Liberal Forum

CORRUPTION CORPORATION: The Dirty Money That Powered The Arab Spring...

BRIBERY SCANDAL FUELS GLOBAL INSTABILITY

There’s A Huge New Corporate Corruption Scandal.
Here’s Why Everyone Should Care.
Bribery fuels political instability — and it’s a propaganda tool for terrorists.

Most people remember that the Arab Spring started with a guy who lit himself on fire. What they don’t remember is that he did it as a protest against corruption:
Mohamed Bouazizi, a Tunisian fruit vendor, decided he’d been shaken down by police officers one too many times.

Bouazizi’s death set in motion the biggest political upheaval of the 21st century.
The Arab Spring was “mostly about corruption,” said FBI Special Agent George McEachern, one of the leading investigators of global graft. “Corruption leads to failed states, which leads to terrorism.”

That’s what makes the corruption revealed in a new trove of confidential emails from a mysterious Monaco-based company called Unaoil so significant.

On Wednesday, The Huffington Post and its Australian partner, Fairfax Media — led by reporters Richard Baker and Nick McKenzie — published the results of a months-long investigation of Unaoil, an obscure firm that helps big multinational corporations win contracts in areas of the world where corruption is common.

Hundreds of major international corporations — including Halliburton, its former subsidiary KBR, Rolls-Royce and Samsung — counted on Unaoil to secure lucrative contracts in Iraq, Kazakhstan, Libya, Syria, Tunisia, and other countries in Africa, the Middle East, and the former Soviet Union, tens of thousands of internal emails and documents reveal.

It’s common for large multinational corporations to partner with smaller firms with local expertise to win contracts. But in many cases, Unaoil wasn’t winning contracts because of its expertise — it was winning them by paying millions of dollars in bribes to corrupt officials.

Most of the companies that worked with Unaoil denied involvement in corrupt activities. “KBR is committed to conducting its business honestly, with integrity, and in compliance with all applicable laws,” a spokeswoman said. “We do not tolerate illegal or unethical practices by our employees or others working on behalf of the Company.”

Samsung “has always complied with the laws and regulations when performing business,” the company said. Rolls-Royce, which sent a Unaoil subsidiary a letter in 2013 suspending the relationship, citing corruption allegations, said that it is “co-operating with the authorities and do not comment on ongoing investigations. We have made it clear that Rolls-Royce will not tolerate business misconduct of any kind.”

By aiding the corruption of already-distrusted regimes and accelerating the flow of money and resources out of poor countries, Unaoil and its partners were risking far more than fines and criminal penalties. They were creating political instability, turning citizens against their governments, and fueling the rage that would erupt during the Arab Spring — and be exploited by terrorist groups like al Qaeda and the Islamic State.

Companies and individuals pay at least $1 trillion in bribes to public sector officials annually, according to an estimate by Daniel Kaufman, a governance expert with the World Bank Institute.

The Unaoil emails don’t show corrupt third-world kleptocracies shaking down helpless Western corporations.

They show the opposite: Unaoil, working for Western companies, is seen slowly corrupting foreign officials, starting off with small gifts and shopping sprees and eventually hooking them on major graft.

“There is always somebody who pays,” the billionaire hedge fund magnate George Soros has said, “and international business is generally the main source of corruption.” That’s part of the story that terrorists have long told local populations to justify jihadist insurgency. In many of the cases uncovered here, it happens to be true.

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