatemalan government.
On top of this, despite the official certification of Arevalo as the new president, there remain doubts about his ability to take office. According to a report by Al-Jazeera, the outgoing president of Guatemala, Alejandro Giammattei, has assured Arevalo and his campaign that there will be a smooth transition of power. Despite this, Guatemala’s electoral registry has suspended Arevalo’s party Movimento Semilla (the seed Movement). There are still fears that Guatemala’s political establishment, which is notoriously corrupt, will try and find some way to impede Arevalo’s ascension to the presidency. One has to hope that democracy will prevail and that Arevalo can take power.
Anti-Corruption Crusader Wins Guatemala Election.
On Sunday, in the Guatemalan presidential election, a candidate named Bernardo Arevalo ran on an anti-corruption platform. According to an article in the New York Times, Arevalo, the leader of the Movimento Semilla (Seed Movement), is a sociologist and won 58 percent of the vote. In comparison, his opponent Sandra Torres received 37 percent. Despite being a democracy, Guatemala has been plagued by political scandals and societal corruption for years. According to another piece in The Times 2019, Guatemala had a pioneering anti-corruption body backed by the UN called the International Commission against Impunity in Guatemala, which was shut down due to the efforts of high-ranking officials such as businessmen and politicians who were charged with corruption, but still had enough institutional power prevent prosecutors and other officials favorable to anti-corruption steps from staying in office. Despite the current positivity in Guatemala, an article from the AP suggests that corrupt judges and government officials could try and stop the certification, thus throwing the country back into turmoil. It would be a massive boost for Latin America and the USA if Arevalo could take power and stop the endemic corruption that plagues Latin America.
Ecuador Anti-Corruption Presidential Candidate Assassinated.
Last week Ecuadorian presidential candidate Fernando Villavicencio was assassinated while leaving a campaign event in Quito. According to a report by Reuters, Villavicencio was formerly an investigative journalist who focused on exposing corruption and stated that he was not afraid of being targeted by criminal gangs. Violence against politicians in Ecuador is not new. According to a report by the AP from July 23rd, the mayor of Manta, Ecuador’s third largest city, Agustin Intriago, was assassinated by what authorities believe to be organized crime elements.
According to an article by El Pais, both Mexican and Colombian drug cartels have made inroads into Ecuadorian society and have been trafficking drugs, as well as conducting other criminal enterprises. The killing of Villavicencio is concerning for two reasons. First, it hindered ongoing anti-corruption efforts, scaring people into silence and emboldening transnational criminal organizations. Secondly, it adds to the overall feeling of political and social instability in Ecuador.
Ukrainian Military Officers Fired Over Bribery Allegations.
Last Week President Zelenskyy fired officials who led Ukraine’s military recruitment drive over bribery allegations. Under Zelenskyy’s leadership, Ukraine has started to crack down on corruption, partially to improve its prospects of joining the EU and NATO. According to a BBC article, Zelenskyy announced that 30 people would face bribery allegations, including all the regional heads of the military conscription effort. The charges allege that these officials took bribes in cash and cryptocurrency and aided non-disabled men to leave the country. Current Ukrainian law states that all men over 18 able to fight up to 60 can be conscripted. It is admirable to see Zelenskyy clamp down on corruption after years of unchecked greed by other Ukrainian leaders.
SBF in Prison After Allegations of Witness Tampering.
On Friday, Sam Bankman Fried, the disgraced former CEO of FTX, had his bail revoked by a federal Judge in New York. Bankman-Fried had been out on bail living at his parent’s house in Palo Alto, CA, under House arrest. According to an article in The New York Times, prosecutors allege that Bankman-Fried has tried to tamper with witnesses on two occasions and gave documents related to his case to media members. According to a report by NPR, SBF leaked private diary entries of his former girlfriend, Caroline Ellison, to the New York Times and participated in phone calls with the author Michael Lewis. The prosecution in SBF’s case felt that these actions could be an attempt to corrupt Ellison’s testimony at the upcoming trial. If this is true, SBF has some serious explaining to the judge.
A follow-up on Navalny.
Last week Alexei Navalny was sentenced to 19 years in a Russian prison camp on extremism charges. According to ABC, Navalny is already in prison on other charges that are politically driven. These charges are related to Navalny’s efforts to expose endemic corruption in the Russian state. According to VOAnews, Russian prosecutors asked for a 20-year sentence. It is abundantly clear that Navalny will never get out of prison and that the Putin regime doesn’t want him to give any opportunities to fuel protests that could bring down Putin.
Crispin Corruption Report 