Crime and Corruption | Page 3

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Crime and Corruption
1st EDITION

Sam Vaknin, Ph.D.

Editing and Design: Lidija Rangelovska

Lidija Rangelovska A Narcissus Publications Imprint, Skopje 2002
First published by United Press International – UPI Not for Sale!
Non-commercial edition.

© 2002 Copyright Lidija Rangelovska. All rights reserved. This book,
or any part thereof, may not be used or reproduced in any manner
without written permission from: Lidija Rangelovska – write to:
[email protected] or to [email protected]
Visit the Author Archive of Dr. Sam Vaknin in "Central Europe
Review": http://www.ce-
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Visit Sam Vaknin's United Press International (UPI) Article Archive
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ISBN: 9989-929-36-X
http://samvak.tripod.com/guide.html http://economics.cjb.net
http://samvak.tripod.com/after.html
Created by: LIDIJA RANGELOVSKA REPUBLIC OF MACEDONIA

C O N T E N T S
I. Slush Funds II. Corruption and Transparency III. Money Laundering
in a Changed World IV. Hawala, the Bank that Never Was V. Straf –
Corruption in Central and Eastern Europe VI. Russia’s Missing Billions
VII. The Enrons of the East VIII. The Typology of Financial Scandals
IX. The Shadowy World of International Finance X. Maritime Piracy
XI. The Author XII. About "After the Rain"
Slush Funds
According to David McClintick ("Swordfish: A True Story of

Ambition, Savagery, and Betrayal"), in the late 1980's, the FBI and
DEA set up dummy corporations to deal in drugs. They funneled into
these corporate fronts money from drug-related asset seizures. The idea
was to infiltrate global crime networks but a lot of the money in
"Operation Swordfish" may have ended up in the wrong pockets.
Government agents and sheriffs got mysteriously and filthily rich and
the whole sorry affair was wound down. The GAO reported more than
$3.6 billion missing. This bit of history gave rise to at least one
blockbuster with Oscar-winner Halle Berry. Alas, slush funds are much
less glamorous in reality. They usually involve grubby politicians,
pawky bankers, and philistine businessmen - rather than glamorous
hackers and James Bondean secret agents. The Kazakh prime minister,
Imanghaliy Tasmaghambetov, freely admitted on April 4 to his
country's rubber-stamp parliament the existence of a $1 billion slush
fund. The money was apparently skimmed off the proceeds of the
opaque sale of the Tengiz oilfield. Remitting it to Kazakhstan - he
expostulated with a poker face - would have fostered inflation. So, the
country's president, Nazarbaev, kept the funds abroad "for use in the
event of either an economic crisis or a threat to Kazakhstan's security".

The money was used to pay off pension arrears in 1997 and to offset
the pernicious effects of the 1998 devaluation of the Russian ruble.
What was left was duly transferred to the $1.5 billion National Fund,
the PM insisted. Alas, the original money in the Fund came entirely
from another sale of oil assets to Chevron, thus casting in doubt the
official version. The National Fund was, indeed, augmented by a
transfer or two from the slush fund - but at least one of these transfers
occurred only 11 days after the damning revelations. Moreover,