Are corruption, fraud and scandal universal?

There is not a single day that goes without the media across the world, including of course our own local media, reporting on some case or the other of a scandal or multiple scandals of fraud and corruption. They take place in all countries big and small, and it’s all about money that X, Y or Z want to make for themselves or their families, or privileges that are obtained as trade-offs in deals that are made involving both government and private sectors. There is no one that seems to be exempt from the tendency – individuals rich and poor, companies, corporates, banks, NGOs: you name it, or think of it, and it will be up there on the fraud/corruption list in one way or another if you scan the web.

To use modern terminology, fraud and corruption look like they are ‘hard-wired’ in the ‘system’. And since the system is inert and is made by human beings, it follows that this ‘hard-wiring’ can only be in the – another modern terminology – DNA of human beings. We wish – or do we really! — that it were not so, but all evidence making the headlines seems to indicate that this may well be the case. It only remains for scientists to look for and find the fraud/corruption gene which, if identified, may then perhaps be amenable to tweaking so as to eliminate this destructive tendency in humans.

A vaccine against fraud/corruption? How neat that would be! But it may be a long time coming, and in the meantime more headlines will bristle with ever more scandals.

We need not go into details of the local ones that have rocked us within living memory, the most long-running one that is still unresolved and that dominated the headlines for a long, long time being the MCB scandal involving NPF funds to the tune of the then astronomical Rs 880 million. This sum pales in comparison to the billions that are nowadays bandied about since the eruption of the BAI scandal, which has revealed alleged malfeasances and ramifications that extend beyond so far beyond our shores that we cannot even begin to think whether any radical remedy is even possible.

Meanwhile, a lot of taxpayer money continues to go into trying to bail out and to avert further catastrophic consequences – so we are told officially. It goes without saying that this money could have been used to, for example, pay their due overtime to various categories of public service staff who have been waiting to be remunerated after they have sweated it out. However, priority elsewhere to get big limousines for politicians and political appointees, sundry directors and high cadres again at taxpayer expense does not seem to be a problem… As usual, it is those at the lower levels who have to bear the brunt of the apparent lack of funds – their gaping holes are not big enough as to warrant bailouts!

And that’s another paradox of such scandals: the bigger they are, the more likely they are to benefit form government generosities. Just think of the financial crisis of 2009 and the huge bailouts to banks and companies, which didn’t prevent directors from getting their inordinately large packages despite losses their banks and companies were making!!

To shift to more recent cases, we learn that in Romania, the Prime Minister Ponta has submitted his resignation following street protests in Bucharest after a fire in a nightclub that has resulted in several deaths a few days ago. But that is not the only reason: he had been under growing pressure to step down after he faced trial in September last on charges of fraud, tax evasion and money laundering that went back to the period 2007-2011 when he was working as a lawyer.

Two other mega-scandals have come to light in the past few weeks, having to do with the automobile industry. They are of more serious import because they put lives at risk, and in fact there have been 7 deaths and numerous injuries linked to one of them. This is the Japanese firm Takata which has been fined 200 million dollars by US auto regulators for manufacturing defective airbags which have been fitted in nearly 19 million vehicles in the US alone, and other millions worldwide. They are accused of using an explosive substance, ammonium nitrate, in the making of the airbags but worse, they knowingly failed to report two incidents to the US regulator. All these cars will now have to be recalled to be fitted with replacement airbags.

The other case is that of the German company Volkswagen, which fitted its cars with meters that understated the level of carbon dioxide emissions. This is what a report online says: ‘The emissions-testing scandal at Volkswagen AG widened Wednesday as the auto maker said the recall could include about 800,000 more cars than previously disclosed and that it would stop U.S. sales of certain vehicles.

Europe’s largest automaker said it understated the level of carbon-dioxide emissions and fuel use of the additional cars to regulators. Some of the cars were gasoline-powered, Volkswagen said, moving the violations beyond the company’s diesel fleet for the first time.

German Transport Minister Alexander Dobrindt said on Wednesday that Volkswagen had advised the ministry that about 98,000 of the affected cars are gasoline-powered. Volkswagen hadn’t previously said how many were gasoline or diesel.

Shares of Volkswagen fell 2.5% Wednesday in Frankfurt.

Ratings firm Moody’s Investors Service downgraded some of Volkswagen’s corporate debt, citing “mounting risks to Volkswagen’s reputation and future earnings” in the wake of new disclosures in the widening emissions crisis.’

With such reputed companies taking the risk of defaulting on customers that trust them, one is left to wonder and ask: who can be trusted at all in today’s world not to cheat on the public they are meant to serve and earn their living from?

Perhaps there will never be a definitive answer. Perhaps the tendency to default is really hardwired into our DNA…


  • Published in print edition on 6 November 2015
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