As the country heads to a general election in September, the visiting head of anti-corruption group Transparency International says New Zealand’s political party financing should be made more transparent.
José Ugaz has been chairman of the global anti-corruption group, which has chapters in more than 100 countries including New Zealand, for the past three years.
He’s a Peruvian lawyer who was special state attorney in one of the biggest corruption cases in Latin American history – against former Peruvian president Albert Fujimori.
He says although New Zealand placed first equal with Denmark in Transparency International’s 2016 Corruption Perceptions Index, there is no room for complacency.
Mr Ugaz says introducing more openness for political financing should be one of the key priorities for New Zealand along with more investigation into properties bought by wealthy offshore buyers.
New Zealand election law sets statutory limits for political spending by individuals, groups or organisations during election campaigns and parties and candidates have to file financial reports on donations that are over $15,000. However, the reports don’t cover expenses, a donor’s identity can be easily concealed, and the Electoral Commission overseeing this is fairly toothless.
The Greens campaigned for change after the 2005 general election which saw political scandals over donations to both major parties, including the Exclusive Brethren Church campaign for the National Party through an initially secret $1 million intervention.
Mr Ugaz is also critical of the New Zealand government for dragging its heels over the signing of the United Nations Convention Against Corruption in 2014 and in implementing the multilateral Open Government Partnership which it has also signed up to.
Recent investigations by TI chapters in the UK and Brazil into luxury property purchases in London, Manchester, Sao Paulo and Rio de Janiero have found nearly two-thirds of acquisitions were by secretive offshore companies. He says using offshore companies with obscure origins as the buyer typically points to money laundering and that the money behind the transaction has come from illicit means including organised crime.
Sports is another area where corruption is rife, he says, though he stopped short of pointing the finger at New Zealand’s national sport, rugby. A recent Transparency International report into sport corruption says while it is not new, poor governance and scandals threaten to undermine the joy sports can bring and the good it can do. The report said the indictment in May 2015 of nine current and former FIFA officials on money-laundering and racketeering charges changed the landscape overnight, even though the FIFA president who presided over that culture was re-elected two days later.
Mr Ugaz says sports corruption is most evident at big events such as the Olympics and the FIFA World Cup, both of which Russia is hosting next.
While New Zealand may not have the same level of corruption as countries in Latin America or Asia, he says living in a global world means every country is susceptible to money laundering, offshore companies, and illicit flows.
When asked whether corruption has become worse or better, Mr Ugaz says Transparency International asked itself that question three years ago on its 20th anniversary. On the plus side, corruption has been placed on the agenda of many major institutions including the UN.
On the downside, there is still plenty of evidence of corruption.
He points to the Lava Jato (car wash) corruption case which led to the conviction and sentencing this month of former Brazilian president Luiz Inacio Lula de Silva. The Lava Jato investigation focused on deals made by politicians and businesspeople in exchange for big construction contracts and spread across 12 Latin American countries and two African countries. He says that scandal alone wiped off 1% of the Peruvian’s equivalent of gross domestic product – money that could otherwise have been spent on trying to lift people out of extreme poverty.
An Oxfam report in January found the eight richest people in the world – all men – own the same wealth as the 3.6 billion people who make up the poorest half of humanity.
Several of those men are suspected of having obtained their wealth by illegal means, he says.
“We don’t know if we have more or less corruption than before. We do know we have too much corruption and corruption is an issue of human rights,” he says. “Corruption kills people, corruptions denies health, corruption for poor countries like mine or countries trying to reach basic standards for people is a tax paid by the poorest.”
If corruption is left unchecked, it will lead to social unrest and more conflict which is already occurring in countries with the greatest wealth inequality, he says.
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