Saturday 19 December 2009

Drug money saved banks in global crisis, claims UN advisor

Drug money saved banks in global crisis, claims UN advisor

Drugs and crime chief says $352bn in criminal proceeds was effectively laundered by financial institutions

Drugs money worth billions of dollars kept the financial system afloat at the height of the global crisis, the United Nations' drugs and crime tsar has told the Observer.

Antonio Maria Costa, head of the UN Office on Drugs and Crime, said he has seen evidence that the proceeds of organised crime were "the only liquid investment capital" available to some banks on the brink of collapse last year. He said that a majority of the $352bn (£216bn) of drugs profits was absorbed into the economic system as a result.

This will raise questions about crime's influence on the economic system at times of crisis. It will also prompt further examination of the banking sector as world leaders, including Barack Obama and Gordon Brown, call for new International Monetary Fund regulations. Speaking from his office in Vienna, Costa said evidence that illegal money was being absorbed into the financial system was first drawn to his attention by intelligence agencies and prosecutors around 18 months ago. "In many instances, the money from drugs was the only liquid investment capital. In the second half of 2008, liquidity was the banking system's main problem and hence liquid capital became an important factor," he said.

Some of the evidence put before his office indicated that gang money was used to save some banks from collapse when lending seized up, he said.

"Inter-bank loans were funded by money that originated from the drugs trade and other illegal activities... There were signs that some banks were rescued that way." Costa declined to identify countries or banks that may have received any drugs money, saying that would be inappropriate because his office is supposed to address the problem, not apportion blame. But he said the money is now a part of the official system and had been effectively laundered.

"That was the moment [last year] when the system was basically paralysed because of the unwillingness of banks to lend money to one another. The progressive liquidisation to the system and the progressive improvement by some banks of their share values [has meant that] the problem [of illegal money] has become much less serious than it was," he said.

The IMF estimated that large US and European banks lost more than $1tn on toxic assets and from bad loans from January 2007 to September 2009 and more than 200 mortgage lenders went bankrupt. Many major institutions either failed, were acquired under duress, or were subject to government takeover.

Gangs are now believed to make most of their profits from the drugs trade and are estimated to be worth £352bn, the UN says. They have traditionally kept proceeds in cash or moved it offshore to hide it from the authorities. It is understood that evidence that drug money has flowed into banks came from officials in Britain, Switzerland, Italy and the US.

British bankers would want to see any evidence that Costa has to back his claims. A British Bankers' Association spokesman said: "We have not been party to any regulatory dialogue that would support a theory of this kind. There was clearly a lack of liquidity in the system and to a large degree this was filled by the intervention of central banks."


Friday 11 December 2009

European Stability Initiative reports on 'Ergenekon and the Secret History of Turkey

European Stability Initiative

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Dear friends of ESI,

Sometimes the exposure of a hidden truth changes the course of history.

A White House tape, recording the US president six days after the Watergate break-in, sealed President Nixon's fate, forcing his resignation within weeks. Aleksandr Solzhenitsyn's The Gulag Archipelago, smuggled out of the USSR and published in 1973, shocked the world by describing the vast Soviet system of prison labour. Throughout history, those in power have kept secrets hidden from the public eye. But if it leads to a culture of impunity for crimes committed by the state, secrecy becomes dangerous. A culture of impunity thrives on secrecy, and on complicit media and a passive civil society.

In Turkey, both secrecy and impunity for those defending the state against its enemies at home and abroad were long taken for granted. Attempts to cast light on the activities of groups and institutions referred to as the "deep state" (derin devlet) have invariably failed. Some have even questioned whether the deep state really exists.

Hand grenades found in Poyrazköy / Istanbul (April 2009)

Hand grenades found in Poyrazköy / Istanbul (April 2009)

Recent weeks have seen the Turkish veil of secrecy drawn aside in a spectacular manner. Two documents have emerged which describe, in detail, operations planned by members of the Turkish armed forces to terrify, frame and even assassinate innocent civilians, Christians or Muslim students, and undermine the elected government.

One document is called Operation Cage (Kafes) Action Plan. The other is the Action Plan to Combat Reaction – Current Status. Each of these documents in itself, but even more so when read together, deals a serious blow to the credibility and legitimacy of the Turkish security structures. Both have come to light as a result of the current Ergenekon court case. The case has involved Istanbul prosecutors investigating a range of alleged crimes committed by groups linked to the Turkish security structures with the apparent intent to topple the elected government.

An electronic copy of the Cage Plan was found – encrypted - on a CD seized in April 2009, when a former member of the Turkish Underwater Assault Team of the Naval Forces was arrested. A signed copy of the Reaction Plan was found during the arrest of another former military officer in June 2009. The Turkish General Staff immediately dismissed it as fake, a mere "piece of paper." The Chief of the General Staff even alleged a conspiracy against the military. Then, in October 2009, a whistleblower within the General Staff sent the original signed copy of the Reaction Plan to a Turkish prosecutor, together with a letter explaining the role of the former Deputy Chief of the General Staff in drawing up the plan. This was made public on 24 October. The Cage Plan was made public on 19 November in an article in the Taraf daily.

What makes these two documents so explosive?

The Cage Plan is remarkably specific. There is a date on it: March 2009. There is the name of the author: Ercan Kirectepe, Naval Officer, Acting Special Operations Force Command. The Plan sets out a distribution of tasks among some 35 members of the Navy, under a consultative assembly presided over by Vice Admiral Feyyaz Ogutcu. And there is a clear, concrete target:

"to increase both internal and external pressures on the AKP Government, to keep the public preoccupied and to change the agenda, particularly the Ergenekon case, by calling into question the safety of the life and property of non-Muslims."

Most chilling of all, there is a list of concrete tasks to be prepared and carried out, including these:

"(d) Operation stage:

(1) Bombs will be detonated at various quarters in the Adalar district/the Princes islands near Istanbul.

(2) Assassinations will be organized against persons known as fierce defenders of minority rights.

(3) Sound bombs will be placed in identified locations such as the vicinity of AGOS Newspaper.

(4) By placing suspicious packages at many spots and informing the police of them, the security forces will be kept preoccupied.

(5) Actions with bombs will be carried out at piers from which boat journeys to Adalar originate.

(6) Sensational operations will be executed towards the cemeteries of non-Muslims.

(7) One or several popular non-Muslim businessmen and artists will be kidnapped.

(8) In regions with a dense non-Muslim population vehicles, houses and workplaces will be set on fire at close intervals.

(9) Similar actions will also be conducted in provinces with a high population of non-Muslims, such as Istanbul and Izmir.

(10) Responsibility for sabotage, kidnapping and assassination operations will be claimed by reactionary organizations. The organisations themselves will be determined by way of coordination with the special plan cell leaders."

The full text of the Cage Plan in English translation can be found here.

The Action Plan against Reaction, signed by a colonel working directly in the Office of the General Staff, defines a similar target:

"To put an end to hesitation over this issue by revealing the hidden face of the religious reactionary elements and to eradicate public support for such networks. To minimize the impact of the erosive campaigns staged in the framework of Ergenekon and to put an end to the negative propaganda against the Turkish Armed Forces."

To achieve this, the Action Plan outlines a set of concrete measures, directed primarily against the conservative Gulen movement that supports both the AKP government and Turkey's EU aspirations:

"The theme, 'Fethullah Gulen supporters are out of control, attacking the Turkish Armed forces head on,' will be pursued and work towards getting even conservative citizens to say 'this is too much, we are all Muslims, but these supporters of Fethullah Gulen are making provocations in order to attack the Turkish Armed Forces' will be carried out."

"During the raids against the addresses of Gulen dormitories (ısık evleri) to be conducted under military law, weapons, ammunitions, plans and other material will be arranged to be found so that the Fethullah Gulen group is described as an armed terrorist organization; Pro-Fethullah Armed Terror Organisation (FATO) investigations will be conducted under military jurisdiction."

"News articles will be written that Turkish Armed Forces staff members arrested under Ergenekon investigation are innocent and that they are slandered just because they effectively fight reactionary Islam."

"The issue of moderate Islam will be particularly emphasized, with the fact that Fehtullah Gulen followers act under US guidance and aim to degrade the originality of Islam being voiced intensively."

"House raids will be carried out and it will be ensured that besides weapons and munitions, objects are found that will point to relations with groups that Fethullah Gulen supporters will be made to appear associated with (Jewishness, CIA, MOSSAD, Moon Sect, Khomeini, etc)."

"It will be ensured that information and documents that arouse Anti-Alevite feelings are found in such houses as part of house raids."

Yasemin Congar Bartholomew Ufuk Uras

Yasemin Congar

Bartholomew

Ufuk Uras

Pro-European Turkish media, above all the Taraf daily, played a decisive role in uncovering and disseminating such information. Turkey's minority representatives have also been speaking out. On 4 December the Armenian weekly AGOS ran the headline "The Cage did not Surprise us". The Armenian advisor to (CHP) Mayor of Adalar (the Princes islands near Istanbul) stated that "we experienced such incidents in Heybeliada, Kinaliada and Buyukada. We thought these were separate incidents, but when we saw the Cage plan, we understood that they were all part of a detailed plot." Greek Orthodox Patriarch Bartholomew told Zaman daily that dark forces planned to use minorities to overthrow the government, and that "it is a very satisfactory development that the Turkish police and the prosecutors have been revealing those dark plans so the responsible people are captured and tried."

Eyup Can wrote in Hurriyet (21 November) that "if even half of what is written in Taraf is accurate everybody with a conscience in this country has to go mad." Hadi Uluengin noted in the same paper on 24 November that "if this is true, then this is the most terrible conspiracy ever planned within the ranks of the Armed Forces." Independent left-wing MP Ufuk Uras stated that "those who see this and do not write about it become accomplices to that crime." ("Uras: People who ignore Cage Plan are accomplices").

The ongoing Ergenekon investigation will hopefully uncover the full genesis of these documents. Only a court of law can determine the guilt of any specific individual. But the debates surrounding documents are already changing Turkey. In July, a new law passed by the Turkish Parliament extended the power of civilian courts to try crimes committed by both former and active members of the military. And last week three retired four-star generals were for the first time interrogated by civilian prosecutors on alleged coup plots in 2003-2004.

The silent revolution in Turkish civil-military relations is in full swing.

Friday 6 November 2009

Albania's Top Prosecutor Slams Judicial Immunity

Albania's Top Prosecutor Slams Judicial Immunity

Balkan Insight.com
Tirana | 23 October 2009 | Besar Likmeta
Ina Rama
Ina Rama
Albanian General Prosecutor Ina Rama has called for a constitutional amendment that would restrict the immunity of judges, in order to strengthen the fight against corruption in the judiciary.
“It's problematic because [while] prosecutors can be investigated without hassles, we don't have the possibility to investigate judges, who are granted immunity by the constitution,” Rama said on Thursday at a conference on judicial reform.

“If the General Prosecutor's Office seeks the authorisation to investigate a judge on corruption-related charges, the investigation has already become public and it its difficult to move forward,” she said, adding: “It's not possible to investigate a judge on corruption, if he knows that he is being investigated.”

Rama also spoke out against corporatism in the judicial system, illustrating her argument with cases where prosecutors arrested on corruption charges were set free by the courts.

According to the 2009 European Commission progress report, judicial reform in Albania remains in its early stages, with little progress made thereon in the last year.

“Key pieces of legislation needed to complete the legal framework have not been adopted and the justice system continues to function poorly due to shortcomings in independence, transparency and efficiency,” the report found.

Socialized Judicial Corruption Caught On Tape

Isn’t Monopoly Justice wonderful?

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Bulgaria Prosecutor to Release Full List of Corrupt Magistrates

Bulgaria Prosecutor to Release Full List of Corrupt Magistrates

Crime | November 5, 2009, Thursday

Bulgaria Prosecutor to Release Full List of Corrupt Magistrates: Bulgaria Prosecutor to Release Full List of Corrupt Magistrates

Bulgaria Chief Prosecutor, Boris Velchev, has stated that the full list of people who have been in contact with “Krasio from Pleven’ will be published in a few days time.

Velchev, speaking after attending the Bulgarian Parliament, said that with the help of the State National Security Agency (DANS) the list would be published to stop speculation as to who is in Krasio’s little black book.

Bulgaria's Supreme Judicial Council (VSS) earlier announced the names of five new magistrates, who have been in contact with the famous businessman ‘Krasio from Pleven’.

Tsoni Tsonev, the Chairman of the corruption commission at VSS, stated late Wednesday that the total number of magistrates who have liaised with ‘Krasio’ had now been confirmed as 18.

Friday 30 October 2009

Pa. court throws out thousands of juvenile convictions linked to judicial corruption case


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Pa. court throws out thousands of juvenile convictions linked to judicial corruption case

By: MICHAEL RUBINKAM
Associated Press
10/29/09 6:00 PM EDT

ALLENTOWN, PA. — The Pennsylvania Supreme Court on Thursday dismissed thousands of juvenile convictions issued by a judge charged in a corruption scandal, saying that none of the young offenders got a fair hearing.

The high court on Thursday threw out more than five years' worth of juvenile cases heard by disgraced former Luzerne County Judge Mark Ciavarella, who is charged with accepting millions of dollars in kickbacks to send youths to private detention centers.

The Philadelphia-based Juvenile Law Center, which represents some of the youths, said the court's order covers as many as 6,500 cases. The justices barred any possibility of retrial in all but a fraction of them.

"This is exactly the relief these kids needed," said Marsha Levick, the center's legal director. "It's the most serious judicial corruption scandal in our history and the court took an extraordinary step in addressing it."

Children routinely appeared in front of Ciavarella without lawyers for hearings that lasted only a few minutes. Ciavarella also failed to question young defendants to make sure they fully understood the consequences of waiving counsel and pleading guilty, showing "complete disregard for the constitutional rights of the juveniles," the Supreme Court said.

After being found delinquent, the youths were often shackled and taken to private jails whose owner was paying bribes to the judge. Federal prosecutors have said that Ciavarella and another Luzerne County judge, Michael Conahan, took a total of $2.8 million in payoffs.

"Ciavarella's admission that he received these payments, and that he failed to disclose his financial interests arising from the development of the juvenile facilities, thoroughly undermines the integrity of all juvenile proceedings before Ciavarella," the Supreme Court said.

The judges pleaded guilty in February to honest services fraud and tax evasion in a deal with prosecutors that called for a sentence of 87 months in prison. But the deal was rejected in August by Senior U.S. District Judge Edward M. Kosik, who said the two hadn't fully accepted responsibility for the crimes, and the ex-judges switched their pleas to not guilty.

A federal grand jury then returned a 48-count racketeering indictment against the judges, who await trial.

The Supreme Court had previously overturned hundreds of juvenile convictions involving low-level offenses. Thursday's ruling covered all cases heard by Ciavarella between 2003 and 2008, including ones involving more serious crimes.

"We fully agree that, given the nature and extent of the taint, this Court simply cannot have confidence that any juvenile matter adjudicated by Ciavarella during this period was tried in a fair and impartial manner," the court wrote.

Prosecutors in Luzerne County had agreed that none of the convictions should stand, but they wanted the right to bring dangerous offenders back into court for retrials.

The court said the district attorney's office may seek to retry youths who remain under court supervision — a group that Levick said likely numbers fewer than 100. And those youths may challenge any attempt to retry them on double-jeopardy grounds, the court said.

Berks County Senior Judge Arthur Grim, whom the justices appointed in February to review cases handled by Ciavarella, will consider any retrial requests made by the DA's office and forward his recommendations to the high court.

Wednesday 28 October 2009

FBI: Mobster more powerful than Gotti

FBI: Mobster more powerful than Gotti

From Jeanne Meserve
CNN
October 24, 2009 12:17 p.m. EDT
Click to play
FBI: Mobster swindled $150m
STORY HIGHLIGHTS
  • Semion Mogilevich accused of taking U.S., Canadian investors for $150 million
  • FBI believes he moved on to manipulating international energy markets
  • FBI: Mogilevich's business degree, large influence on nations make him dangerous
  • Alleged Russian mobster known for his ruthlessness, power, business acumen
RELATED TOPICS

Editor's Note: In an exclusive series this week on "Campbell Brown," the FBI has unveiled three additions to its list of the Ten Most Wanted Fugitives.

NEWTOWN, Pennsylvania (CNN) -- Semion Mogilevich may be the most powerful man you've never heard of.

The FBI says Mogilevich, a Russian mobster, has been involved in arms trafficking, prostitution, extortion and murder for hire.

"He has access to so much, including funding, including other criminal organizations, that he can, with a telephone call and order, affect the global economy," said FBI Supervisory Special Agent Peter Kowenhoven.

Mogilevich's alleged brutality, financial savvy and international influence have earned him a slot on the FBI's Ten Most Wanted Fugitives list, though he has lived and operated from Moscow, Russia, for years. Watch CNN report on Mogilevich

"He's a big man. He's a very powerful man," FBI Special Agent Mike Dixon said. "I think more powerful than a John Gotti would be, because he has the ability to influence nations. Gotti never reached that stature."

He is accused of swindling Canadian and U.S. investors out of $150 million in a complex international financial scheme. It centered on a firm called YBM, which purportedly made magnets at a factory in Hungary.

Authorities say the scheme involved preparing bogus financial books and records, lying to Securities and Exchange Commission officials, offering bribes to accountants and inflating stock values of YBM, which was headquartered in Newtown, Pennsylvania.

In a raid in 1998, FBI agents found a treasure trove of documents -- purchase orders, invoices, shipping orders, even technical drawings -- everything a legitimate business would produce.

But there was one thing missing.

"There were no magnets," Dixon said.

It was all a sham, investigators say.

"In essence, what his companies were doing was moving money through bank accounts in Budapest and countries throughout the world and reporting these to the investment community as purchases of raw materials and sales of magnets," Dixon said.

And because the company was publicly traded, anyone owning the stock would have made a lot of money.

"And of course Mogilevich controlled large, large blocks of stock from the outset, and he made a substantial amount of money in this process," Dixon said.

Investors lost millions into the pockets of Mogilevich and his associates. He and his associates were indicted in 2003 on 45 counts of racketeering, securities fraud, wire fraud, mail fraud and money laundering.

Russian authorities arrested him last year on tax fraud charges, but because the United States does not have an extradition treaty with Russia, he remained beyond the reach of U.S. law enforcement. He is now free on bail.

The FBI believes Mogilevich moved on after YBM and began manipulating international energy markets, giving him a large influence on other nations.

Dixon noted that Mogilevich had control or influence over companies involved in natural gas disputes between Russia and Ukraine.

Authorities say Mogilevich, who has an economics degree from Ukraine, is known for his ruthless nature but also for his business acumen, which led to his nickname "the Brainy Don."

"He has a very sophisticated, well-educated, loyal group of associates that he works with," Dixon said. "He hires top-notch consultants, attorneys, risk management firms to assist him and protect him in his criminal ventures."

Louise Shelley, an organized crime expert from George Mason University, says Mogilevich is a new kind of criminal.

"The major criminal organizations in Russia have not only tapped into people with economics degrees," Shelley said. "They've tapped into people with PHDs in finance and statistics who assist them."

The FBI hopes Mogilevich will eventually travel to a country that has an extradition treaty with the U.S.

But, in case he doesn't, his wanted poster will be distributed all over Russia.

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Saturday 24 October 2009

Albania's Top Prosecutor Slams Judicial Immunity

Tirana | 23 October 2009 | Besar Likmeta
BallkanInsight.com

Ina Rama
Ina Rama
Albanian General Prosecutor Ina Rama has called for a constitutional amendment that would restrict the immunity of judges, in order to strengthen the fight against corruption in the judiciary.
“It's problematic because [while] prosecutors can be investigated without hassles, we don't have the possibility to investigate judges, who are granted immunity by the constitution,” Rama said on Thursday at a conference on judicial reform.

“If the General Prosecutor's Office seeks the authorisation to investigate a judge on corruption-related charges, the investigation has already become public and it its difficult to move forward,” she said, adding: “It's not possible to investigate a judge on corruption, if he knows that he is being investigated.”

Rama also spoke out against corporatism in the judicial system, illustrating her argument with cases where prosecutors arrested on corruption charges were set free by the courts.

According to the 2009 European Commission progress report, judicial reform in Albania remains in its early stages, with little progress made thereon in the last year.

“Key pieces of legislation needed to complete the legal framework have not been adopted and the justice system continues to function poorly due to shortcomings in independence, transparency and efficiency,” the report found.

Zero tolerance to judicial corruption: CJ

Zero tolerance to judicial corruption: CJ

Saturday, 24 Oct, 2009
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The National Judicial Policy Making Committee said that non-production of under trial prisoners before the court is the main cause of delay in disposal of criminal cases, therefore, the police authorities should be compelled to ensure production of prisoners. - File photo

ISLAMABAD: Chief Justice Iftikhar Mohammad Chaudhry on Saturday stressed upon the Chief Justices of the High Courts to show zero tolerance to corruption and improve the existing monitoring mechanism for eradication of corruption from the judiciary at all levels.

The chief justice took serious notice of the complaints of corruption against the judicial officers and court staff and stated that since they were drawing reasonable salaries any corruption and inefficiency should not be tolerated in anyway.

He was speaking at a meeting of the National Judicial Policy Making Committee which was held in the Supreme Court Building. The objective of holding the two-day meeting was to ensure effective implementation of National Judicial Policy for expeditious and speedy disposal of cases to restore confidence of people in the judicial system.

In his introductory remarks the chief justice emphasized that the National Judicial Policy is formulated through exhaustive consultation with the stakeholders of the justice sector and its objective can only be achieved through strict monitoring of the performance of the district judiciary.

The committee also considered issues relating to non-production of prisoners before the courts for trial, overcrowding in jails and resolved that the provincial governments should be asked to construct at least one jail at district levels and sub-jails at tehsil level.

The committee further resolved that spacious judicial lockups (Bhakhshi Khanas) with necessary facilities should be constructed in the court premises for under-trial prisoners rather keeping them in prisons van in scorching temperature.

About establishment of jails for Islamabad, the committee requested the CJ Federal Shariat Court to convene meetings with the concerned authorities for early construction so that the prisoners of the federal capital, who are presently confined in Rawalpindi District Jail, could be transferred there.

The committee further resolved that non-production of under trial prisoners before the court is the main cause of delay in disposal of criminal cases, therefore, the police authorities should be compelled to ensure production of prisoners before the courts.

The committee resolved that the concept of open court should not be compromised and in only extraordinary and exceptional cases trial may be held in jail premises.

The committee asked the District and Sessions Judges to visit jails regularly and to decide the cases of the prisoners involved in petty cases by invoking the relevant provisions of law. This practice would not only give relief to the prisoners confined on chargers of minor offences but also help to reduce the burden on the overcrowded jails.

During the meeting, the District and Sessions Judges gave a presentation on the implementation of National Judicial policy with reference to the disposal of old/new cases, family/rent matters and bifurcating the civil and criminal function of the judicial and its effect on quick disposal of cases.

The committee stressed upon the District and Sessions Judges to make all possible efforts for effective implementation of the policy and to ensure that the framework given in the policy should be met and its benefit should be trickle down to the grass root level.

During the meeting, the provincial high courts gave demonstrations about the progress made for automation of justice sector. The committee resolved that by bringing the data base on networking the performance of the district judiciary could be monitored effectively, therefore, efforts should be made for computerization and networking of courts to facilitate the litigants.

The meeting was also attended by Justice Agha Rafiq Ahmed Khan, Chief Justice, Federal Shariat Court, Justice Khawaja Muhammad Sharif, Chief Justice, Lahore High Court, Justice Qazi Faez Isa, Chief Justice, High Court of Balochistan; Justice Ejaz Afzal Khan, Chief Justice, Peshawar High Court; Justice Mushir Alam Acting Chief Justice, High Court of Sindh and Dr. Faqir Hussain, Registrar, Supreme Court/Secretary, National Judicial Policy Making Committee.—APP

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