UK: Mishcon´s Culture vs Corruption Diary

Welcome to the first edition of Mishcon's Culture vs Corruption Diary, the object of which is to better inform those within corporations responsible for managing the fraud risk by illustrating how different countries treat issues which lie at the very heart of allegations of corrupt practices. 

We make no judgement whatsoever as to the morality, legality, or appropriateness of the conduct which forms the subject matter of this diary.

We simply aim to bring these matters to the attention of those whose responsibility it is to set ethical standards and produce business practice guidelines for the companies they work for and allow them to make an informed decision as to the best practice for their organisation.

The Serious Organised Crime Agency (SOCA) became operational on 1 April 2006.  SOCA merges the National Crime Squad, the National Criminal Intelligence Service and investigation teams at HM Customs and Excise and the Immigration Service.

A police investigation into the loans for peerages affair has been widened to include other political parties.  Scotland Yard has confirmed that it is looking at corruption charges as part of the ongoing investigation.  All political parties have come under pressure to reveal the names of those who have lent them money.

The House of Lords will introduce an amendment to the electoral administration bill, which will force political parties to disclose the identity of existing as well as future lenders.

Compass Group is facing further allegations of bribery and corruption over United Nations contracts after competitors, Es-Ko and Supreme Foodservice, filed complaints with a US district court.  Es-Ko claims that IHC Services and ESS, a subsidiary of Compass, bribed a former UN procurement officer to leak confidential information about competitors bids. This resulted in Es-Ko losing $574m of UN food contracts between 1999 and 2005. Es-Ko is seeking at least £125m in damages from Compass.

The African All Party Parliamentary Group has published a report entitled 'The Other Side of the Coin: the UK and Corruption in Africa'.  The report criticises the government for not clamping down on companies involved in corruption abroad and for falling short of the aims set out last year by the British-led Commission for Africa, which highlighted the need for more transparency to fight corruption.

The Mayor of Marbella and 20 others have been arrested on suspicion of corruption in connection with town planning and the consequent laundering of money gained illegally. The accused are expected to face charges of embezzlement, bribery and influence peddling.  It is alleged that Town Planning Consultant, Juan Antonio Roca, earned illegal income from deals involving the re-designation of land and building licences.

Two former employees of Siemens AG have been charged in connection with a corruption case in Italy.   A former board member and a former employee of Power Generation, the Munich-based power station equipment division of Siemens, are accused of having paid Î6m in bribes in order to secure contracts with Italian electricity company Enel SpA between 1999 and 2002.

Yu Zhendong, the former head of Bank of China's Kaiping branch, has been sentenced to 12 years in prison by a Chinese court after being found guilty of embezzling public funds.  Mr Yu was extradited from the US. 

Thailand's ruling party, Thai Rak Thai, has won the general election but the election has failed to dispel accusations of corruption against the Prime Minister, Thaksin Shinawatra.  Accusations of corruption, insider trading and abuse of power were made against the prime minister after his family netted 73.3bn bhat from the sale of the controlling stake in state owned telecommunications company, Shin Corp. 

A report published by the Australian Senate Foreign Affairs Committee says that rivalry between China and Taiwan is causing corruption and political unrest in the South Pacific. The report concludes that intrusion or interference by China or Taiwan may impede, not help, development.

The Australian government has tabled two bills to establish the Australian Commission for Law Enforcement Integrity.  The commission will probe corrupt practices in the Australian Federal Police and the Australian Crime Commission.  It is thought that other law enforcement agencies will eventually be included in the jurisdiction. 

Indonesia's parliament has passed two bills ratifying a United Nations convention against corruption and a bilateral agreement with China on combating transnational crimes.

Ex-Philippine president, Joseph Estrada, has taken the stand in his corruption trial to deny that he amassed $80m by plundering state coffers and taking bribes. 

The Brazilian parliament has published a report on corruption in the government of President Luis Inacio Lula da Silva.  The report, compiled by deputy Oscar Serraglio, accuses 200 officials and politicians of, amongst other things, using illegal funds in election campaigns and buying opposition votes.  The report says that the corruption network operated from January 1997 to August 2005 and handled about 2bn reals.  The report did not find the prime minister to be personally responsible for the actions of those involved in the corruption. 

The president of Namibia, Hifikepunye Pohamba, has launched a zero tolerance for corruption campaign.  He has also reiterated that his government will strive for good governance, transparency, accountability and honesty.

Almost 1,3000 corruption cases have been reported to the Kenya Anti-Corruption Commission (Kacc) in the last two months.  This represents an increase of almost 300% over the same period in 2005.  Kacc has called for the establishment of an ombudsman to help deal with the rising number of cases against public officers.  Complaints against civil servants numbered 1,436 in 2005, out of a total of 5,678 reported cases.

Faheem Mousa Salam, An Iraqi-American translator employed by Titan Corporation, has been arrested on charges of offering $60,000 in bribes in connection with the award of a $1 million contract for providing flak jackets and other equipment to Iraqi police officers. 

A judge in Miami sentenced Jack Abramoff to five years and ten months in jail.  Mr Abramoff and a former partner pleaded guilty to conspiracy and wire fraud in connection with the purchase six years ago of a fleet of gambling cruise ships. The two are also helping authorities with a Washington corruption investigation and a Florida state probe into the murder of the former owner of SunCruz Casinos, Gus Boulis.

Mishcon's Culture vs Corruption Diary sheet is published by the Asset Protection & Recovery Group of Mishcon de Reya Solicitors.  Widely recognised as the leader in the field of fraud investigations, the Group has extensive experience in conducting and/or project managing highly sensitive international investigations in respect of bribery and corruption allegations.  The Group founded and run both the Asset Protection & Recovery Network, made up of international legal fraud specialists, and the Financial Fraud Group, for risk and compliance officers.