This week I noticed one thing, all governments whether of developed, developing or third world countries are claiming their helplessness in bringing about a change. Now isn’t it amazing the citizens of the world assume that the government has the power to manage the nation and heads of nations are giving justifications for not being able to do the right thing for the people. You might question since when has doing the right thing become such a difficult task? Right thing to do is easy when self-interest is not at stake. This week I am covering three posts, which highlight governments’ inability to do the right thing.
The first post is from Rolling Stone -“Why Isn’t Wall Street in Jail?” The post discusses the financial crises in US. It talks about how no senior official of financial institution was prosecuted for the damage. It emphasizes that in US normal people who steal less than a $100 end up in prison, and who have defrauded/ mismanaged billions of dollars go scot free. In most cases the Wall Street big guys have not been investigated, leave alone being prosecuted. The American public is unable to do anything about it and just watch the whole society paying the cost of greed of a few.
You will find an Indian citizen loudly complaining about corrupt politicians, corrupt judiciary and corrupt law enforcement agencies. Remarkably, I have not seen in an American blogger making a statement that his/her government is corrupt. If the creators of financial crises are unpunished, there is clearly some high level corruption. I am not sure why Americans hesitate to use the word. Maybe they are fearful or politically correct.
This brings me to the Indian scenario. I rarely feel grateful to Indian politicians and media because of the level of corruption. However, I must give them credit that despite these factors they managed to hold government accountable for the recent scams. They have forced the Indian government to commence investigations against the culprits. Most of the main accused of scams are presently vacationing in Tihar jail.
Now our Indian politicians have screaming matches in Parliament and stomp out when their viewpoint is not heard. Infrequently they stand of chairs to shout at other members of parliament. This may not be politically correct, and may require rethinking the meaning of leadership but seems to be more effective than the civilized decorum of US Senate. Here is an extract of Prime Minister’s Manmohan Singh opening remarks at a media meeting on 16 February 2011 giving a clarification on corruption charges.
The discussion wouldn’t be complete without Egypt and Tunisia. Kudos to the citizens of both the nations, they brought down corrupt governments. They didn’t consider themselves helpless but the international community does consider itself helpless. Ex-president’s of Tunisia and Egypt are stated of having billions of dollars and assets stashed away in developed countries. However, governments of UK, US, Switzerland and other countries are yet to freeze their accounts. These countries are unable to explain why they accepted illicit money in the first place. My view is it will take time for new governments of Tunisia and Egypt to embark on judicial proceedings against the ex-presidents. The international community is going to state later that in their respective countries the two have no assets. Read the interesting post from Taskforce- No Impunity for Corrupt Dictators.
Click on the headings to read the full post.
Financial crooks brought down the world’s economy — but the feds are doing more to protect them than to prosecute them
The rest of them, all of them, got off. Not a single executive who ran the companies that cooked up and cashed in on the phony financial boom — an industrywide scam that involved the mass sale of mismarked, fraudulent mortgage-backed securities — has ever been convicted. Their names by now are familiar to even the most casual Middle American news consumer: companies like AIG, Goldman Sachs, Lehman Brothers, JP Morgan Chase, Bank of America and Morgan Stanley. Most of these firms were directly involved in elaborate fraud and theft. Lehman Brothers hid billions in loans from its investors. Bank of America lied about billions in bonuses. Goldman Sachs failed to tell clients how it put together the born-to-lose toxic mortgage deals it was selling. What’s more, many of these companies had corporate chieftains whose actions cost investors billions — from AIG derivatives chief Joe Cassano, who assured investors they would not lose even “one dollar” just months before his unit imploded, to the $263 million in compensation that former Lehman chief Dick “The Gorilla” Fuld conveniently failed to disclose. Yet not one of them has faced time behind bars.
In the end, of course, it wasn’t just the executives of Lehman and AIGFP who got passes. Virtually every one of the major players on Wall Street was similarly embroiled in scandal, yet their executives skated off into the sunset, uncharged and unfined. Goldman Sachs paid $550 million last year when it was caught defrauding investors with crappy mortgages, but no executive has been fined or jailed — not even Fabrice “Fabulous Fab” Tourre, Goldman’s outrageous Euro-douche who gleefully e-mailed a pal about the “surreal” transactions in the middle of a meeting with the firm’s victims. In a similar case, a sales executive at the German powerhouse Deutsche Bank got off on charges of insider trading; its general counsel at the time of the questionable deals, Robert Khuzami, now serves as director of enforcement for the SEC.
So there you have it. Illegal immigrants: 393,000. Lying moms: one. Bankers: zero. The math makes sense only because the politics are so obvious. You want to win elections, you bang on the jailable class. You build prisons and fill them with people for selling dime bags and stealing CD players. But for stealing a billion dollars? For fraud that puts a million people into foreclosure? Pass. It’s not a crime. Prison is too harsh. Get them to say they’re sorry, and move on. Oh, wait — let’s not even make them say they’re sorry. That’s too mean; let’s just give them a piece of paper with a government stamp on it, officially clearing them of the need to apologize, and make them pay a fine instead. But don’t make them pay it out of their own pockets, and don’t ask them to give back the money they stole. In fact, let them profit from their collective crimes, to the tune of a record $135 billion in pay and benefits last year. What’s next? Taxpayer-funded massages for every Wall Street executive guilty of fraud?
2. Prime Minister Manmohan Singh’s Opening Remarks at the meeting with Editors of Electronic Media – 16 February 2011
During the last couple of months, the media have drawn the country’s attention to some aberrations whether in the form of allocation of 2G spectrum, the Commonwealth Games and more recently some developments in the Space organization, Adarsh society affairs. I think media have played a very important role in drawing the country’s attention to these issues which require corrective action. I wish to assure you and I wish to assure the country as a whole that our Government is dead serious in bringing to book all the wrong doers, regardless of the position they may occupy. However I would like to say that in projecting these events an impression has gone round that we are a scam-driven country and that nothing good is happening in our country. In the process, believingly, I think we are weakening the self-confidence of the people of India. I don’t that it is in the interest of anybody in our country. We have a functioning government, and whatever some people may say that we are a lame duck government that I am a lame duck prime minister, we take our job very seriously, we are here to govern and to govern effectively, tackle the problems as they arise and get this country moving forward on a pace of development which would do justice to the demands being made on the process of governance.
I wish to tell you that our economy is in good shape. We will have a growth rate of 8.5 percent this fiscal year and that the way India has come out and tackled the aftermath of international financial crisis, I think does our country a great credit. It is certainly true that in recent months inflation and food inflation in particular has been a problem. We want to deal it in a manner that the growth rhythm is not disturbed. If we were concerned with only curbing inflation I think we could have done it by pursuing tighter monetary policies, we could have brought about a situation where price rise could be moderated. But if in the process, growth process gets hurt I think that would not do our country any good and we are trying to deal with inflation at a time when we don’t have all instruments at our command in the sense that we do not have control over international events. We are now increasingly an open economy and the oil prices are rising, the food prices are rising, commodity prices are rising, we have to deal with inflation despite an adverse international environment and you have my assurance that we will succeed. And at the end of the fiscal year, the inflation rate should come down to no more than 7 percent.
The recent events in Tunisia and Egypt have demonstrated the power of citizens who won’t endure corrupt governments any longer. Their call for accountable and transparent leadership to ensure an equal distribution of public goods was heard around the world.
In France, the UK and Switzerland governments heeded calls to freeze and investigate the assets of ex-president of Tunisia Ben Ali and ex-president of Egypt Hosni Mubarak and their families. There should be no impunity for those who wield power for their own benefit and not for their people.
The international community has a duty to act. Effective international action against misappropriation of funds and money-laundering sends the message to corrupt politicians and business people all over the world that they will not be able to hide their assets easily anymore. In November last year the G20 signed on to a comprehensive Anti-Corruption Action Plan.
But as we know well, commitments made on the international stage don’t always translate into immediate actions; especially where long established power networks prevail. So that’s why we have to keep the pressure on. Just this week we got together with Global Witness to send a letter signed by 78 civil society organisations to the G20 Finance Ministers meeting in Paris on 18-19 February calling on the G20 to act now.
The Anti-Corruption Action Plan when fully implemented would make a big difference. It mandates international cooperation in preventing illicit flows into G20 financial markets and in tracing and recovering stolen assets. It also calls for criminalisation and prosecution of foreign bribery, measures to prevent corruption in the public sector and enhanced protection of whistleblowers, which have long been requests from civil society and anti-corruption fighters.
The Action Plan is largely based on the UN Convention Against Corruption which has been ratified by all but four G20 countries. The laggards are Germany, India, Japan and Saudi-Arabia.
As the governments are helpless, maybe the public should stop feeling helpless and hopeless. The world citizens need to actively ensure that their is justice and equity in the society. We can get excellent guidance from Gene Sharp the author of the book “From Dictatorship to Democracy” (link here). On his site Albert Einstein Institution he has put a lot of material to conduct a non-violent revolution. Mr. Sharp is definitely thought-provoking and inspiring.