Remarks by Ambassador Jean Manes at the “Anti-Fraud” Conference

“Anti-Fraud” Conference

Ambassador Jean Elizabeth Manes
February 8, 8:30 AM,

 

* This is a courtesy translation. Only the original Spanish language text should be considered authoritative.  

I want to start with a phrase that many Salvadorans send me on Twitter. They say, “somos más los buenos [there are more good ones].” And in this room this morning, that’s what we see. There are more good ones. I believe in that in the United States “there are more good ones”, and I also believe that of El Salvador, “there are more good ones.”

There is also another consistently used phrase, “There is no government money, it’s the people’s money that public officials manage for social programs.”  When people talk about money, we have to be clear that there is nothing magical about government money. There is public money the government manages, and that is exactly why we are all here today. Because we have the responsibility to manage the public money.

We are all here this morning because we share the commitment to fight against corruption and fraud. These issues are critical not only for ourselves and our organizations, but also for our societies, which increasingly demand more transparency from their governments and also from private companies.

When we talk about fraud, we are talking about a complex problem that exists in every nation and that affects the public and private sectors throughout the world. It is estimated that companies lose 5% of their annual income due to fraud. This equates to a total loss of up to $3.7 trillion worldwide. To put it in context, this figure is more than Germany’s GDP.

It is not about whether fraud exists or not, but about what we do to fight it.

How can it be ensured that the funds that are invested in so many aid programs really fulfill their intended purposes and support the ultimate goals of eliminating extreme poverty and increasing shared prosperity?

Solving this problem requires an efficient combination of imposing internal controls over assets, educating employees about fraud schemes, and rigorously applying established policies and procedures. If we want to end fraud and corruption, we must work together and be clear about how we will do just that. This is the purpose of the conference we are launching today — equipping all of us with the same knowledge and tools necessary to identify vulnerabilities that we all have, in order to design appropriate mitigation measures and actions. And, as you know, everytime we uncover a fraud scheme, unfortunately there are people who are thinking of a new scheme. And that’s why it’s important that we keep improving, that we keep looking for new tools.

You have an extremely important role to play so that our work has the credibility and transparency that are part of our commitments every time we invest in a country. Being passive about this issue has serious consequences. The most serious one is that people are losing confidence in their institutions and their own government. That is the most serious consequence of all.

We have seen it in the United States in cases like HealthSouth, where for six years they manipulated the amount of their income until the company collapsed. Or the case of Bernie Madoff, who led a pyramid fraud scheme for 18 years with an illicit profit of $20 billion to the detriment of thousands of investors large and small. People lost their life savings and their retirement money; they lost everything. As in the United States, we have seen it in many other countries in the world, in the region and also here in El Salvador.

Therefore, let me repeat: it is not about whether fraud exists or not, but about what we are going to do to fight it. Combating fraud and corruption is everyone’s responsibility, including the private sector that you represent.

Fraud is a multifaceted problem that prevents good solutions and solid policies from reaching their full potential. Therefore, it is key that all parties involved address the problem with a more strategic and multifaceted approach. In this way, the risks of corruption can be reduced in order to make the most of the opportunities available to us.

Raising awareness among all and increasing collaboration between the private sector and government institutions is key to detecting and addressing situations of conflict of interest, collusion and coercion in projects. It is an effective way to address systemic problems. At the base of all this effort is to establish mechanisms that allow identifying the points of vulnerability and allow for an early warning system.

The Regulatory Improvement Organization is an example of one such mechanism.  It aims to  reduce bureaucracy and red tape and establish transparent processes in El Salvador. Moreover, as in everything, prevention is always more effective than trying to remedy a situation that has already been consummated.  I agree that we want less work for the Prosecutor and for his office. I hope we can help with that.

I want to be very clear, transparency and honesty are good business and being trustworthy in the way you make your deals shows the world that you can be trusted in doing business with their companies. Achieving a reputation as a transparent company that has appropriate control and monitoring mechanisms is, in itself, a smart investment. At the end of the day, I know that what we all want is for our contribution to the country to be relevant, lasting, and to improve the lives of as many Salvadorans as possible, even if we do it in different ways. Transparency achieves that goal, putting locks on projects to ensure their probity allows you to get more out of each investment. Is that not what we are here for; those of us who work every day for a more prosperous and secure El Salvador? I am convinced that it is, that we are here simply for this reason.  Each one of you is leading this effort. Each of you is someone important in this fight against corruption.

It may be that some days you think: “This struggle is too big, I can’t have a significant impact. It is something beyond me. It is simply our system. It’s how we’ve done things for decades.” At the end of  a day like that, you have to remember that every major change in a country is led by people like you. That each person can make a difference. It is not a government that leads the big changes, it is you.  Each one of you is playing this essential and important role in the change of this country.

On behalf of me and the United States, we will continue to fight at your side. The reason we are here is to support Salvadoran efforts to continue improving your country.

Thank you very much.

* This is a courtesy translation. Only the original Spanish language text should be considered authoritative.