annahazar anti corruption

India tentatively moves for talks with anti-graft activist



Hazare raises his hand on the sixth day of his fast at Ramlila grounds in New Delhi 21/08/2011

REUTERS/Parivartan Sharma.

* Premier Singh says scope for "give and take" if talks held

* More rallies planned this week by citizens, political parties (Adds minister quote in paragraphs 8-9)

By Alistair Scrutton and Arup Roychoudhury.

NEW DELHI, Aug 22 (Reuters) - A hunger strike by an Indian anti-graft activist entered its seventh day on Monday with opposition parties calling for nationwide rallies this week, prompting the government of Premier Manmohan Singh to take tentative steps to open talks.

The 74-year-old Anna Hazare, who has shed five kgs (11 lbs), spent the seventh day of his fast lying down on a makeshift stage on an open ground in the capital as electric fans cooled him in the humid monsoon heat. Temperatures reached into the mid-30s Celsius (95 Fahrenheit).

Hazare's supporters and the government said at the weekend they are open to talks, with Singh saying there was a "lot of scope for give and take."

But a prominent Hazare supporter said that the government had so far shown caution.

"The government sent an innocuous three page, unsigned note yesterday which summarised their position -- as if we need to know that," Kiran Bedi, a former police officer and one of India's best known anti-graft campaigners who works with Hazare, told Reuters.

Moves to open talks come as the main Hindu nationalist opposition Bharatiya Janata Party is organising a nationwide protest against the government on Thursday, while a group of left parties is planning a national protest on Tuesday.

Singh continued to strike a more conciliatory tone on Monday than when Hazare's fast first began after he was jailed by the government last week in a ham-handed move to thwart the hunger strike.

"The standing committee has the power to propose any amendment or amendments," Singh said in Kolkata city, referring to a parliamentary body looking at an anti-corruption bill before parliament that lies at the heart of the standoff.

In another sign of possible compromise, Jairam Ramesh, a minister and Congress Party stalwart, publicly lent support to Hazare's demand that his team only negotiate with mediators from the prime minister's office or with Rahul Gandhi, the son of the Congress party chief, as opposed to a third party.

"That is a way out," Jairam Ramesh told reporters. He also said the government was mulling introducing a separate bill to tackle graft in the lower orders of bureaucracy, which had been another demand from Hazare.

With key state elections next year that pave the way for a 2014 general election, the government is keen to end a crisis that has paralysed policy making and parliament and added to Singh's unpopularity amid high inflation and corruption scams.

At least 50,000 people protested on Sunday to support Hazare and on Monday, a holiday in the capital, thousands came again carrying flags, banners and shouting slogans like "long live the revolution."

Hazare's campaign has struck a chord with India's rising middle class, many sick of endemic bribes and angry at a series of corruption scandals that have touched top politicians and businessmen in Asia's third largest economy.

Hazare's team members have said this is not a fast to death -- he is also drinking water. The activist has carried out scores of hunger strikes against governments in the last few decades.

"Our demand that they pass the bill by the end of the month remains unchanged. It's what the people want," Bedi said.

Criticism of Hazare's hunger strike has also surfaced from activists who say it is setting a bad precedent by holding democratic institutions hostage.

"While his means may be Gandhian, Anna Hazare's demands are certainly not," Booker prize-winning novelist and social activist Arundhati Roy wrote in The Hindu newspaper.

"The (Hazare) bill is a draconian anti corruption law in which a panel of carefully chosen people will administer a giant bureaucracy."

In another sign of the tentative efforts by a fumbling government to take the initiative, a Congress party lawmaker has also sent Hazare's bill to a parliamentary committee for consideration, meeting a demand of the protesters.

"The government and Team Anna are in back channel negotiations. So that's a start," said Anirudh Goenka, a 36-year-old social worker, at the protest. "Maybe we will not achieve everything the Jan Lokpal set out to do, but even a compromise is a way forward."

Hazare was briefly jailed last Tuesday, a move the government sought to reverse quietly. But he refused to leave prison until the government allowed him to continue his vigil, in public, for 15 days. He was released on Friday to huge cheering crowds and widespread media coverage.

For many, the pro-Hazare movement has highlighted the vibrant democracy of an urban generation that wants good governance rather than government through regional strongmen or caste ties -- a transformation that may be played out in 2012 state polls.

Several scandals, including a telecoms bribery scam that may have cost the government up to $39 billion, led to Hazare demanding anti-corruption measures. But the government bill creating an anti-graft ombudsman was criticised as too weak as it exempted the prime minister and the judiciary from probes.

(Additional reporting by Annie Banerji and Manoj Kumar; Editing by Matthias Williams, Ed Laneand and Ed Lane)

annahazar anti corruption

Anti-Corruption Views - Can the feds do an Al Capone on News Corp?

The seal of the U.S. Securities and Exchange Commission hangs on the wall at SEC headquarters in Washington, 24/6/2011 REUTERS/Jonathan Ernst

By James Ledbetter

James Ledbetter is the op-ed editor of Reuters. He is the author of the new book Unwarranted Influence: Dwight D. Eisenhower and the Military-Industrial Complex, published in January 2011.

I wrote last week that using the U.S. Foreign Corrupt Practices Act (FCPA) to charge News Corp over allegations that officials at the now-shuttered News of the World bribed police officials would be an “enormous, unprecedented stretch…which seems unlikely to stand up in court.” There are two qualifiers to this; first, the column was referring to Guardian reports about payments to police supposedly made in 2003, which appear to have been for tips leading to stories for the paper. If it could be shown that subsequent sums to police were made to delay or thwart investigations into News Corp activity—a very big if—then those payments might come a little closer to the types of bribes historically punished under the FCPA. (Even there, however, U.S. authorities would still be reluctant to jump into such a case unless British prosecutors abandoned such an inquiry, which seems unlikely to occur any time soon.)

I also hinted at a second possibility, both more intriguing and more likely: a different part of the FCPA could apply to any police bribes News Corp paid. This is the “books and records” provision of the FCPA; ProPublica’s Jake Bernstein summarized its potential use in this case succinctly: “If you pay off the policemen and you don’t write it down in your company ledger as ‘Bribe two policemen,’ then this can be a problem because you haven’t accurately kept your books and records.”

The FCPA is quite explicit about this: an American company doing business abroad has to maintain timely and accurate books; has to have internal accounting controls that ensure that employees don’t have the authority to wander off paying bribes on their own; and has to constantly check its records for any discrepancies.

At least two aspects of books-and-records make it a very powerful tool that should be keeping News Corp lawyers very busy: a) there’s no threshold attached to it, meaning that theoretically even a small bribe could trigger it, b) the government doesn’t need to prove that a bribe met all the specific FCPA provisions, merely that it was improperly accounted for. You might call it the Al Capone technique: when the federal government couldn’t get much traction on more exotic charges, it nailed the mobster for tax evasion.

And so while I am still waiting for someone, somewhere to name a case in which bribes resembling payments to police officers for story tips were successfully prosecuted under the FCPA, there are indeed recent examples in which the U.S. government extracted fines and penalties for books-and-records violations without having to win on the alleged bribes themselves.

I spoke to Hugh Jones, CEO of Accuity, probably the most important company in the world that helps companies establish payment systems that comply with rules like the FCPA, who pointed me to three such cases in the past few years. One is the SEC’s case against NATCO, a Texas company oil and gas company. The government maintains that in 2007, the company bribed immigration officials in Kazakhstan who were threatening to deport some people working for a NATCO subsidiary. Company books, the government maintains, improperly recorded the expenses as advances against salary or bonuses, or as “visa fines.” Similarly, NATCO allegedly also signed off on some invoices it knew were fraudulent.

Another books-and-records example, which strikes me as a bit removed from what News Corp might have done, is the SEC’s case against Comverse, described by the government as more of a classic kickback for a lucrative telecommunications contract in Greece, and also supposedly involved the creation of an offshore entity by a third party. The third seems to me even more far afield, the El Paso Corporation’s payments to Iraq, which stemmed from the scandal-ridden U.N. Oil for Food Program.

But even if the underlying circumstances of dubious payments in these cases may differ from what is believed to have happened at News of the World, that’s sort of the point of doing an Al Capone. The SEC or Justice Department wouldn’t have to prove all the messy quid-pro-quos about who knew or expected what when the cash changed hands. All they need to do is to prove that the company misrepresented the payments.

Keep in mind that the results might not be very heartening to the Murdoch haters. The NATCO case, for example, was a civil—not criminal—action in which the company paid a not-overwhelming $65,000 fine and admitted no wrongdoing. Then again, as Jones points out, the very fact that the U.S. has signaled interest in News Corp’s books ought to trigger a bunch of internal investigations. And if those investigations turn up anything even mildly smelly, the company would be idiotic at this late stage not to disclose them to regulators. If that happens, the U.S. might yet find material for a broader case.

annahazar anti corruption

Anti-Corruption Views - ‘One size does not fit all’ in corporate anti-graft culture





A man walks over a colourful carpet at an exhibition stand at the Frankfurt book fair, October 16, 2009. REUTERS/Johannes Eisele.

If compliance with the U.S. Foreign Corrupt Practices Act and the UK Bribery Act is to become a reality it must become a daily part of the corporate culture, according to Mike Munro, vice president and chief compliance officer of Transocean, the world's largest offshore drilling company.

Speaking at the recent sixth FCPA and Anti-corruption Compliance conference near Washington, DC, Munro pointed out that every company is different and, when it comes to compliance, "one size does not fit all".

Specifically when it comes to multinationals, he said, it's important to remember that "we're not all Americans". In fact, some 70 percent of employees of multinationals are not Americans and training must be tailored to reflect that, he said.

At Transocean, he said, he worked to build a "brand" of compliance that came to be known within the company as LC&E, that is, Legal Compliance and Ethics. It took 2.5 years, but today every employee is aware of it, he said.

The motto of LC&E is "Everywhere...Every Day".
When it came to developing a compliance template, Munro said he stripped it of legal jargon and carefully put it in terms that could easily be understood by the engineers who make up the majority of Transocean's frontline personnel.
They are the people who would most closely encounter the risks of bribery in customs situations requiring expedition or oil rig crews requiring expedited work permits, for example.
As a result, he pushed the compliance message through the engineers themselves, not compliance officers and attorneys, he said.
Since companies deal with a number of foreign countries, Munro said he often sees the need to clarify the compliance message.
Specifically, he said, there are five areas where multinationals need to improve their compliance message:
1. All training material must be carefully translated into the local language.
2. All communications and policies have to be reduced to their simplest and clearest forms.
3. Trainers must be carefully chosen to mesh with the personalities, culture, age and rank of the personnel being trained.
4. Training materials must be tailored to local needs. Munro discovered that about 80 percent of training materials used U.S.-based names and situations. Using a guy called Mike as an example in a country where Mohammed might be a more common name is not useful. And it isn't helpful to include hypothetical situations more common to Manhattan than Mumbai, he said.
5. Make sure anonymous reporting of corruption works and is easy to do. Munro pointed out that a toll-free corporate helpline is no help at all in countries where you can't make a toll-free or collect call easily. He stressed that companies should make sure they procure access numbers for all of the countries in which they work.
"It's not easy and it's not cheap, but it's a good thing to do to have an effective programme and it's a good thing to do out of respect" to the local employees, he said.

annahazar anti corruption

Anti-Corruption Views - Seeking sunlight: The Stop Tax Haven Abuse Act



A picture illustration of crumpled kuna, Dollar and euro banknotes, taken in Zagreb January 18, 2011. REUTERS/Nikola Solic.

Almost 100 years ago a Harvard-trained attorney by the name of Louis Brandeis in ‘Harper’s Weekly’ magazine which focused on the problems related to what was then referred to as the “money trust.” 

The money trust was several large corporations, and the men who ran them, that controlled much of the country’s economic and political power. Given the inherent unfairness, that situation engendered Brandeis, who was well known as an advocate of progressive causes, to suggest ways to curb that power.  

In what is perhaps his most oft-quoted comment, Brandeis wrote that “sunlight is said to be the best of disinfectants,” by which he meant that information is power. Information on who runs companies, how they are run and how they are financed is crucial, he believed, in an efficient and fair capitalist system. Not being one to pull punches he also noted that “publicity is justly commended as a remedy for social and industrial diseases.”  Today ‘publicity’ would be translated to ‘transparency,’ but, in the end, it means the same thing. 

Despite Brandeis’ warnings, we still seek the answers to many of the same questions: where are companies based?; where do corporations pay taxes? and what activities do corporations have offshore?

The answers to these queries are important. Each year an estimated $100 billion in taxes is not collected by the U.S. Treasury due to companies and wealthy individuals using offshore havens to hide their profits and wealth. Fortunately, a bill recently introduced in Congress would require companies to provide information that would answer those questions. The Act of 2011, sponsored by Senator Carl Leven and five other senators would “restrict the use of offshore tax havens and abusive tax shelters to inappropriately avoid Federal taxation,” according to the legislation. 

Among the many requirements of the bill, corporations that are listed with the U.S. Securities and Exchange Commission would be required to report their sales, profits, taxes and number of employees for each jurisdiction where the firm operates. Known , this provision would provide far better information on the activities of a company than does an annual consolidated financial statement. 

Additionally, the bill would require financial institutions to report to the Internal Revenue Service (IRS) bank accounts opened by offshore entities controlled by U.S. corporations and would require reporting to Congress of information related to tax exempt status provided by the IRS. In all, the bill would provide far more transparency than is currently required on the offshore activities of corporations. 

Back in 1913, Brandeis understood that reporting by corporations was fundamental to securing a level playing field for all those who participated in an economy whether they were other, smaller, companies or investors. He knew that power in the hands of a few could only be wrested away by requiring constant monitoring. 

In the ‘Harper’s’ article, Brandeis wrote that publicity was a “potent force [that] must, in the impending struggle, be utilized in many ways as a continuous remedial measure.” 

No doubt the Levin bill faces an impending struggle to pass through the rigors of the legislative process. No doubt, too, that those in Congress who benefit from the political donations of today’s “money trust” will work to defeat the legislation. But what must be kept in mind is that the Stop Tax Haven Abuse Act does not seek to limit business activity. It simply seeks sunlight.



annahazar anti corruption

Anti-Corruption Views - The challenges of measuring the rule of law by index

A Justice statue is pictured at the office of an Iranian lawyer in Tehran 10/05/2011 REUTERS/Morteza Nikoubazl.

In his keynote address to last month's World Justice Forum (WJF) in Barcelona, intrepid Premier Morgan Tsvangirai of Zimbabwe commended the WJF’s multi-disciplinary approach to the rule of law and the World Justice Project's Rule of Law Index.

The latter, he said, “has spurred some governments across the world to work harder to ensure that they do not occupy the bottom tier in the matrix of good governance and observance of the rule of law.”

However, the World Justice Project (WJP) does admit that there already is a “crowded field of indicators on different aspects of the rule of law”. But its index, it says, is different in that it is comprehensive, its data are fresh, it reflects the real world and looks at a number of separate elements of the rule of law simultaneously.

However, the well-funded rule of law industry does not have a good track record. More often than not the copious amounts of money spent on projects are not commensurate with the meagre results achieved.

In the candid words of the World Bank, “rule of law reform in fragile or post-conflict countries (and more generally in developing countries) aims to bring about highly complex and interdependent social goods, yet there is little clarity on how to best proceed.”

The Bank's 2006 report: 'Rule of Law Reform in Post-Conflict Countries - Operational Initiatives and Lessons Learnt', goes on to confirm that 71 percent of those countries that emerge from conflict become embroiled in it again within ten years.

The “situation,” it says, “is reinforced by the striking lack of coherent and systematic studies evaluating rule of law programming, especially independent, rigorous, cross-country evaluations, or comprehensive case studies of all the rule of law programmes in a country. There is also a lack of available institutionalised expertise.”

Thus, since many rule of law initiatives are ineffective through being disconnected from reality, any rule of law initiative on conventional lines rightly deserves to be taken with a pinch of salt, and the WJP Rule of Law Index is no exception. 

For the purposes of its index, the WJP has four “universal principles” to define its particular concept of the rule of law:

• legally accountable government
• laws that are fair, clear, publicised, stable and  protect fundamental rights; accessible, fair and efficient enactment
• administration and enforcement of laws
• access to justice provided by competent, independent and ethical adjudicators, attorneys or representatives, and judicial officers in sufficient numbers, adequately resourced and reflective of society as a whole

One is entitled to question what the adjectives such as “fair”, “efficient” and “competent” actually mean in this context, and whether it ought to be mentioned in the last of these principles that “advocates and representatives” should be affordable and able to properly relate to their clients' problems at all levels.

RULE OF LAW ELUSIVE

As with most definitions of the rule of law drawn up by the legal fraternity, open justice, legal system transparency and the engagement of civil society do not feature, which could be why the spread and strengthening of the rule of law is proving so elusive. 

Nevertheless, it is on its “universal principles” that Rule of Law Index, which uses nine factors to define the extent to which countries adhere to the rule of law, is based.

The data being collected via the polling of 1,000 persons from three cities per country regardless of state size and eliciting the views of, on average, 30 local legal experts in each nation.

This same modus operandi is used for states as small as Albania and Estonia, as it is for giants such as Russia, Brazil, Indonesia and the United States.

If one is looking for flaws (and one certainly should), then just one that immediately jumps out is that while the archipelagic nation of Indonesia consists of 17,508 islands, all three cities surveyed are situated on just one of those islands, namely Java.

The creators of the index claim that its “findings reflect the conditions experienced by the population, including marginalised sectors of society”,  yet Java, unlike the more peripheral islands, has no secessionist populations being kept in check by the military and, thus, cannot possibly be representative.

Furthermore, one must question the actual questions being asked of those being polled.

How does even a very well informed person gauge, for instance, factor 1 of the index: the extent to which constitutional and institutional means limit the powers of government and its officials and make them accountable under the law?

For the average person struggling to get by in a poor, developing country, such considerations must be of another world.

What is more, the views of the “practitioners and academics with expertise in civil and commercial law, criminal justice, labour law and public health” that the index also draws on, ought to be treated with a degree of scepticism as, by their very nature, they come from an unrepresentative and privileged coterie. 

It may be that such issues as the interpretation of the four adjective-laden principles and the likelihood of data distortion of this type have been addressed.

However, the selective filtering of questions – which were required in writing - at the World Justice Forum about the methodology of the index and the tediously dreary way in which less probing questions were answered, did not instil much confidence.

If the term “there are three kinds of lies: lies, damned lies, and statistics” is unwarranted here, the onus is on the WJP to rigorously demonstrate that it is.

Open debate, rather than the shielding of the academic, anodyne and unworldly, is the healthier option and more likely to produce meaningful results.

annahazar anti corruption

Anti-Corruption Views - Among the protests, India’s poor get on with life

Supporters of veteran social activist Hazare crowd around him at Mahatma Gandhi memorial at Rajghat in New Delhi 15/08/2011 REUTERS/Adnan Abidi

Matthias Williams is a Reuters correspondent. Any views expressed are his own.

“Shoe polish, sir?” That was a quote your correspondent was not expecting to record as he paced through the crowds protesting in New Delhi in solidarity with Anna Hazare, the 74-year-old poster boy for India’s fight against endemic corruption.

Among the waving flags, painted faces and punched fists of thousands of mostly students and young professionals on Wednesday, were beggars, trinket-sellers and shoe-shiners plying their trade seemingly indifferent to the din around them.

The sight gave pause for thought as to how far the spiralling protests against Prime Minister Manmohan Singh’s scandal-plagued government have trickled down to an underclass of hundreds of millions of Indians living below the bread line.

Hazare, a self-styled Gandhian activist, has caused huge embarrassment for Singh’s coalition for months, staging street protests and fasts demanding tougher laws against graft.

He has tapped into a groundswell of discontent against the corruption which touches Indian lives every day. Protests have erupted in cities throughout the country, from the hilly northeast to the southern tech hubs of Bangalore and Hyderabad.

But the question remains whether this week’s protests are mostly confined to relatively affluent urbanites who have thrived from two decades of economic boom but are tired of the older, corrupt elites governing their country.

On Wednesday, protesters had gathered at India Gate, a colonial era memorial that has turned into a tourist hot spot in the Indian capital, hence a magnet for those hoping to earn a few rupees or dollars from visitors. Ice cream carts, soda carts and ornaments laid out on mats were still parked next to TV vans.

While I was interviewing a group of students and young IT professionals who had travelled from the trendy city of Gurgaon, next door to the capital, shoe-shiners and trinket sellers approached us several times, and were ignored or spoken over.

The group, who wore paper signs on their chests criticising Sonia Gandhi, the country’s most powerful politician, was later making jokes about Singh being Sonia’s “toy” when children in bare feet prodded them, asking for money.

They were gently but firmly brushed away, a common sight in Indian cities where toddlers dance acrobatically and older or disabled men and women knock at car windows and prod travellers in auto rickshaws for money.

The beggars did not share the excitement of the protests, just as it is not clear how much of the news of scandals involving politicians and bureaucrats on trial have filtered down to rural areas, where concerns of jobs and where the next meal is coming from dominate.

In a recent poll by the Hindu newspaper, only 45 percent of respondents had even heard of Anna Hazare. The figure dropped to 39 percent among rural respondents.

When I asked the protesters why they had come to protest, their gripes against corruption had a distinctly middle class flavour. Manas, a student with a goatee wearing huge sunglasses and a rucksack on his back, told of how he was asked to pay $8,800 as a bribe for college admission.

“The principal said we’re not worrying about your mark sheet, just give me money and you’ll get in,” he said.

The crowds met at India Gate on Wednesday afternoon, either leaving work early or bunking classes. They marched in circles, punching the air, shouting abusive slogans against several leading politicians, and crowding around TV cameras and yelling as correspondents were giving updates to the studio.

But as the crowds thinned out, marching onwards to another, bigger protest nearby, kids and older men, armed with large, dirty white sacks, were rooting through the trash left behind by the protesters, looking for something usable to sell.