RETA 6447: Anticorruption Seminar

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Anticorruption Seminar, October 2009

RETA 6447:

Anticorruption

Seminar

Genevieve Abel

Office of Anticorruption

and Integrity

Anticorruption Seminar, October 2009

RETA 6447:

Workshop components

Introduction to Integrity

Conducting basic due diligence

Spotting Every Day Red Flags

The costs of corruption:

Political

Economic Social

Environmental

?

:


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The political cost of corruption

Obstructs democracy

popular opinion is not important

justice can be bought

Undermines trust in government

hurts tax collection

Can result in political instability


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The economic cost of corruption

Depletes national wealth

Hinders development of fair marketstructures

Distorts competition

Deters investment

The social cost of corruption

Undermines public trust

in political system

in institutions

in leadership

Causes frustration and apathy

May promote outward migration

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The environmental cost

Degradation

Destruction of natural environments

Corruption Poverty


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Bribery: $1,000 billion ($1 trillion) /year

Procurement bribes: $200 billion/year

One Asian country lost $48 billion throughcorruption over the past 20 years,surpassing its foreign debt level.

: $1,000 ($1 )

: $200

20 $48 ,

Global Challenges

Cultural norms

Different understandings of acceptableconduct

Different expectations

Precision of language

Risks in upholding anticorruption initiatives

()

Corruption Perception IndexCountry CPI Ranking CPI Score

Somalia 180 1.0

Afghanistan 176 1.5

Kyrgyzstan 166 1.8

Turkmenistan 166 1.8

Uzbekistan 166 1.8Azerbaijan 158 1.9

Tajikistan 151 2.0

Belarus 151 2.0

Russia 147 2.1

Kazakhstan 145 2.2

Source: http://www.transparency.org/The scores range from 0 (most corrupt) to 10 (no corruption)

180 1.0

176 1.5

166 1.8

166 1.8

166 1.8 158 1.9

151 2.0

151 2.0

147 2.1

145 2.2

: http://www.transparency.org/ 0 ( ) 10 ()


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The Fraud Triangle

motive

rationalizationopp

ortun

ity

to obtain afinancial or

other benefitor to avoid an

obligation.

I didnt thinktheyd catch me

Everyoneelse isdoing it

It wonthurt

anyone

I deserve it!

,

.

,

!

Fraudulent Practice

Any act or omission, including a misrepresentation,that knowingly or recklessly misleads, or attemptsto mislead, a party to obtain a financial or otherbenefit or to avoid an obligation.

,

. - ,

, , , .

Falsified bus ticket


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Corrupt Practice

The offering, giving,

receiving, or soliciting,

directly or indirectly, anything

of value to influence

improperly the actions of

another party.

,

, , ,

.

Bribery

receiving/providing money or a favor in exchange for a

contract or other action.

.

Misaligned doors


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Exposed bars

Gaps in wooden sheets

Coercive Practice

Impairing or harming, or

threatening to impair or harm,

directly or indirectly, any party or

the property of the party toinfluence improperly the actions of

a party.

, ,

, .


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Coercion --Examples

Extortion

* obtaining money or favors through blackmailor threat

Blackmail

* an act intended to manipulate the conduct ofanother

Threat of violence (real or perceived)

--

*

*

()

Collusive Practice

An arrangement between twoor more parties designed toachieve an improper purpose,including influencingimproperly the actions ofanother party.

, , .

Collusion -- Examples

Sharing of information by vendors whilepreparing bids

Bid rotation

Pre-negotiation of award between vendorsand/or Project Management Unit, ExecutingAgency, ADB

--

()

/ , ,


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Company X

Company YCompany Z

Company X

Company YCompany Z

Conflict of Interest

Any situation in which a party has interests that couldimproperly influence that partys performance of officialduties or responsibilities, contractual obligations, orcompliance with applicable laws and regulations.

, , , , .

Sharing principal stakeholders ,


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Ali Baba Printing Alakazaam Printing BeezlebubPrinting WE-BE PRINTING Ali Baba Printing Alakazaam Printing BeezlebubPrinting WE-BE PRINTING

Examples of False Claims

Fake airline tickets

False time sheets

False hotel receipts (exercise)

()

John Not an

John Not an


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Fake Airline Tickets

Background

Resident Mission reported that a consultingfirm submitted fake airline tickets

Red Flags Grossly inflated prices for tickets

Air France tickets were issued thru GarudaIndonesia

Ticket was not in format of Air France tickets

,

Air France ,

Air France

Is the airfare,

Reasonable for

A one-way

economy ticket?

John Not an

EltonJohn

Why were Air FranceTickets Issued by

Garuda Indonesia AirlinesWhen Air France has anOffice in Jakarta?

-

?

John Not an

Air France ,, Air France ?

Findings

Tickets were fake

Elton John was not a Air France travel agent

Further review revealed time sheets werefabricated also

Fake Airline Tickets

Air France

,


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Fraudulent Hotel Receipts Background:

Receipts were submitted by a consultantthrough a consulting firm

Department reported alleged fraudulentreceipts for hotel

Find the Fraud

:

,

FAKE FAKE

Matching Exercise

Time: 15 minutes

Instructions:

Match the terms in the left column with

the definitions in the right column

: 15

:


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Questions

15 minute break 15

Documents

RETA 6447: Anticorruption Seminar