OFFICIALS HIDING ILL-GOTTEN GAINS UNDERMINE CORRUPTION FIGHT – TI

Efforts to end graft will be undermined as long as corrupt officials are able to hide their ill-gotten gains in other countries, a global watchdog said yesterday as it released its annual rankings.

Transparency International said countries with limited public sector corruption could help stop it elsewhere by doing more to prevent money laundering and the creation of secret companies.

More than two-thirds of the 175 countries TI surveyed performed poorly, scoring less than 50 per cent on its 2014 Corruption Perceptions Index.

The index, which is based on perceived levels of public sector corruption for which scores are given by business people and country experts, rates countries from zero to 100 per cent, zero being the most corrupt.

It measures perceptions of graft rather than actual levels, given the secrecy surrounding most corrupt dealings.

José Ugaz, Chairman of the Berlin-based organisation, said the index showed that economic growth and efforts to stop graft were undermined when leaders and officials abused their power by appropriating public funds for personal gain.
“Corrupt officials smuggle ill-gotten assets into safe havens through offshore companies with absolute impunity,” Ugaz said in a statement.

Denmark is seen as the least corrupt country in the world, topping the index for the third successive year, followed by New Zealand, Finland, Sweden and Norway.

North Korea and Somalia came last, faring worse than Sudan, Afghanistan and South Sudan.

China had one of the biggest falls in the index, dropping 20 places to 100th, despite the government’s launch of an anti-corruption campaign targeting corrupt public officials.

TI said too many Chinese corruption cases were heard behind closed doors and called for prosecutions to be more transparent and all forms of bribery to be outlawed.

In a separate report on corporate disclosure practices published by TI last month, Chinese companies held eight of the bottom 13 places in the index.

TI said Denmark last month announced plans to create a public register for all companies incorporated in the country, making it harder for corrupt people to hide behind companies registered in another person’s name.

It urged the European Union, the United States and G20 countries to follow Denmark’s lead and create public registers that would make clear who controls or is the beneficial owner of every company.

“None of us would fly on planes that do not register passengers, yet we allow secret companies to conceal illegal activity,” TI managing director Cobus de Swardt said in a statement.

“Public registers that show who really owns a company would make it harder for the corrupt to take off with the spoils of their abuse of power,” he added.

While also reporting that Turkey and China’s rating on perceived corruption has fallen steeply, TI has called for closer international cooperation to root out graft and abuses of power.

It showed that Turkey’s record has worsened the most precipitously this year, dropping by five points to 45.
A corruption scandal broke out in the country in late December last year, the worst since the Islamist-rooted AK Party came to power more than a decade ago.

China’s rating meanwhile fell by four points to 36, even though the Beijing Communist government has launched a concerted campaign to weed out venal officials, according to the TI report.

Beijing’s low score matched a poor performance by Chinese companies in the watchdog’s recent report on corporate disclosure practice.

“Grand corruption in big economies not only blocks basic human rights for the poorest but also creates governance problems and instability,” Ugaz said in a statement in the report.

He urged states ranked at the bottom of the index to take radical anti-graft steps in their people’s interest, saying: “Countries at the top of the index should make sure they don’t export corrupt practices to underdeveloped countries.”

Corruption undermines economic growth and efforts to stop graft tend to fade when even high level officials abuse their power to embezzle public funds for personal gain, he said.

Yet again the top performer, Denmark scored 92 points, a rise of one from last year, and New Zealand, Finland, Sweden and Norway again rounded out the top five.

Ukraine (26 points) remained the European country with the highest perceived level of graft, while Italy, Greece and Romania (43) jointly scored the worst among the European Union member states.

•REUTERS
 

SOURCE: THE GUARDIAN