Posts Tagged ‘Corruption’


How China’s Corruption Issue Affects U.S. Economy

When the Shanghai stock market fell at the beginning of the year, markets in London and New York shook.

When China showed official numbers that its economic growth rate might falter, economists around the globe talked of dire financial consequences around the world.

And yet, anyone who has spent any time dealing with the China and its government would know — or should know — that the numbers released by the Chinese government are always suspect and the Chinese stock markets are about as transparent as a block of onyx.

Rule one in dealing with the Chinese government is that all things must be bent to serve the official line. If the official position is that China will have a 7 percent growth in GDP, then the appropriate government agencies must ensure the numbers they put out show at least that level. (A 6.9 percent growth is not acceptable, because it is not at least seven.)

And now Wang Bao’an, director of the National Bureau of Statistics is under investigation for  “serious violations of party discipline.” That phrase is veiled code for corruption.

As Charles Riley at CNN noted, this calls into question the data presented by Wang:

The…announcement, which is bound to raise new questions about the accuracy of Beijing’s economic statistics, came just hours after Wang briefed reporters on the state of China’s economy.

China Digital Times notes economist Xu Dianqing, of Beijing Normal University and the University of West Ontario, has raised doubts about China’s official growth rate for some time. According to Xu’s calculations, the real rate is between 4.3 percent 5.2 percent, not the official growth rate of 6.9 percent for 2015.

Granted, the investigation against Wang may not be related to his current job but may involve other activities during his 24 years in the finance ministry.

Yes, the Chinese government and ruling party (one in the same) are moving on corrupt officials. It would be nice to say that they are doing this because it is the right thing and that corruption is bad. Instead, the move seems more motivated to prevent a popular uprising against the ruling party.

China ranks 83 out of 168 on the perceived corruption index of Transparency International. (The higher the number, the more corrupt.) And we all know that China ranks near the bottom for political, social and media freedom.

The Communist Party holds onto its power largely because it promises the people of China a better life. If that better life is stalled or blocked by corrupt officials, the people see fewer reasons to support the party. If people are hurt or damaged by shoddy workmanship in infrastructure projects or public buildings because of corruption, there is less support for the government.

By moving against corrupt officials, the government wants to show that it is “doing the people’s will” by rooting out the (few) bad influences in power. The problem is that an anti-democratic, free-press bashing government by its very nature is a breading ground for corruption. There are no independent checks on abusive government officials. The Chinese government only tends to move against corrupt officials after the corruption is so blatant as to cause social unrest.

So China is corrupt. What does that mean for the average American.

For starters, look at the first two paragraphs of this entry. The world’s economy went into a tailspin because of activities in a country that regularly cooks the books and that has no resources to independently check the factual nature of its economic numbers.

Jobs in the United States are put at risk when China falters.

Yes, the U.S. buys more from China than it sells, but in the past few years the exports to China have been growing. Until the Chinese economy started to hesitate.

Exports to China were on a steady growth pattern for the past decade. January-November exports to China rose from $37 billion in 2005 to $109 billion in 2014. Then, last year, that number slipped to $106 billion. In fact, 2015 showed a marked decline month-on-month in exports to China.

Unlike what we import from China, what we sell is high-end aircraft parts, machinery and electronic equipment. These are products made with high-wage labor. A reduction in sales of these types of products overseas could mean more people forced to take lower-paid jobs and, therefore, contributing less to the American economy.

So, a handful of experts were keeping an eye on the situation in China. And occasionally there would be a story about the status of the Chinese economy. There would also be stories about how the changes in the Chinese economy affect trade with the United States. But where were the stories that showed how the Chinese economic changes impacted individual Americans?

How difficult would it be for a local reporter in Seattle or South Carolina to ask the local Boeing factory how sales to China were going? Along with the expected follow-up of, “What does it mean to local production and employment?”Washington2China

Or maybe for a local reporter in Galveston, Tex., to ask about how chemical sales are doing with China. (Yes, they are also down.)

Or even a reporter from Louisiana to call the New Orleans Port Authority to make inquiries about how shipments to and from China are doing.

Or how about a reporter along the Mississippi River asking how grain sales are doing to the rest of the world — and China in particular?

Had any of these inquiries been made and followed through, perhaps there would have been less shock about the slow down in China. People would not have been happy about the slow down, but at least they would have understood what was happening and why.

And the last time I looked, explaining what happened and why is part of the job description of being a jorunalist.

Corruption in China’s media

As usual David Bandurski does a great job breaking down the media situation in China.

The Roots of Media Corruption in China

Excerpt:

Periodically, China’s leaders declare a war of attrition against the spectre of media corruption. They nibble at the monster’s heels, arresting a handful of regional bureau chiefs, or “fake reporters” operating without formal press credentials. They announce a new round of moral training for journalists in the “Marxist View of Journalism.”

The core causes go unaddressed. Chief among these is the inescapable fact that media and information are defined as tools of power. Look no further than the “Marxist View of Journalism,” which states that all news must serve the interests of the Chinese Communist Party.

When political power is given precedence — as opposed to accuracy, relevance and the public interest — the upshot is that all media are in a sense morally bankrupted. Those who possess sufficient power can exploit the media. Conversely, media, as extensions of power, can apply that power for economic gain in a competitive, commercialised media environment.

Transparency and military sales

Transparency International just issued a report on military sales into the Middle East. (Transparency International: Mideast and North African Military Corruption “Critical”)

The report notes the massive sales by Western countries is worsening many of the region’s conflicts.

Many of the 17 countries listed in the report are already notoriously corrupt, and increasing military spending without adequate oversight, the report states, means defense budgets are not being spent to meet countries’ strategic needs, weapons are increasingly trafficked over porous borders and the governments’ domestic legitimacy — already battered by 2011’s revolts — are further undermined.

Remember that TI looks at how transparent government operations are. Only two of the 17 countries covered in the 2-year report — Jordan and Tunisia — publish their defense numbers. The rest keep the numbers as secret as possible.

Another thing to look at in this situation is not only the corruption index of these countries — all “High” to “Critical” — but also at how these governments look at press freedom.

None of these countries, with the exception of Kuwait, breaks into the “Partly Free” category of press freedom by Freedom House.

Previous reports from Freedom House show a steady decline in press freedom in the area.

There is a real connection between freedom of the press and reduced corruption. Just look at the bottom 20 of press freedom and the worst 20 on the TI corruption scale. (More political freedom=More press freedom=Less corruption)

Or look at how just the general issue of transparency and free press interact: Transparency and Free Press.

Free and independent media are vital to democratic and transparent government. And remember that this is not exclusively an international issue. This idea filters all the way down to the most local of local governments. The freedom of information laws we have at all levels of government are there for a reason.

And if anyone is wondering, there is a major effort on the international level to expand FOI laws in countries where they exist and to introduce such laws where they don’t. The problem is the real need for FOI laws is also in those countries that don’t recognize press freedom.

Honduran Money Laundering Arrests Affect Major News Outlets

The US government arrested Honduran Yanki Rosenthal when he landed in Miami October 6 on charges of money laundering. The next day indictments were handed down for other members of his family.

While many in the world media are focusing on Yanki’s ownership of a major Honduran soccer team and the family’s ownership of the bank Grupo Continental, the reach of the Rosenthal family is much more extensive.

For journalists, the indictments hit close to home.

The Rosenthals own one of the major newspapers — El Tiempo — and a national TV outlet — Canal 11.

How the Honduran press handled the arrest and indictments clearly showed the biases

El Tiempo lead with:

The Continental Group issued a statement rejecting the accusations made Wednesday the Treasury Department of the United States, where several companies linked to the group of the crime of money laundering. Facing accusations Continental Group denies allegations of money laundering involving companies in the Continental Group.

Competitor El Heraldo, however, went with:

The US attorney in Manhattan announced charges Wednesday against four Hondurans by “laundering of proceeds of drug trafficking and bribery crimes through accounts in the United States.

Rolando Jaime Rosenthal Oliva, Yani Benjamin Rosenthal Hidalgo, Yankel Rosenthal and Andrew Acosta Garcia Coello “were charged in connection with a conspiracy carried out over several years to launder profits from drug crimes,” said the office of the Southern District of New York.

The newspapers — and television news outlets — have never been shy about showing off the political leanings of the owners. It will now be interesting to see how the news media handle the trials of one of the five big families of Honduras.

What will be important for foreign journalists to pay attention to will not be the cat fight that is sure to be played out in the front pages, but rather if (when) the number of life-threatening threats against journalists covering this case increases.

Journalists in Honduras have faced numerous threats — not so much from the government as from the narcos. Threats will most likely come against anyone digging deeply into this story.

THIS IS BIG! In the past, the US and Honduran governments have acted against drug kingpins and their holdings. This is the first time there is a major move against such a prominent family and such large corporate holdings in the country. Among those indicted are a former president of the country and a presidential candidate for the Liberal Party, the mainstream opposition party to the ruling National Party.

Grupo Continental is one of the largest banks in Honduras. Its holding extend deeply into Honduran society, including — as noted — the news media.

Under Honduran law, the property and goods of indicted individuals is put under the control of the Administrative Office of Seized Goods (OABI). When a major narco was arrested, OABI took over control of his private zoo, which was occasionally opened to the public. OABI brought in animal experts to evaluate and run the zoo and kept it open to the public. (The narco zoo was much larger than the Tegucigalpa Zoo, but the animals were in much worse shape.)

Seized gym equipment was donated to outreach centers to help keep young people active in safe (non-gang related) activities. Likewise, OABI arranged for a boat, including fuel and maintenance for the boat, so a school in Cayos Cochinos could make sure the kids got an education. (The islands are inhabited by some of the poorest people in Honduras.)

The director of OABI fought corrupt bosses and politicians before he rose to the top job. Once he took command of the organization, he made sure everything was handled by the book. (In other words, no more seized cars for a political leader, just because he wants one.)

The director understands and operates OABI under a transparent and open system. He also understands that fighting back against intimidation is important part of beating corruption. His heart and mind are in the right place to allow El Tiempo and Channel 11 operate as fair and independent news outlets, if they are seized under the law.

He might even appoint a director of the newspaper and TV channel who will encourage the journalists in those groups to step out from the partisan restrictions of the current owners. And maybe even help arrange for some additional training.

And if anyone is looking for a success story about the fight against corruption, a profile of OABI and its director is a good place to start.

New Corruption List Out. Connection between no free press and corruption

First posted at Journalism, Journalists and the World.

Transparency International released its latest list of corruption in the world.

And the list confirms that the relationship between countries with high levels of corruption and lack of a free press.

RSF Ranking Country Freedom House Transparency Intl. 2009 Transparency Intl. 2010
Worst=178 RSF Bottom 10 Worst=196 Worst=180 Worst=178
169 Rwanda 178 89 66
170 Yemen 173 154 146
171 China 181 79 78
172 Sudan 165 176 172
173 Syria 178 126 127
174 Burma 194 178 176
175 Iran 187 168 146
176 Turkmenistan 194 168 172
177 North Korea 196 No Data No Data
178 Eritrea 192 126 123

The countries with numbers in red indicate “membership” in the bottom 10 of their respective indexes. A number of countries can be “tied” in their position in the list, such as Turkmenistan and Burma in the 2010 Transparency list.

For the United States, the rankings aren’t so hot. Seems the USA dropped out of the top 20 for honesty.

According to Reuters:

Nancy Boswell, president of TI in the United States, said lending practices in the subprime crisis, the disclosure of Bernard Madoff’s Ponzi scheme and rows over political funding had all rattled public faith about prevailing ethics in America. “We’re not talking about corruption in the sense of breaking the law,” she said.

“We’re talking about a sense that the system is corrupted by these practices. There’s an integrity deficit.”

At least in the States that “integrity deficit” can be openly discussed. In China or Iran or Venezuela discussing such a deficit gets you tossed in jail.

FYI: The three countries that tied for least corrupt are Denmark, New Zealand and Singapore. And the bottom three were Somalia (178) Myanmar (176) and Afghanistan (176).

Journalists under fire in Dominican Republic

The Dominican Republic has a love affair with guns that makes Virginia and Texas look like Sweden. (When I lived there, it seemed that everyone was packing heat.)

And many in DR society are not known for, shall we say honest and ethical behavior. (See Transparency International report.) The Dominican Republic was rated in 21st place of 31 countries in the Americas. (The higher the number the more corrupt.) That put it as more corrupt than Mexico and El Salvador. But less corrupt than Honduras and Haiti.

To be fair, there are honest politicians. Organizations that try to end corruption and make the government more responsive to the citizenry, such as Citizen Participation, are growing in influence. But they still have a long way to go.

Besides the civic groups, the DR is fortunate to have strong and independent media. The pursuit of stories by some Dominican reporters can and do make many politicians and government leaders nervous.

So with the use of guns in the DR as common as Tombstone in 1880 and political leaders looking to prevent reports of their activities, no one was surprised that some journalists were shot at while pursuing a story of questionable use of government vehicles.

Below is a summary of the event from DR1, a news service that translates the Spanish-language news into English.

Note: The PLD, the Dominican Liberation Party, is the ruling party. La Romana is a city about an hour from the capital of Santo Domingo. In the recent past, drug runners brought their product in either by boat to the La Romana port or by airplanes with late-night landings on the new highway leading to the city. (Some landed at the regional airport after making the proper “contributions” to local political leaders and security forces.)

Who shot at Alicia’s reporters?

For several weeks reporters for El Informe, the SIN channel investigative television show hosted by Alicia Ortega, have been trailing trucks loaded with appliances from the Lottery headquarters to several PLD warehouses. According to the reporters, on Friday night their vehicle was following a truck from the National Lottery to a Price Stabilization Institute (INESPRE) building in La Romana where it unloaded its cargo of appliances. The SIN reporters say that they were shot at by armed men in a gray and black L200 Mitsubishi and another that the SIN reporters could not identify due to the darkness, except for the fact that it was flying the PLD flag. The shooting occurred just outside San Pedro de Macoris.

In La Romana, the PLD candidate for re-election in the Senate is Amarilis Santana, who happens to be married to National Lottery administrator Enrique Martinez.

A video of the incident was broadcast on El Informe de Alicia Ortega Monday night.

From SIN

First published on Journalism, Journalists and the World.

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