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That she is a new york city resident. She has worked to promote transparency and combat this. Please join me in welcoming alexander. That was wrong okay. Think you so much. My name is erica westerberg. The original moderator cant be with us today. Im in fact very happy to step in and introduce alex. Ive have the pleasure of working with alex at the institute for eight years. In the inclusive developments. One of the Biggest Challenges in this pursuit is of course corruption is very timely for the excellent new book. Better solutions on how to tackle oil corruption. A bit more. She has a phd in international relations. When she is research the politics. Shes worked the last ten years where she leads projects in countries around the world. To research how the oil sector works. And combat corruption. We are changing the format a bit. Please give her a warm welcome. Thank you very much erica. Thank you all for coming despite very various risks in our world. I had been working on this project as many of you know well for many years and have gotten a lot of same questions over the years. So i thought i would try to preemptively answer a few of those and open it up for discussion. The first question is why would you write a book about that it really kind of traces back to the oil boom which is the main topic of the book. Today it seems crazy. And they dropped a bit but then really from 28 they stayed historically high and it sent sent about 9 trillion in new money plugging into the oilproducing world. I was spending a lot of time in nigeria are going back and forth frequently. There is just so much money sloshing around in corruption was on the rise i just want to read a couple paragraphs about what the scene was like. In 2012 the scandal broke and it revealed that have paid fuel importers for billions of dollars worth of gasoline and diesel that never actually enter the country. No senior officials lost their job. Many of the culprits kept in business with the government. With hardly any experience. Backroom chaos. They grew more frequent and more convincing. Friends and acquaintances traded story about the neglect on the loyal henchmen who gathered in the house at night. You would walk into the hilton hotel it was just throbbing. Various big leagues helped courts. Large paintings could be purchased at the Hotels Tourist shop. By bigger watches a designer bag became a desire. You could spell smell the money in the air. It was surprisingly difficult to understand what precisely was going on. Especially because some the actors including International Actors were behaving as if everything was fine. A former Government Official grew the whistle. In the governments of the u. S. Italy, switzerland and eventually nigeria darted investigations into Different Cases. It wasnt just from nigeria that this kind of information was coming out in 2015 the carwash scandal broke open. I was a huge scandal that started in the Brazilian Oil industry. In 2016 the Panama Papers came on the scene that was a year we also started to learn about the Corruption Case from malaysia. There was ngo investigations. I just kept coming. The court cases the exposes so i set out to try to look across all of these Different Cases and thats it what we could learn from them. Another question ive got a lot is we are not surprised to hear that there is corruption in the oil sector. My should we care. There is a lot a material in the book is about the u. S. And even the schemes that do start in malaysia or nigeria grow tentacles that end up having very disabled affects her home. They help structure the deals. Just a couple miles from here in midtown. The majority of people in the world live in extreme poverty. In brazil there was one corrupt project that the public funds lost couldve educated 4 million schoolkids for a year. It stands in the way of addressing wealth inequality i also wreaks havoc on the politics of oilrich countries they are propped up by the oil industry. In some cases people have risen up against them. If they have hollowed out the state then you end up with a power vacuum like we see in libya. You might end up with extremism and violence in iraq. And more democratic countries they can cause citizens to lose faith. You can embrace more radical elements. Its difficult to see how evil see Climate Change targets. The Industry Needs to change Oil Companies had chosen profits over responsible behavior. They depend on industry for their fortune but also for their political survival. Maybe the more academic minded or how i have defined corruption or what counts as corruption. This is a difficult question to answer. I try to cast a very wide net. I included all kinds of cases where actors captured more than their fair share of oil wealth but many of those cases would be very difficult to prosecute in the court of law. If you want to bring an antibribery case you need to be able to prove a quick pro quote. Direct exchange of benefits. There are some bribery cases in the book where that is definitely the case there is a lot fuzzier than that. And i want to share just a couple of stories where i think they illustrate the gray area where corruption mostly exist today. In libya when that will bloom got started the government wanted to invest some of its oil money savings and so investment banks rushed to tripoli to try to win that business. They sent a representative there who took Government Officials on trips around the world. And took them out to elaborate dinners. The bank provided a internship. The even have Financial Market classes. And eventually the officials decided to invest 1. 2 billion and some complex derivative trades. And they lost every single cent of it and in response the Libyan Government sued goldman and the judge in the uk court that was hearing the case reviewed all of the hospitality and concluded that it was just a normal way for them to inch back. Another scenario that i look at involved a lawmaker from texas estate representative named drew darby. Like many Government Officials. They received very Large Campaign donations from Oil Companies. It helps determine how much Oil Companies should pay the government when they are producing oil. The resulting conflict of interest is not only illegal in the u. S. It is talked about very openly they even gave representative darby the legislative champion of the year award. It is certainly not something that is can you show in a show up in court anytime soon. There is another story i want to tell from nigeria briefly. Shall and eni two of the Worlds Largest companies wanted to get their hands on this really big nigerian oil block. And finally in 2011 they paid to the Nigerian Government 1. 3 million in return they receive the rights to the oil block. A billion dollars of that amount exit number government accounts. They have taken them to court. What happens to the money after that is their problem not ours. The trial is ongoing. We do not know what the verdict will be. I want to share one more case a few of the other big trends that i see in the book. This is about the russian and National Oil Company. They built more pipelines than they needed. A longer longer and more complicated ones. The brothers handle a chunk of the pipeline business from their days sparring at a judo club they sit across a new class of our graph. And then selling them to gas prom. They cost 45 billion per year. They suspended that and created loyal alien heirs. Leaners. It strengthened his role. The kind of corruption that i talk about in the book from a number of different countries. You see political elites awarding lucrative Business Opportunities to family members. There are three reasons why it is really difficult to combat. First is that it is often legal the same political actors writing the rules of the game. Another challenge is that the political leaders may never see a cent off of these deals again there is no quid pro quo. They have invested a lot of time trying to trace whether himself has benefited financially from some of the deals and the favored oligarchs. In the hammock come up with that much. Its possible that they never saw a cent off of these deals. He gets to control who gets to get rich and creates loyal billionaires who very well would likely be able to do favors for him should they be needed. The third reason is that the small smart oligarch takes a favors and builds him into them into a Global Business empire. A few of you here work in this field and im sure read a lot about the lawanda leaks that came onto the scene earlier this year. It was filed about the business affairs. Until just a few years ago. What isabel did was received some favorable Business Opportunities and turn them into a business opportunity. She partnered with the top accounting firm. Until the lawanda leaks came out everyone felt very comfortable working with her she have as she have his Business Empire a lot of the initial Business Success was due to be the dictators daughter. The question i probably get the most is is it working on this really depressing. It actually ended up being less depressing than i thought it would be. A roadmap for how to build the smarter response. They show what the problem areas are. They crop up. The National Oil Company affairs. Procurement in the oil industry. These are clear areas of vulnerability where we need better policy and more scrutiny but all of the cases that i write about the Success Stories they did it get away with it. It ends up being overshadowed by that juicy stories that they expose. Before i wanted to close i wanted to mention a couple of the really big things that are working in brazil the carwash scandal was broken open by the Brazilian Police were able to do so even though it appliqued as some of the most powerful people in the country. They represent the crossborder. Hundreds of journalists working together so that all of the stories come out on the same day. It is remarkable. Prosecutors and more and more countries are starting to pursue antibribery cases and going after companies for behaviors that 15 years ago Law Enforcement has also come up with some creative new tools for going after offshore money flows. When the u. S. Investigators started to look into that corruption in nigeria that i mentioned they discovered a few businessmen who they suspected have stolen about a billion dollars worth of oil from the government. They didnt have the mandate to go after the individual so they raised the case against a 50 milliondollar condo overlooking central park. The case documents are the u. S. Government against the yacht in the kind dash my condo. Because they had been purchased in the u. S. Or with money that have entered u. S. Accounts. They have the jurisdictions. There was other examples. There is other still met all of the successes do create an agenda of what is working the problem is it is being pursued in a very uneven manner so i think the challenges pursuing that agenda with the kind of consistency and urgency that it demands. Speemac i really want to hear any comments and questions any of you might have. I hope we can have an informal discussion for a while. See mac. I see a hand. [inaudible conversations] [inaudible conversations] [inaudible conversations] i dont know if i get excited there is less money to seal. No reliable measures of the oil section. The quantity of money being stolen and the number of schemes went up when prices were so high. You could run so many schemes and still make a profit i do think that especially the drop in prices in general and now this very severe drop well had that kind of an effect. I am less optimistic about the lesson learning. I think it tends to be kind of shortterm belt tightening rather than more institutional reform in a lot of cases. Maybe this time it will be different. I think there also will be the Climate Change issues as well. If they are getting nervous that there is less of a market than their oil there could be a race for the bottom as they try to get companies to come in and theres giving the whole house away in hopes that companies will still invest money in their oil industry. [inaudible conversations]. Yes. I guess we will know more in november about whether that is the case or not one story that is kinda plain out right now that shows how corporate influence can influence policy is that one of the ways to address corruption is through more transparency. It is an ingredient in trying to move forward on the u. S. Has been trying to and they had been trying to get the u. S. Government to pass a lot a law requiring oil and Mining Companies to be more transparent. They passed a law in 2010 hasnt been it hasnt been implemented. One of the first things he did was to vacate these roles. The opposite dynamic is very ingrained in becoming normalized is a little bit different cult to be optimistic about where that is going particularly if there is not a change in november. One of the things that you mentioned at the beginning. If you conceive that corruption happening over there. Whether it is a anonymous property purchasing. I think one of my favorite ended oaks in antidotes in the book is about the malaysian gentlemen using and befriending a member of the fijis and read directed to a pro obama feature fact. They are working on behalf of the political interest. How does this impact the american discourse or concerns not just that property purchases. And not just the property purchases moving forward. Its so easy to get dirty money into the u. S. Into u. S. Companies that are then donating to a super pacs and money finding its way into impact political agendas through a formal or informal channels. We have no idea which actors interests are impacting the public discourse. Until it becomes harder to move dirty money around in this country i think that will continue to be true. You have to get rid of the anonymous shell companies. You have to cooperate with the other countries where that dirty money is also flowing through. It is alarming not only the examples that we have seen but they might just be the tip of the iceberg and we cant actually see foreign actors and corrupt actors and others are exerting their interest on their civic space i guess. Other than possibly norway and possibly alaska are there other Success Stories where they have handled this while. I was reading about kiana which is about trying to set up something to interpret the norwegian sovereign fund. It is a great question. For those of you that dont know. Its a very small country in south america that will soon had probably the highest Oil Production per capita in the world. They had found the huge reserve of oil there is a lot of efforts to try to avoid similar mistakes in guyana but as i can a second be easy at all. There is a lot of Political Polarization in that country. It is democratic. There is freedom of speech. You can build up in the accountability dynamics. It depends on how you use them. They wont in and of themselves. They could be manipulated just like any other institution could be. There are some other developing countries that are newer producers i do think they have it easier. If you look at countries like iraq or nigeria. The oil industry and politics had been in bed together for decades reversing the situation is really challenging for other newer producers. They can learn some lessons and start from scratch. And start from and more transparent place. In the african countries there has been some pitfalls and stuff i think its on a better trajectory than some of the older producers who have those vested interests in place. I dont know how we are doing on time . Maybe one or two more questions. [inaudible conversations] for the other countries that you mentioned. They match the sector. Are they always key actors are just one of the many programs. A very striking majority of the cases that i look at outside of the u. S. And in countries where there is a National Oil Company. Its an undeniable trend. Have these entities that sit outside of the formal government system. Typically the ceo is appointed by the president and very close to the political leadership. Its so tempting for the leaders to then stick their fingers in and then manipulate the institution to pursue their Foreign Policy goals for their Political Goals or even enriching themselves and their families. Its one of the most striking and obvious to the trends that i came up with including from the country that you mentioned. On the other countries that you mentioned 100 percent. Ive never needed a microphone before. We are exploring some of these issues one of the things that came up a little bit later in the game is just how different and often extracteds get to put in one bucket. This is obviously a book about oil i know that your experience is broader than that. Do you think theres something unique about oil versus mining and you can pick what. And then they make it so easy. Versus the other sectors. It is put very simply and not as a matter. The difference between the cost of producing something and how much you can sell it for. And a lot of the world you can produce it for 20 or 30 per barrel that creates 70 in rent that kind of is money that is up for grabs. Compare that to other industries. When certain prices are high. It creates the same dynamic. You just dont have rents like that. Theres so much more potential payoff for striking the right deal. I think that is the main vulnerability. They are not unrelated. Governments tend to be heavily involved in the oil industry. Not as much in the u. S. And canada and other countries because of this. You have this really intimate involvement. Being a participant in it. When it is manipulating things. I think we will wrap up. You mention the case that we saw and everybody was very comfortable working with her. I kind of wanted to get your commentary on what in private companies can they do short of just reviewing that. And any type of active bribery investigation. To protect themselves in the future going forward. Its very hard to neglect doing business with them. Companies need to review review their list of partners and clients against a much wider set of exposed persons. The restrictions on who you can do business with. They are far too narrow and as soon as they open it came open everyone was severing ties. The week before they were fine with her. I think the first step is to look at different kind of actors who might be controversial who might be complicit in certain regimes and make sure you are not working with them. And needs to be widened out. Its not like it comes with a participant list or something. It can be done. Before we break for a drink i would just want to say thank you to a lot of people in this room have been very supportive for me. And many of you have just provided really good company and support along the way. Thanks very much for being here. [applause]. Youre watching book tv on cspan two. Next netflix director. The invisible barriers. They look into the archives to bring you author programs about pandemics. About his book on the 1918 influenza outbreak. The first of many virtual author programs. Check the Program Guide or check book checkbook tv. Org for more information. Michael strain the director of the institute of economic studies. The majority of americans are better off than our clip current political debates in this scene. Here is a portion of the event. Im not trying to sugarcoat or ignore any of the real problems that we face instead im trying to be accurate and accurate about the broad picture of the american experience. And how American Life is experienced. I think worse focusing so much that we are confusing those pockets of a struggle for the common experience facing people. I think the American People key. That they are experience the same experience of people in places who are really suffering and struggling. I dont want to deny that suffering or struggling. Those are typical situations and the common experience would be much more positive than the narrative suggests

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