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FM
Former Member

Crony capitalism exists everywhere

BY VISHNU BISRAM

There has been much criticism in the media over the government’s handling of contracts and sale of assets asserting corruption. The opposition calls the government’s action “crony capitalism”. I have travelled worldwide and studied development of numerous societies and found that virtually none of them is free of cronyism.

Crony capitalism describes an economy in which there is favouritism in the distribution of legal permits, grants, concessions, contracts and tax breaks, among other things, to businesses whose owners have some kind of close relationship with government officials and or business perquisites are obtained on the basis of bribes.  Such favouritism allows for these businesses to generate huge amounts of wealth in a very short time.

 

Special privileges

It is noted that officials in government become corrupted, granting special privileges to those who grease the palm. In my studies and travels, I find there is hardly an economy that does not have crony capitalism. Every prosperous society, including the UK and U.S., has been built on cronyism.

Raymond Vernon, specialist in economics and international affairs, said cronyism has existed in Britain since the time of the industrial revolution. He said corrupt British governments favoured a set of business owners who have had close ties to the government over others. The government bestowed privileges on those companies that grease government officials – standard practice in every society, including the U.S., Germany, Canada and India.

Which country does not have corruption? The U.S. has both crony capitalism as well corporate welfare in which it favours certain big companies, granting them tax breaks and other subsidies at the expense of the poor. Every industry in America was built on cronyism.

Fannie Mae and Freddie Mac and are well known examples of crony capitalism in America. Government backing let Fannie and Freddie dominate mortgage underwriting. These giants return some of the huge profits to the politicians – in the form of campaign funds or lecture fees. The British and American governments grant special concessions and billion-dollar contracts to their campaign donors and friends.

Governments in Germany, Canada, Italy, Japan, Australia and New Zealand all do the same. The big companies in Japan like the Keiretsu; the Chaebol of South Korea; the Tata and Birla of India, as well as Mahendra, billionaires in India (recent sale of telecom rights); powerful families in Latin America; the wealthy class in Vietnam, Taiwan, Thailand and the Philippines; and newly created millionaires or billionaires in China were all beneficiaries of cronyism.

Without cronyism, there will be no economic expansion, growth or job creation.  Without it, an economy will be stagnant and standard of living may decline. Cronyism also has its negative effects like stifling initiative and discouraging non-favourites from working hard and it could corrupt the entire system.

Not new

Crony capitalism is not new in Guyana. The People’s National Congress (PNC) practised aspects of cronyism right after Guyana became an independent state – friends and families of PNC officials benefited from government’s awarding of contracts, tax concessions and distribution of grants. Private companies received all kinds of concessions to invest so as to keep the People’s Progressive Party (PPP) out of office.

As academics, Robert Manley and Jay Mandle wrote, after the PNC nationalised businesses and acquired control over imports and exports during the 1970s, beneficiaries of the distribution and sale of supplies (co-ops) were allies and friends of PNC officials – in which a small bunch of individuals became extremely wealthy under the PNC state capitalist system.

Professor Clive Thomas also exposed cronyism under PNC rule. And when state corporations were privatised after the implementation of the Economy Recovery Programme (ERP) in 1988, friends and families of the PNC were the primary beneficiaries.  It was well known that palms were greased, who were the recipients of large amounts of bribes as well as who got state property at dirt cheap prices, and who funded the PNC election campaign in October 1992 – all of those who acquired state property funded the campaign.

I notice critics are mum about crony capitalism during the PNC apartheid regime and about the brutality that the opposition experienced – the extent of which may never be fully known. At least, during the crony capitalism of recent years, the country has progressed – jobs created and growth experienced and opponents have not been brutalised or denied jobs.

 

PNC dictatorship

During the cronyism of the dictatorship, Guyana was blessed with abundant natural resources and a perfect climate to become a developed country like Singapore.  Instead, Guyana became like Haiti whereas today, the World Bank says standard of living is growing and Guyana is poised to take off.

Every country that has been in transition from socialism to capitalism over the last 20 years practices aspects of crony capitalism. Billionaires have been born out of the process.  All the billionaires from Russia (including Mikhail Khodoravsky), Ukraine and India were beneficiaries of special business deals.

Post apartheid South Africa has the worst excesses of cronyism, and this when Nelson Mandela was alive – he could not stop it. Reports describe Vice President Cyril Ramaphosa’s net value at US$600 million acquired in less than 20 years of democratic rule. Which Guyanese politician or capitalist in our own post apartheid Guyana has acquired such a large amount of wealth since Dr Cheddi Jagan’s death?

And Ramaphosa is not the only multi-millionaire in South Africa. Almost Every African National Congress (ANC) biggie (Thabo Mbeki and Jacob Zuma, for example) is super wealthy from crony capitalist deals. The families of rulers in Mozambique, Kenya, Nigeria and the Ivory Coast, among others, have acquired huge amounts of wealth since they came into office.

The daughter of the Angolan president is Africa’s wealthiest person, worth billions. All African countries practise crony capitalism in which friends and family members of government officials are super wealthy.  Foreign companies (from the West) who offer bribes make big bucks in Africa.  All of our Caribbean Community (Caricom) friends practise some form of cronyism.

I am not excusing crony capitalism.  I am simply pointing out it has existed throughout history and in all societies and readers should not be naÏve to think it exists only in Guyana or that it will go away. All the big companies in America emerged out of some form of cronyism. And so did the big companies in Guyana before the restoration of democracy in 1992.

Concessions

It is noted that several companies that got crony concessions have not made a successful transition into giant companies. If the owners squander their handouts and inheritance, they should not blame others and become jealous of those who become successful from hard  work.

Instead of targeting and criticising those who succeed, critics and detractors should find more productive avenues to direct their energies – like how to create wealth. To limit the effects of cronyism on the poor, what Guyana and other countries need are better and strong agencies to regulate industries and brave judges to render tough decisions against the corrupt.

Replies sorted oldest to newest

Originally Posted by redux:
 

Bisram:

"Without cronyism, there will be no economic expansion, growth or job creation.  Without it, an economy will be stagnant and standard of living may decline"

These are the people that tests a mans patience. This ignoramus is creating the classic straw man to excuse an odium. In our tiny society of limited resources crony capitalism is not only transparent but it is a cruel in your face beat down of the poor and dispossessed.  Who the hell needs economics and planners! just get your chacha, chachee, poowah mousie, agee or whomever is related and give them money to spend. When they get rich the nation prospers! Never mind every body's else and their relative are in the dumps. I wonder if Markos and Suharto  had a great economist/pollster cum need-a-***.king-lash-on the head ******* like this to advise on the necessity for cronyism as the basics for development.

FM
Last edited by Former Member

Vishnu Bisram is conspicuously silent on one important point.

He writes about cronyism under the PNC regime.

He does not write that PPP founder-leader Dr Cheddi Jagan defeated the PNC in 1992 because he was impressively incorruptible.

Bisram does not write that Dr Jagan's PPP fought fiercely aqainst PNC cronyism, nepotism and other corrupt practices for over 20 years.

Bisram does not write that Dr Jagan's PPP manifesto in 1992 promised lean and clean government.

Clean government has no place for cronyism, nepotism, etc.

No one today is naive to believe that cronyism doesn't exist in other countries.

What is unacceptable is the fact that cronyism and nepotism are the main pillars of the PPP/C's spending plans.

The PPP/C has been using public/taxpayers money and borrowed money to award enormous contracts and other perks to its friends, femilies and other favourites.

If Dr Jagan had known his successors would have surpassed the PNC in the politics of cronyism, he might well have left the PNC alone.

 

FM

What a pile of baloney I just had the privilege of reading...just a crock o'shit.

There should be some kind of public flogging for those who try to pull a fast one on the people with lies and deceit.

cain
Originally Posted by Gilbakka:

Vishnu Bisram is conspicuously silent on one important point.

He writes about cronyism under the PNC regime.

He does not write that PPP founder-leader Dr Cheddi Jagan defeated the PNC in 1992 because he was impressively incorruptible.

Bisram does not write that Dr Jagan's PPP fought fiercely aqainst PNC cronyism, nepotism and other corrupt practices for over 20 years.

Bisram does not write that Dr Jagan's PPP manifesto in 1992 promised lean and clean government.

Clean government has no place for cronyism, nepotism, etc.

No one today is naive to believe that cronyism doesn't exist in other countries.

What is unacceptable is the fact that cronyism and nepotism are the main pillars of the PPP/C's spending plans.

The PPP/C has been using public/taxpayers money and borrowed money to award enormous contracts and other perks to its friends, femilies and other favourites.

If Dr Jagan had known his successors would have surpassed the PNC in the politics of cronyism, he might well have left the PNC alone.

 

Nonsense, Jagan was the most corrupt of the lot as he look the other way while his ministers practiced corruption. Jagan compromised his ethics by supporting Burnham's plans during the PNC era. 

FM
Originally Posted by BGurd_See:
 

.

If Dr Jagan had known his successors would have surpassed the PNC in the politics of cronyism, he might well have left the PNC alone.

 

Nonsense, Jagan was the most corrupt of the lot as he look the other way while his ministers practiced corruption.

Why don't you, name the Ministers who practiced corruption or point out the corruption?

Mitwah

 

VISHNU BISRAM'S ARTICLE WAS TRUTHFUL

 

* Here in the United States Corporate cronyism has corrupted the political process.

 

* America was made great by free market capitalism----but that's now dead.

 

* The new thing is corporate cronyism.

 

* IN GUYANA YOU HAVE POLITICAL CRONYISM---and that has spilled over into business----and the result is CRONY CAPITALISM.

 

LISTEN UP FOLKS!

 

* Bisram is right! There is crony capitalism all over the world.

 

* Of course, the CUFFY LOVERS will bawl and scream that under a CUFFY there would be no kind of CRONYISM in Guyana----they are full of shyt.

 

* Economic growth and progress continues under the PPP----but that is not good enough for the CUFFY LOVERS----they are dying for a CUFFY leader.

 

WHO VEX, VEX.

 

Rev

FM
Last edited by Former Member

Former Va. Gov. McDonnell and wife charged in gifts case

The Washington Post | By  , and , Published: January 21

Former Virginia governor Robert F. McDonnell and his wife, Maureen, were charged Tuesday with illegally accepting gifts, luxury vacations and large loans from a wealthy Richmond area businessman who sought special treatment from state government.

Authorities allege that for nearly two years, the McDonnells repeatedly asked executive Jonnie R. Williams Sr. for loans and gifts of money, clothes, golf fees and equipment, trips, and private plane rides. The gifts and loans totaled at least $165,000.

In exchange, authorities allege, the McDonnells worked in concert to lend the prestige of the governor’s office to Williams’s struggling company, Star Scientific, a former small cigarette manufacturer that now sells dietary supplements.

McDonnell, 59, is the first governor ever to face criminal charges in Virginia, a state that has prided itself on a history of clean and ethical politics, and the charges will probably accelerate a push for the legislature to tighten state ethics laws.

The criminal prosecution marks a stunning crash for a politician who was considered for the Republican vice presidential nomination in 2012 and who, just a year ago, was considered a credible prospective candidate for president.

The 43-page, 14-count indictment adds new details to a story line of largess that was first recounted by The Washington Post in March. It depicts an elected official in financial trouble who sought help from a businessman with something to gain.

McDonnell and his legal team immediately denounced the charges and said prosecutors overstepped their authority. In an unprecedented televised public appearance Tuesday night, McDonnell said, “ I come before you this evening as someone who has been falsely and wrongfully accused and whose public service has been wrongfully attacked.”

He went on to insist, “I repeat again, emphatically, that I did nothing illegal for Mr. Williams.” 

Prosecutors contend that the then-first couple arranged access for Williams to top state officials, allowed the historic governor’s mansion to be used for a launch party for a company pill not approved by the Food and Drug Administration, and attended Star events designed to boost the company’s prestige, particularly with university researchers with whom the company was trying to build credibility.

They also said the couple took significant steps to hide the relationship. They accuse the  former first lady of lying to investigators about how and when her husband had met Williams and of trying to pass off luxury clothes he purchased for her as a loan from his daughter.

The former governor, they said, illegally failed to disclose to banks the loans he had received from Williams as he sought  to refinance several home loans.

If convicted of the charges, the couple could face a maximum of 30 years in prison, though they probably would serve far less. They are scheduled to be arraigned Friday.

“We will continue to work tirelessly with our law enforcement partners to investigate and prosecute public corruption,” U.S. Attorney Dana J. Boente said in a statement.

Through an attorney, McDonnell repeated an apology he has offered several times for his interactions with Williams. But he strongly denied that his actions were illegal and promised to fight the charges in court.

His attorneys were even more forceful, filing court papers Tuesday that in unusually strong language accused prosecutors of ignoring evidence that might damage the credibility of a witness and overzealously pursuing a case built on the testimony of Williams, who was offered immunity from prosecution.

“The federal government’s decision to use these deceitful tactics in order to prosecute a popular and successful Republican Governor immediately upon his leaving office is disgraceful, violates basic principles of justice, and is contemptuous of the citizens of Virginia who elected him,” McDonnell’s attorneys wrote.

William Burck, an attorney for the former first lady, said she, too, is innocent. “The Department of Justice has overreached to bring these charges,” he said.

Jerry Kilgore, an attorney for Williams, declined to comment. Abbe Lowell, an attorney for Star Scientific, said the company has “cooperated with authorities and will continue to do so.”

The threat of indictment loomed over the final months of McDonnell’s four-year term, which ended with the inauguration of Gov. Terry McAuliffe (D) on Jan. 11.

Although Boente had informed McDonnell in December that he intended to pursue charges, McDonnell made a final appeal to top Justice Department officials in Washington and no action was taken until 10 days after he left office.

McDonnell’s indictment comes during the General Assembly’s annual legislative session and is likely to step up efforts to overhaul the state’s ethics and gifts laws, long considered among the most lax in the nation. McAuliffe and leading state lawmakers in both parties have said they support such changes.

During the one term allowed to him under Virginia’s constitution, McDonnell presided over a state whose jobless rate was declining and fiscal outlook was brightening. Even his political opponents admired his civil temperament, and he had faced no challenges to his ethics or character before the relationship with Williams emerged.

But the indictment alleges that there was another side to the governor and his wife. Authorities contend that the McDonnells, as first couple, relied on the wealthy political benefactor to support a life of luxury. At the same time, they came to rely on Williams’s assistance to stave off mounting personal financial difficulties.

“We are broke, have an unconscionable amount in credit card debt already, and this Inaugural is killing us!!” Maureen McDonnell wrote in an e-mail to an aide to the then-governor-elect in December 2009, after the aide expressed concerns about an offer by Williams to buy her inaugural gown. “I need answers and I need help, and I need to get this done.”

The first lady told Williams that she would take a “rain check” from him, authorities said, and made good on that promise during an April 13, 2011, shopping trip in New York City. Williams paid $11,000 for clothes at Oscar de la Renta and spent $5,685 at Louis Vuitton and $2,604 at Bergdorf Goodman.

Items from that trip were on a long list of gifts that authorities said the couple must forfeit. They include black and white Louis Vuitton shoes, two gold Oscar de la Renta dresses, a blue Giorgio Armani jacket and two matching dresses, two sets of golf clubs, two iPhones and a silver Rolex inscribed “71st Governor of Virginia.”

Twice, authorities said the McDonnells went to Williams for loans as they struggled to make payments on expensive beach houses they had bought in Virginia Beach with the intention of renting them to vacationers.

First, in May 2011, Maureen McDonnell met with Williams at the governor’s mansion, where she said she and her husband were having “severe financial difficulties” and asked for a $50,000 loan. According to authorities, she told Williams that she could help Star Scientific but needed financial assistance.

According to authorities, Williams insisted on talking directly to the governor, who explained that the rental income on the properties was not covering the bills and said he would appreciate a loan with a two-year term at 5 percent interest. Williams agreed and said there was no need for formal loan papers.

Less than a year later, in February 2012, authorities said McDonnell began discussing a new loan with Williams. First, they talked about whether the businessman could give the couple 50,000 shares of company stock, but then decided on a $50,000 payment to avoid having to disclose the stock. The loan went to a small real estate company that McDonnell owned with a sister, which managed the Virginia Beach properties.

In addition to the Virginia Beach houses, purchased for $2 million in 2005 and 2006, the McDonnells owned a $1 million home at the Wintergreen resort with his sisters and an $835,000 home outside Richmond.

In exchange, authorities said the couple worked to lend the prestige and help of the governor’s office to Star Scientific and repeatedly connected him with state officials who could help the company.

Maureen McDonnell attended Star events in Richmond and Michigan and one in Florida —  held just days before a daughter’s 2011 wedding, for which Williams footed the $15,000 bill for catering —where she spoke to investors and doctors on the company’s behalf.

The indictment reveals that she attended the conference in place of her husband, after a staff member e-mailed Williams that he could not attend “due to some Dad commitments” before the wedding. “What else can we do to fix this?” the staffer wrote.

The McDonnells attended a Star event intended at Richmond’s Jefferson Hotel to persuade doctors to use the company’s product in February 2011. According to prosecutors, McDonnell spoke and said he supported the company. 

In 2011 and 2012, Star Scientific was also trying to persuade scientists at the University of Virginia and Virginia Commonwealth University to submit an application on the company’s behalf to the state’s tobacco commission, which distributes Virginia’s share of the 1998 legal settlement with major cigarette companies.

The company needed  university involvement to fund research on its Anatabloc pill because the tobacco commission does not accept applications from for-profit entities. According to the indictment, Maureen McDonnell in a February 2012 e-mail pressed an aide of the governor’s to intervene to speed the process. “I’m just trying to talk w [JW]. Gov wants to get this going w VCU and MCV.”

Eight days later, the governor chimed in as well to the staffer: “Pls see me about anatabloc issues at VCU and UVA. Thx,” he wrote in an e-mail.

“Will do. We need to be careful with this issue,” the staffer wrote back.

Even as she complained of financial distress to friends, the first lady used $30,000 of the money she received from Williams in 2011 to buy thousands of shares of Star Scientific stock.

Her attorney has said she honestly believed in the company’s promise, part of a long-standing interest by the former Redskins cheerleader in wellness and diet.

But according to the indictment, she told her stockbroker that she needed to avoid publicly revealing her ownership and then purposely sold and repurchased her shares to avoid Virginia disclosure.

Authorities said she also told investigators, when first questioned, that Williams and her husband had once worked together and met years ago. In fact, they met in 2009, while he was running for governor.

And in March, not long after she was interviewed by investigators, she tried to return clothing that Williams had given her.

“I truly hope your daughter will now be able to enjoy these lovely outfits and show them off on many grand occasions,” she wrote in a note, which she gave to Williams’s brother, along with a box of clothes. She suggested auctioning the clothes for charity, given that they had once been worn by Virginia’s first lady.

McDonnell first apologized for his interactions with Williams in July, paying back the loans and then returning what he called “tangible” gifts his family accepted from Williams.

But he has insisted that he did not abuse his office. Star Scientific, after all, received no state grants, contracts or economic incentives, and its employees got no state appointments.

Matt Zapotosky, Laura Vozzella and Rachel Weiner contributed to this report

FM
Originally Posted by Rev:

 

VISHNU BISRAM'S ARTICLE WAS TRUTHFUL

 

* Here in the United States Corporate cronyism has corrupted the political process.

 

* America was made great by free market capitalism----but that's now dead.

 

* The new thing is corporate cronyism.

 

* IN GUYANA YOU HAVE POLITICAL CRONYISM---and that has spilled over into business----and the result is CRONY CAPITALISM.

 

LISTEN UP FOLKS!

 

* Bisram is right! There is crony capitalism all over the world.

 

* Of course, the CUFFY LOVERS will bawl and scream that under a CUFFY there would be no kind of CRONYISM in Guyana----they are full of shyt.

 

* Economic growth and progress continues under the PPP----but that is not good enough for the CUFFY LOVERS----they are dying for a CUFFY leader.

 

WHO VEX, VEX.

 

Rev

prancing antiman making no sense at all

 

loud, thinly educated and stupid, rev 'unblocks' and makes an appearance . . . pulling down he soiled buckta to his ankles . . . bending over . . . inviting all who care to get "vex" wid he

 

hmmmm?

FM
Last edited by Former Member
Originally Posted by Rev:

redux:

 

* For a man who has never had a real job you have a lot of big talk.

 

* Keep up with the VULGARITY.

 

* You are good at it.

 

Rev

oi, u horing lil antiman, didn't u announce to the world that i was on yuh "BLOCKED" list?

 

stumbling all over your low IQ as usual, i seee

FM
Last edited by Former Member
Originally Posted by Rev:

 

VISHNU BISRAM'S ARTICLE WAS TRUTHFUL

 

* Here in the United States Corporate cronyism has corrupted the political process.

 

* America was made great by free market capitalism----but that's now dead.

 

* The new thing is corporate cronyism.

 

* IN GUYANA YOU HAVE POLITICAL CRONYISM---and that has spilled over into business----and the result is CRONY CAPITALISM.

 

LISTEN UP FOLKS!

 

* Bisram is right! There is crony capitalism all over the world.

 

 

 

* Economic growth and progress continues under the PPP

 

WHO VEX, VEX.

 

Rev the Perv

I don't think your IQ is as great as your shoe size. The PPP/C does not recognize you.

Mitwah
Originally Posted by Rev:

redux:

 

* For a man who has never had a real job you have a lot of big talk.

 

* Keep up with the VULGARITY.

 

* You are good at it.

 

Rev

Rev: you have to realise that Redux received an athletic scholarship from the PNC. It wasn't a real scholarship. It was nepotism. Ever wonder why his respopnses contain only words like "antiman", "Low Iq etc."?

FM
Originally Posted by skeldon_man:
Originally Posted by Rev:

redux:

 

* For a man who has never had a real job you have a lot of big talk.

 

* Keep up with the VULGARITY.

 

* You are good at it.

 

Rev

Rev: you have to realise that Redux received an athletic scholarship from the PNC. It wasn't a real scholarship. It was nepotism. Ever wonder why his respopnses contain only words like "antiman", "Low Iq etc."?

a man who is so smart but dumb to know what honesty is 

FM
Originally Posted by JoKer:

One must admire Bisram for his ballsy honesty. For that alone he should get some credit as a PPP supporter

 

Mr Rohee cuss him out recently. Mr Bisram and Mr Ravi Dev think it is important to maintain the racial discrimination.

FM
Originally Posted by JB:
Originally Posted by JoKer:

One must admire Bisram for his ballsy honesty. For that alone he should get some credit as a PPP supporter

 

Mr Rohee cuss him out recently. Mr Bisram and Mr Ravi Dev think it is important to maintain the racial discrimination.

Why stop if it works?

FM
Originally Posted by JB:
Originally Posted by JoKer:

One must admire Bisram for his ballsy honesty. For that alone he should get some credit as a PPP supporter

 

Mr Rohee cuss him out recently. Mr Bisram and Mr Ravi Dev think it is important to maintain the racial discrimination.

Bisram is a paid writer for the PPP/C.

Mitwah
Originally Posted by skeldon_man:
Originally Posted by JB:
Originally Posted by JoKer:

One must admire Bisram for his ballsy honesty. For that alone he should get some credit as a PPP supporter

 

Mr Rohee cuss him out recently. Mr Bisram and Mr Ravi Dev think it is important to maintain the racial discrimination.

Why stop if it works?

What an ignorant man you are.

FM

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