Defence Anti-Corruption Digest Edition 8, September 2006

Including...

Interview : Lord Garden, Interview 1

Asia Pacific: Defence Attache recalled

Europe: Romanian President Suspends Defense Minister

Americas: Haliburton Fraud Lawsuit Details Super Bowl Party

Middle East: "I Was a Propaganda Intern in Iraq"

Africa: Zuma's corruption trial collapses

Transparency International UK's

Defence Anti-Corruption Digest

Edition 8 / Sep 06

Defence Against Corruption

In the News

Our Work

Links

This e-mail address is being protected from spambots. You need JavaScript enabled to view it

Interview - Lord Garden, Interview 1

In the News

Below is a selection of news headlines from around the world from the past month. Please see our disclaimer immediately below the news section.

Asia & Pacific

Defence procurement policy revised

31 August 2006

The Indian Watchdog Central Vigilance Commission (CVC) has urged the Defence Ministry to ensure competition and avoid single vendor outcomes in its defence purchases.

Defence Attache recalled

India

31 August 2006

The Indian army’s defence attaché in Berlin was recalled in August for performing (unspecified) “certain actions not in the charter” of duties.

13 Tied to Sri Lankan Separatists Are Charged by U.S. With Aiding Terrorists
Copyright New York Times By William K. Rashbaum
22 August 2006

13 men have been arrested on charges that include bribing Federal agents to remove them from a list of foreign terrorist organisations.

Related article
Editorial: Lawmakers and defense graft, Copyright Taipei Times, 15 September 2006

Europe

Cyprus defence minister resigns over parliamentary unit
Copyright Financial Mirror
13 September 2006

Defence Minister Klokkaris has resigned after only 3 months in the position. It has been suggested that this follows the rejection of his attempts to unravel a paramilitary unit within the National Guard by President Papadopoulos.

Romanian President Suspends Defense Minister
Copyright Reuters, Bucharest
12 September 2006

Defence Minister Atanasiu has been suspended by the president following the launch of a probe for abuse of power.

Related article

Romanian Minister Asks Court to Annul Suspension, Copyright Reuters, 14 September 2006

Intelligence official detained on bribery charges
Copyright Associated Press
22 September 2006

The head of an economic security department in the Romanian Intelligence Service has been detained by prosecutors on charges including bribery.

Americas

Iraq Contractor Inflated Costs, Lawsuit Alleges
Copyright New York Times
9 September 2006

A former Halliburton employee, turned whistleblower, is claiming in a lawsuit that she was fired for revealing to her managers that the company was fraudulently inflating its costs to the government.

Haliburton Fraud Lawsuit Details Super Bowl Party
Copyright The Los Angeles Times
9 September 2006

According to a lawsuit recently unsealed, Halliburton have engaged in a series of activities in which they have defrauded the US government, including double- and triple-billing services for soldiers, and billing US taxpayers for a Super Bowl party in Iraq.

Peru to reform defense ministry after corruption allegations
Copyright People's Daily
1 September 2006

Peruvian Defence Minister Wagner has launched a special commission to propose reforms to the Defense Ministry. The ministry will also be given a special audit by Peru’s comptroller general.

Middle East

Israeli president battles sexual harassment, corruption claims
Copyright Ynetnews, 2006

Malaysia

23 August 2006

Police investigators have interrogated President Moshe Katsav on accusations that include pardoning prisoners in exchange for money.

"I Was a Propaganda Intern in Iraq"
Copyright Democracy Now!
22 August 2006

In this interview, former intern Willem Marx recounts his summer spent as a “military propagandist in Iraq” with Lincoln Group, including his own investigations into elaborate kickback schemes as well as a culture of overcharging.

Africa

Zuma's corruption trial collapses
Copyright BBC News
20 September 2006

The corruption trial of South African Deputy President Jacob Zuma’s collapsed in September. The judge stated that the state’s case had “limped from one disaster to another”.

Related article
Corruption charges may haunt Zuma yet Copyright Mail & Guardian 22 September 2006

Werewolves not sold to US - claim

Claims that armoured vehicles manufactured by Namibian Ministry of Defence commercial subsidiary August 26 Holdings have been sold to the US contrary to the Government’s assertions raise questions about the transparency and accountability of the company.

Disclaimer

Transparency International UK takes no position on the views presented by reporters, commentators, organisations and companies in the materials listed in this email or linked to in our website. As with any such resource, our purpose is to provide access to a wide selection of materials representing diverse viewpoints on a matter of obvious public interest. We do not exercise any editorial control over the materials and cannot guarantee their accuracy. The Digest is a free publication of Transparency International UK.

Interview

Lord Garden

Lord Garden has been visiting professor at the Centre for Defence Studies, King's College London since 2000 and is the 2004 Wells Professor at Indiana University. Since retiring from the RAF, Lord Garden has been closely involved in developing foreign and security policy for the Liberal Democrats and is the party's Defence spokesman in the Lords. Lord Garden was awarded a CB in 1992, and received his knighthood in 1994.

Lord Garden sits on the strategy group of Transparency International UK’s preventing corruption in the official arms trade project

Our interview with Lord Garden is split over editions 8 and 9. The first interview, below, is broadly on international defence issues. Next month’s edition will continue on

issues.

Lord Garden sees corruption as subverting the aims of defence. “Corruption in the defence sector undermines democracy, human rights and the rule of law. It distorts procurement decisions, and thereby exacerbates the problem of the mismatch of resources with operation requirements – a problem already dogging many Western governments. This will mean that defence efforts and missions don’t work. Strategically, it undermines partner countries to which the government chooses to sell defence products.”

One perennial problem is that of agents. However, simply outlawing agents will not necessarily solve the problem: “The problem is you just rename the agents as consultants or give them some employed status for a particular length of time.” So how can this onerous corruption risk be undercut? “Transparency is the key. The commercial confidence argument is used far too widely. During the course of a deal you may want to keep the details confidential; but once the competition is secured and the deal is signed, you should publish a breakdown of where all the payments went. In most cases, illuminating the details of the deal will be enough to ensure that certain potential problems don’t emerge. The agents should be named, inevitably, put on the web. Once everybody knows the system, they will be forced to clean up their acts.”

“I would put a ban on the practice” - Lord Garden on the 'revolving door issue

On another common corruption risk in the defence industry – the “revolving door” syndrome, Lord Garden states “I am totally against it”. “I find it quite distressing to see people who have been either civilians or military working on particular defence procurement areas then going to companies in relatively short time scales. I would put a ban on the practice; that is just my personal view.”

Supporting national champions can also be an issue. “Defence is not about supporting one large national champion – it is about defence providing military capability. You are unlikely to be obtaining good value for money if you always deal with one large national contractor. You need competition,” says Lord Garden. The market economy, he believes, can be a helpful tool for better and cleaner defence procurement systems.

Despite some of these corruption-prone practices still prevalent in the defence industry, Lord Garden sees improvement in the overall situation, especially on the part of defence companies. “The work Transparency International has done has been very encouraging. At the start it was difficult to talk about these issues with defence companies, but now they are actually able to come together. There is now much greater hope of making progress.” While companies may be concerned that enacting regulations may give other, less scrupulous outfits the advantage, the international nature of the current talks is helpful in promoting an end goal of a level playing field. “It is useful to look at the global basis. That should help to assuage the companies’ worries.”

A couple of measures in particular are proving useful. First, industry anti-corruption consortia are “a way for industry to make proposals to strengthen regulation. This seems to be a wholly beneficial way forward.” And, defence integrity pacts “I think are a good practical example of measures which can be taken and built on. Such pacts may not change embedded corrupt practices overnight, but they encourage cultural change and a level playing field.”

“We are making progress.”

Our Work

An overview of our project within the defence sector can be accessed here .

Links

Transparency International UK Defence Against Corruption project
Transparency International UK
Transparency International
Daily Corruption News
UN Convention Against Corruption
OECD Convention on Combating Bribery
David Isenberg list – subscribe here
Business Principles for Countering Bribery
Ethicsworld
BRIBEline

2nd Floor
Downstream Building
1 London Bridge
SE1 9BG
London

Map

defence [at] transparency.org.uk

Telephone: 020 7785 6358
Fax: 020 7785 6355