Corruption of Public Officials

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Table of Contents

Abstract
Introduction
Types of White-Collar Crime
Fraud in Public Organizations
Conclusion
References

Abstract

White-collar crime has been an issue that has been affecting many governments and organizations. Since the inception of the term in 1939, the rate and diversity of the crime have increased. Fraud is one among the many forms of white-collar crimes that has found its way into public organizations. Its resultant impact is the reduction of the amount of revenue that is earned by public corporations as a result of shady deals between public officials and third parties. This essay therefore critically analyzes fraud, its impacts and the measures that can be put in place to minimize it.

Introduction

White-collar crime is a relatively new branch of criminology. The term was coined by Edwin Sutherland. He defined it as a form of crime that is committed by an individual who is highly respected and has earned a high social status in his/her occupation (Braithwaite, 1985). In the course of committing these crimes, such individuals usually go against the trust that has been vested to them. They usually abuse the power that the hold for their personal interests and benefits at the expense of the organization or corporation that they work for. According to Sutherland, the behaviour that leads to the commission of white-collar crime arises from collision with other individuals (p. 5). Due to this fact, white-collar crime is also associated with other offences such as corporate crime.

Initially, it was considered that crime came about because of poverty, psychopathic behaviour or sociopathic conditions that come about as a result of poverty (Sutherland, 2006). With regards to these facts, criminologist normally believed that people of the middle and lower classes in the society could only commit crime. This has however been proven to be false. It has been identified that individuals of the upper class also commit crime by the virtue of the positions that they hold and the trust and power that is vested to them. These individuals commit white-collar crimes. The nature of offences that individuals of these two classes commit is more or less the same. However, when these crimes are quantifies in monetary terms, the crime that is committed by people of the upper class is much more than that committed by the people of the lower class.

The number and extent to which white-collar crimes are being committed has increased with time (Sutherland, 2006). As stated earlier, it is the individuals who hold high positions in their occupation that mainly commit these crimes. This therefore includes people who are in the public and private sector. Due to the broad nature of this crime, this paper will concentrate on the white-collar crimes that are committed by officials in the public sector. It will focus on the nature of the crimes that can be committed by these individuals, their consequences and various measures that can be put in place to reduce the occurrence of the same offences in future.

Types of White-Collar Crime

There are several types of white-collar crime. They include fraud, bankruptcy, embezzlement, computer crime, money laundering, inside trading and so on (Sutherland, 2006). All these crimes are similar in application. They only differ in the nature and extent to which they are committed. All in all, these crimes are committed by individuals who take advantage of the trust that is vested in them and the positions that they hold.

Public officials, due to the positions that they hold, are capable of committing any one of these crimes. Such acts normally portray a bad image of state owned organizations (Shover, 1998). Due to the high preference of corruption and white-collar crimes, state owned organizations in many countries have lost the trust and respect from the public. People normally view public officials as corrupt individuals who work only to achieve their individual goals and objectives and not that of their respective corporations or the nation at large. Due to the high rates of white-collar crimes, the performance of state owned corporations in many states around the world has been mediocre. This has risen as a result of the poor performance that is neither effective nor efficient.

Fraud in Public Organizations

Due to the diverse nature of the different types of white collar crimes that can be committed by public officials, this paper will only concentrate on fraud. According to a study that was conducted by Rosoff and Pontell (2002), fraud is the most common white-collar crimes that are being committed by public officials (p. 4). Like any other form of white-collar crime, individuals commit fraud for personal gains. In many instances, the crime may go unnoticed if the organization does not have strong internal control systems that are effective and efficient (Rosoff and Pontell, 2002).

Fraud can be defined as an intentional deception that aims at gaining personal benefits or damaging the reputation of another individual (Anand et al, 2003). It is a criminal offence and a civil wrong at the same time. The main intention of a fraudulent activity is to take money or any other valuables from an individual or an organization on a manner that is not consistent with the law. Furthermore, these acts are normally committed without the consent of the victims.

On average, state owned organizations lose an average of 5% of their total revenue to fraudulent activities that have been conducted by their employees (Mary, 2005). In most cases, it is the employees who hold high offices that commit these crimes. Public officials commit fraud through financial misrepresentations, misappropriation of funds, giving false stock information, false advertisements, embezzlement, bank frauds and tax frauds (Sutherland, 2006). At the same time, fraud can be committed by using various methods and means. The most common methods include the use of telephone, mail and the internet. At the present moment, the internet is the most common means through which individuals use to commit these offences. This is because it is efficient in hiding their identity, location and legitimacy. Many organizations have incorporated the use of IT and ICT in their operations. This has made them to be vulnerable to fraud especially by their employees who have pass codes and other relevant information that gives them an easy access to the system network where they can manipulate files and information for their personal gains.

For an act committed by a public official to amount to fraud, the public official has to present some sort of information or facts to the plaintiff. This information or fact has to reflect to something that is in existence. In many instances, material information has to be presented to the plaintiff that will make him believe that the situation that is presented to him is actually true. However, for an act to amount to fraud, the information that is actually presented to the plaintiff should be false. On top of that, the plaintiff has to believe that such information is true and act in good faith. In addition, the public official has to be aware that the information that he/she is passing is false. This therefore amounts to false representation. He/she therefore dictates the actions and thoughts of the plaintiff. As a result, the plaintiff shall have no idea whatsoever that the information that is being presented to him/her is actually false. He/she will rely on the information by believing on its content. However, the plaintiff has to take utmost care to ensure that the information that is being presented to him is actually true. Finally, the plaintiff has to suffer the consequences of the resultant actions. However, it is the jurisdiction of the court to determine whether an act amounts to fraud or not.

The availability of legitimate rackets in state owned organizations contributes greatly to the white-collar crimes that are committed by public officials (Mary, 2005). These rackets create loopholes that give them the opportunity to be involved in shady deals that most of the times go unnoticed. With this respect, it is the public officials who work in business-based corporations that stand a high chance of committing fraud as compared to officials in other professions. However, this is not always the case. In the medical industry, for example, public officials are also involved in a lot of scandals despite the fact that this field is not that exposed to crime in nature. This may include the illegal sale of alcohol, narcotics, abortions, false accident reports, unqualified specialists, operating without valid licences and fee splitting (Hofstede, 2005). In all these examples, public officials in the medical sector take advantage of either their positions or the trust that is vested to them for their personal gains.

Fee splitting and presentation of false accident reports are perhaps the most common fraudulent acts that are committed by public officials in the medical sector (Braithwaite, 1985). Fee splitting occurs between the collusion of two or more officials in the medical sector. In most cases, it occurs between a physician and a surgeon. Here, a physician refers a patient to the most expensive surgeon rather than one who can provide the best services. Here, they share the excess fee paid by the patient. This act is a crime in many states in the United States. At the same time, this act goes against the ethics of the medical profession. On the other hand, presentation of false accident reports by physicians is also another common fraudulent act in the medical profession. Here, a physician is bribed to manipulate the accident report in favour of a specific party in a given case. Likewise, this act is also illegal and goes against the professional ethics of the medical profession.

Therefore, the fraudulent activities that are committed by public officials mainly occur due to the violation of trust that is vested to them. Strict measures therefore have to be put in place to minimize the occurrence of fraud in state owned corporations. To achieve this, the administration and the law of the state have to work hand in hand. First, the administration has to ensure that it has strong internal control systems that are effective and efficient in operations. Such systems create an environment that makes it difficult to commit any fraudulent activities. Due to their efficiency, they should detect any act of fraud at an early stage. The law on the other hand should be used to punish individuals who are found guilty of committing fraudulent activities. To be more effective, fraudulent cases and other white-collar crimes should not fall under the criminal court. Instead, independent commissions and tribunals should be set to conducts investigations, hear the cases and offer punishment to public officials that are found guilty (Sutherland, 2006). Strict punishment should be given to public officials who are found guilty of fraud and other white-collar crimes. Restitution, strict penalties and jail time should be some of the sentences given to such individuals. This will ensure that the same acts are not repeated in future.

Conclusion

White-Collar crime is a new field in criminology. This crime is mainly committed by individuals who hold high positions in their professions or by the virtue of trust that is vested on them. Fraud is one among the many acts of white-collar crimes that can be committed by public officials. The high intensity and frequency of these acts has created a bad picture in state owned organizations. Due to this fact therefore, strict measures should be put in place to minimize the occurrence of fraud or any other white-collar crime in state owned organizations.

References

Anand, V., Blake, A. and Mahendra, J. (2003). Business as usual: The acceptance and perpetuation of corruption in organizations. Amsterdam: Elsevier.

Braithwaite, J. (1985). White Collar Crimes. Annual Review of Sociology, 4 (2), p. 1-25.

Hofstede, G. (2010). Culture’s Consequences: International Differences in Work-Related Values. Beverly Hills, CA: Sage Publications.

Mary, J. (2005). The Stages of a Civil Lawsuit. Maryland: University of Maryland Press.

Rosoff, S.M and Pontell, H. N. (2002).Profit Without Honour: White-Collar Crime and looting in America.Web.

Shover, N. (1998). The Handbook of Crime and Punishment. New York: Sage.

Sutherland, E.H. (2006). White-Collar Criminality. American Sociological Review, 5 (1), p. 1- 11.

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