KI Daily Brief – March 27, 2015

The Very High Cost of Global Corruption
Huffington Post

Such organizations have extensive resources to help corrupt individuals hide wealth and local authorities are helpless against them. So while some governments may have policies in place to combat corruption in country, policies fail to account for corrupt money moved offshore where it is typically unrecoverable. The problem is that perpetrators move abroad and draw on the expertise of accountants, law firms and international banks. 

Texas Energy Giant Schlumberger Ltd. Agrees To Pay Criminal Penalties For Violating US Sanctions In Iran, Sudan
International Business Times

Texas energy giant Schlumberger Ltd. has agreed to pay a steep penalty for violating U.S. sanctions in Iran and Sudan. The world’s largest oil-field services company will pay $232.7 million as part of a plea agreement with the U.S. Department of Justice. The deal caps a six-year federal probe into the Houston-based company’s activities. U.S. justice and trade officials in recent years have begun cracking down on companies that do business with countries the U.S. deems off limits.

Russia Could Approve Schlumberger Acquisition of Eurasia Drilling Stake

Russia’s governmental commission on foreign investment has considered Schlumberger’s request to buy a 45 percent stake in Eurasia Drilling, and a positive decision is possible, the head of the Federal Anti-Monopoly Service said on Thursday.”In principle it’s possible that the deal will have a positive decision, but only if several conditions are observed,” Igor Artemyev said.

The Devil, Or Mr. Wang

Fear is Wang Qishan’s favoured weapon. As leader of the Communist Party’s most sustained and wide-ranging anti-corruption campaign in its history, he often urges his investigators to be “frightening”. One story goes that at a meeting of the party’s Central Commission for Discipline Inspection (CCDI), convened after Mr Wang took charge of it in November 2012, senior members—themselves among the most feared officials in the party—were presented with dossiers of their own sins. Mr Wang’s aim, it appeared, was to terrorise the enforcers themselves. Failure to uncover high-level graft, he has warned them, would be “dereliction of duty”.

Chinese Diplomats Run Rings Around Australia
Sydney Morning Herald

Successive Australian governments have failed to talk with honesty and nuance about China, making challenges posed by the rising power look more daunting than they are. Forrest’s people no longer deny that CAIFC is a military intelligence front organisation, as they did to me two years ago. And since my earlier report they say they have been proceeding “with eyes wide open” and kept the Australian government informed of all dealings.

Liu Weigao: The Developer Behind Qiu He’s Curtain
East by Southeast

The following translation is a detailed exposé of Liu Weigao, the Suqian businessman whose exploits brought down Qiu He, the Vice-Party Secretary of Yunnan Province. The smartly crafted article written by Southern Weekend reporters Liu Jun was published on March 19 on the Phoenix News site. The author is careful not to directly connect Qiu He to Liu Weigao, but the implications are extremely salient.

Making Corruption Unsustainable in China
Wall Street Journal

The current corruption campaign is heavy on dealing with nonstructural factors and moral suasion by trying to reign in bribes and greed through enhanced penalties. The chance of going to jail for corruption according to one study, is only 3% in China—making corruption a low-risk, high-return gamble. But ultimately Mr. Xi will succeed only if more is done to address the structural factors driving corruption. This means breaking the corruptive relationship between the central players in the dual economy, separating the roles and responsibilities of the four major agents driving China’s system—the Party, the government, enterprises and banks. This would require some form of political liberalization to build more effective mechanisms for accountability and transparency that would make it more difficult for corruption to be sustainable.

Putin Urges FSB: Harder, Faster, Stronger
The Moscow Times

Western governments will attempt to discredit and destabilize Russia, but their efforts will be futile, President Vladimir Putin told Russia’s top security officials Thursday. Putin, himself a previous director of the FSB, listed as external threats the expansion of NATO infrastructure to Russia’s borders, the establishment of European and Asian segments of the U.S. missile defense system and the development of new weapons as part of the U.S. Prompt Global Strike program, which aims to create a conventional weapon system that can reach any target in the world within one hour.

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