Corruption and Coronavirus – A Toxic Combination
Alex Cotoia, who recently joined The Volkov Law Group, as a Regulatory Manager and Compliance Consultant, joins us for a posting on Transparency International’s 2020 Corruption Perceptions Index. Alex can be reached at [email protected]
On January 28, 2021, Transparency International (“TI”), a non-governmental organization globally renowned for its work in combatting corruption in both the public and private sectors, released its much-awaited Corruption Perceptions Index (“CPI”) for the previous year. According to TI, of the 180 countries and territories ranked on the CPI, over two-thirds of countries scored below a composite score of 50, indicating that corruption continues to broadly undermine civil society and—perhaps most pertinently—impede effective governmental responses to the crippling effects of COVID-19.
While the list of proverbial ‘bad actors’ on the 2020 CPI (Somalia, South Sudan, Syria, Yemen, and Venezuela among them) will come as no surprise to those working in the field of compliance and ethics, perhaps most startling are the reports of malfeasance in countries that rank perennially high on the CPI. In the UK, for example, which scored an admirable 77 on the CPI, the New York Times reports that an estimated $11 billion in COVID-19 contracts were awarded to companies “either run by friends and associates of politicians in the [ruling] Conservative Party, or with no prior experience or a history of controversy,” as a consequence of “cronyism, waste and poor due diligence” owing to the government’s decision to forego competitive bidding. According to a damning National Audit Office report, a so-called “VIP lane” was set up for potential suppliers with political connections. These suppliers were ten times more likely than their non-VIP lane counterparts to ultimately garner a lucrative central government coronavirus contract.
In highly developed and industrialized nations like the UK, reports like these and others are deeply corrosive of public confidence in democratic government and ultimately undermine the effort to mitigate the effects of COVID-19 on the country at-large. In less affluent countries—many of whom score comparatively low on the TI 2020 CPI—sweetheart deals have an even graver impact, routinely becoming matters of life and death; life for those who can afford to bribe a government official for treatment or access to PPE, and death for those who cannot.
Similar to the UK, the United States has continued to fall down the rankings as its corruption score continues to grow worse. The US fell two spots from its 2019 ranking to number 25 out of 180 countries, and saw its score decrease from 69 to 67 (lower score is indicative of higher risk of corruption). Critics of the CPI note that these rankings are still likely higher than they should. Sure, a significant amount of corruption has occurred within less developed countries. However, as the critics note, it takes two to tango and the vast majority of enforcement actions have been against companies based in these highly developed nations—notably, the UK or the US—despite the fact that they still maintain high rankings in the CPI.
Faced with the increased likelihood that graft and greed could infiltrate even the most scrupulous companies amidst the current crisis, it is incumbent on ethics and compliance professionals to be even more vigilant about monitoring and assessing third-party relationships across the board—from partners, to vendors, suppliers, manufacturers and contractors, to the oft-neglected intermediaries and agents. Equally important is reinforcement of the company’s express commitment to anti-bribery and corruption protocols, and zero tolerance for infractions of these rules by company officials at all levels—executive or otherwise. In the context of the ongoing struggle with coronavirus, corruption is not only illegal; it also clearly kills.