Corruption is still Tunisia's challenge

In the year since the Arab Spring, attention has been riveted on one issue above all others: the place of religious practice in public life. In Tunisia, where the movement began, full-face and body veils, now often worn complete with gloves, are increasingly visible on the streets — an exotic sight for locals and foreigners alike. And the secular opposition seems increasingly strident in its conviction that the Islamist government is driving the country the way of Iran.

But it wasn't religion that set off the Jasmine Revolution; it was acute economic injustice and the pervasive and structured corruption that helped produce it. The fate of Tunisia, and its neighbors, may depend most on whether that lingering problem is addressed.

You can usually tell which buildings in this sparkling, white-and-sky-blue country the family of former dictator Zine el Abidine ben Ali had a stake in; they're eyesores. Last month, a small group of protesters gathered in front of one of them, a squat, mustard-colored hotel complex on a beach in the town of Kilibia.

Kilibia, home to extensive Roman and Punic archaeological sites, also boasts beaches of silky, ash-white sand, which audibly sings underfoot as you walk across it. The seafront is exactly the kind of resource members of the Ben Ali family liked to commandeer for their personal gain.

They had shares in several sprawling hotels here, including the yellow one, built with an Italian investor. Typically for the Tunisian tourism industry, it functioned and still functions as a closed system: Tunisians are not allowed on the beach; the hotel employs no Tunisians except for a few guards, purchases no Tunisian supplies or food — not even any luscious local olive oil. Everything is shipped in from Italy.

Now the hotel is dumping coarse yellow sand across the top half of the beach to cushion tourists' feet from a rock formation.

This may sound like a trivial transgression. But it typifies the arrogation of public resources and financial opportunities for the personal enrichment of regime insiders that sparked last year's uprising.

Under the Ben Ali dictatorship, physical repression, torture and disappearances were fairly uncommon. The regime perpetrated its oppression by means of a diabolically intrusive system of state corruption.

This particularity has prompted Tunisian activists to blaze new paths in human rights doctrine. They are seeking to expand the definition of "gross violations of human rights" to include systematic economic crimes. They want perpetrators to answer for these crimes in a public reckoning, as part of a transitional justice process, like the ones in South Africa or Rwanda that focused on physical abuses.

Tunisia's new Cabinet includes a minister for "governance and anti-corruption." This is an innovation, certainly, but activists worry that his appointment was more show than substance.

A commission established in the weeks after Ben Ali's overthrow, and including public accountants and specialists in the intricacies of administrative or real estate law, examined some 5,000 complaints. The report it released in November exposed a vast system of structured corruption by which the Ben Ali in-laws and their cronies helped themselves to the best of everything: stakes in the most lucrative businesses, exemption from customs dues, choice public land. Government institutions such as tax authorities and the judiciary, even private banks, became instruments of coercion. Recalcitrant chief executives would get slapped with an audit or see their loans dry up or their authorizations revoked.

The commission developed evidence on 400 cases, which it transferred to courts. But according to member Amine Ghali, only a handful have been taken up by a judiciary still largely staffed by Ben Ali-era personnel.

"We're no one's first priority," says Ghali, detailing examples of neglect by the current government. "We have no office equipment or vehicles, no power to subpoena witnesses or to protect them. Members who are government employees don't even get relieved of their regular duties but have to do this work on the side. You get the feeling the government doesn't care if we succeed."

Many fear that the current political elite, including the leadership of the ruling Islamist party, intends to quietly appropriate the old structures and practices for their own benefit. Recently passed provisions of this year's budget include Ben Ali-style shelters for potentially ill-gotten gains, in return for a financial contribution. Taoufik Chamari, of the National Anti-Corruption Network, warns of the "real risk that the same system of corruption will be maintained, legitimized by new beneficiaries."

Corruption is a less photogenic issue than heavily veiled women. Yet when it grows so pervasive as to amount to capture of the state by a structured criminal network, as it did in Tunisia and in Egypt, public outrage can get explosive. Many here predict that if Tunisia does not use this remarkable post-revolutionary moment to impose accountability, then a frustrated people may truly radicalize, turning to militant, puritanical readings of Islam to afford a recourse the post-revolutionary democracy did not.

As the example of the yellow hotel suggests, actions of Westerners — conscious or unconscious — matter. Our support for Arab nations in transition, our behavior as investors and visitors, should break with past habits of contributing to corruption.

Subject of Bank Indonesia bribery case a hero of the people

Eight years after dozens of legislators took bribes to vote for Miranda Goeltom as senior deputy governor of Bank Indonesia, the woman at the center of the saga has been jailed, but the big question remains: who benefited from having her in office?

Twenty-eight legislators have been tried and convicted in the case, along with Nunun Nurbaetie, Miranda’s acquaintance and the woman accused of channeling the Rp 20.8 billion ($2.2 million) in bribes.

Miranda, however, has consistently denied knowing about the bribes, a stance stressed by her lawyer, Dodi Abdul Kadir. “Miranda firmly declares that she knows nothing about the distribution of the traveler’s checks,” he said on Monday.

She never made any promises to the members of House of Representatives Commission IX who voted her into office, and she only found out about the bribes later through media reports, Dodi said.

But testimony presented in Nunun’s trial paints a different picture. Witnesses alleged Miranda asked Nunun to set up a meeting for her with Commission IX legislators prior to the vote.

Nunun did as asked, hosting a meeting at her home in South Jakarta. Miranda continued to have meetings with other legislators, witnesses said.

But the question of who was bankrolling the whole venture remains unanswered. Speculation has long been rife that the money came from people within the banking industry who were seeking to influence central bank policy.

Dodi acknowledged that Miranda often met with senior executives from a host of banks during her time in office, but said these meetings were part of the job.

“There was nothing special about those meetings,” he said. “In fact, she hardly remembers what they spoke about because they were informal gatherings.”

The Financial Transactions Report and Analysis Center (PPATK), the government’s anti-money laundering agency, previously determined the traveler’s checks were purchased from Bank International Indonesia by First Mujur Plantation and Industry, a palm oil firm owned by tycoon Tommy Winata.

A BII executive testified in one of the earlier trials that First Mujur purchased the checks through Bank Artha Graha, another of Winata’s companies, on the day Miranda was elected in June 2004.

A year later, Bank Indonesia approved a merger between Bank Artha Graha and the publicly held Bank Interpac, which meant Winata’s new company, Bank Artha Graha International, qualified for a listing on the Indonesia Stock Exchange (IDX).

But Dodi said there was nothing wrong if parties benefitted from policies that Miranda pushed. “What’s wrong with a policy that benefits a single party if it’s based on prevailing regulations?” he said. “There will always be those who are disadvantaged by policies and those who benefit. That’s normal.”

He added that even as senior deputy governor, Miranda still needed the support of other BI officials to change bank policy.

So who really benefited in the end? “Look at the country’s economic performance indicators,” the lawyer said.

“The rupiah strengthened, inflation went down. Who benefitted the most? The Indonesian people, of course.”

Bribery investigations underway in Senegal

Two ministers under former Senegalese President Abdoulaye Wade and the country’s current Senate chief have all been called in for police questioning as the new administration works to fulfill its pledge to tackle past corruption.

According to local media, police plan to talk to at least three more former Wade ministers as part of their investigation into bribery under the previous president.

After President Macky Sall was elected in March of this year, he vowed to hold the former president’s government accountable for any past misconduct. These investigations into possible bribes are in the preliminary stages, said Dakar-based lawyer Mouhamed Kebe.

“Under the Wade regime, many of his ministers had been involved in some non-transparent transactions. It seemed that a lot of them became very, very rich in a very short time,” said Kebe. “Very recently the current minister of mining is saying that he has seen a lot of contracts between the state and mining corporations where it is obvious that there is some case of bribery.”

But the matter is also complicated by the fact that President Sall, himself, was a high-ranking minister under Mr. Wade. His experience under the former president included stints both as mining minister and as prime minister.

“Some people from the side of Wade are saying if you are investigating, President Macky Sall should be investigated as well, because he is a former minister of Wade and his former prime minister, and he became rich more than he should do,” said Kebe.

The lawyer added that it is too early in the Sall presidency to tell if the judiciary will be able to act independently of the president’s office. But he said, so far, many are hopeful that these preliminary investigations indicate this government will maintain oversight.

Police have so far questioned former ministers Farba Senghor and Samuel Sarr, who each held a variety of positions in Mr. Wade’s cabinet. They have also questioned Pape Diop, the current president of Senegal’s Senate.

Local media reported that police have also requested to question Karim Wade, son of the former president, who also served in various ministerial roles.

China's crashing the party as police put expats in their sights

It was a Thursday, 11pm, and the parties were getting started at the nightspots popular with expatriates on Yongfu Road, in Shanghai's trendy former French Concession. Then, at upmarket bar The Apartment, the police arrived, about 50 of them. The party stalled. They blocked the exits to the four-storey colonial era building, cut the music and ordered the lights be switched on.

The raid was part of a 100-day crackdown, purportedly on foreigner visa violations, launched weeks earlier in Beijing that has left a bitter taste among many young foreigners here, and raised questions about possible political motives behind it.

A Dutch resident who witnessed the raid on The Apartment said police demanded passports from all patrons and recorded passport and visa numbers.

Those without passports or copies of identity documents or who had invalid visas were detained.

The Dutch patron, an employee of a multinational company in Shanghai who asked not to be named, says he avoided detention with a discreet bribe, the equivalent of about $47.

Others were not so lucky. "I saw at least 12 foreigners in the back of a police van,'' he said. "The door was closed and the van drove away."

Neighbouring nightclubs were also raided that night two weeks ago, but within an hour The Apartment was open again. This weekend it is advertising four nights of parties to celebrate its second anniversary.

Bar owners interviewed by The Sunday Age were reluctant to be identified, not wanting to draw attention to themselves. But one said the incident was unprecedented in his more than a decade in Shanghai's entertainment industry. Business was down on subsequent nights.

Some linked the raid to a viral video of a British man apparently committing a sexual assault on a Chinese woman in Beijing. Within 24 hours of being posted last month, the video had been viewed more than 3 million times on China's equivalent of Twitter, Sina Weibo. It attracted more than 50,000 comments, many of them distinctly anti-foreigner.

"Suddenly the government launches a crackdown on all laowai [foreigners] like we are some sort of plague," said one online post by an expatriate in Shanghai.

The crackdown, which was announced in China's state-controlled media on May 15, officially targets foreigners living or working in China illegally.

Expat unease worsened after a xenophobic online rant by Yang Rui, a prominent TV host on CCTV 9.

Rui lauded the campaign to protect "innocent girls" from "foreign trash", "thugs" and "spies", and described recently expelled al-Jazeera English correspondent Melissa Chan as a "foreign bitch".

Rui received no official reprimand for the post, which was also published on CCTV's website.

The crackdown started in Beijing, prompting a bitter reaction from some foreigners who have lived in the city for years and see it as home.

American media worker Jacob Trent told CNN he was pulled off his bike by police who demanded his papers.

''I have been living here for a decade and yet I still get treated like - and sometimes called - a foreign barbarian,'' Trent said.

British expat David Park told CNN: ''I have noticed a change in how I am treated. It has gone from curiosity to hostility.''

The Shanghai raids were played down in the local media.

The Global Times reported a police denial of any raid and quoted a manager from The Apartment stating the club was merely visited by four officers who asked them to keep the noise down.

But The Sunday Age has established that exclusive Shanghai nightclub and restaurant M1NT, whose founder and CEO Alistair Paton is Australian, was raided two weeks before The Apartment raid. Four foreign staff and four patrons were found without documents, detained and later released once valid papers were provided.

The crackdown is taking place against a backdrop of political uncertainty.

The scandal involving the downfall of Chongqing Communist Party chief Bo Xilai, a slowing economy, rampant corruption, domestic food safety concerns and the widening gulf between rich and poor is causing unease within party ranks and the general populace.

There is a feeling among some foreigners that the visa campaign serves not only to whip up nationalist fervour, but to distract from more pressing problems.

Unlike some other Asian nations, foreign residents in China mostly apply for yearly visa extensions. Many expatriates in Shanghai consider it their home, but live under a cloud of uncertainty.

For this reason, there is reluctance among foreigners to openly discuss sensitive issues. The Australian owner of a successful Shanghai company said: "We run a legitimate business and follow the system, but things can change in an instant here."

Corruption seen as fueling Europe's debt crisis

The failure of some European governments to tackle corruption has helped fuel the euro-zone’s debt crisis, according to a new report released Wednesday.

Transparency International, an anticorruption watchdog, points to a strong correlation between graft and fiscal deficits, with crisis-hit countries Greece, Portugal and Spain suffering the most from corruption in Western Europe.

“The reasons for the crisis differ from country to country, but countries that are worst hit by the crisis are also those where corruption is most pervasive and where there’s a lack of integrity in the public system,” says Finn Heinrich, TI’s research director.

The report, “Money, Politics and Power: Corruption Risks in Europe,” is to be presented to the media in Brussels later Wednesday and investigates more than 300 national institutions across 25 states to assess their capacity to fight corruption. Political parties, business and the civil service performed the worst in the fight against graft and wrongdoing, the report says, and “too many governments are not accountable enough for public finances and public contracts,” the latter worth €1.8 trillion in the European Union each year.

Greece, which triggered the euro-zone’s debt crisis and is under pressure from its international lenders to reform its institutions and economy, received top billing in terms of the prevalence of bribery, feeding into broader fiscal problems such as tax-evasion.

There was a widespread practice in Greece of paying officials “to knock a zero off someone’s tax bill or to speed up health care,” Mr. Heinrich said in an interview. “But as well as front-line bribery there’s also bribery on a grand scale, such as with public procurement, and the oversight of public spending is too weak.”

Greece, Portugal and Spain also performed well below average when it came to the strength of their auditing institution, seen as key to overseeing public spending and promoting transparent financial reporting by governments. TI called into question the independence of Greece’s Court of Audit, citing the fact that it was accountable to the executive and not to the parliament — unlike most European systems — and its head was appointed by the government.

The report’s findings are in line with a recent pan-European poll in which 98% of Greeks considered corruption a major problem, while only 19% of Danes worried about the issue. “When it comes to Western Europe, there is clearly a North-South divide here,” said Mr. Heinrich.

Another risk area singled out in the study is public procurement. Despite EU rules seeking to root out waste and fraud, “high-profile scandals involving public procurement continue to occur,” the report said. Here however, it is mainly among the EU’s newcomers — Bulgaria, the Czech Republic, Slovakia and Romania — where the problem is most acute. One in three managers of small and medium sized enterprises in the Czech Republic believes it is impossible to clinch a public contract without having recourse to bribery, kickbacks or other incentives, the report said.

The Berlin watchdog also sounds the alarm over the lack of transparency in the funding of political groups and in the area of lobbying. It says that 19 of the 25 countries surveyed have yet to regulate lobbying, while many of the rules in place are too weak and not binding.

“Across Europe, many of the institutions that define a democracy and enable a country to stop corruption are weaker than often assumed. This report raises troubling issues at a time when transparent leadership is needed as Europe tries to resolve its economic crisis,” said Cobus de Swardt, TI’s managing director, in a statement.

Three quarters of Europeans view corruption as a growing problem in their country, according to recent EU surveys, showing that Europeans are no longer looking at corruption as something which can be used to their advantage or embracing its potential benefits.