draining development.pdf - Khazar University

392 Draining Development?has been recovered in total. Given that this figure includes at least US$600million recovered from Swiss accounts, this would mean that less thanUS$1 billion has been recovered from domestic sources.Gordon (2009) has generated some 21 case studies on corruption. Ofthese, we have excluded from our examination all developed-countrycases and, with the partial exception of the Salinas case (discussedbelow), those cases in which payments were primarily made to offshoreaccounts and in which there is no evidence (in Gordon or elsewhere)that significant funds were reimported. Thus, if a bribe-payer sets up aforeign credit card that is used to pay the expenditures of a kleptocratoverseas (as was alleged in relation to Swiss accounts of former RussianPresident Yeltsin), we exclude the case as irrelevant, though some of thepurchases may be physically imported into developing countries. Ouraim is not merely to demonstrate corruption laundering mechanisms,but also to analyze bribes and laundering that may or may not have beendetected and acted against.It is important to think of AML as a dynamic process over time. If anAML system is having any effect, then bribe-payers and bribe-takers orbribe-demanders will adapt their modes of laundering to changes in themethods of control. As in the areas discussed elsewhere above, one maywonder what has changed other than risk aversion, which is generating agrowing preference for corporate vehicles as intermediaries. The numberof PEPs reported on to FIUs is not disclosed in public reports, so wedo not know if this subcategory is an exception to Takats’s (2007) economicmodel of a rising trend in defensive SAR disclosures. We return tothis topic below.The cases below are adapted from Gordon (2009). In some of thecases (for example, the funds given by Japanese donors to Apenkai, acharitable foundation, for the rebuilding of Peru), the moneys appear tohave simply been stolen by Fujimori factions after they had been handedover to the Embassy of Peru in Japan and passed on to Apenkai.Case 1. When he was president of Nicaragua, Arnoldo Aleman misappropriatedmillions in public funds for his personal benefit, as well as forthe benefit of his family and associates. Many of the officers in his cabinetwere his close personal friends and assisted in the theft and launderingof state funds. Most of the funds that Aleman misappropriated were