The Merriam-Webster dictionary defines Corruption as “impairment of integrity, virtue, or moral principle and as inducement to wrong by improper or unlawful means (as bribery)”. According to Transparency International, “Corruption is the abuse of entrusted power for private gain. It hurts everyone who depends on the integrity of people in a position of authority”.
Over the past century, corruption has been cited as one of the chief evils that have been ailing countries, corporations, and other organizations. The chief import of corruption in government and governmental agencies is financial and economic. The social and moral aspects of corruption cannot be ignored either.
Corruption Perception Index
London-based non-profit, Transparency International has been publishing Corruption Perception Index – a ranking of 183 different countries since 1995. These rankings are awarded “by their perceived levels of corruption, as determined by expert assessments and opinion surveys”. These rankings are based on the scores from 0 (most corrupt) to 10 (least corrupt) awarded by Transparency International. The organization helps fight corruption in many countries of the world and has more than 100 chapters in different parts of the globe. Apart from grading the countries based on the corruption perception, Transparency International also helps in anti-corruption awareness and legal assistance.
Most and Least Corrupt Countries
According to the Corruption Perception Index ratings 2011, North Korea, Somalia, Afghanistan, Myanmar, Sudan, Turkmenistan, Uzbekistan, Haiti, Iraq, Burundi, Equatorial Guinea, and Venezuela are among the most corrupt countries of the world. Among the least corrupt nations are New Zealand, Denmark, Finland, Sweden, Singapore, Norway, Netherlands, Australia, Switzerland, and Canada. UK ranks 16 and USA ranks 24 according to the index.
The abuse of public offices or public resources by government officials in the form of bribery is, perhaps, the commonest form of corruption. In 1999 and again in 2002, 2006, 2008, and 2011, Transparency International had published the BPI (Bribe Payers Index) – a measurement of the ‘likelihood of companies from 28 leading economies to win business abroad by paying bribes’. According to the 2011 BPI rankings, Russian, Chinese, Mexican, Indonesian, and UAE companies were the most likely (among the 28 countries ranked) to offer bribes to secure business abroad. Corporations from the Netherlands, Switzerland, Belgium, Germany, and Japan were deemed least likely.
The banking systems of Switzerland and a few other European countries such as Austria must be mentioned in this regard. Banking secrecy in Switzerland dates back to the Middle Ages. The numbered accounts of Swiss banks provide the account holders a degree of protection from scrutiny and have thus been viewed as promoting bribery and financial laundering. A number of countries such as the US have negotiated agreements with Switzerland to weaken this insulation.
Corrupt Leaders of the World
A look at some of the most corrupt leaders of the world reveals a prolonged history of financial frauds and illegal manipulation of public funds. Bribery and misuse of public offices is key to corruption. Here are some of the most corrupt leaders of modern times.
Muhammad Hosni Mubarak, the fourth President of Egypt held office between 1981 and 2011. Corruption was a widespread state problem during the regime of Mubarak Hosni. Hosni, his family and associates are believed to have built up huge amounts of personal wealth (between $70 billion & $90 billion) by gross abuse of power. He was ousted following a violent revolution in 2011 (part of the Arab Spring uprisings).
Mohamed Suharto, the second president of Indonesia, held office between 1967 and 1998, for 31 years. Mohamed Suharto and his family are estimated to have embezzled between $15 billion and $35 billion by controlling the national charities and other government funds. Mohamed Suharto was ousted by a nation-wide protest against corruption.
Ferdinand Marcos, the tenth President of Philippines was the autocratic ruler of the country between 1965 and 1986. In the guise of public administration, development of infrastructure, and land reforms Ferdinand Marcos and his wife Imelda Marcos are believed to have misappropriated between $5 billion and $10 billion. Marcos was ousted by the EDSA Revolution.
Mobutu Sese Seko, the second president of the Democratic Republic of Congo (erstwhile Zaire) from 1965 to 1997, is believed to have swindled over $5 billion of public money. The President was overthrown by a popular uprising in 1997.
Sani Abacha, the President of Nigeria between 1993 and 1998 is believed to have embezzled funds amounting between $2 billion and $5 billion during his office.
Poverty & Corruption
Poverty is often cited as both the cause and effect of corruption. In 2010, Oxford University had put together a list of countries ranked by poverty. The researchers had used a composite index referred to as Multidimensional Poverty Index. We compared the 10 poorest countries rated by the index and their 2011 CPI rankings – Niger (Rank - 134 Score - 2.5), Ethiopia (Rank - 120 Score - 2.7), Mali (Rank - 118 Score - 2.8), Burkina Faso (Rank - 100 Score - 3), Burundi (Rank - 172 Score – 1.9), Somalia (Rank - 182 Score - 1), Central African Republic (Rank - 154 Score - 2.2), Liberia (Rank - 91 Score – 3.2), Guinea (Rank - 164 Score - 2.1), and Sierra Leone (Rank - 134 Score - 2.5). While all the ‘poor’ countries seem to have scored low on the CPI, there seems to be no logical proportionality to the rankings. Also it is not clear from socio-economic studies if poverty and corruption are causally related.
A Look at the US
Here’s a look at some US politicians who were found guilty of corruption
Carroll Hubbard - Carroll Hubbard served as the Kentucky Senator between 1968 and 1974 He served a long stint at the U.S. House of Representatives till 1992. In the 1992 Rubbergate House Banking Scandal, Hubbard was indicted for gross misuse of government resources. In 1994, again, Hubbard pled guilty to felony charges including theft, conversion of federal property, and obstruction of justice. Hubbard was fined $153,794 and sentenced for a three year prison term.
Edwin Edwards - Edwin Edwards was the Democratic Governor of Louisiana between 1972 and 1996. In 1997 the FBI raided Edwin Edwards' home following accusations of fraud, impropriety, and extortion. Indicted in 1998 and found guilty on 17 of 26 counts of conspiracy, extortion, corruption, fraud, and racketeering. Edwards was released from prison in 2011.
James Traficant - James Traficant is a nine-term Democrat Member of the US House of Representatives from Ohio serving between 1985 and 2002. Traficant was convicted of 10 felonies counts involving tax fraud, bribery, racketeering and making his aides performed chores at his Ohio farm. In 2002, Traficant was expelled from Congress - the second member of the House to be removed since the Civil War. Traficant served an eight-year prison sentence was released in September 2009.
George Ryan - George Ryan served as the Illinois Secretary of State and later as the Republican Governor of Illinois from 1999 to 2003. In 1994, the License For Bribe investigation was initiated and the evidences of sale of driving licenses to unqualified drivers by Ryan's office were unearthed. In 2006, Ryan was found guilty of money laundering and embezzlement, bribery, corruption, extortion, racketeering and tax fraud while in office. He is currently serving a term in prison.
Duke Cunningham - Randall Harold Cunningham or Duke Cunningham is a United States Navy veteran who served as the Republican member of the US House of Representatives from California between 1991 and 2005. Cunningham pleaded guilty to accepting bribes worth $2.4 million and for tax frauds. He resigned from the House in November 2005 and in March 2006 he was sentenced to over eight years in prison.
Popular Cases of Corruption
There have been controversial corruption scandals in almost every sphere across the globe. Let us take a look at some of the recent scandals that made big news
Media – In one of the greatest news and media corruption scandal, News of the World, a red top tabloid of the UK shut down in July 2011. The scandal implicated Rupert Murdoch, the media mogal and several senior media figures in the use of unfair practices and in sensationalism.
Sports – In April 2011 Suresh Kalmadi, a senior Indian politician and other organizing committee members of the 2010 Commonwealth Games were arrested following charges of corruption involving awarding an illegal contract to a Swiss corporation for a Timing-Scoring-Result system. The scandal cost the Indian exchequer about $16.29 million (INR 95 crore). A number of other cases misappropriations of funds were subsequently revealed.
Healthcare – In May 2009 a whistleblower brought up corruption allegations against the Zambian government, alerting the country’s Anti-Corruption Commission. Following the investigation of the $ 2 million embezzlement, many donor countries suspended their healthcare aid to Zambia deeply affecting the national health budget which was completely funded by other countries.
Education – In August 2012 the anti-corruption police of Prague charged three officials including an Education Minister of manipulating procurements worth 2 million CRK ($ 1,01,260). The procurement pertained to the IT system to support the existing education system.
From time to time corrupt practices in major corporations and private institutions have come to light taking a toll on public funds and good faith.
In the recently unearthed Libor (London Interbank Offered Rate) scandal it came to be evident that billions of dollars worth of derivates had been underpinned by banks which were fraudulently inflating or deflating their rates. This gave them the appearance of better credit-worthiness and helped them trade profitably in securities. This came to light in July 2012. The scandal cost US banks over 35 billion.
Ex-Goldman Sachs director, Rajat Gupta was found to be guilty of insider trading by a US federal court in a classic case of Wall Street corruption.
The Mexican subsidiary of Wal-Mart was reported to have systematically used bribery to obtain permits in the country. Also, Wal-Mart failed to report these bribes to the US government. The scandal caused Wal-Mart shares to plummet in April 2012.
Regional Anti-corruption Measures
In 1996 the Organization of American States adopted its earliest anti-corruption instrument and policies. The Inter-American Convention against Corruption (2002) and subsequent mechanism for follow up have been the guiding principles behind anti-corruption legislation in the Americas. In India, the proposed Lokpal Bill 2011 seeks the establishment of an ombudsman, a Lokpal to oversee implementation of anti-corruption measures. This demand for a Lokpal has been the result of increasing corruption as reflected in the many scams including the 2G Spectrum scam, the Commonwealth Games Scam, the Telgi Scam, the Satyam Scam, the IPL Scam and the 2012 Coalgate scam.
The European Commission proposes to publish a bi-annual report called the EU Anti-Corruption Report to assist and monitor the member states of the European Union in harnessing corruption. Apart from these various regional initiatives to curb corruption in public and private offices have been undertaken across the world.
UN Against Corruption
The United Nations’ official involvement in fighting corruption took the form of the United Nations Convention against Corruption, a legal anti-corruption agreement among the member states. The convention details out clear anti-corruption measures that the members are required to undertake. International cooperation in terms of information sharing and technical aid are also assured to the member nations. The UN Convention against Corruption was signed on December 9, 2003. Initially signed by 140 nations, the convention has been accepted and ratified by over 161 countries (as of July 2012) and thus applies to most major nations. Due to the criminalization and law enforcement specifications, a number of countries have not ratified the convention yet. The major countries that have not ratified the UN Convention against Corruption (UNCAC) include Japan, Germany, Burma, Sudan, Saudi Arabia, New Zealand, Czech Republic, and Syria. Some of the main countries which have not signed the convention yet include – North Korea, Chad, Somalia, Eritrea, and Oman.
The corruption prevention measures of the UNCAC apply primarily to the public sector. The member nations are required to adopt the policies and implement them besides negotiation anti-corruption legislation along the same lines. These laws shall then apply to the private sector as well.
Can we avoid corruption?
Can a county rid itself completely of corruption? While anti-corruption and bribery-prevention is part of the legislation in many parts of the world, the irrefutable existence of corruption is proof that the mere existence of laws is not enough. The need, then, may be for ethical trading practices and a stepped up corporate social responsibility. The consciousness of the people and whistleblower protection is also an important aspect when it comes to any anti-corruption campaign. A number of non-partisan agencies, commissions, and bills have been working to weed out corruption in different parts of the world. These include Transparency International, GOING, BIANCO, Investigation Task Force Sweep, Commissions against Corruption, Servicio de Vigilancia Aduanera, Lokpal, USKOK, and Warioba Commission.