The k2p blog

Transparency International in its newly published Corruption Perception Index focuses understandably on the under-developed and developing countries where the endemic petty bribery and facilitation fees to augment low wage levels are the visible and easily identifiable face of corruption. Of course grand corruption is also present in these countries but perception indices are inevitably skewed and dominated by what is visible and to the number of people affected rather than reflecting the monetary value of the corruption.

My own experience suggests – but I cannot prove – that in monetary terms the levels of corruption in the developed world are orders of magnitude larger but much more sophisticated and very well camouflaged compared to cases in the developing world. But with the much higher living standards the need for highly visible petty corruption has been largely eliminated. But the greed based cases in the developed world – when they are disclosed – are usually spectacular. As has now happened in Germany.

http://www.bloomberg.com/news/2011-01-05/ex-bayernlb-management-board-member-gribkowsky-arrested-in-bribery-probe.html

Gerhard Gribkowsky, the former chief risk officer of German state-owned bank Bayerische Landesbank, was arrested today over allegations he accepted bribes during his tenure at the lender. Munich prosecutors are investigating him on bribery, breach of trust and tax evasion allegations, Barbara Stockinger, a spokeswoman for the prosecutors, said in an e-mailed statement today. An arrest warrant was issued and executed today, she said.

The probe is reviewing the sale of a stake in Formula One motor-sports company which Gribkowsky, 52, was responsible for overseeing. BayernLB sold the stake in 2006 without it being properly evaluated, Stockinger said. “According to the current findings, the suspect in turn received $50 million in payments disguised via two consultancy agreements,” Stockinger said.

One instance with $50 million involved to one individual!!!

My $20 facilitation bribe to speed up my visa renewal in a developing country would need to be replicated 2,500,000 times for monetary equivalence with this one case. The corruption perception index would be overwhelmed.

I have the clear impression that the monetary value of corrupt and fraudulent practices in the developed world is enormous but extremely sophisticated and rarely found out. From UK MP’s cheating on their expenses, to selling Knighthoods and other Honours , to European MP’s expense and subsidy fiddles, to billions distributed in carbon trading scams and the enormous cases of corruption/fraud whether at AIG or Lehman Brothers or by Bernie Madoff.

The monetary value of fraud and corruption in the OECD countries is probably one or two orders of magnitude greater than in the developing countries but the number of cases is probably an order of magnitude less.

The CPI is perhaps a measure of visible corruption in the public sector – but does not- and can not –  reflect the monetary value of sophisticated – and invisible – corrupt practices.

Tags: BayernLB, Bribery and corruption, Corruption Perception Index, Germany corruption, OECD corruption

This entry was posted on January 7, 2011 at 9:34 pm and is filed under Corruption, Ethics, European Union, Germany. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.