PC 36 Corruption and Public Money

I sit on the chair, up against the dining room table, with my laptop in front of me. Through the windows I can glimpse the palm trees and tropical plants of the family garden and in the distance the tower blocks that line the shore of Sāo Conrado. The electric fan, sitting on the floor, stirs the air and keeps me moderately cool.

Dateline Monday 2nd March 2015 Rio de Janeiro . ……” I stare at the empty screen, praying my weekly ‘copy’ for the Times of London (I can dream, can’t I?!!) is going to flow ….. although I know from experience it never does! My battered notebook, full of scribbles, lies open. Yesterday was the 450th anniversary of the city of Rio de Janeiro; the founding fathers would not recognise this beautiful city of 2015.”

It depends on your perspective and the reliability of your information, as to how you view this world of ours. But recently I have been rather open-mouthed, hence this PC follows sharply on the heels on the last one!! In The Times of London of Saturday last week there was a long article on how much money the Blair government of New Labour, in 2005, had wasted or was unaccountable. The author has suggested the figure was some £230bn! There was the normal run-list of items such as failed IT projects and how the taxman had written off some £37.6 bn but most interesting to me was the amount of smuggling that apparently goes on. I thought that that had disappeared with sailing ships and rocky shores in Cornwall … but I can be very naïve sometimes!! It seems that enough fuel oil is smuggled into the UK to deprive the country of some £5.5bn of tax. And tobacco? Well, just how many cartons of packets of 20 cigarettes account for £21.4bn of lost tax? Unbelievably, the Government announced that they would increase the surveillance at 11 of the 43 points of entry. So the smugglers simply used the other 32! I was shocked. But I guess I shouldn’t have been. It’s natural that everyone wants to pay as little as possible to the government, especially if the Government wastes money, so tax avoidance becomes a game. And this report says that the government wasted £230bn, that’s £230,000,000,000! Isn’t someone accountable, you might think?

In simplistic terms we have a National Audit Office that scrutinises public expenditure and a Parliamentary Accounts Committee that can call anyone to appear before it, to question them. Both bodies write reports and everyone goes: “Oh!” and “Ah!” at some revelation of waste or profligacy …and shakes hands:  “Job well done”.  And ……… that’s it. Neither organisation points the finger of blame and cries: “Off to the Tower!” Maybe they should. Ah! But these are the people, those we elect to govern us, who bend the rules governing their own expenses … and declare all innocence when they get caught. There was the famous case of one Member of Parliament who used public money to do maintenance on a little duck house on the island in the lake of his country house. And he thought he could!! The arrogance!

And yet I suppose if you’re Greek, you have a different perspective; you think you’re the only country in the world with corrupt politicians and civil servants. It simply depends on where you live. The other day the ex-president of Yemen, one of the poorest countries on the planet, was accused of taking kickbacks from foreign companies wanting oil & gas exploration rights. Ali Abdullah Saleh also took a 10% slice of the ‘National Fuel Subsidiary Programme’. He is accused of amassing a personal fortune of $60 billion ….. robbing one of the poorest countries of its wealth. There is news everywhere of people milking the system and thinking it’s OK

And where am I typing this from? Well, Rio de Janeiro in Brazil, where for some months now the absolute scandalous story of corruption at the highest levels in government and business is laid bare through one company – Petrobras. Founded in 1953 this semi-public company (public 36% Government 64%) dominates the Oil & Gas Sector here and accounts for 90% of oil production and some 1/5th of the Brazilian economy. The figures appearing daily are breath-taking. One spotlight shone on the story of the Pasadena (USA) Oil Refinery. Bought by a Belgian company in 2004 for $50m, it was then sold to Petrobras two years later for $1bn, twenty times the earlier price!! Or the chairman of Petrobras who seemingly had 5% of the turnover of the company added to his paypacket! The money has allegedly gone to fund the governing Workers’ Party for years, despite continuing denials from the past and current Presidents. Completely unbelievable!! Sitting in a makeshift jail in Curitiba, those who stole billions of the nation’s wealth protest ….. some offering millions of dollars to buy their ‘plea bargain’. Disgusting!

Brazilians love their Soap Operas and now we have a real life story that sounds like one. It runs alongside the daily dosage of corruption news from Petrobras, and is a bankruptcy hearing of a faded industrialist, Eike Batista. He had built his fortune on oil forecasts from unproven drillings. The judge hearing this case is one Flavio Roberto de Souza. Well, maybe he isn’t anymore, as last week he was seen driving around in Batista’s impounded Porsche Cayenne and parking it in the underground garage …. of his apartment block! “I felt it needed to be protected from the sun and rain.” he said in mitigation! And the ex-Batista grand piano was also seen on its way to an apartment in the same building! You seriously couldn’t make up a script such as this for a soap opera – except this is life here in Brazil.

It’s often thought that in Britain we ‘do the right thing’ and that we are an ethical country. Sometimes I wonder what we would really find if we did more than scratch the surface. Waste and corruption, greed and dishonesty? Probably!

Something to chew on over breakfast, wherever you are. Just scribbles really!

Richard Yates – richardyates24@gmail.com

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