What Corruption Means

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Published on Tuesday, 02 February 2010 20:49

Written by Todd Schweitzer

Political corruption is a persistent problem in virtually all countries in the developing world. First, it is a drain on the economy. It is more expensive to do business in a climate of corruption, so there is less investment and fewer jobs created. Non-Governmental Organizations (NGOs) and aid agencies are reluctant to donate, knowing that some of their funds will end up in a bureaucrat’s Cayman Islands bank account. It disrupts the democratic process when favors and votes can be bought. It also can lead to social instability: the poorest citizens can’t obtain permits, licenses or social services, public goods don’t reach them, and they can no longer trust the ballot box. It is simultaneously a cause and effect of many of the larger problems that people in developing countries must confront daily.

But what does political corruption mean? In the most general sense, it refers to dishonest behavior by government officials for personal gain. The first thing that comes to mind may be bribes to public officials, but corruption can take several forms. The following is a list of the various ways that public officials can grease their palms, line their pockets, take some off the top, and rob the taxpayer. Now, there are a zillion ways that politicians and bureaucrats can earn illegitimate cash on the side; these are just the instances I have personally witnessed or heard from first-hand accounts:

1.    The Mystery Coworker.

You’ve been a dedicated party member and campaign worker in the last election, and you deserve a reward. How about a position in the Agency for such-and-such, where all you have to do is show up once a month to sign some documents and collect your paycheck? You can keep your current job, or you can take a few years off and sleep in until noon every day. It’s up to you, but this fake job important public service position is yours until the next election, or until someone with a grudge blows the whistle.

Fake government jobs are a common way to award patronage to your buddies and supporters. Among the reasons for bestowing someone with free paychecks:

• Rewarding someone for a political contribution;
• Providing party members with steady income while they work full-time as a “volunteer” party organizer;
• As an added perk for VIP officials, who then proceed to put their wife, kids, cousins, pets, and dead relatives on the payroll. (In the Dominican Republic, the most recent example is Radhames Segura, the president of the state-owned electric company. When a former employee blew the whistle in 2009, it was discovered that over 200 of his family members were receiving paychecks.)

2.    The $5,000 Car Repair.

You’ve been appointed as the head of the Transportation Department, managing the fleet of vehicles for a government agency. You have a workshop on site, but the mechanics are mystery coworkers (see above). So when one of the vehicles has transmission trouble, you call your buddy who owns an auto repair shop in town.

You the bureaucrat: “So, uh, how much do you charge for transmission repair?”

Mechanic buddy: “About $1,500 or so.” (His normal price is $700-800).

You: “Okay, write me up for a new transmission at $5,000 and I’ll come by with your check.”

The transmission gets repaired (not replaced), and you arrive with the check and take your mechanic buddy to the bank to cash it. The mechanic keeps the $1,500 plus another $500 for his trouble, and you just made $3,000.

Variations of this method:

You’re an official at the Public Works Ministry who needs 2,000 steel girders for highway construction. You want to make a deal with your buddy, who happens to own a steel mill outside of town. You’re weighing two options:

• Cut a check for 2,000 girders, your buddy delivers 1,500, and you split the revenue from the 500 mystery girders. You write off the 500 girders as faulty or unused in construction.
• Cut a check for 2,000 girders, your buddy inflates the unit cost of steel, and you and your buddy split the profit. Accountants usually demand invoices from three separate suppliers, but that is easily dealt with. Either your buddy’s girder order is part of a larger government contract he had won, or your bribe two other steel mill owners into providing you with similar invoices.

In the end, you decide to employ both options, and then you trade in your Gulfstream jet for the newer model.

Check back for the next post for more exciting ways to make yourself rich in politics: the patriotic donation method, and the ol’ bottomless gas tank scheme, along with some musings on the causes and effects of corruption.

We’ll continue with the various ways in which taxpayer disappears in the countries of the developing world:

4.    The Patriotic Donation.

The most common, traditional, old-fashioned form of corruption is the bribe. It is typically the only form of corruption that directly involves common citizens. People pay bribes to avoid arrest, avoid customs violations, to get their name to the top of a waiting list, to get a property lot re-zoned, and to obtain all sorts of permits and licenses. A Dominican friend recently explained that when taking the test for your driver’s license, you need to “tip” the evaluator or else you’ll fail the driving test.

We now start to enter a gray area: what is corruption and what isn’t? For example, should you be able to pay foreign officials so that they expedite a certain process or clearance for you? The U.S. Foreign Corrupt Practices Act, passed in 1977, allows Americans to offer payment so to facilitate or expedite an action that a foreign official would normally perform. For example, I could supposedly grease the palm of a customs official so that my import passes inspection in a day instead of a week or month. Is “facilitation” such as that an act of corruption? Another hypothetical: What if you have an option of paying an extra fee to have your student visa to Corruptistan granted within 30 days, but if you don’t pay the fee, you possibly may never receive the visa?

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