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Corona millionaires: How pandemic profiteers around the world enrich themselves with public money

2021-09-14T09:13:11.602Z


High pressure to act, fewer controls: the pandemic is making corruption easier worldwide. In many countries money is pouring into the pockets of corrupt businessmen and politicians. The poor pay the price.


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A police officer disinfects streets in Guatemala.

However, a lot of money that should be used to fight pandemics has vanished into thin air due to corruption - worldwide

Photo: Esteban Biba / Agencia EFE / IMAGO

Geoffrey Mongeri is mad. He caught the corona virus at the end of last year. The fault is a lack of protective equipment, he says. Because Mongeri works in Nairobi in the health sector, he disinfects facilities in which Covid patients are housed. "We had two protective suits a week that we had to put on several times," he says.

According to media reports, Kenya received around 1.5 billion euros in financial aid in 2020, mainly from the World Bank and the International Monetary Fund (IMF); This should also help the country cushion the consequences of the pandemic and make the health care system fit. But many of the intensive care beds that had been promised were never made available, and there was a lack of protective equipment for months, in some places still. On the other hand, some Kenyans got rich during the crisis - the »Covid millionaires«, as they are called in the country.

The entrepreneur Eunice Cheromo collected around 320,000 euros from the state agency for medical products Kemsa - for protective masks, for example.

She runs a decor and interior design company.

Cheromo later told a committee of inquiry: "God led me to Kemsa." In the waiting room, those present were asked who could provide masks - Cheromo raised his hand.

Almost 18 million euros were allegedly burned at Kemsa in Kenya: According to reports, the agency awarded public contracts, sometimes within a few hours, and often purchased equipment that was completely overpriced.

Several companies were also associated with high-ranking politicians - one company was even able to show the deputy chairman of the ruling party as bank guarantor.

However, corruption in the pandemic is not a Kenyan problem - in many countries around the world the corona crisis is a hotbed for corrupt entrepreneurs, politicians and other profiteers. "In emergencies like the pandemic, the risk of corruption increases fundamentally," observes Delia Ferreira Rubio, chairwoman of Transparency International. Not only do additional billions of public money flow to combat the crisis - these have to be spent particularly quickly in an emergency. For potential perpetrators, this situation is evidently an invitation to abuse power and self-service.

"Governments introduce measures and processes that are not transparent and are not subject to the established control mechanisms," warns Delia Ferreira Rubio. And while the state authorities gain power in the crisis, civil society and the media are being weakened in many places - this means that further public controls are no longer necessary.

In countries where the rule of law prevails and democratic institutions are strong, the risk of abuse is lower, but cases of corruption have also been reported in developed countries - for example in the procurement of ventilators, vaccinations, protective clothing and masks. According to the expert, corruption is not just an institutional question by which the quality of governments can be measured. "Corruption directly affects the everyday lives of billions of people worldwide," says Ferreira Rubio. "The money that is lost is missing in health care, education and infrastructure."

The Colombian government also spent billions to cope with the crisis, a large proportion of which did not flow into the health system, but was invested in emergency aid for the poor - at least in theory. Local governors and mayors made deals with companies buying groceries at overpriced prices. For example, according to media reports, the Arauca region stocked its aid packages for the poor with cans of tuna, for which suppliers charged $ 4.87 per can - three times the usual price. A can in the supermarket would only have cost around $ 1.50. So only a fraction of the aid actually reached the poor.

According to Andrés Hernández from Transparency International Colombia, the procedure is a well-known pattern in the country: "Local politicians have awarded contracts to private companies that they previously supported in the election campaign," he says. According to Hernández, the judiciary is also part of the problem: There are numerous investigations, including in connection with corona money - but in the end hardly anything comes of it. "The perpetrators remain unpunished," says Hernández. "It's a system that keeps saying: Corruption is worthwhile, nothing happens."

In countries like El Salvador and Guatemala, the governments have recently massively undermined existing anti-corruption mechanisms and pushed anti-corruption fighters out of office - also to prevent high-ranking politicians from being investigated during pandemic times.

Citizens are protesting in Guatemala against the misappropriation of funds and the growing social divide in the country - according to critics, the country is ruled by a corrupt clique of politicians and entrepreneurs.

Meanwhile, anti-corruption fighters are increasingly being hindered from their work by the Guatemalan government.

Juan Francisco Sandoval, head of a special prosecutor in Guatemala, was released at the end of July and has been in exile ever since.

According to him, law enforcement officers in Guatemala work in an "atmosphere of intimidation and threat."

Nayib Bukele, El Salvador's controversial president, even guarantees officials immunity when purchasing medical pandemic equipment: A new law prevents the review of orders and contracts and protects officials and suppliers from corruption investigations. The law, which was passed in May, is also expected to apply retrospectively until the start of the pandemic in March 2020 - undermining ongoing investigations against the Bukele government and its allies.

Since last year, the Prosecutor General's anti-corruption unit had coordinated a search of the Ministry of Health and around 20 other government agencies to find evidence of criminal offenses in purchases and contracts relating to the pandemic.

The Ministry of Health, headed by Francisco Alabí, was also targeted by investigators - it is said to have bought rubber boots worth $ 225,000 from a company owned by the wife of an uncle of Alabí.

"The pandemic was misunderstood by some as a 'blank check' and revealed our weaknesses in the fight against corruption in El Salvador," says Marjorie Chorro de Trigueros, director of the legal department of the Salvadoran think tank Fusades.

Marjorie Chorro de Trigueros criticizes the fact that authorities in El Salvador are hardly accountable for their purchases during the pandemic and that the right to access information is increasingly restricted - "towards a culture of opacity".

One of the

Bukele government's planned reform of the Access to Public Information Act (LAIP) could further curtail the state's documentation and disclosure obligations.

According to a report by the Latin American anti-corruption network Real, of which Fusades is a member, the transparency of government agencies across Latin America continues to decline during the corona crisis.

"The pandemic was the perfect excuse to consolidate the policy of secrecy," criticizes Chorro de Trigueros.

"And the lack of transparency opens the door to corruption."

In Brazil, a parliamentary commission of inquiry is currently trying to uncover who has enriched themselves during the crisis - here, too, abuse extends to the highest levels of politics.

Most recently, it emerged that the government insured its vaccine orders at a high price with a bank that turned out to be a pure mailbox company.

There is also a dubious deal to buy 20 million doses of the Indian Covid-19 vaccine Covaxin.

The whole thing was supposed to cost $ 300 million, the price of $ 15 a dose of vaccine well above what the government had paid for other vaccines;

in addition, Covaxin was not even approved in Brazil.

The order has since been canceled.

According to Transparency International, it is now certain that there have been requests for bribes to the Indian manufacturer. The leads lead to a man named Ricardo Barros, former health minister and confidante of President Jair Bolsonaro, who appointed him his representative in Congress. The President was personally informed by a member of parliament about the irregularities in the vaccine order. But he did nothing, which is why the public prosecutor's office is now investigating. Senators had previously filed a criminal complaint against Bolsonaro. The accusation: abuse of office. According to the senators, there is a "gigantic corruption system" in the Ministry of Health that the president has ignored.

"It's frightening how sure these people are about their cause," says Bruno Brandão from Transparency International Brazil.

The vaccine deals are in the center of public attention - "and yet they believe that even in this exposed area they can get away with completely amateurish corruption plans like a fake bank."

In Brazil, the structural conditions would encourage corruption - long before the pandemic.

There is no lobby control, too little transparency in the awarding of public contracts and, above all, "historical impunity for those in power." According to Brandão, the fact that there is any investigation is a sign of progress: "Only corruption that has failed is visible", he says.

Kenya's Covid millionaires have so far remained unpunished, so far no one has been held responsible - apart from the whistleblower who started the Kemsa scandal and was suddenly prosecuted in another matter shortly afterwards. He is said to have kidnapped and blackmailed an entrepreneur. Donors such as the International Monetary Fund want to hold those responsible in Kenya accountable - they are now calling for their names to be published and for appropriate investigations to be carried out. Deadlines have been set, but the first ones have already passed - without consequences.

The economist Jason Braganza is skeptical that something will change in the future: “The system is designed in such a way that donors like the IMF earn money with their loans, even if interest rates are lower than on the free market.

It is therefore very unlikely that the irresponsible use of the Covid aid funds will have serious consequences. «With his organization Afrodad, he is campaigning for a new debt policy in Africa.

It would make more sense to provide equipment directly to the affected countries instead of funds with interest, says Braganza.

But the pandemic has shown that the Global North takes care of itself first.

This contribution is part of the Global Society project

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Source: spiegel

All news articles on 2021-09-14

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