Corruption not endemic and systemic but should be fought more

Fri, Mar 30, 2012, 01:00

ECONOMICS:‘CORRUPTION LOWERS tax revenue, inflates the cost of public services and distorts allocation of resources in the private sector. The negative correlation between good governance and economic development has been identified. Corruption humiliates the ordinary citizen and weakens the state.” * This description of graft and its ill-effects could hardly be bettered.

The publication last week of the Mahon report begs many questions. Here are two: what can be learnt from anti-corruption practices elsewhere and how pervasive is this universal vice in Ireland?

There is a massive body of literature on corruption’s pernicious effects and what can be done to curb this form of abuse of power.

Given the duration and costs of the tribunals of inquiry established in the 1990s, one might have thought that cheaper and more effective alternatives would have been proposed but that has not happened. It is remarkable how little the debate has been informed by other countries’ anti-corruption laws and investigating practices.

“Nothing can be proved” was the lament year after year as Charles Haughey lived so blatantly beyond the means of a full-time elected representative. The sources of the considerable sums received by Bertie Ahern could not be ascertained despite many years of digging by the Mahon tribunal.

Other jurisdictions have arrived at a simple response to the otherwise difficult job of catching bung-takers: place the onus on all elected representatives and public officials to explain the origins of their wealth if it appears out of line with their remuneration.

Where such laws have been enacted, the failure to explain satisfactorily is a criminal offence. Such laws are not disproportionate given the damage graft causes.

Having the appropriate laws in place is one thing, enforcing them another. Investigators need the powers, skills, resources, desire and independence to pursue those on the take.

Again, there is no shortage of models that work better and more cheaply than the absurd tribunal system. The US has special prosecutors who, among other things, drove the Watergate investigation which unseated a corrupt president. In the inquisitorial continental European legal systems, investigating magistrates often lead the fight against corruption, most notably in Italy in the early 1990s. Elsewhere, stand-alone, permanent agencies have been established to fight corruption. The case for such an agency in Ireland is very strong, particularly given the Garda’s poor track record in the area.

Here, palm-greasing was systemic in land rezoning and will always tempt unscrupulous politicians. This alone warrants stronger laws and the establishment of a dedicated graft-busting agency.

If Mahon did not go far enough in advocating new anti-corruption mechanisms, he went too far in describing past wrong-doing as endemic and systemic.

In many countries, securing a job in the public sector involves paying a bribe. Merit-based entry to public employment is the norm here. Abuse of the power of appointment has happened – by packing boards of public entities with cronies, for example – but given the hundreds of thousands of people employed by the State, it makes for a small proportion of all public jobs.

Kickbacks in tendering processes are among the most common forms of graft worldwide. In many countries, highly formalised systems exist whereby politicians and officials take a cut of all public contracts.

The Moriarty tribunal found the largest single contract ever issued in this State was won because Michael Lowry lined his pockets in the process. Nor has it been unknown for businesses, whose owners and bosses are supporters of the party or parties in power, to benefit from preferential treatment when public contracts are up for grabs.

Reprehensible though this is, politicians have never routinely preyed on business people in the public procurement process. If they had, those who lose out would have more to say about it. Ask around the business community and even those who are most disdainful of the political class do not say that kickbacks are common.

If Mahon knew a little more of the world, he would know what endemic and systemic political corruption really looks like. That said, there has been too much of it here. More should be done to stop it.

* Organisation for Security and Co-operation in Europe

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