Outcomes of the Joint Plenary meeting of the FATF and GAFISUD, Mexico City, 22-24 June 2011

Under the Mexican Presidency, the first joint FATF-GAFISUD Plenary meeting was held in Mexico City on 22-24 June 2011. The meeting was co-chaired by the FATF and GAFISUD Presidents.

FATF Decisions

The FATF took important new steps to protect the international financial system from abuse by:

• Producing two public documents as part of its ongoing work to identify jurisdictions that may pose a risk to the international financial system:
• FATF Public Statement on jurisdictions with strategic anti-money laundering and combating the financing of terrorism (AML/CFT) deficiencies.
• Improving Global AML/CFT Compliance: on-going process - Jurisdictions with strategic AML/CFT deficiencies for which they have developed an action plan with the FATF

• Issuing a statement on the progress made by Argentina in addressing deficiencies identified in its mutual evaluation of October 2010.

• Adopting the mutual evaluation reports of the State of Kuwait and the Sultanate of Oman.

• Publishing a detailed examination of Organised Maritime Piracy and Related Kidnapping for Ransom, Trafficking in Human Beings and Smuggling of Migrants and Money Laundering and Corruption.

• Publishing Guidance on Financial Inclusion.

• Continuing its work on revision of the FATF Recommendations and preparation for the fourth round of mutual evaluations.

AML/CFT improvements in Greece

The FATF welcomes Greece’s significant progress in improving its AML/CFT regime and notes that Greece has met its commitments in its Action Plan regarding the strategic AML/CFT deficiencies that the FATF had identified in February 2010. Greece is therefore no longer subject to monitoring under the FATF’s ongoing global AML/CFT compliance process. Greece will continue to work with the FATF to further strengthen its AML/CFT regime.

Statement on the progress made by Argentina

The FATF heard Argentina´s report on progress made since its first follow-up report presented in February 2011 and recognised the important legislative efforts aimed at improving the criminalisation of money laundering. Based on the initial analysis of the recent legal amendments, the FATF expressed some specific concerns that there are still shortcomings in the criminalisation of money laundering, and further clarification is required. Substantial progress to improve the criminalisation of terrorist financing has not yet taken place, and there are a large number of other AML/CFT deficiencies remaining. The FATF remains seriously concerned about the risks that such deficiencies may pose, as identified in “Improving Global AML/CFT Compliance: on-going process”, and will continue to review progress, in the context of measures that the FATF has agreed to follow under its enhanced follow-up procedures for members insufficiently in compliance with the FATF Recommendations.

The FATF expects more substantial progress by Argentina by October 2011. In particular, the FATF expects Argentina to fully address the FATF´s concerns regarding the criminalisation of money laundering in accordance with international standards, present to the FATF a draft law criminalising terrorist financing in accordance with international standards, and inform about the progress in addressing the other AML/CFT deficiencies. As part of this discussion, the FATF reaffirmed the responsibility of all members to observe a high level of compliance with the FATF Recommendations in an expedited manner.

Mutual Evaluation of the State of Kuwait and the Sultanate of Oman

The FATF discussed and adopted two mutual evaluation reports assessing the compliance of two Gulf Cooperation Council members, the State of Kuwait and the Sultanate of Oman against the international standards for combating money laundering and terrorist financing – the 40+9 Recommendations.

Summaries of these mutual evaluations will soon be available on the FATF website, and the full reports will be released in the coming weeks.

There is currently no evidence of significant money laundering and no major terrorist activity has been recorded in the State of Kuwait. However, Kuwait’s financial sector is growing rapidly and thus may create a potential environment for such activities. The assessment team for this evaluation, composed of staff of the International Monetary Fund (IMF), concluded that the Kuwaiti AML/CFT framework had some deficiencies: terrorist financing is currently not criminalised, the money laundering offence does not cover all serious predicate offences, the Kuwaiti financial intelligence unit (KFIU) has not been established as an independent agency carrying out all core functions set out by the FATF standards, and there are shortcomings in the AML/CFT supervisory framework for some financial institutions and designated non-financial businesses and professions (DNFBPs).

The evaluation of the AML/CFT regime of the Sultanate of Oman was conducted jointly by the FATF and the Middle East and North Africa Financial Action Task Force (MENAFATF). The level of compliance with the FATF Recommendations for the AML/CFT regime of Oman is comparatively high for the region, and the legal framework is generally sound. However, the Omani AML/CFT Law was only recently updated, and executive regulations must still be issued. In addition, the overall effectiveness is generally lacking, parts of the terrorist financing legal framework need to be improved and the number of money laundering cases needs to be significantly raised.

With the adoption of the mutual evaluation reports of the State of Kuwait and the Sultanate of Oman, the FATF concluded its third round of mutual evaluations that started in 2005 and comprised 35 FATF jurisdictions and five members of the Gulf Cooperation Council.

Organised Maritime Piracy and Related Kidnapping for Ransom

In recent years, there has been a growing concern over organised piracy on the high seas and kidnapping for ransom. These activities present a number of a potential risks to the international financial system and challenges to the law enforcement and regulatory framework worldwide. The FATF has completed a study that provides an overview of this problem and analyses the related money flows to the extent that this is possible. In addition to informing the work of other international bodies dealing with this issue, the report, which will be published shortly, will also serve as a useful source of general information on the subject.

Human Being Trafficking and Smuggling of Migrants

Criminals are increasingly turning to the trafficking of human beings and the smuggling of migrants given the high profitability of these illegal activities. The money generated by such activities finds its way into the financial system. The FATF has carried out a study which describes the money flows related to these two distinct problems and attempts to assess their scale. The report, which will be published shortly, provides a series of red-flag indicators for the various destination / origin countries and different sectors to help financial institutions to better detect related suspicious financial activity.

Money Laundering and Corruption

Corruption continues to be a significant public policy issue throughout the world, and for that reason work related to anti-corruption was identified as an objective under the Mexican Presidency. In the larger framework of its work on corruption, the FATF has prepared a study on the links between corruption and money laundering. The report, which will be published shortly, identifies key vulnerabilities within the current AML/CFT framework and discusses some of the obstacles to the recovery of corruption. In addition to providing the basis for further examination of related issues, the report will serve as the catalyst for future FATF work in developing guidance or best practices on AML/CFT measures relevant to combating corruption. The FATF will continue to work on issues related to the use of AML/CFT tools in the fight against corruption.

Guidance on Financial Inclusion

Financial inclusion is an important policy objective for many countries, and the implementation of AML/CFT measures should not become an impediment to financial inclusion. However, an overly cautious approach to AML/CFT safeguards could have the unintended consequence of excluding legitimate business and consumers from the financial system. In collaboration with the World Bank and the Asia Pacific Group on Money Laundering (APG) and in consideration of the objectives set by the Mexican Presidency, the FATF has completed work on guidance that will help in developing AML/CFT measures that are in line with financial inclusion goals without compromising the overall purpose of combating crime. In providing this guidance, the FATF is contributing to the common objective of the G20 in this area as agreed at the Seoul Summit of November 2010. The FATF will continue to strive to ensure that the objectives of financial inclusion and AML/CFT are complementary. The report will be available on the FATF website shortly.

Revision of the FATF Recommendations and Preparation for the Fourth Round of Mutual Evaluations

The FATF continues its work to revise the FATF Recommendations to ensure that they will continue to provide a comprehensive set of means to combat money laundering and terrorist financing, and to build on the experience of the 3rd round of mutual evaluations. The FATF is committed to a constructive engagement with all stakeholders, and is issuing a second public consultation document (pdf, 438 Kb) on a range of issues where changes to the Standards are being considered. This covers important issues such as:

• Clarifying beneficial ownership requirements (Recommendations 5, 33 and 34)
• Ensuring no inconsistency between AML/CFT and data protection / privacy requirements
• Creating an obligation for group wide compliance programmes for financial groups
• Enhancing international cooperation (Recommendation 40)
• Promoting a risk based approach to supervision
• Strengthening measures in relation to politically exposed persons
• Enhancing the transparency of wire transfers
• Implementing targeted financial sanctions in the context of terrorist financing and proliferation financing
• Strengthening and clarifying the requirements for financial intelligence units and law enforcement authorities

The President of the FATF, Mr. Luis Urrutia, thanked the FATF members for their decisive support to achieve the objectives set at the outset of his tenure and wished the new President, Mr. Giancarlo del Bufalo of Italy, and the new Vice-President, M. Bjorn Skogstag AAMO of Norway, Godspeed.

Luis Urrutia Corral

FATF President

Mediawatch: $500,000 diverted by Free Zones CEO?

Mediawatch Research Associates, an organization dedicated to addressing corruption in Ghana and Africa is calling on the Ghanaian Government, the Attorney General, and the Criminal Investigations Department to investigate the alleged disappearance of 500,000 Dollars from the Ghana Free Zones Account between May 2009 and November 2010.

The Group also wants the above institutions to investigate a deposit account at the Standard Bank in South Africa registered in the names of Mr. Kwadwo Twum Boafo, the current CEO of the Ghana Free Zones Board and Pieter Van Huggestien, a South African Businessman currently wanted for corporate fraud and false accounting in South Africa and believed to be hiding in Djakarta, Indonesia, of which 500,000 Dollars which is part of the free zones budget allocation was deposited in three batches between June and September 2010.

The group wants Mr. Kojo Twum Boafo to step aside due to the serious nature of these acts of corruption.

The following is the Group’s full statement:

INVESTIGATE CORRUPTION AND STEALING AT THE GHANA FREE ZONES BOARD

Mediawatch Research Associates is calling on the Ghanaian Government, the Attornery General, Ghana and the Criminal Investigations Office of the Ghana Police Service to investigate the alleged disappearance of 500,000 Dollars from the Ghana Free Zones Account for the year MAY 2009 to NOV 2010. We also call on the above organizations to

A. investigate a deposit account at the Standard Bank in South Africa registered in the Names of Mr. Kwadwo Twum Boafo, the current Chief Executive Officer of the Ghana Free Zones Board and Pieter Van Huggestien, a South African Businessman currently wanted for corporate fraud and false accounting in South Africa and believed to be hiding in Djarkata, Indonesia, of which 500,000 Dollars which is part of the free zones budget allocation was deposited in three batches on the following dates

11th June, 2010- 300,000 Dollars

1st of July, 2010- 100,000 Dollars

15th of September, 2010- 100,000 Dollars

B. Investigate allegations that the Ghana FreeZones Board is being used for money laundering for some South African Nationals who have registered companies in Ghana to evade customs duties for a fee with the monies diverted into the accounts in South Africa.

C. Why Mr. Twum Boafo has opened a Special Deposit Account(SDA) under a Ghana Free Zones Board Investment initiative in Namibia and Angola for 2 other individuals one in the name of Pieter van Huggestien of which regular deposits are to be made starting October 2010. The authorities would need to find out who the other person is

D. Why Kojo Twum Boafo has diverted resources and logistics from the Ghana Free Zones to a company he owns with Mr. Ato Ahwoi at Labone estates

MEDIAWATCH is calling for

1. Kojo Twum Boafo to stand down from his position due to the serious nature of these acts of corruption

2. The Attorney General and EOCO carry out a forensic examination of all electronic mail and financial transactions of Mr. Twum Boafo and other staff since May 2009.

3. The Criminal Investigations Department of the Ghana Police service investigates financial crime and theft of public funds.

We wait for action from President Mills and his government on this breach of public trust.

Mrs. Haleema Asana Kabore

Mediawatch Research Associates

Source: CITIFM

Billions of dollars lost to corruption, $5b repatriated from stolen assets in developing countries – World Bank

The World Bank says billions of dollars are lost through corruption in developing countries each year and almost one-third of these amounts are retrieved.

According to the World Bank, although the exact magnitude of the proceeds of corruption circulating in the global economy is impossible to ascertain, estimates demonstrate the severity and scale of the problem.

“An estimated $20 to $40 billion is lost to developing countries each year through corruption”, the Bank said in a report titled “Barriers to Asset Recovery” which was released Tuesday, June 21, 2011.

But the Bank indicated that the estimated amount “does not capture the societal costs of corruption and the devastating impact of such crimes on victim countries.”

According to the report citing the Stolen Asset Recovery Initiative (StAR) study, only $5 billion in stolen assets has been repatriated over the past 15 years.

The study cites “lack of political will” as a key impediment to the recovery of the proceeds of corruption, the Bank said adding “lack of a comprehensive, sustained, and concerted policy or strategy to identify asset recovery as a priority and to ensure alignment of objectives, tools, and resources to this end.”

The general barriers also include the lack of adherence to and enforcement of anti-money laundering (AML) measures as a means to prevent and detect the proceeds of corruption in the first place, the study indicates.

The World Bank said, theft of public assets from developing countries is an immense problem with a staggering development impact and these thefts divert valuable public resources from addressing the abject poverty and fragile infrastructure often present in these countries.

“Theft of assets by corrupt officials, often at the highest levels of government, weakens confidence in public institutions, damages the private investment climate, and divests needed funding available for core investment in such poverty alleviation measures as public health, education, and infrastructure”, the report said.

In solving this menace, StAR recommended some actions to be taken by international bodies, civil societies etc.

“Because asset recovery is about collective action, we also believe that other critical constituencies—such as the Group of 20, the UNCAC Asset Recovery Working Group, the Financial Action Task Force on Money Laundering, financial institutions, developmental agencies, and civil society—can all take actions that could assist in diminishing the barriers to assets recovery”, the StAR urges.

Also, civil society could use this study to derive a checklist for measuring states’ progress in addressing and overcoming the barriers to asset recovery, said the report.

By Ekow Quandzie

Source: GBN

Govt must seized black money stashed in Swiss banks

CPM politburo member S R Pillai, while demanding confiscation of black money stashed in Swiss bank accounts, has said check on corruption will be the main slogan of anti-price rise agitation to be launched from February 9 to 20 by ten Left and secular parties.


Talking to the newsmen here on Sunday, Pillai said the failure of the UPA-II government at the Centre in unearthing black money stashed in Swiss banks and other tax havens has been exposed by the recent observations of the Supreme Court. He said unaccounted and ill-gotten wealth, amassed through tax evasion, money laundering and other illegal means, kept in Swiss banks should be directly confiscated by the Centre.

While maintaining that common people were suffering due to the relentless increase in the prices of food items, Pillai said onions and vegetables had gone out of the reach of the common people.

"Food inflation remains unbearably high. Yet, the UPA government remains callous to the plight of the people. False assurances are given that the prices will come down within a short period. The ministers in the UPA government are giving contradictory statements regarding price rise and ways to tackle it," he added.

He said since deregulation, petrol prices have been hiked seven times leading to 20 per cent rise in petrol prices and adedd oil companies had increased the price of petrol twice in a month.The hike amounts to a steep Rs 5.50 per litre, he said.

Source: The Times of India

Bangladesh Bank signs deal with 10 states to combat money laundering

Prime Minister Sheikh Hasina Wednesday said the Bangladesh Bank (BB) has signed an agreement with financial intelligence units of 10 countries to share information related to money laundering in a bid to combat such crimes.

The prime minister informed it to the Jatiyo Sangsad (JS) in a tabled question, raised by lawmaker Mohammad Imazuddin Pramanik of Naogaon.

She said her government has taken steps to bring some changes in two acts - Money Laundering Prevention Act 2009 and Anti Terrorism Act 2009 - to make anti-money laundering system more effective.

Sheikh Hasina assured the JS of scrutinising the wealth statements of government officials, if it is necessary to curb corruption in the administration. "Wealth statements of the government officials have already been collected. Their accounts have been preserved under the respective authorities."

She said another measure has been taken to curb official corruption by launching e-tendering system. Initially Local Government Engineering Department, Roads and Highways Department, Water Development Board and Rural Electrification Board have been brought under the system. All offices would be brought under the system by the end of the year.

The government has also taken initiatives to strengthen the Anti-Corruption Commission (ACC) through ensuring its transparency and accountability. All necessary administrative, financial and legal assistance have been extended to the organisation to deal with the corrupt elements as her government is committed to curb corruption.

"With this objective in mind, a bill named Anti-Corruption Commission (amendment) Act 2011 has been placed in the House," she said, claiming that the commission is performing its activities independently.

However, she said the government has no plan to set up a separate ministry to curb corruption.

Source: FE

Corrupt Chinese officials transfer their assets overseas

Corrupt officials and company executives in China transfer their assets overseas through at least eight channels, according to a report released on Monday by the Anti-Money Laundering Monitoring and Analysis Center set up by the People's Bank of China.

Often a combination of legal and illegal channels is used to make cross-border transfers of ill-gotten gains, the report said.

The eight main channels are smuggling cash, underground banking services, trade under current accounts, overseas investment, credit cards, offshore financial centers, direct overseas payments and payments to family members or lovers living overseas.

However, the exact amount of assets transferred overseas, since Chinese officials on corruption charges began to flee the country at the end of the 1980s, remains a mystery, said the report.

The report quotes statistics released by the Chinese Academy of Social Sciences, which estimate that up to 800 billion yuan ($123 billion) has been transferred overseas by fleeing or missing officials and company executives since the mid-1990s.

The cross-border transfer of such assets causes huge losses to the country as the majority cannot be recovered and their whereabouts are hard to find, the report added.

The report also provided details about the destinations for corrupt officials and businesspeople.

People with a higher rank or larger assets tended to flee to Western countries such as the United States, Canada, Australia and the Netherlands.

Those who cannot reach Western countries directly, use Hong Kong or some small countries in Africa, East Europe and Latin America as a stopover.

Those with lower rankings or smaller assets often find safe havens in China's neighboring countries such as Thailand, Myanmar, Malaysia, Mongolia and Russia.

Source: China Daily

Hollywood executives jailed for Thai film festival bribery

Two married Hollywood movie executives have been jailed for six months in Los Angeles for bribing Thai officials so they could run the Bangkok International Film Festival.

Gerald Green, 78, and Patricia Green 55, were sentenced to prison despite a supportive letter to the court from the veteran film star Kirk Douglas.

Mr Douglas said the couple “were extremely honest and fair in all of their dealings with me.”

The Greens were convicted of conspiracy and money laundering after a jury found they had paid a former Thai tourism official $1.8 million (£1.1 million) to secure the film festival rights, and other tourism-related deals, between 2002 and 2007.

The deals were said to have earned them more than $13 million (£8 million.)

Prosecutors said they created shell companies to pay off Juthamas Siriwan, former governor of the Tourism Authority of Thailand.

They then transferred money into bank accounts of Juthamas’ daughter and a friend so they would be awarded business contracts.

Juthamas has denied any wrongdoing and has not been charged in Thailand. She and her daughter have been charged with conspiracy in Los Angeles.

The Greens helped transform the Bangkok Film Festival, attracting stars including Jeremy Irons and director Oliver Stone to Thailand for the event.

Gerald Green’s career in Hollywood spans more than 30 years. He worked with Stone on the Oscar-nominated “Salvador” and was executive producer on the 2006 film “Rescue Dawn” which starred Christian Bale.

Patricia Green produced the 1999 comedy “Diamonds” starring Kirk Douglas and Lauren Bacall.

The Greens were also ordered to serve six months of home detention after their jail sentence and pay $250,000 (£150,000.)

Source: Telegraph

Apple Global Supply Manager Accused of Accepting $1 Million in Kickbacks

A mid-level Apple manager faces twenty-three counts of a federal grand jury indictment alleging that the 37-year-old Paul Shin Devine, a global supply manager, is guilty of wire fraud, money laundering, and kickbacks related to his position at the company. Andrew Ang, of Singapore, faces the same charges as well.

And if that's not bad enough, Apple itself has filed a separate civil suit against Devine, alleging that the Sunnyvale, CA-based (former) employee accepted more than $1 million in bribes and kickbacks from countries including China, South Korea, Taiwan, and Singapore.

According to the indictment, Devine allegedly used his position at Apple to acquire various bits of confidential information about the company. He would turn around and sell this information to more than a half-dozen Apple suppliers—including the aforementioned Ang—and both would receive payments for their efforts. Using the confidential knowledge, said suppliers would be able to better position themselves to bid for and receive Apple contracts.

The San Jose Mercury News reports that the companies in the indictment remained unnamed, but they're said to be involved in supplying materials for Apple's iPods and iPhones.

"Apple is committed to the highest ethical standards in the way we do business," said Apple spokesman Steve Dowling in a statement. "We have zero tolerance for dishonest behavior inside or outside the company."

The somewhat-complicated scheme, reads the indictment, involved a number of U.S. and foreign bank accounts, as well as the falsified company "CPK Engineering," to process the payments. Devine allegedly attempted to conceal the money transfers using code words as to not clue his employer into what was actually transpiring, and would even go so far as to open the foreign bank accounts in his wife's name.

The Internal Revenue Service reports that Devine is currently in the custody of U.S. Marshals, awaiting a 1:30 p.m. court appearance this coming Monday in the U.S. Northern District Court in San Jose.

Source: PC Mag

'Afghan's New Ansari Exchange was laundering Taliban money'

Afghanistan's largest 'hawala' money transfer business, whose Kabul office was shuttered following a raid by an anti-graft task force, was helping to launder profits from the illicit opium trade and moving the cash earned by Taliban through extortion and drug trafficking, a media report said on Thursday.

Citing US and Afghan officials, the Wall Street Journal reported that there were links between the money transfers by the New Ansari Exchange and some of the most powerful political and business figures in the country, including relatives of President Hamid Karzai.

The Kabul office of New Ansari Exchange was shuttered after a January raid by US-trained agents of an anti-corruption taskforce.

Armed with thousands of records seized from the building, investigators have been digging into the movement of billions of dollars in and out of Afghanistan, the report said.

It said the New Ansari probe is threatening to disrupt relations between the Afghan President and his US allies.

Last week, Karzai took more direct control of the taskforce that staged the raid, the Sensitive Investigative Unit, and another US-advised anti-corruption group, the Major Crimes Task Force. He ordered a handpicked commission to review scores of past and current anti-corruption inquests.

Senior US military and civilian officials with direct knowledge of the events view Karzai's move as an effort to protect those close to him and, in the process, to quash the investigation into New Ansari and describe it as a blow to American-backed anti-corruption efforts, the report said.

Members of the Sensitive Investigative Unit are vetted and trained by the US Drug Enforcement Administration and the Major Crimes Task Force is trained by the Federal Bureau of Investigation.

Source: Zeenews

FBI investigates Florida political corruption in Capitol

Federal agents have begun investigating numerous Florida politicians at the State Capitol regarding improper campaign fundraising by now-indicted Hollywood ophthalmologist Alan Mendelsohn and former Ft. Lauderdale State Senator Mandy Dawson.

The charges against Dr. Mendelsohn include fraudulently using three Political Action Committees (PAC’s) to funnel $87,000 through an a former Dawson Aide, Venica Blakely, and ultimately to an unnamed public official from 2003 through 2006. Mendelsohn, well known as a high-rolling fundraiser, has reportedly raised over $2 million for Florida legislators, and apparently lied to investigators regarding his supposed connections and influence over Florida Governor Charlie Crist pertaining to an investigation against an insurance company.

Federal agents questioned a number of legislators regarding Mendelsohn and Dawson’s activities at the Capitol, including lobbying practices. Mendlesohn lobbied legislators on medical issues as well as on behalf of race tracks and casinos. Some allegations of fraud are also related to his representation of these types of entities as a lobbyist.

In a relatively unrelated matter, disgraced former Broward County Commissioner Josephus Eggeletion plead guilty in federal court on Thursday to charges of money laundering. He was accused of helping two other co-conspirators of laundering money provided by undercover federal agents, purportedly as proceeds of criminal acts, through banks in the Virgin Islands and Bahamas.

Later the same day, Eggeletion officially resigned as Broward County Commissioner, as he read his resignation letter sent to the Governor’s office.

Eggeletion will likely be sentenced by Judge Donald Middlebrooks in February, and will remain free on bond until then.

Source: Examiner

Indonesia AML Agency Reports 1,800 Officials to Corruption Authorities

Indonesia's anti-money laundering agency on Tuesday called on government institutions, including the House of Representatives and law enforcers, to be transparent about what they do with reports of suspicious bank accounts held by their staff.

Muhammad Yusuf, chairman of the Financial Transaction Reports and Analysis Center (PPATK), said the list of more than 1,800 people who since 2003 had been detected as having suspiciously large bank accounts did not only include young civil servants and police officers, as had previously been said.

The names of the account holders also included some members of the House and officials working in law enforcement institutions, Yusuf said.

He declined to identify people on the list by name, but said the data had been submitted to their respective employers as well as to the police, prosecutors and the Corruption Eradication Commission (KPK) for further action.

“Regarding the details and the development of the legal processes — which cases are legally processed and which are not — you will have to ask them,” Yusuf said of the institutions.

And since it was now up to the institutions to investigate and sanction those unable to explain the source of their wealth, he called for transparency, including for cases that end up being dropped.

“If it turns out true that A has an account containing, let us say, Rp 20 billion to Rp 30 billion [$2.2 million to $3.3 million], but investigations fail to find enough evidence, it is OK, there is no problem with that, as long as the public is told,” Yusuf said.

He said the PPATK was planning to regularly query the relevant government institutions about the progress of the cases reported among their ranks.

“We will do it once every two or three months,” Yusuf said, adding that every time they would synchronize the information they had with those of the institutions concerned.

He added that if the ministries responded that they had to drop an investigation for lack of evidence, his institution would demand data to authenticate the claim rather than accept it on face value. “We want to be more comprehensive, not like in the past,” he said.

The state administrative reform deputy minister, Eko Prasodjo, said last month that his ministry would soon begin investigating the “fat accounts” of young civil servants after PPATK announced that 10 civil servants aged 28 to 38 held bank accounts worth hundreds of billion rupiah. 

The National Police last year said it had investigated reports of 17 suspiciously large bank accounts held by senior police officers. 

Only three of those accounts were found to have irregularities, but those three belonged to officers already convicted of or on trial for other crimes.

On Monday, the private Indonesian Survey Institute (LSI) announced the results of a survey it conducted last month that found that only 44 percent of respondents were satisfied with President Susilo Bambang Yudhoyono’s corruption eradication efforts, the lowest in five years.

The survey blamed long-unresolved cases and the KPK’s declining reputation for the erosion of public trust.

The government on the weekend flagged a plan to force civil servants to disclose their wealth.

Source: Jakarta Globe

Mogadishu Mayor Accused of Money Laundering

Ahmed Nur Mohamoud better know as Tarzan, the mayor of Mogadishu was widely accused of money laundering.

Kulmiye Yabarow Haruur, Shibis district commissioner told Shabelle Radio that he has clear evidence showing Mogadishu mayor has misused and mismanaged revenues of Benadir region. He said the money destined for the women working on hygienic fields in the capital is missing because he took them.

Harur spelled out all Mogadishu's district commissioners know the mayor's money laundering. The statement of Shibish district commissioner comes days after the mayor of Somalia's capital denied he committed money related crimes such as mismanaging and misusing.

Source: All Africa

KENYA: AML Bill Passes, But Does Govt Mean Business?

Kenya's Parliament finally passed the Proceeds of Crime and Anti-Money Laundering Bill in December. But while the passing of the bill is viewed as a highlight of the Tenth Parliament, many fear it may just be a gimmick by the government to appease international partners.

George Kegoro, the executive director of International Commission of Jurists - Kenya Chapter, says while the legislation is good, he doubts there is political will to completely stamp out money laundering in Kenya.

"The existence of the legislation is not sufficient to deter the vice neither are the stiff penalties that are recommended in the bill," he says. "There is need for genuine support from the government to enact this law. We need a good set of people to be put in place to interpret the legislation."

Kegoro, whose organisation undertakes advocacy and policy work aimed at strengthening the role of lawyers and judges in protecting human rights and the rule of law, argues that while the bill was government-sponsored, Kenya’s track-record on corruption is poor and he doubts the genuineness of the political class.

It is the fourth attempt since 2004 to pass a bill to prevent the concealment of large profits from drug trafficking and other organised crime, and even this time around it faced resistance from members of parliament who believed the bill was a sly back-door re-introduction of an Anti-Terrorism Bill which had been quashed.

When the bill was tabled in November, an assistant minister in defiance of his own government, strongly opposed the tenets of the Bill. The assistant minister for public service, Aden Sugow, opposed the Bill saying it was an attack on the Muslim community. He argued implementing the Bill would be bowing to the interests of external interests and said that Kenya currently has adequate laws in place to deter money laundering.

While supporting the bill, defence minister Yusuf Hajji warned of a general feeling among the Muslim community that the legislation was targeting them. The Bill went forward after assurances from Prime Minister Raila Odinga that the government had no such intentions.

Once signed by the president, the law will establish a Financial Reporting Centre to assist in the identification of the proceeds of crime. An Asset Recovery Agency will be charged with tracing and recovering ill-gotten assets.

According to Job Ogonda executive director of international corruption watchdogs Transparency International, this would mean millions of dollars stashed in off-shore accounts swindled from Kenya could be recovered.

But Ogonda doubts the passage of new legislation will improve Kenya’s standing as a corrupt state internationally.

"At the moment it is embarrassing to be a Kenyan. Nigeria is improving with regards to corruption because they have shown tangible commitment of doing something about graft. However, the same cannot be said for Kenya," he says.

"We have previously had good pieces of legislation which would have helped fight graft, however, nothing has been done. How many ministers or former ministers have ever gone to prison because of corruption?" Ogonda wonders.

Ogonda is referring to anti-corruption legislation such as the Public Procurement and the Public Officers Ethics Act which require all public office holders to declare their wealth and origin of the same: this older legislation has had no noticeable effect.

Kenya’s record internationally as a corrupt state has for many years been bad and in the bribery and corruption index released by Transparency International, the country has kept the company of states such as Nigeria, Russia and Zimbabwe. Currently, Kenya is position 147 out of 180 on the global index of corruption.

Indeed the passing of the anti-money laundering bill comes in the wake of the release of a U.S. State Department report saying 93 million dollars of earnings from drug trafficking are laundered in the country’s financial system annually.

Another equally damning report by a UK firm, Kroll Associates, hired by the Kenyan government to track wealth acquired corruptly, revealed an estimated $1.7 billion is currently stashed in off-shore accounts. While the results of this 2004 report have remained confidential, the document was leaked: no action has been taken against any of the prominent figures named in its 110 pages.

But all the right noises were made when the bill was moved in Parliament by deputy Prime Minister Uhuru Kenyatta, who said that in view of the magnitude of the problem to the economy, the debate should focus on the quality of the legislation to ensure it was stringent enough.

Seconding the bill, Raila said, "The country risks becoming a pariah state unless the legislation is passed. We have suffered from the effects of money laundering especially in the property sector whose value has been skyrocketing due to the money being brought from the acts of piracy off the coast of Somalia".

A boom in property prices in Nairobi is preventing a majority of Kenyans from buying real estate, and in some cases even pricing locals out of the rental market. Media reports are linking the boom with profits from Somali pirates who seized numerous vessels during 2009, extracting handsome fees from their owners before releasing ships and crew members. In certain Nairobi neighbourhoods, Somalis are willing and able to pay rent up front for periods of even up to two years.

Ogonda states that for many years, Kenya has been a hub of money laundering with illegally acquired cash from Europe, South Africa, South America, Democratic Republic of Congo, Sudan, Rwanda, Burundi, Uganda and Tanzania finding its way into local financial markets.

"Due to our porous borders and poor implementation of legislation, people have simply walked in with huge amounts of cash, hired a lawyer to front for them who in turn invest the cash, especially in property," Ogonda says.

He says despite moves to assure the independence of the new watchdog agencies' leadership, and fresh monitoring requirements for the banking system, the version of the bill which is now awaiting presidential assent does not demand greater accountability from lawyers whose lawyer-client privileges remain intact.

Kegoro notes that the prescribed penalties are fairly high - jail terms of two to five years, with fines of up to $65,000 for individuals, and corporate penalties set as high as $330,000 or the value of the property. But, he argues, it is not the severity of the penalty that will make people fear it. It is the certainty of being caught, hence the need for genuine political will to implement the law.

Ogonda is in agreement. "Application of the bill is what will be the determining factor. The structure of governance has to support the law and if it remains the same the legislation can exist and nothing will change."

By Susan Anyangu-Amu

Source: IPS

Khaleda Zia''s younger son goes on trial for money laundering

Arafat Rahman Koko, the younger son of former Bangladesh prime minister Khaleda Zia, went on trial today in a graft case for allegedly laundering Tk 23 crore.

The trial of Koko, who is in Bangkok for medical treatment since July 2008, and Ismail Hossain Saimon, son of former shipping minister Akbar Hossain, began today for alleged money laundering Taka 23 crore, the Star online reported.

Koko and Saimon were indicted for money laundering on November 30 last year.

Justice Mohammad Mozammel Hossain of Special Judge''s Court-3 recorded the statement of complainant Abu Sayeed, deputy director of Anti-Corruption Commission (ACC), the report said.

Hossain had framed the charges against the duo in their absence and said the trial would continue in their absence.

The anti-graft body has accused them of siphoning off money from China Harbour Engineering Company Ltd and Siemens for helping them win government contracts.

China Harbour got a Taka 351 crore contract to set up New Mooring Container Terminal and Siemens a Taka 239 crore contract to supply and install equipment for Teletalk, the state-owned mobile phone operator.

Koko, who was arrested in September 2007, on graft charges and paroled for treatment abroad in July the following year, is now in Bangkok.

Saimon has been on the run since the Anti-corruption Commission filed the money-laundering case against him and Koko on March 17, 2009.

A Bangladeshi court yesterday rejected a petition of Tarique Rahman, Koko''s elder brother, seeking relief in a money-laundering case.

Bangladesh''s Anti-corruption Commission (ACC) on Octobe 26, 2009, filed the case with a Dhaka court against Tarique and his business partner Giasuddin Al Mamun on charges of siphoning of Taka 204.1 million to Singapore between 2003 and 2007.

Bangladesh''s Appellate Division upheld the High Court verdict rejecting a petition challenging the money-laundering case against Tarique, the bdnews24 online reported.

Tarique, the senior vice-chairman of BNP, has 14 cases filed against him on various charges. He has been undergoing treatment in the UK. PTI

Source: MSN News

Spanish Judge Demands US$77 Million From Pinochet’s Wife And Advisers

Spanish judge Baltasar Garzon on Monday demanded that the widow and advisors of former Chilean Dictator Augusto Pinochet pay US$77 million to a Spanish charity for his regime’s victims within the next 10 days.


If the money is not paid, the dictator’s widow, Luicia Hiriart, and three associates, Oscar Aitken, Pablo Granifo and Hernan Donoso, will all face extradition to Spain on charges of embezzlement and money laundering and will have up to US$25 million worth of their assets frozen.

The judge intends to visit Chile with colleagues from the Spanish high court to oversee investigations against the four charged.

The money is sought by Spanish organization Foundación Salvador Allende to compensate the families of Spanish nationals killed during Pinochet's regime, which began after the 1973 military coup that toppled elected president Allende. This is the latest of Garzon’s charges against Pinochet and members of his inner circle.

Garzon arranged for the 1998 London arrest of the dictator on charges of genocide and terrorism. Pinochet was released after 16 months of extradition proceedings, but he was facing charges of tax evasion, embezzlement and money laundering until his death in 2006.

His family members and former legal advisor Aitken were acquitted of wrong-doing in previous cases and therefore cannot face retrial in Chile. However, evidence has emerged in recent years that Pinochet amassed a fortune in kick-backs from international arms deals and misappropriation of public funds. This wealth is apparently held in bank accounts all over the globe.

In 2005 the Salvador Allende charity received US$9 million after American-based Riggs bank was found guilty of holding illegal accounts for Pinochet. Following on from that case the organization petitioned Spanish courts to bring similar charges against Chilean Banco de Chile and two of its subsidiaries. Garzon postponed the case so that individuals at the bank could be identified and evidence collected against them.

Two of those charged yesterday are high-ranking officials at the Banco de Chile. Granifo is currently the firm’s president, while Dononso is a former head of the bank’s US operations. The bank was acquitted of wrongdoing in a 2006 US investigation into money laundering allegations against the bank's New York operations (ST. Oct 5, 2006).

Corruption charges also continue to emerge in Chile, with the arrest earlier this year of a former military aide to the dictator accused of misappropriating up to US$20 million in public funds. Human rights investigations against former secret police agents are also ongoing (ST. Sept 3).

In September 2008 the Chilean government announced that it would seek the return of US$26 million held in secret accounts for Pinochet from the Miami branches of four different banks including Banco de Chile and Spanish bank Santander (ST. Sept 30, 2008).

The Pinochet family has always denied corruption accusations made against the late dictator, insisting that their private wealth was accumulated thanks to financial prudence and wise investments.

SOURCE: El MERCURIO, LA TERCERA, EL PAIS.COM
By James Fowler ( editor@santiagotimes.cl )

Former Interpol Mexico Director Faces Money Laundering Charges

The former director of Interpol Mexico, who is being held in prison, will be prosecuted on money laundering charges, the Attorney General’s Office said.

Rodolfo de la Guardia’s prosecution will move forward now that a criminal court has ruled in favor of the AG’s office, overturning a decision by a federal judge, prosecutors said.

De la Guardia has been held at the prison in Tepic, a city in the western state of Nayarit, since January 2009 on organized crime, drug and other charges.

Prosecutors allege that the former Interpol director was on the payroll of the Beltran Leyva cartel, one of the most violent criminal organizations in Mexico.

De la Guardia was in charge of assigning the heads of the field offices of the defunct AFI, Mexico’s equivalent of the FBI, allowing him to place agents the cartel had on its payroll in key posts, the AG’s office said.

The former Interpol director was paid $10,000 a month by the cartel for his services, the AG’s office said, adding that he has not been able to legally account for the money.

De la Guardia was arrested during “Operation Clean-Up,” which the government launched in March 2008 to root out corruption.

The Beltran Leyva cartel managed to infiltrate the security forces and put Noe Ramirez Mandujano, who served as Mexico’s drug czar, on their payroll.

Ramirez Mandujano was arrested in November 2008 during the operation, which targeted corrupt officials in the upper ranks of the Federal Police and AG’s office.

The former drug czar had been taking $450,000 monthly from drug traffickers, officials said.

Source: Latin American Herald Tribune

Corruption shadow casts Bhutto in a different light

That one shouldn't speak ill of the dead is conventional wisdom but conventional wisdom usually turns out to be an oxymoron. And so the dead Benazir Bhutto is now the "former prime minister of Pakistan" rather than "the fugitive facing corruption investigations in Spain, Britain and Switzerland" that she was a fortnight ago.

Corruption aside, Bhutto showed a remarkably cavalier disregard for the lives of even her own supporters. Guns of any make, either genuine or cheap local rip-offs, are freely available in Pakistan. The use of bombs has also become more widespread.

So when Bhutto arrived back in Pakistan in October, rather than being whisked by helicopter amid tight security from the airport to wherever she needed to be, she had her party organisers bus in 200,000 people to the route from the airport so the world's television cameras could record her glorious return. The route was lengthened to heighten the drama of the procession.

It all served to give those with murderous intent greater opportunity. Bhutto was safe inside her bombproof vehicle. But outside, almost 140 of her supporters were blown to bits by two bombs and another 450 injured. Bhutto directed the blame to anyone but herself.

This recklessness extended to herself last week when, having been provided with a bulletproof car, she stood up through its sunroof on leaving a political rally - with predictable results. But martyrdom is a wonderful way to launder one's reputation. If saintliness is what you're after, then it's certainly a good career move - you can emerge a saviour unhindered by the practicalities of having to deliver, leaving your supporters to wistfully imagine what might have been.

Except that Bhutto was twice put to the test. Twice she was prime minister of Pakistan, twice she was shown to be a poor administrator and twice her government was removed for corruption.

Bhutto did have her plusses. She was a democrat. But politics in most of Asia is about power: getting it and keeping it. Rarely is it about policy. Bhutto liked democracy because it was the only means by which she could get into power. Her family was not a military family so a coup was out of the question.

And although from the province of Sindh, she clearly sought to represent and govern all Pakistan - her interest was in transcending ethnic and regional divides. She was a Pakistani above all, something few politicians in Pakistan actually are, or are seen to be.

The trouble is, she was most probably corrupt and her husband, Asif Ali Zardari, definitely was. Bhutto made him a minister during her second term as prime minister. But once she was out of office, he was arrested on charges of organising the murder of Bhutto's brother, Murtaza, blackmail, the murder of a judge and his son, and corruption, for which he was jailed. He has always maintained that the charges were politically motivated, which undoubtedly they were. But the motivations of one's accusers do not change the facts of one's crimes.

A 1998 New York Times report claimed that Pakistani investigators had evidence that Zardari offered a contract to Dassault, a French aircraft maker, to replace the Pakistani Air Force's fighter jets, in exchange for a 5% commission to be paid to a Swiss corporation he controlled.

The same report also said Zardari had organised for a Dubai company to have the exclusive licence to import gold into Pakistan, for which he received more than $10 million in "fees". Other allegations relate to the purchase of 7000 tractors from a Polish company, for which the Bhuttos were allegedly paid a commission.

In 2003, a Swiss magistrate convicted Zardari and Bhutto, in their absence, of money laundering. They had accepted $US15 million in bribes from Swiss companies SGS and Cotecna to do customs inspections on goods imported into Pakistan. The couple had the Swiss companies pay 6% of the value of their contracts into Bomer Finance Inc and Nassam Overseas, two British Virgin Islands-registered companies with which they were linked. The two were sentenced to six months in prison and ordered to return almost $US12 million to the Government of Pakistan.

Bhutto appealed against the conviction on the basis that she had no knowledge of the payments despite having been shown to be a beneficiary of at least one of the BVI companies. The case is still under appeal. But why did Bhutto imagine she could be prime minister of a country of 160 million people if she could not even manage her husband? Either she was corrupt or incompetent, but probably both.

In 2004, Zardari admitted owning a £4.35 million estate in Surrey, England - that included a 20-room mansion - that the Pakistani authorities allege was probably bought with the proceeds of corruption in 1995. A British judge concurred.

In 2005, the Independent Inquiry Commission, led by former US Federal Reserve head Paul Volcker, named Petroline FZC among the companies to have breached UN sanctions by making illegal payments to Saddam Hussein's regime so it could trade in Iraqi oil. Documents suggest that Bhutto chaired the company. They might be fake but the company is connected to her associates. Spanish authorities are investigating the affairs of the company, which received $US2 million in illegal payments.

Anti-corruption officials with Pakistan's National Accountability Bureau claimed to have identified $US1.5 billion in the names of Zardari and Bhutto's mother - who has Alzheimer's disease - in Swiss bank accounts. And so, in 2006, Interpol issued a request for the arrest of Bhutto and her husband on corruption charges, on behalf of the Pakistani Government.

Did Pakistan really need a third Bhutto-Zardari prime ministership? Undoubtedly there will now be the movie and perhaps an Andrew Lloyd Webber musical (Don't Cry for me Pakistan). But at the end of the day, a thief in lipstick is still a thief.

The trouble is, she was most probably corrupt and her husband, Asif Ali Zardari, definitely was. Bhutto made him a minister during her second term as prime minister. But once she was out of office, he was arrested on charges of organising the murder of Bhutto's brother, Murtaza, blackmail, the murder of a judge and his son, and corruption, for which he was jailed. He has always maintained that the charges were politically motivated, which undoubtedly they were. But the motivations of one's accusers do not change the facts of one's crimes.

A 1998 New York Times report claimed that Pakistani investigators had evidence that Zardari offered a contract to Dassault, a French aircraft maker, to replace the Pakistani Air Force's fighter jets, in exchange for a 5% commission to be paid to a Swiss corporation he controlled.

The same report also said Zardari had organised for a Dubai company to have the exclusive licence to import gold into Pakistan, for which he received more than $10 million in "fees". Other allegations relate to the purchase of 7000 tractors from a Polish company, for which the Bhuttos were allegedly paid a commission.

In 2003, a Swiss magistrate convicted Zardari and Bhutto, in their absence, of money laundering. They had accepted $US15 million in bribes from Swiss companies SGS and Cotecna to do customs inspections on goods imported into Pakistan. The couple had the Swiss companies pay 6% of the value of their contracts into Bomer Finance Inc and Nassam Overseas, two British Virgin Islands-registered companies with which they were linked. The two were sentenced to six months in prison and ordered to return almost $US12 million to the Government of Pakistan.

Bhutto appealed against the conviction on the basis that she had no knowledge of the payments despite having been shown to be a beneficiary of at least one of the BVI companies. The case is still under appeal. But why did Bhutto imagine she could be prime minister of a country of 160 million people if she could not even manage her husband? Either she was corrupt or incompetent, but probably both.

In 2004, Zardari admitted owning a £4.35 million estate in Surrey, England - that included a 20-room mansion - that the Pakistani authorities allege was probably bought with the proceeds of corruption in 1995. A British judge concurred.

In 2005, the Independent Inquiry Commission, led by former US Federal Reserve head Paul Volcker, named Petroline FZC among the companies to have breached UN sanctions by making illegal payments to Saddam Hussein's regime so it could trade in Iraqi oil. Documents suggest that Bhutto chaired the company. They might be fake but the company is connected to her associates. Spanish authorities are investigating the affairs of the company, which received $US2 million in illegal payments.

Anti-corruption officials with Pakistan's National Accountability Bureau claimed to have identified $US1.5 billion in the names of Zardari and Bhutto's mother - who has Alzheimer's disease - in Swiss bank accounts. And so, in 2006, Interpol issued a request for the arrest of Bhutto and her husband on corruption charges, on behalf of the Pakistani Government.

Did Pakistan really need a third Bhutto-Zardari prime ministership? Undoubtedly there will now be the movie and perhaps an Andrew Lloyd Webber musical (Don't Cry for me Pakistan). But at the end of the day, a thief in lipstick is still a thief.

www.michaelbackman.com
http://business.theage.com.au/corruption-shadow-casts-bhutto-in-a-different-light/20071231-1jo3.html?page=2

Massachusetts Senator Faces Corruption Charges

Eight-term Massachusetts State Senator Dianne Wilkerson was arrested Tuesday morning on public corruption charges stemming from her acceptance of more than $20,000 in cash payments to introduce legislation in the State Senate.

Wilkerson, 53, of 74 Howland Street in Boston, was arrested on a federal complaint charging her with attempted extortion under color of official right and theft of honest services as a state senator.

The complaint alleges that law enforcement authorities were first alerted to Wilkerson’s acceptance of cash in connection with the use of her public office in the spring of 2007. The Federal Bureau of Investigation, in conjunction with the Boston Police Anti-Corruption Unit, undertook a long-term covert operation, which included audio and videotaped recordings, commencing in May 2007 aimed at exploring these allegations.

It is alleged that, between June 2007 and March 2008, Wilkerson took $8,500 in cash payments from an undercover agent, and a cooperating witness, to assist in obtaining a liquor license for a proposed nightclub in Roxbury. It is further alleged that, in exchange for these payments, Wilkerson pressured the Boston Licensing Board, the Mayor and the City Council, and also held-up pending legislation in the State Senate, including legislation increasing the salaries of the Boston Licensing Board.

The complaint alleges that in an effort to obtain a license for which she was obtaining unreported cash payments, Wilkerson ultimately introduced legislation to increase the number of liquor licenses available in Boston, and then manipulated the timing of that legislation at the request of undercover agents.

It is further alleged that in January 2008 Wilkerson proposed that an undercover agent, posing as out-of-state businessman, become involved in the development of a piece of state property in Roxbury. Wilkerson proposed that she introduce legislation which directly designated the property to a private entity for development in order to avoid the ordinary public bidding process.

In exchange for her assistance in the direct designation of the property, Wilkerson allegedly took a $5,000 payment in June 2008.

The complaint further alleges that, in September 2008, Wilkerson requested that another undercover agent, posing as an out of state businessman, pay her $10,000 in cash. According to the Complaint, in early October 2008, the undercover agent paid her $10,000 in cash, on her promise to file the direct designation legislation in the State Senate and to continue to advance the private interests of his business.

Wilkerson allegedly filed the legislation and was pressing their interests with the House of Representatives and the Boston Redevelopment Authority as recently as last week.

In total, Wilkerson allegedly accepted a total of $23,500 in cash payments, ranging in amounts from $500 to $10,000. Each of the eight payments was in connection with the use of her office as a state senator.

If convicted, she faces up to 20 years imprisonment, three years of supervised release and a $250,000 fine on each of the charges. 10-27-08

Source: North Country Gazette

Kenya losing war on corruption-report

Kenya is still losing the war on corruption.

This is according to a report released Thursday by the Africa Policy Institute.

Speaking during the launch of the corruption report the institute's president Dr. Peter Kagwanja said the Grand Coalition Government was not doing enough to fight graft as it had concentrated its efforts on other issues.

According to the report, the rate of corruption had risen in the period after last year's election compared to the same period after the 2002 general election that brought in the NARC government.

"Kenya has slipped into a democratic recession, unable to create strong legal and political institutions to stamp out corruption and promote a culture of accountability and probity", says Dr Kagwanja.

Research reveals that the anti-corruption system in the country is less vibrant than it was five years ago.

The institute's findings also indicate that the power sharing deal brokered after the 2007 general elections has not made it any easier for the government to fight against corruption.

"For all the euphoria around power sharing, the power arrangement signifies the failure of democratic consolidation, which has given impetus to a new wave of corruption", Dr Kagwanja says.

"In order to win the war against corruption, the country needs to recommit to the vision of a strong democracy and civic citizenship to and undertake far reaching political reforms, including constitutional reforms", he adds.

The report also recommends that the country needs to embark on building strong state institutions and citizen's lobbies.

"There is also need for coordination and strengthening of counter-corruption institutions and recommitment to international instruments on combating corruption including implementing the Africa Peer Review Mechanism Kenya report", the report says.

Source: KBC

Charges still dog Benazir's husband

ISLAMABAD: Benazir Bhutto's husband, who took effective control of his slain wife's party yesterday, is a former cabinet minister who spent eight years in prison on corruption charges and is known as "Mr 10 Per Cent" for allegedly taking kickbacks.

In her will, read yesterday, Bhutto named Asif Ali Zardari as her successor as head of the Pakistan People's Party in case of her death. But Mr Zardari, who is viewed with suspicion by many Pakistanis, appointed his son, Bilawal Bhutto Zardari, as official chairman of the party that the 19-year-old's grandfather founded in 1967.

Mr Zardari, 54, who comes from a feudal family, shot to fame after his arranged marriage to Bhutto, who become prime minister for the first time in 1988, less than three months after giving birth to her son. Bhutto's husband is generally blamed for many of her political misfortunes, with her twice being forced out of the prime minister's office over allegations of corruption and misrule.

He was jailed for the first time in 1990 on charges ranging from murder to fraud when Bhutto's first government was dismissed. He was released in 1993 and acquitted of the charges, including the claim he tried to extort millions of dollars from a British man by attaching a bomb to his leg. Mr Zardari said the charges were politically motivated.

Mr Zardari became investment minister in Bhutto's second government, and was nicknamed "Mr 10 Per Cent" for allegedly skimming off commissions on government contracts.

He was jailed a second time in 1996 over corruption allegations and his alleged involvement in an attack on Bhutto's brother, Murtaza, who died in a shootout near his home in Karachi.

After years in prison Mr Zardari was freed in 2004 and left Pakistan to live with his family in the United Arab Emirates. He still faces charges at a Swiss court of money laundering. He is accused of siphoning off $US1.5 billion in kickbacks.

A Geneva magistrate convicted Bhutto and her husband in absentia of money laundering in 2003 under a Swiss law that empowers high-level investigators to impose penalties without a court hearing.

They received six-month suspended sentences and were ordered to pay $US11 million to the Pakistani Government, but the conviction was automatically thrown out when the pair contested it. They were then charged by another Swiss magistrate in 2004 and the case was reopened.

The Swiss investigation against Bhutto for alleged money-laundering was declared closed after her assassination last week, although the parallel investigation against her husband remains open.

Swiss authorities said in 1998 they found about 20 million Swiss francs in Swiss accounts belonging to Bhutto and her family. These accounts were frozen at Pakistan's request.

"Zardari is not very much liked in the party. He goes for big hotels, world's best addresses. He wants to live like a prince abroad," said Rafiq Safi, a longtime party activist.

Mr Zardari also has many critics in the West, which could further complicate US hopes that President Pervez Musharraf and the PPP might form a coalition that would unify moderate forces in Pakistan against extremism.

"The US is not going to be excited about working with Zardari," Daniel Markey, fellow at the Council on Foreign Relations, told The Washington Post.

AP

http://www.theaustralian.news.com.au/story/0,25197,22991942-2703,00.html