13 Jul 2015 BY Kate Evans
Corruption often relies on banks to thrive.

With the right tools, banks are an important part of the fight against corruption.
It was the US$100 million in his bank account that gave him away.
There was no legitimate reason why Labora Sitorus, a low ranking police officer in Sorong in Indonesia’s West Papua province, should be quite so wealthy.
As it turned out, Sitorus had a nice little earner on the side – illegal logging.
In 2013, police seized 115 containers of the protected, rare tropical hardwood merbau – logged illegally, shipped from Sorong, and bound for China – where it’s estimated it would have sold for $US20 million.
They also found 400,000 litres of smuggled gasoline in a boat registered in his name.
And then, investigations by Indonesia’s Financial Investigation Unit (PPTAK) revealed Labora had paid up to US$1 million in bribes to various local, regional and national police officials in just three months – and that more than US$127 million in suspicious transactions had passed through his bank accounts in the previous five years.
Sitorus was originally sentenced to 2 years in jail and fined $US4000. But a Supreme Court retrial last year found him guilty of illegal logging, fuel smuggling and money laundering, and sent him to prison for 15 years.
The case is an example of the integral role banks and other financial service providers play in facilitating environmental crime – and shows how diligent monitoring can help stop it, according to a new study.
FINANCING, ORGANISATION AND CORRUPTION
“There is a pervasive problem within the forestry sector: the worst offences often involve  actors that regularly get away with them,” says Jacob Phelps, a scientist from the Center for International Forestry Research (CIFOR) and one of the authors of the study.
Laws tend to be enforced against the small guy who’s found with the axe or match in hand ….but not his boss, not the person who put up the money or the politician that gave out the illegal timber or agricultural concession
“Laws tend to be enforced against the small guy who’s found with the axe or match in hand, but not against those that stand to benefit most from illegality – not his boss, not the person who put up the money or the politician that gave out the illegal timber or agricultural concession.”
These ‘intellectual actors’ – those responsible for the financing, organisation or corruption that enable illegal environmental activities – rely on the services provided by the financial sector to deposit their profits, make and receive payments, and launder money.
“The persistent land clearing, illegal logging and wildlife trafficking we see today could not happen without the financial sector,” says Phelps.
There is increasing momentum in the global banking sector towards voluntary sustainability commitments – as seen at the recent London conference CIFOR organised on the topic, says Sophia Gnych, a CIFOR researcher who also worked on the paper.