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A True Ghost Story

Written by Transparency International UK on Monday, 31 October 2016

Everywhere we turn the spectre of corruption haunts our world. This Halloween we take a look at the chilling reality of the ghosts of corruption………

Ghost mansions

Corrupt individuals buy UK property because it represents a good store of wealth and can be used as a bolthole in case they come under threat in their own country. Houses in the UK can also be bought anonymously, using a company registered in a secrecy jurisdiction like the British Virgin Islands with no transparency over who owns companies there.

These factors mean houses purchased using the proceeds of corruption can lie empty for years, falling into disrepair and shrouded in mystery over who the real owner is. This phenomenon has led to some calling these properties ‘ghost mansions’. An investigation revealed that 740 prime properties lie empty across London, it’s likely that a number of these were bought using corrupt wealth.

The £10m house of Saif Gadaffi; son of the former leader is one example. Bought in 2010 through a mysterious offshore company, the house was said by neighbours to be largely unoccupied until it was recovered in 2012 following a High Court battle and returned to the Libyan government.

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Neighbours of this house said they’d rarely seen anyone come or go. Spooky. From 2010 to 2012 this was one of London’s notorious ghost mansions, used to launder the proceeds of corrupt money stolen from Libya

Ghost soldiers

With the annual Halloween rollout of costumes, pranks and parties it’s all too easy to forget the REAL spectre that haunts 365 days a year: the spectre of ghost soldiers.  In places like Iraq, Somalia, and Afghanistan corruption is more corrosive than candy: gnawing at the foundations of security services to the point soldiers literally – not just figuratively – stop existing. In 2014, Iraqi Prime Minister Haider al-Abbadi’s discovered nearly 50,000 ghost soldiers on the military payroll, across four military divisions. These soldiers had names. These soldiers collected pay-checks. But, they weren’t there for training and they weren’t there for fighting.

To say that’s spooky is an understatement. It’s downright dangerous – as the collapse of Mosul so clearly demonstrated when a 1,500-strong attacking ISIL force was able to capture the city from a 30,000-strong defending force in a matter of days.  But the problem isn’t special to Iraq.  In TI’s 2015 Government Defence Anti-Corruption Index, we found that 50% of all states assessed either had evidence of ghost soldiers on their payrolls OR had such weak payment systems that the phenomenon is likely to occur. In Somalia, it has been suggested that there are not only up to 10,000 Ghost Soldiers in the Somalia National Alliance, but that many of the “lost wages” have in fact been used to bribe clan elders in the 2016 election. The ghosts it seems, have tricks as well as treats.

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As ISIL forces gained momentum in 2014, Iraqi Prime Minister Haider al-Abbadi discovered corrupt commanders were collecting pay checks for 50,000 soldiers on his payroll rendering them “ghost soldiers.”

Ghost companies

Ghosts, puppets, wolves and doubles – when it comes to Halloween horrors, the 1MDB scandal has it all.

According to lawsuits filed by the US Department of Justice, US$3.5 billion was embezzled from the state-owned Malaysian investment fund and made its way through a vast network of shady offshore entities to the private bank accounts of the Malaysian Prime Minister Najib Razak.

Once clear of this ghastly maze of banks, intermediaries and shell companies, the money was used to finance a spree of personal spending including, perhaps most horrifyingly of all, the 2013 Hollywood film Wolf of Wall Street.

The details of the transactions also reveal a taste for the uncanny. In one instance, funds meant for Aabar Investments PJS, a unit of Abu Dhabi’s International Petroleum Investment Company, were paid to a sinister double: the BVI-registered Aabar Investments PJS Ltd.

In the face of continued denial of wrongdoing, let’s hope investigators can bring the sunlight and draw these monsters out of the shadows.

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US$3.5 billion – that’s how much, according to lawsuits filed by the US Department of Justice, state owned Malaysian investment fund embezzled through a network of spooky offshore companies into the pockets of Malaysian Prime Minister Najib Razak.

Ghost doctors

Funds earmarked to pay staff salaries can be stolen in hospitals and health centres. To steal the money, officials can channel salaries into the bank accounts of what are termed “ghost doctors”. These are doctors that do not actually work at the hospital, although some may have previously worked there, in other cases some may have never existed. Officials are then able to take the money from the account for their own private gain.

There is obviously a serious aspect to this type of corruption. Due to corrupt officials siphoning off money for salaries, the hospital may be unable to pay the salaries of the doctors that are really there. These doctors may choose to not attend work and instead offer their services privately. This will affect the level and quality of healthcare provided, and compromise patient safety.

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An investigation into The Federal Medical Centre, of Katsina, Nigeria found that in 6 months over N8 million was paid into bank accounts of medics who no longer work at the hospital. An analysis of the doctors’ pay register showed a continuous channelling of government funds into the bank accounts of ghost doctors, who had previously left the hospital.

image: flickr.com/simpleinsomnia

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Read 489 times Last modified on Monday, 31 October 2016 15:32

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