Journalists Killed For Covering Graft

More than half the journalists murdered in the line of duty were working to expose corruption.

"Murder, after all, is the ultimate form of censorship," wrote Robert Mahoney, deputy director of the Committee to Protect Journalists (CPJ).

In a story that first appeared in The Media magazine and is now available here, Mahoney said 44 journalists were killed last year as a direct result of their work, eight of them in Africa, and 145 were thrown in prison.

Since 1992, the CPJ reports 861 journalists killed in the line of duty. The 10 deadliest countries have been:

Iraq: 149
Philippines: 71
Algeria: 60
Russia: 52
Colombia: 43
Pakistan: 35
Somalia: 34
India: 27
Mexico: 25
Afghanistan: 22

Editors, Mahoney said, are usually afraid to write about the big fish in corruption stories, so they tackle the small fry.

But not always.

"Only a few courageous writers progress far up the chain to the political and business elites who cream off a country’s wealth," Mahoney said. "Among them are editor Abdou Latif Coulibaly, who has taken on Senegal’s elite, exposing corruption in a US$200 million government deal for a telecom licence. He is now facing three separate criminal defamation lawsuits."

A Shocking Confession

German police last Thursday raided a global pipeline-equipment supplier on suspicion of bribing foreign officials to win work.

The raid came two weeks after Eginhard Vietz, 69, the owner and managing director of Hanover-based Vietz GmbH, gave an interview to the German business newspaper Handelsblatt. Vietz told the paper his company and its competitors pay bribes in Africa, the Middle East, and Asia as a standard business practice.

Vietz GmbH supplies welding, bending, and testing gear for onshore and offshore oil and gas pipelines to customers world wide.

Mr. Vietz said his company regularly paid bribes "because there are certain countries where there is no other way to do it."

"Nobody is disadvantaged by what I am doing," he said, explaining he was only trying to keep his workers busy.

The Hanover prosecutor, Manfred Knothe, told the German Press Agency (DPA) that police raided the company's head office in Hanover and plants in Leipzig and Essen, seizing computers and files.

Knothe told DPA that "Vietz's description of the kickbacks had been so detailed that prosecutors had no choice but to investigate him on suspicion of corrupting others, an offence punishable by up to 5 years in prison."

Overseas bribery is sensitive in Germany. Since 2007, prosecutors have charged leading firms Siemens, Daimler, and MAN. Siemens and Daimler also faced FCPA enforcement actions in the U.S.

The Handelsblatt newspaper quoted Vietz as saying, "I don't feel I did anything wrong. You can't change the way the world is."

Last year, according to German press reports, Vietz accompanied Germany's economics minister on a trip to Abu Dhabi and Saudi Arabia. This year, he visited the United Arab Emirates as part of a delegation with state premier Christian Wulff, who's now Germany's president.

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In the Handelsblatt interview, Eginhard Vietz said among other things that he'd paid bribes repeatedly. In countries such as Algeria, Egypt, and Nigeria, he said it's not easy to do business without bribery. "The same goes for Russia," Vietz said.

Asked about anti-corruption laws in the countries where he does business, he said China even has the death penalty for bribery. "Nevertheless, I have experienced myself that I could only win contracts through bribes. And I also have lost contracts because a competitor paid more."

Vietz said most of the people deciding who wins state contracts are poorly paid and easily bribed. "They're only human," he said. He usually bribes the senior management in purchasing departments -- the people who make the buying decisions. "They are mostly civil servants we are dealing with in these countries, mainly at state firms."

The payments are usually funded by inflating commissions to sales agents, he said, with the money then transferred to accounts in Switzerland and then passed on as bribes. The amounts are usually between 5% and 10% of the total contract value. He said those amounts are added to the prices he charges the customers, so his margins aren't reduced. He said he's always careful in structuring the payments to comply with German tax laws.

U.S. companies, he said, claim to be particularly clean but are actually the worst. The SEC, he said, uses its authority to prosecute foreign competitors, while U.S. companies make themselves world leaders with government protection. Asked for an example, he said three years ago in Moscow, while bidding for a big contract, he knew he was 40% below the offer of his American competitors. "Suddenly, the American ambassador spoke to the customer. I did not get the job."

Handelsblatt pointed out that since Siemens stopped paying bribes, it hasn't lost work or shed jobs because of compliance. Vietz replied, "I can't speak for Siemens. Maybe a large corporation has other possibilities. But I doubt that anyone can build large plants in countries such as Nigeria without making specific contributions."

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Special thanks to a reader for sending the link to the August 10, 2010 Handelsblatt interview with Eginhard Vietz. It can be viewed here.

Graft Probe Shakes Algeria Energy Sector

Mohamed Meziane, the chief of Algeria's state energy company Sonatrach, and ten other executives are under investigation for corruption, according to reports.The head of Algeria's state energy firm Sonatrach and ten other company executives are under investigation for corruption. Reports this week from several sources including upstreamonline.com said Mohamed Meziane, Sonatrach's president since 2003, has stepped down because of the ongoing investigation.

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