27 August 2017

How to Bribe a policeman

Is "petty corruption" the same as major corporate or central government corruption?

When flagged down for a minor driving offense, an acquaintance was told by the male and female police officers that this would be a $75 fine. Okay, said the acquaintance, you’re right, I was wrong, write me the ticket and we'll all the on our ways. If only it was so simple. Driving in Panama City can be very difficult, and while a right turn from the inner of three lanes is considered normal, it is possible to break the road code, indeed this is what happened.

First, this is not a comment advocating corruption, or bribing policemen, or bribing anyone else for that matter. This is a comment on the reality of life in Panama, and no doubt in many other countries. Bribery is "normal" in so many places and situation; sometimes petty as I'm going to describe, while at other times major such as the brown envelop scandals of Siemens and Odebrecht, and the Asset Seizure Program in the United States.

Odebrecht is the current poster-child for massive corporate corruption, having bribed its way to successful bids for major infrastructure projects across Latin America. One estimate is that Odebrecht paid out over $780 million in bribes, with investigations and arrests under way in Brazil, Ecuador, Peru, Panama and other countries. This was corruption on a massive scale, and has already brought down at least one government.

Unlike corporate corruption, in too many countries, including Panama and the United States, to name just two, police forces are under-funded, and in many cases, police officers are poorly paid. In some cases, they are so poorly paid that they cannot, on their salaries, feed their families and buy their uniforms. An unfortunate position to place the protectors of social order, including general ethical standards.

In the United States, police budgets are boosted by something called the Asset Seizure Program ("Civil Forfeiture" program), a process by which police can declare that you had the intent to use your assets to commit a crime, or that those assets were gained as a result of criminal activity. Of course, if you can prove that you are innocent, in as much as you did not commit a crime to afford your car, and if you can prove that you did not plan to commit a crime such as buying drugs with the $200 (or $2000) that you have on you, then they will give those assets back to you. You will need to hire a lawyer and go to court, so in many cases, even fighting will cost you more than the assets sieved. US police forces boosted their budgets by $4.5 billion in 2014, more that the total reported value of property reported stolen in burglaries that year.
This can better the described as Kleptocratic behavior on the part of a government. Top-down corruption, if you will.

But coming back to Panama, and our friend stopped by the police.

"A ticket would be a bad thing for your record" the police said, "there is probably a better way to handle this". According to the story we were told, the driver then figured out what was being suggested, and decided to play along, with no desire or intent to pay a bribe. "What do you mean?" She is European, and Northern European, and the thought of bribing a policeman for any reason was deeply repugnant to her way of thinking.

Well, they said, if you were, for example, to pay the fine on the spot, it would of course be reduced, and there would be no need to add it to your permanent record. "Okay", she said, "can I pay it right now at the police station?"

Well that wouldn't be very convenient, would it? So they asked for her passport, which you are required to have with you at all times in Panama. She handed it over, and they looked at it, and handed it back. "There seems to be something missing" she was told. Again, she played dumb.

This carried on for a short while, with the two police looking at each other, wondering about just how dim this woman could possibly be. This was a perfectly normal transaction, and they were confused as to why this wasn't going to script.

So they passed her a red notebook, and in their frustration, said "Look, the way it works is that you put a $20 in the notebook, and everyone is happy." And with no option being given, and instead of the $75 fine that she would legitimately have had to pay for a real ticket, she took a $20, put into the red notebook as instructed, and handed the notebook back to the police.

And yes, that was the end of the story. They then very politely wished her on her way, as if nothing had happened. The law had been upheld, she had been fined for breaking the law. They did their job in pointing that out to her, and giving her an option that did not include wasting her time and theirs, and costing her more money. And they were paid what is in effect the top-up to their salaries that is expected.

Does any of this excuse or condone what was done. Was the FCPA (Foreign Corrupt Practices Act) law broken, or the UK Bribery Act broken? Most surely, a foreign official, two actually, were paid a bribe.

Am I suggesting a moral equivalence between the individual police extracting bribes when minor infringements happen, and the crimes of Odebrecht, Siemens and the US national and state governments? Actually, I would suggest that the bigger evil, not just because of the bigger amounts involved, is the US Asset Seizure Program. This is the nation-state acting as the organized criminal enterprise. Odebrecht and Siemens were crooked, not doubt about that, and used capitalist incentives to illegally entice officials to win sales. The local police who use these tactics to pay for uniforms, food and housing, and schooling for their children, all within an existing and established culture that has effectively established a price for infringements, is the lesser evil by far.

Corruption starts at the top, and the messages from the top determine if a society is corrupt. In the case of the police in Panama, are they individually more corrupt than company executives, or less (or more) than local and national police forces that use extra-judicial seizure of assets? The higher the corruption starts and is justified, the greater the rot it contributes to and create in a society.

1 comment:

  1. From an email response by Ray Flynn, expert on Anti-corruption and Anti-bribery.

    Both the FCPA and the UK Bribery Act distinguish between large scale bribery and petty bribery. Under the FCPA small amounts paid to junior government officials, to move normal administrative things along, are considered ‘facilitation payments’, which are unlikely to be prosecuted. Although not the case with the driver, she would be highly unlikely to be pursued by US law enforcement because of the amount involved and the fact that the bribe was solicited. The official Guidance to the UKBA advises citizens to pay a bribe, and report it, if they feel that their freedom is at risk or if there is risk to ‘life and limb’. The driver could have argued that she feared being locked up had she opted to be brought to the police station, where she could have been accused of being ‘obstructive’. The Guidance makes it clear that a prosecution is highly unlikely under circumstances like this.

    In all cases, from petty bribery to larger scale corruption, the briber does a risk assessment, even if subconsciously, to decide that the benefit of paying the bribe outweighs the risks involved in being caught. The driver decided it was cheaper and (more importantly) less hassle to pay the policeman $20 and go home. Oderbrecht executives thought, for years, that they were immune from investigation and conviction, given the government officials they had in their pockets. I doubt that anyone involved in the US Asset Seizure Program fears being taken to task, especially as they have the law on their side, however unjust. Their actions are, undoubtedly, corrupt in certain cases, and the problem lies in there being a conflict of interests, which incentivises them to abuse their power for their own benefit, or maybe only for the benefit of the government. If this is the case, it could be considered an unjust tax, and there is plenty of that about!

    In nearly all cases of bribery, someone benefits personally and the public pays! The driver, for example, has deprived the Panamanian exchequer of $55, so that the policeman could benefit to the tune of $20, and maybe if all these ‘fines’ were paid officially there would be sufficient funds to pay the police more.