Organizational corruption has been a social problem since ancient times. Plato’s critique of democracy expressed his disillusionment with corrupt ancient Athenian leaders.
Over two thousand years later, the writings of many, including Rousseau and Freud, referred to corrupt influences in organizations and the society at large.
Prominent examples of such corruption can be found in a variety of contexts from John Quincy Adam’s controversial agent to the presidency in 1825 to Napoleon III and his concern with avoiding Grant and corruption during his ambitious revitalization of Paris during the 1850’s to the U.S. industrial robber barons of the late nineteenth century.
The twentieth century was marked by major scandals such as Watergate. Ivan Contra, the saving and loan industry, collapsed. During this time, corporate criminals such as Billy Sal Estes, Ivan Boesky, and Michael Milken, became household names.
Occupational crime is the classic misdemeanor of specialized assets and probably account for most white-collar crime. Nearly all occupations present some opportunity for crime or corruption. Bank employees can embezzle money, warehouse superiors have access to supplies, purchasing agents can extract kickbacks from vendors, health care providers could commit insurance fraud and police officers are able to take advantage of vulnerable citizens. Positions of power and trust present opportunity for these criminals.
Unlike collective embezzlement, corporate crime and occupational crime can be committed at every level of the organization. Occupational crimes are committed primarily for the benefits of the perpetrator. Usually to the detriment of the organization, examples of occupational crime vary from the General Manager of a building supply firm who accepts under-the-table payment from a contractor in exchange for providing the contractor with lumber at below cost. To the janitor at a computer software company who rummages through trash can in search of proprietary information that can be sold to the firm’s major competitor.
Many occupational crimes are the result of a conspiracy by two or more employees. As organizations strengthen their security and refine their accounting controls, the likelihood of one person being able to commit an act of embezzlement or fraud is reduced.
Two or more employees acting in concert, however, can frequently circumvent security devices or accounting procedure and perpetuate criminal activity over a long period of time. One classic example of an occupational crime conspiracy that also had links to organized crime was Lufthansa heist of 1978 that betted $5 million in cash and $850,000 in jewelry with the assistance of an insider who worked the Kennedy International Airport/
The public is likely to perceive a crime as serious if it is violent, if the victim is not at fault and is relatively powerless, or if the crime causes serious economic damage. Terrorism, murder, rape, violent assault during a robbery, a burglary that financially devastates a business, injuries or deaths caused by inebriated drivers, violence toward children, and arson that results in millions of dollars in damage are usually regarded by the public as serious crime. Such crimes receive extensive media coverage, and there is likely to be a great deal of pressure on law enforcement and on the judicial system to apprehend and punish the offenders.
The public is less concerned about simple assaults (especially in cases where both sides played a part in initiating the dispute and the combatants were evenly matched). Public drunkenness, recreational drug use by adults, or prostitution are crimes regarded by many as being less deviant, having no unwilling victim, or affecting only a small and more fringe segment of the population.
Similarly, white-collar crimes have traditionally been regarded as being high or low severity by the public. As noted earlier, white-collar crimes do not involve violence, or at least not the immediate application of violence. The victims of white-collar crime often elicit little public sympathy because they may have contributed to the crime through their poor judgment, lack of attention, or greed. Furthermore, white-collar criminals do not have a sinister physical appearance. They are often personable and well dressed, in stark contrast of many street criminals.
These are two crucial points about white-collar crime that explain why these crimes fall below the radar. First, violent street crimes are taken more seriously than white-collar crimes. Second, white-collar crimes are more complex and difficult to prosecute than street crimes. Because of public pressures and limited resources, Federal and State prosecutors are reluctant to pursue white-collar criminals with so many violent criminal cases vying for their attention.
Corrupt Acts of Public Officials
A corrupt act of public officials as a category focuses primarily on the perpetrator of a crime rather than the nature of the crime itself. Elected officials control the passage of legislation, command vast resources, and make important decisions that have profound social and economic consequences. Political appointees and civil servants are also in positions of specialized access and trust.
Corruption occurs when public officials use their position of power for personal gain. The state senator who enjoys a cozy relationship with an industry interest group, the official who is a silent partner in a highway construction company, the city judge who accepts bribes from drug dealers, or the police officer who gives preferential referrals to certain ambulance, and towing companies in exchange for kickback are all examples of corruption with the public reason.
Acts of corruption differ among Federal, State and local officials (as here in USA, for example), because each has different opportunities on which they can capitalize. The corruption of public officials often involves a bribe, an illicit gratuity, or on act of extortion. Bribery involves offering/giving or soliciting anything of value to influence an official act by a government official or to influence a business decision. Extortion is an attempt to coerce a victim through physical or economic means to comply with the demands of the extortionist.
One of the fastest growing white-collar crimes is health care or medical fraud. Common forms of health care fraud include: providing unnecessary treatments to patients, double-billing patients and insurance companies, rendering less expensive services but billing the patient for more expensive ones, for splitting obtaining kickbacks for referrals to other health care professionals, submitting fraudulent claims to health insurers so that insurers will pay for non-covered medical procedures, edifying a claim for a hernia repair to cover the cost of a liposuction, self-referrals, sending patients to facilities in which physicians have an undisclosed financial interest distributing pharmaceuticals illegally and sexually exploiting patients.
A major consequence of health care fraud is that it inflates that already high cost of medical care. Some physicians, for example, send patient’s laboratory work to an inexpensive lab but bill the patient’s insurance company at a much higher rate. Health care providers incur the added expense of competing with legislative and anti-fraud measures. The safeguards slow insurance payment processes and causes inconvenience for patients and health care providers.
Mr. Robert Hunja, a blogger, advanced the following strategies on how to be minimized in developing in African courtiers. He is the Director for Public Integrity and Openness in the World Bank’s Governance Global Practice.
- Corruption is not only about bribes: People, especially the poor, get hurt when resources are wasted. That’s why it is so important to understand the different kinds of corruption to develop smart responses.
- Power of the people: Create pathways that give citizens relevant tools to engage and participate in their governments – identify priorities, problems and find solutions.
- Cut the red tape: Bring together formal and informal processes (this means working with the government as well as non-governmental groups) to change behavior and monitor progress.
- It’s not 1999: Use the power of technology to build dynamic and continuous exchanges between key stakeholders: government, citizens, business, civil society groups, media, academia etc.
- Deliver the goods: Invest in institutions and policy – sustainable improvement in how a government delivers services is only possible if the people in these institutions endorse sensible rules and practices that allow for change while making the best use of tested traditions and legacies – imported models often do not work.
- Get incentives right: Align anti-corruption measures with market, behavioral, and social forces. Adopting integrity standards is a smart business decision, especially for companies interested in doing business with the World Bank Group and other development partners.
- Sanctions matter: Punishing corruption is a vital component of any effective anti-corruption effort.
- Act globally and locally: Keep citizens engaged on corruption at local, national, international and global levels—in line with the scale and scope of corruption. Make use of the architecture that has been developed and the platforms that exist for engagement.
- Build capacity for those who need it most: Countries that suffer from chronic fragility, conflict and violence are often the ones that have the fewest internal resources to combat corruption. Identify ways to leverage international resources to support and sustain good governance.
- Learn by doing: Any good strategy must be continually monitored and evaluated to make sure it can be easily adapted as situations on the ground change (Robert Hunja On Tue, 12/08/2015)
Conclusion
According to Marcus Felson, modern-day white-collar crime is a fraud of specialized access that are committed by managers and profession also during their work activities: Felson makes two critical points. First, he regards the term white-collar crime as an “unfortunate expression” that encourages us to define crime primarily by the people who commit it.
Classifying crimes as “white-collar” provides little insight into how and why these crimes occur. Second, access to power, money and resources provides executives with the opportunity to misbehave. A clerical worker does not have the power to commit an antitrust violation, whereas a CEO does. Similarly, crime such as embezzlement requires that the perpetrator have access to many on other valuable resources, otherwise the crime cannot take place.
Felson’s definition of white-collar crime ties in nicely with the term corruption. Corrupt behaviors are those in which managers and professionals use their formal power for personal gain.
Acts of corruption may or may not violate a criminal statute, but they almost always nepotism, cronyism, throwing lavish parties at shareholders’ expense or taking indecent liberties with a vulnerable client are forms of corruption with the passage of time. In addition, laws have been passed that prohibit a wide range of dissolute behaviors, sexual harassments for example. Has long been viewed as a corrupt workplace behavior, but it was not until the late 1970s that the courts also began to view it as a form of illegal set discrimination.
It is now the time for all Liberian politicians to realize that corruptions continue to plague our society practically, in all its fabrics. This cancer continues to disproportionately impact on the livelihood of the Liberian citizens, especially the poor.
Corruption undermines the delivery of public services, such as public housing, healthcare, and access to water, adequate sanitation, and access to reliable supplies of electricity. Corruption continues to divert financial and other resources that could be used for development with respect to job creation, and poverty alleviation instead weakening the capacity of the state to deliver effective services and equally undermining the trust of ordinary people in government.
Most foreign investors report or complain about corruption in Liberia being pervasive in government procurement, award of contracts or concessions, customs and taxation system, regulatory system, performance requirements, and government payments systems ([email protected]).
As Liberians, we need to do better than this. Corruption needs to be minimized and eventually eliminated.
About Author
Jerry Barcon, Contributing Writer, BSc Law Enforcement, Roger Williams University, Bristol Rhode Island, Master of Science: Homeland Security and Administration of Justice in Cyber and U.S. Intelligence, Master of Science: Homeland Security and Administration of Justice in Leadership. E-mail: [email protected]