Posts Tagged ‘Transparency International’

Reward for fraud: $285 billion in Pentagon contracts

February 3, 2011

The Corruption Perception Index produced annually by Transparency International becomes meaningless relative to the scale of fraud and corruption with large contracts in the developed world and which do not seem to be reflected in the CPI.

An AP report carried by 660news.com reports:

Hundreds of defence companies that defrauded the U.S. military between 2007 and 2009 still received $285 billion in contracts from the Pentagon during the same period, a U.S. senator said Wednesday.

Citing a January report prepared by Pentagon acquisition officials at Sanders request, the senator said the bulk of the contracts, just over $280 billion, went to 211 companies that had civil judgments against them or settled fraud charges of more than $1 million.

During the same period, 30 defence contractors were convicted of criminal fraud, but still were awarded $682 million in new work, according to the Pentagon’s report.

Among the contractors listed in the report is AEY Inc., a Miami, Florida-based company that received a $300 million contract to supply ammunition to Afghan security forces. AEY got the work despite a record of poor performance on other government contracts.

The fraud involved shipment of millions of rounds of banned Chinese-made military ammunition that was repackaged to appear of Albanian origin. After nearly $67 million in payments, the Afghan ammunition contract was terminated in May 2008. The owner of AEY was sentenced to four years in federal prison after pleading guilty in 2009 to a fraud conspiracy charge.

In the report, defence officials listed a series of actions the military has taken to guard against contractor wrongdoing, including the formation of a working group focused on procurement fraud.

I am quite sure that many lobbyists, middlemen, bureaucrats and politicians all received their share of the largesse in these Defence Contracts. The margins available in Defence contracts far exceed those available in other large infrastructure contracts.

Related posts:

  1. https://ktwop.wordpress.com/2011/01/12/corruption-in-the-european-union-is-alive-and-well/
  2. https://ktwop.wordpress.com/2011/01/07/chief-risk-officer-of-bayerische-landesbank-arrested-for-50-million-bribes/

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Posted in Behaviour, Corruption, Fraud, US | Comments Off on Reward for fraud: $285 billion in Pentagon contracts

Widespread corruption within Turkish customs: Bribes pool of $125 million

January 9, 2011

In Transparency International’s Corruption Perceptions Index, Turkey ranks together with countries such as the Czech Republic, Hungary, Saudi Arabia, South Africa and Slovenia but somewhat better than Italy.

image: http://www.worldbulletin.net

A bribery ring composed of customs officials in Turkey and including the Director of the Istanbul Region has been revealed. It appears that the 34 arrested shared a bribes pool which in the period of the 6 month investigation is estimated to have contained about $125 million.

From the magnitude of the bribes pool it would seem that Turkey is well qualified for membership of the European Union and the monetary value of this case compares “well” with the Formula 1 bribery case in Germany – though that involved just one individual(?).

It was announced today that:

Thirty-four individuals serving at the İstanbul Customs Regional Directorate have been detained in a major investigation into bribery and corruption allegations at the customs department. The suspects include the chief director of the İstanbul Customs Regional Directorate.

The operation was carried out on Friday.

The allegations against the suspects include the collection of money paid in bribes in a pool and then the distribution of this money to İstanbul customs officials every Friday on the basis of rank and seniority. The investigators claim Chief Director Lütfi Ekinci was aware of this practice among his staff. Ekinci was detained in Mersin, where he was vacationing in his summerhouse.
The suspects allegedly relied on three methods to take bribes from companies importing goods to Turkey. One was to force companies that had all their documents in order to give money, calling this a “donation.” The other method was showing the value of an imported good to be nine-tenths less than the actual value on paper. In other words, an item that would normally cost TL 10 would be recorded as costing TL 1. A third method the officials used was falsifying documents and showing those products that are subject to higher taxes — such as cigarettes — as if they belong in another taxation category. The difference would be taken by the customs officials and added to the bribery pool. Investigators estimate the amount channeled into the bribe fund was TL 200 million ($125 million)…….. The center of the raids was the İstanbul Atatürk Airport Customs and the Ambarlı Customs Zone, but the raids were staged simultaneously at 20 different addresses. Hayrettin Eker, the İstanbul Atatürk Airport Customs Directorate Cargo Terminal chief, and Smuggling Intelligence and Narcotic Department Chief Coşkun Cihanoğlu were also detained in the operation. Documents and computers in the offices of the two men were seized by the police.

The police found TL 20,000 inside an envelope in Eker’s office. A total of TL 150,000 was found on other customs officials detained in the operation, which the investigators claim was taken in bribes. Investigators say the operations will extend to the companies that were involved in the customs bribery scheme.

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Posted in Behaviour, Business, Corruption, Ethics, Turkey | 3 Comments »

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