SOC 3740 global corruption student doc

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University of Manitoba *

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2610

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Law

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May 29, 2024

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docx

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18

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Sept 8 Expectations ● For the teacher: ○ Respond to questions and aid those who need it ● For the student ○ Be able to read and make sense of the notes, come to your own conclusions Sept 13 Airbus article - Tldr, if you are rich you can get away with crimes by paying for it, settlements and bribes SNC-lavalin case - They were supposed to be prosecuted but ended up bribing a few million dollars to get away with it. Out of court settlements The disparity between rich and poor criminal cases - Poor people have a significantly harder time getting away with crimes and often deal with harsher consequences than the rich Whistleblower documentary - The system that hold up banks and public officials has been set up in such a way that it is illegal to call out any crimes that are being committed by the company - Private information being brought to light, while still technically illegal, is still the right thing to do - Those who are “whistleblowers” put everything on the line to show the misuse of power and the leverage of money use by giant corporations and political parties whose interests align - Corporate and state crime often goes unpunished Corruption according to Soreide, 2014 - How individuals entrusted with authority make decisions on behalf of an organization and misuse their position for personal gain Different forms of corruption - Crony capitalism - Business success is tied to close relationships between business people, government officials and politicians. It comes with favoritism in distributing legal permits, contracts, government grants, special tax breaks and forms of state intervention - Ex: in the US, market makers and hedge funds cut deals with government subsidies like the SEC to work around illicit activities and bury evidence of their corruption. - Embezzlement: Stealing state funds - Ex: Enron: CEO embezzled $11 billion from the company by misrepresenting earning reports, a fake energy crisis and embezzling of retirement funds. Shareholders lost up to $74 billion and CEO Jeff Skilling was imprisoned in federal prison for 24 years
- Extortion or extortive corruption - Service providers or government officials / institutions demand bribes (or unauthorized payment) in exchange for a particular service, permit, license or approval for something that should otherwise be provided free or offered at low cost - Also, it can indicate a bribe demanded in exchange for the opportunity to avoid an underserved disadvantaged, such as paying a fine even though no offense has been committed - Ex: holding someones phone hostage unless the give you USD 11 billion - Collusive - Two parties agree to do something illegal, both parties benefit and normally keep it very quiet. Both parties asses at the same time - Kick back - Secret payments to a buyer or seller who provided a contract or facilitates a transaction or appointment unlawfully - Typically after the fact, but basically a bribe - It can also indicate a situation where a supervisor or the boss “takes a portion of a workers wage in return for a certain benefit, as when a supervisor arranged for a worker to get a job” - Kleptocracy - Using a governmental position to help yourself and allies to your personal cause. The term is associated with substantial embezzlement and unfair allocation of state funds and contracts. (soreide, 2014, p2.) - EX: Dictator or a corrupt official who embezzled money to help his own company or personal goals Sept 15 (cont’ with corruption) - - Queue corruption - Bribes offered to secure a better position in the waiting list. It results in unfair allocation of rights, including access to health services - Regulatory capture - According to soreide (2014, p. 4) “an act of advancing the commercial or other special concerns of a particular interest group by a regulatory agency with regulating the industry or sector within which that interest group operates” - In politics, regulatory capture is a form of corruption of authority that occurs when a political entity, policymaker, or regulator is co-opted to serve the commercial, ideological, or political interests of a minor constituency, such as a particular geographic area, industry, profession, or ideological group. - State capture - A form of political corruption in which a private interest significantly influences a state's decision-making processes to gain an advantage through illicit and non obvious channels. Although similar to regulatory capture, it differs because of the wider variety of bodies through which it can be exercised - Every part of the government is used
- Systemic corruption - It is when corruption becomes “so prevalent that it is part of the everyday structure of society… when the consequences of working against corruption are too high for individuals, and even managers in government institutions, they adapt rather than react to the situation” - Corruption has been so normalized in the structure that it doesn't make sense to try and change it. The cons by far outweigh the pros - Collective action problem - Tender corruption (or p/rocurement corruption) - It occurs when bribes are given to “influence the outcome of competition for public procurement contracts. Bribery involved in governmental contracting is not associated exclusively with bidding; it can also take place at the planning/budgeting stage or agreed to before the tender and later combines with renegotiated contracts or flawed quality control” - The term tender refers to an invitation to bid for a project . Tendering usually refers to the process whereby governments and financial institutions invite bids for large projects that must be submitted within a finite deadline. The word tender can also refer to the acceptance of a formal offer, such as a takeover bid. - Continued acceptance of poor quality goods, works or services . Corruption. Delivery of poor quality goods, works or services.
(prevention)Measures put in place to deter state admins and industries from being corrupt. (disclosure, having someone find out and report corruption [ex: whistleblowers])We should have processes in place to help people to expose corruption and protect the people who do so. ____________________________________________________________________________ Watchdogs: those who may be watching over corruption may be corrupt themselves Academic corruption - When an individual illicitly puts personal interests above those of the people, and ideals they pledge to serve Petty corruption - The amount of corruption used is small Grand corruption - Large amounts of corruption Classifying corruption - Political - Public sector - Private sector
- Media corruption Can also be described as individual and institutional (Newhouse., 2014) - Institutional is the unintended by-products of legitimate incentives such as positive media attention, legal campaign, and ultimately electoral success. It's the institute's failure to act on the public's behalf due to its dysfunctional incentive structures. - If an officer need to take a bribe to perform official duties, still institutional corruption Institutional corruption - Emphasis is on institutional practices that can resort in the public official or the office that may be compromised - - Entails all “influences that implicitly or purposely serve to distort the independence of a professional in a position of trust” - Ex: Lobbying and campaign donations are legal, they ten to compromise the independence of the recipients holding public offices - Institutional routines that violate public trust can be referred to as “institutional corruption” Individual corruption - The individual sidesteps the guidelines while performing mandated duties - Indiv relies on only the one person doing a corrupt action, with individual choices for private gain or the gain of a third party Four categories of institutional corruption (Newhouse, 2014, p. 553) - Breaches of fiduciary ( involving trust, especially with regard to the relationship between a trustee and a beneficiary, Oxford. ) duty, - Fraud or otherwise unfair commercial practices - Destructive firm behaviour, and - Mistake, inefficiency, or incompetence” Conclusions - No universal consensus on the meaning of corruption, in many cases local contexts are required Class #4 September 20 th Understanding Corruption Learning Objectives 1. Explain corruption; 2. Differentiate between individual and institutional corruption; and 3. Mention and explain different forms of corruption with specific examples. Defining Corruption
- Corruption is generally defined as a misuse of power to serve private ends - But what form of abuse of power can be termed “corruption”? - The point is that what is corruption and what is not depends on specific local contexts. - For example, Klitgaard (1991) argues that corruption - “Can entail acts of omission; can involve illicit or licit services… The boundaries of corruption are hard to define and depend on local laws and customs” - Hence, there is no single universally accepted definition - Varying legal and academic definitions exist. - For example, Brooks (1970, p. 58) views corruption as “the intentional misperformance or neglect of a recognized duty, or the unwarranted exercise of power, with the motive of gaining some advantage, more or less personal.” (there are many ways to define corruption, you will have to identify which definition YOU feel as though describes corruption best) - For Cockcroft (2014, p. 2) corruption “involves acquisition of money, assets or power in a way which escapes the public view; is usually illegal; and is at the expense of society as a whole either at a grand or everyday level.” - Official corruption: Although corruption is mostly illegal, “there are also forms of corruption that are technically legal, but which most of society regards as corrupt” (Cockroft, 2014, p.3). Motives for corruption can be entwined: Motives can vary, but corruption usually has something to do with personal enrichment. - Personal enrichment - Achieving or retaining political power, which can also be abused to ensure personal enrichment. Academic Definitions Example: - Corruption occurs “when an individual illicitly puts personal interest above those of the people, and ideals he or she is pledged to serve” (Klitgaard, 1991, p. xi). - Activity 1 – hypothetical situation: - In 2010, Mr. Paladi, a district chief executive, was given $500,000 to run the HIV/AIDS campaign. Three years later, an audit report and further investigations show that Mr. Paladi used only $100,000 for the campaign and the remainder for buying himself a magnificent mansion. - Is this case an example of corruption and why? (Embezzlement) - Well, what does the local /national law define as corruption?
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