RE: [wanabidii] Chris Matthews accuses Romney of playing ‘race card’ (VIDEO)

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-----Original Message-----
From: Judy Miriga
Sent: 28/08/2012 17:25:30
Subject: [wanabidii] Chris Matthews accuses Romney of playing 'race card' (VIDEO)



 
 
Folks,
 



USA is a Nation created and formed by immigrants from all Nationals of the world. It is formed by immigrants from all parts of the world. It is the only Nation in the world where people of all over the world are found united at peace with each other. United States of America is therefore the eye of the world. If democratic principles are clearly observed, America is able to make the world a better peaceful place to live in. It can be detrimental and dangerous if 1% of the rich special interest are left to rock the boat of global economic to destruction. This is the time that sober debate should take a centre stage and face facts with fundamental real issues that are of great concern to all of us so the world can remain a peaceful and safe place to live. America is therefore seen as the mediator of the world's crisis. The Democratic principles for good governance is emulated all over the world, people look for America for hope not for destruction, or
where corruption thrives or even where leaders attack each other on ethnic undertones. America is of a Multi-National ethinic groupings have open door for cultural diversity without conflict of interest. Africa is equally seeing hope in America and at no time should it be made to feel inferior where they feel one of their own is castigated on ethnic under-undertone.
 

In Democracy, things must be done differently the right way people ! Humanity life is sacred irrespective whether they are disadvantaged poor or not; whether they are black or not. Africans have lost a great deal when they are butchered and slaughtered and pushed into abject poverty for the unscrupulous International network of corporate special interest wealth creators who evade paying taxes and want to gain public wealth resources for free while turning the majority into slavery. This is morally and legally not acceptable and America's leadership must take a front line to curtail this behavior from getting out of control and into facing same consequences of EuroZone crisis, which can be stabilized with proper policy regulatory management.
 

My African people are crying for freedom, to be free from slaughter houses, to be free from poverty pain and sufferings and to be free from being treated like valueless humankind. With the unscrupulous International Corporate special ibusiness nterest bribery, organized crime and corruption to create unregulated quick wealth, my African people remain a target for assassination and poverty. We believe it is possible to have an organized deals where everyone have a fair share of benefits from public wealth resources and it can be done responsibly in an organized exchange format without impunity or engaging pirating, drug cartels or other forms of thuggery. There are plenty of riches in the world enough for everyone, but selfishness and greed is allowed to consum and destroy the world.
 

Lets wake up people and put clear lens to view Global economic prospects; be real and determine our options in facing reality upon our leadership expectations. It will be clear that we do not need racial cards to guide our hope for better things in the future......It is only facing the truth that we shall save ourselves from the depth of confusion, being thrown out of balance, catapulted from the force of the selfish and greedy into destruction. America is too important on the face of the world, and is too big to be dealt a blow and trodden down by the few 1%; a war between the rich and the poor.
 

Majority of People view global corruption networking (offshore business & Outsourcing of jobs), from Free Trading Business Enterprising is getting out of touch, is seen as a cancer that is spreading fast but need urgent attention in a quick fix. It is affecting and destroying Africa and the World's disadvantaged middle-class and the poor's survival and livelihood if left uncheck. There are evidence indicators that corruption affected and destroyed the lives of people in Africa and the middle-class poor of the world. If we compare the results of Free Trading Enterprise without Government's Trading regulatory procedures for checks and balances, we find that, the rich business traders of special interest avoid paying taxes and shifts the burden of accrued fiscal debts to be borne by the public without considering consequences and repercussions it impacts in the long run. Consequently, the unscrupulous International Corporate network of the Special
Business interest, form a Political Party wing to influence their interest to control Government function-ability through their appointed political agents, CEOs and legal solicitors to front for their interests. This therefore becomes an explosion of organized corruption controlling government facilitating system and its operation and not caring for the majority interests (Public Mandate) of the rest of the citizens those of the 99%. Where there is no control, people behave wild in most cases. When African Government leaderships pay unscrupulous business engagements to clean their image, they are engaging in criminal illegal activities against Public Interests and is a way to open for more corrupt practices that push economy into more difficulties and problems in the future. This is because money paid out to such CEOs and Agents of Special Interest does not provide a balance in profitability margin for both the Supply Vs. Consumer principle. It is a
conspiracy for wealth creation by the corrupt which results in bad economic situations which we all must agree to avoid. It is the more reason why those legal justice must take center stage to protect interests of all and leadership in America must provide a showcase model to mentor the world people......!
 

This is the more reason why on behalf of the voiceless of people Africa with those of African decent, and as a voice of reason, I support President Obama's blue print for Foreign Policy and inclusively those that President Obama's Administration stand for in support for Constitutional Reform Change with fair Development Partnership in shared interest for common value to all. Everyone must play by the same rule and it is only through proper Government negotiations are facilitated through the Legislative policy enactment that all our needs can be fairly met. We honestly believe that Mitt Romeny is not serious to engage in a political fair game and that is the reason he has no blue print plan of action how he intend to take leadership of America but instead is looking forward to front and shut the government from public service delivery and instead offer opening to the 1% special interest to plunder Free Trading Enterprising without paying taxes and this
can surely be very divastating to all of us.
 

Since government is the People and it is for the People, its service delivery must remain fair and neutral commonly shared in a bi-partisan manner for the benefit of all without discrimination or racial biasness. Government is therefore a very important organ for survival and livelihood that must steer away from being politicized. For those who consider Government a stambling block blocking their way to Wealth Creation, need to go back to drawing board and get a reality why survival and livelihood is a shared responsibility. It is a "Give and Take" principle that guarantees harmonious exchange of goods and services and which results in Unity of purpose. Where there is unity, there is peace. I believe that 99% of Global Citizens are all ready to trade in for Peace and we must challenge and rebuke those who are bend to disrupt our peace. Where there is peace there is progress. Where there is progress there are challenges that brings about innovative edge
that are logically open to evaluation and criticism then accepted and shared. This is the way things should be.
 

This is why the Global Democratic Governments if constitutionally sound and the legislative policies are made guiding principles for Trading in Supply Vs. Demand prospects, the Global Governments should provide ways and means to regulate in checks and balances, protect and facilitate business transactions in a fair and shared for common interest favorably to all.
 

As things stand, there is an urgent need to strengthen the credibility and professionalism of Global media to dig and investigate (outsourcing free trading) Global offshore private sector business networking to promote integrity from tax evasion and transparency to discourage government rip-off from public wealth resources from utilities, facilities or Government's Trading loans, bonds and shares etc., to avoid excessive corruption rip-off that are easily identified from Indicators of Intellectual Property Theft by special interest corporate agents, CEOs and insiders.
 


It is noteworthy that the International network of Unscrupulous Special Business Interest, are the reason for Euro-zone economic collapse.
 

As a matter of concern, by mapping risk in a number of rapidly expanding areas and bringing good governance to the forefront of the climate change (effects from commercial practices) debate, the report clearly illustrates that decisions made at the global level need to take account of the effects of corruption at all levels in order to pave ways for future success in combating climate change.
 

Contributions to the Global Corruption Report sheds light on those most adversely affected by climate change: indigenous and rural poor communities in remote locations, the urban poor living in precarious settlements, and displaced persons who require resettlement.
 

An overarching message of the Global Corruption Report is that a dramatic strengthening of governance mechanisms can reduce corruption risk and make climate change policy more effective and more successful. The quality of climate governance – the degree to which policy development and decisions are made through participatory, accountable, transparent, inclusive and responsive, and respect the rule of law – will help determine how well it addresses inherent corruption risks.
 

Cooperation on land and water resources is motivated by misuse, carelessness, scarcity and degradation of economics. There is urgent need to increase management (protection and preservation), access and productivity, and ensure land and water remain a conduit feasible for agricultural and economic growth in a sustainable manner and that the ultimate concern for general advancement of human well-being is fully and responsibly catered for.
 

The United Nations system plays an important and unique role in international cooperation in regard to the management of land and water resources. It has facilitated a series of key meetings on the topic and helped establish a range of international organizations and programs focusing on enhanced management and improved support to land and water. These must be taken seriously by all Governments of the world.
 

Thanking you all,
 


Cheers everybody..........!!!



Judy Miriga
Diaspora Spokesperson
Executive Director
Confederation Council Foundation for Africa Inc.,
USA
http://socioeconomicforum50.blogspot.com
 
 
 
 
 





WhiteHouse12.com: Chris Matthews Melts Down While Playing the Race and Class Warfare Cards
a) http://www.youtube.com/watch?v=1dUxoW2_3yQ


b) http://www.youtube.com/watch?v=mf-bKEDTUg8



c) http://www.youtube.com/watch?v=nwNbLYoRzuQ


Published on Aug 27, 2012 by WhiteHouse2012blog

http://whitehouse12.com/2012/08/27/chris-matthews-meltsdown-while-playing-the... --- The latest demonstration of Chris Matthews' objective opinions came this morning on Morning Joe, a liberal think tank program that airs weekday mornings on the low rated MSNBC. On this particular show, Matthews appeared on a panel discussing the Republican National Convention among hosts, Mika Brzezinski and Joe Scarborough and guests Tom Brokaw and RNC Chairman Reince Priebus. As the discussion took place Matthews leaned forward in his seat and as he pointed finger at Preibus, he stated that he had to call the RNC chairman out for suggesting that the Obama campaign has been running a negative campaign and that the Romney campaign hasn't.
 
 
 












Mitt Romney: Out of Touch and Harmful for Women's Health
http://www.youtube.com/watch?v=IeCWZZKq3o4
Published on May 30, 2012 by PPVotes

When women hear about Mitt Romney's plans for women's health -- in his own words -- they are appalled. Mitt Romney is out of touch and harmful for women's health in America. Planned Parenthood Action Fund will be making sure voters know exactly where Mitt Romney stands and will be mobilizing our more than 6 million strong network to fight for women's health come November.
Tell him you're watching, take the pledge: http://womenarewatching.org
 
 
 













Mitt Romney's Top 10 Out Of Touch Moments
http://www.youtube.com/watch?v=lFUUDrh9wNg&feature=related
Uploaded by ThinkProgressVideo on Feb 27, 2012

No description available.





You're kidding right? Romney recently went on a tour in Europe, and upset the UK, Poland, and Israel all within one week. If Romney is able to upset three of our allies within one week I would hate to put him in a conversation with one of our enemies.
idrthrbsailinin reply to mcmahorj(Show the comment) 2 weeks ago 18
 
 
 








Bain Capital : When Mitt Romney Came To Town
http://www.youtube.com/watch?v=-J9papNPAJQ&feature=related
Uploaded by eyehateevil1 on Jan 9, 2012
If you close your eyes, you can image these are the people who were laid off from:
Solyndra,
First Solar,
Ecotality,
or Sun Power.
.
The word is out, Prez O doesn't have a clue on how to run the Economy.
DOESne1WANTaPEANUT 1 week ago


I wonder if he rode his wife's horse dancing when he came to town???
I feel sorry for those people. I know what a squeeze play like that feels like. I had GM stocks and almost lost all my pension but Obama came in on behalf of the unions at GM and Chrysler. It's no fun to be downsized.
memorast 2 weeks ago
 
 
 







Mitt Romney's 'Job Killing' Bain Capital Past Continues To Haunt The Rich Flip-Flopper
http://www.youtube.com/watch?v=TEPe8avt8nQ&feature=related
Uploaded by politicalarticles on Dec 29, 2011

No description available.





btw, Mitt Romney doesn't care about workers & their companies - he cares about money.
Eye2EyeIIIV 7 months ago
Wow, just what America needs, a vulture capitalist for president. Joy.
MamaJacqueroo 7 months ago
 
 
 







Perry Slams Romney's Record at Bain Capital
http://www.youtube.com/watch?v=f9osZGVqCUA&feature=related
Anybody who votes for Romney would have to put ALL COMMON SENSE aside, period. IF he runs against Obama, the only way anybody other than millionaires that would vote for him will be racist pigs. period.

louise441000 3 months ago
 
 
 








Job creation may just be Mitt Romney's bane
http://www.youtube.com/watch?v=F2lRsCrlBis&feature=related
Published on Aug 6, 2012 by FastNewsNetwork

http://www.youtube.com/FastNewsNetwork
Fast News Network
Please Subscribe FastNewsNetwork
US presidential hopeful Mitt Romney is on a European tour to promote among other things, his job-creating credentials but back home in a small town in Illinois - those qualities are being questioned. Nearly 200 workers at the Sensata plant linked to Romney's former company, Bain Capital, are about to lose their jobs. And to add insult to injury, They have to train their Chinese replacements first. Al Jazeera's John Hendren reports from Freeport.
 
 
 












As CEO of Bain Capital Mitt Romney Pocketed Huge Profits While Bankrupting 5 Companies
http://www.youtube.com/watch?v=GwxQvkZKSNs&feature=related
Uploaded by politicalarticles on Jun 3, 2011

Beating Governor RomBOT: http://www.politicalarticles.net/blog/2011/05/19/beating-governor-rombot-why-...
 
 
 












Mitt Romney: 'I am Not Concerned About The Poor; Let Struggling Home Owners Drown'
http://www.youtube.com/watch?v=QIXORE7wK8w
Uploaded by politicalarticles on Feb 2, 2012

No description available.
 
 
 









Gingrich rips Romney on "poor" comment http://www.youtube.com/watch?v=s3UKtebFLyE&feature=related


Published on Feb 1, 2012 by CBSNewsOnline


Newt Gingrich on Wednesday ripped GOP front-runner Mitt Romney for comments he made about not caring about the poor. Gingrich went on to say he's "fed up with politicians in either party dividing Americans against each other."
 





Mitt Romney: Out of Touch
http://www.youtube.com/watch?v=hw896Y4vzeg
Published on Jun 13, 2012 by BarackObamadotcom

Facebook it: https://my.barackobama.com/outoftouchvid
 
 
 




Willard Mitt Romney's Pathological Lies: A Brief History (1/2)
http://www.youtube.com/watch?v=4iDOHt2QFCQ
Published on Jul 13, 2012 by politicalarticles

Pathological 'Romnesia' and The Stunning Ease With Which Willard Mitt Romney LIES: http://www.politicalarticles.net/blog/2012/07/13/pathological-romnesia-and-th...
 
 
 



Caught in Another LIE: Romney Brought Supporters To NAACP Speech To Provide 'Cheers'
http://www.youtube.com/watch?v=4g12tNYBIIc&feature=relmfu
Published on Jul 13, 2012 by politicalarticles

Pathological 'Romnesia' and The Stunning Ease With Which Willard Mitt Romney LIES: http://www.politicalarticles.net/blog/2012/07/13/pathological-romnesia-and-th...
 
 
 



WHOPPER: Once Caught, Shameless Romney Not Interested in Correcting LIES (1/2)
http://www.youtube.com/watch?v=5CF4GKSb3oY
Published on Jun 9, 2012 by politicalarticles

Grand Theft Auto: Mitt Romney, The 'Professional Liar' -- Claims He Saved The U.S. Auto Industry!: http://www.politicalarticles.net/blog/2012/05/09/grand-theft-auto-mitt-romney...
 
 
 




WHOPPER: Once Caught, Shameless Romney Not Interested in Correcting LIES (2/2)
http://www.youtube.com/watch?v=2VSiUAqMRZs&playnext=1&list=PL8B5E2079C91FFD2C&feature=results_main

Published on Jun 9, 2012 by politicalarticles

Grand Theft Auto: Mitt Romney, The 'Professional Liar' -- Claims He Saved The U.S. Auto Industry!: http://www.politicalarticles.net/blog/2012/05/09/grand-theft-auto-mitt-romney...
 
 
 




Political corruption

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World map of the 2010 Corruption Perceptions Index by Transparency International, which measures "the degree to which corruption is perceived to exist among public officials and politicians". High numbers (blue) indicate less perception of corruption, whereas lower numbers (red) an indicate higher perception of corruption.
Political corruption is the use of power by government officials for illegitimate private gain. Misuse of government power for other purposes, such as repression of political opponents and general police brutality, is not considered political corruption. Neither are illegal acts by private persons or corporations not directly involved with the government. An illegal act by an officeholder constitutes political corruption only if the act is directly related to their official duties, is done under color of law or involves trading in influence.
Forms of corruption vary, but include bribery, extortion, cronyism, nepotism, patronage, graft, and embezzlement. Corruption may facilitate criminal enterprise such as drug trafficking, money laundering, and human trafficking, though is not restricted to these activities.
The activities that constitute illegal corruption differ depending on the country or jurisdiction. For instance, some political funding practices that are legal in one place may be illegal in another. In some cases, government officials have broad or ill-defined powers, which make it difficult to distinguish between legal and illegal actions. Worldwide, bribery alone is estimated to involve over 1 trillion US dollars annually.[1] A state of unrestrained political corruption is known as a kleptocracy, literally meaning "rule by thieves".
Some forms of corruption—-now called "institutional corruption"[2]—-are distinguished from bribery and other kinds of obvious personal gain. Campaign contributions are the prime example. Even when they are legal, and do not constitute a quid pro quo, they have a tendency to bias the process in favor of special interests, and undermine public confidence in the political institution. They corrupt the institution without individual members being corrupt themselves. A similar problem of corruption arises in any institution that depends on financial support from people who have interests that may conflict with the primary purpose of the institution.

Effects on politics, administration, and institutions



Detail from Corrupt Legislation (1896) by Elihu Vedder. Library of Congress Thomas Jefferson Building, Washington, D.C.
Corruption poses a serious development challenge. In the political realm, it undermines democracy and good governance by flouting or even subverting formal processes. Corruption in elections and in legislative bodies reduces accountability and distorts representation in policymaking; corruption in the judiciary compromises the rule of law; and corruption in public administration results in the inefficient provision of services. It violates a basic principle of republicanism regarding the centrality of civic virtue. More generally, corruption erodes the institutional capacity of government as procedures are disregarded, resources are siphoned off, and public offices are bought and sold. At the same time, corruption undermines the legitimacy of government and such democratic values as trust and tolerance.
[edit] Economic effects
See also: Corporate crime
In the private sector, corruption increases the cost of business through the price of illicit payments themselves, the management cost of negotiating with officials, and the risk of breached agreements or detection. Although some claim corruption reduces costs by cutting bureaucracy, the availability of bribes can also induce officials to contrive new rules and delays. Openly removing costly and lengthy regulations are better than covertly allowing them to be bypassed by using bribes. Where corruption inflates the cost of business, it also distorts the playing field, shielding firms with connections from competition and thereby sustaining inefficient firms.[3]
Corruption also generates economic distortions in the public sector by diverting public investment into capital projects where bribes and kickbacks are more plentiful. Officials may increase the technical complexity of public sector projects to conceal or pave the way for such dealings, thus further distorting investment.[4] Corruption also lowers compliance with construction, environmental, or other regulations, reduces the quality of government services and infrastructure, and increases budgetary pressures on government.
Economists argue that one of the factors behind the differing economic development in Africa and Asia is that in Africa, corruption has primarily taken the form of rent extraction with the resulting financial capital moved overseas rather than invested at home (hence the stereotypical, but often accurate, image of African dictators having Swiss bank accounts). In Nigeria, for example, more than $400 billion was stolen from the treasury by Nigeria's leaders between 1960 and 1999.[5] University of Massachusetts Amherst Amherst researchers estimated that from 1970 to 1996, capital flight from 30 sub-Saharan countries totaled $187bn, exceeding those nations' external debts.[6] (The results, expressed in retarded or suppressed development, have been modeled in theory by economist Mancur Olson.) In the case of Africa, one of the factors for this behavior was political instability, and the fact that new governments often confiscated previous government's
corruptly-obtained assets. This encouraged officials to stash their wealth abroad, out of reach of any future expropriation. In contrast, Asian administrations such as Suharto's New Order often took a cut on business transactions or provided conditions for development, through infrastructure investment, law and order, etc.
[edit] Environmental and social effects
Corruption facilitates environmental destruction. Corrupt countries may formally have legislation to protect the environment, it cannot be enforced if officials can easily be bribed. The same applies to social rights worker protection, unionization prevention, and child labor. Violation of these laws rights enables corrupt countries to gain illegitimate economic advantage in the international market.
The Nobel Prize-winning economist Amartya Sen has observed that "there is no such thing as an apolitical food problem." While drought and other naturally occurring events may trigger famine conditions, it is government action or inaction that determines its severity, and often even whether or not a famine will occur. Governments with strong tendencies towards kleptocracy can undermine food security even when harvests are good. Officials often steal state property. In Bihar, India, more than 80% of the subsidized food aid to poor is stolen by corrupt officials.[7] Similarly, food aid is often robbed at gunpoint by governments, criminals, and warlords alike, and sold for a profit. The 20th century is full of many examples of governments undermining the food security of their own nations – sometimes intentionally.[8]
[edit] Effects on Humanitarian Aid
The scale of humanitarian aid to the poor and unstable regions of the world grows, but it is highly vulnerable to corruption, with food aid, construction and other highly valued assistance as the most at risk.[9] Food aid can be directly and physically diverted from its intended destination, or indirectly through the manipulation of assessments, targeting, registration and distributions to favour certain groups or individuals.[9] Elsewhere, in construction and shelter, there are numerous opportunities for diversion and profit through substandard workmanship, kickbacks for contracts and favouritism in the provision of valuable shelter material.[9] Thus while humanitarian aid agencies are usually most concerned about aid being diverted by including too many, recipients themselves are most concerned about exclusion.[9] Access to aid may be limited to those with connections, to those who pay bribes or are forced to give sexual favours.[9] Equally, those able
to do so may manipulate statistics to inflate the number beneficiaries and siphon off additional assistance.[9]
[edit] Other areas: health, public safety, education, trade unions, etc.
See also: Police corruption
Corruption is not specific to poor, developing, or transition countries. In western countries, cases of bribery and other forms of corruption in all possible fields exist: under-the-table payments made to reputed surgeons by patients attempting to be on top of the list of forthcoming surgeries,[10] bribes paid by suppliers to the automotive industry in order to sell low-quality connectors used for instance in safety equipment such as airbags, bribes paid by suppliers to manufacturers of defibrillators (to sell low-quality capacitors), contributions paid by wealthy parents to the "social and culture fund" of a prestigious university in exchange for it to accept their children, bribes paid to obtain diplomas, financial and other advantages granted to unionists by members of the executive board of a car manufacturer in exchange for employer-friendly positions and votes, etc. Examples are endless. These various manifestations of corruption can ultimately
present a danger for the public health; they can discredit specific, essential institutions or social relationships.
Corruption can also affect the various components of sports activities (referees, players, medical and laboratory staff involved in anti-doping controls, members of national sport federation and international committees deciding about the allocation of contracts and competition places).
Cases exist against (members of) various types of non-profit and non-government organisations, as well as religious organisations.
Ultimately, the distinction between public and private sector corruption sometimes appears rather artificial and national anti-corruption initiatives may need to avoid legal and other loopholes in the coverage of the instruments.
[edit] Types
[edit] Bribery
Main article: Bribery
A bribe is a payment given personally to a government official in exchange of his use of official powers. Bribery requires two participants: one to give the bribe, and one to take it. Either may initiate the corrupt offering; for example, a customs official may demand bribes to let through allowed (or disallowed) goods, or a smuggler might offer bribes to gain passage. In some countries the culture of corruption extends to every aspect of public life, making it extremely difficult for individuals to stay in business without resorting to bribes. Bribes may be demanded in order for an official to do something he is already paid to do. They may also be demanded in order to bypass laws and regulations. In addition to using bribery for private financial gain, they are also used to intentionally and maliciously cause harm to another (i.e. no financial incentive). In some developing nations, up to half of the population has paid bribes during the past 12
months.[11]
In recent years, efforts have been made by the international community to encourage countries to dissociate and incriminate as separate offences, active and passive bribery. Active bribery can be defined for instance as the promising, offering or giving by any person, directly or indirectly, of any undue advantage [to any public official], for himself or herself or for anyone else, for him or her to act or refrain from acting in the exercise of his or her functions. (article 2 of the Criminal Law Convention on Corruption (ETS 173) of the Council of Europe). Passive bribery can be defined as the request or receipt [by any public official], directly or indirectly, of any undue advantage, for himself or herself or for anyone else, or the acceptance of an offer or a promise of such an advantage, to act or refrain from acting in the exercise of his or her functions (article 3 of the Criminal Law Convention on Corruption (ETS 173)). The reason for this
dissociation is to make the early steps (offering, promising, requesting an advantage) of a corrupt deal already an offence and, thus, to give a clear signal (from a criminal policy point of view) that bribery is not acceptable. Furthermore, such a dissociation makes the prosecution of bribery offences easier since it can be very difficult to prove that two parties (the bribe-giver and the bribe-taker) have formally agreed upon a corrupt deal. In addition, there is often no such formal deal but only a mutual understanding, for instance when it is common knowledge in a municipality that to obtain a building permit one has to pay a "fee" to the decision maker to obtain a favourable decision. A working definition of corruption is also provided as follows in article 3 of the Civil Law Convention on Corruption (ETS 174): For the purpose of this Convention, "corruption" means requesting, offering, giving or accepting, directly or indirectly, a bribe or any
other undue advantage or prospect thereof, which distorts the proper performance of any duty or behavior required of the recipient of the bribe, the undue advantage or the prospect thereof.
[edit] Trading in influence
Trading in influence, or influence peddling in some countries, refers to the situation where a person is selling his/her influence over the decision process involving a third party (person or institution). The difference with bribery is that this is a tri-lateral relation. From a legal point of view, the role of the third party (who is the target of the influence) does not really matter although he/she can be an accessory in some instances. It can be difficult to make a distinction between this form of corruption and some forms of extreme and loosely regulated lobbying where for instance law- or decision-makers can freely "sell" their vote, decision power or influence to those lobbyists who offer the highest compensation, including where for instance the latter act on behalf of powerful clients such as industrial groups who want to avoid the passing of specific environmental, social, or other regulations perceived as too stringent, etc. Where lobbying is
(sufficiently) regulated, it becomes possible to provide for a distinctive criteria and to consider that trading in influence involves the use of "improper influence", as in article 12 of the Criminal Law Convention on Corruption (ETS 173) of the Council of Europe.
[edit] Patronage
Main article: Patronage
Patronage refers to favoring supporters, for example with government employment. This may be legitimate, as when a newly elected government changes the top officials in the administration in order to effectively implement its policy. It can be seen as corruption if this means that incompetent persons, as a payment for supporting the regime, are selected before more able ones. In nondemocracies many government officials are often selected for loyalty rather than ability. They may be almost exclusively selected from a particular group (for example, Sunni Arabs in Saddam Hussein's Iraq, the nomenklatura in the Soviet Union, or the Junkers in Imperial Germany) that support the regime in return for such favors. A similar problem can also be seen in Eastern Europe, for example in Romania, where the government is often accused of patronage (when a new government comes to power it rapidly changes most of the officials in the public sector).[12]
[edit] Nepotism and cronyism
Main articles: Nepotism and Cronyism
Favoring relatives (nepotism) or personal friends (cronyism) of an official is a form of illegitimate private gain. This may be combined with bribery, for example demanding that a business should employ a relative of an official controlling regulations affecting the business. The most extreme example is when the entire state is inherited, as in North Korea or Syria. A lesser form might be in the Southern United States with Good ol' boys, where women and minorities are excluded. A milder form of cronyism is a "old boy network", in which appointees to official positions are selected only from a closed and exclusive social network – such as the alumni of particular universities – instead of appointing the most competent candidate.
Seeking to harm enemies becomes corruption when official powers are illegitimately used as means to this end. For example, trumped-up charges are often brought up against journalists or writers who bring up politically sensitive issues, such as a politician's acceptance of bribes.
[edit] Electoral fraud
Main article: Electoral fraud
Electoral fraud is illegal interference with the process of an election. Acts of fraud affect vote counts to bring about an election result, whether by increasing the vote share of the favored candidate, depressing the vote share of the rival candidates, or both. Also called voter fraud, the mechanisms involved include illegal voter registration, intimidation at polls, and improper vote counting.
[edit] Embezzlement
Main article: Embezzlement
Embezzlement is outright theft of entrusted funds. It is political when it involves public money taken by a responsible public official. A common type of embezzlement is that of personal use of entrusted government resources; for example, when an official assigns public employees to renovate his own house.
[edit] Kickbacks
See also: Anti-competitive practices and Bid rigging
A kickback is an official's share of misappropriated funds allocated from his or her organization to an organization involved in corrupt bidding. For example, suppose that a politician is in charge of choosing how to spend some public funds. He can give a contract to a company that is not the best bidder, or allocate more than they deserve. In this case, the company benefits, and in exchange for betraying the public, the official receives a kickback payment, which is a portion of the sum the company received. This sum itself may be all or a portion of the difference between the actual (inflated) payment to the company and the (lower) market-based price that would have been paid had the bidding been competitive.
Another example of a kickback would be if a judge receives a portion of the profits that a business makes in exchange for his judicial decisions.
Kickbacks are not limited to government officials; any situation in which people are entrusted to spend funds that do not belong to them are susceptible to this kind of corruption.
[edit] Unholy alliance
An [abhilash Alliance (geopolitical)|unholy alliance]] is a coalition among seemingly antagonistic groups for ad hoc or hidden gain. Like patronage, unholy alliances are not necessarily illegal, but unlike patronage, by its deceptive nature and often great financial resources, an unholy alliance can be much more dangerous to the public interest. An early, well-known use of the term was by Theodore Roosevelt (TR):

"To destroy this invisible Government, to dissolve the unholy alliance between corrupt business and corrupt politics is the first task of the statesmanship of the day." – 1912 Progressive Party Platform, attributed to TR[13] and quoted again in his autobiography[14] where he connects trusts and monopolies (sugar interests, Standard Oil, etc.) to Woodrow Wilson, Howard Taft, and consequently both major political parties.
[edit] Involvement in organized crime
An illustrative example of official involvement in organized crime can be found from 1920s and 1930s Shanghai, where Huang Jinrong was a police chief in the French concession, while simultaneously being a gang boss and co-operating with Du Yuesheng, the local gang ringleader. The relationship kept the flow of profits from the gang's gambling dens, prostitution, and protection rackets undisturbed.
The United States accused Manuel Noriega's government in Panama of being a "narcokleptocracy", a corrupt government profiting on illegal drug trade. Later the U.S. invaded Panama and captured Noriega.




International corporate crime against africa



Corporate interests and activities in Africa have also contributed to exploitation, conflict and poverty for ordinary people while enriching African and foreign elites.


The easy access to natural resources to maintain and fuel rebellions (combined with corporate interests) makes for a nasty combination.


A lack of support for basic rights in the region, plus a lack of supporting institutions, as well as the international community's political will to do something about it and help towards building peace and stability has also been a factor. A World Bank report notes that "politics and poverty cause civil wars, not ethnic diversity." It also points out that in Africa, failed institutions are also a cause. It adds that where there is ethnic diversity, there is actually less chance for civil wars, as long as there is not just a small number of very large ethnic groups, or ethnic polarization.



These And Other Causes Reinforce Each Other
For the June 2002 G8 summit, a briefing was prepared by Action for Southern Africa and the World Development Movement. In that, they also pointed out similar causes to the above, when looking at the wider issue of economic problems as well as political:


It is undeniable that there has been poor governance, corruption and mismanagement in Africa. However, the briefing reveals the context — the legacy of colonialism, the support of the G8 for repressive regimes in the Cold War, the creation of the debt trap, the massive failure of Structural Adjustment Programmes imposed by the IMF and World Bank and the deeply unfair rules on international trade. The role of the G8 in creating the conditions for Africa's crisis cannot be denied. Its overriding responsibility must be to put its own house in order, and to end the unjust policies that are inhibiting Africa's development.
— It's the "Blame the Victim" Summit, Action for Southern Africa, June 25, 2002. (You can see the briefing in full (PDF format) from this link.)

Side Note»

As an aside, though also related, in terms of the economic situation, it has been common, as the above briefing is titled, to "blame the victim" on causes of poverty, corruption, lack of development, and so forth. This has often applied to Africa, as well as other regions around the world when discussing such things in the mainstream. But, as the above briefing also highlights, some common "myths" are often used to highlight such aspects, including (and quoting):

Africa has received increasing amounts of aid over the years—in fact, aid to Sub-Saharan Africa fell by 48% over the 1990s
Africa needs to integrate more into the global economy—in fact, trade accounts for larger proportion of Africa's income than of the G8
Economic reform will generate new foreign investment—in fact, investment to Africa has fallen since they opened up their economies
Bad governance has caused Africa's poverty—in fact, according to the UN Conference on Trade and Development (UNCTAD), economic conditions imposed by the IMF and the World Bank were the dominant influence on economic policy in the two decades to 2000, a period in which Africa's income per head fell by 10% and income of the poorest 20% of people fell by 2% per year
The G8 section on this web site also looks in more detail at the way Western nations appear to have offered to help Africa, e.g. through wiping out their debts, but that in reality it turns out far less has actually happened, and that G8 nations are amongst the ones that have actually played a big role in Africa's current problems.

Hence, as well as looking into the urgent and critical issues of corruption, mismanaged leadership and governance in Africa, external factors resulting from geopolitical power play must also be considered.
Back to top


China and Africa; concerns over rights and exploitation
Criticism of China's human rights is (predictably) increasing in the West, as China rises. Some of the concerns are genuine, while others may hide political agenda. Common criticisms are over areas such as human rights, environment, and labor standards. As Chinese enterprises expand overseas, especially in Africa, criticisms of exploitation are increasing.


For example, China's silence on the Sudanese government's policy in Darfur suggests that China is not concerned about human rights; just about its own economic interests. In Angola for example, where there are lots of oil interest (not just from China), some Chinese companies have been accused of ignoring local issues, for example by importing many materials from China rather than sourcing it locally, and even hiring Chinese only, excluding local Angolans.


A BBC television report in early July 2007 even noted that at an African/Chinese conference, the West was not there, implying the West could perhaps have been able to tame Chinese attempts at exploitation. Nothing was mentioned about the decades of Western exploitation of Africa that continues today albeit more benignly.
A BBC web site forum even asked, Is China Africa's new master?, perhaps not realizing that by saying "new", it appeared to acknowledge a role that the West currently attempts to fill.
It seems that there may be some double standards here.








China slowdown bigger worry than eurozone?








Posted by:
CNN.com business producer, Kevin Voigt


August 3rd, 2012
04:17 AM GMT




Hong Kong (CNN) – Will China's economy have a hard landing, soft touchdown or slow ascension?
The lack of strong action Thursday from the European Central Bank on Europe's spiraling debt crisis – coupled with similar inaction from the U.S. Federal Reserve on the slowing U.S. economy earlier this week – has ratcheted global investor stress on how China will handle its own slowdown.
The question percolated throughout interviews on CNN International business shows this week.
"It is quite disturbing that Brazil and India have slowed down so much, obviously there's this huge debate going on about China's slowdown," Jim O'Neill, chairman of asset management for Goldman Sachs, told Richard Quest when he argued the slowdown in developing behemoths like China and the rest of the BRIC bloc is more worrisome than the eurozone crisis.
Investor Mark Mobius, head of Templeton Emerging Markets Group, disagreed.
"A lot of people ask me if China is going to have a hard or soft landing," Mobius said. "And I say they are not landing. They're continuing to grow and they're growing at a pretty fast pace."
Still, the signs of a China slowdown are many. Inventories in factories are piling up, and companies ranging from electronics, airlines and sportswear have issued profit warnings.
"While the world fixates on what the Fed and the ECB have up their collective sleeves to stem the sovereign debt contagion and to spur growth, it appears to me that the policy prescriptions might need to include China," wrote Mike Paulenoff of MPTrader.com. "As in, how to avert a hard landing?"
So, hard days ahead for China? Will its economy touch down gently, or is it likely to trampoline – with help from Beijing – like it did in the wake of the 2008-2009 financial crisis?
Have your say. Leave a comment below.





Departing IMF economist blasts fund for eurozone 'failure'; Lagarde is 'tainted'

By Nina Dos Santos, CNN
July 20, 2012 -- Updated 1710 GMT (0110 HKT)



An outgoing economist at the IMF has blasted the selection process of managing director Christine Lagarde, pictured here at the June G-20 Leaders Summit in Mexico.


STORY HIGHLIGHTS

A former IMF economist blasts the fund for its lack of leadership
Peter Doyle, a 20-year veteran of the fund, left the IMF in June
Claims IMF indecision has brought the euro "to the brink"
IMF: Issues raised by Doyle "are covered by a host of public reports"
London (CNN) -- A senior economist at the institution spearheading the bailouts of three eurozone countries has lambasted its lack of leadership and said its first female chief is not fit for the job.
In a letter obtained exclusively by CNN and addressed to Shakour Shaalan, dean of the executive board of the International Monetary Fund, 20-year veteran Peter Doyle says he is "ashamed to have had any association with the Fund at all."


Doyle, a former advisor to the IMF's European Department, which runs its programs for Greece, Portugal and Ireland, argues the body's failure to deliver timely and sustained warnings to the region's dithering politicians had led to widespread suffering for those living in stricken countries and the risk of worse to come.
The institution's lack of decisive action, Doyle says, has left "the second global reserve currency (the euro) on the brink."






IMF sees slow growth






IMF cuts global growth forecast for 2013






U.S. heading toward 'fiscal cliff'?






Lagarde: Euro has 3 months to be saved
"The fund for the past two years has been playing catch-up and reactive roles in the last ditch efforts to save it," he writes.
Read full letter here
Doyle, a former IMF division head for Israel and non-eurozone nations Sweden and Denmark, was widely respected within the organization, according to IMF insiders who did not wish to be named due to the sensitivity of the issue.
Doyle did not work on countries within the monetary union, but his comments highlight strong feelings among the fund's economists about its work underway in places like Greece.
His attack comes amid concerns the fund's stringent austerity measures for debtor nations are doing more harm than good whilst failing to contain a crisis that is now well into its third year.
Doyle penned his missive on June 18 just as senior IMF representatives, including its first female Managing Director, Christine Lagarde, were trying to hammer out a new set of emergency measures with key eurozone heads of government at the Group of 20 summit in Los Cabos, Mexico.
Doyle says one of the reasons the IMF has not delivered on its surveillance of the global economy is European bias which if anything, he says, is "becoming more deeply entrenched."
Lagarde: Euro crisis is 'everyone's problem'
"This fact is most clear," Doyle states, "in regard to the appointments for Managing Director, which over the past decade, have all-too-evidently been disastrous."
Referring to Lagarde -- who recently completed her first year in the role -- Doyle says, "even the current incumbent is tainted, as neither her gender, integrity, or elan can make up for the fundamental illegitimacy of the selection process."
Doyle, who copied in Stanley Fischer, governor of the Bank of Israel, and Stefan Ingves, head of the Sweden's central bank, says his early warnings of the impending crisis were "identified well in advance but were suppressed."
William Murray, a spokesman for the IMF in Washington, said the fund had found no evidence to substantiate that claim, from Doyle or any other sources.
Doyle went on to accuse the IMF's board of preferring a "handicapped fund" paralyzed by the powerplay of international politics within its upper echelons and "subject to those proximate roots of surveillance failure."
"There are good salty people here," Doyle signs off, "but this one is moving on. You might want to take care not to lose others."
The IMF's Murray says, "A lot of the points raised are covered by a host of public reports related to the IMF's economic surveillance and public statements by the management on these issues."





Dilemma for Greek youth: Fight or flee

By Irene Chapple, CNN
July 13, 2012 -- Updated 1649 GMT (0049 HKT)


STORY HIGHLIGHTS

Maria Papanagiotaki and Aristotle Skalizos are in love, but they disagree over whether to stay in Greece or leave
The couple belong to a generation devastated by the country's economic crisis
Others who have left Greece come back to contribute to the recovery of their homeland
The country's young face such dilemmas even as politicians try and renegotiate the bailout package
Athens (CNN) -- Wandering through central Athens' Syntagma Square, Maria Papanagiotaki and Aristotle Skalizos stop to perch on a sun-soaked bench as they consider their future.
The couple, who have been dating for two-and-a-half years, belong to Greece's post-junta generation, growing up as the country emerged into its modern democracy.
As Greece's turbulent history faded into its past, the country's political landscape remained fraught with nepotism and mismanagement.
Read more: Is Greek democracy regressing?
But the boom times had begun. Greece entered the euro in 2001, and ex-pat money flooded back into the country.
It hosted the Olympic Games in 2004, swelling the country with pride.



It was time to feed my heart, not my mind
Christina Psarra
But by 2009 -- when the country admitted its deficit was out of control -- the financial mirage evaporated. Maria, 34, and 25-year old Aristotle's generation was caught in the fallout.
The couple belong to a young professional class that will help shape their country's future. Together, they must decide if they are willing to live through -- and help alleviate -- Greece's pain.
Their views differ dramatically, and it weighs on their relationship.
A few meters away from where Maria, an electronic mobile technician, and Aristotle, an electronics tester, chat, a man stumbles to his knees, dropping a begging cup. Grasping for it as it rolls away, he ends up splayed on the ground.
It's a disturbing sight, but one which has become increasingly common in Athens since austerity measures began to bite.
Greece's poverty, suicide and crime rates have increased alongside unemployment and emigration.
It is this environment Maria wants to leave. She dreams of life outside of Greece, in the UK or the U.S., where she has relatives. "I have to go," she says. "I have to leave from here."
Aristotle wants to remain. "I want to stay and fight," he says. "I don't want to abandon my country."
His reasoning is clear: "I love my country."
Maria and Aristotle
Maria and Aristotle began dating after meeting at their workplace, a Germany-based telecommunications company. The relationship blossomed after, in Maria's words, "he saw me there, we became friends, he was trying to approach me in any [way]... and finally after eight months we were together."



The game is not lost but we are two goals behind
George Stathopoulos
They moved in together, but say their financial situation has become increasingly difficult as the crisis has unfolded. Each has taken a significant cut in pay since April, in part because both have seen their work week reduced to four days a week.
They now earn €1,160 ($1,415) a month between them, down from €1,480 ($1,805) two years ago.
They pay €300 ($366) in rent and around €65 ($79) a week in groceries, but face extra costs because of the crisis. Since Aristotle's father's sculpture business went bankrupt in the recession, the young couple must also help his parents get by, he says.
Neither voted in the June 17 elections, because they could not spare the cash to return to their home villages -- €15 ($18) for Maria, and €40 ($48) for Aristotle -- to vote.
Pro-austerity package party New Democracy won the election, despite soaring support for the radical left Syriza party.



I have to go, I have to leave from here.
Maria Papanagiotaki
Alexis Tsipras, who heads Syriza, is, like Maria, is in his 30s. Tsipras's vociferous rejection of Europe's austerity-driven demands for Greece appealed to discontented youth, with the party capturing 33% of 18 to 34-year-olds, compared to 20% for New Democracy.
The surge is all the more dramatic given that Greeks, born in a country where family loyalty is embedded deep in the national psyche, usually vote the way of their forebears.
Maria, for one, would have fallen behind her parents and voted New Democracy. The party now leads a fragile coalition, but that provides no comfort for Maria.
A country fights for its future
Greece's new government is now renegotiating its bailout package, but there is no guarantee the country will emerge from years of recession. And the country could lose people like Maria and Aristotle overseas, while those with less hope could give in to despair.



I don't want to abandon the situation.... because I love my country
Aristotle Skalizos
More than 50% of working age Greeks under 26 are without a job. Those just entering the workforce are particularly hard-hit, with 2011 figures from Eurostat showing 56% unemployment among those aged 15 to 19. Around one in four workers under 39 years old are unemployed.
Eurostat figures show the extent of the exodus of young workers fleeing Greece's crisis. In 2010, almost 2.5% of those in their mid-to-late 20s left the country, while around 2% of those aged 30 to 34 emigrated.
Dreams of going abroad
Those choosing to leave must struggle against the desire to stay and help their family, and overcome a deep loyalty to a country which has suffered under civil war, dictatorship, and foreign rule under Germany, now its main paymaster.
Those entering the workforce carry a cultural weight of responsibility to family. Aristotle's 19-year-old brother, Nick, a student, wants to move to the Netherlands to study fine arts. Holland attracts him because of its place in art history, and the "country and the color of the sky are beautiful," he says. But any money he earns -- after he's made enough to get by -- will be sent back to Greece, to help his family.
Marios-Aristotle Koulouris, a 23-year-old soldier, also wants to go abroad, and study political science. But he wants to return, to break his generation's "consciousness of dependency."
Greece, he believes, needs to "rise up and develop its own power, to protect our people's benefits. Economically and politically, we need to rise up."
The country's next generation needs to be taught the value of productivity, he believes. The crisis represents a chance "to change people's minds.... to abolish the mentality of dependency."
Coming back home
Some of those who have left Greece have already returned in an effort to help the country they love.



The country [Netherlands] and the color of the sky are beautiful
Nick Skalizos
Christina Psarra, a 27-year-old who works in policy at humanitarian organization Doctors of the World studied at the London School of Economics, while George Stathopoulos, a 33-year-old investment banker studied at Middlesex University.
Although their educations opened a world of possibility, both opted to forgo careers abroad to return to Athens.
Christina says when her studies in London were coming to an end last year, she knew it was time to "feed my heart not my mind."
Christina and George describe Greece as a country where one always cooks extra food in preparation for a guest, where a feisty debate over sport will end with friendly drink, and where parents maintain close contact with children after they leave home.
But this often idyllic country today finds itself immersed in anger and fear. And Christina, who is passionate about helping the vulnerable and now works with drug addicts, says she doesn't know which is more dangerous.
"I'm afraid for other people and myself," she says.



Economically and politically, we need to rise up
Marios- Aristotle Koulouris
With the option to work overseas, she believes she may be forced to leave, due to Greece's lack of opportunities. "I have the chance, I have the choice to decide to live abroad. If I am forced to do it, I can do it," she says.
George believes the country can -- should it follow the example of others, such as Turkey -- restructure itself into a viable European economy. The revelations of its financial irresponsibility, which led the spiral into bailout, were akin to the country being caught "skinny-dipping" when the tide went out, he says.
George wants to see the country's red-tape unraveled to allow investment into its promising industries such as tourism and shipping. The problems for Greece are structural, he says, and that can be a "glass half full ...you can see that as an opportunity. [If] you realize you have a problem, you can transform how you do business."
The way he sees it: "The game is not lost but we are two goals behind."
Marios-Aristotle also sees opportunity in Greece's future, and he is not afraid of the pain that may still come. "My country [during] its history has passed many greater disasters. So I am not afraid."
For Aristotle, there is one answer to a difficult question. It goes against his wishes but he will put his relationship with Maria ahead of his country. "I love [Maria], and I will follow her. I will sacrifice," he says.





European slowdown hits Hong Kong's paper paupers

By Ramy Inocencio, CNN
July 23, 2012 -- Updated 0629 GMT (1429 HKT)

(CNN) -- Every morning Kong Kit Tam goes on a 7 a.m. walk around his neighborhood - not for exercise, but for money.


Tam is a paper scavenger. His currency is waste paper. For the past three years, he has dug into dirty garbage cans to pull out old newsprint and has shuffled through dimly-lit back alleys to haul out used cardboard boxes. An empty carton of Marlboro cigarettes, a torn envelope for an electricity bill and a pink pastry box get stuffed into his shoulder bag today. He sells it all to a recycler for money.
"Each month I might earn $100 or $200 or $300 Hong Kong dollars," Tam says. That's $12 to $36 U.S. dollars and is his only source of income. The short, rumpled 50-year old talks through a slight smile but his circumstances are no joke.
"I never thought that I would be doing this," Tam admits. "I do it to survive, it's my livelihood."
Tam's life stands in stark contrast to a Hong Kong more famous for its iconic skyline and glitzy high life as an Asian hub for global financial firms. A Hong Kong government report released last month revealed that the city's wealth gap is the widest in the developed world. Tam is a prime example of that other extreme. And he is not the only one.
"There are an estimated 10,000 people who are recycling scavengers in Hong Kong," says Sze Lai Shan, a well-known local rights activist and social worker for Hong Kong's Society for Community Organization, or SOCO.




Eurozone crisis impacts emerging markets
But paper scavengers like Tam are making much less money today than last year. The reason is thousands of miles away, says Jacky Lau, president of one of Hong Kong's oldest recycling companies.
"Europe is facing many economic problems and this has translated to fewer manufacturing orders for clothes and toys in China," explains Lau. "Fewer orders mean a slowing demand for paper boxes, so prices have fallen dramatically."
Standing among bales of crushed plastic bottles and piles of books waiting to be recycled, Lau says that one kilogram of waste paper would have gotten about 18 cents this time last year. Today, that value has been halved.
Adam Minter, who runs the China-based blog Shanghai Scrap, says the recycling industry as a whole is one of the first to experience a slowdown in the event of a global economic slump.
"The street prices [for scrap metal] are down along the east coast of China -- down 50% from highs of about 6 months ago. They're very sensitive to demand for raw materials."
And the paper industry can be even more delicate. "Paper might be the most consumer sensitive of all because it's used in packaging - and packaging is used for everything," said Minter, who has just finished writing a book about the globalization of the waste and recycling industry.
And Hong Kong waste recovery companies are feeling the pinch because 98% of Hong Kong's recovered paper goes to be recycled in China, says Lau. He adds several of the city's 400 firms have already closed down. And he's not optimistic the economy will make a comeback this year.
"July is when prices should start to pick up. Retailers in Europe and the U.S. should be placing their Christmas orders right now but business has remained relatively quiet. The second half of this year is looking rather grim."
Lau said he earned up to $400,000 last year. This year, he expects to just break even.
As for Tam, his hope is just a dollar a day. Like Lau, he is equally uncertain about the future.
Back at his tiny 9th story walk-up, entirely subsidized by the government, Tam stashes his paper trash in a corner under a table until he makes his weekly trek to the recycler. The money he makes mostly goes to food for himself, his disabled 32-year old wife and his 10-year old daughter.
Tam, who moved to Hong Kong from Guangdong province three years ago, explains that is the only thing he can do for money. He never went to high school and only did four years of elementary school -- two years at each level because of his mental disability.
"I'm not sure about next year. Prices might rise or fall. It's like buying shares, you never know whether they are going to rise or fall."
And so Tam's only hedge is to keep scavenging for even more paper, shuffling along the city's streets and hoping that prices rise again.






Chris Matthews accuses Romney of playing 'race card' (VIDEO)




By Dylan Stableford, Yahoo! News
Senior Media Reporter
The Ticket – 16 hrs ago










Chris Matthews lashed out at Republican National Committee Chairman Reince Priebus on Monday in Tampa during a live "Morning Joe" segment, with the feisty MSNBC host accusing Mitt Romney and the GOP of playing the race card in their campaign against President Barack Obama.
"It is an embarrassment to your party to play that card," Matthews said. "This stuff about getting rid of the work requirement for welfare is dishonest, everyone's pointed out it's dishonest, and you are playing that little ethnic card there. You can play games and giggle about it, but the fact is your side is playing that card. You start talking about work requirements, everyone knows what game you're playing. It's a race card."
Matthews railed Priebus over Romney's recent joke about the birther movement.
"This thing about if your name is Romney," Matthews said. "Yeah you went to prep school and you brag about it. This guy's got an African name, he has to live with it. Look who's going further in their life. Who was born on third base? This absurdity, making fun of the birth certificate issue."
"Of course he's playing the race card," he continued. "Why would he bring [the birth certificate] up?"
"Because he's an awkward joker," co-host Mika Brzezinski responded.
"He misfired badly on the joke," Joe Scarborough said.
Tom Brokaw, seated next to Matthews, called it a demonstration of Romney's "awkward sense of humor."
"I do think in fairness that during the debates there was a lot of stuff aimed at the president that was not refuted by leaders of the party," Brokaw said.
Priebus, who stayed mostly silent during Matthews' rant, eventually responded.
"I'm not going to get into a shouting match with Chris," Priebus said, calling his accusations "garbage."
"We've gotten to a point in politics where any moment of levity is frowned upon by guys like you just so you can push your brand," the RNC chairman said. "You know what, good for you."
Last week on "The Tonight Show," Matthews was far less critical of the GOP campaign, but alluded to Romney's awkwardness.
"He's a little remote, you know?" Matthews said. "He says things like, 'Oh, I just left the aircraft.' What are you, a Conehead? What planet are you from? Nobody talks like that. We earthlings have a certain language. [We say] 'I just got off the plane.'"
[Hat tip: Mediaite]






Texas delegates planning floor mutiny over RNC rules changes




By Liz Goodwin, Yahoo! News
National Affairs Reporter
The Ticket – 8 hrs ago









Members of the Texas delegation on Monday. (Goodwin/Yahoo)
TAMPA--On Monday morning, at a meeting of more than 100 Texan delegates and alternates at the Saddlebrook Resort 20 miles north of Tampa, one topic got the crowd more fired up than any other. Delegate Melinda Fredricks read aloud a letter condemning recent changes to the national Republican party's rules that would allow the GOP presidential candidate to veto and replace state delegates.
"Our delegates are in shock that such an amendment even would be presented before the Rules Committee much less passed into rule," Fredricks said. "Please know from the Texas delegation standpoint that the only way a floor fight can be avoided is for this rule to be stricken."
At that point, the entire Texas delegation stood up and applauded.
Texans don't necessarily want to have an ugly floor fight on the same day the party officially nominates Mitt Romney. But they're willing to do it if their concerns about the rule aren't satisfied. The changes, which Mitt Romney's top lawyer put forward last week and Gov. Haley Barbour along with some other Romney supporters have embraced, are seen by opponents as intended to significantly weaken the power of grassroots politics and insurgent candidates such as Ron Paul. Many against the move worry that it would give national candidates the power to replace delegates--often grassroots party faithfuls--with big-time donors or friends.
"We truly consider that an infringement on our rights," Fredricks, a member of the rules committee, told Yahoo News of the changes. Today, states generally choose their delegates at state conventions, and then those individuals travel to the national convention to cast their vote for a candidate based on the share the candidate won of the primary or caucus vote of each state. But, the changes could allow a candidate such as Mitt Romney to boot out any delegates who are assigned to vote for him and replace them.
While opposition to the rules began with Ron Paul supporters, it has spread to the entire Texas delegation and significant portions of those from South Carolina, Colorado, Virginia and Louisiana too. Mitt Romney's campaign lawyer Ben Ginsberg proposed the rule last week, but even some Romney supporters are staunchly opposed to the changes. Indiana delegate and Romney supporter James Bopp wrote in an email to RNC members that it's "the biggest power grab in the history of the Republican Party." Fredricks, a Romney supporter, says only 30 people of the more than 300 Texan alternates and delegates support Ron Paul, yet the delegation is "united" in its opposition to the rule.
At 2pm on Tuesday, the Rules Committee members will debate whether the new rule should be struck down. Fredericks thinks she has the 29 members necessary to start a debate about the change, and is hopeful she can resolve the issue before the committee adjourns and joins the larger convention floor.
"We like to fight behind closed doors...Most of us are reluctant to do a floor flight," Fredricks said.
RNC Chairman Reince Priebus told Salon Monday that he does not expect a floor fight, though he did not explain why.
Paulites are among the staunchest opponents of the new rule. It would prevent insurgent candidates such as Paul from raking up delegate votes in caucus states where party conventions instead of the statewide vote determine how many delegates are awarded. ABC's Chris Good points out that Paul would not have won a plurality of delegates in four states if this rule had been in effect during this primary.
Paul supporter Karen Skrill, an alternate delegate from Vermont, said she and her husband Stewart, a delegate, are upset about the changed rules.
"If this is how it's going to be, I don't want to be a Republican," Skrill told Yahoo News in a discussion on the floor Monday. The Skrills are retired farmers.
"Texas in general doesn't believe the national level should be picking delegates," added Jon Burgin, an alternate delegate from San Antonio who supports Paul. "It's pretty egregious."



corporate corruption impact on Africa
TalkingPoint: Addressing Corporate Fraud And Corruption In Africa

August 2012

FW moderates an online discussion on addressing corporate fraud and corruption in Africa between Reagan R. Demas, a partner at Baker & McKenzie LLP, Petrus Marais, a partner at KPMG, and Robert Driman, a director at Norton Rose.

FW: From your experience, what seems to be the prevailing global perception of fraud, corruption and bribery when it comes to conducting business in Africa?

Marais: One does not have to look further than the countries included in the bottom half of Transparency International's annual Corruption Perception Index to realize that the majority are located on the African continent. Transparency International conducted a further study in Southern Africa in 2011 to ascertain the public's perception on the corruption levels in the countries and the governments' effort to fight corruption. The study titled 'Daily Lives and Corruption: Public Opinion in Southern Africa' included face-to-face interviews with over 6000 people in six Southern African countries, namely the Democratic Republic of Congo (DRC), Malawi, Mozambique, South Africa, Zambia and Zimbabwe. According to the study, 56 percent of people surveyed in these Southern African countries stated that they have paid a bribe in the last 12 months. The study indicated that 62 percent of the people surveyed believed that the corruption levels in their
countries have increased in the past three years and the Police Services are perceived to be the most corrupt institution in these countries. In our dealings with the US Department of Justice (DOJ) it is apparent that they view Africa as a high risk location. In summary therefore, we are of the view that these personal experiences, as well as the surveys and literature on the subject, do confirm and to an extent perpetuate the perception of there being high levels of bribery and corruption in Africa. However, one must be reminded that this perception also applies to most of the BRIC countries and other high growth markets.

Demas: Despite the precarious global economy and the cloud of uncertainty lingering over global economies, Africa remains a continent of great opportunity for investors. The continent weathered the downturn better than the West and GDP growth rates are some of the highest in the world. Yet the prevailing view is that corruption and poor rule of law in Africa prevents companies from operating and obtaining quality returns on investment on the continent. This view prevents many from pursuing opportunities in Africa, but the reality is that companies that effectively assess and minimise risk achieve on average higher returns on African investments than they obtain anywhere else on earth. The key to success on the continent is to properly identify those risks and take appropriate steps to protect your investment in advance. Africa remains one of the last 'economic frontiers' on earth and can be highly profitable for companies that take a smart approach
and seek knowledgeable counsel.

Driman: The Western perception is that doing business in Africa is rife with corruption, particularly when dealing with government officials. There are countries where this is true. However, there are many shining exceptions – the tiny Kingdom of Lesotho famously acted against multinationals and their employees for corruption in its Highlands Water Scheme project. Countries like China and India have made huge commercial inroads in Africa by not accepting prevailing Western perceptions. The reality is that Africa is not nearly as monolithic, nor is doing the right sort of business as different, as is often perceived globally. There are many examples of excellent legitimate business propositions in all industries. Because it is resource-rich, there is the temptation to secure lucrative deals by going outside of acceptable norms. The best advice for businesses is to conduct business as in any well-regulated jurisdiction. A pre-deal territory due diligence
is often advisable.

FW: To what extent does enforcement of extraterritorial laws such as the US FCPA and the UK Bribery Act affect the African operations of multinational companies? What is the practical impact of such enforcement?

Demas: Enforcement of US extraterritorial bribery legislation – the FCPA – has dramatically escalated in the past decade and shows little sign of abating. Other countries have passed similar legislation and are beginning to enforce those new laws. The African continent has been in the crosshairs of numerous investigations due in part to the perception by regulators that the rule of law is weak on the continent. In the wake of criminal settlements with companies operating in Africa in the oil & gas, mining, telecommunications, freight forwarding and other industries, businesses are recognizing the importance of a well-developed compliance program when operating in these higher-risk/higher-reward jurisdictions. Given the scrutiny on businesses operating in Africa, companies are well-advised to ensure they have absorbed compliance best practices into their Africa operations before a problem arises. While these measures do result in additional front end
costs for the investment, few companies regret such an investment in ethics and compliance. In Africa, that investment pays for itself down the road.

Driman: Fraudulent and corrupt practices are gradually being marginalized. These new laws mean that proscribed behavior is punishable in the legislating jurisdiction. Multinationals are accordingly very reluctant to transact in countries with poor records on governance. Investors know that the early profits from improperly obtained business are soon outweighed by reputational and legal impediments. Old practices of facilitation or similar fees, which have no proper commercial basis, are declining. Advisers who have only political influence and no business role are less influential. There is much more emphasis on early due diligence. Existing business is more carefully scrutinized and audited, and investors in multinational businesses and funds are in turn much more critical in assessing underlying investments in Africa.

FW: While many emerging markets pose corruption risks to company operations, what challenges may companies face that are unique to the African continent?

Marais: Conducting business on the African continent poses some unique corruption risks to multinationals. In various African countries, public officials would require certain payments to be made based on so-called local customary laws. These payments would generally be in the form of a gift or a donation. Indigenisation quotas or minimum local shareholder requirements can compel a company to take local partners on board, often on the recommendation of government and on favourable financial terms to the local party. Foreign companies generally are not allowed to purchase real estate in the majority of African countries. Therefore, these companies are left to enter into some form of lease agreement with local land owners. Some of these land owners could be public officials and it is not always possible to determine the details of the actual owners as ownership records are not always publicly accessible. To maintain proper accounting books and records in
some African countries can also pose difficulty, mainly due to poor record-keeping and inadequate internal controls. In addition, poor or over congested infrastructure creates logistic complexity, particularly when there is an expectation that there be financial facilitation 'to get things moving'. While there are many risks, the economic growth of most Africa markets, which is predicted to be in the region of 5 percent per annum for the next number of years, makes it difficult for multinationals to ignore the African opportunity. Africa has a young population of about 1 billion people, a rapidly growing consumer class, resource wealth and huge agricultural opportunity, all contributing to its attraction as an investment destination. But regional complexities across the continent demand accurate insights into local risks.

Demas: The African continent presents unique security issues that require effective but realistic solutions. It is generally understood that where individuals are placed in a situation where they reasonably believe they face imminent physical harm or illegal detention, a payment to officials to escape such a scenario is not conduct likely to be charged by regulators. In practice, managing expectations regarding these payments are difficult and personnel should be discouraged from making payments to police, customs, or other officials at the first feeling of discomfort. The personal safety payments exception should never be seen to condone 'convenience payments' when personnel are pulled over for speeding or talking on cell phones, or even where company vehicles are pulled over for no valid reason at all, unless the situation escalates to the point that a reasonable person would believe physical harm is imminent. The more common scenario, as
experienced in the Democratic Republic of Congo recently, is where company vehicles are pulled over for minor or 'made up' violations – for example, mud on tail lights – and the officer threatens to fine the driver or impound the vehicle unless a cash payment is made. While these scenarios would not be seen by US regulators as instances where cash payments to officials were warranted from a personal safety standpoint, each company should have clear, narrowly-defined policies governing payments under duress and, most importantly, any such payments should be transparently documented in the company's books and records.

Driman: Africa is resource-rich, and business which is attractive to multinationals is likely to be highly lucrative and long-term. Early gains taken by cutting corners are unlikely to produce long-term results. Contracts may require terms dealing with enforcement under one of the international arbitration regimes if enforcement could be otherwise be problematic. The biggest challenge however lies in seeing all of Africa as being the same, and in underestimating African business which has developed significantly. There are significant national, regional and continental differences culturally, politically and economically. The fact that enforcement of international best practice may be lacking in many African jurisdictions may lead to the temptation for less scrupulous corporations to use corrupt methods to secure or retain business. This could be fatal, given the extraterritorial reach of legislation such as the FCPA and UK Bribery Act.

FW: Risk management controls and defences are essential for any business. What considerations should companies make when implementing an anti-corruption compliance framework and whistleblowing procedures in Africa?

Demas: Your people on the ground in Africa will always be your best compliance resources. Train personnel to be vigilant and persistent on anti-corruption matters. The most successful companies operating compliantly in Africa develop personnel who do not accept "it's just the way business is done in Africa" as an excuse and never presume that improper payments, however small, are necessary to succeed on the continent. In one case, a company operating in Africa was told by the head of its Equatorial Guinea subsidiary that it was impossible to obtain a visa locally without making an unofficial payment, only to learn later that nobody in the company had ever actually tried obtaining a visa without making the payment. Another best practice is to develop and leverage good human compliance resources by rotating personnel. Managers who succeed in developing and maintaining compliant operations in one country can draw on their experience to solve seemingly
intractable problems the company may face in another country. And ensure the personnel you have in Africa have experience in the region so they can effectively assess and manage the unique risks. This applies to outside counsel as well; in one case, outside counsel from the US for a large multinational oil services company arrived at the company's compound in Luanda, Angola with a large, heavily armed South African guard. Both were quickly run off the premises by the company's angry personnel, who lived in the compound without personal guard and saw the scenario as evidence that outside counsel had little or no experience in sub-Sahara Africa.

Driman: Many businesses have global risk management processes tailored to local circumstances. The same is advised equally in Africa. Representations and warranties, with enforceable breach provisions, should be incorporated in agreements. Business partners and third party service providers and intermediaries must either demonstrate unequivocal commitment to international best practice when it comes to anti-corruption compliance or be required to subscribe to the policies and procedures of the principal. Businesses need to know what the reporting obligations in the different jurisdictions are, and to comply even if enforcement seems problematic. There may also be international compliance issues. Group compliance and risk management policies for Africa ought to be the same as in any other part of the globe.

Marais: First and foremost, the implementation of an anti-corruption compliance framework in Africa requires the full support of an organisation's top management, both at holdings and subsidiary level. There is no use in having a 'paper programme', which top management does not ascribe to and is not evidenced by their decision making and actions. This non-compliant or lip-service attitude ultimately filters down to middle management and lower level employees, resulting in a 'checklist compliance culture' which does not stand up to the rigor of legislative enforcement. Another important factor is to ensure that the anti-corruption compliance framework is properly communicated to all stakeholders and that all staff and TPIs receive proper and regular training. Regarding the use of a hotline or whistleblower mechanism in Africa, organizations should ensure that incidents are reported in a confidential manner and all whistleblowers are protected
from any form of victimization. Furthermore, it is necessary to understand how employees in that culture prefer to report allegations.

FW: Considering the tightening regulatory regime, what advice would you give to foreign companies doing business in Africa?

Driman: No better sign exists for doing business in Africa than that countries across the continent are aligning themselves with the global regulatory climate. There are incredible opportunities in Africa, and being able to bring them to fruition means that regulation across the continent has to fit with global best practice. The first rule is that if the deal or its negotiation seems unusual, then it almost certainly is, and extra care and outside advice is required. Increasingly foreign companies report that they are successfully connecting with business being done in Africa in the same manner it is done anywhere else in the world. That, together with significant growth, is also our vision and experience.

Marais: One of the biggest challenges for companies operating in Africa is striking the balance between acceptable conduct in terms of the local business environment, on the one hand, and ensuring compliance with international anti-corruption legislation such as the FCPA and the UK Bribery Act, on the other. With various foreign and African companies currently operating in or being listed on foreign stock exchanges, they also need to consider the impact of, and ensuring compliance with, all applicable anti-bribery and corruption legislation. No new territory is without its challenges for a company looking to penetrate the market. If the challenges are unique on the African continent, then the potential is in the same class. It is imperative to always remember that Africa is a continent of patriots who are proud of their countries and cultures. It is critical that foreign employers gain knowledge of the cultural beliefs and practices of the people in an
African country and respect them. The key to doing business in Africa was succinctly summed up in an article entitled 'How to Succeed in the African Market': 'Be mindful of the three Ps of African business: pensiveness, patience, and perseverance. Pensiveness demands the use of common sense. Success demands a lot of patience. Above all, you must persevere and be persistent, but polite.' We add a fourth P – Preparation. Preparation entails understanding the local market, doing detailed due diligences, and knowing and vetting your local partners, suppliers, and employees.

Demas: Demonstrated commitment to compliance is a growing competitive advantage for companies operating in Africa. On a continent where local laws are often absent or confusing and an understanding of cultural context is vital, the most important weapon a company can have in its compliance arsenal on the African continent is reliable and trustworthy legal counsel. Foreign companies that succeed in Africa recognize the importance of working with a global legal firm with demonstrated expertise on US, UK and EU anti-corruption laws, as well as on-the-ground experience and contacts with reliable local counsels across the African continent, to ensure seamless advice. Despite the often daunting anti-corruption hazards of working in Africa, the continent offers substantial opportunities for companies that effectively identify and manage those risks.


Reagan R. Demas is a partner at Baker & McKenzie LLP. He has significant experience working on behalf of companies and investors conducting work or business in developing countries, with particular focus on Africa. He has worked on the ground evaluating investment and business opportunities with greater clarity and conducting investigations and due diligence on behalf of clients worldwide. Mr Demas has also written and spoken extensively on corruption, compliance issues and how to do business in Africa. He can be contacted on +1 (202) 835 1886 or by email: reagan.demas@bakermckenzie.com.

Petrus Marais is Global Head of KPMG Forensic. Mr Marais founded a dedicated Forensic practice at KPMG South Africa in 1993. He was appointed to the KPMG International Forensic Steering Group in 1997 and participated in the drafting and roll-out of the Global Forensic Strategy for KPMG. Mr Marais was KPMG Regional Forensic Chairman for Europe Middle East and Africa (EMA) from October 2002 to Sept 2006. In this role was responsible for the development of Forensic practices in the EMA region. He can be contacted on +27 21 408 7022 or by email: petrus.marais@kpmg.co.za.

Robert Driman is a director at Norton Rose. He is a commercial lawyer specializing in commercial and banking and finance and his experience makes him uniquely placed to advise corporate clients on virtually any aspect of their business – in particular high-profile complex commercial and regulatory issues. Mr Driman has gained considerable experience in advising listed and non-listed South African and international corporate clients in banking and financial services and insolvency, industry and manufacturing and consumer and luxury goods. He can be contacted on +27 21 405 1310 or by email: robert.driman@nortonrose.com.


South African Institute of Corporate Fraud Management
http://www.fraudabc.com/about.html
The South African Institute of Corporate Fraud Management is committed to improving the lives of the South African citizens and those of its neighbours.

Economic crime and ethics abuse affects everyone in measurable ways not least of all by draining economies and increasing the costs of living for ordinary consumers.

Economic crime contributes to joblessness and deprives the government of much needed revenue to fund grass roots projects and infrastructure development.

High levels of bribery and corruption along with economic crime in a country creates a negative image in the eyes of the international community and discourages investment leading to further job losses. Higher levels of unemployment lead to higher levels of petty crime and violent crimes.

Of course, we are living in a global village. The state of our neighbour economies has a direct impact on our own. It would not only be immoral, but irresponsible to ignore their plight. That is why we are as committed to helping our neighbours as we are toward helping our own people.

The Institute is a non-political philanthropic organisation dedicated to being part of the South African solution and it's Renaissance.

Our Mission is to promote ethical and responsible leadership - to provide a resource for citizens to report ethics abuse anonymously while ensuring absolute confidentiality - to vigorously oppose any regulations, statements of standards, corporate governance tenets or laws which might give rise to or serve to promote conflicts of interest in private business or the business of government.

To achieve this latter aim we provide information for dissemination and discourse sourced from around the globe as well as incisive and cutting comment and analyses on various platforms.

Furthermore it is our mission to open skills portals by providing a platform for suitably qualified Africans to seek employment in countries on the Continent thereby ensuring that any skills migration is not lost to the continent and in doing so further promoting the principles and vision of the African Renaissance.

Finally, The Institute serves as the only accreditation body in Africa, for Africans, who are employed in the field of Fraud Management and Investigation. The Institute provides the highest and most intensive levels of skills training available on the continent.




http://www.imf.org/external/pubs/nft/2002/govern/index.htm





The Economics of Corruption: An Overview
George T. Abed and Sanjeev Gupta




I. Introduction
Until the 1980s, scholarly research on corruption was largely confined to the fields of sociology, political science, history, public administration, and criminal law. Since then, economists have also turned their interest to this topic, largely on account of its increasingly evident link to economic performance. Much of the early research1 focused on weaknesses in public institutions and distortions in economic policies that gave rise to rent seeking by public officials and the incubation of corrupt practices. It also highlighted some positive effects of corruption, which were discounted in the subsequent literature.
Since the early 1990s, there has been a virtual explosion of academic writing on the economics of corruption. The initial thrust for this work came from the transformation of the socialist economies of the former Soviet Union,2 awareness of the costs of corruption in both developed as well as developing countries, and the construction of indicators of corruption that could be used in empirical studies. The flood of writings has continued unabated.3 As noted below, and as is clear from the contents of this volume, a considerable part of this research activity took place at the IMF and the World Bank. There are several reasons for the burgeoning interest of Bretton Woods institutions, and the economics profession in general, in this topic.
One factor is the accelerating trend of globalization and world economic integration. Together with an associated drive for economic liberalization, notably in the area of international trade, globalization has increased the pressure on countries to be more transparent and accountable in the management of their economies. More to the point, it created incentives for policymakers to reform policies and institutions for countries to benefit from the rising international flows of capital, technology, and information. While the countries most eager to exploit the widening opportunities were initially the larger emerging economies, other developing countries also sought to access markets and attract investment flows in the new environment.
Data on the size and composition of international capital movements in the 1990s underscore this point. Since the mid-1990s, the composition of capital flows to emerging and developing countries began to shift markedly in favor of the private sector, with multinational corporations, and financial markets more generally, dominating the field and eclipsing the role of official transfers. Thus, while at the start of the decade private capital flows to developing countries were about the same as official transfers, about $50 billion each, by mid-1997 (on the eve of the Asian financial crisis) the former had grown to about six times the size of the latter. Not surprisingly, private capital flows to developing countries declined in the wake of the financial crises of the late 1990s, but they remained at levels that are a multiple of official transfers.
The importance of this development to growing interest in the economics of corruption is compelling, if at first not so obvious. Official flows to developing countries had been motivated, since the early postwar period, by the exigencies of the Cold War and the desire by the superpowers and their allies to maintain political influence in various strategic areas of the globe. The strict criteria of economic performance and commitment to reform played only a minor role, if at all, in the distribution of bilateral official aid. In this environment, the pressure to reform was absent or minimal in many developing countries. A number of countries operated their economies under the protection of high tariffs and pervasive state intervention with only a minimum of transparency and accountability. However, they suffered neither the displeasure of aid givers nor the retribution of the markets, whose influence was too small to matter anyhow. Moreover, many
countries were governed by regimes that, to say the least, did not adhere to the strictures of good governance, and most bilateral (and to some extent multilateral) donors and creditors often refrained from asking too many questions. The economics profession, with notable exceptions, lacking the requisite information or the will to challenge the prevailing political order, went on to other pursuits.
With the end of the Cold War, the breakup of the former Soviet Union, and the consequent unwinding of regional conflicts, many developing countries lost their privileged position in the global geopolitical game and were suddenly exposed to the more exacting requirements of market discipline. In the increasingly globalized and private-sector-driven world of the 1990s, developing countries (including the newly industrialized countries of Asia and the transition economies of Central and Eastern Europe) found themselves in a highly competitive environment where financial flows were now driven, above all, by expected rates of return on investment. Sound macroeconomic policies, a healthy regulatory environment, more transparent and accountable public institutions, and protection of property and investor's rights became essential prerequisites for attracting foreign direct investment and for accessing financial markets at reasonable terms.
The breakup of the former Soviet Union also brought on one of the most profound and far-reaching transformations of the twentieth century. The disintegration of the command structures in the old regimes triggered some of the most chaotic economic, political, and social changes in modern history. Absence of the rule of law and accountable systems of governance led to rent seeking, corruption, and outright thievery. While some governments, notably in Eastern Europe, quickly found their bearings and developed the institutional and policy frameworks needed for the operation of markets, others took much longer. In the meantime, professional economists could not help but be struck by the importance of sound policies and institutions for better performance in the newly created market economies. This "discovery" triggered a wave of research on rent seeking, the role of the state, governance, and corruption. While the awakened interest of researchers in
corruption in the transition economies was somewhat distinct from that which focused on developing countries, the two developments were not entirely unrelated. Indeed, both had their provenance in the end of the Cold War and the shift in the risk/reward calculus from one based on geopolitics to one based on hard, economic criteria.
Another factor underlying the rising importance of transparency in government operations is the spread of democratic practices in the late 1980s and throughout the decade of the 1990s.4 In Central and South America, generally open elections for top officials and representative assemblies were held in virtually all countries, while in Africa the spread of presidential and parliamentary elections was also notable. Although not necessarily immune to corruption, electoral democracies have been found to foster a vigilant civil society, increased government accountability, and a higher degree of transparency.5
Growing availability of data "measuring" corruption further stimulated the empirical research on its economic effects. During the 1980s, new statistical surveys of households, enterprises, public officials, and others became available to researchers. This led to the construction of summary governance indicators, such as the indices of "perception of corruption" that were then widely used in the empirical analysis.
II. International Organizations
Another factor that heightened interest in the economics of corruption, and more generally the promotion of good governance, is the growing role of the international financial institutions (IFIs) as well as trade and regulatory organizations in defining international standards as a basis for transparent policy formulation and implementation. Stimulated in large part by the desire to prevent the occurrence of global financial crises, such as those of Mexico, East Asia, and Russia in the middle and late 1990s, the IFIs took a number of initiatives to promote greater transparency and accountability in member countries. These initiatives were reinforced by the promulgation of codes and standards embodying good international practice in economic management and by newly created obligations for countries to widely disseminate statistical information on fiscal, monetary, and financial developments in a timely manner. In this regard, the IMF has taken the lead in
work on standards and codes in the fiscal and statistical areas and jointly with the World Bank and the Bank for International Settlements on the promotion of standards and codes in the monetary and banking area (see below).
Moreover, the World Bank has recently adopted a framework for addressing corruption as a development issue, in the context of assistance it provides to member countries. The framework has the following components: (1) preventing fraud and corruption in Bank-financed projects by improving procurement and financial management policies related to the implementation of projects; (2) helping countries in their efforts to eliminate corruption; (3) taking corruption more explicitly into account in the formulation of country assistance strategies; and (4) adding voice and support to the international efforts to reduce corruption, including by collaborating with regional development institutions on anticorruption measures.
Interest in research on corruption and governance in IFIs was also stimulated by concern that public spending and aid were not having the desired impact on poverty and social outcomes. Questions have been raised on the extent to which budgetary allocations for unproductive programs or inefficiencies in public spending are attributable to corrupt practices. In fact, as the present volume demonstrates, these issues have received special attention from IFIs.
III. Nongovernmental Organizations
Other players on the international scene also became interested in more transparent and accountable conduct of economic management. Nongovernmental organizations (NGOs) and other organs of civil society, including the media, showed greater interest in the economics of corruption and in the conduct of officials entrusted with the management of public funds. A variety of motives spurred this awakened interest. For the media, the demise of the once overarching ideological confrontation of the Cold War created room for a wider coverage of economic news. Economic prosperity in a number of countries and regions became headline news (Japan and Europe in the 1980s, the United States, the Asian tigers, and peripheral Europe in the 1990s), stimulated by the technology and information revolution, fascinated large portions of the globe and made for good copy in the press. The growing reach of the Internet spread the news of economic success, as well as of economic
failure. In the midst of all of this activity, stories of corruption and malfeasance fed the curiosity of a global audience and brought questions of good governance and economic performance to the forefront of academic and policy debate.
Other interested parties incorporated the problems of corruption into their agendas for yet different reasons. NGOs in industrial countries took up the cause of monitoring aid spending of their own governments, while seeking to enhance the capacity of the recipient countries to use such aid more effectively. This enterprise invariably involved the NGOs in questions of transparency and accountability of the donors (and the institutions through which they channel the bulk of their aid funds), and in the drive for instituting good governance and anticorruption safeguards in recipient countries. In time, many NGOs were brought into the deliberations of the IFIs on questions of debt relief and its use, development assistance, and governance.
Other NGOs took up the fight against corruption directly. Foremost among them is Transparency International (TI), established
by a former World Bank staff member. It has grown to be a visible presence on the world economic scene, pressing its campaign in global forums (such as the biennial International Conference on Corruption) and through chapters in an increasing number of countries. TI's annual publication of country rankings on a "corruption perception index" is a major event and is widely noted by the countries so ranked, by academics and policymakers, and, above all, by financial markets.
Other organizations that have expanded their coverage of country assessments to include important indicators of transparency, accountability, and good governance are the Political Risk Services Group, which publishes the International Country Risk Guides; the Switzerland-based International Institute for Management Development, which publishes the World Competitiveness Report; and other credit-rating agencies. The International Chamber of Commerce has also added its voice and influence to combat corruption in international transactions through revised Rules of Conduct on Extortion and Bribery in International Business Transactions and through the creation of standing committees of business executives, lawyers, and academics to mobilize support for adherence to the new rules.
IV. Multilateral Action
Since the passage of the U.S. Foreign Corrupt Practices Act in 1977, pressure on the international community has been mounting for multilateral action not only to specifically outlaw the bribery of foreign public officials but also to take measures to fight corruption in general. One of the more far-reaching efforts in this regard is that of the Organization for Economic Cooperation and Development (OECD), which, beginning in 1994, sought to end the tax deductibility of bribes and to criminalize the bribing of foreign officials. In a landmark decision taken at its ministerial meeting in May 1997, the OECD Council adopted recommendations of a working group on a Revised Recommendation on Combating Bribery in International Business Transactions. Compared with earlier recommendations, the Revised Recommendation was far more concrete and prescriptive, covering broad areas related to the conduct of international business and establishing a mechanism for
monitoring implementation. The adoption of a Convention on Combating Bribery of Foreign Officials in International Business Transactions obligated signatory states, all 30 OECD members plus a growing number of nonmembers, to make bribery a crime under their laws.
In December 1996, the United Nations (UN) General Assembly adopted a Declaration Against Corruption and Bribery in International Commercial Transactions, as recommended by the UN Economic and Social Council. Although not legally binding, the declaration's wording on criminalizing foreign bribery and ending its tax deductibility signifies broad political agreement in the international community on this matter.
In May 1997, the European Commission (EC) issued a Communication to the Council and the European Parliament on a Union Policy against corruption. This communication sets out the EC's comprehensive policy on corruption inside the European Union as well as regarding relations with nonmember countries.
V. The Role of the IMF
The IMF has paid increasing attention to the importance of good governance in member countries in support of macroeconomic stability and noninflationary sustainable growth, the promotion of which is central to its mandate. This recognition is reflected in the IMF's three core activities: surveillance of economic policies of member countries, financial support for adjustment programs, and technical assistance to strengthen economic and financial management. The IMF's Interim Committee—now the International Monetary and Financial Committee—stressed the importance of good governance for macroeconomic policies in its meetings in September 1996 and September 1997.
The IMF is contributing to strengthening governance in member countries through various means. The first is by supporting economic policies and structural reforms that limit the scope for ad hoc decision making, for rent seeking, and for preferential treatment of individuals or organizations. This approach is founded on the IMF's mandate to promote macroeconomic stability, and limits its role to those aspects of governance that could have a significant macroeconomic impact. A Guidance Note for IMF staff, for example, calls for


A more comprehensive treatment of governance issues in the IMF's core activities and policy advice.

A more proactive approach in advocating policies and development of institutions that promote governance.

An evenhanded treatment of governance issues in all member countries.

Enhanced collaboration with other multilateral institutions, in particular the World Bank and other IFIs such as the regional development banks, to make better use of complementary areas of expertise.

What forms have governance issues taken in IMF policy advice? In general, the IMF has required greater transparency and accountability in the management of public funds, including strengthening revenue administration, enhancing the financial accountability of state enterprises, monitoring the use of public resources for poverty reduction (part of the enhanced Heavily Indebted Poor Countries (HIPC) Initiative), consolidating extrabudgetary funds into the budget, enhancing transparency of tax and tariff systems, reinforcing central bank independence, strengthening prudential bank supervision, and improving the quality and timeliness of economic and financial statistics. Where issues of poor governance may have affected macroeconomic performance, the IMF has also urged member countries to address specific instances of poor governance and corruption (e.g., illegal logging in Cambodia following evidence published by Global Witness and fraud in government
accounts reported by the Attorney-General in Kenya), and has recently strengthened policies to safeguard the use of IMF resources with regard to misreporting of information to the IMF. These measures have led to inquiries directed at central bank actions in Russia, Ukraine, and Indonesia.
In its approach to governance, the IMF has increasingly taken a proactive role along with the World Bank, stressing the importance of country ownership of policies for improving governance. Prevention is the centerpiece of the IMF's governance strategy. According to the strategy, participation in initiatives to strengthen governance, including the adoption of standards and codes, is voluntary. Furthermore, the strategy recognizes the importance of timely and well-targeted technical assistance to help alleviate constraints on institutional capacity.
The second principal means through which the IMF is contributing to strengthening governance in member countries is by promoting transparency in financial transactions in the government budget, the central bank, and the public sector at large. This is being done by developing standards and codes of best practices. They include


Data dissemination standards. These standards guide member countries in the dissemination of their economic and financial data to the public, and consists of two tiers:
— Special Data Dissemination Standard (SDDS). Established in March 1996 for those members that have, or that might seek, access to international capital markets.
— General Data Dissemination System (GDDS). Established in December 1997, it applies to all member countries and guides them in the dissemination of comprehensive, timely, and reliable economic, financial, and socio-demographic statistics to the public.

The Code of Good Practices on Fiscal Transparency, which was adopted in 1998 and updated in March 2001. Adoption of this code is voluntary, and diversity across countries is fully recognized. One of the key objectives of the code is to promote open budget preparation, execution, and reporting.

Reports on the Observance of Standards and Codes (ROSCs), adopted in 1999. These reports summarize the extent to which countries observe certain internationally recognized standards in the areas of direct operational concerns to the IMF. Numerous ROSC modules have been published on the IMF's external website.

The Code of Good Practices on Transparency in Monetary and Financial Policies, adopted in 1999. Good governance calls for central banks and financial agencies to be accountable, particularly where the monetary and financial authorities are granted a high degree of autonomy.

The IMF also adopted Financial System Stability Assessments (FSSAs) and the Financial Sector Assessment Program (FSAP) in 1999. These instruments help countries assess vulnerabilities in the financial sector and identify the needs for corrective action. FSAPs, jointly conducted with the World Bank, have led to FSSAs, which become part of the IMF's core responsibility of surveillance. The IMF plans to conduct 24 FSAPs every year over the next couple of years. The IMF has also adopted, in collaboration with the Financial Stability Forum and the World Bank, experimental modalities for its approach to financial sector practices in offshore centers concerning financial system abuse, financial crime, and money laundering.
Since April 2001, the IMF has strengthened its efforts to counter money laundering, as well as terrorism financing. Together with other financial institutions, it has a key role in preventing the abuse of financial systems as well as protecting and enhancing the integrity of the international financial system. In this regard, IMF and World Bank staffs have prepared a draft methodology to assess a country's compliance with certain standards, and this methodology is being applied to several pilot cases. Anti-money-laundering concerns are being included in IMF's surveillance and other operational activities when they are relevant from a macroeconomic perspective.
Third, the IMF contributes to improved governance in member countries by helping them through technical assistance to strengthen their capacities for effective public resource management, as well as the design and implementation of economic policies. The focus of IMF technical assistance has been on areas in which the IMF has a comparative advantage--strengthening public expenditure management, tax administration, banking systems, foreign exchange, and on improving the quality and timeliness of data. Since 1997, the IMF has developed new forms of technical assistance that attempt to ascertain the extent to which countries are complying with the above-noted standards and codes.
In recognition of a close nexus between weak public expenditure management systems and poor governance, both the IMF and the World Bank have initiated additional work in the area of public expenditure management in heavily indebted poor countries. The objective is to help strengthen the link between debt relief and poverty reduction and make government budgets more pro-poor. There is recognition that citizens and governments in donor countries need assurances that debt relief and other financial assistance are devoted to poverty reduction. Citizens and legislatures in recipient countries also need assurances that these resources are being used for the purpose intended, to strengthen country ownership of the poverty-reduction strategy.
VI. The Focus of This Volume
The fourth principal means through which the IMF is contributing to strengthening governance in member countries is through policy research. The IMF has thus contributed to the growing awareness of the causes, consequences, and remedies for fighting corruption. The empirical research has highlighted the impact of corruption on economic growth, public finances, poverty, income inequality, provision of social services, and the causes of corruption and anticorruption strategies. Many studies have been carried out by IMF staff since the mid-1990s. This volume compiles most of these studies, with the objective of contributing to the ongoing debate on the role of good governance in promoting growth and reducing poverty. As discussed above, the empirical research in this area has been facilitated by the efforts of IFIs and others to collect and construct indicators of governance in recent years.
In Chapter 2, Tanzi discusses issues related to the causes, consequences, and scope of corruption and possible corrective actions. The phenomenon of corruption affects many countries and is a source of disillusionment among the population of some transition economies and developing countries. Corruption cannot be substantially reduced without modifying the way governments operate, and in this sense, the fight against corruption is linked with the reform of the state. Thus, a multipronged strategy is needed, including reducing excessive and complex regulations and reforming the civil service.
How critical is the role of civil service salaries in curbing corruption? In Chapter 3, Van Rijckeghem and Weder find that an increase in civil service salaries in relation to those paid in the manufacturing sector has a favorable impact on the corruption index. Civil service wages are also highly correlated with measures of rule of law and quality of bureaucracy. A related issue is whether government officials responsible for fiscal management of a country should be paid bonuses, particularly when public sector wage levels are relatively low. Chand and Moene examine a country case in Chapter 4 and analyze the circumstances under which bonus payments to tax officers can promote less corrupt outcomes. They further contend that this strategy is not sufficient: corruption at higher levels of government also needs to be contained--a strategy that would entail reforming the role of the state as suggested by Tanzi (Chapter 2).
In Chapter 5, Dabla-Norris argues that there is an optimal level of corruption, reflecting self-interested behavior of different players in a society. And because governments in some countries lack an effective monitoring mechanism, it may be optimal for them to pay lower wages to their employees—a policy recommendation that is contrary to the one contained in the study by Van Rijckeghem and Weder (see Chapter 3). Typically, most developing countries have a bloated civil service, and a corruption-reducing higher wage for all government employees is not sustainable from a fiscal perspective. This implies that the issue of a higher wage for government workers should be an integral part of a comprehensive civil service reform.
Charap and Harm (Chapter 6) contend that corruption is endogenous to political structures and helps maintain an "equilibrium" among different population groups. Elimination of corruption in such instances could then destabilize existing political systems and lead to anarchy, rather than enhancing economic efficiency. Under these conditions, a comprehensive reform of the civil service could be implemented only if a "ruler" gains stability from benevolence, rather than patronage. If the survival of the regime is threatened, this reform program is likely to be rejected.
In Chapter 7, Leite and Weidmann identify availability of natural resources as another factor that creates opportunities for corruption. Their statistical results show that capital- (labor-)intensive natural resource industries tend to induce a higher (lower) level of corruption, other things being equal.
Corruption lowers growth through limiting development of small and medium-sized enterprises, and has serious implications for a country's public finances. This is the subject of Chapter 8 by Tanzi and Davoodi. Because entrepreneurs have to devote their scarce time to bribing officials, the growth-promoting benefit of small and medium-sized enterprises is not fully realized. As a result, they estimate that due to this misuse of resources, economic growth is lowered by 0.4 percentage point for a sample of countries.
Understandably, the link between corruption and public finances is of special interest to the IMF in the conduct of its core mandate. The studies carried out at the IMF show that both expenditure and revenue sides of the budget are affected by corruption and rent-seeking behavior. By using cross-section data, Mauro (Chapter 9) shows that corruption is negatively associated with government expenditure on education. An increase in corruption by one unit (on a scale of 0 to 10) lowers the ratio of public spending on education by 0.2 percentage point of GDP. Corruption, therefore, could lead to a suboptimal composition of government expenditure. The reason for this result is that education programs are less prone to rent seeking.
The adverse impact of corruption is not confined to inappropriate expenditure allocations. Gupta, Davoodi, and Tiongson (Chapter 10) show that a high level of corruption has adverse consequences for a country's child and infant mortality rates, percent of low-birthweight babies in total births, and dropout rates in primary schools. For example, an increase in corruption by one unit (on a scale of 0 to 10) raises the child mortality rate on average by 1.1 to 2.7 deaths per 1,000 live births. These results are consistent with predictions stemming from theoretical models and service delivery surveys. An important implication of the results is that improvements in health and education outcomes do not necessarily require higher public spending.
In Chapter 11, Tanzi and Davoodi provide further evidence on how corruption distorts the composition of public expenditure. It leads to allocations in favor of less-productive investment projects and against nonwage operations and maintenance expenditures, such as books and medicines, which reduce the quality and productivity of existing infrastructure. Corruption also reduces government revenue needed to finance productive spending.
There are other types of public spending that are affected by corruption as well. Gupta, de Mello, and Sharan (Chapter 12) show that corruption is associated with higher military spending as a share of both GDP and total government spending, as well as with arms procurement in relation to GDP and total government spending. Military spending is a monopoly of the state, and contracts are often drawn in secrecy and under considerable discretionary power of the authorities. The results from the study suggest that defense spending can be considered for constructing governance indicators.
A considerable amount of public spending takes places at subnational levels in a number of countries, and the share of this spending is increasing. De Mello and Barenstein (Chapter 13) find that governance can be enhanced through the decentralization of expenditure functions to subnational governments. The higher the share of subnational spending in total government expenditures, the stronger the positive association between decentralization and governance. The relationship between decentralization and poor governance also depends on how subnational expenditures are financed—the higher the share of nontax revenues in total revenues as well as grants and transfers from higher levels of government in total expenditure, the stronger the association between decentralization and corruption.
Studies have also focused on the revenue side of the budget. In Chapter 14, Ghura contends on the basis of data for sub-Saharan African countries that the level of corruption also influences the tax revenue-to-GDP ratio. Lower revenues, in turn, have an impact on the ability of the government to finance critical poverty-allocation programs. For a given tax regime and rate structure, measures taken to curb corruption can be expected to raise tax revenues.
Collecting taxes while minimizing evasion and corruption remains a challenging policy problem. Hindriks, Keen, and Muthoo (Chapter 15) find that the distributional implications of evasion and corruption are unambiguously regressive under most tax collection schemes, and that collecting progressive taxes without inducing evasion or corruption may require that inspectors be paid commissions, with the cost of this policy potentially creating a trade-off between equity and efficiency. Inducing honesty in the collection of taxes therefore carries a cost. Hindriks, Keen, and Muthoo thus support the results of Van Rijckeghem and Weder (Chapter 3) as well as Chand and Moene (Chapter 4).
Poor governance also affects a country's income distribution and poverty. Dabla-Norris and Wade (Chapter 16) present a model to explain why the relatively wealthy choose rent-seeking activities such as employment in the government bureaucracy, army, and police rather than engaging in productive and entrepreneurial activities. Given imperfect capital markets, and lump-sum entry fees associated with rent seeking, those who are relatively wealthy to begin with tend to engage in rent seeking to protect their wealth from expropriation.
Gupta, Davoodi, and Alonso-Terme (Chapter 17) provide evidence of significant adverse distributional effects of corruption. They find that high and rising corruption is associated with higher income inequality and poverty. A worsening of the corruption index of a country by one standard deviation increases the Gini coefficient by 11 points, and one standard deviation increase in the growth of corruption reduces income growth of the poor by 4.7 percentage points a year.
The issue of governance has assumed increasing importance in transition economies in recent years. In Chapter 18, Abed and Davoodi conclude that corruption is mostly, but not entirely, a symptom of underlying policy distortions and weak economic institutions in transition economies. They argue that reform of the state—as noted by Tanzi in Chapter 2—is critical for reducing corruption and enhancing economic performance in transition economies. Increasing the reliance on market-based pricing and creating a sound regulatory environment should help in lowering corruption. Abed and Davoodi also provide evidence to show that structural reforms in these economies can help lower the scope for corruption, a point reiterated by Wolf and Gürgen (Chapter 19), who examine the indirect role played by the IMF in combating corruption in the Baltic and Commonwealth of Independent States countries through its policies for promoting structural reforms. The IMF's
emphasis on deregulation, liberalization, privatization, and its technical assistance aimed at strengthening the budgetary process and institution building, help improve economic governance and reduce opportunities for rent-seeking behavior.


1See Bhagwati (1982); Becker (1968); Buchanan, Tollison, and Tullock (1980); Klitgaard (1984 and 1988); Krueger (1974 and 1993); Murphy, Shleifer, and Vishny (1993); and Rose-Ackerman (1975 and 1978).
2For example, Shleifer and Vishny (1993).
3Bardhan (1997).
4Between 1987 and 2000, the number of electoral democracies rose from 69 to 120, representing 63 percent of the worldÕs states (Freedom House, various issues). This roster is based on a stringent standard; elected national authorities must be drawn from free and fair elections.
5See, for example, Freedom House (2000) and Treisman (2000).






http://www.fas.org/irp/threat/pub45270chap2.html#14
International Crimes Affecting US Interests
The threat to the United States from international crime continues to grow as criminals exploit the globalization of trade and finance and rapid changes in technology. These developments have helped create new mechanisms for trafficking contraband, conducting illicit trade, laundering money, and engaging in large-scale economic crimes. They have also opened the door to new criminal opportunities. While organized crime groups have greatly benefited from these developments, the pace of globalization and technological advancements also have inadvertently resulted in some legitimate businesses becoming engaged in economic criminal activity.
The President's International Crime Control Strategy states that international crime threatens vital US interests in three broad, interrelated categories:

Threats to Americans and their communities, which affect the lives, livelihood, and social welfare of US citizens living in the United States and abroad.
Threats to American businesses and financial institutions, which affect US trade, the competitiveness of US products, and the US interest in a stable worldwide financial system.
Threats to global security and stability, which affect the broader US national security interest in promoting regional peace and democratic and free market systems, particularly in regions where outlaw regimes aspire to develop weapons of mass destruction or where US forces may be deployed.
This chapter addresses the major international crimes identified as a threat to US interests in the International Crime Control Strategy, including their impact and costs to American citizens, businesses, or national security interests. This survey does not address them in any priority order indicating severity of threat to US interests.

International terrorism and drug trafficking most directly threaten American lives and property. These international crimes are addressed in greater detail in the State Department's annual Patterns of Global Terrorism and International Narcotics Control Strategy Reports and the administration's annual National Drug Control Strategy.
Illegal immigration, worldwide trafficking of women and children, and environmental crimes may pose direct threats to safety, health, stability, values, and other interests of American communities--as well as to the entire world community of which the United States is a leading member.
The illicit transfer or trafficking of products across international borders--including the violation of US or international sanctions, illicit transfer and smuggling of materials for weapons of mass destruction, arms trafficking, and trafficking in diamonds and other precious gems--undermines US national security objectives of isolating pariah regimes and promoting regional stability.
Economic trade crimes such as piracy, the smuggling of contraband, the violation of intellectual property rights (IPR) through product piracy and counterfeiting, industrial theft and economic espionage, and foreign corrupt business practices rob US companies of substantial commercial revenues and affect their competitiveness in world markets.
Financial crimes such as counterfeiting US currency and other monetary instruments, sophisticated fraud schemes directed at both individuals and businesses, high-tech computer crimes targeting businesses and financial institutions, and money laundering cause significant financial losses to American citizens and companies at home and overseas and contribute to instability in the international financial system.
Terrorism
Many international terrorist groups continue to see US interests as prime targets. Terrorists continue to demonstrate their operational ability to strike at a broad array of targets using both crude and sophisticated methods. The 1993 World Trade Center bombing in New York City; the 1995 and 1996 bombings in Saudi Arabia; the 1997 massacre of Western tourists in Luxor, Egypt; the 1998 bombings of US Embassies in Kenya and Tanzania; and the October 2000 suicide attack on the USS Cole in Yemen highlight the international terrorist threat posed to American lives and property, at home and abroad.

In 1999, there were 169 terrorist attacks against US targets worldwide, a 52 percent increase from 1998, when there were 111 anti-US terrorist attacks-- including the bombing of US Embassies in Nairobi, Kenya, and Dar es Salaam, Tanzania.
Graphic
Anti-US Terrorist Incidents 1990-2000
The terrorist threat to US citizens and national security interests comes principally from organized groups with political, ethnic, or religious agendas in their countries, state sponsors of terrorist organizations, and transnational groups with broader goals. Traditional, established terrorist organizations--some backed by state sponsors such as Iran, Iraq, Syria, Libya, Sudan, North Korea, and Cuba--remain a dangerous threat. Iran, which still considers terrorism a legitimate foreign policy tool, maintains a terrorist infrastructure and ties to Islamic extremists and Palestinian groups that give it a worldwide terrorist capability.
Islamic terrorist groups with vague international agendas have become a growing threat in recent years. These groups are sometimes loosely organized, draw their membership from communities in several different countries, and obtain support from an informal international network of like-minded extremists rather than from state sponsors of terrorism. Many of these terrorists met while fighting against the Soviets in Afghanistan or have since received military and explosives training there.

The group led by Ramzi Yousef, the convicted mastermind of the World Trade Center bombing, and the network maintained by Afghanistan-based terrorist Usama Bin Laden are prime examples of this evolution in the international terrorist threat.
Algerian national Ahmed Ressam, who was arrested in Port Angeles, Washington, attempting to smuggle bombmaking material into the United States from Canada, was associated with an extremist group based in Algeria that has ties to Bin Ladin's organization.
Graphic
Total Persons Killed Worldwide in International Terrorist Incidents, 1990-2000
The international political and economic changes that drug-trafficking and organized crime groups are exploiting to facilitate their activities are enhancing the ability of terrorist groups to operate worldwide. International terrorist groups are particularly adept at exploiting the advantages of more open borders and the globalization of international commerce to move people, money, and material across national borders. Like drug trafficking and other criminal organizations, terrorist groups are becoming more sophisticated in the use of computer technology that enhances their communications and logistic networks.
Although terrorist groups and criminal organizations have similar requirements for moving people, money, and material across international borders, traditionally there has been minimal cooperation between them. Terrorist groups maintain their own clandestine networks and typically control all aspects of their operations to minimize the risk of exposure. There is the potential, however, for cooperation between transnational terrorist groups and criminal organizations.

Some terrorist groups that lack a single state sponsor may use criminal activities to help finance their operations.
Some terrorist groups look to organized crime groups to assist them in acquiring more sophisticated weapons or materials.
Drug Trafficking
The worldwide illicit drug industry is one of the greatest threats to social stability and welfare in the United States. In addition to the terrible human cost of addiction and associated health concerns--including HIV and AIDS--endured by users of illicit narcotics, drug abuse has a significant impact on the social fabric that affects all Americans. Drug abuse undermines family cohesion and has a terrible daily and often lifelong effect on the lives of children across the country.

Results from the most recent National Household Survey on Drug Abuse indicated that 14.8 million Americans--about 6.7 percent of the population 12 years or older--were current users of illicit drugs, having used them within the previous 30 days.
In 1999, according to a study sponsored by the Office of National Drug Control Policy (ONDCP), there were about 3.3 million hard-core users of cocaine and 977,000 hard-core heroin users in the United States.
ONDCP estimates there were 52,600 drug-related deaths in 1995, including 14,200 who died directly from drug consumption. This was the only year for which this estimate, derived from a methodology that incorporates deaths from other drug-related causes, was made.
Medical examiners from 42 metropolitan areas in the United States reported more than 10,000 direct drug abuse deaths in 1998, the latest year for which figures are available, according to a survey conducted by the Drug Abuse Warning Network.
Drug-related causes accounted for about 33 percent of new AIDS cases for men and 42 percent of new AIDS cases for women in the United States in 1998, according to data from the Centers of Disease Control and Prevention.
The economic costs of drug abuse to US citizens and society are substantial. These include significant personal spending of disposable income on illegal drugs; costs associated with medical care and drug rehabilitation programs for drug abusers; lost productivity in the workplace; and spending required by federal, state, and local law enforcement agencies and judicial and penal systems to deal with drug-related crimes.

In 1999, Americans spent $63 billion on illegal drugs, according to a study sponsored by ONDCP.
The estimated total costs of drug abuse in the United States--including health care and lost productivity--were $110 billion in 1995, the latest year for which data are available, according to the US National Institute for Drug Abuse (NIDA). Nearly $12 billion of that was for health-care costs and medical consequences.
US Department of Labor studies have shown that drug users are less dependable than other workers; they are twice as likely as nonusers to take unexcused absences from work, are nearly twice as likely to switch jobs, and are more than three times as likely to be terminated.
More than 8.3 million Americans in the work force age 18 and older used illicit drugs in 1998, according to the National Household Survey on Drug Abuse; 6.4 percent of full-time workers and 7.4 percent of part-time workers reported current illicit use in the survey.
Drug use is estimated to cost $77 billion a year in decreased productivity and lost earnings in the United States, according to a 1998 report by NIDA.
Drug abuse also leads to antisocial behavior and promotes disrespect for laws and institutions. The drug trade brings with it high levels of street crime and violence by addicts needing to pay for drugs and by drug groups fighting for turf. There is a strong correlation between drug abuse and crime.

More than two-thirds of the adult males arrested for crimes tested positive for at least one drug in 1998, according to the Arrestee Drug Abuse Monitoring Program sponsored by the National Institute of Justice.
In 1995, the latest year for which data are available, almost 225,000 people were incarcerated in state prisons and nearly 52,000 in federal prisons for drug offenses. About 60 percent of the federal prison population was incarcerated for drug-related crimes.
Graphic
Estimated US Hard-Core User Population for Heroin and Cocaine, 1988-98
Graphic
US Customs Seizures of MDMA (Ecstasy), 1997-2000
Illicit Drug Production
The most dangerous drugs of abuse in the United States--cocaine, heroin, MDMA (also known as ecstasy), and much of the methamphetamine--are smuggled into the country by international criminal organizations from source countries in Latin America, Asia, and--for MDMA--Europe. Cocaine consumption in the United States, the world's most important and largest market, has declined somewhat since its peak in the late 1980s, but has remained relatively stable for most of the last decade. Cocaine is produced in the South American Andean countries of Colombia, Peru, and Bolivia; Colombia is the source of an estimated 90 percent of the cocaine supply in the US market.

In 1999, the United States seized some 73 metric tons of cocaine at its borders, according to the US Customs Service.
Fueled by high-purity, low-cost heroin introduced into the US market by Southeast Asian and Colombian traffickers, heroin use in the United States increased significantly in the early-to-mid 1990s and has leveled off in recent years. The purity of heroin currently available in the United States is higher than ever. Southwest Asia's "Golden Crescent" (Afghanistan and Pakistan) and Southeast Asia's "Golden Triangle" (Burma, Laos, and Thailand) are the world's major sources of heroin for the international market, but Colombia is the largest source of supply for the US heroin market and Mexico the second largest. Colombia and Mexico account for about 75 percent of the US heroin market, with heroin from Southeast Asia making up most of the remainder.

About 875 kilograms of heroin were seized at US ports-of-entry in 1999, according to US Customs Service data.
The use of synthetic drugs in the United States, many of which come from abroad, has become a more significant problem over the last decade. Beginning in the 1990s, there has been a dramatic surge in the worldwide production and consumption of synthetic drugs--particularly amphetamine-type stimulants, including methamphetamine and ecstasy.

The majority of methamphetamine available in the US market is produced by Mexican traffickers operating in the United States or in Mexico; the US Drug Enforcement Administration (DEA) estimates that Mexican trafficking groups control 70 to 90 percent of the US methamphetamine supply. There has been a significant increase in methamphetamine production in Southeast Asia in recent years. Although little has found its way to the US market from Southeast Asia, increasing quantities of "Thai Tabs" have been seized in the western United States.
Most of the ecstasy in the US market is produced in the Netherlands. Amsterdam, Brussels, Frankfurt, and Paris are major European hubs for transshipping ecstasy to foreign markets, including the United States. US law enforcement reporting indicates that the Dominican Republic, Suriname, and Curacao are used as transshipment points for US-bound ecstasy from Europe and that Mexican and South American traffickers are becoming involved in the ecstasy trade. In FY 1999, according to the US Customs Service, 3.5 million ecstasy tablets were seized being smuggled into the United States--a sevenfold increase over the 400,000 tablets seized in 1997. For FY 2000, more than 9.3 million tablets were seized.
Marijuana remains the most widely used and readily available illicit drug in the United States. It is the gateway drug for nearly all users of more dangerous illicit drugs. While most of the marijuana consumed in the United States is from domestic sources, including both outdoor and indoor cannabis cultivation in every state, a significant share of the US market is met by marijuana grown in Mexico, with lesser amounts coming from Jamaica, Colombia, and Canada. Very little of the cannabis grown in other major producers--including Morocco, Lebanon, Afghanistan, Thailand, and Cambodia--comes to the United States.

In 1999, some 536 metric tons of marijuana were seized entering the United States, most of which came from Mexico.
Drug-Trafficking Networks
International drug-trafficking organizations have extensive networks of suppliers and front companies and businesses to facilitate narcotics smuggling and laundering of illicit proceeds. Colombian and Mexican trafficking organizations dominate the drug trade in the Western Hemisphere. Colombia supplies most of the cocaine and contributes the largest share of heroin to the US market, and Mexico is the major avenue for cocaine trafficking into the United States as well as a major supplier of heroin, marijuana, and methamphetamine. In the Asian source regions, heroin production is dominated by large trafficking organizations, but the trafficking networks smuggling heroin from Asia are more diffuse. Asian heroin shipments typically change hands among criminal organizations as the drug is smuggled to markets in the United States and elsewhere.
The evolution of the international drug trade in the last decade has included greater involvement by a growing number of players and more worldwide trafficking of synthetic drugs. Criminal organizations whose principal activities focus more on traditional contraband smuggling, racketeering enterprises, and fraud schemes have become increasingly involved in international drug trafficking. Although they generally are not narcotics producers themselves, many organized crime groups--including those from Russia, China, Italy, and Albania--have cultivated and expanded ties to drug-trafficking organizations to obtain cocaine, heroin, and synthetic drugs for their own distribution markets and trafficking networks. Traffickers from many countries increasingly are eschewing traditional preferences for criminal partnerships with single ethnic groups and collaborating in the purchase, transportation, and distribution of illegal drugs. Nontraditional trafficking
groups--including rebel armies and extremist organizations--have also turned to the drug trade as a means of raising revenue.
Taking advantage of more open borders and modern telecommunications technology, international drug-trafficking organizations are sophisticated and flexible in their operations. They adapt quickly to law enforcement pressures by finding new methods for smuggling drugs, new transshipment routes, and new mechanisms to launder money. In many of the major cocaine- and heroin-producing and transit countries, drug traffickers have acquired significant power and wealth through the use of violence, intimidation, and payoffs of corrupt officials. They are ruthless in protecting their operations, threatening and sometimes resorting to violence against US law enforcement officers and Americans working and living in drug-producing and transit countries.

Global Implications
The consequences of drug abuse and trafficking are also a major challenge to countries worldwide, and they have become serious enough in recent years to affect regional stability. Countries that today are major narcotics producing or transit areas have significant drug addiction problems that grew with their involvement in the drug trade. In some countries, large segments of the population are stricken by AIDS, undermining economic growth and future prospects. The social, economic, and political stresses these problems cause are felt across national borders, contributing to regional economic problems and political tensions.
Alien Smuggling
Alien smuggling groups traffic in "human cargo," criminally orchestrating the movement of undocumented or fraudulently documented foreign nationals to the United States and other prosperous countries in often cramped, unhealthy, and dangerous conditions. Countries under economic or demographic stress-- particularly China, India, and Pakistan in Asia, and Mexico, Caribbean island nations, and Central American states in the Western Hemisphere--are the major sources of illegal migrants seeking new homes and livelihoods in the United States and Canada. While most illegal migrants come for economic reasons, some are criminals and associates of extremist groups. Once in their destination country, illegal immigrants disappear into ethnic communities to find work and avoid the authorities.
The US Immigration and Naturalization Service (INS) estimated in 1996 that there were about 5 million undocumented aliens illegally in the United States, representing about 2 percent of the total US population. More than half of the illegal immigrants in the United States--some 2.7 million--are Mexican nationals; another 700,000 came from Central America. Most illegal aliens entered the United States without passing through immigration controls. The remainder--about 40 percent--overstayed their visas. Nearly 80 percent of foreign nationals illegally living or working in the United States are concentrated in five states: California, Texas, New York, Florida, and Illinois. Forty percent live in California alone.

The US Government estimates that 500,000 illegal migrants are brought into the United States annually by organized alien smuggling networks; another estimated half-million enter without the assistance of alien smugglers. Most illegal migrants enter the United States overland from Mexico or Canada.
According to US Government estimates, some 500,000 to 600,000 illegal migrants who entered the United States in 1999 were Mexican nationals, and another 225,000 were Central American nationals.
Chinese smugglers, known as snakeheads, often move aliens into the United States by maritime vessels, including offshore transfers of migrants, but also transit South and Central America, Mexico, and Canada. The US Government estimates that 30,000 to 40,000 Chinese were smuggled into the United States in 1999.
Alien smuggling contributes to the broader problem of increasing numbers of foreign nationals illegally resident in the United States, as well as in other relatively prosperous countries, who are straining social and economic resources and contributing to rising crime and anti-immigrant sentiment. Illegal aliens undermine wages and working conditions for legal employees, increasing the potential health and safety risks to the work force. Illegal immigration also increases the burden and cost of some government social programs.
Map
The Illicit Chinese Migrant Flow to the United States, 2000
Indications of links connecting some alien smuggling to drug trafficking, terrorist or extremist political organizations, and other organized crime groups are a major cause for concern. Persistent--but largely unverified--reporting from a variety of sources suggests that drug shipments are sometimes collocated with illegal aliens in transit to the United States. Some primarily drug-trafficking groups are believed to include or work with alien smugglers. Many ethnic-based criminal organizations--particularly Nigerian, Chinese, and Russian crime groups--employ illegal aliens smuggled into the country to undertake higher-risk criminal activities. Terrorists and members of extremist organizations seeking to enter the United States and wanting to avoid detection at ports-of-entry sometimes use the services of alien smuggling networks, including document forging services.

Several of the conspirators in the 1993 World Trade Center bombing entered the United States with false documents.
Alien smuggling also raises serious human rights concerns. Most illegal migrants come to the United States willingly in search of a better livelihood and higher standard of living, and they pay alien smugglers high prices for that opportunity. However, because they lack legal status and rights, they are often abused en route and once they reach their destinations. Some illegal migrants die in transit from cramped, unhealthy, and unsafe conditions or from abusive treatment by their handlers. Once in the United States, most illegal aliens work in menial jobs with few benefits, and their status puts them very often at the mercy of exploitative employers. To pay off large debts to their smugglers, many illegal immigrants wind up working in unregulated and untaxed industries. Some alien smuggling evolves into trafficking situations where the illegal migrants are forced by their smugglers into other crimes or virtual slavery to pay off their debts. (1)

To avoid US law enforcement authorities, it is not uncommon for smugglers to abandon their clients in the desert without food or water, or to toss them in frigid waters. On Chinese alien smuggling vessels in 1999, a number of migrants were beaten by smugglers until they lost consciousness, according to the US Coast Guard. Smugglers also coerced female migrants into sex by withholding food or otherwise making the journey miserable for noncompliant females.
In the last two years there have been several major incidents involving would-be illegal Chinese immigrants found dead inside cargo containers, including three in Seattle in January 2000 and 58 in Britain in June 2000.
Alien Smuggling Networks
Illegal migration facilitated by organized alien smuggling networks is on the rise. The easing of national border controls worldwide, growth of commercial travel options, availability of technology that can be readily adapted to forge identification and travel documents, and the rising sophistication of global criminal networks are key factors contributing to this development. The vast pool of potential migrants seeking economic opportunity in the United States and other developed countries, diminished opportunities for legal migration as the world's more prosperous countries seek to reduce immigration, and increased border enforcement and interdiction of illegal migrants have translated into substantial profits for alien smuggling groups.

The UN estimates that migrant smuggling worldwide involves 4 million people and $7 billion annually, according to a report in December 1997.
Besides being a profitable criminal business, smuggling illegal immigrants is less risky than trafficking in other illicit contraband, such as drugs. Only a handful of source and transit countries have enacted criminal statutes against alien smuggling, and virtually no ethnic group stigmatizes the practice. Most governments--including those in Central America, a primary conduit for smuggling illegal migrants into the United States--are lax toward alien smuggling because they view it largely as a US problem and perceive higher bilateral priorities with Washington.
Alien smuggling thrives in corrupt environments, and bribery undermines effective enforcement against illegal border crossings and false documentation where corruption is less endemic. The ready availability of means to counterfeit and forge travel documents also minimizes the risks for traffickers in "human cargo."
The networks involved in alien smuggling are highly efficient movers of people across national frontiers. Unlike other international criminal organizations, some of which smuggle illegal aliens as an adjunct to other criminal activities, alien smuggling groups typically are less hierarchical and more characterized by loose networks of associates to facilitate the movement of illegal migrants across regions and continents. These networks typically include local agents who recruit people interested in illegal immigration to the United States and elsewhere and bring them together for departure; travel processors who arrange for identification and any necessary travel documents; and international "brokers" along the way who facilitate intermediate passages and make arrangements for arrival at final destinations. The widespread dispersion of associates gives alien smuggling groups the flexibility to quickly and easily shift routes or call upon different
operatives if law enforcement or other conditions disrupt their operations. The fact that groups of illegal aliens are typically handed from smuggler to smuggler during portions of their journey makes it difficult to target and disrupt alien smuggling networks.
Central America has emerged as the primary gateway for US-bound illegal migrants from all over the world. Scores of loosely linked networks that span the region and extend into Asia facilitate their movement. These networks include an abundance of smugglers and escorts, fraudulent document vendors, safehouse keepers, corrupt airline and bus company employees, and corrupt officials. While illegal migrants from China and elsewhere outside the Western Hemisphere have handlers for all stages of their journey through Central America, many Central American migrants do not enlist the services of a smuggler until they independently reach Mexico. Many illegal migrants caught in Central America are deported to the country from which they most recently arrived, which is usually another country in the region or hemisphere, because they travel without documents indicating their country of origin. From there, they usually resume traveling northward.
Although many alien smuggling groups are highly specialized, the growing profitability of this criminal business has increased the involvement of larger polycrime syndicates. Some groups have engaged in moving both drugs and people, although not necessarily at the same time.

The Chinese Fuk Ching Gang, for example, has engaged in large-scale smuggling of illegal immigrants by sea. This group was reportedly responsible for organizing the voyage of the Golden Venture, which ran aground off New York City in 1993 with hundreds of illegal Chinese aliens from Fujian Province aboard.
Trafficking in Women and Children
Trafficking in human beings, especially women and children, across international borders for sexual exploitation and forced labor is an increasing crime problem as well as a grave violation of human rights. People caught in human trafficking rings are placed in situations of abuse and exploitation--including enforced prostitution, sexual slavery, sweatshop labor, domestic servitude or other forms of coerced labor, service, or subjugation--that subject them to the threat of violence, rape, battery, and extreme cruelty.

The US Government estimated in 1997 that 700,000 women and children were moved across international borders by trafficking rings each year. Some nongovernmental organizations estimate the number to be significantly higher.
The worldwide brothel industry earns at least $4 billion from trafficking victims, according to US Government estimates.
Map
Global Trafficking in Women in Women and Children: Major Source Regions and Destinations
Some 45,000 to 50,000 women and children were trafficked to the United States, according to US Government estimates for 1997, about 6 to 7 percent of the worldwide total. Most are from Southeast Asia and Latin America. There have also been a few cases where American women have been trafficked abroad. US international airports in New York, Miami, Chicago, Los Angeles, and San Francisco are major entry points for traffickers bringing women and children into the United States. Greater Customs and Immigration scrutiny at these airports have caused the District of Columbia, Cleveland, Orlando, Atlanta, and Houston to emerge as significant ports-of-entry for victims of trafficking rings. Like alien smuggling in general, trafficking in women and children helps build criminal support structures in the United States.

Trafficking to the United States violates US criminal, immigration, and labor laws, as well as the Victims of Trafficking and Violence Protection Act. Trafficking also usually involves conspiracy and visa, mail, and wire fraud. The gross, systematic violation of human rights, which often includes kidnapping, extortion, and enslavement, is also a violation of US laws.
In 1997, Florida police arrested a brothel operator who smuggled Mexican women and underage children into the United States and forced them to work as prostitutes to pay off their $2,000 smuggle fee.
The dramatic rise in cross-border crimes against children is a growing concern. US law enforcement agencies also report an increase in international sex tourism in which adults--including US citizens-- travel to foreign countries to have sex with children.

Typically, the children--some not yet teenagers-- are victims of trafficking, having been sold by their families or kidnapped and forced into bondage.
Trafficking Networks
Traffickers of women and children, much like narcotics traffickers, operate boldly across sovereign borders. They prey on women from countries where economic and employment prospects are bleak, organized crime is rampant, and females have a subordinate role in society. Often these women are tricked into leaving their countries by false promises of a better economic life abroad; traffickers lure victims with false advertisements and promises of jobs as models, dancers, waitresses, and maids. Once the women are abroad, traffickers use a variety of coercive means to sell and enslave them. In other instances, traffickers buy young girls from their relatives. The UN Commission on Crime Prevention and Criminal Justice has reported a dramatic increase in the abduction of children for commercial purposes by organized crime syndicates.

According to the US Government, an estimated 225,000 women and children from Southeast Asia were trafficked across international borders in 1997, accounting for nearly one-third of the worldwide total. Nearly half are younger than 18, and most--60 percent--are trafficked within the East Asia-Pacific region, primarily to wealthier markets such as Thailand, Hong Kong, Singapore, Japan, and Australia. An estimated 30,000 women from Southeast Asia were trafficked to the US market in 1997, about two-thirds of the total trafficking victims brought into the United States that year.
Latin America was the second-largest source region for women and children trafficked to the United States in 1997. About 10,000 of the total 100,000 women and children caught in Latin American trafficking rings in 1997 were sent to the United States, according to US Government estimates.
The former Soviet Union and Eastern Europe is becoming an important center for trafficking in women and children. The US Government estimates that about 175,000 of the women and children from countries in these regions were caught in trafficking rings in 1997. Most--an estimated 120,000--were sent to Western Europe, with Germany, Italy, and the Netherlands the most likely destinations. About 4,000 women and children from the former Soviet Union and Eastern Europe were brought to the United States.
Some 150,000 victims from South Asia were trafficked to buyers elsewhere in the region, in the Middle East, and in Southeast Asia in 1997.
Traffickers of women and children use a variety of methods to move their victims across national and international boundaries. They sometimes operate through nominally reputable employment agencies, travel agencies, entertainment companies, or marriage agencies. Legitimate travel documents are often obtained and used to cross international borders, after which the trafficking victims disappear or overstay their visas. Traffickers, however, also use fraudulent documents to obtain genuine travel documents or use altered or counterfeit documents to move the women and children. Victims caught in these trafficking rings are most often moved out of their home countries and regions by commercial airlines. Traffickers typically move them in small groups, change flights frequently, and vary their routes in efforts to avoid being caught.
While small trafficking groups with loosely connected networks and affiliates dominate the global trade in women and children, the role of large, polycrime international criminal organizations is becoming an increasing problem. Because women and children are seen as a reusable commodity, trafficking in human beings is becoming a major source of income for some organized crime groups. Profits from this activity are laundered and fed into other illicit activities, including narcotics and arms trafficking.
Corrupt officials often facilitate trafficking in the source, transit, or destination countries. Law enforcement officials in the source countries often ignore the recruitment process, since they believe that in most cases the actual coercion takes place at the final destination.

In Bulgaria, four senior officials--including two involved in security or anticrime forces--were fired in April 1997 because of their links to an organized crime group involved in procuring women for forced prostitution, according to Bulgarian press.
In Thailand, traffickers recruit military and police force members to serve as escorts for women who are being trafficked to foreign sex markets.
Trafficking in women and children to the United States and abroad is likely to continue increasing in the years ahead given the large profits, relatively low risk, and rare convictions for traffickers. Lack of visa and border controls, as well as almost nonexistent antitrafficking legislation in many source and transit countries, will only further embolden the traffickers. Economic hardship, poor employment prospects, and the low status of females in many source countries will continue to underpin the problem.

These concerns are leading to increased international countermeasures. In 1998, the G-8 heads of state, for example, used their communique at Birmingham to call for activities to prevent trafficking, prosecute the criminals, and protect the victims.
In 1998, the United States introduced a resolution on trafficking in women and children that was adopted by the UN Crime Commission. The resulting protocol on trafficking in persons, cosponsored by the United States and Argentina, will be attached to the UN Convention Against Transnational Organized Crime.
Environmental Crimes
Environmental crime is one of the most profitable and fastest growing new areas of international criminal activity. Growing international environmental concerns have led to the proliferation of multilateral conventions and national laws and regulations to control pollutants that are health or environmental hazards, to prevent wanton exploitation of scarce natural resources, and to protect endangered plant and animal species. Criminal organizations around the world-- most notably in Italy, Russia, China, and Japan--have taken advantage of the significantly greater costs for waste disposal, as well as the much-increased value of rare or precious natural resource commodities that are the subject of tight trade and sale restrictions, to earn substantial illicit income from circumventing environmental laws and regulations.

The US Government estimates that local and international crime syndicates worldwide earn $22-31 billion annually from hazardous waste dumping, smuggling proscribed hazardous materials, and exploiting and trafficking protected natural resources.
Graphic
Selected Criminal Groups' Involvement in Environmental Abuses
The tremendous costs for legally disposing of pollutants and dangerous chemicals have created new illicit business opportunities for criminal organizations, who earn $10-12 billion per year for dumping trash and hazardous waste materials. Organized crime groups are taking increasing advantage of the multibillion-dollar legal trade in recyclable materials, such as scrap metals, to comingle or illegally export or dump toxic wastes. Most of these wastes are shipped in "trash-for-cash" schemes to countries in Eastern and Central Europe, Asia, and Africa where disposal costs and enforcement of environmental regulations are lower. The lack of specific legislation governing such crimes in many countries and poor enforcement or limited legal penalties in many others (often only fines that are insignificant in comparison to the millions in profits that can be made from this activity) reduce the risks for international crime groups involved in dumping hazardous
wastes.
While crime groups in Russia, Japan, and elsewhere have increasingly moved into illegal waste disposal, Italian criminal organizations are the most involved largely because of their success in infiltrating Italy's industrial waste disposal sector. They have used their control over waste-disposal businesses, both legitimate and front companies, to secure contracts in Italy and elsewhere in Europe and illegally dump wastes to boost profits.

About half the 80 million metric tons of waste produced annually in Italy disappears and is presumed to be illegally dumped, according to Italian press sources. In 1997, Italian law enforcement authorities investigating the role of Italian organized crime in the illegal export and dumping of hazardous wastes claimed that criminal groups control most of Italy's waste disposal contracts.
Italian authorities claimed in 1997 that 11 million metric tons of toxic and industrial waste are deposited annually in some 2,000 illegal domestic dump sites in local waterways or in the Mediterranean.
In 1997, there were at least 53 Italian crime groups trafficking and disposing of hazardous waste, which was shipped to dumpsites in Albania, Eastern Europe, and the African west coast, according to European law enforcement officials cited in the press.
The lack of inexpensive, adequate, safe disposal options for radioactive waste is also attracting the increased involvement of organized crime groups throughout Europe. In many cases, these groups appear to be using illicit networks already in place for smuggling arms, drugs, and other contraband.

European authorities are investigating illegal dumping of radioactive wastes from Austria, France, and Germany--all of which have good, but costly, disposal options--and Eastern Europe into the Mediterranean and Adriatic Seas by companies purportedly hired by Italian organized crime groups. In 1998, an 'Ndrangheta Italian organized crime family was being investigated by Italian authorities for dumping radioactive waste off Italy's southern coast, according to press reports.
Criminal groups also smuggle environmentally harmful products, particularly ozone-depleting chlorofluorocarbons (CFCs) whose legal trade is subject to stringent international restrictions. The illegal trade of these substances into the United States and other markets is accomplished through false labeling, counterfeit paperwork, and bogus export corporations.

The size of the global black market for ozone-depleting substances is estimated by the UN to range from 20,000 to 30,000 metric tons annually, with more than half entering the United States. Illegal imports of these substances are far cheaper than CFCs that are legally recycled or obtained from limited existing stocks.
The stealing and illicit trade of natural resources is also a significant income generator for criminal organizations, earning them $5-8 billion per year. Well-organized criminal groups in Africa, Eastern Europe, Latin America, China, and Southeast and Southwest Asia are heavily involved in illegal logging and trade of forest timber. Illegal logging threatens bio-diversity and has contributed to the significant decline in forest areas worldwide. Russian and Chinese crime groups earn substantial income from illegal fishing. Poaching not only depletes seafood stocks, but also deprives seafood industries of legitimate earnings and government authorities of import and export revenues.

Russian crime syndicates are believed to earn as much as $4 billion annually from the illegal export of some 2 million metric tons of seafood, according to press reports citing Russian law enforcement estimates. The poaching of sturgeon from the northern Caspian Sea and the sale of crab and other seafood to Japan make up much of the trade. Japan, in 1997, imported more than $1 billion worth of fish from Russia--six times the volume that Moscow says it exported, according to trade data.
The illegal trade in animal parts--in particular elephant, whale, and hawksbill turtle parts--and endangered animal species has also become a lucrative business, particularly for Chinese and other Asian criminal groups. The illegal trade in exotic birds, ivory and rhino horn, reptiles and insects, rare tigers, and wild game is estimated to earn criminal groups $6-10 billion per year. In April 1999, waiver of the international ban on the African ivory trade to allow shipments to Japan caused a surge in poaching and smuggling of African and Asian elephant ivory.
Sanctions Violations
Some states of concern use international criminal networks to help in their efforts to undermine US and multilateral sanctions aimed at isolating those states from the global community. Regional and international networks of front companies, unethical businessmen, and crime groups help these regimes evade trade, military, and financial sanctions by facilitating clandestine shipments of embargoed products, including weapons, and executing financial transfers.

In the 1990s, trade and other sanctions on Serbia and Montenegro in the former Yugoslavia, Iraq, Libya, and Haiti were imposed by Western countries or the United Nations. In addition to these sanctions, the United States has maintained financial sanctions, as well as extensive trade embargoes, on Cuba, North Korea, Iran, and several other countries.
Iraq, which unlike the other states of concern is currently under comprehensive trade sanctions, has used traditional means for smuggling contraband to earn substantial illicit export revenue that Baghdad uses to fund procurement of embargoed goods. Much of Iraq's smuggling-derived income comes from Baghdad's illicit exports of gasoil through Iran's territorial waters and across its land borders. Barges, small tankers, cargo ships, and dhows are used by the Iraqis for maritime smuggling of gasoil exports.
In most cases, states of concern make use of legitimate and illicit business infrastructures to circumvent sanctions. Much of this activity takes place in countries with a high volume of commercial trade, including legal commerce with the regime, that could mask surreptitious dealings. In some cases, organized crime groups have played a significant role in attempts to circumvent trade sanctions. Most notably in the former Yugoslavia, local crime groups have flourished by stepping in to arrange clandestine shipments of embargoed goods and to provide covert financing.
Illicit Technology Transfers and Smuggling of Materials for Weapons of Mass Destruction
Several countries--including Iran, Iraq, Libya, Pakistan, and North Korea--have relied on networks of independent brokers and front companies to acquire controlled technology and circumvent US and international efforts to prevent them from developing weapons of mass destruction. The threat posed by continuing indications that states of concern and terrorist groups are intent on acquiring nuclear, chemical, or biological weapons increases the likelihood that international criminal networks may be used to smuggle the materials needed for their production.
There is no confirmed reporting that organized criminal groups have planned or attempted to steal nuclear warheads or weapons-usable nuclear material
(uranium with greater than 90-percent uranium-235 concentration and plutonium). Known thefts of weapons-usable nuclear material have primarily been committed by opportunists with insider knowledge of the facility storing nuclear material but without buyers identified prior to the theft.

To date, there have been a total of 14 confirmed seizures totaling 15.3 kilograms of weapons-usable uranium at various enrichments and 368.8 grams of plutonium--far less than what is necessary for a nuclear weapon.
Arms Trafficking
Illicit gray- and black-market arms sales became an increasing problem during the 1990s and pose an array of threats to US national security and foreign policy interests. The end of the Cold War and the winding down of several regional conflicts, such as those in Lebanon and Central America, increased the availability of both newly produced and used weapons. The items typically sold on the illegal arms market include spare parts for large weapons systems, particularly for clients under UN embargoes or sanctioned by the original seller; small arms, including assault rifles, and man-portable antitank and antiaircraft weapons; and ammunition for both small arms and larger artillery and armor systems. In some cases, however, larger military systems also are sold.

The US Government estimates that military equipment worth several hundred million dollars is sold annually on the illegal arms market to countries under UN arms embargoes. Insurgents, terrorists, and organized criminal groups acquire smaller quantities of small arms and other light infantry weapons on the illegal arms market.
Most illegal arms sales are through the gray arms market, which has been dominated by individual brokers--and their arms brokering firms--during the past decade. Gray-market arms transfers exploit legitimate export licensing processes, usually by using false paperwork to disguise the recipient, the military nature of the goods involved, or--more rarely--the supplier. Obtaining licenses, however fraudulent, allows gray-market players to make deals appear legitimate, helping them to arrange payment and international transportation for transactions that can be valued at millions of dollars and involve hundreds of tons of weapons.

In some cases, however, large illegal arms shipments arranged by gray arms brokers will be smuggled as contraband. Illicit arms sold or transferred to combatants in Afghanistan and the former republics of Yugoslavia were often provided by foreign suppliers donating and transporting tens of millions of dollars worth of weapons disguised as "humanitarian aid."
The end of the Cold War has made the bloated defense industry and large inventory of weapons in Russia and other former Warsaw Pact countries an easy mark for gray-market brokers. Since 1992, for example, combatants in civil conflicts in Afghanistan and the republics of the former Yugoslavia have purchased dozens of complete helicopters and fighter aircraft from gray arms suppliers. Brokers also acquire military equipment from US and other Western suppliers.
Black-market arms transfers do not go through an export licensing process. Rather, smugglers rely exclusively on hiding contraband arms from government officials. Black-market transfers usually involve smaller quantities of weapons, often pilfered from military stocks or gunshops. The theft and illegal sales of weapons and other military stocks has become a significant problem in Russia.
Organized crime groups have become increasingly involved in arms trafficking since the end of the Cold War, taking advantage of both the availability of large numbers of infantry weapons from the former Soviet Bloc countries and regional conflicts.

In the midst of conflicts in the former Yugoslavia, Italian and Russian criminal organizations have been buying and selling military-style arms on the black market, and criminal groups operating in the region are increasingly well armed.
Threats to US Security Interests
Illicit arms sales help fuel conflicts and undermine US political and military efforts to promote stability in several regions of the world. The illegal arms trade has helped arm combatants in the former Yugoslavia and Africa. Countries under UN or other international arms embargoes in which the United States participates are major clients in the illicit arms market. Purchases by insurgents and factions in civil war increase the risk to US military personnel and law enforcement officers operating in hostile environments overseas.
Insurgents and extremists acquire some small arms and ammunition to augment their own inventories of weapons. Although terrorist groups frequently try to obtain weapons on their own, their greatest source of conventional military weapons continues to be state sponsors like Iran and Libya.
Drug traffickers and organized criminal groups have increasingly turned to the illicit arms market in the 1990s. In addition to smuggling weapons via
the black market, these organizations have used
gray-market acquisitions of military weapons to strengthen their ability to defend their operations from government forces and rival organizations.
Trafficking in Precious Gems
The lucrative market for diamonds, gold, and other precious gems has attracted the interest of organized crime groups as well as become the dominant source of revenue for warlords and insurgent groups in war-torn diamond-rich areas in Africa. Diamond brokers traditionally have given little scrutiny to the source of rough diamonds they purchase for the global industry in precious gems and jewelry. Trafficking in diamonds, gold, and other precious gems has not generally undercut the profits of legitimate mining industries, but has deprived national governments of significant export-related revenues.

Nearly three-quarters of the world's rough diamonds--valued at about $5.2 billion on the open market--are mined in Africa, according to 1998 industry estimates. Of the total 1998 diamond production in Africa, 13 percent was mined informally, mostly by insurgent groups.
Russian, Chinese, Italian, and African criminal groups are involved in the illegal trade of precious minerals and gems. Russian crime groups are believed to have infiltrated the legitimate diamond and gold industries in Russia to smuggle precious gems out of the country. They use an array of front companies to conceal and facilitate smuggling operations. Payoffs to local authorities allow them to avoid customs duties and other tariffs, increasing their profit potential when they sell these precious gems at market value to industry brokers.

Russian crime groups illegally extract and sell 300 metric tons of amber worth an estimated $1 billion each year, according to 1998 press reports.
Criminal syndicates operating in South Africa stole 20 metric tons of gold and diamonds valued at $350 million in 1996, according to press reports citing South African police.
In Southeast Asia, smuggling of precious gems was a major source of revenue for the Khmer Rouge insurgency in Cambodia and remains a secondary source of income for drug-trafficking insurgent armies based in Burma.
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Diamond Mining in African Conflict Areas
In recent years, trafficking in diamonds by insurgent groups in Africa to finance their wars in the face of regional and international efforts and embargoes to end the fighting has become a significant problem. The UNITA insurgent group in Angola, rebel militias in the Democratic Republic of the Congo (DROC), and the Revolutionary United Front (RUF) in Sierra Leone exploit the lucrative diamond mines located in areas they control to raise revenue for arms purchases and other operational expenses. The RUF's principal supporter--neighboring Liberia--also profits from the illicit diamond trade in Sierra Leone.
The sale of diamonds for arms and other supplies by insurgent groups in Africa has stymied regional and international peace efforts and kept the fighting at high levels, resulting in significant casualties and displacement of civilian populations. Insurgents' control of most of their countries' diamond mines has also deprived the governments of substantial revenues.

According to an industry estimate, the value of rough-cut diamonds trafficked by UNITA rebels in 1998 was about $300 million, as compared to earnings of about $230 million for producing mines in areas controlled by the Angolan Government. Since the government offensive in late 1999, however, the loss of diamond mines and international sanctions have curtailed UNITA's diamond production in 1999-2000 to about $100 million.
The same industry source indicates that rough-cut diamonds from source-areas partly controlled by insurgent groups in DROC were valued at about $338 million in 1998.
Most of the diamond trade in Sierra Leone, earning about $45 million annually, is controlled by the RUF insurgents.
Growing international concern about the ability of African insurgent groups noted for their atrocities against civilians to finance their operations through the trafficking in rough-cut diamonds has led to movements for international certification regimes, although much work remains to be done.
Piracy
Maritime piracy, which is particularly prevalent off the coasts of Southeast Asia and Africa, threatens the security of some of the world's most important sea lanes as well as the safe and orderly flow of international maritime commerce. Piracy raises insurance rates, restricts free trade, increases tensions between the affected littoral states, their neighbors, and the countries whose flagged ships are attacked or hijacked. This criminal activity also has the potential to cause enormous damage to the sea and shorelines when ships carrying environmentally hazardous cargoes are targeted. Pirates endanger navigation by leaving vessels, including fully laden tankers, under way and not in command, increasing the risk of collision or grounding.

According to data made available by the US Coast Guard, direct financial losses incurred as a result of high-seas piracy are estimated at about $450 million per year.
Reported incidents of maritime piracy have more than doubled since 1994, according to data from the International Maritime Bureau (IMB) Piracy Reporting Center based in Malaysia, averaging between 200 and 300 per year over the last five years as compared to an average of less than 100 piracy incidents between 1990 and 1994. These figures, however, understate the extent of the problem because most piracy attacks go unreported. In particular, incidents involving coastal fishermen and recreational boaters are heavily under-reported.

In 1999, there were 285 attacks on ships at sea, at anchor, or in port, according to the International Maritime Bureau's Piracy Reporting Center. Piracy attacks increased by 25 percent from 1998 to 1999, with 408 crewmembers taken hostage in ship boardings.
Most acts of maritime piracy take place in poorly patrolled straits and coastal waterways, where pirates are able to strike quickly with little warning. Piracy is a significant problem (as it has been for centuries) along the coasts of Indonesia, Malaysia, Thailand, and the Philippines, where numerous maritime chokepoints channel large numbers of merchant ships into coastal waters where they are most vulnerable to attack. The west coast of Africa, off Nigeria and Senegal, and Somalia's east coast are the most piracy-prone areas in Africa. In East Africa, the ports of Mombasa, Kenya, and Dar es Salaam, Tanzania, are plagued by pirate attacks against berthed or anchored ships. While a large number of piracy attacks are targets of opportunity, local press reporting indicates that in some cases ships are specifically targeted for their cargo and the sale of their goods is prearranged on the black market.

Of the total piracy incidents reported for 1999, eight ships were hijacked, mostly in the waters off Southeast Asia and Somalia.
Pirate groups generally appear to operate independently, but some may be linked to more traditional organized crime groups.
The growing sophistication and increasing violence of piracy is a major concern to the maritime industry and to governments, particularly in Asia where piracy is having greater impact on maritime commerce. There are increasing incidents of maritime pirates coordinating multiship attacks and attempting to disguise their vessels. They often appear to be familiar with shipping schedules, plotting their attacks and hijackings of cargo accordingly. In some cases, pirates target only local shipping lines, which may own only one or two vessels, rather than ships from larger shipping companies. In addition, many of the pirate ships are increasingly well-armed and inclined to use force when seizing targeted vessels. From 1995 to 1998, the number of crewmembers assaulted, injured, or killed increased each year, according to data from the International Maritime Bureau in Malaysia.
Nondrug Contraband Smuggling
Nondrug contraband smuggling across international borders--including illegal import and export of legitimate goods such as alcohol, cigarettes, textiles, and manufactured products--is a highly profitable criminal activity that typically carries lighter criminal penalties than narcotics trafficking. The evasion of tariffs and taxes on commodities can reap sizable illicit profits for criminal organizations or companies engaged in illegal trade--often at the expense of US companies-- both by saving tax payments and by undercutting the market price of legitimate sales. The trafficking of contraband across international borders is prevalent in countries with large volumes of commercial trade, which helps minimize the risk of law enforcement detection and high import duties.

High profits and lighter penalties in contraband smuggling have attracted criminal organizations from Asia, the former Soviet Union, the Middle East, and Central and South America.
Consumer demand for contraband--particularly tobacco and alcohol products and expensive items such as luxury automobiles--is especially high in countries where high-import tariffs and excise taxes add significantly to the price of legitimate sales. International contraband smuggling rings cater to consumers seeking to acquire luxury items cheaply by avoiding customs duties and other taxes. Revenue losses caused by the trafficking and black-market sale of contraband commodities can be significant.

Russia, China, and countries of the former Yugoslavia are among those with the highest tariffs on luxury imports, making them prime markets for contraband smuggling.
Colombian drug traffickers often use illicit drug proceeds to purchase cigarettes that they smuggle into Colombia for black-market sales, avoiding high tariffs and taxes on legal tobacco imports, according to the US Bureau of Alcohol, Tobacco, and Firearms.
Cigarette smuggling into European Union countries cost them $3.7 billion in 1999, according to an EU study. The Scandinavian countries have also suffered major revenue losses because of trafficking and black-market sales of tobacco and alcohol by crime groups, primarily from the former Soviet Bloc and former Yugoslavia, that circumvent their import, excise, and value-added taxes.
Illegal imports and exports are a particular problem for the United States, which is considered by criminals with international connections to be both a major market and source for contraband as well as a transit avenue for international contraband smuggling. Criminals involved in smuggling contraband rely on the volume of export trade in the United States to conceal their illicit activities.

US Customs data indicate more than 1.3 million people, 341,000 vehicles, and more than 45,000 trucks and containers enter the United States daily. The Customs Service is able to physically examine only about 3 percent of all goods crossing US borders each day. Five years from now, US Customs will be able to inspect only 1 percent of all goods entering the United States if resource levels remain unchanged.
Contraband, such as firearms, alcohol, or cigarettes, is frequently concealed in shipping containers or packaging for seemingly legitimate goods.
In addition, the United States is frequently a transit country for merchandise being shipped to another foreign destination. Routing contraband through a transit country helps to conceal the true country of origin on merchandise that is controlled or restricted by the importing country.
Most contraband smuggling is facilitated by physical concealment of the illicit goods or by a fraudulent misrepresentation of facts. False invoicing, over or under valuation of goods, and transfer price mechanisms are frequently used to misrepresent the value of smuggled goods; undervaluation of goods allows contraband traffickers to avoid tariffs or excise taxes, while overvaluation is used either to disguise the true identity of the item or to launder illicitly derived proceeds.
Contraband Smuggling Into the United States
The volume of contraband commercial goods entering the United States skews the marketplace for some manufacturing, retail, and even high-tech industries by providing consumers with less expensive substitutes for legitimate products, hindering the competitiveness of US businesses. Moreover, many contraband imports are substandard products--such as tainted foods, substandard automotive parts, or dangerous imitation pharmaceutical drugs--that may threaten public health and safety.
The uncontrolled movement and disposal of hazardous wastes and material into and within the United States may cause harm to public safety and the ecosystem. The black market for chloroflourocarbons (CFCs), which deplete ozone from the atmosphere, in the United States and Europe is an extremely lucrative illicit business for international criminals. Russia, China, Mexico, and India are major sources of the approximately 10,000 to 20,000 metric tons of CFCs that US Customs has reported are smuggled into the United States each year. In addition to undermining international progress toward eliminating the use of ozone-depleting substances, the illegal CFC trade evades the high cost of US excise taxes on legally imported CFCs and takes business away from US companies developing ozone-safe chemicals and the equipment that uses them.

Brokers in Mexico can purchase freon, much of it legally imported from China, for less than $2 per kilogram and sell it in Los Angeles for 10 times as much, according to US Customs officials.
Industry estimates in 1998 indicated that smugglers of ozone-depleting substances earn as much as $600 million annually from sales to buyers in Europe and North America and deprive the US Government of some $150 million in excise tax revenues each year.
The United States is most often the destination of illicit trade in protected wildlife and rare plants, although both the United States and Canada are also raided to obtain exotic plants and animals. Trafficking in exotic species threatens bio-diversity and could expose unsuspecting Americans to deadly diseases.
Contraband Smuggling Out of the United States
Illegal exports of contraband leaving the United States are a significant problem, with criminal networks engaged in this activity taking advantage of US federal and state laws as well as the border control focus on the smuggling of drugs, illegal immigrants, and other contraband into the United States. Commodities smuggled out of the United States are often items restricted for export by US law and involve munitions list items, firearms, and defense-related technologies tightly controlled for export by the US Government. Other items frequently smuggled out of the United States include stolen automobiles, dual-use items, and other goods that are difficult to obtain.

Illegal trafficking in US-origin firearms has become a security issue of concern for many foreign governments. Foreign law enforcement agencies continue to uncover US-manufactured firearms owned by narcotics traffickers, insurgents, terrorists, and organized crime groups. Several foreign governments are pressing the US Government to stem the international flow of weapons from the United States. The US Customs Service seized nearly $4.6 million in arms and ammunition at US ports-of-entry and exit in 1999.
The illegal smuggling and trafficking of US-manufactured cigarettes and alcohol by worldwide criminal networks results in major losses of legitimate state revenues in Europe, Russia, Asia, and the Western Hemisphere. Some alcohol and tobacco contraband are legally exported but stolen in transit--often at an intermediate stop--or after they legally entered the destination country for black-market sales. Some US cigarette manufacturers sell directly to known smugglers. If US taxes on cigarettes rise over the next several years, international crime syndicates may expand smuggling operations into the United States to circumvent import taxes.
Contraband smuggling groups with worldwide networks are meeting a growing demand for stolen vehicles from the United States, as well as Western Europe and Japan. Luxury and sports utility vehicles are in particular high demand by criminals because of their high international black-market values and low probability of being detected by law enforcement in overseas markets. The annual global contraband trade in stolen vehicles is estimated at $10-15 billion.

In 1997 the FBI Uniform Crime Report estimated that 1.4-1.6 million automobiles are stolen annually in the United States, of which 200,000 valued at approximately $20,000 each are illegally transported out of the country--making the overseas black market for stolen US vehicles worth about $4 billion. Fewer than 1 percent of US stolen vehicles smuggled overseas are repatriated.
European law enforcement agencies report that 300,000 vehicles worth some $5 billion are acquired by car theft rings annually in the European Union countries.
The demand for stolen luxury cars is especially high in Russia and China, where import tariffs average more than 100 percent for most types of luxury vehicles, according to data from the US Commerce Department and industry sources. According to estimates by the National Insurance Crime Bureau, stolen vehicles sold in Europe fetch three to four times their US market value.
Map
Major US Ports-of-Exit for Stolen Vehicles Being Smuggled Abroad, 1988
Crime syndicates from China, Russia, Eastern Europe, and Mexico dominate much of the world trade in stolen cars. Russian and Asian crime groups rely on members or associates in the United States, who often collaborate with local theft gangs in US cities, to steal vehicles and arrange for transport overseas. Both Russian and Asian criminal groups cooperate with Mexican smuggling rings that appear to be responsible for moving stolen vehicles across the US-Mexican border for re-export to Russia and China, according to insurance industry and press sources. Automobile smuggling syndicates export most of the vehicles stolen in the United States in maritime shipping containers either directly from US seaports, or after driving the vehicles into Mexico. Most vehicles stolen in Western Europe, on the other hand, are simply driven to Russia or other destinations.

International car theft rings run by Russian, Asian, and other crime groups appear to be increasingly organized and professional in their operations, according to US Customs reporting. Their operations include altering vehicle identification numbers so the stolen vehicles cannot be traced. Many countries in which these vehicles are sold lack the technical expertise to detect such tampering.
Trafficking stolen vehicles also helps crime groups facilitate other international criminal activities. Stolen vehicles, for example, sometimes are used to conceal and transport narcotics or other smuggled contraband.
Intellectual Property Rights (IPR) Violations
Most intellectual property rights (IPR) crimes affecting US businesses involve the theft of trade secrets and copyright, trademark, and patent violations. Criminal violations of intellectual property rights--particularly the sale of counterfeit or illegally manufactured products--distort international trade, undermine the legitimate marketplace, and cause extensive revenue losses to legitimate industries. The explosion of digitization and the Internet have further enabled IPR violators to easily copy and illegally distribute trade secrets, trademarks, and logos.
US businesses are particularly vulnerable and especially hard hit by counterfeiting and other forms of copyright, trademark, and patent infringement because the United States leads the world in the creation and export of intellectual property--primarily in motion pictures, computer software, sound recording, and book publishing. These industries contributed more than $270 billion to the US economy in 1996, or approximately 3.65 percent of GDP, according to International Intellectual Property Association estimates. Copyright industry products have surpassed agricultural products as the single-largest export sector in the US economy, and America's three largest software companies are now worth more than the steel, automotive, aerospace, chemical, and plastics industries combined.
Counterfeit or illegally manufactured products compete with, and often displace, legitimate sales. US businesses increasingly are losing legitimate sales due to the manufacture and distribution of illegal products that violate intellectual property rights. Many of these illegal products are exported to the United States, but most are circulated in markets abroad in direct competition with the legitimate products of US firms. In some countries, illicit products saturate the domestic market so completely that it is impossible for owners of intellectual property copyrights and trademarks to establish legitimate manufacturing or distribution interests.
US businesses experience significant profit and market loss due to the theft of trade secrets. Foreign companies seek to steal US trade secrets--particularly theft of sensitive information pertaining to research and development, production processes, and corporate strategies--to erode US companies' overseas market competitiveness and technological leadership. By so doing, they also try to outmaneuver or underbid US companies, hoping to tilt the playing field in their favor. The American Society for Industrial Security, which conducts a comprehensive survey of Fortune 500 companies, estimated in 2000 that potential known losses to all American industry resulting from the theft of proprietary information amounted to $45 billion.
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US Customs Intellectual Property Rights (IPR) Seizures, 1995-99
Copyright violations primarily involve the illicit production and sale of computer software, recorded music, and videos. The International Intellectual Property Alliance estimated that, in 1998, trade losses suffered by US-based industries due to copyright violations totaled nearly $12.4 billion, with losses to the motion picture industry of $1.7 billion, the sound recording and music publishing industry at $1.7 billion, the business software industry at nearly $4.6 billion, the entertainment software industry at $3.4 billion, and the book publishing industry at $685 million. In 1996, law enforcement raids around the world resulted in the seizure of nearly 5.1 million unauthorized copies of motion picture videocassettes, according to the Motion Picture Association; also seized were more than 25,000 VCRs with an estimated production capacity of almost 33 million pirate videos per year.

Globally, one in every three compact discs (CDs) sold is a counterfeit copy, according to an estimate published in 1998. Data provided by the International Federation of the Phonographic Industry indicate that, in 1999, worldwide sales of pirated sound recordings totaled more than $4 billion.
The situation is as bad for computer software. According to current estimates by the Business Software Alliance, stolen software costs the industry $12 billion globally and topped $59 billion during the last five years. The average global piracy rate for software is 38 percent of total sales, with a US rate of about 25 percent. In 1997, Global Software Piracy Report estimated that 225 of the 523 new business software applications sold worldwide in 1996 were pirated copies.
Trademark violations include the counterfeiting of certain products and trademark goods. According to current estimates by the International Chamber of Commerce (ICC), counterfeit trademarked products account for approximately 8 percent of world trade-- roughly $200 billion annually. A recent survey of 10 leading apparel and footwear companies by the International Trademark Association indicated annual losses of nearly $2 billion. Online counterfeit sales may exceed $25 billion annually worldwide, according to ICC estimates.
In 1999, US Customs seized a record $98.5 million in counterfeit imported merchandise, an increase of $22 million during the previous year. Record media-- including audiocassettes, videocassettes, and CDs-- computer parts, sunglasses, and clothing were the commodities most commonly seized.
Patent violations involve the illegal manufacture of products using production processes, designs, or materials that are protected by patents giving the holder the right to exclude others from making, using, or selling an invention for a specified period of time. The 1995 Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) requires that members of the World Trade Organization protect most inventions for a period of 20 years and that their domestic laws permit effective action against patent infringement.

The Pharmaceutical Research and Manufacturers Association estimates that the pharmaceutical industry loses more than $2 billion annually due to counterfeit medications sold on the open market. US nongeneric pharmaceutical sales totaled $110.8 billion worldwide in 1997; estimated sales for 1998 were $124.6 billion.
Besides significant business losses, IPR crime costs the US Government tax revenue and reduces potential jobs available to US citizens. The International Anti-Counterfeiting Coalition (IACC) estimated in 1998 that product and software counterfeiting costs the United States more than $200 billion per year in lost sales, jobs, and tax revenues. The US Customs Service has estimated that foreign counterfeiting of US products has caused the loss of 750,000 jobs in the United States.
IPR crimes threaten consumer interests in the United States and elsewhere when counterfeit products are reproduced using bogus or inferior materials and poor quality controls that can affect public safety and health. Since 1990, US authorities have identified or seized nonconforming parts in US-produced automobiles and commercial airplanes and substandard materials used in household products and consumables such as infant formula and pharmaceuticals.

The World Health Organization estimated in 1997 that at least 7 percent of the medicines sold worldwide are counterfeit products. US authorities have confiscated misbranded and counterfeit pharmaceuticals, including birth control pills and AIDS, heart, diabetes, cancer, and diet medications.
Global Dimensions
IPR violations are a global phenomenon. Most countries have brought laws protecting intellectual property rights up to international standards, but few are devoting the political or budgetary support necessary to enforce the laws. Intellectual property violations are flourishing because of ineffective laws, weak enforcement, inadequate resources devoted to investigations and prosecutions, corrupt government officials, and uninformed or inadequately trained law enforcement officers. In many of the countries that are major IPR violators, the government turns a blind eye to the activity in the interest of boosting its industries' competitiveness in the international marketplace.

East and Southeast Asia are primary regions of IPR violations that cause significant losses to US businesses. China and Hong Kong harbor major duplicators of Western toys and clothing, while firms in Malaysia, Singapore, and Taiwan copy US audio, video, and software products. According to the US Customs Service, 56 percent of US IPR seizures (mostly music CDs, computer software packages, and movies) in the first half of 1999 were from China and Taiwan.
In Eastern Europe, Ukraine has emerged as the leading producer of illegal optical disc pirated products, exporting pirated CDs for distribution throughout the world. Most of the NIS in the former Soviet Union are improving IPR laws for their admission to the World Trade Organization, but implementation and enforcement are uncertain.
Israel's substantive laws remain deficient under the 1995 TRIPS Agreement, and it remains a key distribution hub in a regional network for pirated optical media products that extends into Russia and Eastern Europe.
Latin America is the third-largest market for illegal duplication of CDs, videos, and cassettes, according to the International Intellectual Property Alliance. Illegal production of these products is centered in Brazil and Argentina, whose governments have toughened their IPR laws but nonetheless are resisting further IPR improvements. Paraguay continues to be a regional center for pirated goods, especially optical media, and serves as a transshipment point for large volumes of IPR-infringing products from Asia to the larger markets bordering Paraguay, particularly Brazil.
Although many IPR crimes are committed by ostensibly legitimate foreign manufacturing, business, and import/export enterprises to enhance their competitiveness, criminal organizations are becoming common players in all stages of IPR crime, from manufacture to distribution. Product piracy and counterfeiting are attractive to criminal organizations because of the absence of strong criminal counterfeiting laws and the potential for large profits in the counterfeit goods market. Moreover, some criminal and terrorist organizations use the proceeds from producing and selling counterfeit brand name consumer goods to fund other types of criminal activity, both in the United States and elsewhere.

In New York City, ethnic Chinese crime syndicates are increasingly counterfeiting consumer products as a source of tax-free income. The Vietnamese gang "Born to Kill" reportedly relies on the sale of counterfeit Rolex and Cartier watches to fund gang activities. The group's founder has claimed earnings exceeding $35 million from counterfeit product sales.
In 1995, law enforcement officials in Los Angeles discovered several Chinese criminal groups-- including the Wah Ching, the Big Circle Boys, and the Four Seas triad--engaged in counterfeiting floppy discs and CD-ROMs. Asset seizures totaled more than $17 million in illicit products and manufacturing equipment, plastic explosives, TNT, and firearms.
Past press reporting indicated that the Provisional Irish Republican Army funded some of its terrorist activities through the sale of counterfeit perfumes, veterinary products, home videos, computer software, and pharmaceuticals.
Foreign Economic Espionage
The stealing of trade secrets from the US Government and from US businesses through economic espionage, in addition to industrial theft, is a growing threat to US global economic competitiveness. These activities are typically carried out by foreign governments, intelligence agencies, or industries to illicitly acquire sensitive or restricted information related to critical technologies, trade, finance, or corporate strategy. The United States has enacted the Economic Espionage Act of 1996 to criminalize both state-sponsored and commercial theft of trade secrets, but few other countries have similar laws. Indeed, collecting "business intelligence"--including by means considered foreign economic espionage--is a commonly accepted business practice in many countries.

Foreign companies and governments routinely take advantage of technological advances in global communications, such as the Internet and digital communications, that have increased opportunities for industrial theft and the ease of information transfers.
The potential losses to all US industry resulting from economic espionage were estimated to be about $300 billion, according to a 2000 estimate by the American Society for Industrial Security, which conducts a comprehensive survey of industrial theft. This figure is three times what it was a few years ago.
Some foreign governments engage in economic espionage to acquire US trade secrets involving sophisticated technologies with potential military applications or to help enhance the global competitiveness of their commercial industries. Economic espionage supporting commercial industries is directed against corporate strategies, marketing plans, or bidding strategies of US businesses or US Government positions in bilateral or multilateral trade negotiations.
Foreign Corrupt Business Practices
Foreign corrupt business practices cost US firms billions of dollars each year in lost contracts. While the United States banned bribery of foreign government officials more than 20 years ago with the Foreign Corrupt Practices Act, other industrialized countries continue to permit overseas bribery, and some still allow tax deductions for such payments. However, bribery of government officials is against the law in virtually every country where it might occur.
Foreign firms often use bribes to help win international contracts. About half of the known bribes in the last five years were for defense contracts, with the other offers directed at major purchases by governments and parastatal organizations for telecommunications, infrastructure, energy, and transportation projects. The actual extent of the practice is probably much larger than available evidence indicates. Procurement corruption is common in virtually all parts of the developing world in Asia, Africa, and Latin America, as well as parts of Europe.
Global Implications
Corrupt business practices have significant costs for the governments that allow them. Governments that regularly allow bribery may ultimately undermine legitimate business activity, creating disincentives for US and other foreign firms to invest in their countries. Domestic companies that are allowed to use bribes to exclude foreign competitors may create undeserved monopolies that deter healthy economic growth and development. Bribery also contributes to poverty and instability in developing countries by undermining the legitimacy of state structures and wasting government resources.
Bribes related to government or parastatal contracts promote official corruption--including at the highest political levels--which adversely affects internal government operations and fosters negative foreign perceptions of such governments. In recent years, government leaders in South Korea, Pakistan, India, Greece, and elsewhere have become enmeshed in procurement corruption scandals. Bribe recipients are vulnerable to exposure in countries with alternating political parties, a free press, or independent judicial authorities.
Although international initiatives are under way to limit international bribery, effective curbs may be years away. In December 1997, member states of the Organization for Economic Cooperation and Development (OECD)--a group of the major industrialized countries--signed an international convention obliging them to pass laws comparable to the US Foreign Corrupt Practices Act.

The Convention on Combating Bribery of Foreign Public Officials in International Business Transactions does not directly address the once-common practice of permitting businesses to deduct bribes paid to foreign officials from their income taxes, but the OECD has recommended that all member states act to eliminate the tax deductibility of bribes. Most member countries have begun to implement such a change.
Effective enforcement of laws against foreign commercial bribery will remain a longer term goal. To date, no country other than the United States is known to have prosecuted anyone for violation of a law passed to implement the OECD convention.
The implementing laws of many countries for the OECD antibribery convention--which had been ratified by 21 of the 34 signatory countries as of July 2000--may take years of negotiation and further legislative action to finalize. The Inter-American Convention Against Corruption, which entered into force in 1998 and which the United States ratified in September 2000, and the Criminal Law Convention Against Corruption of the Council of Europe, which the United States signed in October 2000, both require state parties to pass laws against the bribery of foreign public officials in business transactions. In addition, multilateral lending institutions such as the World Bank and the International Monetary Fund are making efforts to combat corruption by addressing it in the context of their lending programs and by supporting governmental anticorruption efforts.
Counterfeiting
US dollars are the most commonly counterfeited currency in the world because they are the currency of choice worldwide. International criminals produce, distribute, and use counterfeit US money for profit, to make illicit transactions, to finance illegal operations, and to promote illicit activities. Profits for criminal groups placing counterfeit US money into circulation are close to 40 cents per dollar, according to the US Secret Service. Moreover, selling counterfeit currency can provide criminal organizations with capital to invest in other illicit activities, such as the purchase and distribution of illegal weapons and narcotics.
International counterfeiting schemes also include reproducing financial instruments such as commercial checks, traveler's checks, and money orders. Fictitious securities and negotiable instruments are increasingly being used by international criminal enterprises to defraud governments, individuals, corporations, and financial institutions. Criminals have used bogus instruments to obtain government benefits, to underwrite loans, to serve as insurance collateral, and to defraud individual investors, pension funds, and retirement accounts.
About half of counterfeit US currency is produced abroad, where many of the illicit financial transactions by terrorist, drug trafficking, and organized crime groups take place. The US Federal Reserve estimates that about $570 billion of genuine US currency is in circulation worldwide, of which two-thirds circulates outside the United States.

About one-third of US counterfeit currency distributed in the United States in the past three years originated in Colombia, according to US Secret Service data. Lax counterfeiting laws and established drug-trafficking networks in Colombia are key factors that facilitate the production and distribution of counterfeit US dollars.
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US Counterfeit Currency Activity
The circulation of counterfeit US currency is growing worldwide despite vigorous anticounterfeiting measures in the United States and overseas. This increase is due in part to the improved quality and modernization of reproduction equipment. Advanced design, copying, and publishing technology has enhanced production of high-quality counterfeit US currency and other financial instruments. Counterfeit US currency produced with advanced reprographic capabilities and distributed in the United States has increased from less than 1 percent in 1995 to 50 percent in 2000.

Continued improvements in counterfeiting technology would enhance the quality and increase the quantity of counterfeit US currency in circulation, making it more difficult for law enforcement and financial institutions to identify false currency.
Counterfeit currency and financial instruments are also a problem for other governments. Foreign countries lacking adequate government oversight and enforcement of counterfeiting regulations are often susceptible to domestic production and distribution of counterfeit currency. Counterfeiters are also able to take advantage of countries with corrupt, poorly regulated, or poorly equipped financial institutions.
Threats to US Interests
While, at present, the production and circulation of counterfeit US currency present a minimal threat to the US economy, technological advances in counterfeiting and the extension of counterfeiting knowledge to more criminal groups may, in some circumstances, undermine US economic interests. US interests are most threatened by the use of counterfeit currency by some criminal organizations--including terrorist groups--to expand and finance activities and purchases that such groups could otherwise not afford. Some organized crime groups, drug traffickers, and terrorist organizations appear to be involved in producing and distributing counterfeit currency to reap profits and to finance other illegal activities. The international expansion of these criminal organizations has helped increase distribution of counterfeit currency.

Some Italian and Russian crime groups may be involved in printing counterfeit US dollars, possibly to purchase narcotics, military weapons, and other contraband.
Internationally isolated states of concern, like North Korea and Iran, that have in the past resorted to illegal means to finance their operations may be involved in printing or distributing counterfeit US currency.
Financial Fraud
Wide-ranging and complex financial fraud schemes by international criminal organizations are stealing billions of dollars annually from US citizens, businesses, and government entitlement programs. Financial fraud crimes have become more prevalent in recent years as greater amounts of personal and corporate financial information are made available through computer technology and access devices, such as credit cards, debit cards, and smart cards. Worldwide economic and financial systems are continuing to evolve toward a cashless society; plastic cards containing digitized financial information are increasingly being used to effect commerce. In addition, Internet-related financial crime is of growing international concern. Criminal organizations--including Russian, Nigerian, and Asian groups--have taken advantage of these developments to become involved in a wide range of sophisticated fraud schemes.
Financial Fraud Against Individuals
US citizens are direct targets of many fraud schemes originating outside the United States. These include soliciting money for ostensibly legitimate charities or overseas investment or business opportunities. In addition, the accessibility of personal financial information and the ability to gain access to financial accounts, through stolen bank cards or fraudulent means, allow criminals to steal personal savings or use personal financial assets as collateral for their own investments or transactions such as setting up illicit front companies.

Advance fee frauds committed largely by Nigerian criminal syndicates are among the most lucrative financial crimes targeting individuals and businesses worldwide. Criminals purporting to be officials of their government, banking system, or oil companies mail or fax letters to individuals and businesses in the United States that entice victims with the opportunity to take part in million-dollar windfalls, provided up-front fees are paid for necessary expenses such as bribes, taxes, and legal fees. In 1999, US victims reported losses of several hundred million dollars to advance fee frauds, according to US law enforcement. The Secret Service has reported receiving approximately 100 calls and 300 to 500 pieces of correspondence per day from potential victims.
To a limited extent, international criminals have also used Internet banking to target individuals in financial fraud schemes. The 1997 collapse of the Antigua-based European Union Bank (EUB), whose Russian owners fled Antigua with perhaps as much as $10 million in depositors' funds, highlights the threat posed to individuals from financial frauds facilitated by evolving Internet-enabled banking services. The first offshore bank to operate exclusively on the Internet, EUB actively solicited depositors over the Internet with offers of complete privacy, confidentiality, and security. The bank's collapse was precipitated by substantial loans to shell companies owned by EUB shareholders.

Within a one-month period, EUB's advertisement was accessed 7 million times, which led to 10,000 e-mail messages from potential clients and almost 150 activated accounts for the bank, according to press reporting. The EUB Web site was so successful, it was the recipient of a 1997 "Top Business Site" award by ComFind, an Internet business directory.
Financial Fraud Against Businesses
The victimization of US businesses and financial institutions through sophisticated financial fraud schemes results in substantial lost revenue, as well as less tangible but nonetheless real lost opportunities and jobs. International criminals are able to use computer technology and access devices to manipulate accounts and direct the illicit transfer of funds. The ability to rapidly move funds between distant banks or financial institutions hinders law enforcement's ability to track financial transactions and allows sophisticated criminal organizations to mount complex financial fraud schemes.

In 1996, the Association of Certified Fraud Examiners estimated financial losses from fraud perpetrated by domestic and international criminals in the United States at more than $200 billion per year.
Frauds involving credit, debit, and smart cards and communications systems that transfer financial data are a growing problem. International criminals are exploiting electronic payment technology through false purchases and by producing counterfeit cards for the commercial marketplace, according to industry and law enforcement reporting. The huge profits and relatively minor penalties associated with the crime make these kinds of financial frauds attractive to criminal groups that have the capability to pull them off.

According to current industry estimates, fraudulent credit cards cost the US banking industry at least $2 billion annually; losses worldwide are estimated to be an additional $1 billion each year.
Industry experts indicate that organized crime groups play a significant role in credit card frauds and other schemes to defraud banks and financial institutions. Nigerian crime groups capitalize on their ability to produce fraudulent identities and to suborn key employees of banks and companies in order to steal customer credit card data. Chinese and Japanese criminal groups are adept at producing forged credit cards. Russian criminal syndicates are using their access to computers and technological expertise to access account data.
While South America and Mexico are emerging as centers for producing counterfeit credit cards in the Western Hemisphere, Chinese crime groups with operations in major commercial centers in East Asia (particularly Hong Kong) and North America are most notorious for fraudulent credit card activity.

A crackdown on counterfeit credit card manufacturing in southern China resulted in the seizure of thousands of fraudulent cards, uncut blank credit cards, magnetic strips, issuer holograms, encoders, laptop computers, and extensive manufacturing equipment. Law enforcement investigations revealed that the scheme stretched to Hong Kong, Macau, Taiwan, Bangkok, Canada, Honolulu, and Buffalo.
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CSI/FBI 2000 Computer Crime and Security Survey
Financial fraud schemes are also directed against the insurance industry, government entitlement programs, and government tax revenues. Medical fraud scams-- including staged accidents and false billing to insurance companies--are a particularly lucrative source of income. Fraudulent claims from theft, property damage, and automobile accidents cost insurance companies millions of dollars each year. The federal medicare and welfare systems suffer substantial losses due to fraudulent claims for benefits, including false medical billings and false identities, many of which victimize real intended beneficiaries.

Nigerian and Russian criminal groups have been implicated in these kinds of financial fraud crimes. Russian crime groups in the United States also orchestrate computer, telecommunications, and consumer goods contract fraud.
High-Tech Crime
High-tech crimes targeting computer networks are becoming an increasing law enforcement and national security problem because of the growing reliance in the United States of government entities, public utilities, industries, businesses, and financial institutions on electronic data and information storage, retrieval, and transmission. Increasingly, other countries around the world face the same vulnerability. The creation of complex computer networks on which many government, public, private, and financial services depend has created opportunities for illicit access, disruption, and destruction of information by a wide range of hackers. Although most computer attacks are conducted by disgruntled employees and independent hackers, according to US law enforcement information, the threat from foreign intelligence services and foreign corporate competitors is significant for US national security interests. Moreover, international terrorist and criminal
organizations have increasing capability to penetrate and exploit computer-based information and data systems.

Illegal penetration of computer systems provides criminals the ability to access and manipulate personal, financial, commercial, and government data. The introduction of computer viruses can compromise data system integrity. Hostile hackers-- whether individuals, industrial spies, foreign governments, terrorist or criminal organizations--could potentially disrupt critical public-sector assets.
The greater dependence on computer systems for daily business and administrative functions--and the increasing interconnections between computer networks--has increased both the vulnerability and potential costs of systems penetration. US communications and information industries have developed the most technologically advanced systems and networks in the world. Many critical public infrastructure industries--including power and energy, telecommunications, and transportation systems--are operated or managed by computer networks. According to the US Customs Service, all major international industries, businesses, and financial institutions rely on interconnected computer systems for commercial and financial transactions to remain competitive.

Attacks on computer and information systems of US corporations, financial institutions, universities, and government agencies through unauthorized access by employees and external system penetration ranged from denial of service and sabotage to financial fraud and theft of proprietary information, according to surveys jointly conducted by the FBI and Computer Security Institute.
Illegal intrusion and exploitation of computer networks in the United States have sizably increased over the last several years, causing millions of dollars in losses to US businesses and potentially threatening the reliability of public services.

According to the joint 2000 FBI-Computer Security Institute survey of security practitioners in US corporations, financial institutions, universities, and government agencies, 273 of the respondents cited financial losses of $265.5 million from computer crime--almost double the reported losses of $136.8 million in 1998.
The number of US businesses reporting computer intrusions through Internet connections rose from 37 percent in 1996 to 70 percent in 1998, according to the joint survey.
A significant percentage of the information needed to carry out essential government functions is processed at some point by information systems in the nonfederal sector of the national information infrastructure.
Criminals Exploiting High Technology
As worldwide dependence on technology increases, high-tech crime is becoming an increasingly attractive source of revenue for organized crime groups, as well as an attractive option for them to make commercial and financial transactions that support their criminal activities. With little of the risks and penalties associated with more traditional criminal activity, high-tech crime allows criminals to operate in the relative security of computer networks, often beyond the reach of law enforcement where the crime was committed.
International criminals, including members of traditional organized crime groups, are increasingly computer-literate, enabling them to use cutting-edge technologies for illicit gain. International criminals rely on publicly available sources to obtain information on system vulnerabilities. E-mail mailing lists routinely distribute vulnerability information and software that can be used to exploit computer systems. In addition, vulnerabilities are publicly exposed in books, magazine and newspaper articles, electronic bulletin board messages, and a growing list of Web sites that are targeted at informing a wide-ranging global network of potential hackers about the latest methodology for staging computer attacks.

Criminal groups may also exploit businesses and government agencies using programmers, many of whom are lesser paid foreigners, to make software fixes or write new programs to gain access to computer systems and the information they contain. Press reports indicate that a Russian-speaking crime group in the United States recruited unemployed programmers in Russia to hack into other syndicates' computer systems, embezzle funds, and create programs to protect its funds in US banks.
International criminals are using computers to support a wide range of criminal activity, including as an innovative alternative means to commit many traditional crimes. The use of computer networks allows criminals to more securely and efficiently orchestrate and implement crimes without regard to national borders. Drug traffickers, for example, are using encrypted e-mail and the Internet to avoid detection and monitoring of their communications over normal telephone and communications channels.
The Internet has also become the primary means used by international child pornography rings to disseminate their material worldwide. International child pornography rings are operating in dozens of countries, peddling their illicit wares through the Internet and other global distribution networks. Modern technology allows these child pornographers to store vast quantities of digital images on small portable computers easily smuggled into the United States and elsewhere.
Moreover, criminal commercial and financial transactions through computers occur amidst countless legitimate public, business, and personal uses of computer networks, making them especially difficult to identify. Transactions involving technology or components for weapons of mass destruction or embargoed items under US or international sanctions are being done through computers. Virtually any commodity, including weapons of mass destruction and their component parts and delivery systems, is being offered for international sale on Internet sites.

US Customs investigations show that many Internet sellers of contraband materials openly advertise that they have been in operation for many years without being caught by law enforcement. In December 1999, there were about 100 ongoing US Customs investigations involving the sale of counterfeit goods over the Internet.
Computers are also exploited by international criminals to facilitate a wide range of economic crime-- particularly targeting US commercial interests. High-tech financial fraud through illicit access to credit card numbers and commercial accounts has the potential to cause serious losses for US businesses conducting electronic commerce over the Internet.

According to a joint FBI-Computer Security Institute survey in 1998, 241 US business respondents reported $11.2 million in losses caused by computer financial frauds. Telecommunications fraud from computer attacks cost these companies an additional $17.2 million in losses.
In March 1999, hackers pleaded guilty to breaking into US phone companies for calling card numbers that eventually made their way to organized crime syndicates in Italy. US law enforcement information indicates that this high-tech theft cost the US phone companies an estimated $2 million.
Intellectual property rights violations through the penetration of computer networks are also an increasing threat to US businesses. US businesses responding in the 1998 survey reported losses of $33.5 million in theft of proprietary information from computer attacks.
International criminals may be using computer hacking and related methods for financial gain. Industry and law enforcement reporting indicates that high-tech criminals are using advances in technology to target banks and other financial institutions. The anonymity and speed of electronic transactions may encourage criminal exploitation of these technologies. While US and many Western and Asian banks and financial institutions maintain adequate security safeguards to prevent outside penetration of computer-based data financial transaction systems, some have outdated or lax security practices that high-tech criminals are able to exploit.

In October 2000, according to press reports, Italian authorities dismantled a Sicilian Mafia-led crime group that was planning to steal as much as $900 million in European Union aid earmarked for Sicily. Employing corrupt officials from the targeted bank and a telecommunications firm, the crime syndicate broke into the bank's computer network, created a virtual banking site linked to the interbank payments network, and was able to divert $115 million of the EU aid to Mafia-controlled bank accounts in Italy and abroad before they were discovered.
In China, a computer hacker was convicted in November 1999 of breaking into the Shanghai Securities Exchange, where he changed transaction records that cost two Chinese companies more than $300,000, according to Chinese press reports.
In South Africa in November 1999, an unidentified crime syndicate stole hundreds of thousands of dollars from local banks by using the Internet and bank-by-telephone services to hack into financial institutions, according to press reports.
In 1994, individuals in St. Petersburg, Russia-- aided by insider access--attempted to steal more than $10 million from a US bank by making approximately 40 wire transfers to accounts around the world. Members of the gang have since been arrested in several countries, and most of the stolen funds have been recovered.
Money Laundering
Money laundering allows criminals to hide and legitimize illicit proceeds derived from criminal activities. Money laundering hinders efforts by regulatory and law enforcement agencies to identify the source of illegal proceeds, trace the funds to specific criminal activities, and confiscate criminals' financial assets. Moreover, the successful laundering of illicit funds helps to support and finance future criminal activity, including any of the international crimes identified in this assessment. While international law enforcement, intelligence, and financial experts agree that the amount of illegal proceeds in the world is huge and growing, there is little analytical work supporting most estimates of money laundering. A few estimates have been attempted, but no consensus view has emerged about the magnitude of money laundering on a global, regional, or national scale. (2)

According to one recent estimate, worldwide money-laundering activity is roughly $1 trillion per year, with $300-500 billion of that representing laundering related to drug trafficking. A former Managing Director of the International Monetary Fund (IMF) has estimated worldwide money laundering at 2 to 5 percent of the world's gross domestic product--some $800 billion at the low end of the range and perhaps as high as $2 trillion.
The infrastructure used by international crime groups to launder illicit proceeds--which must be placed, layered, and integrated to be "legitimized" in the legal economy--is extensive and worldwide. There are many methods for laundering money. Among those favored by criminal organizations is to establish seemingly legitimate businesses as fronts for illegal activity and money laundering. These tend to be cash-based businesses--such as hotels, casinos, restaurants, financial service firms, construction companies, and travel agencies--whose ostensibly legitimate operations involve substantial cash-flow. This makes it difficult for law enforcement agencies to identify illegal proceeds. Front companies enable criminals to combine legitimate and illicit funds in the business, in addition to providing a plausible source of wealth to deny involvement in criminal activity.
The international banking and financial systems are routinely used to legitimize and transfer criminal proceeds. Huge sums of money are laundered in the world's largest financial markets--such as Hong Kong, Japan, Germany, the United Kingdom, and the United States--even though extensive legislation and enforcement measures make it more difficult and risky to conduct illicit financial transactions in these jurisdictions. Launderers also use banks located in secrecy havens to hide illicit funds. In some cases, money launderers may recruit bank employees to conduct money-laundering transactions on behalf of the criminal organization. Some organized crime groups have sought to gain ownership of banks to facilitate their own money-laundering activity.
Several factors contribute to a country's vulnerability to money laundering: a lack of adequate legislation or appropriate enforcement to address the problem, bank secrecy laws, weak or corrupt financial institutions, and inadequate or ineffective regulatory supervision of the financial sector.

In Latin America, money-laundering investigations are hamstrung by bank secrecy laws, lack of trained personnel, inadequate legislation, or corruption. Weak enforcement of existing legislation in some countries does little to discourage illicit financial activities. In addition, many countries have only drug-related money-laundering laws, which limit the government's ability to prosecute the laundering of proceeds from other crimes.
In Russia and the NIS, which are transitioning to free market economies and developing their financial sectors, organized crime groups have capitalized on industry privatization programs to gain a foothold in the legitimate economy. Weak banking regulations, lax law enforcement, and a general lack of money-laundering controls provide a favorable environment for illicit financial activity.
Offshore banking centers--such as Liechtenstein, The Bahamas, Nauru, and Lebanon--typically offer bank and corporate secrecy, low tax rates, ease of corporate formation, and low incorporation fees. These provisions can provide incentives for criminals to conduct illicit financial activities in these countries. Moreover, smaller, emerging offshore havens, typically in the South Pacific, lack money-laundering legislation and are less regulated than some established offshore financial centers.
In Southeast and Southwest Asia and the Middle East, parallel informal banking systems--known primarily as the hawala, hundi, or hui kuan--offer an alternative for laundering funds outside the formal banking system. These traditional nonbanking systems are increasingly being used by criminals, drug traffickers, and terrorist organizations operating throughout the world to launder and move illicit funds across long distances because they facilitate the rapid and cost-effective transfer of money and leave virtually no useful paper trail for law enforcement investigators or financial regulators.

The multinational Financial Action Task Force (FATF), established at the G-7 summit in 1989 to examine measures to combat money laundering, has noted the significant role that alternative remittance systems are playing to facilitate money laundering worldwide.
The FATF has also observed an increase in illicit funds being laundered through nonbank financial institutions, such as currency exchange houses, money remitters, and gaming establishments. These organizations tend to be less regulated than banking organizations and are often used to place money into the legitimate economy.

The Colombian black-market peso exchange is a primary money-laundering system used by Colombian drug traffickers, according to the US Treasury Department. This laundering system works by traffickers selling their US-dollar drug proceeds at a discount to brokers who credit them with an equivalent amount of pesos in Colombian banks. The dollars in the United States are then sold to Colombian businessmen at an exchange rate better than the official Colombian rate, who then use these funds to finance the purchase and export of dollar-denominated goods from the United States. In this way, the dollars that began as drug proceeds are laundered through a process that effectively circumvents both US and Colombian currency reporting requirements: Colombian drug profits in the United States, in effect, are repatriated in the form of trade goods. US law enforcement estimates that the black-market peso exchange may be responsible for laundering up to $5 billion in
drug proceeds annually.
Colombian, Mexican, and Dominican drug cartels are suspected of using certain money remitters to launder drug proceeds. These businesses arrange payments to recipients in exchange for a commission, usually up to 10 percent of the transaction value. In the United States, money remitters are now required to report suspicious activity, file currency transactions reports for transfers exceeding $10,000, and register with the federal government. They will soon be required to conduct enhanced recordkeeping and reporting for certain high-risk transactions.
Casinos and other forms of gaming establishments are popular for money laundering because of the large, daily volumes of cash transactions that help hide money-laundering activity. Furthermore, launderers can take advantage of the increasingly sophisticated financial services offered by gaming establishments. Organized crime groups and narcotics traffickers are opening new casinos and other gaming establishments or acquiring existing ones. In the United States, reporting of suspicious activity by casinos will soon be mandatory.
Securities brokers and dealers and money service businesses, such as check cashers and money order sellers, are also vulnerable to money laundering. There are an estimated 200,000 money service businesses in the United States. Like money remitters, these businesses will soon be required to register with the federal government and to report suspicious transactions. Within three years, US regulations will require securities brokers and dealers to report suspicious activity, which they may now do voluntarily.
Threats From Money Laundering to World Economies
The International Monetary Fund has identified a number of adverse macroeconomic effects resulting from money laundering, such as greater volatility in foreign exchange markets and interest rates and distortions in market expectations. While current money-laundering activity in the United States has not undermined economic stability, it has hindered US Government efforts to collect taxes and resulted in greater government expenditures in regulating the banking sector, financial markets, and the business environment.
In developing economies, the accumulation and movement of large quantities of illicit funds can destabilize the economy. Investments by criminal groups in licit business enterprises can scare away honest investors and place companies owned by legitimate businessmen at a comparative disadvantage. Widespread money laundering can undermine the solvency and credibility of banks and other financial institutions and erode the public's trust in the financial system. It can also drive away potential investors and place legal investors at risk. Small economies are also vulnerable to destabilization from sophisticated fraud schemes that are attracted to large amounts of free-flowing cash. Finally, developing economies are particularly vulnerable to attempts by money launderers to corrupt institutions and key individuals with large amounts of cash, potentially undermining political stability.

Widespread money laundering and fraudulent pyramid investment schemes orchestrated by Italian and Albanian criminal groups in the mid-1990s led to significant political instability in Albania, the effects of which are still being felt.
Efforts by some countries, such as those in the former Soviet Bloc, to develop modern banking systems can be greatly inhibited by criminal involvement in their financial sectors. Criminal infiltration into the banking sector can impede government efforts to reform the banking industry. Moreover, criminal organizations with control or significant influence over domestic banks are not likely to use sound banking practices. Rather, criminals may use bank capital to finance illicit activities, acquire businesses, or make bad loans, raising the risk of bank insolvency and disruption of domestic financial markets.
Increasing international attention to money laundering has led many countries to implement money-laundering legislation and other preventative measures. In addition, international standards are being established to increase banking transparency and to reduce bank secrecy and other processes that disguise asset ownership.

Since 1994, 53 countries have implemented legislation or regulations requiring banks to maintain records of large currency transactions. During the same time period, the number of countries requiring banks to maintain uniform financial records grew from 25 to 82.
In addition, more countries are beginning to establish controls over nonbank financial institutions. Currently, 47 countries require these institutions to meet the same customer identification standards and reporting requirements required of domestic banks.
In June 2000, the FATF publicly named 15 jurisdictions--The Bahamas, Cayman Islands, Cook Islands, Dominica, Israel, Lebanon, Liechtenstein, Marshall Islands, Nauru, Niue, Panama, the Philippines, Russia, St. Kitts and Nevis, and St. Vincent and the Grenadines--as being noncooperative and deficient in their anti-money-laundering regulatory systems and practices. In July 2000, the US Government issued advisories to US financial institutions noting that the anti-money-laundering regimes in these jurisdictions were deficient. Other members of the G-7 issued similar financial advisories.


Footnotes
(1) The US Government and two different UN protocols make a distinction between alien smuggling--in which foreign individuals willingly contract to be smuggled into a country by persons who gain financial or other material personal benefit from procuring the illegal entry--and trafficking in persons, in which individuals (particularly women and children) are recruited or transported, by means of fraud, deception, coercion, abduction, or the abuse of power, for purposes of exploitation, including sexual exploitation, forced labor or services, or slavery. Often illegal aliens who are voluntarily smuggled into the United States are thereafter forced into virtual slavery in unregulated industries by their smugglers. US law prohibits forced labor regardless of the victim�s initial consent to work; an undocumented person who is brought into the United States and maintained in service of another by force or coercion is treated by law and policy as a
trafficked person, not merely an illegal alien.
(2) There is uncertainty about the feasibility of measuring the amount of money laundering because of the difficulty in obtaining consistent data. Money laundering is a crime in the United States, but is still not a distinct criminal offense in many other countries, especially when the laundering is not related to illicit drug proceeds. Even where money laundering is a distinct crime, estimates are usually measured in connection with one or more of a wide variety of underlying and predicate criminal offenses--which differ markedly between countries.

New US law welcomed for corruption impact





U.S. passes landmark reforms on resource transparency
New bill a breakthrough for campaign against conflict and corruption

Global Witness strongly welcomes a ground-breaking new bill, passed by the U.S. Senate today, which will help to lift the curse of corruption and conflict from poor countries that are rich in oil and minerals by promoting greater public oversight and responsible trading practices.

Provisions in the Dodd-Frank Wall Street Reform and Consumer Protection Act (also known as the Financial Reform Act) will require oil, gas and mining companies registered with the Securities and Exchange Commission (SEC) to publicly disclose their tax and revenue payments to governments around the world. This disclosure will deter the corruption which has brought deep poverty and conflict to many resource-rich countries.

The Act will also require companies whose products contain cassiterite (tin ore), coltan, wolframite and gold to disclose to the SEC whether they are sourcing these minerals from the Democratic Republic of Congo (DRC) or adjoining countries. Companies will have to detail the measures they have taken to avoid sourcing these minerals from DRC armed groups, which are guilty of massacres and other atrocities. The bill also requires that all information disclosed be independently audited.

"These provisions are a huge victory for corporate accountability in the oil, gas and mining industries, and we commend the leadership of Members of Congress who have steadfastly championed them," said Corinna Gifillan of Global Witness, a non-profit group which has campaigned since the 1990s to break the links between natural resources, corruption and conflict

"As well as helping the people of resource-rich-but-poor countries, these provisions will serve U.S. governmental and commercial interests around the world by promoting stability and responsible corporate investment," said Gilfillan. Global Witness is a co-founder of Publish What You Pay, a global coalition of more than 600 civil society groups that works for transparency in the oil and mining industries.

The House of Representatives approved these reforms on June 30th and the Senate did so today. President Obama is expected to sign the Dodd-Frank legislation into law next week.

"Now is the time for the United Kingdom and other major economies to follow the example of the U.S., so that these crucial reforms can become global standards," said Gilfillan.

Global Witness commends Senator Benjamin Cardin (D-MD) and Senator Richard Lugar (R-IN) for championing the extractive industry revenue transparency provision, with the strong support of Senator Richard Durbin, Senator Russell Feingold (D-WI), Senator Patrick Leahy (D-VT), and Senator Charles Schumer (D-NY). Global Witness also recognizes the strong leadership of Senator Sam Brownback (R-KS), Senator Richard Durbin, Senator Russell Feingold, Representative Howard Berman (D-CA), and Representative Jim McDermott (D-WA) for the DRC conflict minerals provision. Global Witness commends Senate Banking Committee Chairman Christopher Dodd (D-CT) and House Financial Services Chairman Barney Frank (D-MA) for their support of these provisions.
http://uk.oneworld.net/article/view/165593/1/5795





http://www.connectuganda.com/forum/kimeeza/11523-keeping-congo-bleeding

How Fact-Finding of The Unscrupulous International Corporate Special Business Interest are Brutalizing, Bleeding, Butchering, Killing and are Busy destroying Humanity Mercilessly without Empathy In The Democratic Republic Of The Congo

Keeping Congo bleeding:
How British mercenaries are 'fuelling Africa's First World War'
Antoine Roger Lokongo, a London-based Congolese journalist, reports.


INTRODUCTION

Mercenaries are anonymous, professional, highly paid and they operate as any of the combatants in the scores of wars from which they make their living. And when they fly their cargoes of weapons or troops into yet another bush conflict their primary aim, after getting out alive, is to keep their actions secret.

But their involvement in the war which has devastated the Democratic Republic of Congo since 2.08.1998, has now become an "open secret". This war has been dubbed by former US Secretary of State Madeleine Albright as "Africa's First World war", pitying troops from Zimbambwe, Angola and Namibia, three countries which came in support of the government of the Democratic Republic of Congo, then led by President Laurent Désiré Kabila, assassinated on 16.01.2001 (his son Joseph Kabila took oven since) and troops from Rwanda, Uganda and Burundi who invaded Congo, very much against international law, under the pretext of pursuing those who committed genocide in Rwanda in 1994.

Since then, Rwanda, Uganda and Burundi have been responsible for crimes against humanity in Congo, not only for the looting Congo's natural and mineral resources (especially coltan, very much sought after for the making of mobile phones and everything high tech today), but also because of a genocide that Rwandan, Ugandan and Burundian troops - given means beyond their capability by well-known superpowers - have committed against the innocent Congolese people. Often Congolese people are buried alive, shot dead or chopped with machetes, their bodies thrown into rivers or forced down the latrines. Women are raped, their sexual organs mutilated or shot at by Rwandan, Ugandan and Burundian troops who are all HIV positive. 60% of the women are now infected with HIV in eastern Congo.

Five millions killed ! The toll is certainly higher and worse than what happened in Kosovo and Rwanda itself. Isn't it? If it goes unreported, it is because stakeholders have managed to suppress the story and to protect the perpetrators from accountability. 5 millions is like the whole Irish, Malawi or Palestinian population wiped out. Could the holocaust have happened without anybody knowing about it? Most likely. The silent genocide in Congo has proved it.

The most atrocious incident took place on 15-22 November 1999 in Mwenga district, in the localities of Bulunzi, Bogombe and Ngando, where 15 women, suspected of supporting the Mai-Mai, that is Congolese combatants resisting against occupation, were buried alive by the Rwandan Patriotic Army (RPA) soldiers, after their bodies were smeared with hot pepper. Mary Robinson, the then UN High Commissioner for Human Rights promised an investigation which was never conducted.

On Sunday 24 august 1998, another massacre took place in Kasika, still in Mwenga district. Rwandan troops came in, encircled a Catholic Church while the priest was celebrating mass. They entered the church and massacred everybody, the priest, nuns and all the attendants. They burnt some people alive, cut off their throats, threw the bodies into pit latrines or threw them away in a nearby bush. As for the local chief, François Mubeza, they chopped his body and that of his wife to pieces and littered them around the local palace. More than a thousand people were killed with machetes and knives. They repeated the same scenario in Makobola (847 people were killed), in Burhinyi (124 people killed), Katana (27 people killed), Bunyakiri (several dozens killed), Mushinga (100 people killed), Burhale, Kaniola, Katogota (127 people killed), Kamituga (more than 201 people killed). Funerals were forbidden as well as investigations to be conducted. Parents were
forbidden to mourn their children or else they would be killed and follow them to the grave.

Three times and under the nose of the UN peace keepers, the armies of Rwanda and Uganda have fought each other over diamond in the city of Kisangani, leaving 3,000 Congolese dead, the city destroyed, and this at 1,500 km away from their borders with the Democratic Republic of Congo which they claim to be securing from rebel incursions! Also, more than 500 people were either decapitated, disembowelled and thrown into the Congo river or buried in mass graves by Rwandan troops and their Congolese RCD rebel allies following a carefully stage-managed and faked mutiny against the Rwandan presence in Kisangani, in 2002.

In the north-eastern part, Ugandan-masterminded ethnic clashes between the Hema (pastoralists) and the Lendu(hunters and cultivators) and their respective rebel allies have claimed 600,000 lives as a result of mass murder, rape, and villages raised to the ground since last year in the area of Bunia alone. It is a pretext used by Uganda to prolong its presence in this area rich in rare minerals and the recently discovered oil in Lake Albert. Tony Buckingham's Oil Heritage is ready to put its hand on these massive oil reserves. Hence the link with Uganda and the ethnic cleansing going on. Tchadian, Lybian, Somalian, Ethiopian, Eritrean, and Sudanese thugs (including John Garang's men) are used for the dirty job. The French "Opération Artemis" in Bunia did not make so much a difference and all the weapons were given to Museveni when the French troops left. The case between Uganda and the Democratic Republic of Congo, now taking place at the
International Criminal Court at the Hague is a high profile one.

The Democratic Republic of Congo (DRC) documented about 1,600 people including 138 Congolese soldiers, which it says were killed by Ugandan soldiers. The DRC documented 38 officers and some 100 Congolese soldiers whom it said had previously been disarmed, as some of those massacred by the Ugandan forces at the Kavumu airport on August 3, 1988. It said about 856 civilians were killed at Kasika in Lwindi in south Kivu and their bodies scattered in a distance of about 60 km between Kilungutwe and Kasika, on August 24 1988. The DRC cited an unspecified number of people, which it said were killed by the Ugandan forces in different places. It said there were many cases of rape particularly on August 29, 1998 in Kasika and on September 22,1998 in Bukavu. It alleged that Ugandan troops spread HIV/AIDS as a weapon of war.

Jean Pierre Bemba's MLC rebel movement (masterminded by Uganda) is also responsible for acts of cannibalism and rape against the Bambuti or the Pygmies of Ituri last year. Those militia believe that by eating the flesh of a pygmy or raping a pygmy woman, they would acquire extra-terrestrial powers. The case is now a high profile one at the Hague. Jean Pierre Bemba is Mobutu's son-in-law (Mobutu was the brutal dictator who rules Zaire, as Congo was then known for 37 years, as an ally if the West in the Cold War. He was overthrown by Laurent Désiré Kabila in 1997). After all this, do not expect the UN to come in and help the people of Congo. You would be foolish to do so! UN troops have been raping and sexually abusing girls as young as 12 in Congo.

Worse, mercenaries have been hired by multinationals as security providers around gold, diamond, copper, cobalt and coltan mines which they are looting there, posing as UN troops. The same Tutsi Rwandan, Ugandan, and Burundian troops, backed by well known superpowers and Western multinationals, who, after subjecting Congo to a 5-year-war of aggression, of invasion, of looting and of untold massacres of more than 5 million Congolese, have never left Congo but are still operating there, disguised as UN troops, thus ostensibly backing and encouraging the "TUTSIFICATION OF POWER" in Central Africa. Shame on the UN Mission in Congo!

II. IT WAS BRIAN "SPORT" MARTIN WHO FIRST SPILLED THE BEANS

For 20 years, "Sport" Martin has clandestinely ferried arms to war areas - and the West has turned a blind eye. But on 17.03.2005, the gun-running pilot broke his silence, and told his tale to BBC Newsnight .

A British pilot, Brian "Sport" Martin, described flying AK47 assault rifles - as well as Unicef medical aid and officials - from Rwanda and Uganda into the rebel-held town of Kisangani.

In special report published by the British daily, The Observer, on 3.09.2000, slammed the so-called "ethical policies of New Labour, the party in power in Britain. In an interview with a United Nations investigator, passed to The Observer, Brian "Sport" Martin described how he has made his living flying armaments, including key components in nuclear weapons programmes, all over the world. Not only has he been able to work unhindered by Western governments, on several occasions - he claimed - British and American officials hired him for clandestine work.

Recently he has been flying general supplies, and "whatever the military would turn up with", to Ugandan-backed rebels in the east of Congo from Entebbe airport. "We mostly carried brand new Kalashnikovs plus their ammunition,'" Martin said. "They were in quite beautiful condition. We could get 350 troops on board and their weapons. It is quite a standard operation for us. You don't really know there is a war on. You're not involved – you're just charter pilots."

Gracious me! "You are not involved?!" Martin named British pilots - including senior ex-RAF officers - who were also transporting arms into Congo and surrounding countries. Many were recruited by companies based on England's south coast and in London. Others are hired by local agencies. One, Planetair, which employed Martin for the trips into Congo, are mentioned in a report into the reasons for the ongoing wars in Africa published by the US State Department last year.

Martin also talked about his work in the early Eighties flying Chinese "heavy water'"- used in the construction of nuclear reactors and weapons - to India, Argentina and, in 1980, Libya. At the same time, Martin, 64, said, he was flying samples of new Soviet weaponry, clandestinely obtained behind the Iron Curtain, to testing grounds on the east coast of America from East German airfields.

According to campaigners, Martin's revelations provided 'shocking' evidence of how easy it is to exploit the loopholes in British arms-control legislation. If no arms touch British soil, no offence has been committed. The Observer knows of at least three British companies involved in the organisation of arms flights to conflicts in Africa and able to arrange the transport of hundreds of tonnes of weapons without breaking the law. Often the arms end up in countries such as Sierra Leone and Angola where the United Nations have imposed sanctions or are attempting to maintain peace.

"Here we have concrete evidence of UK involvement in the supply of arms to conflict zones," said David Bryer, the director of Oxfam, the British aid agency. ' "In the absence of proper legislation to regulate those involved in the supply of arms, these people will continue to get away with it, making large amounts of money from the suffering of others. The Government has so far failed to deliver on the promises it made three years ago, which seems pretty outrageous in light of all the political mileage it made from the last government's record on arms control."

Although the pilots are unlikely to fall foul of British law, they are aware of the risks they are taking. Martin was jailed in Venezuela and spent three days in a filthy cell packed with violent and starved prisoners in Nigeria. He escaped only after paying a $10,000 bribe. On other occasions he has narrowly avoided being shot down. While flying government soldiers into the Sudan, rebels attempted to down his Boeing 707 with Soviet-made surface-to-air missiles. By approaching airstrips at speed Martin had avoided being hit by anything other than heavy-machine gun fire.

Flying into the central African state of Burundi in the middle of a war also proved tricky. On his final approach into Bujumbura airport, Martin, who lives in Sussex, was unable to raise anybody in the control tower. When he finally did so he was told to abort the landing. While arguing with the controllers he heard a loud bang. The tower had been hit by a rocket and destroyed.

You have heard it from the horse's own mouth! British pilots and air cargo companies are been used to supply weapons to both sides in the civil war in the Democratic Republic of the Congo, according to Guardian inquiries and research commissioned by human rights groups. And this, despite the 1993 EU embargo on arms sales to Congo, and Britain's promise to tighten control on exports to all combatants in the conflict, weak UK laws make the government powerless to intervene.

The evidence highlights the dilemma in drawing up a new UK law on brokering and trafficking arms, which is expected to be announced shortly. It also shows that after the Lusaka peace accord agreed between the parties last August - which was renegotiated in Kampala at the weekend and began yesterday - the flow of weapons continued. Mr Martin, a freelance pilot for more than 20 years, says he flew planes registered in Swaziland for two Congolese carriers, Planet Air and New Goma Air, from Entebbe in Uganda, and Kigali in Rwanda. Last year the US state department's bureau of intelligence and research identified Planet Air as one of several airlines supplying the eastern Congo.

In a transcript of an interview he gave to Oxfam in February he said: "Mostly the stuff we carried were brand new AKs plus the ammunition. They're all packed in plastic bags and in beautiful condition. It's quite a standard operation for us. We know there is a war on. We are not in volved in it because we're just charter pilots."

Mr Martin said he was flying 80 to 90 hours a month. "It is very easy. Leave the hotel, do a little hour there and two hours on the ground and you are back in time for dinner." Under the proposed tightening up of arms transfers the British government is suggesting a register of UK brokers, based at home or abroad. It would be illegal to broker arms to countries under UN, EU or national embargoes

III. "WE WERE SIMPLY EN ROUTE, THAT IS, ON OUR WAY TO GUARD MINING OPERATIONS IN THE DEMOCRATIC REPUBLIC OF CONGO."

In August 1998, 70 men accused of plotting to overthrow the government of Equatorial Guinea has pleaded guilty to security offences in a Zimbabwe court. Their ring leader was no other than Simon Mann, a former member of Britain'' elite Special Air Service commando force who holds British and South African citizenship.

Mann actually purchasing the weapons but admitted trying to procure dangerous weapons - a charge which carries a possible 10-year jail sentence. The men's plane was impounded in March, when they picked up weapons bought from the Zimbabwe state arms supplier. All but three pleaded guilty to lesser charges. Simon Mann also entered a limited guilty plea to a second charge of purchasing weapons, but insisted that the deal never went through, Reuters news agency reported.

When prosecutors called Hope Mutize, the marketing manager at Zimbabwe's state arms manufacturer to testify, he told the court that Mr Mann had said he wanted to buy some weapons - and had put a deposit down.

"According to him, he wanted to use the weapons to guard mines in the DR Congo," Mr Mutize said, according to AFP news agency. The group have maintained all along they were going to the Democratic Republic of Congo to provide security for mining operations. The governments of South Africa, Zimbabwe and Equatorial Guinea believe they were heading to the small, oil-rich country to overthrow the government.

IV. MERCENARIES ARE OPERATING IN CONGO, DISGUISED AS UN TROOPS OF MONUC

Keith Harmon Snow, a journalist and photographer specializing in Central Africa reported for WORLD WAR 4 REPORT, on Dec. 10, 2004 that Rwanda and Uganda continue to benefit from high-level military arrangements with the United States. Entebbe, Uganda, is a forward base for US Air Force operations in Central Africa.

According to the Global Policy watchdog, there are eleven US servicemen permanently stationed in Entebbe. The Canadian mining firms Barrick Gold and Heritage Oil & Gas arrived with Ugandan (UPDF) and Rwandan (RPA) military during the "War of Aggression" to exploit mining opportunities in the north. Barrick prinicpals include former Canadian premier Brian Mulroney and former US president George H.W. Bush. Heritage has secured contracts for the vast oil reserves of Semliki basin, beneath Lake Albert, on both the Congolese and Ugandan sides of the border. Heritage is reportedly tapping the Semliki petroleum reserves from the Ugandan side, where a huge pipeline to Mombasa, Kenya, worth billions of dollars, is now in the works.

According to a petroleum futures report (Africafront), Heritage Oil was poised to exploit the northern Lake Albert basin, southern Lake Albert basin, River Semliki basin, and Lake George and Lake Albert basin areas in partnership with the Zhongyuan Petroleum Exploration Bureau (ZPEB) of China. Heritage is surrently exploiting petroleum in neighboring war-torn Congo-Brazzaville in partnership with ZPEB.

Ashanti Goldfields has reportedly secured a contract for the vast gold reserves at Mongwalu, north of Bunia. Ashanti has ties to the British Crown and some sources in Bunia report that the Ashanti interest in nearby Mongwalu is guarded by Nepalese Gurkhas, possibly of the Gurkha Security Group based in Britain. It has also been established that South Africa, Malawi, Djibouti and Zambia are training Rwandan and "Congolese Tutsi" troops who will fight to annex eastern Congo to Rwanda with the full support of the "international community".

Simon Man, the former SAS man, the ring leader of the mercenaries arrested in Zimbabwe for plotting the overthrow of the government of President Theodore Obiang Nguema of Equatorial Guinea (Sir Margaret Tatcher, the son of the former Bristish Prime Minister Margaret Tatcher was also involved), claimed in his deposition that they were on their way to the Democratic Republic of Congo where they have been hired as a private security company to protect vested gold, diamond, cobalt, copper and coltan mines. That is likely. Britain is yet to investigate the role its 12 multinational companies are playing in Congo, beside the 48 anglo-american ones who are working out of South Africa, 9 American ones and 20 which are Belgian.

V. SOUTH AFRICAN MERCENARY COMPANY, EXECUTIVE OUTCOME (EO), HAS ALWAYS BEEN ON THE SCENE IN CONGOLESE OCCUPIED TERRITORIES

If war is business, as they say, the South African "Dogs of War" company, the Executive Outcome (EO), made sure it did not miss the "opportunities" that the "First African World War" offered. EO was compelled to close its doors by the South African government in 1998, following lucrative but criminal operations in support of the Angola rebel movement UNITA et the Sierra Leonean rebel movement, FRU of Foday Sankoh.

But even after the ban, EO still continued to operate albeit illégally, but in full knowledge, quite unembarrassedly, of the same South African government that ordered it to put an end to its activities, when they offred their services to President Paul Kagame of Rwanda and President Yoweri Museveni of Uganda, the two Tutsi leaders who have made of their countries not onlu rogue states but client states of anglo-american multinationals as well as of Britain and America's interests in the region; and who backing they enjoyed before, when and after invading the Democratic Republic of Congo.

In the course of the war in the DRC - 1998-2003 - both Uganda and Rwanda sponsored armed guerrilla movements fighting against the regime in Kinshasa. Museveni and Kagame first created the so-called Congolese rebel movements (RCD-Goma – led by Azarias Ruberwa, a Rwandan and the MLC, led by Jean Pierre Bemba, Mobutu's son-in-law, now dubbed "The Savimbi of Congo". Mobutu worked closely with Savimbi, the two being the most trusted cold war allies of the US in the region ). They used these "rebel movements" a smoke-screen to their invasion of Congo and poured in EO mercenaries within those so-called Congolese rebel movements. And these EO's "barbouzes", coming straight from UNITA bases in Angola, really showed what they were capable of in the repeated massacres of innocent civilians in Kisangani, Congo's third largest city and in Mambasa, further north.

In Mambasa, MLC militiamen engaged in barbaric acts of cannibalism and rape against the Bambuti or the Pygmies of Ituri last year. Those militia believe that by eating the flesh of a pygmy or raping a pygmy woman, they would acquire extra-terrestrial powers. The very day human rights organisations (Human Rights Watch, Amnesty International, International Crisis Group, Global Witness…) accused Bemba of cannibalism and the UN Security Council condemned and condemned these barbaric acts, André Flahaut, the Belgian minister of defense flew to Gbadolite (15.01.2003), Bemba's fiefdom and shook hand with him in front of world's cameras.

Often mercenaries'know how was called in. They buried Congolese people alive, shot them dead or chopped them with machetes, their bodies thrown into rivers, after being disemboweled and stones put into their stomachs so their could sink in the Congo river; or forced down the latrines. Women are raped, their sexual organs mutilated or shot at by Rwandan, Ugandan and Burundian troops who are all HIV positive. 60% of the women are now infected with HIV in eastern Congo.

Colette Braeckman, an expert in Congolese affairs and journalist with the Belgian daily Le Soir, revealed in her book, "Les Nouveaux Préddateurs" that the hidden agenda behind the war in eastern Congo is to cleanse eastern Congo of its native population, so that those in search of land, water, pastures, natural and mineral resources: Tchadian, Lybian Ethiopian, Somalian, Eritrean, Sudanese, Ugandan, Rwandan, Burundian, Tanzanian, as well as white farmers kicked out of Zimbambwe, and very soon from South Africa and Namibia; even Israelis fleeing violence in the Middle East…may settle there.

So a recent white wash BBC documentary by Hilary Andersson, a BBC Africa correspondent laid the blame squarely on "Congolese militia" without bringing into equation all this hegemonic hidden agenda. The white wash report, titled "DR Congo's atrocious secret", said:

"Despite a peace deal signed two years ago to end the long-running civil war, violence is continuing in the east of the Democratic Republic of Congo. And in the province of Ituri, Hilary Andersson finds evidence of cannibalism by some rebels.There is a part of the world where atrocities go beyond all normal bounds, where evil seems to congregate. Almost everyone who has ever worked there will know where I am talking of. The area is not very large on the map of Africa. But the region in and north of the forests of central Africa has hosted Rwanda's genocide, the massacres in Burundi, the devastation of southern Sudan, the mutilations in Uganda, and the atrocities of the north-eastern Congo. And so I had the usual feeling of dread when we flew into the area on this trip. We left the acacia-lined, sunswept plains of east Africa and, as we approached, the sky began to darken. We began to descend through black clouds that hugged the huge forests below. We
landed in a ferocious rainstorm in the small town of Bunia in the north-east of theCongo.

"Hole in Africa's heart"

The Congo is a vast territory, the size of western Europe. The war is not about any principle at all, violence has just moved in where there is no authority. But it has been called the hole in the heart of Africa, because much of it is a giant power vacuum. In the north-east, at least seven warlords are locked in brutal scramble for personal power and control. Lots of the fighters are children. Rape is more widespread than possibly anywhere else on Earth. And the war is not about any principle at all, violence has just moved in where there is no authority.

Mutilation

We visited a refugee camp set in a small valley, a piece of land like a basin. Around its rims the United Nations patrolled to keep the militia out. It reminded me of the atrocities in Bosnia, where at a certain point individuals turned into human devils. In an afternoon every person we spoke to, without exception, had witnessed not just killing but horrific mutilation. The children had sunken, troubled eyes. The women looked exhausted and the men were bursting with what they had to tell. Their relatives had their hearts ripped out, their heads cut off, their sexual organs removed. This, it seemed, was the standard way of killing here. Why? You want to know why? Yes there is war, but this is different. This is not just killing, or taking territory. It is deliberate mutilation on a scale that makes you reel with horror. It reminded me of the atrocities in Bosnia, where at a certain point individuals turned into human devils, bent on doing not just the
worst they could but the most atrocious.

Militia attack

We met a woman whom I will call Kavuo, not her real name. Survivors of militia attacks remain in hiding for fear of further violence. To talk to her about her story we had to travel to a remote location in the jungle, where we could not be seen or heard by others. What she had to speak of is an atrocity shrouded in secrecy here, an atrocity. It is taboo to even speak of it. The events she told me about happened two years ago and hers was one of the first public testimonies of its kind. Kavuo was on the run with her husband, her four children and three other couples. They had spent the night in a hut, and got up in the morning to keep moving. But they had barely left the hut when six militia men accosted them. Kavuo and the women were ordered to lie with their faces on the ground. The militia ordered Kavuo's husband and the other men to collect firewood. Then the women were told to say goodbye to their husbands. They obeyed. The militia then began to
kill the men one by one. Kavuo's husband was third. Her testimony is that the militia men lit a fire and put an old oil drum, cut into two, on the flames. I will omit other details. But Kavuo says the militia cooked her husband's parts in the drums and ate them.

Beliefs perverted

Those who have studied the region say cannibalism has a history there but as a specific animist ritual, carried out only in exceptional circumstances. Fighters told us that those who carry out such acts believe it makes them stronger. What has happened now is that the war has turned Congo's society upside-down. Warlords are exploiting this, and perverting existing beliefs for their own ends. Fighters told us that those who carry out such acts believe it makes them stronger. Some believe they are literally taking spiritual power from their victims. That once they have eaten, they have the power of the enemy. These atrocities are also designed to instil utter fear into the enemy.

Anarchy

It is estimated that four million people have died in the Congo as a result of the long running war. That is truly staggering. It is more than those killed by Cambodia's Pol Pot and more than those killed in Rwanda. Most people have died of hunger and disease that the violence has left in its wake. Kavuo lost four of her children to illness and malnutrition even before her husband was killed. Now she lives in a remote village in the forest, and cannot afford to look after her surviving children. If this is her story, imagine how many others are like it and the numbers begin to make a horrifying sort of sense. As we flew out of the Congo, I could see the vast forests below, thick with trees, infested with malaria, and barely accessible. A huge area that few outsiders venture into an area where evils happen that are rarely reported. The blood red sunsets, the streaks of black clouds a weird sort of echo.

Anarchy is not just a word. In the north-eastern Congo we saw its reality. What is happening there is proof of the scale of devastation that chaos can invite, and of the terrifying human capacity for unleashing deliberate evil on the innocent."

VI. BRITAIN AND AMERICA SUPPORT TERROR IN CONGO AS THEY HAVE TURNED A BLIND EYES TO THE POLPOT OF AFRICA'S CRIMES AGAINST HUMANITY

Britain and America are the major suppliers of arms to Uganda, Rwanda and Burundi for use throughout the Great Lakes Region (central Africa). According to a report by Wayne Madsen, an American Investigative journalist, presented on 17 May 2001, before the American Congressional subcommitee on international operations and the committee on international relations and human rights, the CIA is funding Rwandan and Ugandan military operations throughout the Great Lakes Region.

"It is very disturbing," he said, "to see that the world's greatest democracy is concocting deadly conflicts in Africa at the same time pretending to be a peace-maker. An American Mobile Training Team (MTT) is grooming regional insurgents, he revealed . "American troops," he said, "are stationed in Uganda at Entebbe old airport, Nakasonga, Kabamba, Ssingo, Nkozi, Gulu, Ssese Islands, and at Bugesera in Rwanda and other mobile locations."

The MTT is unfortunately made up of Black American marines. Anybody who remembers the slave trade and colonialism knows that economic exploitation of Africa was its main objective. Imperialists set up political administrators, just like Mobutu, Museveni and Kagame in modern day Africa, for the purpose of defending their foreign economic agenda.

In a White House press briefing following the accord, Pierre Prosper, the US State Department ambassador-at-large for War Crimes said: "We want to see Rwanda withdraw from the Congo. But we also want to see the Democratic Republic of Congo take steps to address Rwanda's security concerns."

Prosper then went on "reminding" all states in the Central African region "of their international obligations to co-operate with the International Criminal Tribunal for Rwanda (ICTR).

"This means that all the states in the region, particularly the Democratic Republic of Congo, The Republic of the Congo (the neighbouring former French colony), and Angola, must seek and arrest all inductees that may be on their territory. Only through a concerted regional and international effort will we be able to take the steps that are necessary to achieve lasting peace in region," he said.

Asked whether the US had any intention of putting in place sanctions in case Rwanda failed to withdraw its troops from Congo, Prosper was rather vague. "What you can see and expect from the US is a country that will be engaged with the parties in the region, will work with South Africa as the broker of the peace agreement to find a way to move this process forward by way of a 'monitoring mechanism'."

But, Nick Gordon, a BBC reporter investigated and reported that the Kigali regime has built crematorium at Bugasira, Ruhengeri, Byumba, Kibungo, Inyungwe and other locations where thousands of Hutus and Congolese deportees (80 Congolese youth were deported from Uvira, South Kivu into Rwanda in January 2001 and are unaacounted for today, according to the Missionary News Agency MISNA), were killed daily and their bodies are incinerated under the program called "MANPOWER DUTIES" while US officials are looking the other way. The Tutsi regime is conducting genocide in Rwanda to reduce the Hutu population to a "manageable level".

"At Gabiro, one of those Auschwitz-like crematorium," Gordon reported, "between 1,000 and 2,000 Hutus and Congolese deportees are incinerated daily and their ashes spread in the fields by a tractor." American troops having established a base adjacent to the crematorium at Bugasira, Gordon wondered: "It is impossible for American Generals not to hear the daily loud and groaning coming from across the fence; neither can they fail to smell the stench of burning flesh."

The Anglo-American press also ignored Cameroonian-born journalist Charles Onana's victory over Kagame in the French High Court after he published a book that clearly demonstrated that it was the Tutsi who started the genocide in Rwanda.

In 1998 at Kabalo airport, eastern Congo, 89 bodies of Tutsi soldiers who were killed by the Congolese army were found headless. Kagame had ordered his generals to cut off the head of every Tutsi soldier who get killed in the battle and bring it back to Rwanda. What was he doing with all these heads? Add them to skulls of the victims of the 1994 genocide and tell the whole world that they all perished during the 1994 genocide? And if there are 1 million Tutsi in Rwanda, besides the Hutu and the Twa (pygmies), and if, as it is said, almost 1million Tutsi preished in the 1994, genocide, then how many Tutsi are there left in Rwanda? It is a matter of simple mathematics!

Wayne Madsen solved the riddle when he said: "It is clear that the United States, contrary to comments made by its senior officials, including former President Clinton, played more of a role in the Rwandan tragedy than it readily admits. This involvement continued through the successive Rwandan and Ugandan-led invasions of neighboring Zaire/Congo. Speculation that Rwanda was behind the recent assassination of President Laurent Kabila in Congo (and rumors that the CIA was behind it) has done little to put the United States in a favorable light in the region. After all, the date of Kabila's assassination on January 16 this year - was practically 40 years from the very day of the CIA-planned and executed assassination of Congolese leader Patrice Lumumba.

"The quick pace at which Kabila's son and successor Joseph Kabila visited the United States at the same time of Kagame's presence, and his subsequent meetings with Corporate Council for Africa officials and Maurice Tempelsman (the majordomo of U.S. Africa policy), calls into question what the United States knew about the assassination and when it knew about it.

"Also, particularly troublesome is a conclusion the CIA is said to have reached in an assessment written in January 1994, a few months before the genocide. According to key officials I have interviewed during my research, that analysis came to the conclusion that in the event that President Habyarimana was assassinated, the minimum number of deaths resulting from the mayhem in Rwanda would be 500 (confined mostly to Kigali and environs) and the maximum 500,000. Regrettably, the CIA's higher figure was closer to reality.

"Remember that Kagame was in Washington about August 1996 checking his battle plans with the Pentagon. Mobutu's days were numbered". The US took all the right decisions to allow the Rwanda genocide to unfold. And Clinton's comment that "we didn't know what was going on at the time" couldn't have been a bigger lie. "Do you suppose it was coincidental that a Rwanda delegate rotated on to the security council early in 1994 and then worked with US representatives to block all subsequent attempts to deal appropriately with the unfolding slaughter?"

"All these US military programs like IMET and E-IMET, ACRI and JCET are designed to consolidate US hegemony. UPDF and RCD-Goma and SPLA have conscripted child soldiers. They use sophisticated weapons not only the machetes so widely advertised by the media propaganda front of 1994 which sowed indifference and apathy in the US public. Troops have been trained by US green berets and US military personnel have worked to coordinate SPLA and RPF/UPDF/RCD military campaigns. This is according to Ugandan dissidents and/or Congolese refugees fleeing Congo and/or ex-patriots on the ground. And there are plenty of people who support these statements....."

"Remember that RPF government claimed the economic growth of 5% then 10%, Just like Enron and other 200 US companies which collapsed in bankrupcy because of bribary, corruption and big lies... I find it particularly remarkable that the diamond exports from the Democratic Republic of Congo (DRC) were some US$897 million in 1997. Now this is a "country" which was in a major war. And then in 1998, DRC ranked second in diamond production at 25.7 million carats. Again, a country in a brutal war where hundreds and hundreds of thousands of people and in fact I think it is millions of people -- suffered the consequences through disease and despair and displacement and rape and hunger and robbery and often death..... This is the non-exhaustive accountability of Paul Kagame during this past decade.

VII. RWANDAN AND UGANDAN TUTSI REGIME ARE ROGUE STATES, BUT THEY NEVER APPEARED ON PRESIDENT GEORGE W. BUSH'S "AXIS OF EVIL" LIST

A. KAGAME'S LINK TO AL-QAEDA PROVEN. PLEASE, READ THE FOLLOWING REPORT:

USA: Kagame links with Al-Qaeda probed by USA

By AfroAmerica Network, Washington, DC. USA. August 10, 2002.

Reliable sources tell AfroAmerica Network that Kagame, his cronies, and the Rwandan Government's links with Al-Qaeda organisation are being probed by USA Intelligence services and the Justice Department. These links may date from the guerrilla war era against Habyalimana's regime and may have intensified with the illegal exploitation of natural resources in Eastern Democratic Republic of the Congo and the fuelling of invasion of the Congo.In this web of international terrorism, arms trafficking, illegal mineral trade, invasion and civil wars, Paul Kagame himself remains the central piece around which the following key figures and organizations gravitate.

Colonel Patrick Karegeya, Kagame's right hand man and Director of the infamous External Intelligence Office (ESO) which is accused of assassinating Rwandan refugees, including Seth Sendashonga and Theonest Lizinde. Colonel Patrick Karegeya is said to have been working with Victor Bout (or Butt), Sanjivan Ruprah, and Faustin Mbundu all known arms dealers with close contacts with Al-Qeada. Sources say Victor Bout and Sanjivan Ruprah, who is married to a Congolese-Rwandan, may have bought weapons from Al-Qaeda cells from Pakistan, Kuweit and UAE, and Lebanon and supply the weapons to Kagame. They also say that using money from Al-Qaeda companies working with the Rwandan Patriotic Army in the Congo, these arms traffickers may have supplied sophisticated weapons, communications equipments and others war materials to Al_Qaeda itself.

Faustin Mbundu, an elusive Rwandan business man who lives in Uganda serves as an agent between Sanjivan Ruprah and Victor.But on one side and General Kagame on the other. Al-QAEDA cells through these contracts of arm sales, have trained Rwandan troops in Pakistan, Afganistan, Somalia, and Erythrea, just until September 11, 2001. Training of Rwandan troops in Somalia, Pakistan, and Erythrea may still be going on. Colonel Jack Nziza, another Kagame's henchman is the Director of the notorious Directorate of Military Intelligence. He is believed to be responsible for contracts with Al-Qaeda linked companies that exploit minerals and other resources in Congo.

These companies, mostly from Pakistan, Lebanon, India and elsewhere, use Hutu prisoners from Rwandan jails, accused of genocide. The product of the exploitation is used to pay for arms supplied by Victor Butt and Sanjivan Ruprah and for training of Rwandan troops by Al-Qaeda. Colonel Jack Nziza's deputy in Congo is Colonel Dan Munyuzwa who oversees Hutu Prisoners, Al-Qaeda linked companies and other similar contracts in Eastern Democratic Republic of the Congo. He also makes sure the minerals and timber are exported and the companies use the planes owned by General Kabarebe, the Rwandan Army Chief of Staff. Some of the Al-Qaeda cells in Somalia and Erythrea still train Rwanda troops but other engage in combats in Congo and Burundi on the Rwandan behalf.

The USAEmbassy in Ethiopia, also known as "Mogadisciu" for a large number of Somalis going in and out of the Embassy on a daily basis, is believed to issue Rwandan passports to Somalis, Yemenis, and Erythreans and to channel money to their families back home. AfroAmerica Network has learned that the USA intelligence may be concerned that the passports, issued to the fighters to allow them to easily move to Rwanda, Burundi and Congo, may be used by Al-Qaeda members among these troops to travel to the United States and commit crimes there.

To facilitate the transfer and laundering of money to Al-Qaeda, a Rwandan bank may have been used extensively. The Rwandan bank, using an American bank, has created fake accounts to legitimize transactions. Businessmen from Somalia, Ethiopia, and elsewhere, working with Al-Barakaat may also have used the bank in Rwanda to transfer money to Al-Qaeda cells.Other people who are mentioned are:

- Mugunga, a brother-in-law of Paul Kagame. While Colonel Dan Munyuza is in minerals and timber, Mugunga is believed to handle coffee and tea businesses with Al-Qaeda.

- Andre Bumaya, the Rwandan Minister of Foreign Affairs and President of Islamic Democratic Party. He manages the Rwandan Embassy in Ethiopia contacts with Somalis, Erythreans, and muslims and may be giving these party memberships cards once in Rwanda.

- Hadj Harelimana, the Representative of Muslims in Rwanda. Provides legal papers to Somalis, Erythreans, Yemenis, Ethiopians, Eastern and Northern African muslims to make them members of the Rwandan Muslim community. Hadj Harelimana is on the record for supporting September 11, 2001 attacks against the USA, during a BBC interview.

- Major Karasira, Ernest Habimana, Emmanuel Kamanzi, Gakwere, Alfred Kalisa, and other names are also mentioned. AfroAmerica Network is still working to find out about the allegations against these individuals.

B. WHAT IS THE NEW POST-GENOCIDE RWANDA LIKE?

Ten years on, the West which has been wrestling with its conscience and seeking ways how to wash it, has taken firm and long-term commitments to help Rwanda, rebuild itself, albeit on the ashes of the genocide. The new regime led by General Paul Kagame (elected with 99.9% in 2003!) has made of security its priority of priorities. Millions of refugees have been repatriated, the reconstruction of the State apparatus and the administration has taken place, faster than was expected. Kigali the capital harbours new avenues, along which new villas (surprisingly and ironically nicknamed by some as "Vive le génocide!" - Long live the genocide!) have been built by the wealthiest, the dignitaries of the new regime, that is. Business is thriving. A new Institute of Science, Technology and Management has even been launched, children go to school and ordinary people can be seen cultivating the land again.

But don't be deceived by appearance. Fear still reigns supreme in the new Rwanda post-genocide. The regime is obsessed with security as the notorious "Military Security Department" has been suspected of acts of kidnapping and killing. The press is gagged and many journalists either languish in jail or in exile. Many dignitaries within the ranks of the Rwandan Patriotic Front (RPF) in power have defected and exiled themselves for fear for their lives, including former prime minister Celestin Rwigema, a Hutu, accused of being a "genocidaire" after working for four years with the new regime. The former president Pasteur Bizimungu (a Hutu) is languishing in jail for having created another party other than the RPF (the same Bizimungu who, by orders of Kagame, brandished a false old map showing that eastern Congo was part of the Rwanda kingdom in the past. Rubbish! It is a pure falsification of history. And now he is rotting in jail). Under President
Kagame's "Imidugu" policy or the "Politics of villagisation", most of the villagers have been forced to built their huts along the main roads so that the notorious Local Defense Forces will keep a vigilant eye on them and to wield off infiltrators. The countryside is therefore deserted and Catholic missions there forced to close.

President Kagame is quoted as having said: "I can't oblige Rwandans, Hutu and Tutsi to love each other. All I can do is guarantee the security of each and all." Survivors of the genocide feel abandoned to themselves. Ordinary Rwandans say their leaders all returned from exile do not identify with them. In fact the new regime keeps a grudge against them, accusing them of having collaborated with the former Hutu regime. Nevertheless, Kagame who branded the Congolese "the Ibicucu" in his native Kinyarwanda language – which means, the "nobodies, good for nothing, therefore killthem as many as you like", cannot "sell" the genocide to draw moral credit out of it anymore. He will not avoid the "Hutu" question for ever and ever.

Just recently, the government of Rwanda blasted the western powers, which decided to negotiate a peace agreement with a group of Ex-Forces Armées Rwandaises (Habyrimana's army), which transformed itself into the Forces Democratique Pour La Libération du Rwanda (FDLR/FOCA). The FDLR, Rwanda's main Hutu rebel group, announced recently in Rome that it was abandoning its armed struggle against the Kigali government and condemned for the first time the 1994 genocide in the central African country, a massacre in which it has been accused of playing a prominent role. The Hutu rebels fled to neighboring Democratic Republic of Congo after being chased out of Rwanda following the genocide, which left more than 800,000 people dead, most of them minority Tutsis and moderate Hutus. The Rwandan government, used as a pretext, the presence of the Hutu the rebels to invade, occupy and loot Congo.

"While government understands the need for the DRC government to talk to the genocidal groups and disarm them, we are gravely concerned to learn that the United Nations, the European Union and some countries plan to sit on the same table with a group that committed the last horrific genocide of the 20th century, " a communiqué issued by the Rwandan Foreign Affairs ministry read.

The communiqué detailed the transformation of the FDLR/FOCA which, later when passing off as ALIR/PALIR was listed by the United States on the international terrorist list after the massacre of tourists in Bwindi National Park.

Yet, the same United States welcomed the FDLR's pledge to abandon violence, disarm, and return to their country from neighboring Democratic Republic of Congo (DRC).

"The United States congratulates and welcomes the recent renunciation of arms and condemnation of genocide and terrorism by the Democratic Liberation Forces of Rwanda (FDLR) rebels," said White House spokesman Scott McClellan. "We urge the FDLR to demonstrate their commitment to peace by turning over all their arms to the United Nations Organization Mission in the DRC (MONUC)," McClellan said in a statement released by the White House.

"After voluntary disarmament, the FDLR should proceed without delay with plans for rapid repatriation of the combatants and families through close cooperation with the governments of the DRC and Rwanda, with assistance from MONUC," said McClellan. "Furthermore, we look to Rwanda, as well as the United Nations and international organizations, to work with the DRC and FDLR to ensure the expeditious repatriation of FDLR members and their families," said McClellan.

"The United States looks forward to working closely with all parties to further our shared interest of building a world in which all peoples can live in peace, freedom, and dignity," said McClellan.

C. UGANDA'S ROSY IMAGE DECEPTIVE - REPORT.

In the latest effort to convince the international community to take a critical look at President Yoweri Museveni's government, a new report claims the country's rosy image in the past 19 years has been a deceitful creation by paid publicists.

The report: "Revealing Uganda: The Mask of Politics, Economics and Social Realities," was released on 11.04.2005 by the New York based Good Governance International (GGI). GGI was founded in August 2004 out of a merger of The Asia Review, Middle East Monitor, Africa Analysis International and Refugee Watch. It says the Movement government's vision for democracy, rule of law, popular participation, transparency and accountability remains "daunting, if not, doubtful and devastating.

"Yet, Uganda is portrayed in the international arena as responsive to the waves of good governance progress in Africa," the report says. The organisation's country monitoring shows that the portrayal of the Ugandan government by some western analysts and nations is consequential of a hidden mask projected by the country's administration and its paid public relations agents. The report says Uganda appears promising and dynamic only because the international community is not obtaining the actual truth. It says political, economic and social progress in Uganda should not be based on what international institutions and western nations hear from Museveni and his emissaries. "Their account would be promotional, subjective, calculative, over-stated and partisan for international impression," the reports reads.

According to the report, the rosy picture of the Movement government painted internationally, results from the need to secure international assistance, recognition and alliance. The report says the donors were initially convinced the Movement would adopt good governance practices by adhering to popular political and economic principles, minimising corruption and guaranteeing human rights protection and establishing an accountable fiscal system.

Museveni's National Resistance Army rebellion of 1981-86 reportedly preached democracy, transparency, accountability and development by promising restoration of political and socio-economic sanity and alleviation of mass poverty and disease. "Yet those promises seem ironical considering his record of misrule," the report says. "There is an absolute diversion from the rule of law, democracy, popular participation, transparency and accountability," the report says. It cites constitutional proposals that would give the president more powers, the insistence by the Movement that it is not a political party, and reports of torture of opposition supporters.

VIII. AT LAST, CONGO VERSUS UGANDA AT THE INTERNATIONAL CRIMINAL COURT IN THE HAGUE

The International Court of Justice (ICJ), the UN's highest legal body, was to start two weeks of hearings on a 1999 complaint filed by the Democratic Republic of Congo (DRC) accusing Uganda of invading its territory and massacring Congolese civilians. The DRC accuses Uganda of violating its territorial sovereignty, violating international humanitarian law and massacring Congolese civilians. It is demanding reparations for destruction and looting allegedly carried out by Ugandan troops and "the restitution of national property and resources appropriated for the benefit of Uganda".

The two parties presented their side of the story before the 15-judge panel from April 11 to April 29. In its 1999 application the DRC said it seeks "to secure the cessation of the acts of aggression directed against it, which constitute a serious threat to peace and security in central Africa in general and in the Great Lakes region in particular". In June 2000 the court issued so-called provisional measures at the DRC's request, ordering that both parties "forthwith, prevent and refrain from any action, in particular armed action" that might aggravate the dispute before the court. Originally the court was set to start hearings in November 2003 in the case but the start was delayed at the request of both parties to allow diplomatic negotiations.

Uganda has consistently denied the claims and said it has only acted to protect national security. Uganda's defense appears already wobbly, perhaps because Museveni is well aware that he ccanot get away with it. On 13.14.2005, an editorial of the Ugandan government official newspaper, the New Vision, commenting on the case, squarely laying the blame on the late dictator of Congo, Mobutu Sese Seko.

It read: "The International Court of Justice has started hearing the case filed by President Kabila against Uganda in 1999. Many things went wrong during the collapse of the Congo in the late 1990s. Uganda is not blameless. Nevertheless, the case should never have been allowed to come this far.

Firstly, Uganda was given permission by President Mobutu to enter Congo to deal with ADF rebels. Ugandan rebels have operated out of Congo for many years, something with direct backing from Kinshasa.

Secondly, Kabila was placed in power by the Rwandan army. Did he have the moral authority to file such a complaint?

Thirdly, claims about Uganda's plunder of Congo were greatly exaggerated. Most of the gold, diamonds and timber exported to Uganda in that period were on a willing buyer-willing seller basis.That trade was there before the war and is still there today.

Fourthly, the claim that Uganda is still active in Congo through proxy militias is absurd. Those militias are themselves part of the Kinshasa government today.

Finally, it was Congo's collapse at the political centre that created the power vacuum that sucked in all its neighbours. That was Mobutu's fault, not Uganda's". Sorry Mr Museveni, I think masks have fallen!

IX. BY LAUNCHING A "COMMISSION FOR AFRICA TO HELP AFRICA", BRITISH PRIME MINISTER TONY BLAIR HAS SIMPLY SHED A CROCODILE'S TEARS!

After arming Rwanda and Uganda to invade Congo, killing 5 million Congolese and looting Congo's natural and mineral resources, especially coltan for mobile phones, British Prime Minister Tony Blair has just shed crocodile's tears by inaugurating his "Commission for Africa to help Africa". Lit the fire and present yourself as an officer of the fire brigade. That's it!

Moreover, according to Dr Tajudeen Abdul Raheem, Secretary General, Global Pan-African Movement, this what you need to know about The Africa Commission (some facts):

- Africa is not short of reports from "do-gooders" which lead to no implementation. Be it Nepad (New Partnership for Development) or Commission for Africa (which takes the shine off Nepad, Africans'own initiative), what we need is a moratorium on implementation.

- The fact that the majority of "Commissioners" in the Commission are Africans themselves does not change anything. Those Africans are puppets of neo-imperialism and neo-colonialism, including President Benjamin Mkapa of Tanzanaia and Prime Minister Meles Zenawi of Ethiopia. Have the many treaties Mkapa and Zenawi have signed and adhered to before been implemented in their respective countries? Where the change?

- Let Prime Minister Tony Blair start by acting and the rest will follow. For example on corruption and good governance. How come British multinationals involved in the raping and the looting of Africa, especially in the Democratic Republic of Congo, are not investigated? As you know Britain has benefited a lot from the booties of corrupt leaders such as Mobutu and Sani Abacha. Britain (London), not Switzerland, is today the main destination of African dictators'looted wealth from their own countries. How come the London end of corruption does not disturb anybody? As you know 60%-70% of the looted money in Africa finds its way in Britain.

- After September 11, Britain and America and their allies had no difficulties in finding the culprits. Why is it not easy to find Africa's looted money in western banks? Or those responsible for a genocide of 5 million Congolese?

- The fact that the Commission for Africa was launched in the British Museum was in itself an irony of history. It is there in the British Museum that you find most of looted goods from Africa since colonial time. We will mention only Nigeria's Benin bronzes which should be returned home.

- The Commission for Africa is a spin on poverty. I was launched on "Red Nose Day" – a day of pitying Africa. Aid and aid pushers will do nothing in Africa as long as the global system incarnated by global financial institutions is fundamentally unjust. The self-interests of bigger countries is an obstacle to a just and fair world, let alone a for a fair trade. We see some powerful countries wanting the UN to be dismantled and the militarisation of the World Bank is the order of the day. The G8 countries have already announced that the targets they set themselves to halve Africa's poverty by 2015 will not be met.

Meanwhile, immigration has become a hot issue in every western countries, especially during electoral campaigns, oblivious to the fact that they are the ones who orchestrate wars in Africa in the first place, in order to have free access to raw material, be it cocoa, oil or coltan for mobile phones and computers. And as you know, in the western high tech driven economy, everything is being computerized and huge supplies of oil (energy) is paramount.

The question is: "How long is Africa going to bear the weight of "White Civilisation"?
 
 
 

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Karibu Jukwaa la www.mwanabidii.com
Pata nafasi mpya za Kazi www.kazibongo.blogspot.com
Blogu ya Habari na Picha www.patahabari.blogspot.com

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--
Karibu Jukwaa la www.mwanabidii.com
Pata nafasi mpya za Kazi www.kazibongo.blogspot.com
Blogu ya Habari na Picha www.patahabari.blogspot.com

Kujiondoa Tuma Email kwenda
wanabidii+unsubscribe@googlegroups.com Utapata Email ya kudhibitisha ukishatuma

Disclaimer:
Everyone posting to this Forum bears the sole responsibility for any legal consequences of his or her postings, and hence statements and facts must be presented responsibly. Your continued membership signifies that you agree to this disclaimer and pledge to abide by our Rules and Guidelines.