Corruption: time to act

We feel for the two billions human beings who are reduced to a life of extreme poverty with absolutely no hope of improvement. What if we were the main purveyors of their misery, the organisers of the silent holocaust of the third world?

A generation and a half ago, some of our compatriots actively helped set up the worst genocide in Western Europe, while the silent majority looked the other way. “We did not know, and we could have done nothing anyway” is the most common excuse. Not so in Denmark, where the whole population displayed the yellow star, effectively preventing the Germans to identify and arrest Jews, or in the area around the French town of Le Chambon-sur-Lignon where a few hundred locals hid and saved thousands of Jews. They acted under the inspired leadership of their pastor who, as a matter of fact, did know what was going on in Germany, because he paid attention. A lot was known or could be guessed, and a lot could be done.

Today, corruption has been exposed in a compelling way as a root cause of world instability and poverty, but we tend to look the other way. In 2005, a book called Capitalism’s Achilles Heel was published by Raymond W. Baker, a consultant with the CSIS and the Brookings Institution. Resting his case on an overwhelming documentation, he proved that the inflow of corruption money from poor countries through tax havens into our first world’s banks is tenfold the amount of development aid. Dozens of well-known heads of state have brazenly stolen amounts well into the billion-dollar range, like Mobutu who used to get bags of money directly from the central bank’s chests, or Suharto who siphoned off anything including funds from charities. Companies do well too, like Gazprom which diverted at one point 100% of the payments of certain gas delivery contracts to offshore accounts, or like numerous major U.S. multinationals which pay no corporate tax whatsoever neither in the U.S. nor elsewhere.

Last year, former judge Eva Joly, who had successfully led the Elf case, in which members of the French nomenklatura were for the first time convicted of embezzlement, published a best-seller in which she names top managers condemned in the Elf case who still quietly enjoy their stolen money, their convictions suspended and apparently forgotten. She also questions the role of French companies in Africa.

This year, Jean Merckaert and Antoine Dulin, who work with CCFD, a Catholic charitable trust against hunger, published a damning report on “ill-acquired money: the fortune of dictators and western leniency”, listing the belongings bought with dirty money and their owners. Capitalising on their research, a group of charities denounced the role of tax havens: “They make it hard to locate stolen assets, because of banking secrecy and of dummy corporation, trust, foundations, etc. which shield the real owner. They encourage the laundering of stolen money. They allow the quick transfer of funds to places in which justice has no access… However, tax havens only exist with the agreement of big international financial markets. Half of worldwide offshore territories belong to the Commonwealth; the State of Delaware in the United States can be defined as a tax and legal haven; Europe gives shelter to Luxembourg, Switzerland and Lichtenstein, and France tolerates two of the worst offshore centres in the world, Monaco and Andorra.”

We start to feel the rub even more when Raymond Baker identifies the promoters of this underground economy. They turn out to be large companies from G8 countries. In particular, big banks are so engrossed in their ferocious competition that they are ready to deliver any service needed to erase the origins of any kind of funds, as long as they lay their hands on these assets. Both in Europe and in the U.S.A. they fought with utmost energy to avoid new accountability rules when efforts were being made to stop dirty money from being used by international terrorists, no matter how much that favours international crime.

So, which percentage of our national income do we accept to derive from drug trafficking, prostitution, human trafficking, racketeering, exploitation of human misery, money transfer from the poorer to the richer? Are we ready to sell off our principles, to trade our souls against more riches? If no, corruption and corrupt practices must be fought; that includes specific actions: setting limits to banking secrecy, to judicial impunity, to laws allowing the handling of money earned through crimes committed abroad. Multinationals need to be compelled to publish their tax records for every country where they operate. Governments, international institutions, the World Bank, universities and business schools need to join forces and take action.

It may be far reaching. The facts gathered in the fight against corruption show that the dominant philosophy in business still counts only two principles: that everything can be reduced to econometrics, and that everything that serves the economic growth of the company is good, regardless of legal or human consequences. This cynical capitalism is at heart incompatible with human rights and human dignity, core values of our democratic societies’ laws and – whenever applicable - religious beliefs. It is the same type of double standards that brought about Nazism and the extermination camps.

The question is whether we want to act, this time.