Thursday, 29 October 2015

Tuesday, 21 February 2012

NZ helps islands region launder billions?




Published February 2012 in Islands Business International,
Business Intelligence section.



by Jason Brown





An Auckland bar, with young Asian women in white mini-skirts. Two Russian men light up a fat joint.



They talk, smoke and casually pass the doobie. Bemused patrons look on. One Russian is chatty. The other, eyes dead, scans each end of the street.



Welcome to 100% pure New Zealand, an unofficial finance centre to mafia gangs from Europe and Asia—and white collar criminals.



“Money laundering prosecutions in New Zealand continue to be low,” reads a 44-page “National Risk Assessment”.



New Zealand police working in the country’s FIU, Financial Intelligence Unit, attribute a low rate of prosecutions to “the result of perceptions of complexity around financial investigations, low enforcement priority and limited resources.”



Another is the “poor use [and] interpretation of legislation, leading to weak legal decisions and restrictive precedent.”



FIU police estimate money laundering through New Zealand companies at more than US$1 billion each year. The 44-page review leaves a question unclear. Gangs are the main problem in New Zealand—or white-collar fraud?



Declaring that 95% of money laundering “is related to drugs”, the police Asset Recovery Unit barely scrapes back US$15 million.



There is a “lack of focus on fraud and financial crime in general by law enforcement agencies”, admit the New Zealand police.



Justice officials and police are not alone.



New Zealand media are also slow to pick up on money laundering, with only one newspaper, the New Zealand Herald, reporting the police review—but not until January 2012, five months after publication. The report was buried on page five.



Elsewhere, journalists are more aware of the role played by New Zealand as a major centre for money laundering.



“The Proxy Platform” is an editorial slogan applied to global money laundering networks, as exposed by an aid-funded alliance of investigative journalists, OCCCP, the Organised Crime and Corruption Reporting Project.



Their final report, published just before Christmas, includes Auckland as a ground zero of money laundering.



In the main CBD, a Queen Street address was home to rented offices of the GT Group, a main player in the Proxy Platform, representative to 2,100 “shell” companies. Offices remain in Vanuatu, Samoa and the Cook Islands, according to a website for GT Group International, headquartered in Port Vila.



According to OCCCP, GTI acts as a conduit linked to secret networks laundering billions.



One set of transactions alone, through a GTI registered company called Tormex Ltd, was worth an estimated US$680 million, flowing into an Oceanic abyss of money laundering.



A similar acronym, GFI, stands for Global Financial Integrity, a group on the other side of the law, focused on exposing money laundering through tax havens and other finance centres.



What GFI terms “illicit finance flows” grew from a “conservatively estimated” US$353 billion at the start of the last decade, to US$775 billion in 2009.



Just the year before, in 2008, money laundering hit a high of US$1.31 trillion, before the fallout from the “Global Financial Crisis” hit bank accounts, secret and otherwise.



Arguably, New Zealand has the most free market economy in the world and an exceptionally light regulatory environment.



“Currently, there is no AML supervision except to a limited extent for banks and casinos,” reads the August 2011 police review; AML referring to “anti-money laundering.”



Authorities in New Zealand seem intent on blaming “organised crime” yet audit giant KPMG uses its “Fraud Barometre” report to identify white collar crime as a much larger problem than gangs.



Established in 1996, the NZ FIU did not write its first National Risk Assessment until 2010, some two decades after joining FATF, the Financial Action Taskforce, in 1990.



New Zealand is a first world nation that has not ratified UNCAC, the United Nations Convention Against Corruption. It compares with its closest trading partner, Australia. In January 2012, Australia released an independent review into its financial intelligence unit, AusTrac, and related agencies.



It spotlights a downward trend for offshore finance havens across the region, revealing plunging revenue in Vanuatu from Australia, which signed an MOU with AusTrac in 2002.



Also last month, a call from Christian Aid in the United Kingdom to end tax haven secrecy, calling it a “global curse” claiming some US$160 billion from poor countries, more than they receive in aid.



Back at the Auckland bar, the two Russian men finish their smoke; flick the butt over the balcony.And head inside, upstairs to a private suite.


The Asian girls avoid eye contact and take more drink orders.


EARLIER

http://100percentpurenzcorruption.blogspot.co.nz/2011/05/nz-role-in-drug-arms-and-tax-scams.html





Wednesday, 16 November 2011

New Zealand aid transparency rates poorly

New Zealand ranks 12th on a list of countries whose aid transparency is rated as "poor". News media coverage is similarly impoverished. 

. . .


NEWS ALERT


Two days after the Aid Transparency Index released its first "pilot" review of global donor systems, mainstream New Zealand media have yet to pick up on the country's poor rating.

Only Yahoo News, Voxy and Scoop news agency carried reports, all based on a press release claiming the index "hailed" the World Bank as the "best performer".

Least worst might be more accurate.

Ratings range only from fair, through moderate and poor, to "very poor" - with apparently no rankings for 'good' or 'very good.'

New Zealand is ranked at 12th worse on a list of 25 countries whose aid transparency is rated as "poor", and 30th overall. As with a number of other indexes, New Zealand rates lowly compared with governance leaders elsewhere, notably western European countries, mostly Scandinavian.

News media in New Zealand are not alone in ignoring the new index.

At post publication, mainstream news media in Australia are yet to report the index, at all, with civil society organisations barely better.

Worldwide, barely a dozen articles show up on Google News, with most coverage on the aid index coming from the United Kingdom, prompting debate in the House of Lords.

Primary conclusions from the pilot 2011 Aid Transparency Index :
> Most aid information is not published
> Information is produced but not always published and is far too hard to access and use
> Achieving aid transparency is possible
Primary recommendations :
> Increase political will and action – using the Aid Effectiveness Agenda as a springboard
> Organisations should publish what they have, build systems to collect what they don’t and make sure it is all accessible
> Aid actors must rally round the common IATI standard and increase its coverage
Aid Transparency Index about us.

> corrections > updates > new zealand ranking changed from 40th to 30tt

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Monday, 15 August 2011

NZ streamlines ethics process


Flying the flag : or are New Zealand ethics fraying in the wind ?



. . .


NEWS



New Zealand is moving towards faster ethics approval for pharmaceuticals.


The move has raised eyebrows among those concerned at the country's reputation for a lack of regulation and related potential for corruption.

New Zealand Doctor noted the news on a page of items dealing with tighter corruption controls here and overseas:
Ethics committee recommendations "sensible" - Hutchison
National MP and Parliament's Health Committee chair Paul Hutchison told conference attendees the Government viewed the recent enquiry recommendations on 
improving ethics committees as "pretty sensible stuff".
It was clear from submissions from committees that a raft of practical changes was needed - eg, speedier processes, a clearinghouse, smaller committee size and an option to add expert members.
Industry submitted it was "blindingly obvious" clinical research was important for New Zealand, whether in medical devices, pharmaceuticals or functional foods, he says.
The call to streamline ethical approval was echoed by many at the conference, including Christchurch Clinical Studies Trust director Richard Robson.

The site also noted that the Serious Fraud Office had created a new position of general manager, fraud and corruption, further distancing the office from moves by the former Labour government to change focused to so-called "organised" crime or gangs.
"Asked about companies sponsoring a researcher to present results to a conference, he says if the hospitality is disproportionate, it can be seen as being intended to foster sales or to inappropriately obtain or retain business." 


Government spends more than $13 billion a year on health care, with some $700 million going on pharmaceuticals, according to Pharmac figures, representing the lowest level of spending on health care and drugs in the developed world.

This is despite New Zealand being one of only two countries in the world allowing direct to consumer marketing, the other being the United States, which spends more than $7,000 per person, compared to less than half that here.

. . .

Tuesday, 31 May 2011

Little or no corruption law enforcement




. . .

NEWS

New Zealand is among 21 of 37 countries across the developed world which have "little or no enforcement" of anti-corruption laws, reads a new report.

The report comes from Transparency International, the world's leading anti-corruption organisation.

Unlike similar reports of a global nature, the TI report last year named names, but could not do the same this year:
"One case and one investigation were initiated in 2010 but no details are available. In the 2010 report two investigations were reported. The first was an investigation of SP Trading Limited. This case involved a New Zealand shell company allegedly implicated in the sale of 35 tonnes of North Korean explosives and anti-aircraft missiles to Iran. The police and the Serious Fraud Office undertook an investigation, which has been completed without any resulting prosecution. The second investigation concerned possible involvement of a New Zealand company in connection with allegations that Hewlett Packard had paid bribes to secure a contract in Russia. According to the TI expert, government officials have indicated that New Zealand’s involvement in that investigation has ended."
As well as a lack of enforcement, TI said that experts had again "found significant inadequacies in the legal framework for prohibiting foreign bribery."

Problems highlighted in the report involving New Zealand include:
Inadequate resources.
Decentralised or uncoordinated enforcement.
Inadequate complaints system and/or whistle-blower protection.
Lack of awareness-raising.
Lack of access to information about the number of foreign bribery cases.
Information on status of cases and other details is not systematically accessible.
The report appears to show that New Zealanders object to allegations of corruption - including the TI "expert" who is said to have stated that "criticism is not warranted" when it comes to New Zealand bribery overseas.

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Sunday, 15 May 2011

NZ role in drugs, arms and tax scams






. . .


NEWS

Companies registered in New Zealand have attracted attention from authorities worldwide for years, long before prime minister John Key started talking about turning New Zealand into a finance centre

One longish running story concerns a Vanuatu representative and long time Kiwi Geoffrey Taylor. December 2009 saw Taylor exposed, first by a former Navy intelligence officer, in the WMR or Wayne Madsen Report, and then by the Times Online as being behind a New Zealand registered company involved with arms exports from North Korea on a massive Russian air transport, stopped in Bangkok.

Now the Sydney Morning Herald has done a follow up, ending on this note:


New Zealand company records show that snuggled up inside Bristoll Export is yet another shell company that can be traced via Panama to an unrelated offshore banking firm in Cyprus operated by a former Russian diplomat. Further evidence, perhaps, of an even more impenetrable labyrinth.

Entitled "
Inside the shell: drugs, arms and tax scams", the piece raises serious questions about how easily companies can be set up in New Zealand, a practice praised as "business-friendly" by organisations like the OECD, apparently without regard to ongoing costs in crime and corruption.




. . .

Wednesday, 27 April 2011

Justice should prevail in Urewera 18 jury decision

. . .

COMMENT

Moves by the National Party government to limit jury trials appear to be moving ahead against increasing opposition.

Commentators are warning legal changes made in 2007 threaten the credibility of New Zealand justice.

"... unless the Supreme Court puts its collective foot down and sends this political and controversial case to trial by jury, it runs the risk that a dangerous precedent will be set which will further erode public confidence in the judicial system."

This comment New Zealand Herald columnist Fran O'Sullivan, marks increasing criticism from mainstream media who previously lavished praise on the John Key party.


. . .

Tuesday, 26 April 2011

Fraud barometer hits record $100m as big cases reach court

UPDATE | WHITE COLLAR CRIME

Corporate fraud AKA white collar crime continues to sky rocket in New Zealand, but most attention stays focused on much smaller amounts of benefit fraud.

"KPMG New Zealand head of forensics Stephen Bell yesterday said the large jump in frauds in the second half of last year was mainly because of a number of large cases involving multi-million dollar frauds, including cases prosecuted by the Serious Fraud Office."

Meanwhile, politicians continue to ignore the problem with the SFO continuing to fall behind in its case load.

Most political and mainstream commentary focuses instead on a relatively small amount of benefit fraud - at $16m last year, less than 10% of corporate corruption.



MORE






Police staff set to help fraud office tackle backlog - Business - NZ Herald News

. . .

NEWS

An increase from $5 million to $7.4m for the SFO, Serious Fraud Office, is still not enough to handle corruption in New Zealand.

SFO is now asking for a revival of secondment schemes from police.

New Zealand Herald reports the background:


"The SFO faced abolition between September 2007 and October 2008 until the election of the National-led Government. The Labour Government it took over from had wanted to merge the SFO with the new police Organised and Financial Crime Agency, which National opposed at the time."


. . .

Sunday, 26 December 2010

stunning recklessness, excess and greeed

. . .

NEWS

Three years after the Global Financial Crisis picked up speed, New Zealand looks pretty soft on corporate crime. 

"The recklessness, excesses and greed have been stunning. But, until Five Star directors Nicholas Kirk and Marcus MacDonald were this week jailed for lying to investors, not a single finance company executive had spent a single night behind bars."

Bernard Hickey is Managing Editor of business news site, Interest, one of the few commentators offering criticism of efforts against fraud and other white collar crime that makes up the bulk of cases in New Zealand

LINK: 


. . .

Tuesday, 14 December 2010

Wong inquiry 'not warranted' - AG - National - NZ Herald News

. . .

Pansy Wong announces her resignation this morning. Photo / Mark Mitchell

NEWS

New Zealand's Auditor-General Lyn Provost says she will not investigate alleged abuse of a Parliamentary travel perk by former minister Pansy Wong.

"It will do more 'public good' for Government to adopt the recommendations of a report tabled today on improving serious flaws in the entire ministerial spending system, she says."

Left unsaid was any word on whether conflicts of interest in promoting her husband's private business constitute corruption. Or whether they profited from that conflict of interest.

The AG's decision compares with a six year sentence given to one of only a few Polynesian MPs, Phillip Taito Field, after he got an Asian immigrant to tile a property of his, in Samoa.

LINK


. . .

Monday, 13 December 2010

Update 100-year-old law, says SFO - National - NZ Herald News

. . .

NEWS

Slated for dismantling under the previous Labour government, the New Zealand Serious Fraud Office is taking aim at corruption laws up to a century old.

"The Serious Fraud Office is signalling a greater focus on bribery and corruption and has asked the Government to review legislation dealing with such crimes, some of which is a century old" reports the New Zealand Herald.

They quote Feeley as saying their latest case exposes widespread shortcomings in New Zealand.

"There have been wider, and serious, issues raised by this investigation, including procurement processes in the public sector, the process for referring corruption allegations to law enforcement agencies, and the scope of New Zealand's bribery laws," Feeley told the daily.

LINK


. . .

Thursday, 25 November 2010

new zealand growing up poorly

New Zealand performs poorly compared with other first world countries but the latest research ignores economic factors.

. . .

COMMENT

Growing Up in New Zealand - a survey launched in 2008 - challenges "much rhetoric" about early childhood in so-called Godzone.


"Although a developed country, New Zealand faces real challenges in health, welfare and education, and
performs poorly in OECD rankings in several of these parameters."


Professor Stuart McCutcheon, Vice-Chancellor at the University of Auckland says that more than 7,000 babies have been "recruited" into the study.

"Their parents have volunteered their time over the next 21 years to provide insights into their lives and those of their children."

RHETORIC

First findings from the survey however point to politically sensitive outcomes.


"Information from the first of many interviews in this study challenges much of our traditional rhetoric about growing up in New Zealand," reads an executive summary of the 101 page report.

Study Director Susan Morton said there were "many" wonderful things about growing up in New Zealand, but added, there are also some "negative things" such as poorer health and school achievement among Māori and Pacific children and those from "impoverished families."

INEQUALITY


The initial research shows "inequality" among children before they are even born. It starts with the access their pregnant mums have to information and help.

"Nearly half of the mums in deprived areas were not aware of the Working for Families tax credit."

Despite highlighting that lack of financial information, the report only mentions economic factors four times, compared with 40 mentions for antenatal factors.

INEQUITY

Previously identified as one of the most economically unequal countries in the OECD, New Zealand researchers however seem reluctant to question economic orthodoxies. Morton refers to "impoverished" families, in a message on the website, but the word does not appear in the study itself.

"Poverty" is mentioned once, in the appendix, considering "appropriate policy initiatives to address outcomes related to the wider influences on development including family structure and support, poverty and financial stress, social networks, cultural affiliation, physical environments and the media."


Even the word "poor" - as in 'performing poorly' - is not used in the economic sense. The only reference to OECD after the foreword refers to immunisation, not economics. Responses to the study findings via the Science Media Centre also ignore poverty.

. . .

Sunday, 7 November 2010

company fraud nearly doubles in new zealand

. . .

NEWS

Corruption in New Zealand is on the rise, nearly doubling over last year as global financial crisis increases desperation at top corporate levels.

"The survey of about 200 groups, in both government and private sector, on both side of the Tasman showed the cost of fraud rose from an average NZ$1.9 million in 2008, to NZ$3.8m this year."

Interestingly, KPMG published the fraud survey in Australia and New Zealand, but not the US and the UK - sources of huge corporate fraud.


. . .

Friday, 29 October 2010

nz pm gets update on suicide secrecy

. . .

Secrecy rules surrounding suicide may be relaxed depending on reaction from government.
"The annual suicide rate in New Zealand is nearly 50 per cent higher than that of the road toll, figures show. The media is prohibited from reporting the circumstances of suicide unless the coroner allows it."
Strict secrecy has not resulted in fewer suicides. In world terms, New Zealand is among the top ten highest suicide rates for youth. Also stopped by secrecy laws is more public debate over why New Zealand is one of the world's few societies to suffer proportionally more youth suicide than adult. For the last 25 years in New Zealand, that society has been dominated by a hard right-wing economic ideology.

LINK:


. . .

Wednesday, 27 October 2010

minister just walks away

. . .
 
COMMENT
 
Walking away from a potential long and expensive judicial conduct hearing leaves the New Zealand justice system exposed to dangers, warns capital newspaper, the Dominion Post, in an editorial.
"The danger for Ms Collins – and for the integrity of justice system – is that the lesson the public will take from the Wilson episode is that, when there is a problem involving the judiciary, shortcuts are taken, it is tidied away, and judges whose behaviour is questioned walk off with what Auckland University law expert Bill Hodge has described as "a very sweet package".
Justice minister Judith Collins, a National Party hardliner, announced the deal after a Supreme Court judge successfully challenged a special panel set up to hear complaints against him of conflicts of interest. The deal includes a salary payout nearing NZ$1 million.

. . .

why NZ is not least corrupt in the world

. . .

Ironically, New Zealand, one of three top ranked countries, does not even appear on the global map at Transparency International.  

NEWS

Unionists and left-wing commentators have praised top ranking in a global corruption index - but a right-wing business paper describes the result as "dubious".

A poll on a mainstream media also reveal significant doubts about the ranking. 

Mixed reactions reveal a surprising twist to the frequently criticised CPI, Corruption Perceptions Index, by leading anti-corruption, Transparency International.

Only one media organisation sought public reaction to today's release of the global survey.

In a front page poll, TVNZ recorded a roughly half-half split between those who believe the CPI ranking - and those who don't.

Website visitors were asked if they "agree New Zealand is the least corrupt country in the world?"

"Yes, we're squeaky clean" was clicked on by 43% of those answering the poll question.

Some 57% - poll numbers were not given - clicked on "No, we're deluding ourselves."

The poll is half way down the TVNZ main page.

However, yet again, the survey failed to make the two main free-to-air news programmes, on TVNZ and TV3.

Perhaps the most damning figure came from an investment advisory service - noting that just a fifth of a percent of law and order spending of NZ$3.5 billion goes on serious fraud cases. Some 62 comments are recorded.

Meanwhile, the Public Service Association has grabbed the survey announcement as an opportunity to praise public service integrity in the face of slashed worker numbers.

"We've held the top spot on Transparency International's Index for five consecutive years," said PSA national Secretary Brenda Pilott.

"This shows our public services and those who work in them are a world-class asset and worthy of our thanks and respect."

"This top ranking is a great credit to New Zealand's public servants," says PSA National Secretary Brenda Pilott.

"Despite the government slashing over 2,000 jobs, excessive workloads that continue to spiral out of control, numerous departmental reviews that bring stress and uncertainty, we've managed to retain our top ranking on Transparency International's Index. As well as indiscriminate cuts, agencies are coping with thousands of long-term vacancies that lump pressure on individuals, teams and ultimately services. So it really is commendable that we've kept on top."

The Dominion Post was another mainstream media organisation reporting doubts.

"Our biggest risk is our companies just don't care," says Alex Tan, director of Transparency International NZ.  

"Blasé – absolutely. When we talk about what they do overseas, they say, 'Oh, yes, we've got good policies'. 

"No, they don't. Only 44 per cent [of NZX 50 companies] have any policies that talk about bribery and corruption."

Only 10 percent actually prohibit "facilitation" payments.

Although New Zealand signed the United Nations Convention Against Corruption in 2003, it is one of only 18 countries not to have ratified it.

Mr Tan said 122 countries had signed and ratified the convention.

"For a country that consistently tops the CPI, the fact that seven years after signing [the convention] we still have not ratified it is somewhat hard to fathom."

High profile liberal blog, No Right Turn, noted that New Zealand actually dropped in ranking - from a score of 9.4 out of 10 to 9.3.

Controversial right-wing blogger, Whale Oil, makes damning reference to a lack of transparency on government tender contracts, including an insolvency agent buying stocks in failing companies he is supposed to be disposing of.

Collapse of finance companies, massive overcharging by telecommunications, power and supermarket companies, the resignation of a supreme court judge to avoid investigation, environmental degradation, and a series of botched cases pointing to police corruption are among a host of criticisms leveled against New Zealand, much from within the country. 

LINKS
. . .

Monday, 25 October 2010

OECD warning on Transparency International

. . .
 
NEWS
International governance indicators like the Transparency International "Corruption Perceptions Index" should be taken with a grain of salt, suggests the OECD, the world's largest economic club.

"Not only are the individual country scores provided by some of these systems less accurate than many users seem to assume, they reflect biases of which users are often unaware," reads the release.

In a press releasetitled the "transparency paradox", the Organisation for Economic Cooperation and Development highlights a "policy brief" released ahead of tomorrow's CPI figures. The OECD policy brief is by far the most heavyweight critique of the CPI in its 15 year history. Some suggest the survey reflects well known but relatively minor third world corruption at the expense of ignoring massive first world scandal.

 

Full release follows.

 

PRESS RELEASE

THE TRANSPARENCY PARADOX: GOVERNANCE RATINGS

 

25 October 2010, Paris – Tomorrow, Transparency International will release its 15th annual Corruption Perceptions Index.  While not disputing the importance of these and other such international governance indicators, the authors of the OECD Development Centre's new Policy Brief "Measuring Governance" warn of a transparency paradox.  They urge potential users to be more inquisitive about the real contents and precision of all international governance rating systems, and more careful how they use them.

 

Not only are the individual country scores provided by some of these systems less accurate than many users seem to assume, they reflect biases of which users are often unaware.  The result can be misguided discrimination against developing and emerging economies not only by the many private international investors who use them, but by official aid donors as well.

 

'All international governance ratings systems are normative and imply a judgment. They are often not determined by an objective theory of what constitutes good governance, or of how to distinguish good from bad governance,' said Charles Oman, Head of Strategy at the OECD Development Centre. 'Governance indicators need to be transparent as official aid agencies often use them as a basis for their aid-allocation decisions.'

 

To access the new policy brief on "Measuring Governance" by The OECD Development Centre, please click here.

To speak to Charles Oman, please call: +33 (0)1 45 24 82 96.

 

 . . .

Tuesday, 28 September 2010

NZ giant rip off says All Black writer

. . .

NEWS

An All Black has joined a rugby writer in attacking the cost of living in New Zealand.


Justin Marshall, 36, agreed with rugby correspondent Peter Bills that New Zealand was an expensive country - and not just for visitors. Bills - sounding a caution ahead of next year's Rugby World Cup - said the prices of everyday articles had "horrified" him and Kiwis were "victims of massive overcharging". He said New Zealand was becoming "one giant rip-off".
Previously, power, phone, net and supermarket companies have been found to have over-charged by up to 500% - costing consumers billions of dollars.
Power alone is said to have cost consumers an extra $4 billion over a 10 year period. 

LINK


NZ really expensive, says All Black - National - NZ Herald News

Wednesday, 22 September 2010

Spot the missing link

. . .
COMMENT
by jason brown, 100% PNZC editor






Scroll down the list below and spot which country link is missing.


Offshore banks in Niue and the Cook Islands, staffed mostly by Kiwis, anyone?


Australia, the country we are supposed to be catching up to, according to Prime Minister John Key, leads from the front.


OECD anti-brbery signatories:





Country database: anti-corruption resources in the Initiative's member jurisdictions
The database on anti-corruption resources in the Inititative's member countries and economies is currently being updated, and the available countrysheets will be enhanced.


. . .