Meet global corruption's hidden players
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0:00 - 0:02When we talk about corruption,
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0:02 - 0:06there are typical types of individuals that spring to mind.
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0:06 - 0:08There's the former Soviet megalomaniacs.
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0:08 - 0:11Saparmurat Niyazov, he was one of them.
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0:11 - 0:13Until his death in 2006,
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0:13 - 0:17he was the all-powerful leader of Turkmenistan,
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0:17 - 0:20a Central Asian country rich in natural gas.
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0:20 - 0:24Now, he really loved to issue presidential decrees.
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0:24 - 0:27In one, renamed the months of the year
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0:27 - 0:30including after himself and his mother.
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0:30 - 0:32He spent millions of dollars
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0:32 - 0:35creating a bizarre personality cult,
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0:35 - 0:37and his crowning glory was the building
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0:37 - 0:41of a 40-foot high gold-plated statue of himself
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0:41 - 0:44which stood proudly in the capital's central square
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0:44 - 0:47and rotated to follow the sun.
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0:47 - 0:49He was a slightly unusual guy.
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0:49 - 0:51And then there's that cliché,
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0:51 - 0:55the African dictator or minister or official.
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0:55 - 0:58There's Teodorín Obiang.
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0:58 - 1:02So his daddy is president for life of Equatorial Guinea,
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1:02 - 1:05a West African nation that has exported
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1:05 - 1:09billions of dollars of oil since the 1990s
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1:09 - 1:13and yet has a truly appalling human rights record.
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1:13 - 1:15The vast majority of its people
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1:15 - 1:18are living in really miserable poverty
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1:18 - 1:20despite an income per capita that's on a par
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1:20 - 1:22with that of Portugal.
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1:22 - 1:25So Obiang junior, well, he buys himself
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1:25 - 1:29a $30 million mansion in Malibu, California.
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1:29 - 1:30I've been up to its front gates.
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1:30 - 1:33I can tell you it's a magnificent spread.
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1:33 - 1:37He bought an €18 million art collection
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1:37 - 1:41that used to belong to fashion designer Yves Saint Laurent,
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1:41 - 1:43a stack of fabulous sports cars,
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1:43 - 1:45some costing a million dollars apiece --
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1:45 - 1:48oh, and a Gulfstream jet, too.
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1:48 - 1:49Now get this:
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1:49 - 1:53Until recently, he was earning an official monthly salary
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1:53 - 1:57of less than 7,000 dollars.
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1:57 - 1:59And there's Dan Etete.
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1:59 - 2:02Well, he was the former oil minister of Nigeria
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2:02 - 2:04under President Abacha,
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2:04 - 2:08and it just so happens he's a convicted money launderer too.
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2:08 - 2:10We've spent a great deal of time
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2:10 - 2:12investigating a $1 billion --
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2:12 - 2:14that's right, a $1 billion —
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2:14 - 2:17oil deal that he was involved with,
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2:17 - 2:19and what we found was pretty shocking,
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2:19 - 2:21but more about that later.
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2:21 - 2:25So it's easy to think that corruption happens
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2:25 - 2:27somewhere over there,
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2:27 - 2:29carried out by a bunch of greedy despots
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2:29 - 2:31and individuals up to no good in countries
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2:31 - 2:34that we, personally, may know very little about
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2:34 - 2:36and feel really unconnected to
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2:36 - 2:39and unaffected by what might be going on.
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2:39 - 2:43But does it just happen over there?
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2:43 - 2:46Well, at 22, I was very lucky.
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2:46 - 2:49My first job out of university
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2:49 - 2:53was investigating the illegal trade in African ivory.
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2:53 - 2:57And that's how my relationship with corruption really began.
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2:57 - 3:00In 1993, with two friends who were colleagues,
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3:00 - 3:03Simon Taylor and Patrick Alley,
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3:03 - 3:06we set up an organization called Global Witness.
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3:06 - 3:09Our first campaign was investigating the role
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3:09 - 3:13of illegal logging in funding the war in Cambodia.
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3:13 - 3:16So a few years later, and it's now 1997,
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3:16 - 3:21and I'm in Angola undercover investigating blood diamonds.
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3:21 - 3:23Perhaps you saw the film,
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3:23 - 3:24the Hollywood film "Blood Diamond,"
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3:24 - 3:26the one with Leonardo DiCaprio.
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3:26 - 3:30Well, some of that sprang from our work.
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3:30 - 3:32Luanda, it was full of land mine victims
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3:32 - 3:35who were struggling to survive on the streets
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3:35 - 3:38and war orphans living in sewers under the streets,
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3:38 - 3:40and a tiny, very wealthy elite
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3:40 - 3:43who gossiped about shopping trips to Brazil and Portugal.
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3:43 - 3:46And it was a slightly crazy place.
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3:46 - 3:49So I'm sitting in a hot and very stuffy hotel room
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3:49 - 3:52feeling just totally overwhelmed.
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3:52 - 3:55But it wasn't about blood diamonds.
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3:55 - 3:58Because I'd been speaking to lots of people there
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3:58 - 4:00who, well, they talked about a different problem:
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4:00 - 4:03that of a massive web of corruption on a global scale
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4:03 - 4:07and millions of oil dollars going missing.
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4:07 - 4:09And for what was then a very small organization
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4:09 - 4:11of just a few people,
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4:11 - 4:14trying to even begin to think of how we might tackle that
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4:14 - 4:17was an enormous challenge.
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4:17 - 4:18And in the years that I've been,
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4:18 - 4:21and we've all been campaigning and investigating,
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4:21 - 4:23I've repeatedly seen that what makes corruption
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4:23 - 4:25on a global, massive scale possible,
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4:25 - 4:28well it isn't just greed or the misuse of power
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4:28 - 4:31or that nebulous phrase "weak governance."
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4:31 - 4:33I mean, yes, it's all of those,
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4:33 - 4:36but corruption, it's made possible by the actions
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4:36 - 4:39of global facilitators.
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4:39 - 4:43So let's go back to some of those people I talked about earlier.
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4:43 - 4:44Now, they're all people we've investigated,
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4:44 - 4:47and they're all people who couldn't do what they do alone.
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4:47 - 4:49Take Obiang junior. Well, he didn't end up
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4:49 - 4:53with high-end art and luxury houses without help.
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4:53 - 4:55He did business with global banks.
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4:55 - 4:59A bank in Paris held accounts of companies controlled by him,
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4:59 - 5:02one of which was used to buy the art,
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5:02 - 5:04and American banks, well, they funneled
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5:04 - 5:0773 million dollars into the States,
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5:07 - 5:11some of which was used to buy that California mansion.
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5:11 - 5:14And he didn't do all of this in his own name either.
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5:14 - 5:16He used shell companies.
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5:16 - 5:18He used one to buy the property, and another,
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5:18 - 5:20which was in somebody else's name,
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5:20 - 5:24to pay the huge bills it cost to run the place.
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5:24 - 5:27And then there's Dan Etete.
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5:27 - 5:29Well, when he was oil minister,
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5:29 - 5:34he awarded an oil block now worth over a billion dollars
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5:34 - 5:37to a company that, guess what, yeah,
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5:37 - 5:39he was the hidden owner of.
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5:39 - 5:42Now, it was then much later traded on
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5:42 - 5:45with the kind assistance of the Nigerian government --
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5:45 - 5:47now I have to be careful what I say here —
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5:47 - 5:51to subsidiaries of Shell and the Italian Eni,
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5:51 - 5:54two of the biggest oil companies around.
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5:54 - 5:56So the reality is that the engine of corruption,
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5:56 - 5:59well, it exists far beyond the shores of countries
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5:59 - 6:02like Equatorial Guinea or Nigeria or Turkmenistan.
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6:02 - 6:04This engine, well, it's driven
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6:04 - 6:07by our international banking system,
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6:07 - 6:09by the problem of anonymous shell companies,
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6:09 - 6:12and by the secrecy that we have afforded
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6:12 - 6:15big oil, gas and mining operations,
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6:15 - 6:18and, most of all, by the failure of our politicians
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6:18 - 6:20to back up their rhetoric and do something
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6:20 - 6:25really meaningful and systemic to tackle this stuff.
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6:25 - 6:27Now let's take the banks first.
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6:27 - 6:30Well, it's not going to come as any surprise
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6:30 - 6:34for me to tell you that banks accept dirty money,
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6:34 - 6:39but they prioritize their profits in other destructive ways too.
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6:39 - 6:42For example, in Sarawak, Malaysia.
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6:42 - 6:45Now this region, it has just five percent
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6:45 - 6:51of its forests left intact. Five percent.
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6:51 - 6:52So how did that happen?
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6:52 - 6:55Well, because an elite and its facilitators
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6:55 - 6:57have been making millions of dollars
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6:57 - 7:01from supporting logging on an industrial scale
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7:01 - 7:03for many years.
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7:03 - 7:06So we sent an undercover investigator in
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7:06 - 7:09to secretly film meetings with members of the ruling elite,
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7:09 - 7:12and the resulting footage, well, it made some people very angry,
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7:12 - 7:15and you can see that on YouTube,
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7:15 - 7:16but it proved what we had long suspected,
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7:16 - 7:20because it showed how the state's chief minister,
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7:20 - 7:22despite his later denials,
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7:22 - 7:26used his control over land and forest licenses
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7:26 - 7:29to enrich himself and his family.
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7:29 - 7:33And HSBC, well, we know that HSBC bankrolled
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7:33 - 7:35the region's largest logging companies
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7:35 - 7:37that were responsible for some that destruction
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7:37 - 7:40in Sarawak and elsewhere.
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7:40 - 7:44The bank violated its own sustainability policies in the process,
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7:44 - 7:48but it earned around 130 million dollars.
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7:48 - 7:50Now shortly after our exposé,
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7:50 - 7:53very shortly after our exposé earlier this year,
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7:53 - 7:56the bank announced a policy review on this.
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7:56 - 7:58And is this progress? Maybe,
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7:58 - 8:01but we're going to be keeping a very close eye
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8:01 - 8:03on that case.
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8:03 - 8:06And then there's the problem of anonymous shell companies.
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8:06 - 8:09Well, we've all heard about what they are, I think,
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8:09 - 8:12and we all know they're used quite a bit
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8:12 - 8:14by people and companies who are trying to avoid
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8:14 - 8:17paying their proper dues to society,
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8:17 - 8:19also known as taxes.
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8:19 - 8:22But what doesn't usually come to light
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8:22 - 8:27is how shell companies are used to steal
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8:27 - 8:30huge sums of money, transformational sums of money,
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8:30 - 8:32from poor countries.
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8:32 - 8:36In virtually every case of corruption that we've investigated,
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8:36 - 8:38shell companies have appeared,
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8:38 - 8:40and sometimes it's been impossible to find out
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8:40 - 8:44who is really involved in the deal.
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8:44 - 8:46A recent study by the World Bank
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8:46 - 8:49looked at 200 cases of corruption.
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8:49 - 8:52It found that over 70 percent of those cases
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8:52 - 8:55had used anonymous shell companies,
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8:55 - 8:59totaling almost 56 billion dollars.
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8:59 - 9:01Now many of these companies were in America
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9:01 - 9:02or the United Kingdom,
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9:02 - 9:05its overseas territories and Crown dependencies,
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9:05 - 9:07and so it's not just an offshore problem,
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9:07 - 9:09it's an on-shore one too.
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9:09 - 9:11You see, shell companies, they're central
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9:11 - 9:14to the secret deals which may benefit wealthy elites
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9:14 - 9:17rather than ordinary citizens.
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9:17 - 9:21One striking recent case that we've investigated
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9:21 - 9:24is how the government in the Democratic Republic of Congo
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9:24 - 9:28sold off a series of valuable, state-owned mining assets
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9:28 - 9:31to shell companies in the British Virgin Islands.
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9:31 - 9:34So we spoke to sources in country,
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9:34 - 9:37trolled through company documents and other information
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9:37 - 9:41trying to piece together a really true picture of the deal.
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9:41 - 9:44And we were alarmed to find that these shell companies
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9:44 - 9:46had quickly flipped many of the assets on
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9:46 - 9:50for huge profits to major international mining companies
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9:50 - 9:53listed in London.
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9:53 - 9:56Now, the Africa Progress Panel, led by Kofi Annan,
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9:56 - 9:59they've calculated that Congo may have lost
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9:59 - 10:04more than 1.3 billion dollars from these deals.
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10:04 - 10:06That's almost twice
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10:06 - 10:12the country's annual health and education budget combined.
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10:12 - 10:14And will the people of Congo, will they ever get their money back?
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10:14 - 10:16Well, the answer to that question,
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10:16 - 10:18and who was really involved and what really happened,
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10:18 - 10:21well that's going to probably remain locked away
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10:21 - 10:24in the secretive company registries of the British Virgin Islands
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10:24 - 10:29and elsewhere unless we all do something about it.
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10:29 - 10:31And how about the oil, gas and mining companies?
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10:31 - 10:34Okay, maybe it's a bit of a cliché to talk about them.
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10:34 - 10:36Corruption in that sector, no surprise.
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10:36 - 10:41There's corruption everywhere, so why focus on that sector?
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10:41 - 10:43Well, because there's a lot at stake.
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10:43 - 10:47In 2011, natural resource exports
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10:47 - 10:51outweighed aid flows by almost 19 to one
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10:51 - 10:55in Africa, Asia and Latin America. Nineteen to one.
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10:55 - 10:59Now that's a hell of a lot of schools and universities
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10:59 - 11:01and hospitals and business startups,
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11:01 - 11:03many of which haven't materialized and never will
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11:03 - 11:07because some of that money has simply been stolen away.
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11:07 - 11:10Now let's go back to the oil and mining companies,
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11:10 - 11:13and let's go back to Dan Etete and that $1 billion deal.
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11:13 - 11:16And now forgive me, I'm going to read the next bit
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11:16 - 11:18because it's a very live issue, and our lawyers
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11:18 - 11:20have been through this in some detail
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11:20 - 11:24and they want me to get it right.
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11:24 - 11:28Now, on the surface, the deal appeared straightforward.
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11:28 - 11:30Subsidiaries of Shell and Eni
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11:30 - 11:33paid the Nigerian government for the block.
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11:33 - 11:35The Nigerian government transferred
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11:35 - 11:38precisely the same amount, to the very dollar,
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11:38 - 11:43to an account earmarked for a shell company
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11:43 - 11:45whose hidden owner was Etete.
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11:45 - 11:48Now, that's not bad going for a convicted money launderer.
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11:48 - 11:50And here's the thing.
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11:50 - 11:51After many months of digging around
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11:51 - 11:55and reading through hundreds of pages of court documents,
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11:55 - 11:57we found evidence that, in fact,
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11:57 - 12:00Shell and Eni had known that the funds
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12:00 - 12:03would be transferred to that shell company,
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12:03 - 12:07and frankly, it's hard to believe they didn't know
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12:07 - 12:10who they were really dealing with there.
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12:10 - 12:14Now, it just shouldn't take these sorts of efforts
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12:14 - 12:16to find out where the money in deals like this went.
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12:16 - 12:18I mean, these are state assets.
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12:18 - 12:19They're supposed to be used for the benefit
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12:19 - 12:21of the people in the country.
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12:21 - 12:24But in some countries, citizens and journalists
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12:24 - 12:26who are trying to expose stories like this
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12:26 - 12:28have been harassed and arrested
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12:28 - 12:32and some have even risked their lives to do so.
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12:32 - 12:36And finally, well, there are those who believe
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12:36 - 12:38that corruption is unavoidable.
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12:38 - 12:40It's just how some business is done.
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12:40 - 12:43It's too complex and difficult to change.
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12:43 - 12:46So in effect, what? We just accept it.
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12:46 - 12:48But as a campaigner and investigator,
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12:48 - 12:49I have a different view,
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12:49 - 12:51because I've seen what can happen
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12:51 - 12:54when an idea gains momentum.
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12:54 - 12:57In the oil and mining sector, for example,
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12:57 - 12:58there is now the beginning
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12:58 - 13:01of a truly worldwide transparency standard
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13:01 - 13:04that could tackle some of these problems.
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13:04 - 13:07In 1999, when Global Witness called
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13:07 - 13:10for oil companies to make payments on deals transparent,
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13:10 - 13:14well, some people laughed at the extreme naiveté
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13:14 - 13:16of that small idea.
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13:16 - 13:19But literally hundreds of civil society groups
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13:19 - 13:21from around the world came together
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13:21 - 13:23to fight for transparency,
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13:23 - 13:27and now it's fast becoming the norm and the law.
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13:27 - 13:29Two thirds of the value
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13:29 - 13:31of the world's oil and mining companies
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13:31 - 13:35are now covered by transparency laws. Two thirds.
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13:35 - 13:36So this is change happening.
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13:36 - 13:38This is progress.
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13:38 - 13:41But we're not there yet, by far.
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13:41 - 13:44Because it really isn't about corruption
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13:44 - 13:46somewhere over there, is it?
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13:46 - 13:48In a globalized world, corruption
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13:48 - 13:50is a truly globalized business,
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13:50 - 13:52and one that needs global solutions,
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13:52 - 13:56supported and pushed by us all, as global citizens,
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13:56 - 13:58right here.
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13:58 - 13:59Thank you.
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13:59 - 14:06(Applause)
- Title:
- Meet global corruption's hidden players
- Speaker:
- Charmian Gooch
- Description:
-
When the son of the president of a desperately poor country starts buying mansions and sportscars on an official monthly salary of $7,000, Charmian Gooch suggests, corruption is probably somewhere in the picture. In a blistering, eye-opening talk (and through several specific examples), she details how global corruption trackers follow the money -- to some surprisingly familiar faces.
- Video Language:
- English
- Team:
- closed TED
- Project:
- TEDTalks
- Duration:
- 14:27
Krystian Aparta edited English subtitles for Meet global corruption's hidden players | ||
Thu-Huong Ha edited English subtitles for Meet global corruption's hidden players | ||
Thu-Huong Ha approved English subtitles for Meet global corruption's hidden players | ||
Thu-Huong Ha edited English subtitles for Meet global corruption's hidden players | ||
Thu-Huong Ha edited English subtitles for Meet global corruption's hidden players | ||
Morton Bast accepted English subtitles for Meet global corruption's hidden players | ||
Morton Bast edited English subtitles for Meet global corruption's hidden players | ||
Joseph Geni edited English subtitles for Meet global corruption's hidden players |