Crime and Corruption | Page 3

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Crime and Corruption
1st EDITION

Sam Vaknin, Ph.D.

Editing and Design: Lidija Rangelovska

Lidija Rangelovska A Narcissus Publications Imprint, Skopje 2002
First published by United Press International – UPI Not for Sale! Non-commercial edition.

? 2002 Copyright Lidija Rangelovska. All rights reserved. This book, or any part thereof, may not be used or reproduced in any manner without written permission from: Lidija Rangelovska – write to: [email protected] or to [email protected]
Visit the Author Archive of Dr. Sam Vaknin in "Central Europe Review": http://www.ce- review.org/authorarchives/vaknin_archive/vaknin_main.html
Visit Sam Vaknin's United Press International (UPI) Article Archive –Click HERE!

ISBN: 9989-929-36-X
http://samvak.tripod.com/guide.html http://economics.cjb.net http://samvak.tripod.com/after.html
Created by: LIDIJA RANGELOVSKA REPUBLIC OF MACEDONIA

C O N T E N T S
I. Slush Funds II. Corruption and Transparency III. Money Laundering in a Changed World IV. Hawala, the Bank that Never Was V. Straf – Corruption in Central and Eastern Europe VI. Russia’s Missing Billions VII. The Enrons of the East VIII. The Typology of Financial Scandals IX. The Shadowy World of International Finance X. Maritime Piracy XI. The Author XII. About "After the Rain"
Slush Funds
According to David McClintick ("Swordfish: A True Story of Ambition, Savagery, and Betrayal"), in the late 1980's, the FBI and DEA set up dummy corporations to deal in drugs. They funneled into these corporate fronts money from drug-related asset seizures. The idea was to infiltrate global crime networks but a lot of the money in "Operation Swordfish" may have ended up in the wrong pockets. Government agents and sheriffs got mysteriously and filthily rich and the whole sorry affair was wound down. The GAO reported more than $3.6 billion missing. This bit of history gave rise to at least one blockbuster with Oscar-winner Halle Berry. Alas, slush funds are much less glamorous in reality. They usually involve grubby politicians, pawky bankers, and philistine businessmen - rather than glamorous hackers and James Bondean secret agents. The Kazakh prime minister, Imanghaliy Tasmaghambetov, freely admitted on April 4 to his country's rubber-stamp parliament the existence of a $1 billion slush fund. The money was apparently skimmed off the proceeds of the opaque sale of the Tengiz oilfield. Remitting it to Kazakhstan - he expostulated with a poker face - would have fostered inflation. So, the country's president, Nazarbaev, kept the funds abroad "for use in the event of either an economic crisis or a threat to Kazakhstan's security".

The money was used to pay off pension arrears in 1997 and to offset the pernicious effects of the 1998 devaluation of the Russian ruble. What was left was duly transferred to the $1.5 billion National Fund, the PM insisted. Alas, the original money in the Fund came entirely from another sale of oil assets to Chevron, thus casting in doubt the official version. The National Fund was, indeed, augmented by a transfer or two from the slush fund - but at least one of these transfers occurred only 11 days after the damning revelations. Moreover, despite incontrovertible evidence to the contrary, the unfazed premier denied that his president possesses multi-million dollar bank accounts abroad. He later rescinded this last bit of disinformation. The president, he said, has no bank accounts abroad but will promptly return all the money in these non-existent accounts to Kazakhstan. These vehemently denied accounts, he speculated, were set up by the president's adversaries "for the purpose of compromising his name". On April 15, even the docile opposition had enough of this fuzzy logic. They established a People Oil's Fund to monitor, henceforth, the regime's