Corruption causes social damage: can it be repaired?

January 31, 2011

We know corruption is bad, we argue about its consequences but we have been obsessed with its causes and the perpetrators.  The main point of academic, activist and reformist attention view has been: whether it is the supply or the demand side of corruption; whether the offender is at home or abroad (or both); whether the method used was a bribe or a kickback; whether we are dealing with petty or grand corruption and how much is it and where does it happen; if and how we can ensure that not only individuals but also that legal entities be responsible for acts of corruption, and so on.  Partly this focus on causes, parallels our focus on the perpetrators, which has been the focus of  what is called the “anti-corruption movement” which includes civil society organizations, international institutions, donors, academics and professionals of different kinds among others. In fact this is the main focus of international legal instruments (United nations Convention Against Corruption and the OECD Anti-Bribery Convention) with some minor exceptions. And where are the victims? Fighting corruption is not an objective per se, and if corruption can’t be prevented or avoided, its consequences at least need to be repaired. Read the rest of this entry »

Advertisements

Of fraud, corruption and self-pity: What are corruption sanctions for?

October 3, 2009

The logic of Judge Rakoff is clean, whether one likes the consequence or not, so does his math. In rendering his decision on the Consent Judgment in S.E.C v Bank of America he considered the proposed agreement unfair, unreasonable and inadequate. According to the facts in the case, in the proxy statement that the Bank of America made to its shareholders for their approval of the merger with Merrill Lynch, it represented “…that Merrill had agreed not to pay year-end performance bonuses or other discretionary compensation to its executives prior to the closing of the merger without Bank of America’s consent[1]…what turned out not to be true. The S.E.C discovers this little problem (thus too late), wields its regulatory sword on the agreement and threats to sanction Bank of America. Short of issuing the sanction, the SEC and the Bank strike an agreement to reduce it: the Bank pays a fine of US$33 Million dollars  and is not expected to accept or deny the charges. This is the agreement the Judge was asked to give his blessing on. Read the rest of this entry »


%d bloggers like this: