This document summarizes a presentation on corruption given by Olaf Kellerhoff, the Resident Representative of Pakistan for the Friedrich-Naumann-Stiftung für die Freiheit foundation. The presentation covers: 1) A brief overview of the foundation and its work in over 60 countries including Pakistan since 1986 to promote liberal democracy, civic education, and human rights. 2) A definition of corruption and examples of historical corruption cases. 3) Examples of corruption scandals in Germany to show that no country is immune from corruption. 4) Ways to increase transparency and the rule of law through tools like freedom of information laws and monitoring of government institutions.

1. CORRUPTION
Women Media Center (WMC), Karachi, Feb. 2010
Olaf Kellerhoff
Resident Representative Pakistan

2. Olaf Kellerhoff Corruption Feb. 1 2010
Resident Representative Pakistan Olaf Kellerhoff
Islamic History + International
Relations (MA) at Hamburg Univ.
Missions & Experiences abroad
Somalia
Marocco
Turkey
Kosovo (3x)
Afghanistan (3x)
Lebanon
Apprenticeship as photographer

3. Olaf Kellerhoff Corruption Feb. 1 2010
Overview
1. Few on FNF
2. What is corruption
3. Paradise Germany?
4. Ways to go
Published under Xiaming

4. Olaf Kellerhoff Corruption Feb. 1 2010
1. Few on FNF

5. Olaf Kellerhoff Corruption Feb. 1 2010
Friedrich-Naumann-Stiftung für die Freiheit
Founded 1958: civic
education for Germans
regional offices in the
provinces
Liberal Institute (LI)
think tank
Scholarship department
International Academy for
Leadership (IAF)
Headquarters in Potsdam (Germany), Jan. 2009 since 1963 abroad
©FNF

6. Olaf Kellerhoff Corruption Feb. 1 2010
Worldwide: in over 60 countries
Regional
approach

7. Olaf Kellerhoff Corruption Feb. 1 2010
Sharing the
FNF in Pakistan
fate with
Pakistan…
working for Freedom in Pakistan
since 1986
objectives:
liberal democracy
civic education
human rights
free market economy
©FNF
peaceful conflict resolution
… and consequently working for betterment

8. Olaf Kellerhoff Corruption Feb. 1 2010
Sustainable work through partners
Crucial Element is the self-responsible programme work of
our partners. FNF trains, consults, interlinks and funds.

9. Olaf Kellerhoff Corruption Feb. 1 2010
2. What is corruption?

10. Olaf Kellerhoff Corruption Feb. 1 2010
Historical Examples
Around 1300 in Egypt death
penalty for priests
1372 in Basel: on year exile
+lifelong exclusion from all
political activities
In MA mayors of Augsburg and
Zürich executed
Preaching water, drinking wine…
Published under Tom

11. Olaf Kellerhoff Corruption Feb. 1 2010
Definition
Lat. corrumpere – to destroy
Corruption is operationally
defined as the misuse of
entrusted power for private
gain.
Transparency International
Published under lynac

12. Olaf Kellerhoff Corruption Feb. 1 2010
CPI
Corruption Perception Index
(CPI) Scale 0–10
Estimate of corruption of
different institutes in a
country + interviewing
different sources
Empirical data analyzed at
University of Passau
(Germany)
www.tranparency.org

13. Olaf Kellerhoff Corruption Feb. 1 2010
Worldwide Corruption
Wikimedia Commons

14. Olaf Kellerhoff Corruption Feb. 1 2010
TI-Ranking
Transparency
International
Germany Place 14
Pakistan 139
Out of 180
New Zealand place 1
Somalia 180
Existing in every country
- more or less…
Published under eli867

15. Olaf Kellerhoff Corruption Feb. 1 2010
Damage of Countries
Manager more time with
Yearly net capital inflow, 1970–1995
bureaucrats in corrupt Corruption and Capital inflow
countries
Prices are indicators for
economic activities
=>not reliable =>wrong
decisions
Less inflow of FDI
& net capital inflow
High corruption low corruption
Corruption index 2002
Aus Politik und Zeitgeschichte, 3-4/2009, p. 24.

16. Olaf Kellerhoff Corruption Feb. 1 2010
Grand corruption
Risk of detection rises by quantity and
duration – but not by amount
=> high end corruption almost not
discovered
Hard to detect, damage hard to assess:
Cleptocracy – greek:
to steel & to reign
Example from Indonesia:
Nephew of President Suharto got benefit
from beer taxes – collected by private
company
=>rising of beer prises – reduction of
tourism
Published under To2BoRnI

17. Olaf Kellerhoff Corruption Feb. 1 2010
Affecting other sectors
Corruption and Productivity Encompassing interest:
cleptokrate remarks
other sectors affected
Productivity (GDP : capital
(most likely Suhoarto’s
other relative in hotel
business
=> beer tax withdrawn
stock), 2000
If CPI up by 1 point, then:
- Net capital import by 0,5%
High corruption low corruption - productivity by 2% up,
Corruption index 2002
- GDP raises by 4%
Aus Politik und Zeitgeschichte, 3-4/2009, p. 23.

18. Olaf Kellerhoff Corruption Feb. 1 2010
Actors: Men are more corrupt*
Higher number in Persuasion of external
leadership positions control (the other’s fault)
No previous conflict with Denial of immoral action
law
Readiness for high risk
due to competencies in
respective field high trust Machiavellian
High living standard Pathologic narcism
Decision equal other
successful management
actions * Anaylsis of actors in Germany

19. Olaf Kellerhoff Corruption Feb. 1 2010
3. Paradise Germany?

20. Olaf Kellerhoff Corruption Feb. 1 2010
Paradise Germany?
Until 1999 possible for
enterprises to get tax reduction
for bribes
Only since 2002 bribing foreign
companies employees forbidden
Proper image: almost no low-level
corruption but web of corporate
sector, parties and bureaucrats

21. Olaf Kellerhoff Corruption Feb. 1 2010
German Scandals
Flick corporate group in 1984
=> loss of people’s trust in
politics
Siemens Nov. 2006 – 2009:
established system of black
costs 2,5 bn Euro (fines,
lawyers etc.)
M.A.N. in court
soccer manipulation
Published under Kenny Miller

22. Olaf Kellerhoff Corruption Feb. 1 2010
Academia
20.000 € for Dr. title
3,5 years prison and
75.000€ fine
Lawyers and advocates
among illegal clients
Easy buying or hard working?
Published under 96dpi

23. Olaf Kellerhoff Corruption Feb. 1 2010
Siemens
Trialed 2006–2009
Long established,
institutionalized web of
bribery to receive
contracts world wide
Costs: 2.5 bn Euro
But:
did not break up
Lost not on value on Siemens Manager taken into custody in Greece.
long term Published under Teacher Dude’s BBQ
Disclosure & stop

24. Olaf Kellerhoff Corruption Feb. 1 2010
M.A.N.
2000-2006 payments of
1.4 bn Euro worldwide
Strong hand in anti-
corruption:
ombusdman
200-300 employees use
specially initiated amnesty
law: keep job if not private
advantage of corruption
M.A.N. – truck and automotive manufacturer
Published under 111 emergency

25. Olaf Kellerhoff Corruption Feb. 1 2010
Soccer Manipulation
Published under baumpaul
Manipulation of results
In some cases the whole team has been bought
Trainer would inform the team which result has to be
achieved
Involved: Clubs, Gamblers, Trainer, Manager, players

26. Olaf Kellerhoff Corruption Feb. 1 2010
New legislation – still dangers
Laws only in recent years
Publicly highlighted cases
Approach by
amnesty law
ombudsman
harsh punishment of culprits
On risk area health care: federal set-
up and intransparent linkages between
pharmacy industry
hospitals / doctors
bureaucrats
insurance companies …and Germany, too.
Published under JBracken

27. Olaf Kellerhoff Corruption Feb. 1 2010
Transparency International
Founded by Peter Eigen,
former director World bank
East Africa in 1993
HQ in Berlin
Approach consensual not
confront
Besides private funds: BMZ
Publications & Tool kits

28. Olaf Kellerhoff Corruption Feb. 1 2010
Peter Eigen
Born 1938 in Augsburg
Law studies in Erlangen
and Frankfurt a.M.
Lawyer Worldbank in HQ,
West Africa,, Latin
America and East Africa
Corruption in daily work,
analyzing mechanism
Left 1993 and founded TI Peter Eigen, lawyer and founder of TI

29. Olaf Kellerhoff Corruption Feb. 1 2010
4. Way to go

30. Olaf Kellerhoff Corruption Feb. 1 2010
Transparency
Support of local Government
Trust building
Increasing tax revenues
Reduce citizens’ apathy
Press to deliver
Raise ethical standards –
professionalization of politicians
Measuring Transparency
Deputy City Nazim Karachi,
Nasreen Jalil, Nov. 2009 ©FNF

31. Olaf Kellerhoff Corruption Feb. 1 2010
Rule of Law & Good Governance
Media Election Monitoring
Monitoring Parliamentary /
City Councils Work
Courts decision – judicial
support
Manual for SME
Publishing Surveys
Hold accountable & be a vigilant citizen!
Published under International Rivers

32. Olaf Kellerhoff Corruption Feb. 1 2010
You have the right to know!
Freedom of information (FoI)
Ordinance, 2002
well intended by Musharraf and
ahead in South Asia
but diluted in policy process
All in all: we are glad to have it
Request this information!
Hold accountable!
FoI Workshop at CIIM, Karachi,
Nov. 2009 ©FNF

33. Olaf Kellerhoff Corruption Feb. 1 2010
Extending FoI in 2010
FoI Study (engl.) in print
Urdu booklet in preparation
Poster and illustrated booklets
for illiterates arranged
FNF cooperation partner CPDI
drafts new law
Get actors on one table
FoI Workshop by CHRI, LFP, Shehri,
in Regent Plaza Karachi, Aug. 2009
©FNF

34. Olaf Kellerhoff Corruption Feb. 1 2010
Property & Privatisation
Privatisation destroys monopolies
which enable power positions
Publicly known and clear property
rights with tracking system
Property Rights Book
(6–8 contributors) prepared
Book on Privatization launched in May
Study Transparency in Privatisation in
drafting
Download Property Rights Index at our German homepage www.freiheit.org.

35. Olaf Kellerhoff Corruption Feb. 1 2010
TI Tool kit
www.transparency.org

36. Olaf Kellerhoff Corruption Feb. 1 2010
Thank you!
Keep in touch!
www.mynameise.com/LiberalFriendsofPAK
www.southasia.fnst.org