Who Goes From President to Prisoner?
By Matthew Blackman, Nick Dall and Charu Sudan Kasturi
Flamboyant French ex-President Nicolas Sarkozy always loved “to be at the center of the action,” former U.S. President Barack Obama wrote in his memoir A Promised Land. For once, Sarkozy won’t be happy to find himself in the spotlight, after a court sentenced him to jail on Monday for trying to bribe a judge in 2014. While Sarkozy will appeal the ruling and can remain free in the meantime — though he will return to court this month on separate charges of evading campaign finance laws — the verdict is a jolt to those leaders who think they’re above the law. Today’s Daily Dose explores how corruption charges are catching up with multiple world leaders even as the COVID-19 pandemic has opened up fresh opportunities to cheat taxpayers. Read about the deep ties between war and corruption, meet unheralded heroes and understand why this battle is as old as civilization itself — and even God isn’t immune.
WHO’S NEXT AFTER SARKOZY?
Donald Trump: The former U.S. president was acquitted by a divided Senate after a second impeachment last month on charges that he instigated the mob that attacked the Capitol on Jan. 6. But New York prosecutors are still investigating allegations of financial fraud by Trump, and Georgia prosecutors are exploring whether he broke the law by trying to strong-arm local officials into reversing the election results, as Trump no longer enjoys the de facto immunity that came with the presidency. At a time when Trump has indicated he’s open to running again in 2024, the outcome of the corruption probe could determine his political future.
Benjamin Netanyahu: They call him Mr. Teflon. For years, no political scandal has seriously damaged the career of Israel’s longest-serving prime minister. But now, as he looks to retain power in a fourth national election in less than two years, Bibi, as Netanyahu is called, faces growing pressure to resign over allegations of corruption that have refused to go away. The charges range from accepting cigars and Champagne from businessmen in exchange for favors to helping media houses that showered him with positive coverage. Now he’s getting bad press for it.
Jacob Zuma: The controversial former South African president has long faced allegations of corruption during his time in office. Now, he finally faces a trial that’ll start in May, more than 16 years after first being implicated. Zuma has refused to cooperate with the probe into the allegations against him, and his defiance is part of a larger battle over the future direction of the nation and its ruling party, the African National Congress (ANC). Current President Cyril Ramaphosa has promised to crush corruption and has taken on Zuma’s ally and ANC Secretary-General Ace Magashule, who is widely seen as corrupt. Zuma’s political survival skills are legendary. But has his luck finally run out? Read more on OZY.
Luiz Inácio ‘Lula’ da Silva: A former trade union leader, Lula is one of two former Brazilian presidents who’ve spent time in jail after corruption convictions in Latin America’s most expansive scam, the Car Wash scandal. But while the conviction meant he couldn’t contest the 2018 presidential elections, Lula remains wildly popular for his social welfare programs like the Bolsa Família cash transfers. And current President Jair Bolsonaro — arguably the biggest political beneficiary of the Car Wash probe — is now feeling the heat too. He shut down the investigation in February amid persistent allegations of graft against his own son.
Park Geun-hye: It was corruption at the highest levels possible. South Korea’s former president accepted a bribe from the heir apparent of the country’s largest firm, Samsung. Now they’re both in prison, Park for 22 years and Samsung scion Lee Jae-yong for 2 ½ years. But current President Moon Jae-in — who has promised to stamp out corruption — is now under political pressure to fire his top prosecutor after the prosecutor turned his attention to Moon’s own justice ministers.
Najib Razak: The former Malaysian prime minister didn’t worry about middlemen. He was sentenced last year to 12 years in jail for transferring $10 million from a state wealth fund directly to his personal bank account. The so-called 1MDB scam is the biggest to have rocked the Southeast Asian nation.
Un-Masked: The U.K. High Court recently found Britain’s health secretary, Matt Hancock, guilty of withholding details of COVID-19 contracts, including a $350 million deal with a finance firm for the supply of 50 million face masks … which eventually couldn’t be used because of safety concerns. In South Africa, investigators found in September that 60 percent of “medical grade” face masks provided by companies hired for the task were substandard. And in Poland, health minister Lukasz Szumowski had to resign after it was revealed he bought useless masks for the country from a ski instructor friend.
Every Breath You Take: Someone might be minting money off it. How did a raspberry firm get a government contract in Bosnia-Herzegovina to buy Chinese ventilators that don’t work? The same way that the state of Rio de Janeiro in Brazil paid for 1,000 ventilators, most of which never arrived. Or how Indian authorities purchased hundreds of fake ventilators for public hospitals. Will these revelations fix pandemic corruption once and for all? Don’t hold your breath.
Aid … or Paid? Indonesian social affairs minister Juliari Batubara was arrested in December for receiving at least $1.2 million in bribes from companies tasked with helping the nation’s pandemic aid efforts. Fraud has also hollowed out the small-business loans program that’s part of America’s COVID-19 recovery package.
The Hidden Link: It’s not just about looting the treasury. Corruption, the World Bank believes, is also fundamentally tied to how well different countries have responded to the pandemic. Consider the evidence. Slovakia, which boasts Europe’s lowest deaths from COVID-19 per capita, is also a pioneer in embracing a public transparency register that lists all beneficiaries of companies that want government contracts. New Zealand, the best-performing country on Transparency International’s Corruption Perceptions Index, is also a major success story in controlling the pandemic. As is Singapore, Asia’s most transparent nation.
Yemen’s Yes-Men: The arms business accounts for 40 percent of global corruption. And nowhere is that stunning statistic on more grotesque display than in the war in Yemen that’s leaving all of us poorer and less safe, suggests Andrew Feinstein, founding director of Shadow World Investigations. The sale of weapons to any side in the Yemen conflict — effectively a proxy war between Saudi Arabia and Iran — contravenes international humanitarian law, he says. And yet, the U.S., the U.K. and the European Union continue to supply tens of billions of dollars’ worth of weapons to Saudi Arabia and its ally, the United Arab Emirates, every year. “Every time a school is bombed in Yemen, politicians in the U.S. and the U.K. get a little bit richer,” Feinstein tells OZY.
Greasy Graft: The Oil-for-Food program was the U.N.’s biggest humanitarian project, aimed at helping Iraq use its oil to feed its people amid global sanctions against the Saddam Hussein regime. But the biggest beneficiaries turned out to be corrupt companies and officials, from French auto giants like Peugeot and Renault, to India’s then-foreign minister Natwar Singh, who won shady contracts from an Iraqi regime that pocketed as much as $11 billion from the scam.
Corruption Intelligence Agency: The Soviet Union’s defeat in Afghanistan couldn’t have been achieved without bags stuffed with slush money sent by the CIA for different factions of the Afghan mujahideen. It’s an approach the American intelligence agency and its British counterpart, the MI6, have subsequently used to influence top Afghan officials by bribing them, even after the country’s transition to a democracy. The CIA has similarly been accused of spying out corrupt officials overseas … and then using them to wield influence in El Salvador, Iraq, Syria and Yemen, among other nations, as Douglas Valentine writes in The CIA as Organized Crime.
Times They Are a-Changin’: European regulations against defense corruption have driven arms scams underground. Mark Thatcher, son of former Prime Minister Margaret Thatcher, was accused of receiving millions for an arms deal struck by his mother. On the other hand, points out Feinstein of Shadow World Investigations, “Tony Blair [prime minister in the 1990s] had to wait until he’d left office to receive a string of lucrative contracts and consultancies from Saudi-backed entities and other insalubrious regimes and companies.” It was worth the wait: Feinstein estimates that Blair — who has denied corruption — might have made more than $100 million from the arms industry and the fallout of the Iraq invasion that led to the deaths of over a million people.
José Domingo Pérez: One former Peruvian president, Alan Garcia, killed himself rather than face the details of corruption exposed by this 44-year-old prosecutor. A second, Garcia’s predecessor, Alejandro Toledo, is fighting Pérez’s push for his extradition from the U.S., also on corruption charges. A third, Pedro Pablo Kuczynski, is under pretrial detention over graft allegations. And in February, Pérez expanded investigations against Keiko Fujimori, the daughter of a fourth former president, Alberto Fujimori. Robert Muller has nothing on him. Read more on OZY.
Chinwe Esimai: The murkiest of scams usually rely on those most regular of financial institutions: big banks. Nigeria-born Esimai is at the forefront of the banking sector’s attempts to reform itself. The Harvard-trained lawyer is Citibank’s first chief anti-corruption and bribery officer, and among the most powerful women of color in the white- and male-dominated world of banking. Read more on OZY.
Anjali Bhardwaj: When India introduced a Right to Information (RTI) law in 2005, modeled on the Freedom of Information Act in the U.S., it was a landmark moment for transparency in the world’s largest democracy. So when the current government of Prime Minister Narendra Modi introduced a set of steps to weaken the law, Bhardwaj, one of the country’s leading RTI activists, decided she had to speak out. And at a time when voices of dissent in India increasingly find themselves jailed, her voice has received amplification, with the U.S. State Department naming her as one of 12 winners of its new Anti-Corruption Champions Award in February.
Tech Tricks: From Ukraine to Armenia, activists in Eastern Europe are using drones to slip behind the high walls that corrupt judges and politicians use to shield their lavish mansions and ill-gotten wealth from public scrutiny. The use of cryptocurrencies for payments could improve transparency. In Nigeria, Ghana, Kenya and South Africa, governments are using blockchain technology to fight local corruption. And the Ethiopian government is turning to blockchain to better monitor its coffee supply chain. Read more on OZY.
Xu Zhiyong: The 47-year-old has made it a habit to call Chinese President Xi Jinping’s bluffs, whether on cracking down on corruption or tackling the coronavirus (he called Xi “clueless”). Among China’s most prominent civil rights and anti-corruption activists, the outspoken Xu frequently ends up in prison. But once released, he resumes his activism with the same intensity. On corruption in China, trust Xu, not Xi.
OLD AS THE HILLS
When in Rome: Corruption is often noted as one of the reasons for the fall of the Roman Empire. That extended from cheating in the ancient Olympics to looting taxpayers’ money. One famous example of corruption was Sicily’s governor Gaius Verres (120–43 B.C.), who is believed to have siphoned off 40 million sesterces (the average yearly salary was around 900 sesterces) from the Roman tax rolls.
Bribing God: Forget pay for play: This is pay for pray. Visit most traditional Chinese homes, and you’ll find the image of the Kitchen God hung near the cooking stove. According to mythology, a week before the Chinese New Year, he rises to the heavens carrying a report card of the family’s behavior to the Jade Emperor. To sweeten the report, families offer a bribe of sugar to the Kitchen God — smearing the image with something sweet and then burning it, so it can ascend to heaven.
Sun City or Sin City? Home to four luxurious hotels, two Gary Player-designed golf courses and an artificial surfing beach, Sun City is South Africa’s (wilder) answer to Disney World. But those faux gold finishes are built on a crooked foundation. In the late 1970s, hotelier Sol Kerzner took advantage of apartheid-era rules to establish casinos in several supposedly independent Black homelands such as Bophuthatswana (gambling was outlawed in white South Africa at the time). Once built, Kerzner paid eye-watering sums to international musicians (Frank Sinatra, Queen, The Beach Boys) to bust the international sanctions imposed on apartheid South Africa and visit Sun City. Player, meanwhile, attracted a stellar field to what was then the world’s richest golf tournament. When apartheid ended, Kerzner used “a working relationship” with Nelson Mandela to ensure the sun never set on Sun City.
Russian Racket: What’s one thing the tsars, Soviet leaders and current Russian President Vladimir Putin have all shared — apart from residing in the Kremlin? A favorite holiday destination overlooking the Black Sea, where lies “Putin’s palace,” a sprawling mansion that now-jailed Russian opposition leader Alexei Navalny alleges was built with the “largest bribe in history” from the country’s oligarchs. Putin’s judo buddy Arkady Rotenberg claims he owns the palace, which is said to have cost more than $1.3 billion.