It makes sense that the British government would want to smooth over relations with Russia by sending a cabinet minister to visit Moscow, the first such visit in over a year. But couldn't the Brits have sent someone -- anyone -- other than Business Secretary Peter Mandelson, who is currently at the center of a scandal over his relationship with a Russian oligarch?

Mandelson's friendly overtures to the Kremlin have been entirely overshadowed by questions from the British press. At issue is whether favors from metals magnate Oleg Deripaska played a role in Mandelson's decision to reduce aluminum tariffs while he was EU trade commissioner, a decision that greatly benefited Russia's richest man. Months after the change, Deripaska entertained Mandelson and other VIPs on his yacht in the Mediterranean.

Mandelson angrily brushed aside a question about the scandal during a press conference Wednesday, telling the reporter, "You have wasted your question." Mandelson has been cleared by the British government of any wrongdoing, but during a BBC interview, also yesterday, he noticeably failed to deny that he and Deripaska had discussed lowering the tariffs prior to the decision being made.

The tabloids have been having a field day with the $9,000-a-night hotel suite where Lord Mandelson is staying during his Moscow visit, a questionable PR move during an economic crisis. The Daily Mail proclaimed the room, "Fit for an Oligarch." It also can't help Mandelson that Deripaska is back in the headlines for the $4.5 billion bailout he received from the Russian government this week.

The Brits might want a do-over on this one.

Photo: Alexey SAZONOV/AFP/Getty Images

Photo by Peter Macdiarmid/Getty Images

There are two stories today about Western politicans soliciting donations from Russian citizens. One is just funny, the other, a potentially bigger deal.

The BBC reports that Russia's U.N. ambassador Vitaly Churkin has been receiving mailers from McCain's campaign asking for help to "stop the Democrats from seizing control of Washington and implementing their radically liberal policy for our nation."

It's obviously just a mistake so there's no foul here, but Russia's U.N. mission seems to be relishing the opportunity to embarrass Mr. "We are all Georgians." As McCain spokesman Brian Rogers said, "it sounds like they're having a little fun at our expense."

If the British media seems to be overselling the Churkin story, it's probably an attempt to tie it to a British scandal with potentially far more serious implications. In a letter to the Times of London today, hedge fund manager Nathaniel Rothschild accused shadow chancellor of the exchequer George Osborne (above) of soliciting a donation to the Conservative Party from Russian billionaire Oleg Deripaska while all three were vacationing on the Greek Island of Corfu over the Summer.

Rothschild suggests that Osborne asked for £50,000 on board Deripaska's private yacht and discussed with a Tory fund raiser how the Russian citizen's donation could be channeled through one of the British companies he owns. Osborne has denied soliciting the donation, though he admits spending time on the yacht. The Osborne allegations are actually just the latest twist in a scandal that until now focused on European Union Trade Commissioner Peter Mandelson, a Labour Party member, who also availed himself of Deripaska's hospitality at the same gathering.

Memo to politicians everywhere: Even if you're not doing anything explicitly illegal, avoid spending time on yachts with wealthy foreign nationals. It never looks good.

ALEXANDER JOE/AFP/Getty Images

If you were investing in South Africa's promising economy, what is the last thing you'd like to see? 

Well, there's no need for hypotheticals. You could have just watched the news last night.

The resignation of President Thabo Mbeki, who for all his flaws oversaw fantastic economic growth, has sent shivers up investors' spines. South Africa is one step closer to its next elected leader, leftist Jacob Zuma of dubious economic credentials, who is hugely favored to win polls in 2009. But even more alarming, the country's respected political system looks closer to operating on tit-for-tat political disputes than ever in its democratic history.

Zuma was once Mbeki's deputy prime minister, but since a falling out several years ago, he has pushed hard to make his own name. In December, Zuma ousted Mbeki as the party leader of the ruling party, the African National Congress (ANC). Just last week, Zuma and Mbeki sparred again -- this time over long-pending corruption charges against the former. A court dismissed the charges against Zuma, and the ANC accused President Mbeki of having pressured the courts to go after his rival. Mbeki denied the charges, but tendered his resignation after his party pushed him out.

Since Zuma -- not yet a minister or MP -- is currently ineligible, ANC political veteran Kgalema Motlanthe looks slated to take over until next year's elections. Investors are waiting to see if Motlanthe will keep Mbeki's ministers or stick in a few of his own. Zuma, when he comes, has promised to redo South Africa's growth, empowering the working classes. No one is yet certain what that will look like, but opposition politician Helen Zille tells BBC that it's code for "grab the spoils of state." 

It would be a shame if a bitter political struggle sends South Africa back in time. As retired Archbishop Desmond Tutu eloquently put it, "The way of retribution leads to a banana republic."

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As dreams of a gas-tax holiday died in Congress amid concerns of lost jobs for transport and construction, lawmakers in the Ivory Coast are paying for a reduction in fuel costs out of their own pockets. Both government ministers and managers of state-owned companies will see their paychecks halved to pay for a 10-percent cut in fuel prices, Prime Minister Guillaume Soro says:

Having heard the people's cry from the heart, the government has decided to cut the price of fuel," Mr Soro said.

A noble effort on its face, yes, this political stunt could actually be double trouble for the people of Ivory Coast. We've expressed our skepticism toward "gas-tax holidays" before, but lowering government officials' pay can also prove problematic, making ministers more susceptible to the ubiquitous temptation of corruption.

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Last month, Dmitry Medvedev assured a group of international CEOs that he would work to enforce the rule of law and establish "absolutely independent modern courts that comply with the country's economic development level." But if the assembled corporate leaders were hoping that the new Russian president would be true to his word, and the corruption and politically motivated prosecutions of the Putin era would end, this has not been an encouraging couple of days.

Yesterday, most of the expatriate staff of TNK-BP, an oil venture co-owned by British Petroleum, were denied extensions of their work visas. CEO Robert Dudley e-mailed employees this morning telling them to prepare for relocation as early as next week. The standoff between BP and its Russian partners has been escalating for months but after today, it appears that that the Russian shareholders have effectively wrestled the company away from the departing Brits. (Medvedev has denied accusations that the government is intervening on behalf of the Russian oligarchs on TNK-BP's board as well as the rumors that his old company Gazprom plans to take control of what's left of the company.)

Also today, new charges were filed against Mikhail Khodorkovsky. Once Russia's richest man, the former CEO of oil company Yukos has languished in a Siberian prison since a tax-evasion conviction in 2003 that was widely seen as punishment for the tycoon's political ambitions. Khodorkovsky has now been charged with embezzling more than $28 billion and stealing 350 million tons of oil. Kohodorkovsky's lawyers had hoped he could be released early after having served more than half his original sentence, but the new charges could keep him behind bars for another 20 years. One of his lawyers, Robert Amsterdam, told Bloomberg: "I don't think they're even trying to make these new charges look real."

Russia's leaders have created a legal system in which it's essentially impossible for a business to operate legally, making anyone who does business there subject to arbitrary prosecution. It's an arrangement that's well-suited to protecting state power, but not very effective at promoting economic growth. If Medvedev really wants to make Russia the world's fifth largest economy by 2020, he's going to need to try a littler harder.

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It looks like Georgia's opposition may have a legitimate beef about yesterday's parliamentary election, which President Mikheil Saakashvili's party appears to have won commandingly. Here's what the observer mission from the Organization for Security and Cooperation in Europe had to say:

Parties were able to campaign actively, but there were numerous allegations of intimidation, some of which could be verified [...] Election day was overall calm and generally assessed positively, although problems with inking and instances of pressure on observers and proxies were noted. Counting and tabulation was evaluated less positively, with many significant procedural shortcomings observed.

While they differ little on policy, opposition parties accuse Saakashvili's government of widespread corruption and are still angry over the crackdown on demonstrators in Tbilisi last year.

But as valid as their complaints may be, last night's post-election rally sounds like one uninspiring affair:

The opposition called for protests in Tbilisi late on Wednesday night, saying tens of thousands would gather, but only about 1,000 people showed up [...] Protesters then watched live coverage of the Champions League final in Moscow between English teams Manchester United and Chelsea.

It does sound like it was a good game, but still, this is no way to overthrow a government. I hope they weren't Chelsea fans at least.

It's getting harder for the Burmese state to hide the truly profound level of its own dysfunction:

The Burmese generals were visible all right. State television showed them handing out boxes of the small amount of aid allowed in from neighbouring Thailand. Unwittingly, it also showed that the Burmese leadership had plastered their own names over the true origins of the food aid to fool their own people into believing that the emergency relief supplies had come from them.

You know things are bad when a military dictatorship can't even get its own propaganda right.

(Hat tip: Reason's Kerry Howley)

The Mexican chapter of the anticorruption group Transparency International polled Mexicans on what percentage of their annual family income they spent on bribes.

Their answer? Nearly 8 percent. For more about corruption in Mexico, watch this National Geographic video below:

bumad.un.kiev.ua

Bulgaria, the EU’s newest member state, is fast becoming one of Brussels' main headaches.

Back in January, corruption accusations grew so rampant around the country’s road construction projects that the EU froze all related funding until further investigation.  

Then, less than a week after EU officials visited Sofia to warn against corruption and organized crime, a prominent businessman was shot twice in the head in the stairwell of his apartment building. Less than 24 hours later, a former mafioso turned novelist was also shot and killed while leaving a downtown café. Their deaths only add to the 150 or so mafia-style killings in Bulgaria since the fall of communism –- none of which have seen convictions.

Now, Bulgaria’s parliament has reported that its country’s problems extend far beyond the new EU border.  Bulgaria’s National Security Agency has found that Bulgarian drug traffickers, who do a sizable business sitting on the fault line between Europe and Southwest Asia, have close links to Arab drug traders who, in turn, fund Hezbollah and Islamic Jihad.

I’m all for the EU accession of Western Balkan states –- if nothing else because there is presently no other viable alternative for an economically and politically stable future in the region. But it's because of the lack of an alternative that accession standards have slipped as far as they have.  And if the EU can’t hold Bulgaria on its commitment to anti-corruption standards, how will it ever manage the likes of Bosnia and Serbia?

DESMOND KWANDE/AFP/Getty Images

Zimbabwean opposition leader Morgan Tsvangirai has an op-ed in today's Guardian in which he predicts that President Robert Mugabe is about to bring the hammer down to maintain power after last week's election, the results of which have still not been released:

Adept at stealing elections from the hands of voters, Mugabe is now amassing government troops; blocking court proceedings where we have attempted to seek an order simply for the electoral commission to release the final tally of the March 29 poll; raiding the offices of the Movement for Democratic Change (MDC); and casting a pall of suppression and gloom over the country. The feared militias, made up of misguided activists and the same war veterans who pushed for and benefited from the disastrous land confiscations from the late 1990s, are being mobilised. This can only mean, despite some earlier evidence to the contrary, that sanity has been discarded along with truth in the offices of Zanu-PF.

Tsvangirai goes on to promise Mugabe that he need not fear prosecution if he steps down.

Mugabe, predictably, is going back to one of his favorite tactics by raiding the country's few remaining white-owned farms and accusing white farmers of trying to regain their lost property amid the election chaos:

"Land must remain in our hands. The land is ours, it must not be allowed to slip back into the hands of whites," President Mugabe told a crowd gathered at a funeral of his wife's uncle.

Stoking racial tensions has worked for Mugabe in past times of crisis, but the fact that election results have still not been released and he is accusing his own handpicked election commission of "errors and miscalculations" is probably a sign that Mugabe did much worse than expected. Mugabe's "father of the nation" routine is going to be harder to pull off this time. Short of resorting to brute force on a massive scale, it's hard to see how he gets out of this one.

Lawrence Lessig -- FP contributor, Stanford law professor, and Internet superstar -- today staked his claim as the leader of a new cause: attacking corruption.

At a joint press conference with the Sunlight Foundation, a relatively new group that seeks to improve transparency and public trust in Congress, Lessig launched the "Change Congress" movement. His new organization will seek pledges from lawmakers and candidates to turn away lobbyist and PAC funds, vote to outlaw earmarks, advocate for public campaign financing, and promote transparency. U.S. voters can also join the movement to let their representatives know that they want the buzzword on everyone's lips: change.

In an interview after the press conference, Lessig told me how he decided to pursue the issue of money in American democracy:

It kind of hit me that it was the same problem that was causing the misallocation of policy in [Al Gore's] area was causing it in my area... just the recognition that Congress failed to address [global warming] for 10 years when it should have addressed it because of the enormous influence of money in that process. That's what made me realize that this was not just limited to marginal, esoteric problems."

By "esoteric problems," Lessig was referring to his intellectual property work. I also asked him about the climate for reform now that a new presidential administration is on the way. His response:

The climate's great but I think anybody who expects a president can affect change like this on his own is not understanding where the system works. So that's why it seems to be really critical to recognize the only way you're going to tee up reform for the president is to begin to build reform in the trenches."

Lessig said his goal is to spark a "process revolution" rather than push for specific policy changes. It's like alcoholism, he said: Only by solving Congress's addiction to money will you be able to tackle its side effects. Here's hoping Congress can sober up.

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We always love a good, old-fashioned international sex scandal here at Passport, be it in Tehran, Kuala Lumpur, Bangkok, or Hong Kong.

Now, it's Greece's turn, and it may be the most fascinating one yet. Here's the story: A young woman slept with the general secretary of the culture ministry in the hopes of obtaining a permanent job (judging by his photo, left, that had to be the only reason). When he didn't follow through, she recorded her encounters with him on a DVD, allegedly to blackmail him, and ended up taking it to the press. Most journalists wouldn't work with her, but a copy of the DVD somehow found its way to the prime minister's office. Once the official being blackmailed got wind of this, he resigned and jumped from his balcony in a suicide attempt. He's now in the hospital recovering, but the scandal has penetrated Greek society deeper than anyone anticipated.

The Greek government tried to spin this as "a sex scandal blown out of proportion," but the public just isn't buying it. The tape submitted to prosecutors as evidence was found to have been edited, raising suspicions the government is hiding something, possibly revelations about graft and corruption. The culture ministry official, whose finances and other possibly shady deals are now under investigation, had controlled significant amounts of EU and Greek funds and had close ties to Prime Minister Costas Karamanlis.

The scandal has sent the government's approval rating below 30 percent, the worst level since it came to power in 2004 -- ironically, on an anti-corruption platform. With the ministry official's resignation, the ruling party is down to 151 seats out of 300, a bare majority.

While corruption has been a huge topic of discussion, others see an opportunity to shed light on Greece's treatment of women. A woman formerly in construction management put the country's problem this way to Reuters:

You study, you work hard and still you have to let someone grab your butt to rise."

PRAKASH SINGH/AFP/Getty Images

In booming India, newspaper and magazine sales have been skyrocketing. Newspaper circulation was up 54 percent from 2001 to 2006, along with an 85 percent increase in advertising revenue.

Unfortunately, one enterprising magazine has been struggling. Tehelka, which FP featured in a Global Newsstand article last year, isn't getting the advertising rupees it needs to stay afloat. The weekly publication, which calls itself "Free.Fair.Fearless," has gained fame for bold undercover investigative reporting that has exposed government corruption. For example, journalists with hidden cameras posed as defense contractors and gave cash bribes to politicians and military officials. The defense minister had to resign as a result (though he was later reinstated).

But challenging the powers-that-be doesn't exactly reel in investors. Editor in chief Tarun Tejpal, who recently launched a Hindi-language Web site of the English-language magazine, says, "There's a certain reluctance to be associated with us because we are seen as people who create trouble and get into the wrong side of money and power."

Part of the problem, too, may be that as India booms, people want more upbeat, "feel-good" news. "The serious part of journalism is taking a back seat. The entertainment journalism is at the front," says a consulting editor for the Indian Press Agency. Anil Dharker, a media critic and columnist, may sum it up best by saying:

Psychologically, Indians are on such a high with the economy booming. They are in no mood to hear bad news. And that's what Tehelka offers.

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The Office of the Special Inspector General for Iraq Reconstruction (SIGIR)—which has spent the past three years looking into allegations of fraud, misconduct, and waste in the efforts to rebuild Iraq—is now under investigation itself. According to a front-page story in today's Washington Post, the FBI, the House Oversight and Government Reform Committee, the Presidential Council on Integrity and Efficiency, and the Army's Equal Employment Opportunity are all conducting separate probes into misdeeds by Inspector General Stuart Bowen and his staff. Some of the allegations, and expenditures that have raised eyebrows:

• Overtime policies that allowed several employees to earn more than $250,000 per person last year. That's more than the salaries of the vice president or supreme court justices. One inspector earned $346,017 last year, claiming more than 1,200 hours of overtime.
• A $3.5 million book project about the reconstruction of Iraq, modeled after the 9/11 Commission.
• Bowen and his deputy, Ginger Cruz, allegedly went through employee emails to determine who was loyal and who was not.
• Cruz, a self-described Wiccan, has allegedly made sexual remarks and threatened to put hexes on employees. (She denies that she made sexual remarks and says that she's been cleared by an internal SIGIR investigation.)
• Cruz sought and was granted special dispensation by Bowen to use SIGIR money to pay for her legal fees.
• An employee, after raising questions about discrimination over the dismissal of an African American employee, was dismissed herself, just two months after receiving a $8500 bonus for outstanding performance.

Ironically, SIGIR has been cited by both Democrats and Republicans as an example of an agency that has worked effectively to spot mismanagement and overspending, and dig out bad apples. It must be payback time. A SIGIR official told the Post that the agency's headquarters is "gripped by paranoia. It's almost a siege mentality."