Vietnam and the World Bank recently held the first Viet Nam Anti-Corruption Intiative, or VACI.  The Initiative encouraged the public—whether ordinary citizens, NGOs, or private business—to develop proposals to help combat corruption in their communities.  VACI then selected 34 promising ideas, and awarded a total of approximately $450,000 to help fund the implementation of these plans in the coming year.  It is hoped that this initiative will be repeated in 2013.

In order for pervasive corruption to be combated effectively, public support for anti-corruption initiatives is essential, and this year has seen people around the world taking a stand against graft in their societies.

The year began with ordinary Tunisians and Egyptians boldly casting out the corrupt dictators who stole their countries’ resources for decades.  Bribery reporting websites, such as IPaidABribe.com (I Paid A Bribe), have become popular in India, China, and elsewhere.  I Paid A Bribe has seen over 12,500 bribes reported, totaling almost $7,000,000 (317 million rupees).  Now, the Indian public continues to take a strong anti-corruption stance, with students, Bollywood stars, and even Mumbai’s famed dabbawallahs, or lunch-deliverymen, have thrown their support behind Anna Hazare and his India Against Corruption movement.

The persistence of, bribery in the developing world, or tax evasion in countries like Greece and Italy, stem from the pervasive nature of the problem.  When people feel that corruption is just part of “the cost of doing business” or that they have no realistic alternative to resorting to bribery, it becomes intractable.  Programs like this initiative from the World Bank offer people in developing countries the resources they need in order to rid their societies of corruption.

VACI’s sponsored initiatives include seemingly basic elements, like educating members of the country’s Khmer minority about their legal rights and resources when dealing with corruption.  These basic tools are the first step towards empowering populations   With luck, this model of financing grassroots efforts towards transparency will provide a successful model to emulate elsewhere.

Michel Meusburger/Flickr*

On Wednesday, the SEC announced a $16 million settlement in an FCPA case filed against Diageo, Inc.  The company, which dominates the global liquor market, was accused of spending at least $2.7 million on bribes through its Asian subsidiaries, and omitting or mislabeling those funds in SEC filings. These bribes were given to government and military officials in South Korea, India, and Thailand in order to gain a variety of advantages, from tax breaks to more beneficial policies in transfer pricing negotiations.  Bribes included trips to Europe, while one Thai bureaucrat received $12,000 a month for helping Diageo, whose brands include Johnnie Walker and Windsor Scotch whiskeys, among others, get an advantage over its competitors.

This case was resolved with cooperation from Diageo, which complied with investigations and fired those responsible for the bribery, without admitting wrongdoing.  Still, this case highlights both the important role the FCPA plays, and the importance of defending it from recent attacks.

The Foreign Corrupt Practices Act is a key tool for ensuring fair competition, and thus a more efficient market.  In this case, Diageo’s bribery allowed it to reap at least $11 million in profits because of their corruption.  These profits may otherwise have gone to more competitive companies, leading to better outcomes for consumers in those countries as well as for the law-abiding corporations that lack Diageo’s ill-gotten advantages.

But recently, the Act has been challenged by the U.S. Chamber of Commerce, attempting to weaken many of its most effective provisions, including some relevant to this case.  Earlier this month investigations revealed a “crystal clear” link between the Chamber’s Board members/donors and corporations with a history of serious FCPA violations.

The Chamber’s proposed changes would not hold corporations liable for subsidiaries or for third parties acting on their behalf—as happened in this case—despite the benefits of those actions directly returning to the parent corporation.  Corporations with anti-corruption programs would also be able to use the existence of those programs in order to defend themselves from legal action.  Yet it is apparent that Diageo’s policies were ineffective, a fact proven by the simple fact that the bribery, and falsification of SEC filings to hide the bribery, occurred at all.

You can find out more about efforts to protect the FCPA from the Chamber here.

–

CLARIFICATION: Prof. Koehler is correct in noting below that “Diageo was not charged with violating the FCPA’s anti-bribery provisions;” Diageo was charged with violations of the “books and records” provisions of the FCPA and the settlement was not pursuant to any charge of bribery under the anti-bribery provisions.  For those well-versed in FCPA terminology, however, we note the following excerpts from the  “summary” portion of the SEC’s Cease and Desist and Civil Penalty order, dated July 27, 2011:

“Over more than six years, Diageo, through its subsidiaries, paid over $2.7 million to various government officials in India, Thailand, and South Korea in separate efforts to obtain lucrative sales and tax benefits.”

“Separately, Diageo made hundreds of gift payments totaling over $230,000 to South Korean military officials in order to obtain and retain liquor business.”

As the SEC only has the power to bring charges under the “books and records” provisions, however, the violations identified by the SEC were that “Diageo’s books and records did not accurately reflect illicit payments that it made, through its subsidiaries, to Indian, Thai, and South Korean government and military officials,” and that the company “failed to devise and maintain sufficient internal accounting controls.”

Do not hesitate to read the Cease and Desist order for yourself here [PDF].

*Image License: Some rights reserved by Michel Meusburger

Global FInancial Integrity

WASHINGTON, DC – A new report from Global Financial Integrity (GFI), “Illicit Financial Flows from Developing Countries: 2000-2009,” released this week shows that Russia has the second highest measured illicit outflows out of the developing world–US$427 billion from 2000-2008, an average of US$53 billion per year.

Report co-author and GFI Lead Economist, Dev Kar has just published a piece on the blog of the Task Force on Financial Integrity and Economic Development examining some of the drivers behind these illicit outflows and offering some policy solutions.

In the blog, Mr. Kar writes:

Recent news from Russia confirms that corruption is a serious issue that, unless curbed, can prevent the country from emerging as a global economic powerhouse.  Corruption in Russia has been a hangover from the Soviet Union days. It is just that the forces of globalization have provided old hands and the up-and-coming younger generation of Russians with unprecedented opportunities to make money under the table. Of course, the exponential increase in Russia’s natural resource exports (such as petroleum products and natural gas) has not helped matters as far as overall governance is concerned. There is simply too much money in the hands of the too few.

China was the top ranked country measured with total outflows of $2.18 trillion while Mexico, Saudi Arabia, and Malaysia followed Russia at the #3, #4, and #5 spots, respectively.

Visit http://iff-update.gfip.org to download and learn more about the report.

See “President of Tunisia Flees Country, Just Like All the Illegal Capital” for more information on illicit financial outflows from Tunisia.

See “Mexico: As Violence Spreads, Money Flees” for more information on illicit financial outflows from Mexico.

###

Contact:

Monique Perry Danziger
mdanziger@gfip.org
+1 202 293 0740 ext. 222

——-

The Task Force on Financial Integrity and Economic Development addresses inequalities in the global financial system that penalize billions of people, and advocates for improved transparency and accountability.

Global Financial Integrity is a coordinating committee and founding member of the Task Force on Financial Integrity & Economic Development.

For additional information please visit http://www.financialtaskforce.org

Alexanda Hulme / Flickr*

Recent news from Russia confirms that corruption is a serious issue that, unless curbed, can prevent the country from emerging as a global economic powerhouse.  Corruption in Russia has been a hangover from the Soviet Union days. It is just that the forces of globalization have provided old hands and the up-and-coming younger generation of Russians with unprecedented opportunities to make money under the table. Of course, the exponential increase in Russia’s natural resource exports (such as petroleum products and natural gas) has not helped matters as far as overall governance is concerned. There is simply too much money in the hands of the too few.

The history of advanced nations shows that, while each had to find its own way to fight this scourge of illicit capital, the rule of law has always been essential in efforts to raise living standards.  In contrast, significant weaknesses in overall legal, institutional, corporate and political governance in many emerging market countries is posing an increasingly serious challenge for governments to meet the aspirations of the poor for a better life.

A recent study by Global Financial Integrity found that the faster rates of economic growth in India since economic reform started in 1991 have not been inclusive. Even as economic growth lifted millions out of poverty, wealth accrued disproportionately in the upper income brackets.  In fact, further research might well show that while growth rates have been on the uptick in Brazil, Russia, China, and other emerging market countries, that happy scenario has neither spawned commensurate improvements in the living conditions of their very poor nor provided an incentive for better governance.

Indeed, as in India, widespread corruption, reflected in a growing underground economy, together with growth concentrating wealth in the hands of a few, is driving illicit capital from Russia. A new GFI study released this week shows that in the decade ending 2009, Russia has generated an increasingly larger share of all illicit capital from developing countries. Such outflows average over US$50 billion annually during this period—likely a significantly understated estimate given the limitations of economic methods to capture all sources of ill-gotten capital. The overwhelming majority of the cross-border transfer of illicit capital from the country takes place through the balance of payments and not through trade mispricing.  In fact, the traditional method of estimating illicit flows would net out illicit inflows through trade mispricing which would reduce gross outflows sufficiently to give the misleading impression that Russia is a well-governed, corruption-free, country. Because the Traditional method of estimating capital flight from developing countries gives credit to where it is not due (namely netting out illicit inflows from outflows as if illicit inflows somehow benefit a country), we see the underlying methodology as deeply flawed.

To curb corruption, Russia must take a long hard look at itself beginning with those in power.  Muddling along is not an alternative for there is a real danger that endemic corruption will beget further social unrest.

* Some rights reserved by Alexanda Hulme

The 2010 CPI shows that nearly three quarters of the 178 countries in the index score below five, on a scale from 0 (perceived to be highly corrupt) to 10 (perceived to have low levels of corruption), indicating a serious corruption problem.

“These results signal that significantly greater efforts must go into strengthening governance across the globe. With the livelihoods of so many at stake, governments’ commitments to anti-corruption, transparency and accountability must speak through their actions. Good governance is an essential part of the solution to the global policy challenges governments face today,” said Huguette Labelle, Chair of Transparency International (TI).

To fully address these challenges, governments need to integrate anti-corruption measures in all spheres, from the responses to the financial crisis and climate change to commitments by the international community to eradicate poverty. For this reason TI advocates stricter implementation of the UN Convention against Corruption, the only global initiative that provides a framework for putting an end to corruption.

“Allowing corruption to continue is unacceptable; too many poor and vulnerable people continue to suffer its consequences around the world. We need to see more enforcement of existing rules and laws. There should be nowhere to hide for the corrupt or their money,” said Labelle.

Corruption Perceptions Index 2010: The results

In the 2010 CPI, Denmark, New Zealand and Singapore tie for first place with scores of 9.3. Unstable governments, often with a legacy of conflict, continue to dominate the bottom rungs of the CPI. Afghanistan and Myanmar share second to last place with a score of 1.4, with Somalia coming in last with a score of 1.1.

Where source surveys for individual countries remain the same, and where there is corroboration by more than half of those sources, real changes in perceptions can be ascertained. Using these criteria, it is possible to establish an improvement in scores from 2009 to 2010 for Bhutan, Chile, Ecuador, FYR Macedonia, Gambia, Haiti, Jamaica, Kuwait, and Qatar. Similarly, a decline in scores from 2009 to 2010 can be identified for the Czech Republic, Greece, Hungary, Italy, Madagascar, Niger and the United States.

Financial fallout

Notable among decliners are some of the countries most affected by a financial crisis precipitated by transparency and integrity deficits. Among those improving, the general absence of OECD states underlines the fact that all nations need to bolster their good governance mechanisms.

TI’s assessment of 36 industrialised countries party to the OECD anti-bribery convention, which forbids bribery of foreign officials, reveals that as many as 20 show little or no enforcement of the rules, sending the wrong signal about their commitment to curb corrupt practices. While corruption continues to plague fledgling states, hampering their efforts to build and strengthen institutions, protect human rights and improve livelihoods, corrupt international flows continue to be considerable.

“The results of this year’s CPI show again that corruption is a global problem that must be addressed in global policy reforms. It is commendable that the Group of 20 in pursuing financial reform has made strong commitments to transparency and integrity ahead of their November summit in Seoul,” said Labelle. “But the process of reform itself must be accelerated.”

TI calls on the G20 to mandate greater government oversight and public transparency in all measures they take to reduce systemic risks and opportunities for corruption and fraud in the public as well as in the private sector.

The message is clear: across the globe, transparency and accountability are critical to restoring trust and turning back the tide of corruption. Without them, global policy solutions to many global crises are at risk.

For more information on Transparency International, visit www.transparency.org.

Click here for interactive graphics and more information on the report.

Click here to download the full report (English).

Click here to download the full French version of the report (Français).

It’s also important to remember that on a day as symbolically important as tomorrow, we (in the developed world) have a tendency to think of corruption solely as a problem for public officials in the developing world.  Indeed, government corruption is not good, but Raymond Baker’s work has shown that only a small percent of the illicit financial flows from developing countries result from public corruption.  The vast majority of illicit financial flows are caused by private corruption – specifically trade mispricing by multinational corporations.  The problem is also facilitated by the opacity in the international financial system – a system that is dominated by Western financial institutions.

So this International Anti-Corruption Day be sure to reflect on both private and public corruption, without forgetting the enabling role of Western financial institutions in this systemic problem.

Confidential U.S. government documents uncovered by campaign group Global Witness and reported on in today’s New York Times, strongly suggest that Teodorin Obiang, son of the dictator of oil-rich Equatorial Guinea, purchased a $33 million private jet, a $35 million Malibu mansion, speedboats and a fleet of fast cars using corruptly acquired funds.

A new Global Witness report, ‘The Secret Life of a Shopaholic’, explains how, despite the ample evidence against him, the investigation is going nowhere and Teodorin continues to be allowed into the U.S. He is reported to be building a custom 200 foot yacht with shark tank but the ordinary citizens of the West African nation continue to exist in poverty and oppression.

“U.S. law requires the State Department to deny visas to foreign officials when there is credible evidence they are involved in corruption; yet the authorities have continued to allow Teodorin to come and go as he pleases. The only possible excuse would be if there was an active investigation and a need to continue gathering evidence, but the investigation is inactive. One wonders whether the U.S. is inclined to turn a blind eye to the evidence of corruption-fuelled excess because of its desire to retain access to his country’s oil,” said Anthea Lawson, a senior investigator at Global Witness.

According to the documents from the Justice Department and Immigration and Customs Enforcement (ICE), Teodorin, who earns a few thousand dollars a month as a minister in his father’s government, transferred about $75 million into U.S. banks between 2005 and 2007, via wire transfers processed by Bank of America, Wachovia, UBS, Union Bank of California and First American Trust.

The first two of these banks filed suspicious activity reports to the authorities about the transactions and eventually blacklisted him as a customer – but not until after they had helped him move tens of millions of dollars into the country.

“This was a spectacular moral failing by the banks, and reveals a disturbing chain of gaps in the design and implementation of the anti-money laundering laws. In 2004, the U.S. bank, Riggs, was fined $41 million and sold off at a discount after a Senate inquiry uncovered it was banking for the corrupt Obiang family. Have no lessons been learnt at all?” Ms Lawson said.

The documents were written by investigators from the Justice Department and ICE to request information from French law enforcement agencies as some of the transfers had come via French banks. They relate to a preliminary money laundering investigation. No charges have been made and sources have told Global Witness that the investigation has effectively stalled.

“With its plentiful oil, paid for by American companies, Equatorial Guinea should be one of the richest countries in the world. Instead its people are among the poorest, and the government is an extreme example of a kleptocracy in action. The U.S. has generally taken a far more effective and robust approach to tackling foreign corruption and bribery than many of its international peers but it seems to have a blind spot when it comes to Equatorial Guinea,” said Ms Lawson.

/ Ends

Read the report

Confidential U.S. government documents uncovered by campaign group Global Witness and reported on in today’s New York Times, strongly suggest that Teodorin Obiang, son of the dictator of oil-rich Equatorial Guinea, purchased a $33 million private jet, a $35 million Malibu mansion, speedboats and a fleet of fast cars using corruptly acquired funds.

A new Global Witness report, ‘The Secret Life of a Shopaholic: How an African dictator’s playboy son went on a multi-million dollar shopping spree in the US‘, explains how, despite the ample evidence against him, the investigation is going nowhere and Teodorin continues to be allowed into the U.S. He is reported to be building a custom 200 foot yacht with shark tank but the ordinary citizens of the West African nation continue to exist in poverty and oppression.

Continue reading the press release…

Doha, Qatar~ Saturday, November 7, 2009

Your Highness, Attorney General Al-Marri, Excellencies, Colleagues:

It is a distinct honor for me to join you to inaugurate the Sixth Global Forum on Combating Corruption and Safeguarding Integrity. Let me begin by commending the leadership and hospitality of His Highness, the Emir — as well as that of His Excellency Dr. Al-Marri and of the Government of Qatar — in their role as hosts of both the Global Forum and the Third Conference of States Parties to the United Nations Convention Against Corruption.

We come here for two reasons: To celebrate what has been accomplished since Global Forum One; and – more important — to recommit ourselves to the task that remains — the task of fighting corruption wherever it manifests itself. We have made progress in this fight — but we must do more.

As President Obama has said, “The struggle against corruption is one of the great struggles of our time.” Corruption is condemned by all religions, all ethical codes, all legal systems. It hinders all development, slows all progress, impedes all advancement — both within our own countries and across our borders. It strikes hardest at the poor and vulnerable, siphoning scarce resources away from those most in need. It advances the selfish interests of a dishonest few over the interests of the great many who work hard and who obey the law and our common traditions. Corruption erodes trust in government and private institutions alike; it undermines confidence in the fairness of free and open markets; and it breeds contempt for the rule of law. Corruption is, simply put, a scourge on civil society.

And yet corruption continues to flourish. All nations – all nations — struggle against corruption – the United States no less than every other nation represented here. I know this- I began my career as a lawyer who prosecuted American public officials who betrayed the trust of the people they were sworn to serve. And all nations can do more. That is why this gathering is so important. Since Vice President Al Gore opened the first Global Forum ten years ago, this conference has stood as a crucial rallying point in the great international struggle against corruption. From Washington to The Hague, from Seoul to Brasilia, in Johannesburg and, now, in Doha, we have joined together every two years to consider how best to fight corruption.

During these ten years, we have accomplished much. We have joined hands to draft and bring into force the United Nations Convention Against Corruption — the first truly global anti-corruption treaty. We have seen unprecedented cooperation across international boundaries to tackle corruption. And we have witnessed such important developments as the establishment of the Extractive Industries Transparency Initiative.

Yet this is not the time to rest on our laurels. For despite our important achievements, the cancer of corruption remains. Indeed, each and every one of us here should be alarmed by the sobering results of Transparency International’s 2009 Global Corruption Barometer, a global public opinion survey of more than 73,000 people in 69 countries. Half of the respondents to that survey viewed the private sector as corrupt – an increase of eight percent from five years ago. More than 60 percent of respondents said that political parties, parliaments, and government civil service were corrupt. And the poor continued to pay more, largely as a result of petty bribery demands. Shockingly, in some regions, four-in-ten respondents reported having had to make bribe payments in the past year. And only three-in-ten respondents to the survey said that their government’s efforts to fight corruption were effective. This last statistic should be a clarion call to all of us here today.

So it is with purpose and urgency that we come here — not simply to acknowledge our achievements, but to chart a way forward that will make our efforts to fight corruption more effective. We must act. Let me suggest three critical steps that I believe we should take together.

First, we must renew our efforts for ratification and full implementation of the UN Convention Against Corruption. Seven years after it opened for signature, several of the world’s largest economies – including several of our close partners in the G-20 – still have not ratified the Convention. Still others that have ratified have not fully implemented the Convention. We again call upon all countries to join and implement the Convention.

And all of us who already are parties to the Convention must put in place an effective, transparent, and inclusive review mechanism. That is the critical question that we face this coming week in the Conference of States Parties. We will have failed our Governments and more importantly our peoples if we do not produce a review mechanism that is itself transparent and inclusive, and that allows our experts to have a candid dialogue about each nation’s anti-corruption efforts. I urge the delegations to dedicate themselves to achieving this goal.

Second, we must work together to ensure that corrupt officials do not retain the illicit proceeds of their corruption. There is no gentle way to say it: When kleptocrats loot their nations’ treasuries, steal natural resources, and embezzle development aid, they condemn their nations’ children to starvation and disease. In the face of this manifest injustice, asset recovery is a global imperative.

In response to this ongoing challenge, I stand before you to announce a redoubled commitment on behalf of the United States Department of Justice to recover such funds. Indeed, we have scored successes in this regard already. Through enforcement of our asset forfeiture laws, and in close cooperation with our law enforcement partners in other countries, the United States was able to repatriate more than $20 million to the nation of Peru that was looted during the government of Alberto Fujimori and Vladimiro Montesinos — and we have assisted in the repatriation of tens of millions of dollars more. We likewise have forfeited and repatriated more than $100 million to Italy that constituted proceeds of corruption in the judiciary, and have repatriated several million dollars to the Government of Nicaragua traceable to the illicit conduct of the administration of Arnoldo Aleman.

But we – both the United States and all countries here – need to do more. It is only with a truly international and cooperative response that we will be able to achieve success in recovering the proceeds of corruption. Asset recovery requires the dedication and expertise of investigators and prosecutors in both the country victimized by the corrupt acts and in those countries in which corruption proceeds have been secreted. In that regard, with support from the U.S. Department of State, we will continue and expand our Asset Recovery Mentor Program piloted earlier this year, and – as called for in the Leaders’ Statement at the G-20 Summit in Pittsburgh, we will work with the World Bank’s Stolen Assets Recovery Program, and with the Financial Action Task Force. I challenge all of my colleagues here today similarly to commit to concerted action in support of asset recovery.

Third, countries must end official impunity with regard to corruption. In a number of countries, immunity for actions of public officials, judges, and parliamentarians has been broadly adopted, often for the legitimate reason of affording officials protection from politically motivated prosecutions. In too many places, however, public officials are given blanket immunity from investigation and prosecution for any action, even where the conduct involves public corruption. In such places, immunity becomes impunity. This cannot stand.

Let me be clear: Swift and effective prosecution of corrupt public officials must be at the core of our broader effort to end corruption. As I indicated, this mandate is deeply personal to me. More than thirty years ago, fresh out of law school, I started my career as a new prosecutor in the United States Department of Justice, prosecuting public officials and those who bribed them. I know first-hand the challenges of fighting corruption as well as the considerable obstacles to effective enforcement. But I also know the vital importance of these efforts. As law enforcement officials, we can have no more solemn duty than to protect the integrity of our government institutions by vindicating the rights of those harmed by the greed and dishonesty of a corrupt few.

The importance of vigorous prosecution of corrupt public officials is a lesson that we in the United States have learned though hard experience. Indeed, from 2004 through 2008, the Department of Justice has convicted hundreds of public officials in the United States. We have convicted elected officials, appointed officials, military officials, and judges, as well as private citizens who illegally sought unfair advantage by bribing public officials.

Key to these efforts is the dedication of career prosecutors with the independence to prosecute corruption cases objectively and fairly, without regard to political affiliation, status, wealth, or position. Because of these prosecutors’ tireless work, our institutions are stronger, our markets are fairer, and our people are better off.

We must all strive for this, and we must help each other in this vital cause. We must vigorously enforce our own laws that prohibit bribery of foreign officials, such as, in the United States, the Foreign Corrupt Practices Act. And we must work together to support our partners in anti-corruption enforcement, and expose all efforts to undermine the effectiveness of anti-corruption initiatives. Together, we can make a difference.

So while this Global Forum series is coming to a conclusion, the work of the Global Forum must not end. Its spirit and its mission must, and will, live on — in the UN Conference of States Parties, in the International Anticorruption Conference, and in the daily work of the many civic organizations, institutions, and governments present here today.

In this great struggle, we must not falter or compromise. Too many children’s lives, too many communities’ hopes, too many futures depend upon the fulfillment of our commitment. We must not turn away from what is truly a defining issue of our time. What, my colleagues, will you do? How committed to this effort will you be? Join me in dedicating ourselves to eradicating the plague of corruption from all of our countries. Our people demand, and deserve, nothing less.

Thank you.

–

Source: US Department of Justice

The Kibaki administration is ruffled by the United States Government latest actions on Kenya and it has nothing to do with travel bans. Money is at stake and the soft underbelly of the regime is exposed. Although it touts itself as financially self-reliant, in truth the Grant Coalition Government of Mwai Kibaki and Raila Odinga cannot afford to ignore the International Community and especially the United States’ stated intention of scrutinizing all loans and financial programmes for Kenya by the International Financial Institutions.

The statement continues, moving on to state that the actions of the U.S. to pressure reform within the government not only have the power to influence Kenyan politicians, but that they are also supported by the Kenyan public:

The news is encouraging, because it means that the Kenya Government cannot as it has always done in the recent past ignore the demands of Kenyans for reform and implementation of the National Accord without consequences. The picture emerging is that the Kenyan public have friends and powerful friends to boot and now the Grand Coalition Government could be facing a serious reality check. You can thumb your nose at public opinion about your economic management of public resources, but there are responsible Governments in the International Community who will have none of it.

Emphasizing this point further, the statement notes that:

The United States is certainly not acting alone. It acts with the support and gratitude of Kenyan Public. The latter is confirmed by public opinion polling by the Kenyan media. The sign of the times, if now seen for what it is should shock the Government into immediate action. The Kenyan Government as sovereign as it may claim to be, cannot do without Bretton Woods Support and the Kenyan public will refuse to be committed to pay private commercial loans to support a Government that is not accountable to its people.

This action by a non-governmental organization within Kenya demonstrates the demand that Kenyan citizens have for government accountability as well as an understanding of the ways in which the Kenyan government relies on international support in order to stay afloat. The organization has previously written letters to Kenya’s multilateral and bilateral donors. In one letter, the organization asked the IMF Board of Directors, “to consider the opinion of those Kenyans who will inevitably be taxed to repay whatever loan the Government of Kenya obtains regardless of whether or not Kenyans obtained any developmental benefit from it.”

The statement points out that the World Bank had already suspended two large projects over the course of two days. This is following Kenyan government auditors’ discovery of losses worth $1.8 million in two World Bank-funded projects. According to Finance Minister Uhuru Kenyatta, the losses appear to be due to “fraud and corruption.” The efforts of the U.S. are echoed in Kofi Annan’s return to Kenya on Sunday, on a visit in which he is “expected to pressure Kenyan leaders to speed up the pace of reforms…”