The cor­rupted spirit of lais­sez-faire au­thor­i­ties

Financial Mirror (Cyprus) - - FRONT PAGE -

When Pres­i­dent Anas­tas­si­ades came to power in 2013, he made nu­mer­ous public state­ments to the ef­fect that his ad­min­is­tra­tion would, for the first time in the Repub­lic’s his­tory, tackle cor­rup­tion head-on, go af­ter ma­jor whitecol­lar crim­i­nals and rein in the cul­ture of in­do­lence, in­ef­fi­ciency and en­ti­tle­ment that had in­fected the state sec­tor for so long.

Some im­pres­sive head­way has been made in pur­su­ing some of the ‘big fish’ and their var­i­ous col­lab­o­ra­tors en­gaged in fraud and/or bribery and cor­rup­tion, thanks to the dogged in­ves­ti­ga­tion and pur­suit of al­leged wrong­do­ers by the Au­di­tor Gen­eral and the po­lice. Th­ese cases all in­volve al­leged sig­nif­i­cant crim­i­nal ac­tiv­ity. But, what about the other things that Anas­tas­si­ades and oth­ers have com­plained of in re­la­tion to the cul­ture of in­ef­fi­ciency, lazi­ness, self-serv­ing be­hav­iour and en­ti­tle­ment that has be­dev­illed the Cyprus civil and public sec­tor for so long? That too is a form of cor­rup­tion - a cor­rup­tion of the spirit, which is just as dam­ag­ing to the na­tional econ­omy and public in­ter­est.

Two re­cent in­stances serve to il­lus­trate how per­ni­cious low-grade malfea­sance, one way or an­other, eats away at the fab­ric of so­ci­ety and brings added risks. or from his reg­is­tra­tion agent. Mr A as­sumed that ei­ther way, dead or alive, no one can use an­other per­son’s ad­dress with­out the owner’s autho­ri­sa­tion. Who knows what un­law­ful ac­tiv­i­ties, such as tax eva­sion, may have mo­ti­vated this dodgy reg­is­tra­tion af­ter so many years? Imag­ine his shock when his lawyers ad­vised that it is not un­law­ful to use in such reg­is­tra­tions some­one else’s ad­dress with­out their per­mis­sion! And, only the di­rec­tors of the reg­is­tered com­pany can, if they wish, choose to al­ter the reg­is­tered ad­dress.

How­ever, be­yond Mr A’s in­dig­na­tion at the cheek of those in­volved, and the laid-back at­ti­tude of the Reg­is­trar, this case has ex­posed a much graver risk to Cyprus in two ar­eas: in­ter­na­tional money laun­der­ing and the park­ing of funds for ter­ror­ism. If, as is ap­par­ent, it is so easy in Cyprus for any­one (even a dead per­son) to get a com­pany reg­is­tered in their name and at some­one else’s ad­dress with­out their ap­proval or con­sent, then one can be pretty sure that crim­i­nals and ter­ror­ists are al­ready ex­ploit­ing this weak­ness. For ex­am­ple, the on-go­ing crim­i­nal trial in In­dia of the for­mer Telecom­mu­ni­ca­tions Min­is­ter Mr A. Raja on mul­ti­ple counts of bribery, cor­rup­tion, fraud and money laun­der­ing in­volv­ing about EUR 479 mln, has heard pros­e­cu­tion ev­i­dence al­leg­ing that the ac­cused chan­nelled mil­lions in bribe money via a set of 32 dummy com­pa­nies reg­is­tered in Cyprus and then on­ward to ac­counts in the Mal­dives and Sey­chelles. The Cyprus au­thor­i­ties are aware of this case but ap­pear to have turned a blind eye. the re­quested an­swers. So, he ad­vised the Icarus boss that per­haps he had mis­un­der­stood that it was an ini­tial en­quiry that did not war­rant a meet­ing, only sim­ple an­swers to two very sim­ple ques­tions. Af­ter re­ceiv­ing no fur­ther re­sponse, Mr B sent a re­minder. This time he re­ceived an in­cred­i­bly vit­ri­olic e-mail ac­cus­ing him of re­fus­ing a meet­ing of­fered by a ‘qual­i­fied pro­fes­sional’ (sic). Icarus were re­fus­ing point­blank to di­vulge any­thing, even the ba­sis of their charges, with­out a face-to-face meet­ing. Fur­ther, the e-mail con­tained threats of legal ac­tion if Mr B should re­port his ap­palling ex­pe­ri­ence at their hands to any­one else!

Un­sur­pris­ingly, Mr B im­me­di­ately dropped Icarus from his list of po­ten­tial con­sul­tants. Mar­ket forces won the day and the rep­u­ta­tion of Icarus now goes well and truly be­fore them. How­ever, there is a wider is­sue. Typ­i­cally, a pro­fes­sional body’s code of con­duct in­cludes re­quire­ments such as ‘…mem­bers should do noth­ing that in any way could di­min­ish the high stand­ing of the pro­fes­sion. This in­cludes any as­pect of a mem­ber’s per­sonal con­duct which could have a neg­a­tive im­pact on the pro­fes­sion’ (In­sti­tu­tion of Civil En­gi­neers). Was the rude, ag­gres­sive, and threat­en­ing out­pour­ing from Icarus pro­fes­sional? What cri­te­ria does the rel­e­vant gov­ern­ment depart­ment use to ap­point such ap­palling peo­ple to ap­proved lists? Sim­ply re­ceipt of an ap­pli­ca­tion form and the fee? There is no ev­i­dence of proper due dili­gence checks, oth­er­wise in­ad­e­quate self-styled ‘pro­fes­sion­als’ like Icarus would be blocked.

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