KI Daily Brief – May 1, 2015

Russia: Massive Capital Flight Continues

Amid Russia’s economic woes, billions of dollars continue to disappear in offshore havens. The net outflow of capital from Russia reached $32.6 billion during the first quarter of 2015, according to the nation’s Central Bank. Financial experts say most of the money now fleeing Russia ends up in offshore accounts, beyond the reach of tax inspectors and other prying eyes.

Putin’s Billionaire Pal’s Bench-Warming Son Has Suddenly Become a Soccer Star
Buzzfeed News

Over the course of a 10-year career, Boris Rotenberg played so little that, outside his soccer club’s dressing room, he was known only for his famous last name. But now the Dynamo Moscow right back finds himself the talk of Russian soccer after a series of unassuming starts caused a national scandal. Rotenberg’s father is Boris Rotenberg (senior), one of Russia’s richest men, with a fortune estimated by Forbes just under $1 billion. He also happens to be Dynamo’s president.

FBI Probes Suspected Bribery in Russian Uranium Sales to U.S.
Wall Street Journal

The seven-year-old probe, which people familiar with the case say is still in progress, is another sign of the tense relations between the U.S. and Russia. It reflects U.S. concerns about crime and corruption in post-Soviet Russia as well as worries about national security and nuclear stockpiles that date back to the Cold War.

Austria Rejects US Bid to Extradite Dmytro Firtash

A court in Austria has turned down a US request for the extradition of the Ukrainian oligarch Dmytro Firtash. It ruled the evidence presented by the US was not enough to justify his extradition on corruption charges. Mr. Firtash denies conspiring to pay millions of dollars in bribes to Indian mining officials through US banks. The tycoon – one of Ukraine’s richest men – was an ally of ousted leader Viktor Yanukovych. He was arrested but got bail in Vienna a year ago.

Not So Far Away: Anti-Corruption Officials Try to Extend Their Reach Abroad
The Economist

“The mountains are high; the emperor is far away,” goes a Chinese saying that has always given comfort to bureaucrats who play fast and loose with the law in remote parts of the country. But often, these days, distance is not enough. Those who hanker after the added protection of a foreign jurisdiction are often called “naked officials”. The term describes people who have moved families and assets abroad in readiness for escape themselves. Now, however, anti-graft officers are trying to extend their reach beyond China’s borders. 

Forced Disappearances, Brutality, and Communist China’s Politics of Fear

China is being purged. An aggressive anti-corruption campaign that began after Xi Jinping became chief of the Chinese Communist Party in 2012 and the nation’s president the following year has shaken institutions from the army to the state television broadcaster. Hundreds of thousands of officials have already been detained. Unlike similar crackdowns of the past, the effort shows no signs of slowing.

No Meetings at Tourist Hotspots, China Reminds Officials

China’s top graft buster took the unusual step on Friday of plastering its website with pictures of 21 top Chinese tourist sites where officials are banned from holding meetings, a reminder of its crackdown on extravagance and corruption. The government issued rules in September to stop such meetings at these hot spots, saying they were a waste of public funds and had ignited popular anger.

China Agrees to $2 Billion Infrastructure Deal with Equatorial Guinea

China’s biggest lender by assets, Industrial and Commercial Bank of China, said on Wednesday it had signed an infrastructure pact worth $2 billion with the oil-rich west African nation of Equatorial Guinea. Equatorial Guinea, a tiny Sub-Saharan African nation, boasts the highest GDP per capita in Africa, thanks to a hydrocarbon boom. But it is also notorious for corruption and ranked 144 of 187 states on the U.N.’s 2014 Human Development Index.

U.S. ‘Welcome’ to Use China’s Man-Made Islands for Civilian Purposes
Financial Times

The US and other countries will be welcome to use facilities on islands China is building in the South China Sea for civilian activities “when the conditions are right”, according to a statement released by Beijing late on Thursday. As well the tentative offer of access for purposes such as weather forecasting and search and rescue operations, Beijing assured Washington that its island-building would not affect navigation or overflight rights, in an effort to allay fears that Beijing is pursuing military expansion in regional waters.


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