Corruption Fuels Border Crisis, Global Economic Woes

Evidence continues to accumulate that a rising tide of corruption threatens economic progress and freedom around the globe. Central America—the source of the current crisis at the southern U.S. border—has big corruption problems.

In February, Judicial Watch highlighted Transparency International’s new global corruption report. The failure to curb corruption is “contributing to a worldwide crisis of democracy,” the group wrote. Research showed “a disturbing link between corruption and the health of democracies.”

Now comes a new report from the investment-oriented global business intelligence firm, Risk Advisory. The angle is a little different from Transparency International—investment climate over democratic norms—but the message is disturbingly similar: global corruption is widespread—and the fish rots from the head.

“Laws against corrupt activity are only as strong as the institutions and individuals whose job it is to enforce them,” said Chris Rowley, Risk Advisory’s chief of business intelligence.

Big picture, according to a United Nations study, the global economy loses a staggering $3.2 trillion per year to bribery and theft of funds. Corruption “robs societies of schools, hospitals and other vital services, drives away foreign investment and strips nations of their natural resources,” says UN Secretary General Antonio Guterres.

Transparency International and Risk Advisory both identify Africa and the Middle East as highly corrupt. Both note that corruption in Asia and Latin America is pervasive, though there are bright spots such as Japan and improving situations in Chile and Uruguay.

The worst corruption offenders? Transparency International says Somalia, Sudan, South Sudan, Libya, Syria and Yemen are among the “most corrupt” countries. Businesses face “the biggest corruption challenges” in Turkmenistan, Libya and Somalia, says Risk Advisory.

The business sectors most vulnerable to corruption are construction, infrastructure, and oil and gas, says Risk Advisory, a finding echoed by numerous other studies. Read more about it here, here, and here.

In Central America, democratic norms are being undermined across the region, warns Transparency International. Risk Advisory says Central America “continues to be a difficult region for businesses to work in.”

Guatemalan President Jimmy Morales is under siege for alleged cronyism. Gangsters in El Salvador and Honduras have created “physical security risks and heightened concerns that the banks in the region will continue to be used as conduits for money laundering and other financial crimes associated with the international drug trade,” says Risk Advisory. Transnational criminal syndicates like MS-13 thrive in corrupt environments and undermine governments.  Gang violence is out of control.

The good news about global corruption? The U.S. and Canada continue to be safe harbors. Nobody’s perfect and concerns remain in the U.S. about beneficial ownership and limited liability structures often used to conceal the flow of illegal money, but both countries rank high in global indexes for transparency and the rule of law. “Both the U.S. and Canada have some of the most robust anti-corruption regimes in the world,” notes Risk Advisory.

Amen to that.

Read the Risk Advisory report here.

Read the Transparency International report here.

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Micah Morrison is chief investigative reporter for Judicial Watch. Follow him on Twitter @micah_morrison. Tips: [email protected]

Investigative Bulletin is published by Judicial Watch. Reprints and media inquiries: [email protected]