Corruption and Fraud
Corruption and fraud are, in this context, when an entity in power does things that are dishonest or contrary to commonly accepted ethics and laws. "Corruption and fraud both mean the misuse of public power for private gain (including gain for one’s own family, group or party)."
How it Works
Profit may be involved, in the form of money or power where favors are exchanged for favors. Often these favors are not legal or questionably legal. In order for curruption and fraud to happen the party engaging in this activity has some kind of power and is abusing this power for some kind of personal gain. Representitives in government could be accepting bribes in order to back certain legislation or to vote one way or another.
A global study into corruption and fraud in the public sector found that public corruption and fraud was an issue that effected countrties from all parts of the world, although to varying degrees.
From the study: "The countries which are mentioned most often as the most corrupt countries in the world are (in this order): Italy, Russia, Nigeria, Brazil, Colombia, Mexico, China, Japan, Zaire and Indonesia."
In October of 2001 news broke that the US company Enron had been lying to thier investors and falsifying thier revenue reports by reporting that they had profits beyond what was actually true. The complexities of the Enron scandal cannot really be overstated, but basically thier accountants falsified profits to make it look as if they made more money than they did, and the accounting firm that was auditing them--the people who are supposed to be safeguarding against this kind of thing--they were in on it too. The scandal was basically one of accounting fraud although there were other illegal activites going on as well. The scandal eventually resulted in the bankrupcy of Enron and the jailing of several executives for the company. Former CEO's Kenneth Lay, and Jeffrey Skilling were both convicted for 29 counts, including insider trading, securities fraud, making false statements to banks and auditors, and conspiracy.
The Hidden Money(citation needed)
- Huberts, L. W. J. C. "What can be done against public corruption and fraud: Expert views on strategies to protect public integrity." Crime, Law and Social Change 29.2-3 (1998): 209-224.
- Huberts, L. W. J. C. "What can be done against public corruption and fraud: Expert views on strategies to protect public integrity." Crime, Law and Social Change 29.2-3 (1998): 210.
- Petrick, Joseph A., and Robert F. Scherer. "The Enron scandal and the neglect of management integrity capacity." American Journal of Business 18.1 (2003): 37-50.
- Johnson, Carrie (2006-10-24). "Skilling Gets 24 Years for Fraud at Enron". Washington Post.