Paul Kirk
In a little over a week Transparency International will publish its Corruption Perceptions Index for the fourth time. This is an international barometer of how corrupt countries are perceived to be by business.
South Africa is fairly high on the list – a sign that business perceives it to be relatively free of graft.
The consistent feature of the index is that First World countries are perceived to be honest while Third World nations are seen as cesspools of graft, corruption and bribery.
This week the ninth International Anti- Corruption Conference, organised by Transparency International, heard how corruption in the Third World nearly always originates in the First World as multinationals bribe the leaders of developing nations and grant loans when they know it will almost certainly be stolen.
As a result, a workshop at the conference heard, Third World graft should be tackled in the developed world first. And offshore financial centres which help to launder money by concealing its source are likely to be the target of international sanctions as the campaign to clean up the developing world gets under way.
Gil Galvao, president of the Financial Action Task Force, an international organisation aimed at combating money laundering, said he had been instructed by the G7 nations to identify countries which do not co-operate in anti-money laundering initiatives and “recommend appropriate action designed to convince them to modify their harmful laws and practices in order to protect the international financial system against criminal proceeds”.
Galvao said it was a source of great concern that the number of jurisdictions offering financial services with little or no appropriate regulation and supervision was on the increase.
Said Willie Hofmeyr, head of South Africa’s asset forfeiture unit and co- chair of the workshop: “Jurisdictions that do not co-operate when it comes to tracing stolen illegally obtained assets are a real problem. While it may be difficult to prove criminal charges of corruption, it is usually quite easy to trace the assets of the corrupt and if the assets can be traced action can be taken. The assets can be seized and returned to the rightful owners, in many cases the governments of developing countries.”
African delegates at the conference expressed great concern that, as First World financial institutions often benefited from Third World graft, they would not be keen on tackling the issue of corruption.
A Nigerian delegate, Emanueal Faganbele, said: “We all know where foreign loans to Africa go. The money is stolen and ends up back in the vaults of wealthy Western banks and financial institutions.
“The West then benefits twice from the loans. Not only do they get the interest payment off the original loans, they also benefit when the loans are stolen and the capital invested with their banks. Clearly many First World financial institutions actively benefit from graft in the Third World.
“When the West wanted slavery to stop, it stopped. When the West wanted apartheid to stop, it stopped. If the West was really serious about stopping corruption then corruption would stop as well. The corrupt bankers are the source of Third World corruption. To stop corruption in developing countries, crooked Western bankers must be the first target.”
Faganbele and other African delegates suggested that Western financial institutions could effectively stop Third World corruption if they simply investigated suspicious movements of large amounts of cash from the Third World with the same vigour as they investigated suspicious cash transactions from their own citizens.
Said Faganbele: “If an American were to try to deposit $42-million in a bank account, surely the bank would inform some law enforcement agency? Why then do banks not inform the police when a dictator walks in with $42-million? By accepting stolen money, which they surely know to be stolen, banks are just as guilty of corruption as the crooked leaders who steal the money.”