Corruption indicators

By its nature corruption can be difficult to detect as it usually involves two or more people entering into a secret agreement (You don’t give a receipt for bribes!). The agreement can be to pay a financial inducement to a public official for securing favour of some description in return. This list is not exhaustive and the ingenuity of those involved in corruption knows no bounds! You may be aware of:

Economic and social effects of corruption

Bribery and corruption impacts upon the poor and vulnerable people in developing countries, it undermines public services and has an economic impact, increasing the costs of doing business whether the corruption is overseas or domestic.

One very real example that helps us to understand why the proactive attack on corruption must be stepped up is a story told to our head of Anti Corruption, Keith McCarthy, while overseas.

It involved a young mother in a developing country who died in childbirth along with her new born baby. The new road that she and her husband chose to travel to the Hospital had not been completed. In fact part of it did not even exist due to the corruption of a public official by a UK person

Corruption Indicators

Abnormal cash payments

Pressure exerted for payments to be made urgently or ahead of schedule

Payments being made through 3rd party country, i.e. goods or services supplied to country A but payment is being made, usually to shell company in country B

Abnormally high commission percentage being paid to a particular agency. This may be split into 2 accounts for same agent often in different jurisdictions

Private meetings with public contractors or companies hoping to tender for contracts

Lavish gifts being received

Individual never takes time off even if ill, or holidays, or insists on dealing with specific contractors him / herself

Making unexpected or illogical decisions accepting projects or contracts

Unusually smooth process of cases where individual does not have the expected level of knowledge or expertise

Abusing decision process or delegated powers in specific cases

Agreeing contracts not favourable to the organisation either with terms or time period

Unexplained preference for certain contractors during tendering period

Avoidance of independent checks on tendering or contracting processes

Raising barriers around specific roles or departments which are key in the tendering / contracting process

Bypassing normal tendering / contractors procedure

 Invoices being agreed in excess of contract without reasonable cause

Missing documents or records regarding meetings or decisions

Company procedures or guidelines not being followed

The payment of or making funds available for high value expenses or school fees etc on behalf of others

 What is corruption?

The term “corruption” is used as a shorthand reference for a large range of illicit or illegal activities. Although there is no universal or comprehensive definition as to what constitutes corrupt behaviour, the most prominent definitions share a common emphasis upon the abuse of public power or position for personal advantage. The Oxford Unabridged Dictionary defines corruption as “perversion or destruction of integrity in the discharge of public duties by bribery or favour.” The Merriam Webster’s Collegiate Dictionary defines it as “inducement to wrong by improper or unlawful means (as bribery).” The succinct definition utilized by the World Bank is “the abuse of public office for private gain.” This definition is similar to that employed by Transparency International (TI), the leading NGO in the global anticorruption effort:
“Corruption involves behaviour on the part of officials in the public sector, whether politicians or civil servants, in whom they improperly and unlawfully enrich themselves, or those close to them, by the misuse of the public power entrusted to them.”

An Illustrative List of Corrupt Behaviours

– The design or selection of uneconomical projects because of opportunities for financial kickbacks and political patronage.
– Procurement fraud, including collusion, overcharging, or the selection of contractors, suppliers, and consultants on criteria other than the lowest evaluated substantially responsive bidder.
– Illicit payments of “speed money” to government officials to facilitate the timely delivery of goods and services to which the public is rightfully entitled, such as permits and licenses.
– Illicit payments to government officials to facilitate access to goods, services, and/or information to which the public is not entitled, or to deny the public access to goods and services to which it is legally entitled.
– Illicit payments to prevent the application of rules and regulations in a fair and consistent manner, particularly in areas concerning public safety, law enforcement, or revenue collection.
– Payments to government officials to foster or sustain monopolistic or oligopolistic access to markets in the absence of a compelling economic rationale for such restrictions.
– The misappropriation of confidential information for personal gain, such as using knowledge about public transportation routings to invest in real estate that is likely to appreciate.
– The deliberate disclosure of false or misleading information on the financial status of corporations that would prevent potential investors from accurately valuing their worth, such as the failure to disclose large contingent liabilities or the undervaluing of assets in enterprises slated for privatization.
– The theft or embezzlement of public property and monies.
– The sale of official posts, positions, or promotions; nepotism; or other actions that undermine the creation of a professional, meritocratic civil service.
– Extortion and the abuse of public office, such as using the threat of a tax audit or legal sanctions to extract personal favours.
Obstruction of justice and interference in the duties of agencies tasked with detecting, investigating, and prosecuting illicit behaviour.