Financial Crime and Corruption by Samuel Vaknin

7. Does the NGO own or run commercial enterprises? If it

1908 words  |  Chapter 77

does, it is a corrupt and compromised NGO involved in conflicts of interest. Q. The way you describe, many NGO are already more powerful and politically influential than many governments. What kind of dangers this elicits? Do you think they are a pest that need control? What kind of control would that be? A. The voluntary sector is now a cancerous phenomenon. NGOs interfere in domestic politics and take sides in election campaigns. They disrupt local economies to the detriment of the impoverished populace. They impose alien religious or Western values. They justify military interventions. They maintain commercial interests which compete with indigenous manufacturers. They provoke unrest in many a place. And this is a partial list. The trouble is that, as opposed to most governments in the world, NGOs are authoritarian. They are not elected institutions. They cannot be voted down. The people have no power over them. Most NGOs are ominously and tellingly secretive about their activities and finances. Light disinfects. The solution is to force NGOs to become both democratic and accountable. All countries and multinational organizations (such as the UN) should pass laws and sign international conventions to regulate the formation and operation of NGOs. NGOs should be forced to democratize. Elections should be introduced on every level. All NGOs should hold "annual stakeholder meetings" and include in these gatherings representatives of the target populations of the NGOs. NGO finances should be made completely transparent and publicly accessible. New accounting standards should be developed and introduced to cope with the current pecuniary opacity and operational double- speak of NGOs. Q. It seems that many values carried by NGO are typically modern and Western. What kind of problems this creates in more traditional and culturally different countries? A. Big problems. The assumption that the West has the monopoly on ethical values is undisguised cultural chauvinism. This arrogance is the 21st century equivalent of the colonialism and racism of the 19th and 20th century. Local populations throughout the world resent this haughty presumption and imposition bitterly. As you said, NGOs are proponents of modern Western values - democracy, women's lib, human rights, civil rights, the protection of minorities, freedom, equality. Not everyone finds this liberal menu palatable. The arrival of NGOs often provokes social polarization and cultural clashes. XLVII. Quis Custodiet Ipsos Custodes? Who is Guarding the Guards in Countries in Transition from Communism? Written: August 23, 1999 Izetbegovic, the nominal president of the nominal Bosnian state, the darling of the gullible western media, denies that he and his cronies and his cronies' cronies stole 40% of all civilian aid targeted at Bosnia - a minor matter of 1 billion US dollars and change, in less than 4 years. The tribes of the Balkans stop bleeding each other to death only when they gang up to bleed another. In this, there are no races and no traces - everyone is equal under the sign of the dollar. Serbs, Bosnians and Croats divided the loot with the loftiest of egalitarian instincts. Honour among thieves transformed into honour among victims and their murderers. Mammon is the only real authority in this god forsaken, writhing rump of a country. And not only there. In Russia, billions (3 to 5) were transferred to secret off shore bank accounts to be "portfolio managed" by mysterious fly-by-night entities. Many paid with their jobs when the trail led to the incestuous Yeltsin clan and their byzantine court. Convoys snake across the mountainous Kosovo, bringing smuggled goods at exorbitant prices to the inhabitants of this parched territory - all under the avuncular gaze of multinational peacekeepers. In Romania, Hungary and Greece, UN forces have been known to take bribes to allow goods into besieged Serbia. Oil, weapons and strategic materials, all slid across this greasy channel of the international brotherhood of cash. A lot of the aid, ostensibly intended to ameliorate the state of refugedom imposed upon the unsuspecting, harried population of Kosovo - resurfaced in markets, white and black, across the region. Food, blankets, tents, electrical equipment, even toys - were on offer in bazaars from Skopje to Podgorica and from Sofia to Thessaloniki, replete with the stamps of the unwitting donors. Aid workers scurried back and forth in expensive utility vehicles, buzzing mobile phones in hand and latest model, officially purchased, infrared laptops humming in the air conditioned coolness of their five star hotel rooms (or fancy apartments). In their back pockets they safeguarded their first class tickets (the food is better and the stewardesses ...). The scavengers of every carnage, they descended upon this tortured land in redundant hordes, feeding off the misery, the autoimmune deficiency of the syndrome of humanism. Ask yourselves: how could one of every 3 dollars - 50% of GNP - be stolen in a country the size of a tiny American state - without the knowledge and collaboration of the international organizations which ostensibly manage this bedlam? Why did the IMF renew the credit lines to a Russia which cheated bold-facely regarding its foreign exchange reserves? How was Serbia awash and flush with oil and other goods prohibited under the terms of the never-ending series of embargoes imposed upon it? The answer is that potent cocktail of fear and graft. First came fear - that Russia will collapse, that the Balkans will spill over, that Bosnia will disintegrate. Nuclear nightmares intermingled with Armenian and Jewish flashbacks of genocide. The west shut its eyes tight and threw money at the bad spirits of irredentism and re- emergent communism. The long arm of the USA, the "international" financial institutions, collaborated in constructing the habit forming dole house that Eastern and Southern Europe has become. This conflict-reticence, these approach-avoidance cycles led to an inevitable collusion between the ruling mob families that pass for regimes in these parts of the planet - and the unilateral institutions that pass for multilateral ones in the rest of it. An elaborate system of winks and nods, the sign language of institutional rot and decaying governance, took over. Greasy palms clapped one another with the eerie silence of conspiracy. The world looked away as both - international financial institutions and corrupt regimes - robbed their constituencies blind. This was perceived to be the inevitable moral cost of stability. Survival of the majority entailed the filthy enrichment of the minority. And the west acquiesced. But this grand design backfired. Like insidious bacteria, corruption breeds violence and hops from host to host. It does not discriminate, this plague of black conscience, between east and west. As it infected the indigenous, it also effected their guardians. They were all engulfed by raging greed, by a degradation of the inhibitions and by the intoxicating promiscuity of lawlessness. Inebriated by their newly found powers, little ceasars - natives and financial colonialists - claimed their little plots of crime and avarice, a not so secret order of disintegration of the social fabric. A ghoulish landscape, shrouded in the opaque mist of the nomenclature, the camaraderie of the omnipotent. And corruption bred violence. The Chicago model imported lock, stock and the barrel of the gun. Former cronies disappeared mysteriously, bloated corpses in stale hotel rooms - being the only "contracts" honoured. Territories were carved up in constant, unrelenting warfare. One billion dollars are worth a lot of blood and it was spilled with glee, with the enthusiasm of the inevitable, with the elation of gambling all on a single spin of the Russian roulette. It is this very violence that the west tried to drown with its credits. But unbeknownst to it, this very violence thrived on these pecuniary fertilizers. A plant of horrors, it devoured its soil and its cultivators alike. And 120,000 people paid with their lives for this wrong gamble. Counting its losses, the west is poised to spin the wheel again. More money is amassed, the dies are cast and more people cast to die. XLVII. The Honorary Academic Higher Education for Sale In Countries in Transition from Communism Mira Markovic is an "Honorary Academic" of the Russian Academy of Science. It cost a lot of money to obtain this title and the Serb multi-billionnaire Karic was only too glad to cough it up. Whatever else you say about Balkan cronies, they rarely bite the hand that feeds them (unless and until it is expedient to do so). And whatever else you say about Russia, it adapted remarkably to capitalism. Everything has a price and a market. Israel had to learn this fact the hard way when Russian practical-nurse-level medical doctors and construction-worker-level civil engineers flooded its shores. Everything is for sale in this region of opportunities, instant education inclusive. It seems that academe suffered the most during the numerous shock therapies and transition periods showered upon the impoverished inhabitants of Eastern and Central Europe. The resident of decrepit communist-era buildings, it had to cope with a flood of eager students and a deluge of anachronistic "scholars". But in Russia, the CIS and the Balkans the scenery is nothing short of Dantesque. Unschooled in any major European language, lazily content with their tenured positions, stagnant and formal - the academics and academicians of the Balkans are both failures and a resounding indictment of the rigor mortis that was socialism. Economics textbooks stop short of mentioning Friedman or Phelps. History textbooks should better be relegated to the science fiction shelves. A brave facade of self sufficiency covers up a vast hinterland of inferiority complex fully supported by real inferiority. In antiquated libraries, shattered labs, crooked buildings and inadequate facilities, student pursue redundant careers with the wrong teachers. Corruption seethes under this repellent surface. Teachers sell exams, take bribes, trade incestuous sex with their students. They refuse to contribute to their communities. In all my years in the Balkans, I have yet to come across a voluntary act - a single voluntary act - by an academic. And I have come across numerous refusals to help and to contribute. Materialism incarnate. This sorry state of affairs has a twofold outcome. On the one hand, herds of victims of rigidly dictated lectures and the suppression of free thought. These academic products suffer from the twin afflictions of irrelevance of skills and the inability to acquire relevant ones, the latter being the result of decades of brainwashing and industrial educational methods. Unable to match their anyhow outdated knowledge with anything a modern marketplace can offer - they default on to menial jobs, rebel or pull levers to advance in life. Which leads us to the death of meritocracy and why this region's future is behind it. In the wake of the downfall of all the major ideologies of the 20th century - Fascism, Communism, etc. the New Order, heralded by President Bush, emerged as a battle of Open Club versus Closed Club societies, at least from the economic point of view. All modern states and societies must choose whether to be governed by merit (meritocracy) or by the privileged few (oligarchy). It is inevitable that the social and economic structures be controlled by elites. It is a complex world and only a few can master the knowledge it takes to govern effectively. What sets meritocracy apart is not the number of members of its ruling (or leading) class, usually no larger than an oligarchy. No, it is distinguished by its membership criteria and by the mode of their application. The meritocratic elite is an open club because it satisfies three conditions:

Chapters

1. Chapter 1 2. 1997. The US Department of Justice brought another 30 3. 1989. Both events have forever altered the patterns of the 4. 1. Egregiously corrupt, high-profile, public figures, 5. 2. All international aid, credits, and investments must 6. 3. Corruption cannot be reduced only by punitive 7. 4. Opportunities to be corrupt should be minimized 8. 5. Corruption is a symptom of systemic institutional 9. 6. Corruption is a symptom of an all-pervasive sense 10. 1999. Its report remains classified but Stroev confirmed 11. 1995. PwC did make a mild comment in the 1997 audit. 12. introduction of best independent directors' practices". 13. 1989. Six years later, their number shrank to 1,612 and it 14. 2600. By 2002, it has increased elevenfold since 1995. 15. 2001. Nine of every 10 hijacked ships are ultimately 16. 4. NEVER expect ANY help from the Nigerian 17. 5. NEVER rely on YOUR Government to bail you 18. 1996. Iraqis are also being trained in Belarus to operate 19. 1. Job security is a thing of the past. Itinerancy in various 20. 2. Outsourcing and offshoring of back office (and, more 21. 3. The populace in developed countries are addicted to 22. 4. The other side of this dismal coin is workaholism - the 23. 5. The depersonalization of manufacturing - the 24. 6. Many former employees of mega-corporations abandon 25. 7. Despite decades of advanced notice, globalization 26. 8. The decline of the professional guilds on the one hand 27. 9. The quality of one's work, and of services and products 28. 10. Moral relativism is the mirror image of rampant 29. 11. The disintegration of the educational systems of the 30. 12. Irrational beliefs, pseudo-sciences, and the occult 31. 1. That the fair "value" of a share is closely 32. 2. That price movements are mostly random, though 33. 3. That the fair value responds to new information 34. introduction of a reciprocal visa regime between the two 35. 1. Legal activities that are not reported to the tax 36. 2. Illegal activities which, needless to say, are also 37. 1. How to make sure that the expenditures match and 38. 2. How to prevent the criminally corrupt activities 39. introduction of free marketry are unemployment and 40. 1. There should be no barriers to the entry of new 41. 2. A larger scale of operation does introduce 42. 3. Efficient competition does not exist when a market 43. 4. A competitive price will be comprised of a 44. 1. Blocking Statutes - which prohibit its legal entities 45. 2. Clawback Provisions - which will enable the local 46. 1. National laws should be applied to solve 47. 2. Parties, regardless of origin, should be treated as 48. 3. A minimum standard for national antitrust rules 49. 4. The establishment of an international authority to 50. 1. Agreements to fix prices (including export and 51. 3. Market or customer allocation (division) 52. 5. Collective action to enforce arrangements, e.g., by 53. 6. Concerted refusal to sell to potential importers; 54. 7. Collective denial of access to an arrangement, or 55. introduction of new management techniques (example: 56. 1. They attack the perceived source of frustration in 57. 2. They seek to subsume the object of envy by 58. 3. They resort to self-deprecation. They idealize the 59. 4. They experience cognitive dissonance. These 60. 5. They avoid the envied person and thus the 61. 2. It is impossible for two players to improve the 62. 3. Is not influenced by the introduction of irrelevant 63. 4. Is symmetric (reversing the roles of the players 64. 1. Crooks and other illegal operators. These take 65. 2. Illegitimate operators include those treading the 66. 3. The "not serious" operators. These are people too 67. 4. The former kind of operators obviously has a 68. 5. Speculators and middlemen are yet another 69. 6. The last type of market impeders is well known 70. 1995. But the phenomenon recurred in Kosovo. 71. 1. What part of the NGO's budget is spent on salaries and 72. 2. Which part of the budget is spent on furthering the aims 73. 3. What portion of the NGOs resources is allocated to 74. 4. What part of the budget is contributed by governments, 75. 5. What do the alleged beneficiaries of the NGO's 76. 6. How many of the NGO's operatives are in the field, 77. 7. Does the NGO own or run commercial enterprises? If it 78. 1. The process and rules of joining up (i.e., the 79. 2. The application and membership procedures are 80. 3. The system alters its membership requirements in

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