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FCPA Blog Daily News

Entries in Illinois (8)


Want to buy Rita Crundwell's belt buckles?

The U.S. Marshals Service is auctioning 150 belt buckles awarded for top finishes in horse shows that belonged to Rita Crundwell, the former comptroller of Dixon, Illinois who stole $53 million from the city over two decades.

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Oh Chicago: It’s like taking championships from a Little Leaguer

For the first time in 15 years, in 2015 an ousted Illinois governor left office without handcuffs. Alas the state -- and more specifically, Chicago -- found a new way to remain on the corruption-related newsfeed. Little League baseball.

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Cocaine and cash: Campaign manager charged with buying votes in Texas election

A campaign manager was arrested Thursday and accused of paying for votes in the November 2012 school board election in Donna, Texas.

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Where's BofA's $17 billion going?

Bank of America is paying $16.65 billion to settle fraud claims by federal and state enforcement agencies and regulators that relate back to the financial crisis of 2008. It's "the largest civil settlement with a single entity in American history," the DOJ said Thursday.

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Ranking America's ten most and least corrupt states

Click image to enlarge (Courtesy of the Public Administration Review)A study by Indiana University and the City University of Hong Kong has ranked the U.S. states from least to most corrupt, with Mississippi scoring worst and Oregon as best.

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Crooked Pols Abound In America Too

Last month's post about graft convictions of four consecutive mayors of two neighboring South Korean cities reminded us of hijinks a lot closer to home.

That's right, the home states of our two presidential candidates, Illinois and Massachusetts.

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I-Fighting Corruption

Does the Internet have a role to play in the battle against graft? It's still early, but the signs are promising.

For public corruption to flourish, a couple of ingredients are necessary -- red tape and opaque decision-making. The Internet can reduce both. Online permitting and licensing systems, for example, open the process to public scrutiny. There's less need for contact between citizens and bureaucrats, removing opportunities for bribery. And online systems are usually simpler. That also encourages citizens to resist demands for bribes during the process.

E-government services have been tested and they work. In Korea, for example, the innovative Seoul Metropolitan Government launched a public online application system for licenses and permits in 1999. Called OPEN -- the Online Procedure Enhancement for Civil Applications -- it covers 54 common procedures. A U.N. report said OPEN has made the administra­tion more transparent -- officials responsible for corruption-prone areas now have to upload reports and documents so citizens can monitor the progress of their applications.

The Korean government, which has a chief information officer in each ministry, is now marketing its e-government expertise to other countries and agencies that want to give it a try.

Russia hopes to develop more e-government services. President Medvedev signaled his support by forming the Presidential Council for the Development of the Information Society in Russia. And the tech-savvy Minister of Mass Communications Igor Shchegolev has said the idea behind creating an e-government in Russia is to help people fight the country's bureaucracy, among the most oppressive and exhausting anywhere.

“An e-government will rid our citizens of the need to visit different offices,” Shchegolev said in an article posted on FutureGov. “I certainly hope it gets somewhere -- for one thing, I can’t think of a surer way to stifle corruption than to increase the number of rules-based computer interactions between citizens and government."

We said (here) that we admire the new Internet-based whistleblower system in Illinois. It's accessible and simple to use. But not all governments, it turns out, want to give the public such an easy way to report fraud.

In Hong Kong, for example, the normally pioneering Independent Commission Against Corruption (ICAC) is resisting an e-complaint system, according to FutureGov (here). Julie Mu, the ICAC Director of Community Relations, said in-person reporting is better. It "enables us to interact directly with the complainant and obtain more detailed information, hence facilitating investigative work. People reporting online may not be traceable,” she said.

Last year the ICAC handled 3,377 corruption reports from citizens. That's a lot. And it followed up on 78 per cent of those. So perhaps the organization is right to be worried; an easy-access, online complaint-filing system might just overwhelm its resources.

The conclusion? E-government can reduce red tape and increase transparency overnight. That makes it the best Internet app we can think of.


Busting Graft From The Other Side

It perennially runs neck-and-neck with Louisiana as the country's most corrupt state. But last week Illinois took a big step toward coming clean. It launched a website that makes it easy for anyone to report corruption in state and local government -- and get paid to do it. And guess what? The site's a winner -- clean, simple and easy to use.

It starts out saying:

A whistleblower is someone who exposes wrongdoing, fraud, corruption and/or waste.

Taxpayers deserve an honest and efficient government. In 1991, then State Treasurer Pat Quinn, led the movement to enact a state whistleblower protection act.

The Illinois Whistleblower Act protects every citizen -- including state and local government employees -- when they blow the whistle on government corruption.

Our state law rewards citizens who blow the whistle.

In 2008, the Illinois Whistleblower Reward and Protection Act expanded the 1991 law to cover all levels of state government. Since the act was strengthened, a whistleblower can get up to 30% of the amount recovered as a reward upon completion of a successful whistleblower suit.

In just one page, the site walks state employees and others through the steps to file a complaint and how to make it stick.

Whistleblower programs work. We've said before that at least a third of the FCPA enforcement investigations now underway probably started with whistleblower complaints. Just as important is how the programs give stakeholders a voice.

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Another big institution struggling with its own corruption is the World Bank. It has a whistleblower program (here). But an independent evaluation released last week said "staff fear reprisal for reporting infringements and unethical behavior." And unlike Illinois, the Bank doesn't advertise financial rewards for successful complainants. That probably limits its usefulness. We also wonder whether the Bank's borrowers and grantees are required to have whistleblower programs? If any readers know the answer, maybe they can send a comment or an email.

The report by the Bank's Independent Evaluation Group gave the lowest possible rating for fraud-detection to the Bank's International Development Association (IDA). The IDA loans and grants $40 billion to the 78 poorest countries. The Wall Street Journal has a story here.

The independent evaluation criticized the IDA for emphasizing project performance and completion over compliance. Job descriptions and performance evaluations, it said, "do not usually contain specific references to internal control-related duties, responsibilities, and accountability. Concerns about the adequacy of current incentives to promote accountability, compliance and quality were also reflected in several units’ responses." The report can be downloaded here.

The World Bank has debarred 351 entities for violating its fraud and corruption provisions. It kept the names secret until January this year, when pressure from the Wall Street Journal and others forced it to be more transparent. The list of debarred organizations is here.