The Corruption Challenge: Unmasking the Handlers


Investigative Journalist and Freelance Writer and keynote speaker at the ACFE European Fraud Conference, 25-27 March in London

You plan to address “The Corruption Challenge” in your presentation. What are some of the current challenges you see anti-fraud professionals facing?

The Western investigator faced with investigating funds introduced into his country’s banking system from a foreign power or individual has a number of challenges. First, he has to negotiate complex political systems in the country from which the funds have been allegedly stolen to obtain evidence. His capacity to investigate the funds may be impeded if the funds are not recognised as stolen, or not removed as a result of a corrupt act.

For example, those engaged at the highest levels of many countries will seek to form conspiracies with business entities and their owners, to blend corrupt money with legitimate proceeds of the business. This is a classic money-laundering technique to disguise sources, and it tests the investigation to seek to disinter the corrupt from the quasi-genuine. That said, the businessman who connives with the corrupt politician is a party to the laundering, and he is likely to be a beneficiary as a result of providing a favour to the politician.

The investigator’s task of extracting details from a country where political corruption is rampant is likely to be coloured by a regime of fear and silence. Even where investigations are triggered by a change of regime (such as recently in the Arab Spring), information from new incumbents may not be forthcoming, it may not be reliable, or it may have been obtained in ways that are not supportable in a UK or European court.

The investigator’s ability to gain orders from a Western court to require a bank to supply information from bank accounts suspected of being used to harbour corrupt money is likewise impeded by the status of an investigation in the country of the funds’ source. Investigators need very clear and clearly substantiated bases for requesting such orders and many countries in a state of political turmoil have legal systems equally in a state of flux.

What do you most hope attendees will take away from your address?

For all the complications, Western countries are increasing their efforts to explore corrupt money and unmask the handlers. There are a number of reasons for this. Corrupt money, especially when it has a political origin, is very likely to be hot money and move very quickly between banks and global institutions. This is destabilising to the financial system of a Western country. Likewise, the country that harbours corrupt money is equally likely to be used by the politicians to further their other ends, such as providing a bolthole in the event they lose power.  This is a political risk, to which many countries would not wish to be subjected.

Read more about Kochan and the other keynote speakers at this year’s ACFE European Fraud Conference here.