Famous cases of bribery and corruption
Wherever there are large amounts of money, or a position of power or influence, there is a great scope for bribery and corruption. The bigger the organisation, the higher the chances are for high-level subornation.
Corruption is an act carried out with the intention of giving some advantage inconsistent with official duty and the rights of others. The legal definition of bribery is:
“The offering, giving, receiving, or soliciting of something of value for the purpose of influencing the action of an official in the discharge of his or her public or legal duties.”
Business and corruption have been bedfellows for a long time.Banking, enterprise, politics are all major arenas where back handers, embezzling funds and abusing positions of power are all too common.
The Bribery Act of 2010 created a new set of rules for organisations to abide by, and imposes a whole new set of responsibilities on companies – such as taking proper steps to know their partners, clients and agents before committing to working together.
However, with or without the Act, these types of crime are still rife. Here we look at some of the most famous cases of bribery and corruption across the world.
Kerry Khan and Michael Alexander
In October 2011, two U.S. Army Corps of Engineers employees were arrested amid allegations of fraud. Kerry Khan and Michael Alexander were accused of taking bribes totalling over $12 million from contractors in exchange for government contracts. The pair were also found to have inflated invoices to the government and taking the difference which amounted $30 million. According the US attorney Ronald C Machen Jnr, this case was the biggest bid-rigging and domestic bribery scandal ever in the history of federal contracting.
The pair were jailed for 19 years and six years respectively.
In September 2014, the Chinese government fined the pharmaceutical giant $490 million, after it was fined guilty of bribing medical staff and institutions in China. Doctors and hospitals were offered cash and sexual favours in order to promote the company’s products. This bribery netted the pharma giants an estimated $150 million, according to the BBC.
Head of the Chinese division, Mark Reilly, received a suspended three year jail sentence and deportation from the country.
This instigated a huge PR operation for the company, who took several major steps in a bid to clean up its image. Some of those included reviewing staff sales incentive schemes, a reduction in the CEO’s annual bonus and developing a better payment monitoring system.
The company suffered a massive drop in sales in China as a result of the scandal and is still working on recovering its market share.
Cash for Questions
Unsurprisingly, there is a lot of room for corruption in politics. The cash for questions affair is the perfect example of how money, greed and ill advice can topple someone from a position of power.
In 1994, the Guardian newspaper released details alleging that a parliamentary lobbyist had bribed two Tory MPs on behalf of Harrods owner, Mohammed Al-Fayed.
According to the newspaper, Al-Fayed had approached the Guardian to accuse Ian Greer of paying Neil Hamilton and Tim Smith to table parliamentary questions for £2000 per question. Smith resigned immediately, but Hamilton and Greer issued libel writs against the Guardian.
Just before the libel case was due to start in September 1996, more evidence came through to support the claim that Al-Fayed’s employees processed cash payments to the two men. Despite denying the allegations, both Hamilton and Greer withdrew their libel action shortly afterwards.
Hamilton was later declared bankrupt after losing a High Court battle against Al-Fayed in relation to comments made on a Channel 4 documentary. Greer was cleared of cash for questions by a subsequent enquiry by Sir Gordon Downey.