The Dark Reality of India depicted in the film Jawan

 

Truth of AAP exposed!

 

The paradox that leads professionals into temptation

 Andrew Hill in The FT

Before her first ward-round as a medical student, Sunita Sah watched as the consultant leading the group stuffed his pockets with branded pens and notepads from a hospital cart piled with drug company freebies. 

Noting her astonishment, he remarked, “these are the only perks of the job”, and continued to stock up. “I couldn’t help but think: ‘What’s the end-effect of this?’” Sah told me. 

She found part of the answer to that question when she moved from medicine into management consulting and started analysing how every interaction between healthcare companies and doctors had an impact on their prescribing habits. 

Now a professor at Cornell University and an honorary fellow at Cambridge’s Judge Business School, Sah has filled in more gaps with a new study that sheds light on the dark side of professionalism and how to avoid it. 

Her findings are stark and surprising. The greater a manager’s sense of professionalism, the more likely he or she is to accept a gift or bribe. Worse, high-minded professionals may be more susceptible to unconscious bias towards gift-givers, precisely because they are convinced they think they know how to ignore their blandishments. 

“I NEVER turn down something for free that I know isn’t going to kill me!” retorted one manager in response to Sah’s survey. “A free lunch from someone? Go for it! If the guy is fool enough to think his free lunch/dinner/use of cabin, etc, is going to influence me, he doesn’t know me at all! People don’t influence me beyond what I, and I alone, allow!” 

In the study for the Academy of Management Perspectives, Sah equates this “professionalism paradox” to the Dunning-Kruger effect, according to which poor performers lack even the ability to recognise their own hopelessness. 

Sah’s study is based on surveys of managers, but some of the pernicious real-world effects of her paradox are clear. In the extreme case of the opioid epidemic, books such as Empire of Pain and Dopesick (now also a television series) have chronicled the way respected physicians were dragged into the overprescription of painkillers after receiving free gifts and conference invitations from manufacturer Purdue Pharma. 

Yet their ability to self-regulate against conflicts of interest is still many professionals’ first line of defence when watchdogs and legislators start threatening to curb their autonomy with new rules. 

One problem is that we are all professionals now. The term used to be almost the exclusive domain of lawyers, doctors, teachers, accountants, and others who had laboriously acquired specialist knowledge, shown integrity, and deserved an elevated status. Now the same status is loosely claimed by everyone from salespeople to, yes, journalists. The currency has been debased. 

In law, behaving professionally and ethically is “part of your training, it’s part of your identity, it’s what makes you tick — which isn’t necessarily true elsewhere”, David Morley, former senior partner at Allen & Overy, says. But the head of a professional services firm adds that professionalism “can’t be an excuse or a cover story” for a lack of underlying principles. 

These senior leaders are describing the difference between what Sah calls “deep” and “shallow” professionalism. 

Deep professionals should recognise the risk of undue influence and avoid exposing themselves to it in the first place. Her parallel is Odysseus plugging his ears with wax to avoid falling for the sirens’ song, or, more prosaically, managers who decline all gifts, rather than relying on a corporate threshold to protect them. It is “easier for individuals to rationalise and morally disengage the acceptance of [small] gifts”, Sah writes, or even to stop noticing them altogether. 

Deep professionals should embrace continued ethical training, to help embed principles, and embrace an understanding that they may be prone to bribes and influence-seeking. They should also continue to practise their values, just as a concert pianist goes on rehearsing scales. 

Professionalism “isn’t an individual characteristic, or a feeling”, says Sah. Instead, she would like to redefine it as “repeated behavioural practices that demonstrate a deep understanding of the concept”, backed by appropriate rules and codes. In that form, anyone can aspire to deep professionalism. 

“The law as a profession doesn’t give you some status or standing: you have to earn that,” the senior partner of another law firm told me. “We shy away from [the attitude] ‘It’s OK, we’re professionals’.” In fact, professionals who catch themselves saying or thinking anything similar should be on their guard. They may be in the ethical shallows and about to run aground.  

Swamy on Government Subsidies: NPA write-off is the biggest subsidy!

 

Aryan Khan and Bail?

 

Is Corruption An Obstacle to Economic Growth? - Economic History in Small Doses 1

 By Girish Menon* 

Corruption is indeed a big problem in developing countries. In fact, the consensus among the IMF led consortia is that corruption is the biggest obstacle to economic growth and development. This has led them to conclude that there is no point in giving aid to developing countries because this money will not reach the intended beneficiaries. Such reasoning has led to serious cuts in the aid programmes of the developed countries. However, is corruption an impediment to economic growth?

Corruption is a violation of the trust vested by its stakeholders in the holders of office in any organisation be it a government, a corporation, a trade union or even an NGO.

 Life would be simpler if corruption produced unambiguously negative economic consequences. But the reality is a lot messier.  In the last half century countries like Zaire under Mobutu, Haiti under Duvalier have had their economies wrecked by corruption. At the other extreme, countries like Finland, Sweden and Singapore have done well in a non corrupt environment. At the same time there are countries like China, Japan, Taiwan, Korea and to some extent India who were corrupt but have done well economically. How is it possible that corruption has such different economic consequences in different economies?

A bribe is a transfer of wealth from one person to another. It does not necessarily have negative effects on economic efficiency and growth. If the bribe-taker is investing that money in another domestic project that is as productive as the bribe-giver would have invested in, then the venality may have no effect on the economy in terms of efficiency or growth. The critical question then is what happens with the bribe money? If the recipient indulges in conspicuous consumption or moves it to a tax haven then the economic effects may be worse.

Corruption may also distort government regulation. If a pharmaceutical company supplying sub-standard drugs can continue its practice by bribing the relevant officials, there will be negative economic consequences. However, if the regulation was an ‘unnecessary’ one then corruption may actually increase economic efficiency. For example if all the paper work to start a business takes a year (say) and paying a bribe gets the entrepreneur the green light in a month, then isn’t corruption adding to economic efficiency?

So the consequences of corruption depend on which decisions the corrupt act affects, how the bribes are used by recipients and what would have been done with the money had there been no corruption. In India, it is rumoured that some of the bribe money makes its way back into the constituency of politicians, after a round trip to tax havens. And that is not necessarily a bad thing!

* Adapted and simplified by the author from Ha Joon Chang's Bad Samaritans - The Guilty Secrets of Rich Nations & The Threat to Global Prosperity

It's not just corruption. Entrance into elite US colleges is rigged in every way

An FBI sting revealed that wealthy parents are buying their children a place in top universities. But they’re not the only problem: the whole system is rigged writes Richard V Reeves in The Guardian 

 

‘Elite colleges are serving to reinforce class inequality, rather than reduce it.’ Photograph: Boston Globe/Boston Globe via Getty Images


Shock horror! Wealthy Americans are using their money to buy their children places at elite colleges. An FBI investigation, appropriately named Operation Varsity Blues, has exposed a $25m cash-for-admissions scandal. Coaches were allegedly bribed to declare candidates as athletic recruits; test administrators to change their scores, or allow someone else to take the test for them.

At the center of the cheating scheme was William “Rick” Singer, the founder of a for-profit college preparation business based in Newport Beach, California. Among the 33 parents caught in the FBI sting were Hollywood stars Lori Loughlin and Felicity Huffman. Loughlin starred in the series Full House. Huffman is famous for her role in Desperate Housewives; now she will be more famous as a desperate mom. And she’s not alone. The breathless anxiety among many affluent parents to get their kids into the very best colleges is a striking feature of upper-class American life.

Singer’s bribery scheme allegedly allowed parents to buy entrance for their offspring at some of the nation’s most prestigious colleges, including Yale, Georgetown University, Stanford University, UCLA, the University of San Diego, USC, University of Texas and Wake Forest.

FBI officers were at pains to point out that the colleges themselves are not being found liable; though nine athletic coaches were caught in the net.

“Following 10 months of investigation using sophisticated techniques, the FBI uncovered what we believe to be a rigged system,” John Bonavolonta, the FBI special agent in charge said, “robbing students all over the country of their right to a fair shot of getting into some of the most elite universities in this country”.

But here’s the thing: the whole system is “rigged” in favor of more affluent parents. It is true that the conversion of wealth into a desirable college seat was especially egregious in this case – to the extent that it was actually illegal. But there are countless ways that students are robbed of a “fair shot” if they are not lucky enough to be born to well-resourced, well-connected parents.

The difference between this illegal scheme and the legal ways in which money buys access is one of degree, not of kind. The mistake here was to do something illegal. Meanwhile, much of what goes on in college admissions many not be illegal, but it is immoral.

Take legacy preferences, for example. This boosts the admissions chances of the children of alumni; and for obvious reasons the alumni of elite colleges tend to be pretty affluent, especially if they marry each other. (They are also disproportionately white.) The acceptance rate for legacy applicants at Harvard, Yale, Princeton, Georgetown and Stanford is between two and three times higher than the general admission rate. If they don’t get in first time round, they might be asked to take a “gap year” and enter a year later instead, a loophole known as “Z-listing”. A Princeton study found that being a legacy applicant had the same effect as adding 160 SAT points – on the old scale up to 1600 – to a student’s application. Imagine if colleges gave that kind of admissions boost to lower-income kids?

As John W Anderson, the former co-director of college counseling at the Phillips Academy, an elite boarding school in Andover, Massachusetts, once admitted, of the students from his school who are Z-listed for Harvard, “a very, very, very high percent” are legacies. The Harvard Crimson estimates the proportion at around one in two.

Or how about donor preferences? Rather than bribing coaches, the wealthiest parents can just bribe – sorry, donate to – the college directly. In 2017, the Washington Post reported on the special treatment given to “VIP applicants” via an annual “watch list”. Applicants whose parents were big donors would have notes on their files reading “$500k. Must be on WL” (wait list). Even better, these donations are tax free!

As a general rule, the bigger the money the bigger the effect on admissions chances. Among elite aspirational alums, the question asked is “what’s the price?”. In other words, how much do you have to donate to get your child in?

Whatever the price is, those with the fattest wallets can obviously pay it. Peter Malkin graduated from Harvard Law School in 1958. He became a very wealthy real estate businessman, and huge donor. In 1985, the university’s indoor athletic facility was renamed the Malkin Athletic Center in his honor. All three of Malkin’s children went to Harvard. By 2009, five of his six college-age grandchildren had followed suit. (One brave boy dared to go to Stanford instead.)

How elite US schools give preference to wealthy and white 'legacy' applicants


Or how about Jared Kushner, Donald Trump’s son-in-law? Kushner was accepted into Harvard shortly after his father donated $2.5m. An official at Kushner’s high school said there was “no way anybody in the administrative office of the school thought he would, on the merits, get into Harvard. His GPA did not warrant it, his SAT scores did not warrant it.”

David E and Stacey Goel just gave $100m to Harvard. I’m going to go out on a limb here and say that their children probably have an excellent chance of Harvard admission.

Even those parents who are not in the wealthiest brackets, but are squarely in the upper middle class, can use their money to boost their kids’ chances, through tutors, SAT prep classes, athletic coaches. Students who apply early have better chances of admission, which favors more affluent families since early admission precedes financial aid decisions. Many colleges prefer students who have “shown an interest” in their college. How to show an interest? By visiting the campus – easy for those with money for flights and hotels, less so for those on modest or low incomes.

Small wonder that at elite colleges, including most of those targeted in the corruption scheme such as Yale, Duke, Stanford and Wake Forest, take more students from families in the top 1% of the income distribution than from those in the bottom 60% combined.

So hats off to FBI special agent Bonavolonta and his team for exposing the corruption admissions. But it is in fact simply the most visible sign of a much deeper problem with college admissions. Elite colleges are serving to reinforce class inequality, rather than reduce it. The opaque, complex, unfair admissions process is a big part of the problem. From an equality perspective, it is not just Singer and his clients who are at fault: it’s the system as a whole.

Britain is far more corrupt than we think

Mary Dejevsky in The Independent

Within Britain, there is a widespread view – seriously dented neither by the MPs’ expenses saga nor by the newspaper phone-hacking scandal – that this is not a corrupt country. It might not be quite as squeaky clean as Scandinavia, but it is nothing like – let’s see, who shall we offend? – Italy or Spain. As for Russia or China, well, we can strut the moral high ground – can’t we? – certain of our superiority.

Incorruptibility is part of our national self-image. But we flatter and deceive ourselves. Over the past few weeks, The Independent has exposed private investigators who routinely break the law, digging for dirt on behalf of commercial clients. The techniques – phone hacking and “blagging” – are the same as those for which journalists have been hauled before the courts and pilloried by public opinion.

If there seems to be a slight edge to our reports, how could there not be? On present evidence, law enforcers would appear to take a dimmer view of journalists applying these illegal methods, or buying them in, than it does of business people and lawyers who do the same. That, at least, was the message from the Serious Organised Crime Agency, which initially instructed MPs not to name the companies commissioning such services on the grounds that it could “undermine their financial viability” by “tainting them with… criminality”.  Yesterday, however, there was a change of heart and Soca supplied the Home Affairs Select Committee with a list of a list of 101 names of people and organisations who have hired private investigators. The committee’s chairman, Keith Vaz, is now deciding whether to publish them.

Strictly speaking, blagging – obtaining information by deceit – can succeed without a partner. The offence is all on one side: no money or favour changes hands. But this is not the only way in which information is obtained. As with journalists and the police or others who hold  sensitive information, it is now known that money or favours have changed hands. And in these cases, those who sell are as culpable as those who buy. There has to be a market for the transaction to work.

The sellers might not see themselves as corrupt, merely as individuals exploiting an opportunity, or enjoying a perk of the job. That such practices may not always have been recognised as corrupt does not make them less so. It just means we are more adept than some of our neighbours at not calling things by their proper names. A gift for euphemism is something else that defines our national character.

If journalists and private investigators were the only ones under investigation, and the only commodity changing hands was information, we might just be able to file it away and argue that Britain has a very limited and very specific corruption problem. But this is not true, either.  In banking, we have had the rigging of Libor, the key lending rate, by individual bank employees for personal gain. As corruption goes, this comes close to the top of any list because  greed compromised a major pillar of the financial system – in a global financial centre which was built largely on its word being its bond.

A few steps further down we have claims of corrupt behaviour by British companies abroad. Only last week accusations were made against employees of a British company in China, GlaxoSmithKline. According to the Chinese, other pharmaceutical firms are also in the frame – for allegedly bribing doctors to prescribe their products. It is not, of course, that paying backhanders, or “doing as the natives do”, was unheard of in the operations of UK companies outside Britain. But the Bribery Act of 2010 made it expressly illegal, and it comes to something when it is the Chinese authorities doing the exposing and British companies that find themselves in the dock. The reputational damage flows only one way.

Again, it might be just possible to winkle out a “British” exception and claim that this sort of corruption reflects the malign influence of “foreigners” rather than any home-grown proclivity. But such complacency is challenged by the latest “global corruption barometer” compiled by Transparency International. Published earlier this month, its findings show not only that the perception of corruption in Britain has increased markedly over the past two years – not surprising, giving the prominence of the phone-hacking scandal – but that in the same period one person in 20 claims to have paid a bribe to a public official for services as diverse as health, justice and education.

A first instinct is, naturally, to question these conclusions. A second would be to surmise that those who admitted paying a bribe were at the margins – newcomers, perhaps or illegal migrants. But that would be too easy an escape. As with journalists and police, corruption is a transaction. There must be takers as well as givers. But I find it credible, too, because of a mini-brush of my own. When posted abroad more than 10 years ago, I checked that my husband, if he became non-resident, would have to pay privately for his (expensive) Parkinson’s medicine. The doctor, a locum, said yes, that was so. Then he paused, and – as I read it – implied, no more, that a deal could be struck. I left, but a possibility was there. 

And this is where corruption begins. Not with GSK in China, but with crimes left unpunished, names left unnamed and the prosaic minutiae of daily needs debased. If the Serious Organised Crime Agency is telling MPs – our representatives – what we the public may and may not know for national commercial reasons, the UK is on a slipperly slope indeed.

Upper caste scams v Lower caste scams

How Some Gather Silver In The Fog

There are two types of scam, upper caste and lower caste. The latter kind is more visible.

AAKAR PATEL

When a Balwa orchestrates a scam, you don’t know how much money was made. Even the Comptroller & Auditor General’s (CAG) accountants are confused about how to value the loss to the exchequer. The payoff is legally offered in the form of a Rs 200 crore loan to the Karunanidhi family. Is it a bribe? Tough to say. The Balwas are from the Gujarati mercantile caste, mostly Muslim, called Cheliyas. They are superb businessmen and the equal of Hindu merchant castes in running hotels and managing retail.

When a Vadra commits a scam, one isn’t even sure whether it was actually a scam, though the numbers are clear on the balancesheet. People are not advanced money without security to get into the construction business. What was the payoff for? Nobody really knows. Vadras, or Vadheras, are Khatris, the great Punjabi trading caste which dominates business in Delhi.

When an Adani (a Jain Baniya) is arrested in a scam, the motive is not to be found. The unbelievable allegation is that he evaded Rs 80 lakh worth of customs duty for a company worth Rs 26,000 crore. When an Ambani (a Modh Vaniya) does a scam, even the victim is not to be found. Was the state duped of billions of dollars in natural resources? Apparently not.

When a Jindal (Baniya) does a scam, he isn’t accused of impropriety, though his own party has allotted to him, without auction, thousands of crores in mineral deposits. When a Goel (Aggarwal Baniya) asks for Rs 100 crore as blackmail, he can coolly deflect it though the evidence is on tape. Even his employees, caught red-handed, keep their jobs.

If scams by SC/STs or OBCs tend to stand out, it’s because the transactions are pretty simple, the exchange open.

When a Dalit Mayawati does a scam, she hands over land to developers near the Taj Mahal and is caught. When a tribal Koda does a scam, he hands over land to miners and is caught. He loses his chief ministership and goes to jail. When a peasant Lingayat does a scam, he gives over land to his sons and is caught. He loses his chief ministership and goes to jail. When a peasant Reddy does a scam, he hands over land and his son goes to jail. When a peasant Yadav does a scam, he dips into money for cattle fodder and is caught. He loses chief ministership and goes to jail.

There is absolutely nothing wrong in Ashis Nandy’s observation about caste and corruption. It is accurate and obvious, unless one is blind to what is around. Nandy said, “...the fact is that most of the corrupt come from the OBC, the Scheduled Castes and now increasingly Scheduled Tribes, and as long as it was the case, the Indian Republic would survive”. He gave this example. “The state of least corruption is West Bengal. In the last 100 years, nobody from the backward classes and the SC and ST groups have come anywhere near power in West Bengal. It is an absolutely clean state.”

What he meant is obvious enough, but subtlely is not our strong suit. We are all corrupt, and this is the true meaning of Nandy’s remarks, but some castes are seen as more corrupt. Why is this so? The fact is that SC/ST and OBC scams tend to stand out as scams to us because of the nature of the transaction.

Upper-caste scams are different from lower-caste scams. The former tend to be complex, less likely to provoke anger, and therefore, more easily forgotten. Scams involving the lower castes tend to be straightforward. No fancy paperwork and an uncomplicated payoff. Cash is to be delivered in India, not Switzerland.

There is a reason for this. Those who are familiar with the process of democracy in India will tell you that over 50 per cent of the money a politician spends on elections is given to the voter. Salman Rushdie accurately defined Indian democracy as “one man, one bribe”. My speculation is that SC/ST corruption is actually more democratic, though it is seen by the middle-class with more revulsion.

What angers middle-class Indians—they will be surprised to know this—is not corruption. It is actually bribery, which is the exchange of money for favour. The correct word for this is rishwatkhori, not bhrashtachar. What is corrupted (made ‘bhrasht’) by this act of bribery is the office. It is the office, and the edifice of the state, that is corrupted. But this isn’t something that we are particularly upset by. If we were, the corruption by the upper caste’s scams would anger us more than the bribery of the lower caste scams.

But it doesn’t. What offends us is the making of money. And what really upsets us is that “those people”, and not we, are the ones making it.

Why Russia locks up so many entrepreneurs

By Rebecca Kesby

BBC World Service

In the last 10 years Russia has imprisoned nearly three million entrepreneurs, many unjustly. This statistic comes from a new ombudsman for business rights, Boris Titov, who says it is "hard to find another social group persecuted on such a large scale". How has this come about?

Businessmen have complained for years that people have been able to frame commercial rivals - by paying corrupt police officers to plant evidence and make arrests to order. But only now are they being taken seriously.

More and more well-heeled entrepreneurs have been joining, even leading street protests in recent months, with reform of the courts one of their main demands.

Perhaps those protests influenced President Putin's decision last month to create a post of "ombudsman for business rights" - but he might also have been persuaded by the $84bn in capital that left Russia last year, a record amount. Russians are investing overseas because they fear for the safety of their businesses at home.

"The economy will be completely destroyed," says entrepreneur Vladimir Perevezin. "Because businessmen are not safe in our country - anyone could be sent to jail."

Perevezin knows what it's like. He was imprisoned for more than seven years after being framed, he says, for money laundering.

His friend Valery Gaiduk was also imprisoned for three years, convicted of fraud. "I'm 100% sure that a rival paid to have me arrested," he says. He had been co-owner of a successful dental practice, but he claims police officers took a $500,000 bribe to frame him.

At the root of the problem is the criminal justice system itself. Statistically, once officially accused of a crime in Russia, there is little chance of proving your innocence. Less than 1% of all criminal cases that make it to court result in a not guilty verdict or acquittal - and that figure comes from Prime Minister Dmitry Medvedev.

Critics say that in practice, if not in theory, courts operate on an assumption of guilt. The prosecution takes the word of the police, and the judge takes the word of the prosecution - no matter how unconvincing the evidence may be.

"If a person ends up in a police cell as a suspect - he will find himself in court no matter what, and the court will find him guilty. That's guaranteed," says Marat Khisamutdinov, a former police officer.

It's not surprising then that, off the record, many Muscovites are prepared to admit paying bribes to police officers when arrested - even if they're innocent.

"It's best to solve the problem as soon as possible, at the police station," Khisamutdinov says.

"You only really need to pay the lowest arresting police officers. The rest of the machine works automatically."

It's much more expensive, by all accounts, to buy your release once the wheels of justice have begun to turn. Valery Gaiduk says he was offered freedom for $300,000, but did not pay as he was unsure the deal would be honoured.

One of the few judges prepared to talk openly about the failings of Russian courts is Sergei Zlobin, who resigned as head of the Volgograd regional criminal board four months ago. His portrait of life as a modern Russian judge is extraordinary.

"Often there are huge gaps in the evidence," Zlobin says.

"Investigators make serious mistakes, but the system is such that even these mistakes are used as evidence against the defendant, and the guilty verdict must be issued anyway - otherwise the judge will face problems."

Zlobin says that in the thousands of cases he heard in the 15 years he was a judge, he only ever issued seven not guilty verdicts - and five of them were later overturned. Issuing a not guilty verdict, he says, was not only a "waste of time" it was risky.

Judges come under all kinds of pressure from the Federal Security Services, the prosecutors and the chairman of the court not to acquit defendants, he says, including blackmail. The result? Many innocent people are locked up.

Zlobin and his family have received threats and abusive messages since his resignation. He knows it's risky to speak openly, but says his conscience compels him to do so.

"Sometimes I just had to follow the instructions from above. Now, with hindsight, I understand that what I was doing was wrong, and moreover, it was illegal... and I deeply regret it."

Several judges and lawyers told me that the system acts to protect itself, rather than the letter of the law.

Asked if he had ever accepted a bribe to arrest someone on false charges, former police officer Marat Khisamutdinov refuses to answer.

Would an officer would feel guilty about framing an innocent person? "No" he answered. "You don't know him, you'll never see him again, and you get a financial reward - so why do you care?"

The business community will be watching Boris Titov's next move very closely.

He has hinted at a possible amnesty for prisoners serving time for "economic crimes", if it is their first offence.

This could affect more than 100,000 businessmen.

It would not, however, have any implications for the most famous jailed businessmen - Mikhail Khodorkovsky (once Russia's richest man) and his partner Platon Lebedev - as both have been convicted more than once.

Rebecca Kesby's Assignment, Russia: Waiting for Justice, will be broadcast on the BBC World Service on Thursday 5 July. Download a podcast or browse the Assignment archive.

WikiLeaks publishes STRATFOR intelligence emails

Ellen Branaghin The Independent

Monday, 27 February 2012

Whistleblowing website WikiLeaks has started to publish more than five million confidential emails from a global intelligence company.

The emails, dated from July 2004 and late December 2011, are said to reveal the "inner workings" of US-based company Stratfor.
The group said the emails show Stratfor's "web of informers, pay-off structure, payment-laundering techniques and psychological methods".
WikiLeaks claims the company "fronts as an intelligence publisher", but provides confidential intelligence services to large corporations such as Bhopal's Dow Chemical Co, Lockheed Martin, Northrop Grumman, Raytheon and government agencies, including the US Department of Homeland Security, the US Marines and the US Defense Intelligence Agency.
At a press conference in London today, WikiLeaks founder Julian Assange would not reveal where the emails had come from.
"We are a source protection organisation," he said.
"As a source protection organisation and simply as a media organisation we don't discuss or speculate on sourcing."
The documents are believed to have come from loose-knit hacker group Anonymous, which claimed to have stolen information from the firm in December.
WikiLeaks said the material contains privileged information about the US government's attacks against Julian Assange and WikiLeaks and Stratfor's own attempts to subvert WikiLeaks. The group said there are more than 4,000 emails mentioning WikiLeaks or Julian Assange.
But today Mr Assange said more information would emerge in the near future: "We have looked most closely at the actions against us, the bigger story is likely to come out of this probably in three or four days' time."
Mr Assange said: "Today WikiLeaks started releasing over 5 million emails from private intelligence firm Stratfor based in Texas, the United States.
"Together with 25 other media partners from around the world we have been investigating the activities of this company for some months.
"And what we have discovered is a company that is a private intelligence Enron.
"On the surface it presents as if it's a media organisation providing a private subscription intelligence newsletter.
"But underneath it is running paid informants networks, laundering those payments through the Bahamas, and through Switzerland, through private credit cards.
"It is monitoring Bhopal activists for Dow Chemicals, Peta activities for Coca-Cola.
"It is engaged in a seedy business."
Mr Assange said Stratfor was using the secret intelligence it had paid for to invest in a wide range of "geopolitical financial instruments".
"This makes News of the World look like kindergarten," he added.
Mr Assange said the exposure of the emails was part of a long history WikiLeaks has had in exposing the activities of secret organisations.
"The activities of intelligence organisations increasingly are privatised and once privatised they are taken out of the realm of the Freedom of Information Act, of US military law and so they are often used by governments who want to conceal particular activity.
"But Stratfor is simply out of control.
"Even as a private intelligence organisation it is being completely hopeless in protecting the identity of its informants, or even providing accurate information. It is engaged in internal deals with a financial investment firm that it is setting up.
"It really is some type of Enron where there is not even proper corporate control within the organisation."
WikiLeaks said it had worked with 25 media organisations to investigate and information would be released over the coming weeks.
The group said the emails expose a "revolving door" in private intelligence companies in the US, claiming Government and diplomatic sources give Stratfor advance knowledge of global politics and events in exchange for money.
"The Global Intelligence Files exposes how Stratfor has recruited a global network of informants who are paid via Swiss banks accounts and pre-paid credit cards," the group said.
"Stratfor has a mix of covert and overt informants, which includes government employees, embassy staff and journalists around the world.
"The material shows how a private intelligence agency works, and how they target individuals for their corporate and government clients."
WikiLeaks accused Stratfor of "routine use of secret cash bribes to get information from insiders", and claims an email from chief executive George Friedman in August 2011 suggested his concern over its legality.
In it, he wrote: "We are retaining a law firm to create a policy for Stratfor on the Foreign Corrupt Practices Act.
"I don't plan to do the perp walk and I don't want anyone here doing it either."
The group said: "Like WikiLeaks' diplomatic cables, much of the significance of the emails will be revealed over the coming weeks, as our coalition and the public search through them and discover connections."
It said Stratfor did secret deals with dozens of media organisations and journalists - from Reuters to the Kiev Post.
"While it is acceptable for journalists to swap information or be paid by other media organisations, because Stratfor is a private intelligence organisation that services governments and private clients these relationships are corrupt or corrupting."
The group said it has also obtained Stratfor's list of informants and, in many cases, records of its payoffs.
PA

So you thought Britain wasn't corrupt?

Mary Dejevsky:

Two of the most deep-rooted maladies of British society are freebies among friends and jobs for the boys

Friday, 22 July 2011 The Independent

Anyone who had expected to drowse through the Home Secretary's Commons statement on the Metropolitan Police might have awoken with a start when she began with "allegations about police corruption". It was the flat, almost casual, way in which Theresa May appeared to accept at least the possibility, that surprised and the use of the actual words "police corruption". She went on to announce a review of "instances of undue influence, inappropriate contractual arrangements and other abuses of power in police relationships..."

The reason this bald catalogue shocks is that Britain has long projected an image of itself as a paragon of good governance and the rule of law, to the point where experts on such matters earn a good living advising other countries how to emulate our standards. It also happens to be an image that the vast majority of its citizens share. We regard ourselves as mercifully free of the sort of corruption that blights the lives of, say, Nigerians, Egyptians or Russians, and a cut above most southern Europeans.

That may be how we see ourselves, but it is not quite how others see us. Transparency International, an independent organisation which monitors this sort of thing, places the UK 20th in its latest (2010) corruption perception index. Overall, this may not look so bad – 178 countries are listed. Look closer, though, and you will see that the UK comes well below all the Nordic countries, below Luxembourg, Ireland and Germany, and just below the small Gulf state of Qatar. It is only marginally ahead of the United States, France and Spain. Is this where Britain should be – in 20th place, and falling?

Corruption, of course, takes many forms. In some countries, bribery is so prevalent as to be tantamount to a tax. Indeed, a theory has recently been advanced that this is how it should be regarded and that it is perhaps not so reprehensible after all. In others, an unofficial tariff – ranging from a box of chocolates to a luxury holiday – dictates access to the best educational establishments, the best hospitals, the best flats. In yet other countries which would not generally be regarded as particularly corrupt, contributions to political parties constitute a perennially murky area in which even otherwise distinguished politicians have come to grief, such as the former German chancellor Helmut Kohl. You might argue that the US system of lobbying is a form of legalised corruption.

Generally, these are not ills that afflict the UK. If you live here, you can probably be fairly confident that you will not have to offer teachers a backhander for admitting your child or ensuring a decent grade. (Although I have heard tell of quite lavish gifts offered.) You will not have to pay a doctor for decent NHS treatment or a fast track up the transplant waiting list. (Although, again, there is apocrypha that hints at exceptions, and it was once intimated to me that a consideration might keep my husband classified as a UK resident when we were living abroad, so that he would still qualify for expensive drugs on the NHS.)

And you probably won't find a speed cop or parking warden suggesting that a small transaction "between us" would "fix it" before he writes out the ticket, or a frontline immigration officer nodding through someone with some crisp banknotes, but no visa, in his passport. Or election officers stuffing ballot-boxes after the polls have closed.

But you will find ways in which Britain falls very far short of Scandinavian-level probity; areas where complacency has meant a blind eye is turned to abuses, and grey zones where transactions take place that are not actually illegal, but which would – and should – embarrass one or both parties if they became public.
Several such instances emerged earlier this week when the Commons Home Affairs Committee questioned the Commissioner of the Metropolitan Police, Sir Paul Stephenson, and the Assistant Commissioner, John Yates – both of whom had just resigned – as well as the head of public affairs, Dick Fedorcio. The most blatant was Sir Paul's acceptance of hospitality from Champney's health farm.

The commissioner may have been recovering from very serious illness (as he was), he may have declared the gift in the register as required (which he said he did on his return to work), and the owner of Champney's may have been a family friend (though it is unclear how close). But the value of this gift – around half the average Briton's annual pre-tax salary – and Sir Paul's apparent inability to understand that accepting it sat uneasily with his position as the country's most senior police officer on a salary of more than £250,000, suggests a blind spot. It left the impression that there was one law, and one set of subsidised living standards, for the well connected, and another for everyone else.

Something similar applied when it came to the hiring of Neil Wallis, former deputy editor of the News of the World, as a media consultant. Despite some close questioning – notably from two sparky new female Tory MPs, Nicola Blackwood and Louise Mensch – there was precious little clarity about how Wallis actually got the job. Between the lines, however, it could be deduced that there was no open advertisement, no standard recruitment procedure, no formal interview and no public disclosure of the appointment. This was a public-sector, tax-payer funded position, yet contacts and networks appear to have been all.

What we have here are two of the most deep-rooted maladies of British society: freebies among friends and jobs for the boys. And there will be many who shrug and say that this is just how the country works. Yet these ingrained ways of doing things are part of the reason why the UK comes below Finland, Australia and Canada in TI's corruption perception index. They are also a reason, along with our segregated schools, why social mobility in Britain is so relatively poor. Advantage compounds advantage.

At root, much of the disparities come down to information and the way so much is still kept from "prying" eyes. The UK-based American journalist Heather Brooke, who has made opening up what she calls Britain's "information cartel" something of a personal crusade and whose work led to the publication of MPs' expenses, notes that records available to US journalists as a matter of course are "off-limits" here, where access to information "depends on one's wealth, power or privilege". She is right – yet the responses, when she argues this, are not all approving. Some accept that it was ever thus; others accuse her of poking her nose into places it does not belong.

Nor has the Freedom of Information Act so far brought the transformation it should have done. Quite basic information still has to be applied for. This government's efforts to open up details of department and local council spending are laudable, but there has hardly been a rush to comply. Until our patronage system is tackled, British boasts of incorruptibility will remain boasts – discredited by our 20th place on the global corruption index and our continuing fall, as those below us move to clean up their act.
m.dejevsky@independent.co.uk

Hacking scandal: is this Britain's Watergate?

 

By Oliver Wright, Ian Burrell, Martin Hickman, Cahal Milmo and Andrew Grice

Saturday, 9 July 2011

David Cameron was forced to cut Rupert Murdoch and his newspaper empire loose from the heart of government yesterday as he tried to deflect public anger about his failure to tackle the phone-hacking scandal.
Mr Cameron turned on Mr Murdoch's son James, saying there were questions "that need to be answered" about his role during the phone-hacking cover-up, and criticising him for not accepting the resignation of News International's chief executive Rebekah Brooks.

He also admitted that his desire to win support from the company's newspapers had led him to turn "a blind eye" as evidence grew of widespread illegality at the News of the World.

With a newspaper closed, five arrests and more to follow, 4,000 possible victims, a media empire shaken to its foundations and the Prime Minister reeling, the escalating scandal has become a controversy comparable to the US Watergate saga, with ramifications for Downing Street, the media and police.

Last night the media regulator Ofcom announced it would contact police about the conduct of Mr Murdoch's empire in covering up phone-hacking allegations, to determine whether it was a "fit and proper" owner of the broadcaster BSkyB, which Mr Murdoch is attempting to buy outright. He is due to fly into London today to deal with the crisis, according to reports. Shares in the broadcaster fell by eight per cent.
 
In a day of further dramatic developments it emerged that:
 
*Police are investigating allegations that a News International (NI) executive deleted millions of emails from an internal archive, in an apparent attempt to obstruct inquiries into phone hacking.
 
*Andy Coulson was arrested on suspicion of bribing police officers and conspiracy to phone hack, and Clive Goodman, the NOTW's former royal correspondent, was held in a dawn raid on suspicion of bribing police officers. Both were bailed. A 63-year-old man, thought to be a private investigator, was also arrested in Surrey.
 
*Mr Cameron's most senior officials were warned before the last election about connections between Mr Coulson and Jonathan Rees, a private investigator paid up to £150,000 a year to illegally trawl for personal information. But Mr Cameron appointed Mr Coulson as his director of communications.
 
*A judge-led public inquiry will take place to investigate phone hacking. Rupert Murdoch and James Murdoch are prepared to give evidence on phone hacking under oath.
 
*Ms Brooks was stripped of control of NI's internal investigation and faced calls for her resignation from the Deputy Prime Minister Nick Clegg.
 
*Wapping sources warned of worse phone-hacking revelations to come.

At a Downing Street press conference, Mr Cameron defended his decision to appoint Mr Coulson but admitted his relationship with senior members of the Murdoch empire had been too close.

"The deeper truth is this... because party leaders were so keen to win the support of newspapers we turned a blind eye to the need to sort this issue, get on top of the bad practices, to change the way our newspapers are regulated," he said. "I want to deal with it."

Mr Cameron said he now thought it was wrong to keep Ms Brooks at the company: "It has been reported that she offered her resignation over this and in this situation, I would have taken it."

Mr Cameron was also asked whether James Murdoch remained a fit and proper person to run a large company, following his admission yesterday that he personally approved out-of-court payments in a way which he now accepted was wrong. The Prime Minister replied: "I read the statement yesterday. I think it raises lots of questions that need to be answered and these processes that are under way are going to have to answer those questions."

Mr Cameron announced two inquires: one to deal with phone hacking and the failure of the police to properly investigate it, and another into press regulation. He said it was clear that the Press Complaints Commission had failed and the second inquiry would bringing forward proposals for an independent body.

Asked what enquiries he had made before employing Andy Coulson, the Prime Minister said: "Obviously I sought assurances, I received assurances. I commissioned a company to do a basic background check."

But the Labour leader, Ed Miliband, said Mr Cameron was still failing to restore confidence in the Government's handling of the scandal: "This is a Prime Minister who clearly still doesn't get it. He is ploughing on regardless on BSkyB. He failed to apologise for the catastrophic mistake of bringing Andy Coulson into the heart of government.

"His wholly unconvincing answers of what he knew and when he knew it about Mr Coulson's activities undermine his ability to lead the change Britain needs."

Asked if Mrs Brooks should consider her position, Mr Clegg told The Independent: "Yes. The whole senior management has to ask how it could have presided over this without appearing to know what was going on. Someone somewhere higher up the food chain needs to be held to account. You can't just ask journalists, secretaries, photographers and low-paid office workers to carry the can for a failure, on James Murdoch's own admission, of corporate governance."
 
Watergate Parallels
 
The Watergate and phone-hacking scandals had small beginnings – a break-in at a hotel, and a single "rogue" reporter and private detective. The News of the World scandal is not just about phone hacking. It is also about statements made to Parliament, personally to David Cameron, and in a court of law which – as James Murdoch has now admitted – were not true. As with Watergate, which brought down Richard Nixon's presidency, the cover-up could have bigger implications than the original offence.