Yesterday, the European Union announced new measures to combat Anti-Corruption. This comes after a recent scandal involving allegations of influence peddling between members of the European Parliament and Qatari government officials. According to a report in The Guardian, the EU executive body plans to criminalize abuse of office, illicit enrichment, and obstruction of justice in cases of misconduct. One of the primary aims of this proposal would be to make it easier for police forces to work together in solving cases across the EU involving transnational criminal groups. This is just a proposal, and despite its importance, it may never come to fruition due to internal European politics.
Category: Corruption
Ex-Peruvian President Toledo deported from the U.S. to Face Corruption Charges.
Recently, the former Peruvian president Alejandro Toledo, who served from 2001 to 2006, arrived back in Peru after exhausting all legal avenues in the U.S. to avoid extradition. Peru is a country with a recent history of corrupt presidents; there have been no less than four former presidents that have faced serious allegations of misconduct. According to The Guardian, Toledo allegedly accepted $35 million from the notorious Brazilian construction company Odebrecht to win a construction contract to build a highway connecting Brazil and Peru. Odebrecht was involved in a massive corruption scandal in Brazil called Operation Car Wash that involved many Brazilian politicians and public figures taking bribes. Toledo will likely join Alberto Fujimori, Pablo Kuczynski, and Pedro Castillo in jail on corruption charges.
UK Government Plan to Enhance Their Transnational Crime Laws.
Recently, the UK Government announced a plan to strengthen its laws regarding transnational crime. A primary focus of this plan is to stop the flow of illicit money entering the country. The government’s press release states it will commit £400 million to combating money laundering worldwide. Despite this supposed rosy outlook, a report by The Guardian suggests that the level of commitment, both in terms of money and personnel, is not enough. Despite the language in the government report, the Guardian notes there are concerns by both politicians and think tanks that not enough is being done to stop the flow of Russian money into the UK. It strikes me that there will need to be more investment into this issue if the tap of dirty money is ever to be turned off.
Joe Tacopina: Trump’s Lawyer and Italian Football Chairman.
One of the most fascinating elements of the NYC Trump Indictment is the naming of his lawyer Joe Tacopina. Tacopina is Italian-American who was born in Brooklyn. According to an article in New York magazine, he has represented many famous clients, including Alex Rodriguez, the rapper Meek Mill, and former NYPD commissioner Bernie Kerik. He has developed a reputation as being outspoken in the media to defend his clients. Interestingly, he has developed a strong connection to Italian football in recent years. According to an article in Forbes, he first dabbled in the sport in 2011 by investing in AS Roma. After four years in Rome, he became the chairman of the Italian club Venezia. Finally, in 2021, he became the chairman of second division team SPAL, thus continuing his journey through the ranks of Italian football. It is unclear what the future will hold for him, but it has been said that many who have represented Trump in court haven’t always been paid for services rendered. I have long been interested in the confluence of sport and politics, but this is a new one on me.
Truth Social: Where Did the Money Come From?
Last week reports surfaced that federal prosecutors were looking into the finances of Truth Social, the former president Donald Trump’s social media website set up after he was banned from Twitter and Facebook. According to an article by The Guardian, questions are being raised about the source of an $8 million loan made to Trump media by Paxum bank and ES Family Trust. Paxum is owned by Anton Postolnikov, a close relation to Aleksandr Smirnov, a long-time ally of Putin, and has a reputation for providing funding to the pornography industry. This bank appears to do business with some dodgy characters. It also seems that other members of trump world, such as the president’s son Donald Trump Jr and long-time trump allies Kash Patel and Devin Nunes, may know where the money from the loan came from.
A follow-up article in The Guardian states that high-ranking executives within Trump Media are increasingly worried that they could face legal action if loans contained dirty money. One executive even suggested returning the money to avoid any potential legal proceedings. However, this was not done as the money was desperately needed to keep the company solvent. Also, according to a report from Business Insider, Truth Social is laying off employees, most likely due to cash flow issues. It is still unclear if Trump Media has committed any crimes, but the saying “Where there is smoke, there is fire” comes to mind.
Mes Que Un Corruption: the Sad Downfall of FC Barcelona.
FC Barcelona is one of the biggest clubs in world football. They are the pride of Catalonia and have supporters worldwide who follow the club religiously. In recent years Barca has assembled a collection of some of the best players in the sport, including Lionel Messi. However, they have also encountered significant financial difficulties due to overspending on the renewal of contracts of players like Messi and wasteful spending on new players. As a result, the club is saddled with €1 billion of debt.
On top of this, there have been reports of Barcelona paying money to a company run by the former vice president of the Referee’s Committee at the Royal Spanish Football Federation (RFEF). According to an article in The Athletic, Barca paid €7.8 million to DASNIL 95, a company run by Jose Maria Enriquez Negreira, to, in his words, “make sure no refereeing decisions were made against them, which is to say, for everything to be neutral.” While this quote may not be a smoking gun yet, it does open up the possibility that Barca was paying bribes to influence the outcome of matches which would call into question the trophies they have won in recent years. According to a BBC article, Real Madrid, Barca’s arch-rival, said they would support Spanish prosecutors in their investigations. There are most likely two reasons Real is interested in this case. First, they wouldn’t mind plunging Barca into another crisis and getting one over on the old enemy. Secondly, Real would be justifiably angry if it appeared that refereeing decisions denied them opportunities to win league titles. Barca has publicly denied any involvement. However, given recent events, I wouldn’t be surprised if Barca faces another crisis of their own making.
Ericsson’s ongoing corruption scandal
The Swedish telecommunication company Ericsson is facing the prospect of being fined again by the U.S. Department of Justice (DOJ). In 2019 Ericsson was fined $1 billion for breaching the Foreign Corrupt Practices Act (FCPA). It is important to note that the DOJ can fine Ericsson, a Swedish company because they are listed on the New York Stock Exchange. Ericsson was found guilty of handing out bribes and operating illicit slush funds to expand their business. According to an article by tech website Fiercewireless.com, Ericsson bribed officials in six countries, Vietnam, China, Djibouti, Indonesia, Kuwait, and Saudi Arabia. On top of that, early last year, there were reports that Ericsson may or may not have paid a bribe to someone affiliated with ISIS to provide telecom equipment to Iraq.
Last week, a Reuters article revealed that Ericsson would be fined another $206 million for not adhering to its original agreement with the DOJ. According to a statement by the DOJ, Ericsson breached the DPA (Deferred Prosecution Agreement) by violating the agreement’s cooperation and disclosure provisions. This means Ericsson was not upfront with the DOJ about their financial activities. As a result, Ericsson must be overseen by an outside compliance professional for a further two years. In many countries where Ericsson operates, corruption is simply part of doing business. However, Ericsson didn’t heed the DOJ’s warning and is now facing a stiffer financial penalty that could have been avoided.
Ukraine Appoints a New Anti-Corruption Czar.
Last week, the Ukrainian government appointed Semen Kryvonos as the new National Anti-Corruption Bureau of Ukraine (NABU) director. According to a Reuters article, Ukrainian prime minister Denys Shmyhal stated that this appointment would satisfy one of the requirements allowing Ukraine to be accepted into the European Union. They must commit to tackling the widespread corruption that has plagued the country for years to gain entry. Despite Kryvonos’ appointment, questions about his suitability for this role have been asked. According to an article published by euromaidanpress.com, the Anti-Corruption Action Center, an activist group in Ukraine, worries that Kryvonos’s previous experience in Ukraine’s urban planning department isn’t sufficient experience for tackling endemic graft. This is a step in the right direction, but Ukraine will have to do more if it is genuinely serious about combating malfeasance and obtaining entry into the EU.
Allegations of Corruption at The Lebanese Central Bank.
Recently, allegations of embezzlement, money laundering, and illicit enrichment have been leveled at the head of the Lebanese central bank Riad Salameh, his brother Raja, and an advisor to Riad. According to an article by the BBC, Salameh and his brother allegedly stole $300 million from Banque Du Liban between 2002 and 2015. Lebanon is a country that, in recent years, has been in the grip of a prolonged recession. According to statistics in the BBC article, 80 percent of the population in Lebanon lives in poverty. A report in Reuters stated that Salameh and his brother allegedly funneled the stolen money through a shell company called Forry Associates based in the British Virgin Islands. It was alleged that a large portion of the funds stolen was used to purchase real estate in European countries.
The Swiss Financial Market Supervisory Authority (FINMA) announced that it was investigating twelve banks that are thought to have aided Salameh in his misdeeds. FINMA recently froze the Swiss assets of Salameh. Several well-known banks, such as HSBC, where Salameh holds an account, could be caught up in the investigation. The situation regarding the charges Salameh faces in Lebanon is more complex. An article by The National News, an English-language newspaper based in the United Arab Emirates, reports that Raja Hamoush, the public prosecutor for Beirut, confirmed that Salameh was being charged with embezzlement, money laundering, and illicit enrichment. In a separate article by The National, another investigation of similar scope was started in 2021 by Lebanese judge Jean Tannous. This appears to be a tangled legal web that will take some time to resolve if it gets sorted out.
The Wagner Group Sanctioned: Putin’s Corrupt Paramilitary
Recently, a mysterious paramilitary group called the Wagner Group, run by a crony of President Putin, has been in the news. Wagner is run by a man named Yevgeny Prigozhin, who, earlier in his life, was in prison after committing a series of robberies in the early 80s. According to an article in The Guardian, Prigozhin excelled in the free-wheeling culture in St Petersburg in the early 1990s. He quickly moved from selling hot dogs to buying up stakes in supermarkets and a liquor store. Eventually, he started managing a restaurant called the Old Customs House, where he made meaningful political connections.
Not long after, Prigozhin started to get involved in military-related issues due to being awarded catering contracts for the army. Shortly afterwards, according to the article in The Guardian, he asked the Russian Ministry of Defense for a parcel of land to train “volunteers” that would have no links to the regular Russian army. The organization quickly became Putin’s go-to option for any off-the-books military operations and gained a bloody reputation in Syria. Since the beginning of the war in Ukraine, Wagner has taken a more prominent role within the Russian military. On January 20th, Wagner was sanctioned by the U.S. government as a transnational criminal organization. According to an article in the AP, Wagner allegedly spends over $100 million monthly on the war in Ukraine. It is not clear from the article where precisely this money comes from, but it is a safe assumption that it comes from the Russian state. If the West is to aid Ukraine, limiting the ability of people or entities wishing to provide material support to the Wagner group will be essential.
Crispin Corruption Report 