Corruption : Previous decade

An interesting study by the World Bank indicates that growth rates in nations with pervasive corruption might be lower than the growth rate of countries with less corruption by 0.5 to 1 per cent. Another study shows that the total cost of corruption worldwide can be as much as $1.5 trillion – or five per cent of the world economy. According to Transparency International, the top corrupt countries are Iraq, Uzbekistan, Turkmenistan, Sudan, Chad, Burundi, and Equatorial Guinea.

However, it would be a mistake if one were to assume that the biggest corruption cases come from these nations; for those are developed countries that, despite anti-corruption mechanisms in place, come out tops in the individual corruption cases list. Several incidents during the last decade prove as much. A case for example is the Enron scandal in the USA. It was the biggest insolvency and audit failure in American history till then – the global auditor Arthur Andersen was closed down due to its corrupt approval of Enron’s accounts. Enron’s stock price nose-dived from $90 in mid-2000 to below $1 by November 2001, resulting in shareholders losing a whopping $11 billion. Interestingly, the founder of Enron, Ken Lay, was one of the biggest contributors to the political career of George W. Bush, donating around $140,000 for Bush’s campaign trail in the run up to the presidential elections.

In 2006, in the UK, the Secretary of State for Culture, Media, and Sports, Tessa Jowell, was accused of being involved in a corruption case with her lawyer husband who was paid £3,40,000 by Italian Prime Minister Silvio Berlusconi for submitting false evidence in a court case. This money was converted by her to a hedge fund.

Back in Italy in the same year, an inquiry revealed a surveillance scandal that had started in 1996. The case involved phone tapping of 5000 eminent citizens that included politicians, magistrates, football players and referees. The main architects behind the scam were a senior officer of SISMI military intelligence agency called Marco Mancini, and former security chief of Italian telecom, Giulio Tavaroli. The motive was to squeeze money from certain people, which they very smartly did.

A famous political scandal in Japan involved their agriculture minister Toshikatsu Matsuoka, who committed suicide after being accused of misappropriating the utility cost of his office. It happened in 2007, when he was charged of falsely claiming $2,36,000 of utility cost, when it was provided free by his parliamentary office. He was also accused of refusing to disclose donations worth $8,500.  All these examples are only the tips of the various icebergs.

Though most developed countries have their national anti-corruption bodies, more often than not they remain inefficient. And worse, corruption in developed nations has a bigger effect globally than corruption in third-world nations. Thus, it makes sense to create an independent anti-corruption watchdog to look into dealings which transcend international borders. With corruption being a critical issue in controlling global terrorism – as happened in India where coast guard personnel allegedly took money to
allow unchecked boats to enter Indian territory; this led to 26/11 – UN’s involvement becomes more an imperative now than ever.