CORRUPTION

Corruption “The Evil Phoenix”
Subramanian Alias Vijay Pillay
Stevens Institute of Technology

Corruption “The Evil Phoenix”
Corruption, a never heard fairy tale for some and a day to day life for others. It is a severe epidemic disease tough to cure. But the victims here are not just some people. It affects the entire world. Corruption is the biggest manifestation of greed and killer of the economic growth which has exponential systemic effects. It has been prevalent in the history and is expected to live happily ever after.
Corruption is defined as “Dishonest or fraudulent conduct by those in power, typically involving bribery”. Corruption can be of different scales, namely Petty, Grand and Systemic.
Corruption is omnipresent and a never ending plague in the society. In this essay, we are going to read about the magnitude of the effects of corruption with examples and some possible solutions.
Corruption creates imbalance in the world. In countries like Somalia, which ranks number one in the corruption list, people have to bribe the government officials even to get the free foods and medicines provided by the government. Corruption is not limited to under developed and developing countries, we have examples of bureaucrats from developed nations, The best example for this are former Siemens AG: U.S. prosecutors charged eight former Siemens AG executives (December 2011) with paying $100 million in bribes for more than a decade to Argentinian officials to help win a $1 billion contract to produce national identity cards.
The executives paid bribes intended for top Argentina officials (Between 1996 and 2007), including two presidents and cabinet ministers, according to the criminal charges and a separate civil lawsuit brought by the top market regulator, the U.S. Securities and Exchange Commission. The charges were filed in U.S. District Court in Manhattan.
The defendants face criminal charges of conspiracy to violate the Foreign Corrupt Practices Act (FCPA) anti-fraud statute, as well as wire fraud and money laundering, crimes that carry a possible maximum prison term of 25 years. In December 2008, Siemens and its subsidiary in Argentina pleaded guilty to criminal violations of the U.S. Foreign Corrupt Practices Act and paid $449 million in fines over the same national identity card contract.
The above is a mammoth corruption involving bureaucrats from countries listed in the least corrupted nations like Switzerland and Germany. Corruption as mentioned earlier is an epidemic disease to the society and it can have catastrophic results. Some powerful people encourage corruption in weak countries for their individual profit. During the cold war between USSR and USA, both of these nations encouraged corruption by supporting dictatorships, destabilizing democracy and funding oppositions. In this cold war, USA succeeded in its mission. As a result, USSR broke into several nations and Russia ranks among top 10 in the corruption list. Another example of an institutional corruption with disastrous effect is the corruption case of Johnson & Johnson.
Johnson & Johnson were charged for bribing the surgeons and other doctors with cash incentives for prescribing Johnson & Johnson products. It undertook an elaborate scheme to pay about 20 percent of the price of the company’s devices to Greek surgeons. Officials at the Securities and Exchange Commission said that Johnson & Johnson’s bribes might have harmed public health in several European countries. For years, the company tried to hide its illegal activities by using sham contracts, off-shore companies and slush funds to cover its tracks. The case is the latest in a string of criminal investigations into illegal marketing practices by drug and device makers. Companies have repeatedly settled allegations that they paid kickbacks to doctors in the United States to induce them to prescribe drugs for, or implant medical devices in, patients who are unaware of their doctors’ financial incentives. With the settlement agreement from Johnson & Johnson, prosecutors have now begun penalizing companies in foreign bribery cases as well.
Corruption makes it impossible for the developing countries to reach higher levels. India is in 88th position in the corruption list. Still more than 40% of the Indian people are affected by corruption. A massive 600 billion dollars are deposited by Indian politicians and higher government officials illegally. A classic example of notorious politicians is the famous 2G spectrum scam in India.
The 2G spectrum scam involved then telecom minister A Raja favoring Unitech & Swan Telecom for unknown bribe but a part of the bribe (4M USD) was transferred to his aide in the scam, Member of Parliament Ms. Kanimozhi. Unitech got licenses without any prior telecom experience and Swan Telecom given license even though it did not meet eligibility criteria. Swan got license for $250 million, sold 45% stake to Etisalat for S1 billion, whereas Unitech Wireless got license for $320 million, sold 60% stake for $1 billion. All nine companies paid only $2.5 billion for 2G licenses. Mr.Raja was given life sentence. Former telecom secretary Sidharth Behura, who allegedly shut counters to physically block other telecom companies, faces the same charges as Raja. And so does Raja 's Personal Secretary RK Chandolia. The capital loss due to the 2G scam has been estimated to colossal 32B USD to the Indian government which could have been used for various infrastructure development and deficit of India.
Some of the possible solutions for reducing corruption are given as follows. Awareness should be caused among people by explaining the impacts of corruption through education. Strict laws should be enacted; the offenders should be punished so that others would be afraid to commit corruption. The government officials should be paid well so that they would not involve in corruption. The process of banking should be made transparent. Media power should be used to create awareness among people. Politicians should not be allowed to involve in any business while in power. All the transactions should be done in a controlled market.
There is a never ending list of many corruption scams and greedy people, recent releases from wiki leaks has revealed several corrupt politicians and business men who have deposited black money in Swiss banks. In several developing countries corruption has deep roots making it an essential evil whereas in others it is prevalent only in the upper tranche of the political system.
As long as there is love in this world, there will be hatred. In the similar way, as long as democracy exists, there will be corruption. Even by taking the measures we have listed above, it is impossible to eradicate corruption completely. But we can reduce the impact of corruption on our economy by avoiding corruption.

“I pledge my honor that I have abided by the Stevens Honor System.”

References
Gardiner Harris. Johnson & Johnson Settles Bribery Complaint for $70 Million in Fines, April 8, ____2011. < http://www.nytimes.com/2011/04/09/business/09drug.html>.
Grant McCool. Siemens executives charged with bribery, December 1, 2011. ____<http://www.reuters.com/article/2011/12/13/us-siemens-argentina- ----------------------------------idUSTRE7BC18J20111213>.
Merrill Goozner. The 10 largest corruption cases, December 13,2011. --------------------------------------<http://www.thefiscaltimes.com/Articles/2011/12/13/The-Ten-Largest-Global-Business-----------Corruption-Cases.aspx#page1>

References: Gardiner Harris. Johnson & Johnson Settles Bribery Complaint for $70 Million in Fines, April 8, ____2011. < http://www.nytimes.com/2011/04/09/business/09drug.html>. Grant McCool. Siemens executives charged with bribery, December 1, 2011. ____<http://www.reuters.com/article/2011/12/13/us-siemens-argentina- ----------------------------------idUSTRE7BC18J20111213>. Merrill Goozner. The 10 largest corruption cases, December 13,2011. --------------------------------------<http://www.thefiscaltimes.com/Articles/2011/12/13/The-Ten-Largest-Global-Business-----------Corruption-Cases.aspx#page1>