Gupta Associates Get Bail as One Brother Becomes a Fugitive

On the same day that people linked to the three politically connected Gupta brothers were granted bail by a South African court after appearing on graft charges, one of the siblings, Ajay Gupta, was declared a fugitive.

The hearing in a Bloemfontein court in South Africa’s Free State province involved a farming project. It followed a day that began with a raid by the Hawks on the Gupta family compound in Johannesburg and ended with the resignation of President Jacob Zuma. The Gupta family has been at the center of a number of corruption scandals that point to them using their friendship with Zuma to win contracts and influence government appointments. Zuma and the Guptas have denied wrongdoing. read more »

The brothers who bought South Africa

The beginning of the end of Nhlanhla Nene’s political career came on a warm Monday morning. He was catching up on email in his office in Pretoria’s neoclassical Old Reserve Bank building, where he was serving as South Africa’s minister of finance, when his deputy, Mcebisi Jonas, asked for an urgent meeting. Jonas had been desperate to speak to his boss for days, but what he wanted to tell Nene was far too sensitive to discuss by phone. read more »

‘We did not understand fully the agendas at play’ – McKinsey on Eskom

US global consultancy firm McKinsey said on Tuesday “we made several errors of judgement and process” as it announced that it would suspend work for state-owned companies in South Africa until further notice.

Eskom paid McKinsey and the Gupta linked Trillian for six months of work up to early 2017.

McKinsey received just more than R1-billion‚ while Trillian was paid R600-million‚ Business Day reported. The contract was for McKinsey to train Eskom engineers to develop internal consulting capacity‚ which it said would save it cash. It offered to pay McKinsey and Trillian – with which it had no contract‚ although it had been introduced as a local supplier development partner – a portion of the savings. The power utility has conceded it did not get the required approval from Treasury to deviate from accepted procurement regulations.

Last week McKinsey said it is prepared to pay back the money if a court determines the contract is unlawful. read more »

Interpreting the False Claims Act

Prepared Senate Floor Statement by Senator Chuck Grassley of Iowa, Chairman, Senate Judiciary Committee

“….We have decades of data showing that the government cannot stop fraud by itself. I also know from many years of oversight that purely administrative remedies are very time consuming and often toothless.

The government should be able to decide how best to protect the taxpayers from fraud. The FCA is the most effective tool the government has. The government should be able to use it, without the courts piling on bogus restrictions that are just not in the law.” read more »

U.S. Bank Cited by Federal Authorities for Lapses on Money Laundering

U.S. Bank, the fifth-largest commercial bank by assets in the United States, was charged by the federal authorities on Thursday with failing to guard against illegal activity and, in at least one instance, even abetting it.

The Justice Department accused U.S. Bank, which is based in Minneapolis, of severely neglecting anti-money laundering rules, helping a payday lender operate an illegal business and lying to a regulator about its plans for tracking potential criminal activity by bank customers.

Federal prosecutors in Manhattan reached an agreement with U.S. Bank to defer prosecution as long as the bank could show it had improved its monitoring of customer transactions. To settle the Justice Department charges and cases brought by other regulators, the bank agreed to pay various fines and penalties totaling $613 million. read more »

Congress Ratcheting Up Pressure On Companies To Notify Consumers of Data Breaches Sooner

Congress is ratcheting up pressure on companies to notify consumers earlier when their personal information such as Social Security and bank account numbers is stolen in data breaches.

But whether the jawboning turns into tough standards remains to be seen.

After a hearing on breaches today, an aide to House Financial Services Committee Financial Institutions Subcommittee Chair Blaine Luetkemeyer said a “discussion draft” of legislation to set national standards should be out soon.

But during the meeting, Luetkemeyer, who said Americans are clamoring for prompt notification, gave no indication what time limits could be placed in the bill for businesses to tell consumers their information had been stolen, nor did he say if legislation would give individuals the right to sue if the deadline was violated. read more »