Corruption can occur in different organizational bodies such as governments and business organizations. It can also take various forms. These forms collectively demonstrate dishonest behaviors or actions carried out to gain some advantage at the expense of relevant stakeholders or parties. Understanding the different forms of corruption is essential to understanding the definition of the practice, its general and specific causes, recognizing specific corrupt activities or practices, and how they transpire and are carried out.
Defining and Recognizing the Different Forms of Corruption
Remember that corruption can take various forms or is carried through different methods. The common theme of all these forms of corruption is that it involves an abuse of power or betrayal of entrusted authority for personal gain or to benefit a particular group while putting other stakeholders at a disadvantage. Take note of the specific forms and their definitions:
The most common form of corruption is bribery according to Transparency International. This involves giving, receiving, or even soliciting something of value or a bribe to influence the action or decision of an individual in a position of power. Examples of bribes include money or kickbacks, gifts, and favors or preferential treatment.
Bribery can transpire in different organizations regardless of size. The transaction between involved parties creates a win-win situation. One of the reasons it is common is that it is often difficult to detect and prove. It is carried out in secrecy unless one of the involved parties or a witness provides court-admissible and traceable records of transactions.
Stealing or misappropriating funds or assets constitutes embezzlement. This specifically involves an entrusted individual or a group of individuals misusing the funds or assets under their care for their personal gain. Examples include diverting public funds, misusing company resources, manipulating financial records, or theft of personal assets.
Embezzlement is a serious criminal offense in most countries that is punishable by fines and imprisonment. It falls under one of the different types of crimes against property. It is considered as graft if it involves government officials and offices and an example of a white-collar crime and financial fraud when occurring in a business setting.
3. Money Laundering
Laundering money involves concealing its illegal origin and converting it in a manner that makes its origin appear legitimate. It is essentially the process of making illegally obtained money appear legitimate or “clean” by disguising its true source. Money laundering supplements other forms of corruption like bribery and embezzlement.
There are three processes involved in laundering. The first is placement. It involves introducing illicit funds to the financial system. The second is layering in which the launderer engages in a series of complex transactions to create layers of transactions. The third is integration. It involves integrating the funds into the legitimate economy.
Activities considered fraudulent center on the intentional deception of someone to gain something of value. This can include disseminating misleading information, giving false statements, misrepresentation of facts, fabrication of documents such as financial data or other pertinent records, and forging signatures and using personal data.
Fraud can be considered corruption when it involves dishonesty, deception, or the intentional misrepresentation of facts for personal gain or to exploit others. A specific example is a government official that fabricates liquidation reports or a corporate employee that forges signatures to complement embezzling and laundering activities.
There are two common types of favoritism. These are nepotism and cronyism. Both are considered two forms of corruption because they involve granting preferential treatment, opportunities, or benefits to family members, friends, or associates despite lacking relevant qualifications or availability of more qualified individuals.
Handing out favors can be considered a corrupt practice because it involves misusing power to give another party an unfair advantage. The practice can even complement other forms of corruption if nepotism and cronyism are carried out for personal gains or to build a closed network of associates designed for collusion and patronage.
Another form of corruption that usually involves government officials is extortion. Extortion is defined as an act of demanding something of value under threat of harm. This can include physical harm, financial harm, or damage to reputation. It is characterized by the exertion of power or influence to force someone into compliance.
Some of the common examples of extortion transpiring in a government setting include political intimidation against political rivals using coercive tactics or even force, offering protection to individuals or businesses in exchange for regular payments, and other unlawful demands to expedite processes in government-involved transactions.
7. Information Trading
Trading confidential information or knowledge intended for internal use can also constitute another form of corruption when it involves the misuse or abuse of entrusted or privileged information for personal gain or to gain an unfair advantage. Examples of this information include classified government documents and company trade secrets.
Some perpetrators leak classified documents of a government office or a political party to sabotage government operations or gain political leverage against rivals. Others trade confidential information about a particular business organization for financial gains. These activities undermine public trust and manipulate circumstances.