Corruption and Integrity Management Explained

Corruption and Integrity Management Explained

Corruption and Integrity Management Explained

Raj Chaturvedi

Corruption and Integrity Management Explained

Raj Chaturvedi

ISBN - 9789361526237

COPYRIGHT © 2025 by Educohack Press. All rights reserved.

This work is protected by copyright, and all rights are reserved by the Publisher. This includes, but is not limited to, the rights to translate, reprint, reproduce, broadcast, electronically store or retrieve, and adapt the work using any methodology, whether currently known or developed in the future.

The use of general descriptive names, registered names, trademarks, service marks, or similar designations in this publication does not imply that such terms are exempt from applicable protective laws and regulations or that they are available for unrestricted use.

The Publisher, authors, and editors have taken great care to ensure the accuracy and reliability of the information presented in this publication at the time of its release. However, no explicit or implied guarantees are provided regarding the accuracy, completeness, or suitability of the content for any particular purpose.

If you identify any errors or omissions, please notify us promptly at [email protected] & [email protected] We deeply value your feedback and will take appropriate corrective actions.

The Publisher remains neutral concerning jurisdictional claims in published maps and institutional affiliations.

Published by Educohack Press, House No. 537, Delhi- 110042, INDIA

Email: [email protected] & [email protected]

Cover design by Team EDUCOHACK

Preface

Corruption, corporate, and personal integrity continues to be an important factor in the global economy increasingly. Many national and multinational companies, as well as organizations, are facing serious cultural problems, especially concerning integrity and corruption issues. It is evident from the most corrupt countries that lack of integrity is harmful to a country’s economy, society, politics, and the overall environment.

There is a lack of proper and accountable leadership in a country wanting in integrity hence opening the door for more corruption to take place. Corruption also intensely affects the country’s economy since the corrupt personnel facilitates immense depletion upon the national wealth. Nevertheless, the most damage that is done to a country is when corruption affects the society: The character of corruption infiltrates upon the citizens of a country. Corruption in a country is unethical behavior, which tends to diminish the trust that citizens and foreigners have towards the government, leadership, and the politics of the nation in question.

This kind of situation creates loopholes for exercising unethical behaviors and corruption within the country as well as with the outside world. The overall environment of a country suffers the repercussion of the dubious deals. The least ethical countries are affected by many ethical issues, among them being craving for power. A country can easily be able to overcome unethical behaviors by first identifying existing unethical behavior. This book brings out the originality of integrity and corruption.

Table of Contents

1 Corruption 1

1.1 What is Corruption? 1

1.1.1 Three Elements of Corruption 4

1.1.2 Common Types of Corruption Include 5

1.2 History of Corruption 6

1.2.1 Tomb robbers and corrupt workers 7

1.2.2 Frauds, Bribes, Embezzlement 9

1.3 Nature of Corruption 11

1.3.1 Recipients and Payers 12

1.3.2 Extortion 13

1.3.3 Lubricant of Society 14

1.3.4 An Ethical Problem 15

1.3.5 Poverty Reduction 17

1.3.6 Small is Beautiful 18

1.3.7 Culture 20

1.3.8 ‘Kindness Among Friends’ 21

1.4 Causes of Corruption 21

1.4.1 Imperatives and Incentives 22

1.4.2 Opportunities for Personal Enrichment 22

1.4.3 Means of Corruption – Access and Control 22

1.4.4 Limited Risk of Detection and Punishment 22

1.4.5 The Political and Economic Environment 23

1.4.6 Professional Ethics and Legislation 26

1.4.7 Habits, Customs, Tradition, and Demography 27

1.5 Effects of Corruption 31

1.6 Conceptualizing Corruption 41

1.7 Exercise 42

2 Integrity 43

2.1 Meaning of Integrity 43

2.2 Types of Integrity 45

2.2.1 Personal Integrity 46

2.2.2 Ecological Integrity 48

2.3 Ethical View 51

2.4 Political View 53

2.5 Law as Integrity 69

2.6 Psychological Tests 74

2.7 Exercise 76

3 Corruption Management 77

3.1 What is Corruption Management? 77

3.1.1 Fighting Corruption within World Bank

Group-financed Projects 78

3.1.2 Helping Countries Fight Corruption 78

3.1.3 Selected Country Examples Include 79

3.2 Corruption in Business 81

3.3 Corruption in the Public Sector 83

3.4 Corruption in Society 85

3.5 Morals, Ethics and Corruption 88

3.6 Corruption Risk Management 91

3.6.1 Phases of Corruption Risk Management 97

3.7 United Nation’s Convention against

Corruption (UNCAC) 98

3.7.1 Article 5. Preventive Anti-corruption

Policies and Practices 100

3.7.2 Article 6. Preventive Anti-corruption Body or Bodies 100

3.7.3 Article 7. Public sector 101

3.7.4 Article 8. Codes of Conduct for Public Officials 102

3.7.5 Article 9. Public Procurement and

Management of Public Finances 103

3.7.6 Article 10. Public Reporting 105

3.7.7 Article 11. Measures Relating to

the Judiciary and Prosecution Services 105

3.7.8 Article 12. Private Sector 106

3.7.9 Article 13. Participation of Society 108

3.7.10 Article 14. Measures to Prevent Money-laundering 109

3.8 Exercise 111

4 Integrity Management 112

4.1 What is Integrity Management? 112

4.1.1 Start with a Secure Deployment 114

4.1.2 Baseline Every System that’s Deployed 114

4.1.3 Monitor Systems for Change 114

4.1.4 Investigate and Remediate Changes 114

4.2 Integrity and Business Ethics 119

4.3 Honesty 122

4.4 Data Integrity 124

4.4.1 Types of Integrity Constraints 126

4.4.2 Examples 127

4.5 Truthfulness 128

4.6 Character 129

4.7 Respect and Respect for the Position 129

4.7.1 Listen 132

4.7.2 Ask Questions 132

4.7.3 Look People in the Eyes 133

4.7.4 Speak one-on-one Whenever

the Opportunity Arises 133

4.7.5 Treat People Without Power with Respect 133

4.7.6 Touch People When Necessary and Smile. 134

4.8 Respect for the Individual 134

4.9 Principles 136

4.10 Integrity Risk Management 141

4.11 Exercise 142

5 Models 143

5.1 Corruption Model 143

5.2 Modelling Principal-Agent Relations 149

5.2.1 A Basic Principal-agent Model 149

5.2.2 Comparison with the Prevailing

Principal-agent Model 152

5.2.3 Trading-off Different Costs 155

5.3 Integrity Model 157

5.3.1 Fred Cohen & Associates 159

5.3.2 System Security Analysis 164

5.3.3 Biba Integrity 165

5.3.4 Dealing With an IsolatedTCB 166

5.3.5 Mandatory Integrity 167

5.3.6 Label Types 167

5.3.7 System Processes 167

5.3.8 Program Files 168

5.3.9 Directories 169

5.3.10 Moldy Directories 169

5.3.11 Network Connections 169

5.3.12 Users 170

5.3.13 Experience 170

5.3.14 Tripwire 171

5.4 The Biba Model 172

5.5 The Clark-Wilson Model 173

5.6 Exercise 174

6 Career on Corruption and Integrity management 175

6.1 Background 175

6.2 Duties and Responsibilities 177

6.3 Competencies 178

6.3.1 Functional Competencies 178

6.3.2 Corporate Competencies 179

6.4 Required Skills and Experience 180

6.4.1 Academic Qualification 180

6.5 Exercise 181

Appendix 182

Glossary 183

Index 221

Chapter 1. Corruption

1.1 What is corruption?

Corruption is the misuse of public power (by elected politicians or appointed civil servant) for private gain.

In order to ensure that the same simple definition could cover not only public corruption but also private corruption between individuals and businesses:

Corruption is the misuse of entrusted power (by heritage, education, marriage, election, appointment, or whatever else) for private gain.

This broader definition covers not only the politician and the public servant but also the CEO and CFO of a company, the notary public, the team leader at a workplace, the administrator, or admissions-officer to a private school or hospital, the coach of a soccer team, etc.

A much more difficult, scientific definition for the concept ‘corruption’ was developed by a professor (emeritus) dr. Petrus van Duyne:

Corruption is an improbity or decay in the decision-making process in which a decision-maker consents to deviate or demands a deviation from the criterion which should rule his or her decision-making, in exchange for a reward or the promise or expectation of a reward, while these motives influencing his or her decision-making cannot be part of the justification of the decision.

Major corruption comes close whenever major events involving large sums of money, multiple ‘players,’ or huge quantities of products (think of food and pharmaceuticals) often in disaster situations, are at stake. Preferably, corruption flourishes in situations involving high technology (no one understands the real quality and value of products), or in chaotic situations. Think of civil war: who is responsible, and who is the rebel? Natural disasters like earthquakes, floods, droughts.

The global community reacts quickly, but the local government might be disorganized and disoriented. Who maintains law and order? Or maybe the purchase of a technologically far advanced aircraft, while only a few can understand the technologies implied in the development and production of such a plane. Mostly, the sums of money involved are huge; a relatively small amount of corrupt payment is difficult to attract attention. Or the number of actions is very large, for instance in betting stations for results of the Olympic Games or international soccer-tournaments which can easily be manipulated. Geo-politics might play a role like, e.g., the East-West conflict did in the second half of the 20th century, in which the major country-alliances sought support from non-aligned countries.

Image 1.1 Corruption

Source: https://akm-img-a-in.tosshub.com/sites/rd/resources/201912/corruptionpic_1575898121_684x384.jpeg

Fighting corruption takes place in many ‘theaters’:

• political reforms, including the financing of political parties and elections;

• economic reforms, regulating markets and the financial sector;

• financial controls: budget, bookkeeping, reporting;

• Public supervision: media, parliament, local administrators and councils, registration;

• free access to information and data;

• maintaining law and order;

• improving and strengthening of the judicial system;

• institutional reforms: Tax systems, customs, public administration in general;

• whistleblowers and civil society organizations (NGO’s).

We know that corruption will not disappear from society. Our efforts are meant to restrict corruption and to protect as much as possible the poor and weak in our societies. In the end, all corruption costs are paid by the consumer and the tax-payer. They need protection.

Generally speaking, as the abuse of entrusted power for private gain. Corruption can be classified as grand, petty, and political, depending on the amounts of money lost and the sector where it occurs.

Grand corruption consists of acts committed at a high level of government that distort policies or the central functioning of the state, enabling leaders to benefit at the expense of the public good. Petty corruption refers to everyday abuse of entrusted power by low- and mid-level public officials in their interactions with ordinary citizens, who often are trying to access basic goods or services in places like hospitals, schools, police departments, and other agencies.

Political corruption is a manipulation of policies, institutions, and rules of procedure in the allocation of resources and financing by political decision-makers, who abuse their position to sustain their power, status, and wealth.

1.1.1 Three Elements of Corruption

Public and private sectors

Corruption occurs in both the public and private sectors. This includes media and civil society actors. Actors can be individuals, companies, or organizations such as political parties.

Abuse of power

Corruption involves abusing power held in a state institution or a private organization.

Benefit

Both sides involved in the corrupt act benefit, either in terms of money or undue advantage.

Sometimes the ‘advantage’ gained may not be ‘undue’ or clear-cut, but is nonetheless an advantage. For example, in some corrupt societies, people can only secure access to public health or education if they pay bribes. In such situations, those who can afford to pay have an advantage over those who cannot. The bribe giver’s ‘benefit’ is merely that which is any way his or her rightful due. Bribe-takers receive a lead for carrying out functions that are nevertheless their duty to perform.

1.1.2 Common Types of Corruption Include

Bribery

We call it bribery when a person with entrusted authority accepts or asks for an undue advantage (money, but also other material or immaterial valuables) to exercise a function or to exercise it in a particular way.

Kickbacks

A kickback usually refers to a payment given in return for receiving a contract (for example, a building company that receives a government contract to build a road or other infrastructure). This payment goes to someone involved in awarding the contract.

Foreign bribery

The bribery of foreign officials by private sector actors is also a crime in many countries. This means that bribes that take place outside a company’s country of origin may be punishable by the home country’s authorities. The OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions is an important international legal instrument that criminalizes foreign bribery, with a focus on the party paying the bribe (the ‘supply-side’).

The fact that not all countries prohibit such bribes illustrates the point above that not all corrupt acts are illegal.

Trading in influence

Trading in influence – or influence peddling – is a form of corruption where, for example, a person exerts improper influence over a public or private sector decision-making process in return for undue advantage. It is mostly people in prominent positions, with political power or connections, who trade in influence. These people abuse their channels of influence to gain money or favors.

1.2 History of corruption

Corruption has existed since the Egyptian dynasty and still persists in almost every country around the globe.

After huge corruption scandals in Malaysia and Brazil, Indonesia has just witnessed one of its regions losing more than 90% of its councilors as they are implicated in graft cases.

Looking through history, corruption seems inevitable.

Corruption originates from a Latin word: corruptus. The word is the past participle of corrumpere, meaning mar, bribe, destroy.

Corruption is as old as human history. The First Dynasty (3100–2700 BC) of ancient Egypt noted corruption in its judiciary. To state that there was justice in ancient Egypt does not exclude injustice or corruption. These were present, too, and were punishable. There were employees in the position of power who exploited their position inappropriately. Priests of the temples embezzled the income of the institutions and misappropriated the contents of tombs. Some officials and tax collectors were, on occasion, venal. There were corrupt and unjust judges over the millennia, more so in days of strife and unrest and uncertainty. Judges were bribed to acquit the guilty and condemn the innocent- If discovered, they were punished harshly.

Corrupt officials and those who prevent free traffic on the Nile had their nose or rarely the ears cut off and were exiled to Tharu in the northeast of the country in Sinai close to the land of Canaan. The Greeks called it Rhinocolura. Not much different from many current societies. It is historically credited to King Horemheb to be the first in history to Fight corruption about 3000 BC. Here, I will disclose that corruption and corrupt authorities existed in ancient Egypt long before King Horemheb. It was observed by the writer of the tale known as Eloquent Peasant that was written almost 900 years before King Horemheb. There were bribes, judicial inaction, and injustice, and collusion and conspiring with the criminals.

The writer was critical and accused the establishment and the political authority of failure to protect its subjects and to set the behavioral pattern of good or evildoer for the society as a whole. Over the millennia, there were various types of anti-social behaviors and crimes that can be labeled as corruption.

1.2.1 Tomb robbers and corrupt workers

Many corruption reports appeared during the building of tombs for the burial of the royalty and rich individuals in preparation for the afterlife. They were buried with expensive supplies and ornaments and other goods to use in the afterlife. The tomb robbers stole the expensive items like jewelry, Figurines made of valuable materials, expensive clothing and headdresses. The small Figurines were very precious as they were thought to come to life in the afterlife to serve the person buried in the tomb.

Image 1.2 Corruption in ancient Egypt

Source: http://www.love-egypt.com/images/magic-ancient-egypt.jpg

The practice also existed in ancient China. In Chinese mythology, every household has a Kitchen God who watches the behavior of its members. A week before the Chinese New Year, the Kitchen God ascends to heaven to present his annual report to the Ruler of Heaven, the Jade Emperor.

The fate of the household, whether this is reward or punishment, depends on this report. In an attempt to ensure a good report, many households smear a cake of sugar and honey onto the picture of the Kitchen God they keep in their homes before burning the image, which in Chinese mythology is how the Kitchen God can ascend to heaven to meet the Jade Emperor.

Corruption in China dates back over a thousand years and has been present through countless dynasties. In fact, widespread corruption is often cited as one of the factors that led to the collapse of the Qing Dynasty in the 19th century.

In dynastic China, the implementation and enforcement of laws and regulations were the tasks of local officials. Their official salary was entirely at their disposal, but they had to finance office expenses, pay their assistants, and bestow lavish treatments upon higher-ranking state officials, as well as pay them a so-called regular fee.

However, the imperial budget allocated to the administration was rather low. Local officials, the prefects, also received a small sum, Jang-lien jin, meaning the silver to maintain the integrity, yet it did not quite prevent them from accepting bribes in just about any form.

Even though taking bribes was generally considered to be an uncouth custom or bad habit, it was nevertheless