$how Me the Money: GFI's Baker in the news
First, a reminder: a point that we've noted several times before:
"While Baker tracks bribery closely, he sees it as part of a bigger problem: the global financial system’s shadow structure. According to GFI research, the proceeds of bribery represent only 3 percent of the $2 trillion annual cross-border flow of illicit money — illicit meaning “illegally earned, transferred, or utilized.” The organized crime component is about 30 to 35 percent. A whopping 60 to 65 percent is due to the private sector’s illegal and intentional manipulation of taxes and commercial transactions. How can this be? Because the global system lacks transparency, Baker explains, it becomes a vast enabler not only of corruption and criminality but also of commercial illegality. This shadow structure facilitates the hiding of money, be it from a murderous “godfather,” a corrupt official, or a tax-evading, transaction-manipulating executive; the system’s mechanisms are available to and exploited by all three actors. “The richest countries are the biggest promoters of lawlessness in international trade and finance,” Baker writes in his 2005 book, Capitalism’s Achilles Heel. “In a process that parades as agreeable enterprise…illegal money streams through mechanisms designed by western countries to bring hundreds of billions annually into western coffers.”
Second, the article turns to Transparency International's definition of corruption as "the abuse of entrusted power for private gain" - a definition that we've objected to in the past.
Third, we'd like to correct another misperception. The article continues:
"Recently, due to its opacity and ease of incorporation (of dummy as well as legitimate companies), Britain’s independent Tax Justice Network placed the state of Delaware at the top of its Financial Secrecy Index, Time magazine reported in February. The magazine added that 'the U.S. just might be the world’s biggest washing machine for dirty money.' "
This does not accurately reflect our index. The jurisdiction at the top of our Financial Secrecy Index is the United States, not Delaware. Our index combines a qualitative secrecy score (where Delaware was used as a benchmark) with a quantitative weighting (which used data for the whole United States) and the overall ranking reflects the country, not the state.