Yojana Sharma05 October 2013 Issue No:290
During the corruption trial in China of high-level official Bo Xilai
this year, and of his wife Gu Kailai who was convicted last year of
murdering a British businessman, much attention focused on the lavish
lifestyle of their son Bo Guagua, who had been a student at expensive
private school Harrow in England, and later studied at Oxford and
Harvard Universities.
Gu claimed in court in China that her son’s education overseas had been funded by ‘scholarships’. It was later revealed these were from a business associate Xu Min. But it also emerged in newspaper reports that she had asked a British balloon firm, Visterama, to accept a £150,000 (US$243,000) over-payment and use the money to pay her son’s fees.
Although he played no direct role in his parents’ crimes, Bo Guagua and indirectly the institutions he attended, may have benefited from allegedly ill-gotten gains.
In recent years British executive William Lowther, who had been head of Australian banknote company Securency, was investigated by the Serious Fraud Office in Britain and Australian police.
They pressed charges alleging he had offered Le Duc Thuy, a State Bank of Vietnam official, more than £20,000 in fees and living costs for his son Le Duc Minh to study for a masters in business administration at Durham University, in return for a lucrative contract to print the Vietnamese currency in 2003.
Lowther was cleared by a jury of the single charge of ‘conspiracy to corrupt’ during his trial in London.
But that the authorities pressed charges – and other cases cited in Transparency International’s just-released Global Corruption Report: Education – are an indication of the attention the authorities are beginning to pay to the link between corruption and international education.
Money laundering
In the United Kingdom, and other countries with a private education sector, using corruptly obtained funds to pay the fees of family members at private schools or universities can be a form of money laundering, according to Ararat Osipian, a PhD candidate at the Peabody College of Education at Vanderbilt University in the United States.
“Anecdotal evidence suggests that educational establishments have in place weak money-laundering controls despite the significant increase in overseas students at UK schools and universities,” Osipian wrote in his paper entitled “Recruitment and admissions: Fostering transparency on the path to higher education”.
The sector’s vulnerability to this type of money laundering was acknowledged in a UK parliamentary report in August last year on the illicit flow of assets into the country, particularly from people in public positions and at risk of being corrupted.
Osipian noted that this can take the form of a third party – such as a company or an intermediary – paying school or university fees as part of inducements for obtaining contracts from ministers or public officials.
A variant is that a public official will specifically seek a cash bribe to pay for school or university fees, as was reportedly attempted in the Gu Kailai case.
Bribes
Gu claimed in court in China that her son’s education overseas had been funded by ‘scholarships’. It was later revealed these were from a business associate Xu Min. But it also emerged in newspaper reports that she had asked a British balloon firm, Visterama, to accept a £150,000 (US$243,000) over-payment and use the money to pay her son’s fees.
Although he played no direct role in his parents’ crimes, Bo Guagua and indirectly the institutions he attended, may have benefited from allegedly ill-gotten gains.
In recent years British executive William Lowther, who had been head of Australian banknote company Securency, was investigated by the Serious Fraud Office in Britain and Australian police.
They pressed charges alleging he had offered Le Duc Thuy, a State Bank of Vietnam official, more than £20,000 in fees and living costs for his son Le Duc Minh to study for a masters in business administration at Durham University, in return for a lucrative contract to print the Vietnamese currency in 2003.
Lowther was cleared by a jury of the single charge of ‘conspiracy to corrupt’ during his trial in London.
But that the authorities pressed charges – and other cases cited in Transparency International’s just-released Global Corruption Report: Education – are an indication of the attention the authorities are beginning to pay to the link between corruption and international education.
Money laundering
In the United Kingdom, and other countries with a private education sector, using corruptly obtained funds to pay the fees of family members at private schools or universities can be a form of money laundering, according to Ararat Osipian, a PhD candidate at the Peabody College of Education at Vanderbilt University in the United States.
“Anecdotal evidence suggests that educational establishments have in place weak money-laundering controls despite the significant increase in overseas students at UK schools and universities,” Osipian wrote in his paper entitled “Recruitment and admissions: Fostering transparency on the path to higher education”.
The sector’s vulnerability to this type of money laundering was acknowledged in a UK parliamentary report in August last year on the illicit flow of assets into the country, particularly from people in public positions and at risk of being corrupted.
Osipian noted that this can take the form of a third party – such as a company or an intermediary – paying school or university fees as part of inducements for obtaining contracts from ministers or public officials.
A variant is that a public official will specifically seek a cash bribe to pay for school or university fees, as was reportedly attempted in the Gu Kailai case.
Bribes
But Osipian added: “Corruption has long plagued the admissions process
to higher education including outright bribery, nepotism, cronyism and
favouritism, to gain a place ‘through the back door’.
“Education systems that used to be government funded are increasingly generating revenue from students and their parents, and the landscape of recruitment and admission to higher education is changing accordingly,” said Osipian, referring in particular to countries like Russia and Ukraine, as well as elsewhere.
In April 2010, for example, a senior lecturer in the school of government at Moscow State University was arrested after allegedly receiving a bribe of €35,000 (US$45,000) in exchange for arranging admission.
And, Osipian noted: “Once admitted, the need to bribe to maintain one’s place does not always abate.”
In many universities, including in the former Soviet Union, bribes are collected by some faculty members not only for entry examinations but also throughout semesters, and during annual exams as well.
Although there is no suggestion that he obtained his place through misconduct Yang Li, the son of a Chinese government official, was jailed for trying to bribe a British professor with £5,000 to pass his masters degree at the University of Bath in England after he feared he might fail.
Pressures
Growing demand for higher education is adding to pressures that lead some to resort to bribes to secure a place, said Osipian.
In Nigeria, for instance, one million students pass university entrance exams, yet there are only 300,000 places available in public universities.
“Limited access to education has no doubt contributed to the use of bribes and personal connections to gain coveted places at universities, with some admissions officials reportedly working with agents to obtain bribes from students,” said Osipian.
And corruption is being fuelled by globalisation.
In 2007 an admissions clerk at a Californian university was alleged to have taken US$4,000 in bribes from three Kuwaiti students in return for granting them admission to the university.
It was later revealed that some of the students met the minimum admissions requirements and probably would have been admitted without the bribes.
“Education systems that used to be government funded are increasingly generating revenue from students and their parents, and the landscape of recruitment and admission to higher education is changing accordingly,” said Osipian, referring in particular to countries like Russia and Ukraine, as well as elsewhere.
In April 2010, for example, a senior lecturer in the school of government at Moscow State University was arrested after allegedly receiving a bribe of €35,000 (US$45,000) in exchange for arranging admission.
And, Osipian noted: “Once admitted, the need to bribe to maintain one’s place does not always abate.”
In many universities, including in the former Soviet Union, bribes are collected by some faculty members not only for entry examinations but also throughout semesters, and during annual exams as well.
Although there is no suggestion that he obtained his place through misconduct Yang Li, the son of a Chinese government official, was jailed for trying to bribe a British professor with £5,000 to pass his masters degree at the University of Bath in England after he feared he might fail.
Pressures
Growing demand for higher education is adding to pressures that lead some to resort to bribes to secure a place, said Osipian.
In Nigeria, for instance, one million students pass university entrance exams, yet there are only 300,000 places available in public universities.
“Limited access to education has no doubt contributed to the use of bribes and personal connections to gain coveted places at universities, with some admissions officials reportedly working with agents to obtain bribes from students,” said Osipian.
And corruption is being fuelled by globalisation.
In 2007 an admissions clerk at a Californian university was alleged to have taken US$4,000 in bribes from three Kuwaiti students in return for granting them admission to the university.
It was later revealed that some of the students met the minimum admissions requirements and probably would have been admitted without the bribes.
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