Retail Corruption

Here’s what the Department of Justice says about American residents who join in the local overseas celebration and “the way we do business in these parts” called bribery: “The Foreign Corrupt Practices Act of 1977, as amended [in 1998], 15 U.S.C. §§ 78dd-1, et seq. ("FCPA"), was enacted for the purpose of making it unlawful for certain classes of persons and entities to make payments to foreign government officials to assist in obtaining or retaining business. Specifically, the anti-bribery provisions of the FCPA prohibit the willful use of the mails or any means of instrumentality of interstate commerce corruptly in furtherance of any offer, payment, promise to pay, or authorization of the payment of money or anything of value to any person, while knowing that all or a portion of such money or thing of value will be offered, given or promised, directly or indirectly, to a foreign official to influence the foreign official in his or her official capacity, induce the foreign official to do or omit to do an act in violation of his or her lawful duty, or to secure any improper advantage in order to assist in obtaining or retaining business for or with, or directing business to, any person.” Cool, huh?

Half (at least) the world operates on formalized bribery, and failure to partake unless you have something that they can’t get anywhere else often means the deal is gone. So folks hire expediters to “get the job done,” but if you (as a U.S. resident) have any reason (really!) to believe some of that expediting you are paying for actually winds up as bribery, you could be a FIT: felon in training!

Graft and corruption have sapped developing and third world economies, fomented angry extremists who proselytize military religion to help angry mobs deal with the corrupt governments that have drained the lifeblood out of their hopes and dreams, leaders often supported by massive U.S. aid because they are willing to oppose a declared enemy of the United States. Such enemies were once the Soviet Union and “communism,” but today it’s Iran, al Qaeda and comparable terrorists. It’s OK for the U.S. to support the pillar of corruption at the top – the Hamid Karzai-du-jour – but woe to American business people trying to compete against unscrupulous competition not constrained by the FCPA. It’s good to be a government... the laws don’t actually apply to “foreign policy,” like bribing Pakistan not to spread nukes to their neighbors... and you thought it was about helping us in our war against terrorism.... Silly you!

Our entire mission in Afghanistan has long since failed – not just for our inept assumption about the Taliban – but precisely because we installed one of the most corrupt regimes on earth that has little geographic control and virtually no popular support: “Betting thousands of dollars a night [in poker games] in a country where most families live off a few hundred dollars a year would seem like a bad play for Sherkhan Farnood, the founder and former chairman of Kabul Bank, the country’s biggest. His assets are supposed to be frozen, and he is still facing the threat of prosecution over a scandal that could end up costing the Afghan government — and, by extension, the Western countries that pay most of its expenses — almost $900 million, a sum that nearly equals the government’s total annual revenues… As Americans pull back from Afghanistan, Mr. Farnood’s case exemplifies how the United States is leaving behind a problem it underwrote over the past decade with tens of billions of dollars of aid and logistical support: a narrow business and political elite defined by its corruption, and despised by most Afghans for it.

“The Americans and Afghans blame each other for the problem’s seeming intractability, contributing to the deterioration in relations that now threatens to scuttle talks on the shape of ties between the countries after the NATO combat mission ends in 2014. What is clear is that the pervasive graft has badly undercut the American war strategy, which hinged on building the Karzai administration into a credible alternative to the Taliban… Still, the Obama administration has concluded that pressing the fight against corruption, as many American officials tried to do in recent years, could further alienate Mr. Karzai and others around him whom Washington is relying on as it tries to manage a graceful drawdown. New York Times, March 7^th. But corruption at the top of most such countries simply is a signal to those below that graft is “okay.”

So let’s drop this corruption thang way down to the bottom of the spectrum... even beneath the drug cartels buying the corner cops... into the grassroots where the bribes are smaller but are simply a way of life. As the son of a U.S. diplomat stationed in Beirut, Lebanon back in the sixties, I heard my dad talk about how clean and well-organized bribery had become. A de facto rate card system – clearing customs, paying traffic tickets, getting a sewer line checked, a new phone line approved and installed, reducing a jail sentence, deciding a case, getting a private parking spot in a public place, reducing your taxes, etc. – all had pretty established rates, and if the relevant government official kept within those boundaries, nobody got hurt... well not too badly, and the system rolled on. The rich obviously did better at this game than those at the bottom of the socioeconomic ladder, of course, but how is that different from anywhere else?

India produced some nasty visual shocks, like the time I saw a cop in Mumbai shake down a four-year-old beggar girl accosting cars at a stop light (Mumbai traffic really doesn’t need traffic lights, since it is stopped all the time anyway!), taking a roughly seized cut of her meager proceeds to allow her to stay... pulling her arm way too hard for her little frail body... but that’s just the way life is isn’t it? Life’s hard, and life at the bottom... well...

Generally, people are angry at corrupt regimes, occasionally so angry that they topple a government when they think the officials have just gone too far. Sorry Hosni, you just took a tad more than you should have. But this rate card structure is now prevalent all over the world. “The cost of claiming a legitimate income tax refund in Hyderabad, India? 10,000 rupees… The going rate to get a child who has already passed the entrance requirements into high school in Nairobi, Kenya? 20,000 shillings… The expense of obtaining a driver’s license after having passed the test in Karachi, Pakistan? 3,000 rupees.

“Such is the price of what Swati Ramanathan calls ‘retail corruption,’ the sort of nickel-and-dime bribery, as opposed to large-scale graft, that infects everyday life in so many parts of the world…Ms. Ramanathan and her husband, Ramesh, along with Sridar Iyengar, set out to change all that in August 2010 when they started ipaidabribe.com, a site [see above picture] that collects anonymous reports of bribes paid, bribes requested but not paid and requests that were expected but not forthcoming.” New York Times, March 6^th.

Before you go to the site, and you really should, you need to know that roughly 50 rupees = US$1, and a lakh = Rps 100,000. Add into that mix that the average annual per capita (number of people divided into GDP) in the U.S. is about $48 thousand, while in India, it’s more like $3,500. Have at the site and look at the results... all in English, thank you. But it’s not just Asia and Africa. Greece is dying because her billionaires cheat on their taxes, bribe when they get caught and export their gains to Swiss bank accounts, laughing all the way. Italy isn’t too far behind, and tax evasion and a little grease of the palm is just a way of life. Everybody does it, so what harm can it really inflict? Other than toppling a few regimes along the way?

“Last year, the Kingdom of Bhutan’s Anti-Corruption Commission created an online form to allow the anonymous reporting of corruption, and a similar site was created in Pakistan, ipaidbribe, which estimates that the country’s economy has lost some 8.5 trillion rupees, or about $94 billion, over the last four years to corruption, tax evasion and weak governance.” NY Times. The underlying horrible is that bribes and corruption push money into the hands of the corrupt elites and sap those on the edge… creating hopelessness and anger. And hopelessness and anger foment extremism. Exactly where do you think al Qaeda and its clones would be if the world’s leaders had pushed all their ill-gotten gains back down to the people to create schools, hospitals, roads and factories? Where would Hamas be if Palestine were a successful economy? Would Israel even be threatened by these malevolent forces? Exact how many people have perished because of corruption?

I’m Peter Dekom, and in the end, those with little or nothing to lose can become the most dangerous people on earth.