Financial Transparency Coalition

Good morning.

Thank you for coming to this launch of my new book. Most particular thanks to Raymond Baker and his colleagues at Global Financial Integrity for organizing and hosting this event. Raymond is one of the heroes of this book. His vision, his skill and his dynamism have made and continue to make an enormous contribution to public understanding of illicit financial flows. From that understanding springs action to reduce those flows – an absolutely vital requirement to curb corruption.

My book is dedicated to friends and colleagues in two organizations that I have had the privilege to have worked with from even before their establishment – Transparency International and the Partnership for Transparency Fund.

Their remarkable achievements in many very difficult countries form part of the argument that is made in this book that leads to the conclusion that we can win this war on corruption. Today, our focus in large measure is on illicit financial flows, but first permit me to spend a few minutes discussing the broad context in which I place this issue in my book. I speak to you today with mixed emotions: anger, passion and joy.

Let me start with anger. A couple of years ago I was at an exclusive dinner of the chairmen of the largest banks in Latin America that convened in Mexico City. The speaker – see chapter 16 –was Nobel laureate Mario Vargas Llosa who decided to the surprise of the bankers to focus his remarks on corruption. He declared that complacency about the abuse of public office for private gain – corruption – is one of the gravest problems facing the region. He is absolutely right.

Let me shake you here today out of your complacency. Too many people look at bad governance as an academic problem – they write about it but do not worry enough about whether
the solutions they advocate are accepted. Too many in this town work in development agencies and they spend a great deal of time on good governance and corruption and they fail to ask themselves why the tens of billions of dollars that their agencies are spending are not reaching the desired objectives – they are satisfied to keep pumping out the cash!

Too many officials in this city and too many people in Western money centers, be they officials or bankers, are complacent about the total failure to block the deposit of stolen cash in major banks, to use shell companies and offshore banking centers to hide their stolen funds, just as they are doing very little to ensure such funds, even when details are known, are repatriated to their rightful owners.

Too many journalists write about corruption as if it is just another story and they fail to ask the really tough questions of top officials and bankers. Last night in the presidential debate there was not a single question on the topic despite the fact that a recent Gallup poll showed that Americans are now more concerned about government corruption in this country than any other issue, except job creation – yes more concerned about corruption than control of the budget, or Medicare or terrorism. But it was never mentioned in the debate last night.

You will see in my book that I am angry about the villains who abuse their government power to steal and to extort and create massive poverty and human rights abuses as a result:
villains in Afghanistan and Iraq who have stolen billions of dollars of US taxpayer cash; villains in scores of corporations who have paid bribes to rig contracts and undermine free enterprise; villains whose corruption and illicit financial operations fuel terrorism and add to international insecurity.

I highlight the villainy, describe the problems and offer a range of key policy solutions. But, there is passion in my book to match the anger and, like the underlying emotion of
anger; my passion is described forcefully and factually. I am passionate about the victims – for every act of corruption there is a victim. While many of the settlements of FCPA cases in this country do not mention the victims, let there be no doubt that the bribes that have been paid by corporations have created great injury to vast numbers of innocent people.

Let us never forget the children who have been denied education, the women who have been denied healthcare, and the families who have been denied sanitation – all because of the
corruption of the bribe-payers and the bribe-takers. Let us never forget the officials who have taken bribes to turn a blind eye to the villains who profit from sex trafficking, who profit from counterfeiting products, who profit from banking stolen cash. Let us never forget that very small bribes were paid by terrorists at a Moscow airport a few years ago so that bombs that killed many people could pass through security checks. If you want to know more – read my book.

But my passion is also evident when it comes to talking about the heroes – first and foremost the civil society activists, the public prosecutors and the investigative journalists in very
dangerous and difficult countries, from Russia to Zimbabwe, who every day take enormous personal risks to speak truth to power. Indeed, those heroes by their thousands who risked the brutal guns of the security forces in Tunisia and in Egypt in January 2011 to go into the streets and the town squares in the name of their dignity, their self-respect and against illegitimate corrupt governments. And the heroes who are uncovering corruption and making acts of graft better known to more people than ever before. And, of course, the heroes who use the Internet now and all kinds of social media to transform the fight against corruption from one of discussions among elites to vast mass public campaigns and movements.

My heroes are people like José Ugaz in Peru who I asked to review the manuscript of my book and who did, but who told me at first he was otherwise occupied as a bomb had just been found under his car. My heroes are people like Elena Panfilova, who also reviewed the manuscript and also wrote a wonderful endorsement of the book, who is watched and followed and has her computer hacked, yet continues to lead Transparency International Russia.

Finally, I am very happy and this comes through in this book as well. I am happy about all the successes of the heroes and of the many others, from Hilary Clinton to Raymond Baker who have done so much, who do so much, to strengthen the anti-corruption cause. Just consider how far we have travelled from the fall of the Berlin Wall through the rise of the Arab Spring:

20 years ago there was no international civil society movement dedicated to fighting corruption when a bunch of us sat down to found Transparency International – today TI
has a 100 national chapters, there are hundreds of NGOs across the world engaged in fighting corruption, PTF has provided over 200 grants to quite a number of these NGOs.

20 years ago there were hardly any academics in this field, now 5,000 people subscribe to TI’s research network.

20 years ago there was not a single anti-corruption international convention or a single official multilateral agency that was willing to discuss corruption and adopt anticorruption as a priority – today we have an array of conventions, a host of new national laws and the OECD, World Bank, United Nations, even G20 summits, are all on the anticorruption battleship.

20 years ago we did not have the Internet and mass e-mail and social media and the tools to disseminate anti-corruption news, or organizations like Global Witness and ProPublica
and Global Integrity to find the news and spread the word.

A paradigm shift is under way from broad resignation and acceptance of corruption to recognizing that the fight against corruption can and will produce substantive victories in the
immediate years ahead. The climb to the summit will continue, and its tempo will accelerate. We have reached base camp, there is an Everest ahead for us to mount – but we shall overcome. And, in this context, we need to understand what a central role the battle against illicit financial flows has to play.

Ladies and gentlemen, there is a great deal that has to be done on this front. My book makes detailed proposals and the panel here is far more expert than I on what has to be done.
But, at this point let me just make one blunt point, which takes me back to anger once more:

The Group of 20 summits over the last two years have approved anti-corruption action plans that highlight a number of very important things that need to be done on illicit financial
flows. They speak to closing the offshore illicit financial centers, strengthening enforcement of rank Vogl, Waging War on Corruption 4 laws, making meaningful know your customer rules at banks, enhancing the effective repatriation of stolen assets.

Some of our panelists may tell you that there is some progress on this agenda. They may suggest that official institutions are making this a big priority. But, the harsh truth is that official rhetoric runs far, far ahead of actual enforcement and implementation. The official organizations that should be bold are too diplomatic; they should be tough; but they constantly seek compromise; they should name names, but they like to talk in generalities.

Yes, there are some prosecutions – but name me one top banker who has gone to prison as his bank has paid big fines for laundering cash? Name me one chairman or CEO of a major bank found to have engaged in illicit financial flows who has lost his job – just one? Explain to me why the Mubarak family still has assets at its disposal in the UK? Explain to me why the Swiss authorities only act to freeze the massive assets in their banks stolen by corrupt politicians once those politicians have been forcefully removed from office? Explain to me why the Abacha family of Nigeria was allowed to keep a considerable portion of the cash that former president Abacha stole? Explain to me how vastly wealthy individuals from many countries whose business interests are a total mystery are able to buy the absolutely most expensive property in London, New York, Paris with no questions being asked about how they got their cash? I have been to Athens several times in the last couple of years and seen the shuttered shops and spoken with people who tell me of huge human misery and I read about how Greeks are among the largest group of investors in the last couple of years in the most expensive residential areas of London and I ask – who is turning a blind eye to this criminality?

I could continue. Raymond Baker has the list of all the things that need to be done and GFI has published the list. But action on the list by officials across the world is woefully slow.
The heroes of my book, joined by rising numbers of ordinary people, are not sitting still. They are waging war on corruption. They have told the world in the Arab Spring and beyond
that, as James Baldwin said, “The people that once walked in darkness are no longer prepared to do so.”

Those who are fighting today for freedom, for justice, for transparency, for government accountability – those who are fighting for the dignity of the individual and for self-respect and against thuggish government officials and politicians who coerce and extort, these people ladies and gentlemen, are assuredly on the right side of history.

Thank you.