Bangladesh fights rampant corporate corruption

It is not a problem specific to Bangladesh. Corporate foreign bribery is a thriving global business, according to studies by the World Bank, which estimates that foreign companies annually pay $1 trillion in kickbacks to corrupt government officials. Two weeks ago, as Bangladesh brought charges against Arafat Rahman, Royal Dutch Shell Corporation reported that it was under investigation by US authorities over allegations that it bribed officials in Nigeria. [Editor's note: The original version misstated the time frame.]

The victims of such bribery are not only the companies that lose out. There is growing awareness that bribery can have a direct, destabilizing impact on developing countries. The case of Bangladesh and Siemens suggests how that could work: In court documents, Siemens admitted to paying bribes not only to Arafat Rahman, but to Bangladesh's former telecommunications minister. That minister was Aminul Haque, who served between 2001 and 2006. Mr. Haque in turn was sentenced in 2007 to 31 years in prison for patronizing the Islamic terrorist group, Jama'tul Mujahideen Bangladesh (JMB).

According to cases filed by the government against Haque, the court ruled that he used JMB as a political tool to eliminate members of political opposition groups beginning in 2004. But by 2005, JMB took on a life of its own and launched a national campaign of violence that left dozens dead. Today Haque is a fugitive, but the group he patronized continues to operate underground and is suspected of involvement in the bloody mutiny that rocked Bangladesh last month.

While there is no direct evidence showing that Siemens' bribe money went to JMB, observers in Bangladesh contend that the possibility of a link underscores the dangers of foreign corporate bribery.

"Many of the [multinational companies] don't care who they're giving money to. They don't try to find out what effect it will have on the life of ordinary people," contends Sultana Kamal, the director of Ain O Salish Kendra, a leading human rights group based in Dhaka. "They should be very careful about it."

Amid growing public awareness and public outrage, Bangladesh's government has in recent years acted with force. In the past two years, the ACC has launched hundreds of investigations into some of the most prominent ministers and businessmen in the country – including the sons of Khaleda Zia. Both brothers were arrested in 2007. They are currently on bail as more charges are framed against them.

"To have Khaleda Zia's two sons and powerful higher ministers accused ... was really the first major cleansing process that started," says Mahfuz Anam, the editor of The Daily Star, Bangladesh's most influential English-language newspaper. "Now, we are far from the end of it, but it's gotten started."

• This article is a joint project with PBS FRONTLINE's "Black Money," which airs Tuesday, April 7, at 9:00 p.m. EST on PBS (check local listings).

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