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RKN Global on Corporate Corruption: The Role of the Individual

The investigative reporting that exposed the alleged widespread corruption scheme perpetrated by the private, Monaco-based firm Unaoil was based on a trove of emails that had been obtained by reporters.  The emails revealed a scheme by which Unaoil performed its function as a middleman between multinational corporations and state governments of oil producing countries by bribing government officials and officers of oil companies in those countries.

This past week, a former employee of Unaoil has come forward to detail how he personally participated in one such bribe in Libya.

RKN Global’s founder, Ronald K. Noble, stresses that every corrupt or criminal scheme rests on the actions of individuals.  Even a large and wide-reaching scheme of bribery or corruption is often built upon numerous, small corrupt transactions and bribes.

The former Unaoil employee underscores this phenomenon with his reports.  The former executive, Lindsey Mitchell, is cooperating with agents from the U.S. Federal Bureau of Investigation and the U.K.’s Serious Fraud Office.

Before he began working for Unaoil in 2009, Mitchell had been CEO of Western Energy Services Corp, a public Canadian energy company.   Shortly after he came onboard with Unaoil, he was asked to unduly influence Libyan officials under the regime of Moammar Gaddafi in order to get them to approve contracts for Unaoil’s customers.

One of those officials told Mitchell that he and other officials could help Unaoil’s customers get contracts.  He provided Mitchell with secret tender documents relating to multi-million dollar government contracts.  Mitchell relayed to his bosses at Unaoil that the official would want to get paid, and he was provided with an envelope to provide the officials containing between fifteen and twenty thousand US dollars.  Around midnight, he went to the official’s home to deliver the bribe.

Mitchell claims that while he was familiar with other instances of corruption and bribery, that incident was the only one where he personally delivered the bribe.

He resigned a few days later, having suffered from feelings of guilt for his participation in the corruption.

Ronald K. Noble and RKN Global recommend that employees that find themselves in an organization with a culture of corruption take efforts to resist the temptation to follow the crowd, and avail themselves of their company’s ethics hotline, or if necessary, the authorities.  One small compromise with corruption often leads to progressively larger moral and legal violations.

Lindsay Mitchell’s story illustrates how easy it is for an otherwise upstanding individual to get pulled into a company’s culture of corruption and bribery. Employees everywhere should take note, so they do not surrender their integrity to corruption by another’s greed.

RKN Global on Corruption in Business: The Power of the Bribe

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Corruption is a plague that affects all societies in their various sectors, from the political to the corporate, from the individual to the public, from arts to entertainment.  Oftentimes, corrupt behavior can continue unabated for years, generating tremendous windfalls for its perpetrators, even as they enjoy a reputation of integrity.

RKN Global’s founder Ronald K. Noble, notes that part of corruption’s danger is that its allure can affect anyone, given the right conditions.  A corporate culture of corruption makes further corruption even more likely.

The case of Unaoil is illustrative of the great reach of corruption in even one company.  Unaoil is a Monaco-based company that is privately owned by the well-known Ahsani family.  The company’s business is to help Western oil companies get contracts in oil-producing countries in the Middle East.  It does so by serving as a middle man, a bridge between Middle-Eastern oil and Western companies which ostensibly “integrate[s] Western technology with local capability,” according to Chariman Ata Ahsani.

However, Australian media broke a story that reveals an allegedly different way that Unaoil gets contracts for its clients: bribery.

According to the news reports, Unaoil convinced its customers that its mediation was necessary to do business overseas. It would then bribe officials in the oil countries in order to get contracts for those customers.

For example, Unaoil allegedly gave bribes of more than $25 million to various Iraqi officials between 2004 and 2012.  This included prominent politicians such as Iraq’s education minister and former Deputy Prime Minister and its Oil Minister, as well as Iraqi oil officials.  One oil official, Oday al-Quraishi, received, in addition to a number of larger bribes, a payment of $6,000 each month which included five thousand dollars for him and one thousand for him to distribute as bribes to others.

Customers who used Unaoil for its middleman services included Rolls-Royce, Samsung, Halliburton, Honeywell and KBR.  While not all of the companies were aware of the bribes and corruption practiced by Unaoil, some allegedly were.

RKN Global’s founder, Ronald Noble, emphasizes that corruption is not a victimless crime that smooths the way for doing business. It tilts the playing field against companies that can provide the best services in favor of those who are helped by corrupt means.  Among other harms, this decreases efficiency, diverts money and profits from companies that should rightfully earn it, and hurts the public in the countries whose officials have been bribed and who therefore do not act in the public interest, but in their own.

The Unaoil saga demonstrates the incredible power of corruption to spread, from an individual company to an entire industry around the world.

RKN Global on Corruption: A Struggle to Contain Human Nature

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Ronald K. Noble, founder RKN Global

Famous quotes are often immortalized for our perception of their truth value.  An observation that eloquently and accurately captures the dynamic of a phenomenon of human life is more likely to become one that is requoted, even to the point of fame.  One such quotation is the oft-quoted dictum of Lord Acton, the British historian: “Power tends to corrupt and absolute power corrupts absolutely.”

What Lord Acton’s observation highlights is that corruption speaks to something universal in human nature; given the right environment, it will sprout like a weed which is given ample water and sunlight to thrive.

Decades of experience in national and international law enforcement have taught me that corruption is indeed intrinsic to the human condition, but that it can nevertheless be combatted, through a combination of education, law enforcement, and social engineering.

Corruption often makes headlines in the context of political leaders; indeed, this is a real phenomenon and a legitimate concern, but it is not limited to political leaders or people of power.  Merriam-Webster dictionary, for example, defines corruption as “impairment of integrity, virtue or moral principle,” and “inducement to wrong by improper or unlawful means (as bribery)”.  Corruption’s scope can involve political leaders, government bureaucrats, business people and management, lower level employees, athletes and coaches, and a host of other individuals and organizations.

The negative effects of corruption can range widely.  When government leaders and politicians engage in corruption, then resources that ultimately belong to the public are misused, misappropriated, or distributed unjustly. Business corruption can undermine the entities that management and employees were hired to serve; when widespread enough, it can eat at the economic foundation of businesses, sectors, and even entire economies.  Corruption on all levels can hurt individuals who are innocent of any connection to the corrupt behavior.

The range of corruption and its effects are as wide as the range of human activity. Combatting corruption requires tremendous thought, attention and dedication at all levels of society.

We will look at some specific areas of corruption and how to deal with them in future essays on this topic, in the belief that knowledge empowers us to improve ourselves and protect ourselves from the moral and legal rot of corruption.

RKN Global on National Cyber Security Awareness Month and the Range of Cybercrime

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October is National Cyber Security Awareness Month, established in a joint effort by industry and the U.S. government to raise the profile of the dangers of the online world and awareness of ways to protect ourselves, our families, and our businesses. While a great deal of our previous focus has been on identity theft and identity fraud, it is important to emphasize the wide range of cybercrime.

RKN Global’s Ronald K. Noble has seen the devastating harm of cybercrime and urges heightened awareness and cooperation by the public and by authorities to combat it and its effects.

Other areas of cybercrime include Cyber-stalking, Revenge Porn, Online Bullying, Child Sexual Abuse, and Online Radicalization and Terror Recruitment.

Cyber-stalking is a form of abuse, often directed at a former domestic partner, involving different modes of electronic communication.  Email, text messages, messaging apps, and social media are used by perpetrators to harass, threaten and intimidate their victims.  Cyber-stalking can be a terrifying crime that destroys the victim’s life and well-being, and even leads to threats and bodily harm in the real world.

Revenge porn is the posting of pornographic images of an adult in order to harass him or her.

Online bullying, or cyberbullying, is bullying using technology to harass, humiliate, degrade and threaten another.  Like cyber-stalking, it can use the full range of electronic communication.  It multiplies the devastating effects of in-person bullying because of the public nature of the attacks online, because it can happen anywhere and anytime, and because it can be done anonymously.  Cyberbullying can have egregious consequences for victims.

Child sexual abuse includes the trafficking in child porn as well as the luring of children into sexual encounters with adults.  The internet enables and thus encourages the proliferation of child porn, and provides opportunities for victimizers to hunt for and groom their victims online.

Online radicalization is an important tool for jihadists, white supremacists and other holders of radical, violent ideologies to expand their reach and convince others to join their ranks.  News reports over the past years have abounded about citizens of various countries becoming radicalized online and traveling to Iraq and Syria to fight for ISIS and other terror groups.

Ronald K. Noble and RKN Global underscore the importance of vigilance by children and by adults in all walks of life in order to avoid and prevent the harm of cybercrime.

In upcoming columns, we will focus on some of the individual areas of cybercrime and look at specific ways to stay safe.

RKN Global on Fake IDs: Sophisticated Counterfeiters Require a Sophisticated Response

The United States 9/11 Commission Report alerted the world to the truth that “for terrorists, travel documents are as important as weapons.”  The same holds true for criminals of all types:  The ability to move and cross borders without being flagged or identified is extremely important for criminal enterprises.   It is therefore no surprise that fake identity documents, including fake passports, are common.

A lot of attention has been focused on the value of many European passports because these passports can be used to gain free and unfettered access to the many European countries that are parties to the Schengen agreement.

Ronald K. Noble, RKN Global founder, has called attention to the danger that the Schengen open-border arrangement poses to the people of Europe, unless a uniformly secure protocol is established at all of the borders and access points to the region.

Yet criminals and terrorists use counterfeit or fraudulently altered passports from other countries as well. The arrest this week of a 22-year-old in Washington State in the United States for possession of counterfeit passport cards shows that any country’s documents can be targeted by criminals.

Officers arrested the suspect after receiving a call reporting that he was trying to purchase a cell phone under a fake name.  The officers found on the suspect seven high quality fake U.S. passport cards with his photo, all of them under different names.  He also had seven ATM cards which matched the names on the fake passport cards.

While reports didn’t indicate why the suspect raised questions in the mind of the store’s employee, the authorities related that the fake passport cards were of a very high quality.  It is likely, then, that something in the suspect’s behavior put the employee on alert.

U.S. passport cards are an alternative to a U.S. passport.  They prove U.S. citizenship and identity, and can be used to re-enter the U.S. from Canada, Mexico, the Caribbean and Bermuda.

RKN Global and Ronald K. Noble note the utility of a passport card in furtherance of smuggling operations or other criminal activity across the borders with Canada or Mexico.

The sophistication necessary to produce realistic looking United States passport cards is very high, which indicates that these cards were intended for high-stakes criminal use.  The cellphone retailer in this case is to be commended for his attention and watchfulness to the behavior of his customers.  Authorities are urged to do the same, and to screen identity documents at every border crossing with the most sophisticated technologies available.

RKN Global on Crime and Terrorism Redux: Illegal Cigarettes

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Last week, we shed light on how antiquities theft, a seemingly non-violent crime, is used by jihadi terrorists and organized crime to fund and further their murderous activities.  The connection between “non-violent” crimes and violent crime and terrorism is not limited to art and antiquities theft.  Another major example has been making headlines which exposes this phenomenon: Illegal Cigarettes.

Ronald K. Noble, before establishing RKN Global, spent almost his entire career in law enforcement and public service.  Through his work as Undersecretary for Enforcement of the U.S. Treasury, and as Secretary General of INTERPOL, he saw firsthand how illicit trade directly serves violent criminal enterprises as well as terrorism.

Cigarettes are a known danger to health, but remain immensely popular around the world.  A billion people worldwide are smokers, of whom almost 80% reside in low and middle-income nations.  The use of tobacco products like cigarettes kills about six million people each year, ultimately killing as many as half of those who use them.  As a result, many countries institute high taxes on cigarettes and other tobacco products, to both disincentivize people from buying them, and to help underwrite the increased health care costs that these products incur in the population.

Consumers don’t like to spend more money if they can spend less, however, and when taxes constitute a significant part of the price of cigarettes, smugglers see an opening to avoid taxes and sell cigarettes at a lower, tax-free price.

This leads to massive problems of illicit cigarettes in places such as Central America, for example, with 2/3 of smokers in Panama, and 1/3 of smokers in El Salvador using illicit cigarettes.  Costa Rica’s 16% of smokers who use illegal cigarettes represent 800,000 smuggled cigarettes being smoked in that country every day.

But Illicit cigarettes are not just a problem in developing nations.  A truckload of cigarettes purchased in Virginia and smuggled for illicit resale in New York can yield a profit of $2 million for smugglers, for example.

Who benefits from the proceeds of trade in illicit cigarettes?  Terrorists and organized crime.  The global trade in illicit cigarettes funds terrorist groups such as Hezbollah and Hamas, as well as violent drug organizations like the Los Zetas cartel.

Ronald K. Noble and RKN Global cannot emphasize strongly enough how the stakes of illegal activity—no matter how seemingly innocuous—can carry unseen and unexpected consequences far beyond the intent of the consumer.  In this case, smugglers literally make a killing off the sale of illicit cigarettes, in more than one meaning of the word.