Category Archives: corruption

How Russians pay to play in other countries

The New York Times reports: For a brief moment, it seemed that the powerful adviser’s head might roll at the Castle. After he lost his long legal battle over a hefty state fine, the Czech president warned him to pay up or lose his post.

Then a guardian angel materialized from Moscow.

Lukoil, the largest private Russian oil company in an industry dependent on Kremlin approval, stepped in to pay the nearly $1.4 million fine owed to a Czech court.

The aide, Martin Nejedly, stayed on as economic adviser to the Czech president, Milos Zeman, and vice chairman of his party. Perhaps more important, he retained his office right next to the president’s in the Castle, the official palace that looms over the capital, Prague.

But the payment last spring raised questions about Russian influence-buying in the Castle, where Mr. Zeman has staked out a position as one of the Kremlin’s most ardent sympathizers among European leaders.

“Unfortunately in the Czech Republic, some advisers to the president or the prime minister are willing to cooperate with the Russians,” said Karel Randak, who retired as head of the Czech foreign intelligence service in 2007. “I am not saying that they are Russian agents — but unfortunately for some people, the money is more important than the security of the Czech Republic.” [Continue reading…]

Netanyahu corruption probe expected within days

Ynet reports: An Israeli TV channel reported Thursday that Prime Minister Benjamin Netanyahu is suspected of receiving valuable gifts from two businessmen.

The Channel 2 segment was the latest in a series of reports in Israeli media saying that police are close to opening a criminal investigation against the prime minister.Attorney General Avichai Mandelblit is expected to order the head of police investigations to open the probe into allegations of bribe-taking and aggravated fraud leveled against Netanyahu.

The station said Netanyahu had accepted large-scale “favors” from businessmen in Israel and abroad. It said there had been a breakthrough in the case three weeks ago, but gave no further details.

Channel 2 said Netanyahu was the central suspect in a second investigation that also involves members of his family. It said some 50 witnesses were involved in the case.

The station, along with the Ynet news site, said a formal criminal probe is expected to be opened next week. [Continue reading…]

Netanyahu to be investigated for bribery, fraud

The Times of Israel reports: Attorney General Avichai Mandelblit has reportedly approved a full criminal investigation of Prime Minister Benjamin Netanyahu into allegations of bribery and fraud.

Netanyahu will be investigated by police for two separate cases and will be called in for police questioning in the coming days, Channel 10 reported on Wednesday.

Asked by The Times of Israel, the Justice Ministry — under whose auspices the attorney general operates — declined to comment Wednesday evening on the report. There was no immediate response from the Prime Minister’s Office.

Earlier this month, Zionist Union MK Erel Margalit and Eldad Yaniv, a lawyer and Labor party activist, petitioned the High Court of Justice to demand the Attorney General answer why had not yet opened an investigation despite what they called “overwhelming evidence.”

Writing on Facebook hours before the Channel 10 report, Yaniv said that Mandelblit “realized there was no other choice but to open an investigation’ after meetings with senior investigators.

“The police have weighty proof linking Bibi to suspicions of bribery and fraud,” Yaniv wrote. [Continue reading…]

The secret wealth of the royal family running ‘Al Saud Inc’

The New York Times reports from Tangiers: Behind a tall perimeter wall, studded with surveillance cameras and guarded by Moroccan soldiers, a sprawling new palace for King Salman of Saudi Arabia rose on the Atlantic coast here last summer.

Even as the Saudi government canceled a quarter of a trillion dollars’ worth of projects back home as part of a fiscal austerity program, workers hustled to finish bright blue landing pads for helicopters at the vacation compound and to erect a tent the size of a circus big-top where the king could feast and entertain his enormous retinue.

The royal family’s fortune derives from the reserves of petroleum discovered during the reign of Salman’s father, King Abdulaziz ibn Saud, more than 75 years ago. The sale of oil provides billions of dollars in annual allowances, public-sector sinecures and perks for royals, the wealthiest of whom own French chateaus and Saudi palaces, stash money in Swiss bank accounts, wear couture dresses under their abayas and frolic on some of the world’s biggest yachts out of sight of commoners.

King Salman serves as chairman of the family business unofficially known as “Al Saud Inc.” Sustained low oil prices have strained the economy and forced questions about whether the family — with thousands of members and still growing — can simultaneously maintain its lavish lifestyle and its unchallenged grip on the country. [Continue reading…]

Trump rewards big donors with jobs and access

Politico reports: More than a third of the almost 200 people who have met with President-elect Donald Trump since his election last month, including those interviewing for administration jobs, gave large amounts of money to support his campaign and other Republicans this election cycle.

Together the 73 donors contributed $1.7 million to Trump and groups supporting him, according to a POLITICO analysis of Federal Election Commission records, and $57.3 million to the rest of the party, averaging more than $800,000 per donor.

Donors also represent 39 percent of the 119 people Trump reportedly considered for high-level government posts, and 38 percent of those he eventually picked, according to the analysis, which counted candidates named by the transition and in news reports.

While campaign donors are often tapped to fill comfy diplomatic posts across the globe, the extent to which donors are stocking Trump’s administration is unparalleled in modern presidential history, due in part to the Supreme Court decisions that loosened restrictions on campaign contributions, according to three longtime campaign experts. [Continue reading…]

Trump plans to dissolve his foundation; N.Y. attorney general pushes back

NPR reports: President-elect Donald Trump plans to dissolve his foundation, his transition team announced on in statement on Saturday.

Soon after, though, the New York attorney general’s spokesperson tweeted that he legally can’t, until the state’s investigation of the Trump Foundation is complete.

.@Fahrenthold @realDonaldTrump Foundation still under investigation by @AGSchneiderman, cannot legally dissolve until investigation complete

— Amy Spitalnick (@amyspitalnick) December 24, 2016

Press Secretary Amy Spitalnick was responding to Washington Post reporter David Fahrenthold, who asked if the investigation would continue. [Continue reading…]

Trump may have a $300 million conflict of interest with Deutsche Bank

Bloomberg reports: For years, Donald Trump has used a powerful tool when dealing with bankers: his personal guarantee.

Now that guarantee — employed to extract better terms on hundreds of millions of dollars of loans to the Trump Organization — is at the center of a delicate loan-restructuring discussion at Deutsche Bank AG, which is under investigation on several fronts by the U.S. Department of Justice.

The bank is trying to restructure some of Trump’s roughly $300 million debt as part of an attempt to reduce any conflict of interest between the loan and his presidency, according to a person familiar with the matter. Normally, the removal of a personal pledge might lead to more-stringent terms. But there is little normal about this interaction. Trump’s attorney general will inherit an investigation of Deutsche Bank related to stock trades for rich clients in Russia — where Trump says he plans to improve relations — and may have to deal with a possible multibillion-dollar penalty to the bank related to mortgage-bond investigations.

Whatever terms a restructured loan might include, they will reflect the complex new relationship spawned between Germany’s largest bank and its highest-profile client. Ethicists say this concerns them. [Continue reading…]

Donald Trump’s network of unsavory Russian connections

James S Henry writes: A few of Donald Trump’s connections to oligarchs and assorted thugs have already received sporadic press attention — for example, former Trump campaign manager Paul Manafort’s reported relationship with exiled Ukrainian oligarch Dmytro Firtash. But no one has pulled the connections together, used them to identify still more relationships, and developed an image of the overall patterns.

Nor has anyone related these cases to one of the most central facts about modern Russia: its emergence since the 1990s as a world-class kleptocracy, second only to China as a source of illicit capital and criminal loot, with more than $1.3 trillion of net offshore “flight wealth” as of 2016.

This tidal wave of illicit capital is hardly just Putin’s doing. It is in fact a symptom of one of the most epic failures in modern political economy — one for which the West bears a great deal of responsibility. This is the failure, in the wake of the Soviet Union’s collapse in the late 1980s, to ensure that Russia acquires the kind of strong, middle-class-centric economic and political base that is required for democratic capitalism, the rule of law, and stable, peaceful relationships with its neighbors.

Instead, from 1992 to the Russian debt crisis of August 1998, the West in general — and the U.S. Treasury, USAID, the State Department, the IMF/World Bank, the ERDB, and many leading economists in particular — actively promoted and, indeed, helped to finance one of the most massive transfers of public wealth into private hands that the world has ever seen. [Continue reading…]

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‘Trump is creating a government of, by, and for the oil and gas industry’

Kate Sheppard writes: Rex Tillerson at the State Department. Scott Pruitt at the Environmental Protection Agency. Rick Perry at the Department of Energy. Jeff Sessions at the Department of Justice.

If environmentalists found themselves in some kind of paralyzing hypnagogia on Nov. 9, the day they realized that there was no waking up from this was Dec. 13.

Tillerson is the CEO of Exxon Mobil, a company that spent decades and millions of dollars supporting climate change denial and is currently under investigation for doing so. Tillerson has personally argued that climate change is no biggie because “we will adapt to this.” If he’s confirmed as secretary of state, he will be in the position of deciding whether the U.S. stays involved in the Paris climate agreement and whether to approve massive international oil pipelines like Keystone XL.

Pruitt is the attorney general of Oklahoma and has described himself as “a leading advocate against the EPA’s activist agenda.” He is currently suing the EPA ― the agency he could lead ― to stop the Obama administration’s regulatory effort to curb emissions from power plants, and he was caught letting oil industry lawyers draft letters to regulators on his behalf.

Perry, the former Republican governor of Texas, is expected to be nominated to lead a department whose name he once famously forgot while pledging to eliminate it. He has said that climate change is just a “theory that remains unproven” and that climate scientists have “manipulated data to keep the money rolling in.” A few years ago, Perry’s top environmental officials in Texas removed all mentions of climate change from a report on rising sea levels in Galveston Bay. There are already signs that the Trump team wants to undertake a climate purge at the Energy Department; transition officials sent a questionnaire to the department last week, asking for the names of employees who had worked on the issue. [Continue reading…]

Anders Åslund writes: President-elect Donald Trump’s nomination of ExxonMobil’s CEO Rex Tillerson is profoundly disturbing. Tillerson will receive a “nest egg” of some $300 million from ExxonMobil when he retires. These future benefits will be paid over many years making Tillerson deeply dependent on the success of ExxonMobil, not least in Russia, which accounts for a significant share of its investment. This is a serious conflict of interest. Worse, it involves a hostile foreign power. Hopefully, the Senate Foreign Relations Committee would consider such a conflict of interest disqualifying.

While ExxonMobil seems to have abided by the US sanctions against Russia, the company has persistently protested against these sanctions since they were introduced in July 2014. Thus, Tillerson stands out as one of the greatest opponents of the current US policy on Russia. Tillerson has also developed close personal relations with Vladimir Putin and Rosneft CEO Igor Sechin. While that might have benefitted the business of ExxonMobil, these are not people that are commonly considered decent. [Continue reading…]

Tillerson’s nomination has been warmly received by prominent Republicans with ties to ExxonMobil.

Rex Tillerson’s company, Exxon, has billions at stake over sanctions on Russia

The New York Times reports: Now that President-elect Donald J. Trump has chosen Rex W. Tillerson, the chief executive of Exxon Mobil, to be the next secretary of state, the giant oil company stands to make some major gains as well: It has billions of dollars in deals that can go forward only if the United States lifts sanctions against Russia.

As head of America’s largest oil company, Mr. Tillerson has earned a friendship award from Russia and voiced skepticism about American sanctions that have halted some of Exxon Mobil’s biggest projects in the country.

But Mr. Tillerson’s stake in Russia’s energy industry could create a very blurry line between his interests as an oilman and his role as America’s leading diplomat.

“The chances that he will view Russia with Exxon Mobil DNA are close to 100 percent,” said Robert Weissman, the president of Public Citizen, a public interest group based in Washington. [Continue reading…]

Bloomberg reports: Rex Tillerson, the Exxon Mobil Corp. chief who is President-elect Donald Trump’s leading candidate for secretary of state, visited the White House repeatedly as sanctions were imposed on Russia in 2014 to make sure his company’s competitors didn’t gain an edge in the way they were enforced.

Tillerson made at least 20 visits to the White House during President Barack Obama’s two terms, visitor logs show, including five after Obama began authorizing the 2014 sanctions in response to Russian aggression toward Ukraine. [Continue reading…]

Trump picks ExxonMobil CEO Rex Tillerson to be secretary of state

The Washington Post reports: President-elect Donald Trump has picked as his secretary of state Rex Tillerson, the chief executive of ExxonMobil, setting up a possible confrontation with members of his own party in the Senate, Trump’s transition team announced Tuesday.

Since Tillerson’s name emerged as a candidate for the post, leading Republicans have expressed reservations about his years of work in Russia and the Middle East on behalf of the multinational petroleum company.

GOP advisers have warned that a growing number of Republican senators may be unwilling to vote to confirm Tillerson because of his ties to Russia. While Senate Democrats cannot filibuster Trump’s Cabinet picks, Republicans have only 52 votes in the Senate, leaving them in potential jeopardy if Democrats unite in opposition to Tillerson. It will take at least 50 votes to confirm a nominee, plus Vice President-elect Mile Pence casting a tiebreaking vote. [Continue reading…]

The Daily Beast reports: Donald Trump’s long-time but informal adviser Roger Stone says the Secretary of State job was dangled in front of Mitt Romney in order to “torture” him for previously opposing the president-elect.

During a Sunday appearance on InfoWars with Alex Jones, a conspiratorial media outlet that has become a mouthpiece of the next president, Stone called Romney a “choker” and said that Trump was simply toying with him.

“Donald Trump was interviewing Mitt Romney for Secretary of State in order to torture him,” Stone claimed on the program. “To toy with him. And given the history, that’s completely understandable. Mitt Romney crossed a line. He didn’t just oppose Trump, which is his democratic right, he called him a phony and a fraud. And a con man. And that’s not the kind of man you want as Secretary of State.” [Continue reading…]

White House ethics experts argue Trump’s business conflicts are so big it should affect how the Electoral College votes

Politico reports: Norm Eisen has become an unlikely media darling. Since Donald Trump’s victory on Nov. 8 opened a debate about how the president-elect would keep his vast business interests separate from his new public obligations, Eisen has emerged as one of the two most prominent government ethicists calling for Trump to take drastic action to avoid scandal or worse. Eisen, the former top Obama White House ethics lawyer, has been cited more than 1,000 times in news stories, explaining the intricacies of the “emoluments clause” to journalists many of whom hadn’t heard the words a month ago. With Richard Painter, who held the same job under President George W. Bush, Eisen has taken control of a leading government watchdog group that’s staffing up to hound Trump’s administration for conflicts of interest they say are unprecedented for the occupant of the Oval Office. A video produced by the liberal advocacy group MoveOn.org of Eisen and Painter talking about a potentially obscure constitutional violation notched more than 2.5 million views in its first week.

“It’s unreal. It’s like a full-employment plan for government ethicists, for White House ethicists,” Eisen told me Monday as he dashed between interviews with U.S. and international journalists lining up to ask him about Trump’s complicated financial arrangements. “Fortunately, there’s basically only a handful of us. There’s really only two.”

That might be an exaggeration, but Eisen and Painter happen to be the two ethicists who are actively working to shape the outcome of an election that most voters think has already been decided. For the #stillnevertrump faction, Eisen and Painter represent the last hope of persuading wobbly members of the Electoral College to vote against the president-elect when they convene on Dec. 19. Failing that, the two men are laying the groundwork for a case that Trump’s sprawling financial arrangements—real estate investments, hotels, golf courses and product licenses spread across the U.S. and at least 20 other countries—will inevitably lead him into scandal or worse once he takes office. Trump is set to hold a news conference Dec. 15 in New York to provide more detail on his future financial plans, but the two men have no expectation that Trump will take their advice and sell off his entire business enterprise and put the proceeds into a “blind trust” with no control or knowledge over where the money goes. [Continue reading…]

Pentagon buries evidence of $125 billion in bureaucratic waste

The Washington Post reports: The Pentagon has buried an internal study that exposed $125 billion in administrative waste in its business operations amid fears Congress would use the findings as an excuse to slash the defense budget, according to interviews and confidential memos obtained by The Washington Post.

Pentagon leaders had requested the study to help make their enormous back-office bureaucracy more efficient and reinvest any savings in combat power. But after the project documented far more wasteful spending than expected, senior defense officials moved swiftly to kill it by discrediting and suppressing the results.

The report, issued in January 2015, identified “a clear path” for the Defense Department to save $125 billion over five years. The plan would not have required layoffs of civil servants or reductions in military personnel. Instead, it would have streamlined the bureaucracy through attrition and early retirements, curtailed high-priced contractors and made better use of information technology.

The study was produced last year by the Defense Business Board, a federal advisory panel of corporate executives, and consultants from McKinsey and Company. Based on reams of personnel and cost data, their report revealed for the first time that the Pentagon was spending almost a quarter of its $580 billion budget on overhead and core business operations such as accounting, human resources, logistics and property management. [Continue reading…]

Another Arab awakening is looming, warns a UN report

The Economist reports: In December 2010 Egypt’s cabinet discussed the findings of their National Youth Survey. Only 16% of 18-29-year-olds voted in elections, it showed; just 2% registered for volunteer work. An apathetic generation, concluded the ministers, who returned to twiddling their thumbs. Weeks later, Egypt’s youth spilled onto the streets and toppled President Hosni Mubarak.

The UN’s latest Arab Development Report, published on November 29th, shows that few lessons have been learnt. Five years on from the revolts that toppled four Arab leaders, regimes are ruthlessly tough on dissent, but much less attentive to its causes.

As states fail, youth identify more with their religion, sect or tribe than their country. In 2002, five Arab states were mired in conflict. Today 11 are. By 2020, predicts the report, almost three out of four Arabs could be “living in countries vulnerable to conflict”.

Horrifyingly, although home to only 5% of the world’s population, in 2014 the Arab world accounted for 45% of the world’s terrorism, 68% of its battle-related deaths, 47% of its internally displaced and 58% of its refugees. War not only kills and maims, but destroys vital infrastructure accelerating the disintegration.

The Arab youth population (aged 15-29) numbers 105m and is growing fast, but unemployment, poverty and marginalisation are all growing faster. The youth unemployment rate, at 30%, stands at more than twice the world’s average of 14%. Almost half of young Arab women looking for jobs fail to find them (against a global average of 16%).

Yet governance remains firmly the domain of an often hereditary elite. “Young people are gripped by an inherent sense of discrimination and exclusion,” says the report, highlighting a “weakening [of] their commitment to preserving government institutions.” Many of those in charge do little more than pay lip-service, lumping youth issues in with toothless ministries for sports. “We’re in a much worse shape than before the Arab Spring,” says Ahmed al-Hendawi, a 32-year-old Jordanian and the UN’s envoy for youth. [Continue reading…]

Donald Trump is assembling the richest administration in modern American history

The Washington Post reports: Many of the Trump appointees were born wealthy, attended elite schools and went on to amass even larger fortunes as adults. As a group, they have much more experience funding political candidates than they do running government agencies.

Their collective wealth in many ways defies Trump’s populist campaign promises. Their business ties, particularly to Wall Street, have drawn rebukes from Democrats. But the group also amplifies Trump’s own campaign pitch: that Washington outsiders who know how to navigate and exploit a “rigged” system are best able to fix that system for the working class.

“It fits into Trump’s message that he’s trying to do business in an unusual way, by bringing in these outsiders,” said Nicole Hemmer, an assistant professor in presidential studies at the University of Virginia’s Miller Center. But Trump and his team, she added, won’t be able to draw on the same sort of life struggles that President Obama did, in crafting policy to lift poor and middle-class Americans.

“They’re just not going to have any access to that” life experience, she said. “I guess it will be a test — does empathy actually matter? If you’re able to echo back what people are telling you, is that enough?”

Trump’s nominee for commerce secretary is industrialist Wilbur Ross, who has amassed a fortune of $2.5 billion through decades at the helm of Rothschild’s bankruptcy practice and his own investment firm, according to Forbes.

Ross’ would-be deputy at the Commerce Department, Todd Ricketts, is the son of a billionaire and the co-owner of the Chicago Cubs. Steven Mnuchin, who Trump named to head the Treasury Department, is a former Goldman Sachs executive, hedge fund executive and Hollywood financier.

Betsy DeVos, a Michigan billionaire who was named as Trump’s education secretary, is the daughter-in-law of Richard DeVos, the co-founder of Amway. Her family has a net worth of $5.1 billion, according to Forbes. Elaine Chao, the choice for transportation secretary, is the daughter of a shipping magnate. [Continue reading…]

Potential conflicts around the globe for Trump, the businessman president

The New York Times reports: On Thanksgiving Day, a Philippine developer named Jose E. B. Antonio hosted a company anniversary bash at one of Manila’s poshest hotels. He had much to be thankful for.

In October, he had quietly been named a special envoy to the United States by the Philippine president, Rodrigo Duterte. Mr. Antonio was nearly finished building a $150 million tower in Manila’s financial district — a 57-story symbol of affluence and capitalism, which bluntly promotes itself with the slogan “Live Above the Rest.” And now his partner on the project, Donald J. Trump, had just been elected president of the United States.

After the election, Mr. Antonio flew to New York for a private meeting at Trump Tower with the president-elect’s children, who have been involved in the Manila project from the beginning, as have Mr. Antonio’s children. The Trumps and Antonios have other ventures in the works, including Trump-branded resorts in the Philippines, Mr. Antonio’s son Robbie Antonio said.

“We will continue to give you products that you can enjoy and be proud of,” the elder Mr. Antonio, one of the richest men in the Philippines, told the 500 friends, employees and customers gathered for his star-studded celebration in Manila.

Mr. Antonio’s combination of jobs — he is a business partner with Mr. Trump, while also representing the Philippines in its relationship with the United States and the president-elect — is hardly inconsequential, given some of the weighty issues on the diplomatic table.

Among them, Mr. Duterte has urged “a separation” from the United States and has called for American troops to exit the country in two years’ time. His antidrug crusade has resulted in the summary killings of thousands of suspected criminals without trial, prompting criticism from the Obama administration.

Situations like these are already leading some former government officials from both parties to ask if America’s reaction to events around the world could potentially be shaded, if only slightly, by the Trump family’s financial ties with foreign players. They worry, too, that in some countries those connections could compromise American efforts to criticize the corrupt intermingling of state power with vast business enterprises controlled by the political elite. [Continue reading…]

Trump’s presidency, overseas business deals and relations with foreign governments could all become intertwined

The Washington Post reports: Days after Donald Trump’s election victory, a news agency in the former Soviet republic of Georgia reported that a long-stalled plan for a Trump-branded tower in a seaside Georgian resort town was now back on track.

Likewise, the local developer of a Trump Tower planned for Buenos Aires announced last week, three days after Trump spoke with Argentina’s president, that the long-delayed project was moving ahead.

Meanwhile, foreign government leaders seeking to speak with Trump have reached out to the president-elect through his overseas network of business partners, an unusually informal process for calls traditionally coordinated with the U.S. State Department.

All of it highlights the muddy new world that Trump’s election may usher in — a world in which his stature as the U.S. president, the status of his private ventures across the globe and his relationships with foreign business partners and the leaders of their governments could all become intertwined.

In that world, Trump could personally profit if his election gives a boost to his brand and results in its expansion overseas. His political rise could also enrich his overseas business partners — and, perhaps more significantly, enhance their statuses in their home countries and alter long-standing diplomatic traditions by establishing them as new conduits for public business. [Continue reading…]

Donald Trump raises prospect of keeping ties to his firms

The Wall Street Journal reports: Donald Trump indicated Tuesday he was unlikely to disentangle himself from his business empire as fully as he previously suggested, raising questions about potential conflicts of interest while president.

Mr. Trump and his representatives said during the campaign he would have nothing to do with his businesses if he became president, promising a “total and complete separation.”

But since the election, Mr. Trump has met with foreign business partners and involved daughter Ivanka Trump in such discussions, even though he has said his children will run his companies during the presidency as a way to separate their operations from the White House.

On Tuesday, Mr. Trump told the New York Times that “the law’s totally on my side” and that “the president can’t have a conflict of interest.” [Continue reading…]

The Washington Post reports: Donald Trump’s chief White House strategist Stephen K. Bannon accepted $376,000 in pay over four years for working 30 hours a week at a tiny tax-exempt charity in Tallahassee while also serving as the hands-on executive chairman of Breitbart News Network.

During the same four-year period, the charity paid about $1.3 million in salaries to two other journalists who said they put in 40 hours a week there while also working for the politically conservative news outlet, according to publicly available documents filed with the Internal Revenue Service.

The salary payments are one part of a close relationship between the nonprofit Government Accountability Institute, a conservative investigative research organization, and for-profit Breitbart News. [Continue reading…]