The entire country got carried away with joy at the news of Shahed Karim's arrest, whose Regent Hospital is accused of issuing fake Covid-19 negative certificates in exchange for money. It came after the arrest of two more corrupt stalwarts, again in the health sector, namely Arif and his physician wife Sabrina, whose JKG Group was also accused of the same crime.
But Shahed was a different character because of his hobnobbing with the highest echelons of the government and the ruling party. He had security clearances to attend state as well as diplomatic functions, not to mention direct access to all power centres, despite over 50 criminal cases lodged with police against him over the last decade or so.
He is now nicknamed Regent Shahed. The media scavenging on the event continues to entertain the audience with the real-life unfolding of a never-ending soap opera involving JKG Arif and Sabrina and Regent Shahed. However, all seem to have been forgotten and forgiven the first crime committed on account of Covid-19 when during the outbreak of the pandemic, a local outfit named JMI Group supplied fake 3M certified N95 masks and PPEs to the government for the use of healthcare professionals.
A few hospitals refused to accept the supplies and reported the substandard quality of the materials to the Directorate General of Health Services, but those who complained were signed off from their responsibilities instead of addressing the reported malpractice.
The former director of the Central Medical Stores Depot (CMSD), Brigadier General Md Shahidullah was removed from his post at CMSD for his unwillingness to bow to the corrupt syndicate that allegedly runs the Directorate General of Health. Many healthcare professionals including doctors contracted the virus because of those fake health products. Many of them passed away. Brigadier General Md Shahidullah also passed away on July 25, 2020 from Covid-19.
However, people keep forgetting the fact that it is their decayed society that keeps churning out Shaheds. Arresting one Shahed or one casino don or dons or one Papia or one Arif or one Dr Sabrina will not cure the society of its evils unless the society cures itself of all its ills that create anti-social elements like Shahed and others. However, Shaheds are merely foot soldiers and the real villains remain behind the curtains and are largely untouchable. Society needs to identify the faces behind the curtains and unmasks those who create, promote and harbour their foot soldiers to commit the crimes on their behalf.
The foolhardy people bask in joy in front of their TV sets seeing the foot soldiers arrested oblivious of the fact that this is merely a tip of the evil iceberg, the real perpetrators are living overseas or at home in luxury beyond the reach of the law.
The Nikkei Asian Review reported that the Directorate General of Health Services paid $59 for a pair of medical personnel safety goggles that is almost five times than the market price. This is a tip of the corruption iceberg in just one single government health department. It takes an infinite imagination to sum up the estimated volume of corruption in all the government departments of Bangladesh together.
So no investigation of corruption is good enough unless it investigates without fear or favour and goes to the roots of corruption and identifies the people deep in the quagmire, irrespective of their power or wealth.
This is perhaps too much of asking for a developing country like Bangladesh. The question will then arise who will investigate the investigators, such is the dilemma of the state. The real villains launder their ill-gotten money overseas by depleting the hard-earned foreign reserve of the country and remain untouchables to the law at home as well as abroad. They live a life beyond the imagination of many mega-rich people of the countries where they found their new homes.
It is also a double standard of the developed world that they lecture developing countries on money laundering while they invite corrupt elements of developing countries and their wealth with open arms without raising any question about the millions they bring with them.
This many love to call hypocrisy of the west. The developing countries are the major victims of this money laundering or illicit financial flow (IFF). As for Bangladesh, millions of wage earners migrating to the Middle East and the Gulf as well as other countries including Malaysia, Italy, Spain etc. toil for an earning and then remit their hard-earned foreign exchange home but only to be plundered by the cartel of the corrupt mafia.
Global Financial Integrity (GFI), a Washington based think tank, reports that Bangladesh lost $7.53 billion a year between 2008 and 2017 to illicit flight of foreign reserve. So the question is who are these people or untouchable criminals that remain beyond the reach of the law. These people are not Shaheds, these are the people who make the Shaheds and until they are roped in along with their foot soldiers, the nation will have to put up with the circus of Tom and Jerry.
The GFI could identify only five common variations of IFF:
1. A drug cartel using trade-based money laundering techniques to mix legal money from the sale of used cars with illegal money from drug sales;
2. An importer using trade misinvoicing to evade customs duties, VAT, or income taxes;
3. A corrupt public official using an anonymous shell company to transfer dirty money to a bank account in the United States;
4. A human trafficker carrying a briefcase of cash across the border and depositing it in a foreign bank; or
5. A member of a terrorist organisation wiring money from one region to an operative in another.
It is the numbers two and three of the above that are hurting Bangladesh economy most followed by the number four. Bangladesh lost a staggering Tk63,924 crore ($7.53 billion) a year between 2008 and 2017 to trade misinvoicing alone leaving the quantum of dirty corrupt money of number three to one's imagination.
Some economists say mega projects create scope for mega corruption, and Bangladesh is now a major home for mega projects. Although most of the mega projects are foreign-financed, yet, the writer's personal experience at Russian funded Rooppur Nuclear Power Plant reflects serious lacking in accounts and audit of project costs and expenses allowing some Russian subcontractors to indulge in IFF.
For example, basic soil works that could easily be done by local contractors are subcontracted to Russian subcontractors at a very high value, which the subcontractors get done by local companies at about one-third of the allocation in the budget. The remaining two-thirds of the payment that has been made to Russian subcontractors are kept in foreign countries and never brought or invested here. The Chinese are reportedly doing the same for their projects. They are not investing what they are supposed to as per budget allocation and the surplus fund ends up in IFF. So it gives credence to the saying that megaprojects facilitate mega corruption in developing countries as mega sums are recorded as project costs but end up as IFF.
In the history of mega projects in Bangladesh, it is only the three JICA funded projects where the Japanese contractor OSJI JV made a cost savings of Tk15 billion as well as completed it before the scheduled time. Almost all other mega projects ended up in cost overrun often two or three times of the budgets and about twice the time to complete the projects.
The global evil of money laundering or illicit financial flow (IFF) also raises the very pertinent question and that is why the international community is shying away from promulgating an international convention to check, control and confiscate any inflow of unexplained funds or IFF and strict compliance of "due diligence".
The financial institutions receiving funds suspected of IFF must demand documents including tax files of both remitters and beneficiaries to support that the inward remittances were legally earned and re-check the documents relating to taxation clearances with the concerned authorities of the countries from where the IFF originated or the countries of remitters' domicile for verification to eliminate any room for submission of fake documents.
Many Bangladeshis reportedly own luxury properties and assets as well as investments in the USA, Canada, UK, Australia etc. that are far beyond their earnings, a kind of meteoric rise in their finances. Protests were organised in Canada by the law-abiding Bangladeshi Canadians against the corrupt Bangladeshi mafia elements who have migrated to Canada and are accused and suspected of corruption and embezzlement of public fund and laundered their ill-gotten money to Canada and invested in the acquisition of assets including procurement of businesses, high-end luxury properties and expensive cars. It is presumed that the Canadian authorities never questioned or investigated the corrupt millions they brought with them into the country.
It is not going to be an easy task as one of my German friends once observed the illicit trillion-dollar turnover from the global drug trade could not be kept in suitcases and so most if not all of it ends up in financial institutions i.e. banks and certainly not the banks in Africa or Iran.
Rumours also circulated about Somali piracy that made ship owners pay billions in hard cash in ransom and surely, Somalis did not eat up the cash, it must have ended up in some banks and no investigation was ever launched to locate or identify real beneficiaries of the piracy. However, Somali foot soldiers still live in poverty.
According to GFI, "Every dollar that leaves one country must end up in another. Very often, this means that illicit financial outflows from developing countries ultimately end up in banks in developed countries like the United States and the United Kingdom, as well as in tax havens like Switzerland, British Virgin Islands, or Singapore. This does not happen by accident. Many countries and their institutions actively facilitate and reap enormous profits from the theft of massive amounts of money from developing countries.
In one of its reports, Transparency International stated, "It is well-known that the global rich are buying up large parts of London. But who they are and where their money comes from is too often a well-kept secret. They use secret offshore companies to buy the properties and don't disclose their identities. These secret companies (or shell companies) are a common way of moving corrupt money around the world. They can hide money that corrupt politicians divert from investments in schools and hospitals and they can hide the proceeds of other crimes".
The menace of IFF, therefore, cannot be checked and brought under control until there is an international legal instrument for mandatory compliance by nations. It is about time the UN considered adopting a mechanism for mandatory compliance by all member states. IFF to banks in member countries should be thoroughly investigated and confiscated and returned to its country of origin or the claimant country if the beneficiary fails to prove that it was legally earned. This is the only hope for developing countries to minimise the flight of their precious foreign reserve but the question is will the powerful beneficiary countries of the IFF i.e. the west be willing to bell the cat?
In the meantime, it makes more sense for a country like Bangladesh to take measures to stop the illicit finance from flowing out of the country by taking to task the people behind the Shaheds and Sabrinas.