Parliament neglects the human cost of corruption. Photo: Flickr/Lars Plougmann
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The fight against poverty overseas is undermined by money laundering in the UK

Why the government's anti-corruption plan is a missed opportunity.

This week, the government published its anti-corruption plan. It has a number of welcome measures – such as making it easier to freeze corrupt funds by lowering the evidential test for a restraint order – but in a number of respects it is a missed opportunity. 

Repeated delays in publishing the plan, and an action list littered with yet more consultations and future reviews, mean money laundering loopholes which could be fixed in the Serious Crime Bill before the House of Commons in January 2015 look set to remain.

The shortcomings of the government’s anti-corruption plan reflect a wider lack of focus in parliament on corruption, despite its devastating consequences for the poorest in the world.

Parliament has voted to increase the overseas aid budget at a time of budget cuts elsewhere, and repeatedly debates the amount of aid the UK distributes. Yet there is far less debate on how much money is being lost from the poorest countries.

The cost of corruption in Africa is estimated by the African Union to be $148bn, on top of the $1tn which the World Bank estimates is paid in bribes.

Specific examples give a sense of the scale of leakage. Malawi is a country where according to Water Aid more than 3,500 children die every year from diarrhoea caused by unsafe water and poor sanitation. The UK government gave Malawi £106m in aid last year.  Yet $30m was recently stolen from Government accounts, and a Minister murdered, in a scandal referred to as “Cashgate”.

The UK’s Department for International Development paid for consultancy firm Baker Tilly to provide expert investigators into Cashgate, but so far they have recovered no cash. External consultants like these do not have the power to obtain key transaction data from banks, or request intelligence from other governments, raising questions as to the value for money of their appointment.

In Nigeria over $1bn was stolen by corrupt officials in a single case, involving Malubu Oil. The oil minister of Nigeria awarded the rights to oil from an offshore site to a company which last year the UK High Court ruled was a company he owned.  $1bn is the equivalent of two thirds of Nigeria’s health budget serving 170 million people, in a country with the second highest HIV burden in the world. 

The UK has some of the best financial investigators globally, but they are massively under-resourced compared to the best lawyers and accountants corrupt money can buy. They can only review a tiny fraction of the number of suspicious activity reports they receive. Investigators also have the cards stacked against them in terms of insufficient time limits to complete investigations.

There is a lack of transparency at home with for example non-government organisations suggesting 45 per cent of London property valued at above £2m is owned by offshore companies. The UK government does not know who owns these offshore companies, and so does not know if a modestly paid minister has suspiciously afforded a multi-million pound London property. 

There is also a lack of transparency overseas. Why are we not requiring ministers who receive UK aid to publish assets declaration records, in line with the UN Convention? Why are we not extending the register of beneficial owners of UK companies to include overseas territories in 2015? 

The benefits of aid risk being undermined due to a failure to tackle corruption laundered here in the UK. 

Corruption is a rich person’s crime against the poorest people in the world. It should outrage us all. It is time for parliament to spend more time looking at how much money illegally comes out of countries, and not just how much money we put in.

Steve Barclay is the Conservative MP for Northeast Cambridgeshire

New Statesman
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Quiz: Can you identify fake news?

The furore around "fake" news shows no sign of abating. Can you spot what's real and what's not?

Hillary Clinton has spoken out today to warn about the fake news epidemic sweeping the world. Clinton went as far as to say that "lives are at risk" from fake news, the day after Pope Francis compared reading fake news to eating poop. (Side note: with real news like that, who needs the fake stuff?)

The sweeping distrust in fake news has caused some confusion, however, as many are unsure about how to actually tell the reals and the fakes apart. Short from seeing whether the logo will scratch off and asking the man from the market where he got it from, how can you really identify fake news? Take our test to see whether you have all the answers.

 

 

In all seriousness, many claim that identifying fake news is a simple matter of checking the source and disbelieving anything "too good to be true". Unfortunately, however, fake news outlets post real stories too, and real news outlets often slip up and publish the fakes. Use fact-checking websites like Snopes to really get to the bottom of a story, and always do a quick Google before you share anything. 

Amelia Tait is a technology and digital culture writer at the New Statesman.