TEDGlobal 2013
Charmian Gooch: Meet global corruption's hidden players
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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 (with several specific examples), she details how global corruption trackers follow the money -- to some surprisingly familiar faces.
Charmian Gooch - Anti-corruption activist
Charmian Gooch is the 2014 TED Prize winner. At Global Witness, she exposes how a global architecture of corruption is woven into the extraction and exploitation of natural resources. Full bio
Charmian Gooch is the 2014 TED Prize winner. At Global Witness, she exposes how a global architecture of corruption is woven into the extraction and exploitation of natural resources. Full bio
Double-click the English transcript below to play the video.
00:12
When we talk about corruption,
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there are typical types of individuals that spring to mind.
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There's the former Soviet megalomaniacs.
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Saparmurat Niyazov, he was one of them.
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Until his death in 2006,
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he was the all-powerful leader of Turkmenistan,
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a Central Asian country rich in natural gas.
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Now, he really loved to issue presidential decrees.
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And one renamed the months of the year
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including after himself and his mother.
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He spent millions of dollars
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creating a bizarre personality cult,
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and his crowning glory was the building
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of a 40-foot-high gold-plated statue of himself
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which stood proudly in the capital's central square
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and rotated to follow the sun.
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He was a slightly unusual guy.
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01:01
And then there's that cliché,
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the African dictator or minister or official.
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There's Teodorín Obiang.
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So his daddy is president for life of Equatorial Guinea,
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a West African nation that has exported
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billions of dollars of oil since the 1990s
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and yet has a truly appalling human rights record.
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The vast majority of its people
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are living in really miserable poverty
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despite an income per capita that's on a par
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with that of Portugal.
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So Obiang junior, well, he buys himself
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a $30 million mansion in Malibu, California.
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I've been up to its front gates.
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I can tell you it's a magnificent spread.
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He bought an €18 million art collection
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that used to belong to fashion designer Yves Saint Laurent,
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a stack of fabulous sports cars,
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some costing a million dollars apiece --
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oh, and a Gulfstream jet, too.
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Now get this:
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Until recently, he was earning an official monthly salary
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of less than 7,000 dollars.
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And there's Dan Etete.
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Well, he was the former oil minister of Nigeria
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under President Abacha,
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and it just so happens he's a convicted money launderer too.
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We've spent a great deal of time
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investigating a $1 billion --
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that's right, a $1 billion —
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oil deal that he was involved with,
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and what we found was pretty shocking,
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but more about that later.
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So it's easy to think that corruption happens
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somewhere over there,
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carried out by a bunch of greedy despots
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and individuals up to no good in countries
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that we, personally, may know very little about
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and feel really unconnected to
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and unaffected by what might be going on.
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But does it just happen over there?
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Well, at 22, I was very lucky.
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My first job out of university
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was investigating the illegal trade in African ivory.
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And that's how my relationship with corruption really began.
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03:09
In 1993, with two friends who were colleagues,
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Simon Taylor and Patrick Alley,
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we set up an organization called Global Witness.
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Our first campaign was investigating the role
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of illegal logging in funding the war in Cambodia.
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So a few years later, and it's now 1997,
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and I'm in Angola undercover investigating blood diamonds.
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03:33
Perhaps you saw the film,
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the Hollywood film "Blood Diamond,"
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the one with Leonardo DiCaprio.
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Well, some of that sprang from our work.
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Luanda, it was full of land mine victims
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who were struggling to survive on the streets
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and war orphans living in sewers under the streets,
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and a tiny, very wealthy elite
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who gossiped about shopping trips to Brazil and Portugal.
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And it was a slightly crazy place.
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So I'm sitting in a hot and very stuffy hotel room
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feeling just totally overwhelmed.
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But it wasn't about blood diamonds.
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Because I'd been speaking to lots of people there
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who, well, they talked about a different problem:
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that of a massive web of corruption on a global scale
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and millions of oil dollars going missing.
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And for what was then a very small organization
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of just a few people,
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trying to even begin to think how we might tackle that
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was an enormous challenge.
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And in the years that I've been,
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and we've all been campaigning and investigating,
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I've repeatedly seen that what makes corruption
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on a global, massive scale possible,
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well it isn't just greed or the misuse of power
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or that nebulous phrase "weak governance."
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I mean, yes, it's all of those,
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but corruption, it's made possible by the actions
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of global facilitators.
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So let's go back to some of those people I talked about earlier.
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Now, they're all people we've investigated,
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and they're all people who couldn't do what they do alone.
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Take Obiang junior. Well, he didn't end up
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with high-end art and luxury houses without help.
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He did business with global banks.
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A bank in Paris held accounts of companies controlled by him,
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one of which was used to buy the art,
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and American banks, well, they funneled
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73 million dollars into the States,
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some of which was used to buy that California mansion.
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05:23
And he didn't do all of this in his own name either.
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He used shell companies.
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He used one to buy the property, and another,
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which was in somebody else's name,
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to pay the huge bills it cost to run the place.
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And then there's Dan Etete.
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Well, when he was oil minister,
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he awarded an oil block now worth over a billion dollars
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to a company that, guess what, yeah,
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he was the hidden owner of.
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Now, it was then much later traded on
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with the kind assistance of the Nigerian government --
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now I have to be careful what I say here —
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to subsidiaries of Shell and the Italian Eni,
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two of the biggest oil companies around.
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So the reality is, is that the engine of corruption,
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well, it exists far beyond the shores of countries
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like Equatorial Guinea or Nigeria or Turkmenistan.
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This engine, well, it's driven
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by our international banking system,
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by the problem of anonymous shell companies,
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and by the secrecy that we have afforded
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big oil, gas and mining operations,
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and, most of all, by the failure of our politicians
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to back up their rhetoric and do something
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really meaningful and systemic to tackle this stuff.
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Now let's take the banks first.
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Well, it's not going to come as any surprise
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for me to tell you that banks accept dirty money,
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but they prioritize their profits in other destructive ways too.
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For example, in Sarawak, Malaysia.
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Now this region, it has just five percent
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of its forests left intact. Five percent.
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So how did that happen?
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Well, because an elite and its facilitators
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have been making millions of dollars
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from supporting logging on an industrial scale
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for many years.
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So we sent an undercover investigator in
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to secretly film meetings with members of the ruling elite,
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and the resulting footage, well, it made some people very angry,
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and you can see that on YouTube,
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but it proved what we had long suspected,
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because it showed how the state's chief minister,
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despite his later denials,
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used his control over land and forest licenses
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to enrich himself and his family.
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And HSBC, well, we know that HSBC bankrolled
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the region's largest logging companies
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that were responsible for some of that destruction
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in Sarawak and elsewhere.
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The bank violated its own sustainability policies in the process,
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but it earned around 130 million dollars.
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Now shortly after our exposé,
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very shortly after our exposé earlier this year,
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the bank announced a policy review on this.
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And is this progress? Maybe,
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but we're going to be keeping a very close eye
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on that case.
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And then there's the problem of anonymous shell companies.
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Well, we've all heard about what they are, I think,
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and we all know they're used quite a bit
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by people and companies who are trying to avoid
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paying their proper dues to society,
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also known as taxes.
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But what doesn't usually come to light
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is how shell companies are used to steal
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huge sums of money, transformational sums of money,
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from poor countries.
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In virtually every case of corruption that we've investigated,
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shell companies have appeared,
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and sometimes it's been impossible to find out
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who is really involved in the deal.
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A recent study by the World Bank
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looked at 200 cases of corruption.
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It found that over 70 percent of those cases
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had used anonymous shell companies,
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totaling almost 56 billion dollars.
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Now many of these companies were in America
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or the United Kingdom,
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its overseas territories and Crown dependencies,
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and so it's not just an offshore problem,
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it's an on-shore one too.
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You see, shell companies, they're central
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to the secret deals which may benefit wealthy elites
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rather than ordinary citizens.
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One striking recent case that we've investigated
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is how the government in the Democratic Republic of Congo
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sold off a series of valuable, state-owned mining assets
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to shell companies in the British Virgin Islands.
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So we spoke to sources in country,
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trawled through company documents and other information
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trying to piece together a really true picture of the deal.
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And we were alarmed to find that these shell companies
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had quickly flipped many of the assets on
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for huge profits to major international mining companies
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listed in London.
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Now, the Africa Progress Panel, led by Kofi Annan,
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they've calculated that Congo may have lost
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more than 1.3 billion dollars from these deals.
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That's almost twice
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the country's annual health and education budget combined.
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And will the people of Congo, will they ever get their money back?
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Well, the answer to that question,
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and who was really involved and what really happened,
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well that's going to probably remain locked away
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in the secretive company registries of the British Virgin Islands
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and elsewhere unless we all do something about it.
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And how about the oil, gas and mining companies?
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Okay, maybe it's a bit of a cliché to talk about them.
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Corruption in that sector, no surprise.
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There's corruption everywhere, so why focus on that sector?
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Well, because there's a lot at stake.
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In 2011, natural resource exports
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outweighed aid flows by almost 19 to one
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in Africa, Asia and Latin America. Nineteen to one.
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Now that's a hell of a lot of schools and universities
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and hospitals and business startups,
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many of which haven't materialized and never will
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because some of that money has simply been stolen away.
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Now let's go back to the oil and mining companies,
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and let's go back to Dan Etete and that $1 billion deal.
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And now forgive me, I'm going to read the next bit
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because it's a very live issue, and our lawyers
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have been through this in some detail
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and they want me to get it right.
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Now, on the surface, the deal appeared straightforward.
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Subsidiaries of Shell and Eni
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paid the Nigerian government for the block.
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The Nigerian government transferred
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precisely the same amount, to the very dollar,
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to an account earmarked for a shell company
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whose hidden owner was Etete.
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Now, that's not bad going for a convicted money launderer.
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And here's the thing.
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After many months of digging around
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and reading through hundreds of pages of court documents,
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we found evidence that, in fact,
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Shell and Eni had known that the funds
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would be transferred to that shell company,
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and frankly, it's hard to believe they didn't know
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who they were really dealing with there.
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Now, it just shouldn't take these sorts of efforts
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to find out where the money in deals like this went.
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I mean, these are state assets.
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They're supposed to be used for the benefit
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of the people in the country.
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But in some countries, citizens and journalists
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who are trying to expose stories like this
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have been harassed and arrested
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and some have even risked their lives to do so.
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And finally, well, there are those who believe
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that corruption is unavoidable.
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It's just how some business is done.
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It's too complex and difficult to change.
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So in effect, what? We just accept it.
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But as a campaigner and investigator,
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I have a different view,
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because I've seen what can happen
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when an idea gains momentum.
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In the oil and mining sector, for example,
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there is now the beginning
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of a truly worldwide transparency standard
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that could tackle some of these problems.
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In 1999, when Global Witness called
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for oil companies to make payments on deals transparent,
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well, some people laughed at the extreme naiveté
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of that small idea.
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But literally hundreds of civil society groups
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from around the world came together
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to fight for transparency,
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and now it's fast becoming the norm and the law.
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Two thirds of the value
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of the world's oil and mining companies
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are now covered by transparency laws. Two thirds.
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So this is change happening.
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This is progress.
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But we're not there yet, by far.
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Because it really isn't about corruption
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somewhere over there, is it?
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In a globalized world, corruption
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is a truly globalized business,
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and one that needs global solutions,
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supported and pushed by us all, as global citizens,
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right here.
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Thank you.
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(Applause)
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ABOUT THE SPEAKER
Charmian Gooch - Anti-corruption activistCharmian Gooch is the 2014 TED Prize winner. At Global Witness, she exposes how a global architecture of corruption is woven into the extraction and exploitation of natural resources.
Why you should listen
Charmian Gooch co-founded the watchdog NGO Global Witness with colleagues Simon Taylor and Patrick Alley, in response to growing concerns over covert warfare funded by illicit trade in 1993. Since then, Global Witness has captured headlines for their exposé of "blood diamonds" in Uganda, of mineral exploitation in the Congo, of illegal timber trade between Cambodia and Thailand, and more. With unique expertise on the shadowy threads connecting corrupt businesses and governments, Global Witness continues its quest to uncover and root out the sources of exploitation.
In 2014, Gooch and Global Witness were awarded the $1 million TED Prize, along with the Skoll Award for Social Entrepreneurship, for their campaign to end anonymous companies. Gooch's TED Prize wish: for us to know who ultimately owns and controls companies and launch a new era of openness in business. Global Witness highlighted the importance of this issue in an investigation, aired on 60 Minutes, where they sent an undercover investigator into 13 New York law firms. The investigator posed as an adviser to a government minister in Africa and asked for thoughts on how to move money into the United States for a plane, a yacht and a brownstone. All but one firm offered advice.
The Panama Papers, released in April of 2016, further demonstrate the need for transparency. The papers paint a picture of how the rich and powerful around the world use offshore accounts and anonymous companies to move money. "This secretive world is being opened up to global public scrutiny," said Gooch, on the day the papers were released.
Charmian Gooch | Speaker | TED.com