World Bank leads corruption fight

This neocon may have much to do with the mess the Americans now have in Iraq but thanks to his tenacity in upholding a basic belief in fighting corruption as a development strategy, the World Bank may yet be able to help victimized countries get their money back. Fighting corruption was on top of the agenda of Paul Wolfowitz when he assumed the presidency of the World Bank, something that veteran World Bank bureaucrats were uneasy with.

Now it seems that Wolfowitz is getting his way. According to The Financial Times, the World Bank will seek international support for a new push to help poor countries recover assets stolen by corrupt leaders and held in banks overseas. The drive follows Nigeria’s success last year in recovering some of the money stolen by former dictator Sani Abacha and held in Swiss bank accounts.

During this week’s annual meeting of the World Bank and the IMF in Singapore, Wolfowitz will formally ask the world’s finance and development ministers to approve this approach as part of a controversial new anti-corruption strategy he has championed. It is not going to be easy. Wolfowitz himself admitted last week that this strategy has had to go through "several iterations" to gain support on the bank’s executive board, which represents its member governments.

The Financial Times noted that many governments have been skeptical about the plan, fearing it would overshadow the bank’s development objectives, slow down disbursement of aid and lead to arbitrary decisions on which countries get help, the same misgivings earlier aired by old time bureaucrats at the World Bank.

But even if there may still be "some debate around the edges" in Singapore, Mr. Wolfowitz said there was now broad agreement on the main principles of the project. Declaring that good governance was essential for development, he conceded this was a "complex issue" and said it was never his intention to hold poor countries to the same standards as a developed country such as Switzerland.

And speaking of Switzerland, the cooperation of that country should be considered vital in any move to deny safe haven for stolen funds that are normally stashed away in secret accounts in Swiss banks by dictators and politicians, including some of our own. It had been 20 years since we got rid of Ferdinand Marcos but aside from the $600 million that was first deposited in escrow in PNB and later apparently misappropriated in the fertilizer fund mess, we haven’t seen much of what is generally believed are Marcos deposits in foreign banks that the PCGG should have recovered a long time ago.

Wolfowitz said the asset recovery drive "could accomplish a lot" in tackling corruption even though the initiative was likely to encounter resistance from financial institutions and states with bank secrecy laws. "If it became difficult or impossible to hide these large amounts of money, it would be a big deterrent to the worst kind of corruption," he said.

There had been a number of international measures in recent years that make hiding large stashes of stolen money more difficult, but still not impossible. Money laundering laws require major financial institutions to report movements of large amounts of money to the Paris-based Financial Action Task Force or FATF, essentially to track down cash movements of crime syndicates and terror groups. But flagging illicit transfer of money by sitting political leaders is proving more difficult to do, since reporting is initiated at the local level.

Well, the Swiss and other Western banks will have to be pressured to do the right thing and deny safe haven to stolen funds from impoverished peoples of the third world. Western countries must pass necessary legislation to make this possible. It is the only responsible thing for developed western countries to do, if they are to put their money where their holier-than-thou lectures on corruption are. After all, those stolen funds stashed in Swiss and other Western banks could be used to feed the hungry, educate growing populations and provide health services to large masses of humanity in the Third World.

Paul Wolfowitz’s difficult mission deserves the world’s support. This is one time when his neocon stubbornness may yet produce some good for the world.

Safe haven

Speaking of safe havens, it seems I was right when I speculated some months ago that Joc Joc Bolante’s US visa was cancelled because the Americans are not about to provide a safe haven for someone suspected of having a part in a corrupt deal that may have misappropriated American taxpayer money intended for foreign aid. It is to be noted that US President George W. Bush had issued Presidential Directive No. 212, the National Strategy to Internationalize Efforts Against Kleptocracy, which denies safe haven in the US to "kleptocrats" or those suspected to be.

As I pointed out in a previous column, perhaps, the Americans are fully aware of how their Official Development Assistance under Public Law No. 480 was commingled and dispensed by Bolante for institutionalized vote buying in the 2004 elections. If Philippine officials are unable to find out the truth from him, the Americans will hopefully make sure he can’t forever run away from it.

Piatco mess

Reader Mario Valderrama wrote to say that "the Supreme Court ruling in Agan v. Piatco may have even stymied the options of the government and only resulted to unintended embarrassing consequences. And further interference by our court may only complicate the effort of the government to defend itself." He commented on column we had last week as follows:

I wish that it were that simple, that is, for the High Court to untangle the NAIA 3 legal mess (your column, Star 8 September). Unfortunately, the mess had taken an international character because of the arbitration clause in the PIATCO contract. And, since the seat of arbitration is not the Philippines, then local courts are not even the so-called "supervising courts" that have supervisory jurisdiction over the arbitration.

As a result, on the "arbitrable issues" as well as on the validity and enforceability of the arbitration clause, the jurisdiction of our courts, including our High Court, is limited to that of "courts of eventual enforcement". In other words, whatever decision it would render (or had rendered as in the case of the "unenforceability" of the arbitration clause) is only relevant on the issue of whether or not the resultant award (or decision) of the arbitrators may be enforced in the Philippines.

At the end of the day it is the decision of the arbitrators, whose awards are subject to the supervisory jurisdiction of Singapore courts, that would be recognized and could be enforced in the international scene. This is by treaty, the Convention on the Recognition and Enforcement of Foreign Arbitral Awards, more known as the New York Convention of 1958. Relevantly, at present count, about a hundred forty countries have adhered to that Convention.

Needless to state, the Philippines has "leviable" assets in many of those countries against which the resultant arbitral award could be enforced. And that award may include assessment for damages if the Philippine government proved recalcitrant by, for example, refusing to obey the orders of the arbitral tribunal.

This is not to say that the government has no hope. But in defending itself it has to follow the "rule of law" as applied in its international context rather than in it domestic context.

Accounting in Tagalog

Because nationalists claim it is easier to teach complex technical terms in Pilipino, Dr. Ernie E claims the following translations were made for an accounting textbook in Pilipino.

Asset — Ari; Fixed Asset — Nakatirik na ari; Liquid Asset — Basang ari;

Solid or Hard Asset — Matigas na ari; Asset Write off — Pinutol na pagaari;

Depreciated Asset — Laspag na pag-aari; Earning asset — Tumutubong pag-aari;

Working Asset — tumatrabahong ari; Non-earning Asset — Baldadong ari;

Hidden asset — nakatagong pag-aari; Revealed asset — nakikitang pag-aari;

Erroneous Entry — Mali ang pagkaka-pasok; Double Entry — Dalawang beses ipinasok; Multiple Entry — Labas pasok nang labas pasok; Correcting Entry — Itinama ang pagpasok; Reversed entry — Baligtad ang pagkakapasok.

Now, who says accountants are boring people?

Boo Chanco ‘s e-mail address is [email protected]