Corruption is Everywhere - Ex French PM and DM Going to Trial for Kickbacks

Pakistan Submarine Deal Scandal: Former French PM Balladur to Stand Trial

Over Role in Kickbacks Scheme

© Reuters / Charles Platiau; Wikipedia

Former French Prime Minister Edouard Balladur will be tried for financial crimes over his role in a kickback scheme tied to an arms deal with Pakistan in the 1990s, which saw large sums paid out to officials in bribes.

Attorney General Francois Molin announced the upcoming trial without specifying a date, but said the proceedings would take place in France’s Court of Justice of the Republic, a tribunal devoted to official misconduct. The country’s ex-defense minister Francois Leotard will also stand trial alongside the former PM. Both deny any wrongdoing.

The 90-year-old Balladur was initially charged in 2017 for “complicity in misuse of corporate assets and concealment” in relation to a 1994 submarine deal between Paris and Islamabad. Hoping to persuade the Pakistanis to purchase French vessels over British competitors, Paris arranged a regime of “commissions” and kickback payments for a litany of officials, lobbyists and other businessmen in both countries.

Balladur is not only believed to have approved the payments, but allegedly profited from the deal personally and used the proceeds to finance his 1995 presidential bid, which he ultimately lost to Jacques Chirac.

Though the kickbacks scheme was first uncovered by Pakistani investigators in 1997, a bus bombing in the city of Karachi put a spotlight back on the case in 2002 – dubbed the “Karachi affair.” The bombing targeted a building site for the submarine project, killing fifteen workers, including 11 French engineers. The incident was blamed on Islamist militants, while some reports claimed the bombing might’ve been a retaliation after the French kickback payments ceased.

Corruption is Everywhere - But in Canadian Politics? Collingwood

Ex-Liberal MP made $1M on Ontario town deals

while sister was mayor, inquiry reveals

Dave Seglins · CBC News 

Former Liberal MP Paul Bonwick's consulting work for companies doing business in Collingwood, Ont., is under scrutiny.

He was awarded for the work while his sister, Sandra Cooper, was mayor of the resort town, northwest of Toronto.

(Metroland and Dave Seglins/CBC)

Former Ontario Liberal MP, the Hon. Paul Bonwick, earned more than $1 million in consultant's fees on a series of backroom deals involving public money while his sister was a local mayor, a judicial inquiry has revealed.

Public hearings got underway Monday in the ski and summer vacation town of Collingwood, Ont., northwest of Toronto, with inquiry lawyers making public key emails and documents from 440,000 pages of evidence they've gathered.

Town council called the probe after Ontario Provincial Police began investigating the multimillion-dollar sell-off of part of Collingwood's power utility and allegations of improper influence and kickbacks involving the proceeds.

Bonwick told CBC News Monday that he and his company, Compenso Communications, performed "a broad range of consulting services" to earn the money and flatly denies any collusion with his sister, town officials or utility insiders to gain an unfair advantage.

"Absolutely not," Boniwck said in an email, saying he never improperly obtained insider information. "No. Nothing deemed confidential or that wasn't accessible by other parties if requested," Bonwick wrote.

Public hearings got underway Monday into town deals in Collingwood, Ont., that netted

former Liberal MP Paul Bonwick about $1 million in consulting fees. (Dave Seglins/CBC)

The current mayor, Brian Saunderson, elected last fall says he pushed for this inquiry while sitting on the previous council.

"I think the public deserves to know what happened," Saunderson said at the outset of the hearings. "The things that happened here in Collingwood are really not unique. They are things that could happen in any small community."

No one has been charged. The OPP investigation continues.

The public inquiry is to hold hearings through June and deliver its findings in the fall.

Insiders paid bonuses 

Bonwick, MP for Simcoe-Grey from 1997 until 2004, is one of the key subjects of the inquiry over his roles as both a consultant — and as brother to former mayor Sandra Cooper.

Bonwick was a paid consultant for PowerStream, which in 2012 bought a 50-per-cent stake in Collingwood's power utility, Collus, despite the town receiving a much higher bid from another potential buyer.

Former MP Paul Bonwick received consulting fees for the sell-off of Collingwood's public power utility, as well as projects

to build membrane structures atop the town's rink and the Collingwood Centennial Aquatic Centre, seen in this photo.

(Dave Seglins/CBC)

The public was never told — and the then-mayor never disclosed — that her brother was involved in the multimillion-dollar sell-off.

Inquiry records released last week revealed for the first time that a number of utility insiders were paid bonuses, and that Bonwick — who worked closely with them and his sister in the mayor's office to help PowerStream clinch the deal — made $323,000 in fees.

The records also suggest PowerStream had insider information and special access to Collingwood council during the bidding.

"It paints a picture which is yet to be proven of a very flawed process that ended up in a deal that brought a subpar return for our taxpayers and will continue to haunt taxpayers for years to come," Mayor Saunderson said.

$756K in fees from construction deal

The public inquiry will also examine what Collingwood officials did with the millions in proceeds from the sale, including $12.4 million the town spent on a sole-sourced contract to build dome structures over a town pool and skating rink.

CBC News last summer revealed that Bonwick secretly made an additional $756,000 fee as a consultant for BLT Construction, helping the firm land the deal with the town in record time with little public scrutiny.

OPP investigators allege Bonwick's role was "shrouded in various layers of secrecy and is evidence of fraudulent activity — to which the Town of Collingwood is the victim," according to a 2014 search warrant.

In the court document, the OPP also accused Bonwick of working closely with the town's then-chief administrative officer Ed Houghton who police suspected of breach of trust for his role.

While the OPP investigation continues, none of those allegations has ever been tested in court and police have charged no one.

Bonwick says the public doesn't have all the facts.

"I remain hopeful that as the inquiry gets underway, and the subsequent recommendations that will be provided by Justice (Frank) Marrocco, a much more clear understanding of the events leading up to the sale of the utility will be made available to the public," Bonwick told CBC News.

Bonwick is attending the inquiry representing himself. He was denied funding for a lawyer in an ongoing dispute with the municipality. Town officials won't offer financial assistance, claiming Bonwick has failed to disclose details about his personal finances to justify support.

Bonwick's sister, ex-mayor Sandra Cooper, is being called to testify at the inquiry.

She has declined numerous opportunities to comment and has hung up on CBC News when asked over the telephone about her brother's role in town deals under her watch.

Houghton, the former town CAO, who also served as president of the utility at the time of the sell-off, has denied any wrongdoing in responses to questions from CBC News.

Collingwood has already changed its own conflict of interest policies to prohibit elected officials from making decisions on deals when a sibling is involved, something not currently prohibited by provincial legislation.

Mayor Saunderson says other small- and medium-sized municipalities across Canada can learn from the Collingwood inquiry, as local governments take on more responsibilities, and face less scrutiny in an age of shrinking media.

"We're increasingly at risk. In the last five years we have seen the closure of the Enterprise Bulletin, which was a newspaper that had been in town for 150 years. Our local TV station is less active. Our fifth estate is not there to shine a light on things."

Inquiry lead counsel Kate McGrann says hearings will continue until mid-June, with the presiding judge to deliver findings and recommendations later this year.

"We're looking to be able to explain to everyone what happened. The people of the town of Collingwood would like to understand what happened when the town sold half of its shares in the public utility." McGrann said in an interview, noting the inquiry will follow the money trail of all involved.

"The inquiry is here to do very specific things. Investigate. Report. And make recommendations."

Corruption is Everywhere: Nissan, Huawei, Big Pharma

Ex-Nissan Chairman Carlos Ghosn indicted for breach of trust

By Allen Cone

(UPI) -- Former Nissan Motors Co. Chairman Carlos Ghosn was indicted on new financial charges Friday in a Tokyo court.

Ghosn, 64, was charged with aggravated breach of trust for allegedly transferring $17 million in personal investment losses to Nissan in 2008 as well understating his compensation by $37 million for three years through March 2018, the Nikkei Asian Review reported.

Last month, he was indicted for under-reporting his pay by around $46 million between 2010 and 2015.

Ghosn has been in jail since his arrest on Nov. 19 at Tokyo's Haneda airport. Nissan dismissed Ghosn as chairman shortly after his arrest, but he remains chairman and CEO of Renault, which is the largest shareholder and partner of Nissan. The French company has assigned his duties to other executives.

Prosecutors expected him to be detained until the trial begins, which could be as long as six months, The Wall Street Journal reported.

"Generally speaking, it's extremely rare for a court to grant bail before a trial begins," Motonari Otsuru told reporters. "That's our main concern, and I think Mr Ghosn is very troubled by this."

Ex-Nissan executive Greg Kelly, who was arrested at the same time for his alleged role in helping his boss understate his pay, was released on a bail $635,000 on Dec. 25.

On Tuesday, Ghosn appeared before a judge in a Tokyo court for the first time. He denied the allegations against him, saying he has been wrongfully accused, is innocent and the accusations are merit-less.

One day later, he came down with a 102-degree fever.

"I recently learned that my husband is suffering from a high fever at the detention center in Tokyo, but my information is limited to news reports as no one in his family has been allowed to contact him since 19 November," wife, Carole Ghosn, said in a statement. "We are fearful and very worried his recovery will be complicated while he continues to endure such harsh conditions and unfair treatment."

Poland arrests Chinese Huawei executive

on espionage charges

By Clyde Hughes

A Chinese man shops in a Huawei computer and smartphone showroom in Beijing on December 10. Photo by Stephen Shaver/UPI | License Photo

(UPI) -- Polish authorities charged a Chinese citizen Friday -- who's worked for smartphone giant Huawei Technologies -- with high-level espionage that could send him to prison for 10 years.

State-owned Telewizja Polska reported Polish counterintelligence officers from the Internal Security Agency arrested the citizen, who was sales director of Huawei's Poland office. Officials said the person charged is a graduate of one of China's top intelligence schools and a former employee of Beijing's consulate in Gdansk.

The suspect and a former Polish official were both charged with espionage against the republic, to which they both pleaded not guilty. The Polish suspect was the former deputy head of Warsaw's counterintelligence's IT security department.

The arrests come as Western countries, including the United States, increase surveillance of Huawei, which recently surpassed Apple as the world's second-largest smartphone manufacturer.

Friday's was the second high-profile arrest of a Huawei official in the past two months. Canadian officials detained Meng Wanzhou, Huawei's chief financial officer, in December at the request of the United States. She was accused of trying to get around Iranian trade sanctions.

U.S. politicians have expressed concern over the growth of Huawei because of the company's potential to spy for Beijing through its electronics, disable communications or conduct another kind of cyberattack.

Huawei has said it's employee-owned and has never conducted espionage or sabotage on behalf of China's government. The telecom giant said doing so would damage its trust as a global telecommunications leader.

Nevertheless, according to Chinese law (read Communist paranoia), every individual and company must be prepared to fully cooperate with the state, if and when the state requires it. It's not what they are doing that has western governments concerned, it's the potential for spectacular catastrophe.

Are illegal kickbacks in Ontario driving up

the cost of your generic drugs?

Canadians pay some of the highest generic drug prices

in the world

Timothy Sawa, Lisa Ellenwood, Mark Kelley · CBC News ·

A hidden camera investigation and confidential documents obtained by CBC's The Fifth Estate raise questions about whether Canada's largest pharmaceutical distributor is profiting from illegal kickbacks on sales of generic drugs in Ontario.

Studies have shown this practice drives up the cost of generic drugs for all Canadians.

McKesson Canada is a subsidiary of the U.S. McKesson Corporation, which is No. 6 on the Fortune 500 and the largest pharmaceutical distributor in North America. (John Badcock/CBC)

McKesson Canada, which distributes pharmaceutical drugs to more than 8,000 pharmacies in this country and recently purchased more than 400 Rexall pharmacies, denies the allegation.

The Canadian company is a subsidiary of the San Francisco-based McKesson Corporation, which is No. 6 on the Fortune 500 and the largest pharmaceutical distributor in North America, delivering one-third of all medications used every day, according to its website.

A Fifth Estate hidden camera investigation captured conversations with three independent pharmacists at two pharmacies who suggest McKesson is breaking the law in Ontario, where kickbacks on generic drugs are illegal.

"[McKesson] gives the numbers to [our buying group], they consolidate the numbers and give me 50 per cent back," one Ontario-based pharmacist told a generic drug salesperson working undercover for The Fifth Estate.

The conversation raises the question of whether this pharmacist is getting a 50 per cent kickback from McKesson Canada.

In other words, for every $10 in drugs this pharmacist sells, he would be able to put $5 in his pocket. In exchange, the pharmacist or his buying group would agree to stock the generic drugs McKesson distributes, giving the company sales ahead of a competitor.

It's a practice that studies have shown dramatically inflates the prices of generic drugs for Canadians, who pay some of the highest generic drug prices in the world.

"Greed is a powerful weapon," said Paul Bailey, president of the Police Pensioners Association of Ontario, a group with many members who live on tight budgets with small police pensions.

He reviewed hidden camera footage captured by The Fifth Estate that also showed several pharmacists in Ontario asking for kickbacks.

"Once again, the taxpayer takes it on the chin," he said.

Banned in 2013
The practice of paying or receiving rebates or kickbacks in exchange for stocking a particular brand of generic drug was regulated in Ontario starting in 2006 as part of efforts to reduce the price of generic drugs.

A full ban on rebates — direct or indirect — in the province came into effect in 2013. Quebec is the only other province or territory in the country that has restrictions on rebates.

Generic prices have come down since 2006, but Canadians are still paying the second-highest amount among OECD countries for their generic drugs, according to a recent government report.

Along with conducting the hidden camera investigation, The Fifth Estate obtained an internal McKesson presentation given to its employees, as well as a confidential document filed in a hearing at the Ontario College of Pharmacists.

Both documents raise the same question: Is McKesson Canada profiting from illegal kickbacks in Ontario?  

Are they giving kickbacks to independent pharmacists in Ontario in order to secure sales or collecting kickbacks from generic drugs manufacturers in exchange for stocking a particular brand in their own Ontario stores?

"People don't know they're getting ripped off and the reason they're paying the high drug costs," said Bailey.

McKesson Canada denies allegations
The Police Pensioners Association of Ontario first became interested in rebates in 2009 when several generic drug makers, wholesalers and a pharmacy were caught in a rebate scheme.

Bailey, a former police detective, called for a criminal investigation at the time. He's now more convinced than ever that drastic action is required.

Paul Bailey, a former police detective and current president of the Police Pensioners Association of Ontario, says a public inquiry is needed into pharmaceutical rebates.

(John Badcock/CBC)

"The only way we're ever going to get to the bottom of this is to have a public inquiry."

The Fifth Estate requested an interview with McKesson Canada president Paula Keays, but she would only provide a written statement.

Keays acknowledged the company makes payments to the pharmacies it supplies with generic drugs, but denied they are illegal kickbacks or rebates.

McKesson Canada president Paula Keays acknowledged in a written statement that the company makes payments to the pharmacies it supplies with generic drugs, but denied they are illegal kickbacks or rebates. (McKesson Canada)

"McKesson Canada does not pay rebates in Ontario and any assertion to the contrary is blatantly false," she said in the statement.

The payments its company makes, she said, are "fully in line with all current provincial regulations and [are] one of the ways independent pharmacies operate and improve services for patients, like installing blood pressure monitoring stations, introducing new technologies and automating services to allow for patient counselling. These are standard business agreements and are entirely appropriate."

Going undercover
A Fifth Estate investigation in March 2018 revealed that Costco was demanding millions of dollars in illegal rebates from a generic drug manufacturer.

After that story aired, The Fifth Estate received an email from someone with many years of experience in pharmaceutical sales suggesting the problem goes far beyond Costco:

"It's not just Costco…. Every single pharmacy across the country takes kickbacks in a monetary form still to this day. I am a former rep and can definitely say that this happens. It is still happening and will continue to happen."

In order to test whether pharmacists in Ontario would ask for illegal kickbacks or disclose if they are receiving kickbacks, the insider agreed to help The Fifth Estate and go undercover as a salesperson. Because he still works in the industry, The Fifth Estate agreed to protect his identity.

CBC's graphics department created a fake drug company website for The Fifth Estate's hidden camera investigation. (David Abrahams/CBC)

"The problem is, everyone's driving these rebates up. It's a competition," he told The Fifth Estate in an interview.

"Basically it's a race to the bottom, if you will. You know, I'll offer more points than the next guy that just came in before me. And that's driving the cost of the pills up. It's just not fair."

The Fifth Estate created a fake generic drug company called Dari Pharmaceuticals and made business cards, a product list and a website.

Over three days, The Fifth Estate visited 17 independent pharmacies in Kitchener, Cambridge and Hamilton and spoke to nine pharmacy owners who were interested in buying generic drugs. All but one asked if the fake company paid illegal rebates.

'Incentives to move their stuff'
Several pharmacists also openly discussed their current arrangement, claiming they received illegal kickbacks from large companies.

"Let's say if you buy 1,000, for example, there is a rebate of 50 per cent," one pharmacist told The Fifth Estate's undercover salesperson, referring to his current arrangement with McKesson Canada.

"[Other companies] go higher [than 50 per cent] to give incentives to move their stuff," said another pharmacist. "Some days they go to 60 [per cent], some days they go to 70 [per cent]."

Some pharmacists wanted to know how The Fifth Estate's fake company would deliver its kickbacks while others talked about technical wording that could be used to hide a kickback and get around the law in Ontario.

"So basically [a middle company] cuts us a cheque every month and it's … not technically a rebate, it's more ... for professional services and what have you, right," another pharmacist said. "That's how most people are wording it nowadays."   

Business cards and a product list were created for the fake generic drug company called Dari Pharmaceuticals. (CBC)

An internal McKesson Canada document obtained by The Fifth Estate suggests the company also uses a variety of terms to describe payments it makes to pharmacists.

The PowerPoint presentation from 2017 instructs employees to remove the word "rebate" from their "vocabularies," while other terms like "professional allowances" should be "used with caution."

The presentation does say rebates are illegal in Ontario but goes on to say the pharmacy brands McKesson owns, like Guardian or IDA, make payments to pharmacies under a variety of circumstances.

"All four main McKesson banners make payments to its pharmacies, but for different things, under different names and under different circumstances. Sometimes we use the same words to mean different things."

CBC asked McKesson about the presentation and the company denied the document suggests it's paying kickbacks or rebates that are illegal in Ontario.

"As could be expected, our various retail banners compensated their respective members for different things, under various names, prior to their acquisitions by McKesson Canada," the company said in a statement.

"Accordingly, a main driver of the project reflected in the presentation was to ensure McKesson Canada's rigorous corporate practices are mirrored across all McKesson Canada banner operations. The references to Ontario throughout the document reinforce the fact that rebates are illegal, and McKesson Canada does not pay them."

A senior pharmacy insider interviewed by The Fifth Estate doesn't buy it.

"You have to have so many terms because you want to complicate it," the former executive said. The Fifth Estate agreed to protect his identity because he still works in the industry.

"You don't want people to follow the money. No matter what you call it," he said, "money that is going from the manufacturer to the pharmacy at the end of the day is a rebate."

Rebates disguised as advertising?
When Costco was caught demanding kickbacks, a document filed at a hearing of the Ontario College of Pharmacists alleged that other pharmacy chains were also potentially breaking the law.

The Fifth Estate filed a motion to see exhibits filed at the hearing and after many months received most of the documents.

A letter from Costco's lawyer to the investigator for the college said: "It should be noted that advertising in the form challenged by the complainant are common for pharmacies in the industry generally."

The lawyer goes on to allege that four other large pharmacy chains that operate in Ontario pay potentially illegal rebates disguised as advertising fees, including Guardian and Rexall.

​Guardian is one of McKesson's independent retail pharmacy banners and Rexall is fully owned and operated by McKesson.

CBC was unable to confirm the allegations, so approached McKesson for an explanation. Again, McKesson Canada said it's not doing anything to break the law in Ontario.

"To be abundantly clear: McKesson Canada does not pay prohibited rebates in the province of Ontario," the company added in its statement. "Any reporting otherwise would be false and inaccurate."

So there is problem with paying kickbacks outside of Ontario and Quebec. The rest of Canada needs to wake up. One wonders why they haven't before now? Or, perhaps I should just follow the money?

Millions could be saved
Canadians have for decades paid some of the highest prices for generic drugs in the world. In the mid-2000s, the Competition Bureau of Canada was one of the first to take a detailed look at why.

"Lots of people had theories but we wanted to clarify how the generic market was working and functioning and how it was broken," said lead investigator Mark Ronayne.

Two reports, one in 2007 and another in 2008, determined the practice of paying kickbacks was widespread in Canada and was costing Canadians hundreds of millions of dollars every year.

"The rebates paid to the pharmacies have accounted for a large portion of payers' generic drug costs, 40 per cent or more of generic drug expenditures," the reports concluded. 

"Canadian taxpayers, consumers and businesses could save up to $800 million a year if changes are made to the way private plans and provinces pay for generic drugs. The potential savings could climb to over $1 billion per year in coming years, as several blockbuster brand name drugs lose patent protection."

Ronayne believes "powerful interests" blocked change in Canada, which is why the practice of paying kickbacks continues to this day.

"If there's money to be made by providing a lower price somehow to pharmacies to somehow get your product on the shelf, then companies will look for some way to do that," said Ronayne. 

"Maybe not necessarily consistent with legislation or could be consistent with legislation but they're going to try to do it. And they've been doing that for a long time and if they are continuing to do that, I wouldn't be terribly surprised."

I would be terribly surprised if they weren't!

Former Venezuelan Officials Charged with Bribery Linked to Oil Company

Corruption is Everywhere - Certainly Venezuela and Even Little Andorra

By Nicholas Sakelaris

More than two dozen people were charged with corruption linked to kickbacks taken in exchange for lucrative PDVSA contracts. Photo by Miguel Guitierrez/EPA

UPI -- More than two dozen people were charged with corruption in an alleged kickback scheme linked to Venezuela's state-run oil company.

On Thursday, a judge in Andorra, a tiny country located between France and Spain, charged 28 people, including former high-ranking Venezuelan officials, with receiving up to $2.3 billion in kickbacks to grease the wheels for the oil company, PDVSA. Prosecutors say the money was hidden in the Banca Privada d'Andorra, or BPA, a now-defunct bank linked to money laundering.

Half of those charged are from Venezuela. Nine are from Andorra and five are from Spain.

The list includes Nervis Villalobos and Javier Alvarado, former deputy energy ministers under former Venezuelan President Hugo Chavez's government. It also includes Diego Salazar, the cousin of former oil minister Rafael Ramirez.

The investigation will focus on bribes that were given in exchange for lucrative contracts between 2007 and 2012.

Judge Canolic Mingorance said the accused conspired to take control of PDVSA's energy infrastructure. She's been investigating the case since 2012.

Andorran authorities shut down BPA after the U.S. Treasury found the bank was laundering money to criminal organizations.

Several high-ranking Venezuelan officials already have sanctions on them or have their assets frozen.

U.S. Treasury official Marshall Billingslea recently accused President Nicolas Maduro of "rapacious corruption" and of operating a "kleptocracy."

Venezuela blames U.S. sanctions for the collapse of the country's economy and PDVSA's woes, saying it's under attack by "imperialist foes."