Page 9 - Carbon Frauds and Corruption

CARBON FRAUD No laughing matter...

Investors lost their money
European companies bought carbon credits based on a forestation project
in Africa. The project destroyed the water table and crops planted by local
villagers. Three people were murdered and the project was abandoned.

Three leading oil companies made a 30 year investment in a
reforestation project in South America, that throughout its life would
generate 5.8 million tonnes of carbon offsets. Investigations conducted
by an environmental charity revealed that in the first eight years the
companies had claimed over 7 million tonnes of credits under their
CSR programs. The case is pending.

Rob Wainwright, the director of Europol, effectively the European Union’s elite police force, stated:
"These criminal activities endanger the credibility of the European Union's
Emissions Trading System and lead to the loss of significant tax revenues Damaged Credibility
for governments"

Peter Younger, Interpol’s Environmental Crime Specialist, said:
“The carbon market would be irresistible to criminal gangs”

The frauds were so extensive that six countries had to change their tax regimes and remove
the VAT liability on carbon credit transactions. European political leaders, who do not Poor systems design
fluoresce with unbounded eagerness to reduce taxes or cut back on red tape, had to admit
that the fraudsters were “unstoppable” in the systems as designed.

In February 2009 Police in Italy arrested the head of both the Italian Organised crime
Vento Power Corporation (IVPC) and the "Associazione Nazionale Energia
del Vento”, (The Italian National Association of Wind Energy), a politician
with the ruling "People of Freedom Party", a Sicilian businessman and a
number of others in an operation named "Aelos" after the Ancient Greek
God of winds.

The prosecution alleged that the Mafia connected conspirators bribed
politicians with luxury cars and cash in return for lucrative contracts to
build and operate multi-million Euro wind farms throughout Southern
Italy and Sicily.

Patricia Adams, Executive Director of Probe, the highly respected Canadian independent
advisory group, summed it thus:
“In the final analysis, carbon markets are political constructs, where the
“underlying” is a dematerialised allowance certificate as opposed to a physical
commodity, controlled by politically empowered regulators who will be A recipe for corruption
gatekeepers to a multi-trillion dollar market. The regulators themselves will
become too numerous to regulate. This then becomes the tried and tested recipe
for good old-fashioned, widespread corruption”.

© Cobasco Group Limited 2010 - Page 06