Explainer: Bribery and Corruption

How should we look at this challenge?

The following article was written by me and posted on Medium on August 10, 2020. It was written out of a desire to take a closer look into what people mean when they say “briber” or “corruption” and to discuss the critical questions of guilt and agency that rarely get discussed with nuance. I recently came across the post again and realized it is just as relevant today as it was 2 years ago. Specifically, when we think about the government’s work on reforming the justice sector it is important to realize that is only one part of a much larger problem.

Let’s Talk About Bribery

Aug 10, 2020·12 min read

Let’s talk about Bribery. Seriously, let’s really talk. Not any of this normal “bribery is bad” and “look over there at that corrupt asshole in the other party!” that we get from pundits and media. Let’s really talk. Because this issue is complex. And if we are to stand any chance at really fighting corruption and changing the status quo we need to understand it better.

So let’s start simple. What is bribery? We probably all have some thought in our head now of paying off a policeman to avoid a ticket or somesuch. Our first task in talking about bribery is to acknowledge that our preconceived notions are one dimensional. If I asked “what is crime?” we all know that a single example cannot answer that question. And the tools needed to fight different crimes are themselves critically different. A pen and paper may write a speeding ticket but it will not stop an armed robber nor catch a criminal guilty of wire fraud. The same is true for the subset of crime called bribery. To fight it, we must recognize that this subset of crime has multiple types and facets and that the tools for fighting them vary by type.

Ok, so how do we find out more? Well, here I would like to refer us all to the wonderful movie “Batman Begins.” In the film, Bruce Wayne decides he wants to push back against the criminal (and corrupt) forces that control his community (Gotham). His first move is to leave. He finds a place he is not known and he becomes a criminal. Bruce spends years in the criminal underworld studying and understanding the people he wants to oppose. Only then does he return to Gotham, become Batman and start taking action. If we wanted to do the same with Bribery, we can talk to almost anyone in Moldova. Bribery is a lived reality here. In schools, in hospitals and healthcare, in business and more. But if you ask your neighbor “what should we do about bribery?” they probably have no idea — or, have a one dimensional concept like we talked about above. Just like with Bruce Wayne, it is different to experience crime and to study crime. In order to study Bribery we need vocabulary to talk about different types of bribery and to ask the right questions to understand where these types exist and what to do about them.

Before we jump into a list, let’s outline our goals here. Firstly, we need to define different types of bribery and acknowledge they are distinct. Secondly, we need to understand who is responsible in a criminal or moral sense in each type. And thirdly, we need to talk about how we go about fighting back against these types of bribery.

Types of Bribery

Type 1: Bribes to Gain Advantage

In defining a code of ethics for businesses, Transparency International asks businesses to “refrain from giving bribes to gain unfair advantage.” We first need to understand what is “unfair advantage” and why this is a key part of their code of ethics. Simply put, bribing an official to gain advantage is when a person pays for special treatment. For example, an owner of a BMW might pay off a police man to look the other way on his street racing. Or a parent might pay a teacher or school administrator so their kids get better grades. Or a businessman might bribe a bureaucrat to get a lucrative government contract. In each of these cases the person paying the bribe is gaining an unfair advantage over those who do not pay.

So who is responsible? In this case the bribe payer and the bribe taker are both responsible in both moral and a criminal sense.

How to Fight Back? Simple, law enforcement needs to deal with both bribe givers and bribe takers. Both actions should be criminal and have severe consequences.

This Type 1 Bribery is the most clear case and most people do not think beyond it. The reason is the moral clarity here — the actors are criminals and the solution is law enforcement. Other types of bribery are less clear.

Type 2: Bribes as part of Bureaucratic Process

Let’s take our case above about the student and teacher and re-imagine it. What if ALL students paid bribes. Imagine a case where the school was so corrupt that not to pay guaranteed failure for a child. Is this the same situation? Or what about a businessman who goes to register for a business license and finds that there is a clearly articulated unofficial “fee” for getting the license. All businesses have to pay and so they all do pay. In this case can we say that the person paying the bribe is doing so to gain advantage? No. In this case we have a payment that is essentially an unofficial tax. Like all taxes, this puts a burden on the economy. Unlike real taxes, the public gets no benefits and the corrupt officials accrue wealth to themselves. But critically, this type of bribery is a crime of power

So who is responsible? In this case we need to look beyond the bribe payer and the bribe taker. A parent paying so their child isn’t the only one to fail school is no less responsible than a person bribing a doctor so their loved one doesn’t die. The bribe payer is not the enemy here — the bribe taker is. This is extortion more than bribery and extortion is a crime of power. Power allocated by the system itself. In Type 1, both the bribe payer and the bribe taker are responsible actors making choices. In Type 2 bribes the bribe taker has total power over the bribe payer. This power dynamic profoundly changes the moral situation. Does this mean it is ok to pay bribes? No, of course not. But it does mean that it is foolish to blame the bribe payer as they have no agency in this power dynamic.

How to Fight Back? In this case, it is easy to think that this is a law enforcement question just like in Type 1. And sometimes, it is. Perhaps a hospital is working as a criminal enterprise to extract bribes from patients. But in most cases, type 2 bribery does not exist outside of the law but as a part of the system meant to create and enforce the law. Fighting back requires new laws and new mechanisms for implementing them. For example, an official who can deny a business license before getting a bribe has far too much control over who does and doesn’t get licenses. A law could be passed setting out clear criteria and then requiring all licenses to be issued to those who fulfill it. On a different note, teachers and hospital workers who behave in this way may not have sufficient pay to do their jobs or outfit their classrooms. This must be looked into BUT do not fall into the trap that increasing pay decreases corruption — the opposite has proven true in many studies. But it is necessary to make sure this is not the only issue. Then, law enforcement must investigate the institutions allowing this criminality to occur and to prosecute both the individuals and the conspiracy itself. Type 2 corruption is much more complicated than Type 1 and requires targeted solutions to specific criminal acts. All of which takes time to fix. One idea for a quick win? In certain areas (like hospitals and schools) you could criminalize bribe taking but not bribe giving. This way, people who have to pay bribes can also report that they paid them in the hopes that the bribe taker would be prosecuted. Ukraine has taken this a step further with a “bribe bounty” concept where the person reporting the bribery gets paid a reward from the state. While these ideas are clever, they do not go at the systemic core that allowed the power dynamic to develop in the first place. This takes time and a tailored approach for each institution.

Type 3: Shakedowns

Imagine three men in leather jackets come into your business and demand 30% of your revenue. They say that if you do not pay, they may hurt you or burn your business down or somesuch. This is a shakedown. It can happen in this mafioso scenario or at a traffic stop where the police threaten to ticket you for something you haven’t done. In all cases the bribe payer is forced to pay because the consequences of not paying are too harsh to face. There are many examples of this in Moldova big and small. Sadly, too few of them make the news. One that occurred recently was a shakedown of a successful honey exporter. Some shadowy figure bribed a prosecutor to fabricate a case and attempted to leverage a takeover. This led to a situation with both judicial and extrajudicial pressure attempting to force the sale of the business at a bargain price. Another example, also from last year, was a shakedown by fiscal officials of farmers. The FISC officials came to process a control. Once the farmer put all their paperwork on the table the officials overturned the table and said “you are wasting our time. We will find whatever problems we want. Let’s cut to the chase — pay us $30,000 or we will send you to jail.”

So who is responsible? Quite obviously, the bribe taker is responsible. The bribe giver is innocent unless it is a crime not to want your legs broken.

How to Fight Back? Once again, we want to say that this is a law enforcement question. Meaning, the police need to go arrest the bad guys who are obviously violating the law. But the reality is, this behavior is being tolerated systemically or else it wouldn’t happen. These types of crimes are too blatant. In this case we need reform. Police reform, justice reform or otherwise. Once this reform is done, the police and prosecutors can push back on the criminals. What should we not do? Criminalize the paying of these bribes. Just as in Type 2 one party is fully at fault here. If you criminalize both the giving and taking of bribes you make both parties criminals and therefore align their interests — neither wants to be caught by law enforcement. It is critical that law enforcement defend victims not threaten or punish them.

Type 4: Legal Bribery

Legal bribery is a situation where Type 1 bribes become legal. For example, it may be criminal to bribe a politician to get a lucrative government contract, but what if you donate to their campaign or party? In many countries the line between legal and illegal is blurred by mechanisms of funneling money to those in power via legal means. In the United States the “Super PAC” mechanism allowing unlimited donations of money to politicians with zero public accountability is a perfect example. A company wants a contract or regulation changed. They anonymously donate huge amounts of money. And when the politician is elected, they get what they want. In Moldova this process is illegal. But we all know that money flows freely through politics no matter what the law says. Either through loopholes or outright criminality.

So who is responsible? Morally? Both the bribe payer and bribe taker are responsible. Legally? As we note in the title “Legal Bribery” no one is responsible.

How to Fight Back? New laws. People must not allow politicians to construct the basis on which they profit and sell influence. This is not a law enforcement question but clearly a question of the law itself. One thing to consider, money and politics always have a relationship. It is impossible to run a political party or election without money so the key is to regulate how and when donations or member fees are appropriate. It is common in this conversation to talk about what we should make illegal. But actually, we should also talk about what can be made legal and thereby regulated transparently. If you allowed certain types of donations to political parties, the public could see who is paying for those parties and cast a more informed vote. This does NOT mean you should open the legal floodgates of money in politics. But it does mean that real reform goes both ways — legalizing and illegalizing actions.

Bribery in Moldova

Ok, now that we have some vocabulary and definitions, let’s talk about Bribery in Moldova. As we see from the 4 types of Bribery listed above, and discussion of bribery must inherently start from understanding the agency of the parties involved and the power dynamics at play. Understanding these concepts is key towards fighting back against any type of corruption and to beginning a process of change and reform to purge corruption from the system as much as is possible.

Next, we should understand what types of corruption exist in Moldova. Obviously, there will be cases of all 4 types that can be identified but when we look at trying to clean up the system we need to focus first on the most prevalent types. To this end, I believe that Moldova has 2 central types of bribery. Big corruption typified by Type 1 Bribery. And Small corruption typified by Type 2 bribery. Now when I say “Big” vs “Small” I am referring to the size of the bribes asked and not the overall quantity of bribes in a society. One hundred thousand, 200 lei bribes is a much bigger problem and drain on the system than ten 1,000,000 lei bribes. Not only because of the overall amount of money paid but because the large number of small bribes has a much broader corrupting effect on society as a whole. It createsmore criminals and more moral issues as compared to large Type 1 transactions. Furthermore, because Type 2 bribes are systemic rather than individual quid pro quos they are more corrupting to the institutions themselves which are needed to fight back against this corruption.

Now, if we understand this small vs big question, we come to a real problem. Most discussion of corruption in the media and society is about big Type 1 corruption. This leads to a focus on law enforcement and judicial reforms. The key problem is that reforming the judicial system in order to take on Type 1 corruption is not possible. Because the whole system — judicial, police and bureaucrats at all levels are engaged in Type 2 bribery. This leads us to a stark conclusion — real reform in Moldova is not a matter of law enforcement it is a matter of law itself. If we focus our discussion on reforming the legal basis which makes Type 2 bribery possible, while at the same time seeking to catch and prosecute the major criminals, only then do we have a real chance at turning the system around.

The Focus is on Thugs not Pencil Pushers, and that is a Problem.

Because we maintain this one dimensional view of bribery as a Type 1 or Type 3 problem we see the answer as “arresting bad guys” or “convincing the population to just say no.” This is a fundamental mistake. We really need to focus on the pencil pushers. The bureaucrats who issue licenses and permissive acts. The predators who have massive discretion over business in their districts. The hospitals who act as a business of extracting payments from the sick and hurt. These are all problems of power dynamics being totally oriented against the people and towards those in positions of power to exploit them. We need to stop thinking of corrupt officials as gopniks and start thinking of them as “public servants” exploiting their positions.

So how do we do this? Well the problem is that the answer isn’t sexy. One example I can give from personal experience occurred in a state office responsible for issuing permissive acts. When I went to apply for one I knocked on the door of the office, went in and was told to come to the nearest open desk. The official there then spent weeks harassing us. Bring this paper, no that paper, etc etc without end. He *clearly* indicated he would accept nothing we applied with because of his broad discretion to keep changing the rules. Eventually we went over him to the department head and got through with our now massive application packet. Two years later I needed to apply for the same document for a different business. I went back to the office and found an electronic ticket machine had been installed. Now people came in and got a ticket with a number and you went to the desk indicated when your number was called. This system was installed for efficiency but the effect was to seriously damage the ability of corrupt officials to do business. Now, instead of being tied to one bureaucrat, you got someone new at random every time you went in the office. This limited official discretion and made all the officials have to give the same answers. The permit was issued quickly and easily. Everyone loves a bad guy getting arrested on TV. But the unsexy work of specific targeted changes is far more important to eradicating Type 2 bribery.

Some will say, “why pay for a ticket machine when you can just fire or arrest the bad person behind the desk?!” The answer to this is simple. Firing one, or even all, the bad people does not help. They will be replaced by more because the incentive and power structure of these positions encourages their behavior. This is not unique to Moldova or Moldovans. If you put Americans in a position with this much power they too would use it to get rich. But, if you take away the power and position the corrupt will leave these jobs on their own. They aren’t there to do a job — they are there to make money. If you take that away, they will be replaced by people who want to do their jobs.

So why aren’t we getting anywhere? Because the people who have answers on how to solve this situation are not asked for the targeted solutions needed. There is no political will for systemic reform because there is no demand for it from the public. And everyone focuses on “arresting bad guys.” And so, we neither fix the systems nor do we arrest bad guys.