BY: IAN ROSS
Like a tired musical event, Transparency International (‘TI’) just sang its annual political song called the Corruption Perception Index (CPI) for 2018. The obtusely selective, definition-crunching and corporate-elite driven league table re-released yet again, with the same old lyrics and monotonous tune.
Indeed, Transparency International has acquired a masterful competence of both reprimanding yet appeasing their member organizations at the same time. Last week’s finger-wagging is quickly forgotten by this week’s refined extraction of six-figure sums in donorships.
Of course, there is a fraternity who think that anything with an anti-corruption title has to be wonderful – especially when it is from Transparency International, spurred on by that welter of disingenuous PR and the toady podium dramatists who endearingly orate the ‘we can stop corruption together’ speech now and again on a 5-star conference stage. But once the political façade is dismantled, there are many glitches exposed in the CPI construct.
In just one element, TI, through its CPI, mollifies certain business empires in their ‘clean’ countries, trying to change their image after being neck-deep in corruption themselves (such as Siemens, and others since). Countries lower down in the CPI (gloss-painted in red on that grotesque CPI map) are castigated and labelled as the ‘more corrupt’ or better put, countries unable to throw money at a political convener just to look good. Whilst it is not against the law to receive bona-fide donor payments, there is more than a hint of political neo-con and fiscal influence regarding how high or low, countries are placed in the CPI.
Indeed, with reams of prolix narratives, TI attests to telling the world who the ‘cleanest’ countries are, and like a cartoon Interpol squad tells us which are the ‘countries to watch’ in a despotic fashion in this, a politically motivated portico.
And these concerns start and end with their definitions.
Corruption: What’s in a name?
Transparency International defines corruption as ‘the abuse of entrusted power for private gain’. Any good?
Only those who know nothing about financial crime would normally set such a banal definition. But TI does know about financial crime, so TI’s definition of corruption has a conflating effect. It poses questions instead of answering them.
The first question is why does TI have a one-cap-fits-all corruption definition? The next, is why does ‘TI’ lop off money laundering? Where is fraud in there? Added to that, TI engaging with certain banks in defining corruption strips away the scope even further. It is like having Attila the Hun review EU human rights policy.
TI’s definition could connect to issues of conflicts of interest but (unluckily for them) reminds us of some informing facts demonstrating both the hypocrisy and blatant misconceptions the CPI throws out. If Denmark is the ‘cleanest’ country in the world at ‘Number 1’, then someone should whisper the words ‘Danske Bank’ in the ear of Delia Ferreira Rubio (Chair, Transparency International).
But money laundering being purposely excluded from TI’s CPI parameters leaves a conclusion of crass policy pigeon-holing. Or is it politically motivated separation of financial crimes? Of course, HSBC laundered millions from Colombian drug cartels. But based on the TI logic here, is it the case that the 200 billion Euros laundered through Danske Bank between 2007 and 2015, overseen and management-centric in the very capital of the world’s ‘cleanest’ country, was from every predicate crime other than bribes and related corruption? With staff collusion rampant? Hardly.
Britannia ‘Waives the Rules’
The UK landed 12thplace in the ‘CPI’ for 2018. A ranking in the ‘clean’ group category made up of the UK alongside other illuminati countries forming the illustrious (but wholly illusory) upper half of ‘the index’ in these FIFA-esque rankings.
But even back in 2015 (when the UK was placed 14thin the CPI) the City of London (aided by British crown dependencies) was and arguably still is the world’s leading tax haven – aside from being the money laundering capital of the world. By controlling 24% of all offshore financial services, ‘the City’ ran an elaborate secrecy regime, thick with tactics and full of sweeteners. All assisting not just tax evaders, but also smugglers, sanction-busters, and by natural consequence, money-launderers. Those who officially didn’t exist until Boris Johnson got his anti-Russian megaphone out. Even the National Crime Agency (NCA) cannot make up their minds about who the UK money launderers are from one day to the next. One reason perhaps for the lack of convictions.
Wind back further, ‘follow the money’ and no senior figure ever faced a criminal court, not even disqualified for practices that directly generated the financial crisis (also due to the applicable laws being rescinded by successive British governments).
A former minister in the government headed HSBC whilst it engaged in systemic money laundering. But no criminal proceedings were brought against the bank, and the then head of HMRC went to work for that very bank upon retirement. If that does not present one major red flag of corruption (evidentially benchmarked at the time the decision not to prosecute was made) then the political CPI blinkers and goldfish memory syndrome clearly overruled reason – and legality.
The inexorable account of banks’ mis-selling (and not on a small scale) mortgage fraud, institutional ‘PPI’ payment protection insurance scamming, Libor rigging. So, if that behaviour is not set in corruption per se,then it is hard to imagine what is.
That last point leads to these questions: is scamming and conning the British public an abnormality, or part of the business model? Would we have corruption at all if wasn’t for the financial systems and laughably weak UK compliance and regulation?
In 2018, Kweku Adoboli was deported to Ghana. (Adoboli was jailed in the UK in 2011 after illegally trading US$2 billion at the Swiss investment bank UBS). Adoboli committed the largest internal fraud in British banking history; as one offender in London stole an equivalent of 28.6 % of Somalia’s gross domestic product (GDP) for 2018 (with Somalia ranked 180 and lowest in the CPI). An uncomfortable comparison, and naturally not a murmur from Transparency International. So if TI carry out such coruscating research, then why no mention of this clean-country-crooked-banker stealing on that scale? Or is that case too politically sensitive for TI and its stakeholders?
Then, the report of a ‘Mighty London-based compliance officer’ who ‘Crashed to Earth’ (his name remains anonymous). ‘He’ fraudulently generated massive bonuses, set up his own servile recruitment process, and systematically fleeced his customers and his bank. But he didn’t ‘crash’ into a prison cell, did he? In fact, was never even arrested. Blatant fraud implicit within the long pattern of corrupt behaviour. Management knew exactly what he was doing but just allowed it to go on under their noses – and with the crook concerned in such a senior management responsibility role of trust? But no disciplinary action. Even his ‘departure reasons’ are not clear. And that is supposed to be a ‘success story’ against city corruption?
Henceforth, the UK, Germany, Switzerland, Singapore and Luxembourg, all confidently ranked by Transparency International, are the ‘cleanest’ in the world. But suitably placed in perspective by a report by the Tax Justice Network, listing these countries as among the world’s worst tax havens and secrecy regimes – and with the rationale to back it.
But to Transparency International, none of all the above matters or counts in its CPI. To TI, evidently, political expediency runs everything.
And so …
Essentially, by appeasing the once-a-season anti-corruption ticket holders from countries with the most ‘clean’ anti-corruption image (those with the deepest pockets) ‘Transparency’ has become a corporate buzzword. So maybe ‘seethroughablity’could be a new buzzword, because many of TI’s statements and CPI parameters do not correlate with the disturbing and illogical external incidents and outcomes TI averts it eyes from when they occur.
If only Transparency International’s corporate congregation could stop singing along for a moment and see this annual report, based on a mutually exclusive splat being passed off as a corruption definition, idiosyncratic politics, and nationalistic stereotyping, for what it is. A strand of neoliberalism gone wrong.
IanRoss has 30 years’ experience in the detection and prevention of financial crime. He is a former UK police officer, and now well established in the corporate sector. Mr. Ross is also an accredited counter fraud specialist and international money laundering investigation project advisor, especially dealing with sophisticated fraud and corruption cases. He supports government regulators, the telecoms industry, national banks, multi-national corporate entities, national police forces and the military. His latest projects include addressing cyber-related fraud.
Please note that opinions expressed in this article are solely those of our contributors, not of Political Insights, which takes no institutional positions.