Corruption and Money Laundering
Palgrave Series on Asian Governance Series editor: Michael Wesley, Griffith University, Australia Books appearing in the series: Dissident Democrats: The Challenge of Democratic Leadership in Asia Edited by John Kane, Haig Patapan, and Benjamin Wong Corruption and Money Laundering: A Symbiotic Relationship by David Chaikin and J.C. Sharman
Corruption and Money Laundering A Symbiotic Relationship David Chaikin and J.C. Sharman
CORRUPTION AND MONEY LAUNDERING Copyright David Chaikin and J.C. Sharman, 2009. Softcover reprint of the hardcover 1st edition 2009 978-0-230-61360-7 All rights reserved. First published in 2009 by PALGRAVE MACMILLAN in the United States a division of St. Martin s Press LLC, 175 Fifth Avenue, New York, NY 10010. Where this book is distributed in the UK, Europe and the rest of the world, this is by Palgrave Macmillan, a division of Macmillan Publishers Limited, registered in England, company number 785998, of Houndmills, Basingstoke, Hampshire RG21 6XS. Palgrave Macmillan is the global academic imprint of the above companies and has companies and representatives throughout the world. Palgrave and Macmillan are registered trademarks in the United States, the United Kingdom, Europe and other countries. ISBN 978-1-349-37827-2 DOI 10.1057/9780230622456 ISBN 978-0-230-62245-6 (ebook) Library of Congress Cataloging-in-Publication Data Chaikin, David. Corruption and money laundering : a symbiotic relationship / David Chaikin and J.C. Sharman. p. cm. (Palgrave series on Asian governance) Includes bibliographical references. 1. Corruption Asia. 2. Corruption Pacific Area. 3. Money laundering Asia. 4. Money laundering Pacific Area. I. Sharman, J. C. (Jason Campbell), 1973 II. Title. JQ29.5C65 2009 364.19323 dc22 2008047354 A catalogue record of the book is available from the British Library. Design by Newgen Imaging Systems (P) Ltd., Chennai, India. First edition: July 2009 10 9 8 7 6 5 4 3 2 1
For Dorothy, Chaikin s late mother. For Bilyana and Sharman s family.
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CONTENTS Acknowledgments ix Introduction 1 1 The Corruption-Money Laundering Nexus 7 2 International Responses to Corruption and Money Laundering 31 3 Points of Vulnerability 59 4 Senior Public Officials and Politically Exposed Persons 83 5 Best Practice for International Cooperation 115 6 The Marcos Kleptocracy 153 Conclusion: Solutions and Prospects for the Corruption-Money Laundering Nexus 187 Notes 199 Bibliography 213 Index 227
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ACKNOWLEDGMENTS Our biggest debts are to those who were generous enough to give us their time in talking to us (either individually or together) about corruption, money laundering, and the relationship between them, though we emphasize that the book s conclusions should in no way implicate our interviewees. Because of the sensitivity of the topic many of these we do not acknowledge by name, but the institutions included the Asia-Pacific Group on Money Laundering, the Financial Action Task Force, Asia-Pacific Economic Co-operation, the United Nations Office on Drugs and Crime, the Organisation for Economic Co-operation and Development, the Commonwealth Secretariat, the Asian Development Bank, the World Bank, the U.S. Treasury, the Hong Kong Independent Commission Against Corruption, the Australian Federal Police, and the Australian Attorney General s Department. Relating to individuals we would also like to thank Gordon Hook, Rita O Sullivan, David Shannon, Rick Small, Klaudijo Stroligo, Christine Uriarte, Kevin Vandergrift, Emile van der Does de Willebois, and Bruce Zagaris, though once again the book is not necessarily reflective of their views and the responsibility for any error lies with the authors Chaikin would like to gratefully acknowledge financial support from the Faculty of Economics and Business at the University of Sydney, while Sharman gratefully acknowledges financial support from the Australian Research Council Discovery Grant DP0771521 and the ARC Centre of Excellence in Policing and Security.