Dictionary of Corruption

By Robert Barrington and Elizabeth David-Barrett

Written by an expert team, the Dictionary of Corruption is a comprehensive resource for students, academics, practitioners and professionals. It establishes a common interpretation of the language and terminology in the field of corruption and anti-corruption studies. From bribery to Watergate, amakudari to zero tolerance and from anti-corruption agencies to whistleblowing, the Dictionary provides explanations of over 300 key terms, events and case studies.

• Language: English
• Publisher: Agenda Publishing
• Release date: Nov 16, 2023
• ISBN: 9781788216616

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Dictionary of Corruption

Also from Agenda Publishing

Understanding Corruption: How Corruption Works in Practice

Robert Barrington, Elizabeth Dávid-Barrett, Sam Power and Dan Hough

Dictionary of Corruption

Edited by

Robert Barrington, Elizabeth Dávid-Barrett, Rebecca Dobson Phillips and Georgia Garrod

© Robert Barrington, Elizabeth Dávid-Barrett, Rebecca Dobson Phillips, Georgia Garrod 2024

This book is copyright under the Berne Convention.

No reproduction without permission.

All rights reserved.

First published in 2024 by Agenda Publishing

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ISBN 978-1-78821-658-6 (hardcover)

ISBN 978-1-78821-659-3 (paperback)

British Library Cataloguing-in-Publication Data

A catalogue record for this book is available from the British Library

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Contents

Acknowledgements

Contributors

Introduction

The Dictionary: alphabetical entries

List of entries

Acknowledgements

This dictionary has text from 63 contributors, and we would like to thank them all for their willingness to participate in a project in which there is little personal acknowledgement or glory. All were agreed about the necessity for a volume of this type, and very generously contributed both their time for the writing and their patience and goodwill during our editorial process. Tom Shipley, especially, has written many excellent entries, and we particularly acknowledge his valuable contribution.

We have drawn on many friends and associates from throughout the world, but closer to home on two groups at the University of Sussex: our colleagues and doctoral researchers at the Centre for the Study of Corruption; and the alumni from our MA in Corruption and Governance programme. Together these groups create an incredibly nurturing teaching and research environment, full of ideas, teamwork and productivity.

For easing the burden of our other commitments so that we had the luxury of time to research and write, we would like to thank our families and close friends. To Alison Howson and the highly professional team at Agenda Publishing, our thanks for adopting this project and seeing it through from the germ of an idea to a finished publication.

Robert Barrington

Elizabeth Dávid-Barrett

Rebecca Dobson Phillips

Georgia Garrod

Centre for the Study of Corruption

University of Sussex

Contributors

Ahmad Asem Al-Hiari (AAA), School of Leadership, Management and Marketing, DeMontfort University

Abrar Alrehaili (AA), Doctoral researcher, Centre for the Study of Corruption, University of Sussex

Felia Allum (FA), Professor of Comparative Organised Crime and Corruption, University of Bath

Noah Arshinoff (NA), Adjunct Professor of Anti-Corruption Law, Faculty of Law, University of Ottawa

Sabina Avdagic (SA), Reader in Political Economy, Centre for the Study of Corruption, University of Sussex

Dani Ball (DB), MA Corruption and Governance, Centre for the Study of Corruption, University of Sussex

Robert Barrington (RB), Professor of Anti-Corruption Practice, Centre for the Study of Corruption, University of Sussex

Agnes Batory (AB), Professor, Department of Public Policy, Central European University

Diana Bociga (DB), Doctoral researcher, Department of Criminology, University of Manchester

Roxana Bratu (RBr), Senior Lecturer in Public Policy, International School for Government, King’s College London

A. J. Brown (AJB), Professor of Public Policy and Law, Centre for Governance and Public Policy, Griffith University

Mark Button (MB), Director of the Centre for Cybercrime and Economic Crime, School of Criminology and Criminal Justice, University of Portsmouth

Juan Camilo Ceballos Oviedo (JCCO), Researcher, International Anti-Corruption Academy (IACA)

Susana Coroado (SC), Postdoctoral researcher, GOVTRUST Centre of Excellence, Universiteit Antwerpen

Ben Cowdock (BC), Investigations Lead, Transparency International UK

Max Cremades-Hashemi (MCH), MA Corruption and Governance, Centre for the Study of Corruption, University of Sussex

Maria Fernanda Cruz Chaves (MCC), MA Corruption and Governance, Centre for the Study of Corruption, University of Sussex

Liljana Cvetanoska (LC), Lecturer in Corruption, Law and Governance, Centre for the Study of Corruption, University of Sussex

Elizabeth Dávid-Barrett (EDB), Director of the Centre for the Study of Corruption, University of Sussex

Riccardo D’Emidio (RDE), Doctoral researcher, Centre for the Study of Corruption, University of Sussex

Rebecca Dobson Phillips (RDP), Lecturer in Corruption Analysis, Centre for the Study of Corruption, University of Sussex

Mihály Fazekas (MF), Associate Professor, Department of Public Policy, Central European University

Shahrzad Fouladvand (SF), Senior Lecturer in International Criminal Law, Centre for the Study of Corruption, University of Sussex

Georgia Garrod (GG), Research assistant, Centre for the Study of Corruption, University of Sussex

Marcia Grimes (MG), Quality of Government Institute, Department of Political Science, University of Gothenburg

Sankhitha Gunaratne (SG), MA Corruption and Governance, Centre for the Study of Corruption, University of Sussex

Irasema Guzmán Orozco (IGO), Centre for the Study of Corruption, University of Sussex

Daniel Haberly (DH), Senior Lecturer in Human Geography, Centre for the Study of Corruption, University of Sussex

Paul Heywood (PH), Sir Francis Hill Professor of European Politics, University of Nottingham

Dan Hough (DHo), Professor of Politics, Centre for the Study of Corruption, University of Sussex

John Lawes (JL), Doctoral researcher, Centre for the Study of Corruption, University of Sussex

Alena Ledeneva (AL), Professor of Politics and Society, University College London

Michael Levi (ML), Professor of Criminology, Cardiff University

Nicholas Lord (NL), Professor in Criminology, University of Manchester

Barry Loveday (BL), Reader in Criminal Justice, School of Criminology and Criminal Justice, University of Portsmouth

József Péter Martin (JPM), Senior Lecturer, Corvinus University of Budapest

Francis McGowan (FM), Senior Lecturer in Politics, Centre for the Study of Corruption, University of Sussex

Kenneth Mohammed (KM), CFO and Senior Advisor, Intelligent Sanctuary Ltd

Bonnie J. Palifka (BJP), Associate Research Professor, Department of Economics, Tecnológico de Monterrey

Caryn Peiffer (CP), Senior Lecturer, School for Policy Studies, University of Bristol

Anna Petherick (AP), Associate Professor of Public Policy, Blavatnik School of Government, University of Oxford

Mark Philp (MP), Professor of History and Politics, University of Warwick

Lucio Picci (LP), Department of Economics, University of Bologna

Viktoriia Poltoratskaya (VP), Central European University and Government Transparency Institute

Sam Power (SP), Senior Lecturer in Corruption Analysis, Centre for the Study of Corruption, University of Sussex

Billy Pratt (BP), MA Corruption and Governance, Centre for the Study of Corruption, University of Sussex

Tena Prelec (TP), Assistant Professor, Center for Advanced Studies on Southeast Europe, University of Rijeka

Tilly Prior (TPr), Senior Programme Officer, Business Integrity Programme, Transparency International UK

Lena Raballand (LR), Doctoral researcher, Centre for the Study of Corruption, University of Sussex

Jonathan Rose (JR), Associate Professor, Department of Leadership, Management and Marketing, De Montfort University

Johanna Schönberg (JS), MA Corruption and Governance, Centre for the Study of Corruption, University of Sussex

Tom Shipley (TS), Doctoral researcher, Centre for the Study of Corruption, University of Sussex

Joseph Sinclair (JSi), Pupil barrister, Mountford Chambers

Luís de Sousa (LDS), Principal researcher, Instituto de Ciências Sociais, Universidade de Lisboa (ICS-ULisboa)

Matthew Stephenson (MS), Henry L. Shattuck Professor of Law, Harvard Law School

Marc Y. Tassé (MT), LTA Lecturer, Telfer School of Management/Faculty of Law, University of Ottawa

Sofia Tirini (ST), Compliance and Market Access Policy Manager, Access Partnership

Slobodan Tomic (STo), Lecturer in Public Management, School for Business and Society, University of York

Peter C. Vincent (PV), MA Corruption and Governance, Centre for the Study of Corruption, University of Sussex

Emily Wegener (EW), Evidence and Advocacy Officer, Transparency International UK

Rose Whiffen (RW), Senior Research Officer, Transparency International UK

Tom Wright (TW), Health Research Manager, Transparency International Global Health

Yang Wu (YW), Assistant research fellow, Sichuan Academy of Social Science

Introduction

The study of corruption and the practice of fighting corruption have become more sophisticated in the last 25 years, and with that comes complexity and technical jargon. This dictionary is an introduction to this vocabulary and aims to help students and practitioners understand the key concepts and how they are used, while acknowledging that meanings change, usage evolves, and new ideas sometimes require new terms to describe them.

We have taken several editorial decisions that warrant explanation. Each entry starts with a one-line definition; this is our editorial effort to provide clarity and a go-to workable definition for rapid reference or easy application. For some terms, this is enough, or needs only to be complemented by a brief elaboration. But for the most widely used or important concepts, policies, or tools, we also provide context. Depending on the type of entry, this might include an explanation of what is contentious about the concept, how its usage has changed over time, or what key assumptions it relies upon. A standard entry is around 200 words long, with some longer pieces on key subjects at either 500 or 1,000 words, and some case studies at 750 words. Many entries could have a long list of references and sources. Our choice here was to add references where there is a specific idea or contribution that should rightly be attributed but to avoid referencing for commonly known and discoverable facts. We do not provide a comprehensive literature review for each topic, but we do flag some key texts and suggest a limited selection of further reading.

As a dictionary of corruption, each term is written with that in mind: it will be clear to readers that subjects like fraud or the World Bank have their own long heritage of analysis and academic research, but here we focus specifically on how such subjects relate to corruption. We also highlight links among different entries in the dictionary, allowing curious readers to deepen their understanding of corruption by tracing these paths across the book.

The dictionary is a collective effort. It draws on the expertise of a wide community of scholars from around the world, meaning that any one entry is likely to be written by one of the foremost experts on that topic. Their initials can be found at the end of each entry and cross-referenced against the list of contributors. We would like to thank all our co-authors for their generous contributions to this project, which has enriched the final product enormously.

The diversity of authorship means that there is some variation in style. While we have sought to standardize entries enough for readers to know what to expect, we have also tried to allow these different voices, coming from varied disciplines and backgrounds, to shine through. Each entry has been through a rigorous editorial process requiring at least three of the editors to review and comment on the text. Controversial – or difficult – entries were brought to full editorial meetings for review. This means that, while entries may not be perfect, readers can be assured that they have been carefully considered.

We are conscious that despite our efforts to be comprehensive and rigorous, some readers will spot omissions, some will disagree with our interpretations, and some may spot more substantial errors. Given the European context in which many of the authors of this volume work, we are also aware that there might be some unintended bias in both our choice and interpretation of certain terms. We view this as an ongoing project and are keen to hear from readers on all such matters to help us improve future editions. Those who have read our previous volume, Understanding Corruption (2022), will recognize some of the case studies. In deciding to include 30 or so of the best-known corruption case studies in this dictionary, there is an inevitable crossover with our earlier work. However, it makes sense to include them here again, in a revised and updated form, precisely because they are among the best-known and formative cases.

Several of the dictionary’s contributors – and all of its editors – are based, or have studied, at the Centre for the Study of Corruption at the University of Sussex. That is because the idea for the volume emerged from our experience of teaching our two Masters programmes on Corruption and Governance. The students on these programmes are a diverse bunch, coming from countries all over the world. Many of them bring years of experience from working in the anti-corruption field, whether in government, the private sector or civil society. Yet while specialists in their own areas, most lack exposure to other parts of the multi-disciplinary scholarship on corruption or the vast toolbox of anti-corruption practices. For example, they have usually heard of the most important corruption cases, but they do not always know the details, how they came to light or how they have shaped the policy debates.

This dictionary is designed to fill some of the inevitable gaps in the knowledge of students, and to help even those practitioners who have been working in the field for many years to stay up to date with the latest thinking. But we hope it might also be useful to everyone, however advanced their knowledge: amongst the editorial committee, it was surprising how often there were differences of nuance and understanding as we dug into the detail of each term.

A dictionary is different to an encyclopaedia or handbook: it can be used as a starting point for deeper research, or can simply allow the reader to satisfy a momentary curiosity. Please use the dictionary in the way that makes most sense to you.

A

Abramoff, Jack: case study

Emblematic case of institutional corruption in US politics and rare example of imprisonment for inappropriate lobbying.

Jack Abramoff began lobbying in the mid-1990s, having spent the previous decade working as a Hollywood producer. He soon mastered the art of bending rules and showering politicians with gifts, to the benefit of his clients. He later claimed to have had very strong influence over around 100 legislators, but saw that as a partial failure, as there were at least as many who were not controlled by him (Stahl 2011).

A 2006 judicial investigation revealed that Abramoff was involved in systematic abuses: he used his companies to receive more than $23 million via fraudulent kickback schemes, often deceiving his clients about the way he would use the hefty fees charged to them. Amongst his lobbying techniques, he had an elaborate mechanism in place for the purchase of gifts for public officials in return for important concessions such as voting in favour of tax breaks aimed to help his clients. A convinced supporter of libertarian conservative stances, and an unabashed anti-communist from his youth, Abramoff put his skills to the use of individuals and organizations who sought to influence politics in this direction, including by slashing taxation for the rich and lobbying for harder stances on reproductive rights.

Abramoff eventually confessed to defrauding four Native American tribes and others of around $25 million (estimated by others at closer to $40 million), evading $1.7 million in federal taxes, and to engaging in conspiracy to bribe public officials. Abramoff was convicted and sentenced to six years, serving three years and six months before being released in 2010 to a centre for rehabilitating former prisoners. His trial exposed a deeply ingrained system of lobbyists bribing politicians to secure political favours that went over and beyond this single case (Stone 2006). About the psychology behind his erstwhile success, Abramoff said: Everyone in DC is for sale. Most of them might not know it. But when someone does something nice for you, what will you feel? Gratitude. Unless you’re a jerk (UT Austin 2013).

There was considerable public outrage: Abramoff was widely seen as the embodiment of a politics–business nexus that was rotten to its core. While it is noteworthy that Abramoff had been allowed to freely exercise his immoral and illegal activity for about a decade, law enforcement acted relatively quickly after the case came to light in 2004. Because of this and other high-profile cases of political corruption, the Office of Congressional Ethics (OCE), an independent body tasked with investigating allegations of misconduct, was instituted in 2008.

The boundary between legal and illegal lobbying is hard to discern. Abramoff seems to have done little that others at the time did not do. He did it on a big scale, with a big personality, and got caught. Many other lobbyists either did not get caught or trod more carefully on the line of illegality so, while acting unethically, they did not cross the line.

The case is illustrative of the significant role played by corporate lobbying in US policy-making. It exposes the ability of power brokers to pervert the course of democracy and offers a cautionary tale in respect to the dangers of the revolving door between business and politics. It is thus an extensively documented case of institutional corruption.

TP

Further reading

Gray, G. 2013. Insider accounts of institutional corruption: examining the social organization of unethical behaviour. British Journal of Criminology 53(4): 533–51. https://doi.org/10.1093/bjc/azt013.

Prelec, T. 2022. Jack Abramoff and the US lobbying industry. In R. Barrington et al. (eds), Understanding Corruption. Newcastle upon Tyne: Agenda Publishing.

Stahl, L. 2011. Jack Abramoff: the lobbyist’s playbook. CBS News. https://www.cbsnews.com/news/jack-abramoff-the-lobbyists-playbook-30-05-2012/.

Stone, P. 2006. Heist: Superlobbyist Jack Abramoff, His Republican Allies, and the Buying of Washington. New York: Farrar, Straus & Giroux.

UT Austin 2013. In it to win: the Jack Abramoff story. Ethics Unwrapped, University of Texas at Austin. https://ethicsunwrapped.utexas.edu/video/in-it-to-win-the-jack-abramoff-story#.

Abuse of office

The exercise of powers granted to an individual by virtue of their professional role or office in ways that are not in accordance with the rules or aims of that office; also referred to as abuse of function, for example, in Article 19 of the United Nations Convention against Corruption.

The abuse can be an act or an omission, and the rules which are violated need not be written down. The relevant office can be in the public or private sector. Where an abuse of office is motivated by private gain, the behaviour is likely to be considered corrupt.

EDB

Abuse of power

The exercise of power, by an individual or organization holding a position of responsibility or authority, in ways that take advantage of others and are often unlawful.

An abuse is a violation of the duties or misuse of the power associated with a trusted role, either through action or inaction. The abuse does not necessarily have to be illegal to be corrupt and can include a breach of regulations and/or integrity standards. It can also include a pattern or aggregation of activities which amount to a collective abuse.

The position of power may be a formal office or a more informal role in a society or organization, providing it comes with authority and expectations that it will be used to the benefit of the relevant community.

Where an abuse of power is motivated by private gain and causes harm to society, the behaviour is likely to be considered corrupt. Abuse of power is often integral to the way that misconduct in public office is defined, although the exact construction of the offence varies among jurisdictions. Sanctions vary, but may include suspension or removal from office, or for elected officials may trigger a recall election.

EDB

Accountability

Being held accountable or responsible for actions and consequences; corruption is an increased risk when accountability mechanisms are weak.

The ability to hold individuals and institutions accountable is a core feature of good governance and central to the principal–agent relationship in which the agent is accountable to the principal when acting on their behalf. Transparency is key for accountability, because it provides information to the principal about the activities of their agents.

There are various ways in which actors can be held accountable for corruption: by the law, institutional processes, political processes and even the media and public. Each of these mechanisms has both strengths and weaknesses, and it is often how they work in combination that creates an environment with high accountability and integrity.

For example, political accountability alone – in the form of elections – is relatively ineffective at sanctioning corrupt behaviour (Johnston 2013). As such, along with other public officials, political actors are usually also subject to codes of conduct and independent ethics committees or commissions to hold them accountable as well as media and public scrutiny. These must be carefully balanced, however, to ensure that they do not become politicized or overrule democratic rights.

In the private sector, actors are often subject to their own standards and self-regulation, which may be administered by a professional body.

RDP

Further reading

Johnston, M. 2013. How do I vote the scoundrels out? Why voters might not punish corrupt politicians at the polls. Crime, Law and Social Change 60(5): 503–14.

Active and passive bribery

Active bribery refers to the act of offering or providing a bribe while passive bribery refers to the act of soliciting or receiving a bribe.

While the terms themselves are not specifically included in the texts of key laws on bribery – for example, the UK Bribery Act or the US Foreign Corrupt Practices Act (FCPA) – they are sometimes used to make a distinction between the roles of actors in a bribery transaction. Although most anti-bribery laws prohibit both the giving and receiving of bribes, these roles may carry different legal sanctions depending on the jurisdiction.

The terms are widely employed in the anti-corruption community but their use is contested. Several commentators have criticized the language of active and passive bribery as misrepresenting the nature of a bribery transaction. Passivity is an incorrect description for the act of soliciting a bribe, which represents an active choice to instigate bribery. Passivity further implies acquiescence, which may or may not be the case, and may be incorrectly understood as carrying lesser culpability than active bribery. Similarly, an active bribe-payer may not have initiated the bribe-paying, and may not be paying voluntarily.

TS

Administrative corruption

Corruption which occurs during the implementation of policy, rather than its formation. Often used interchangeably with bureaucratic corruption.

It involves a one-off transaction to distort the ways that an administrative process is executed, for example bribery of a public official to overlook the rules for issuing a permit or licence.

EDB

Advocacy and Legal Advice Centres (ALACs)

An initiative by Transparency International (TI) designed to provide whistleblowers and the public with a safe place to report instances of corruption and seek legal aid.

ALACs can empower citizen reporting and allow victims of corruption to seek accountability and redress under the guidance of trained legal advisors. The type of aid provided ranges from assessing the strength of a complaint, through identifying and navigating the correct complaint channel, to providing legal assistance should the case reach court. TI’s national chapters run the centres, and through them gain context-specific knowledge of prevalent forms of corruption to inform their advocacy and campaign work.

GG

African Union Convention on Preventing and Combatting Corruption (AUCPCC)

International anti-corruption treaty applying to signatory member states of the African Union (AU).

The AUCPCC aims to strengthen and promote anti-corruption measures in Africa. Adopted in 2003, the Convention came into force in August 2006, and has since been signed by 49 member states of the African Union.

By adopting the Convention, state parties agree to adopt and implement its provisions into domestic law and practice and to criminalize corruption and illicit enrichment. Other provisions oblige states to increase (anti-)corruption awareness and educate their populations to respect the public good and public interest. In promoting anti-corruption throughout the AU, the Convention also enables and regulates anti-corruption cooperation among state parties. Further, it establishes that signatories must establish the necessary conditions to promote transparency and accountability in public affairs management. Keeping in mind the corruption-human rights nexus, the Convention also mandates that obstacles to the enjoyment of economic, social and cultural, as well as civil and political rights be removed.

The implementation of the AUCPCC is monitored by the AU Advisory Board on Corruption, whose members are elected by the AU Executive Council. Unlike some other conventions, such as the OECD Anti-bribery Convention, the AUCPCC does not have a formal implementation review mechanism.

JS

Agents and intermediaries

Third-party individuals or entities that may form part of a corrupt scheme; the terms are usually used interchangeably.

Like other third parties, agents and intermediaries often play legitimate roles in normal business transactions; the terms may encompass sales agents, business consultants, introducers, facilitators, distributors, shipping agents, lawyers and other professional advisors and other third parties providing business services. While they often fulfill legitimate purposes, agents and intermediaries are considered a high risk, or present red flags, for corruption in certain circumstances – for example, when they appear to be earning an unusually large and unjustified fee, charge inflated commissions or have cronyistic relationships with public officials.

Many anti-bribery and corruption programmes make no clear distinction between agents and intermediaries, and require due diligence to be undertaken before appointing them. However, there is a distinction. An agent is a third party who is directly engaged by an individual or organization. Intermediaries, on the other hand, are generally not directly engaged in this way, but act as a mediator between other parties and typically help to facilitate a transaction.

Agents and intermediaries have frequently been used as links in a chain to disguise a corrupt transaction or make a corrupt payment such as a bribe, thereby placing distance between the bribe payer and the bribe recipient (see bribery). In 2016, Transparency International noted that the top 10 Foreign Corrupt Practices Act settlements have all involved bribery originated by companies and channelled through third parties including consultants, agents and joint venture partners. The OECD conducted a review of 115 foreign bribery enforcement resolutions concluded between 2014 and 2018 and found that 81 per cent of the cases involved and agent or intermediary of some kind.

Agents and intermediaries who are involved in corrupt transactions frequently make use of anonymous companies and offshore bank accounts to obscure the transaction and the parties involved.

TS

Further reading

OECD 2020. Foreign Bribery and the Role of Intermediaries, Managers and Gender. Paris: OECD.

Transparency International UK 2016. Managing Third Party Risk: Only as Strong as Your Weakest Link. London: TI-UK.

Alstom: case study

International bribery case involving multinational engineering company headquartered in France which influenced the development of Loi Sapin II.

In 2014, Alstom agreed to pay a $772 million criminal penalty to the US Department of Justice after pleading guilty to violations of the Foreign Corrupt Practices Act (FCPA). The charges covered Alstom’s operations in five countries – the Bahamas, Egypt, Indonesia, Saudi Arabia and Taiwan – and related to conduct dating back to the late 1990s through to 2011.

The issues described here relate to the company’s rail and (now former) power divisions. In a competitive international market, a large proportion of the company’s revenues in these divisions relied on securing contracts with state-owned power and transport companies. The US Department of Justice investigation estimated that for around $75 million in bribe payments, Alstom secured $4 billion in contracts with a net gain of approximately $296 million in five countries.

Alstom’s conduct in Indonesia, where some of the most egregious wrongdoing took place, provides an insight into how this scheme operated. A key client was the state-owned electricity company PT Perusahaan Listrik Negara (PLN), which, in the 2000s, was looking for support to increase power generation in the country. Two tenders issued by PLN became a focus for corruption: the expansion of a coal-fired power plant in Tarahan at a value of $118 million and the expansion of the Muara Tawar power plant at a cost of around $260 million.

As detailed in the Department of Justice charge sheet, senior executives in Alstom’s sales departments organized for bribes to be paid to influence the Indonesian officials responsible for awarding these contracts. The company retained two third-party consultants for the purpose of making bribe payments. The recipients of these bribes included senior officials at PLN and the vice-chair of the Parliament Commission for Power and Energy. The latter received bribe payments totalling $423,985.

The same patterns of bribery are apparent across the other four countries named in the US charge sheet. In each country, agents in the form of third-party consultants were the vehicle through which Alstom sales executives organized for bribes to be paid. In each country, Alstom executives found foreign public officials willing to improperly use the influence conferred by their positions to award contracts to Alstom. In Saudi Arabia for example, Alstom retained as many as six consultancies with different code names to make bribe payments to officials at the state-owned Saudi Electric Company.

The case was uncovered through investigations undertaken by various national authorities. Investigations in France and Switzerland began in 2004 after an audit of Alstom’s Swiss subsidiary uncovered irregular financial payments totalling €20 million. Swiss authorities subsequently sent a request for mutual legal assistance to the US Department of Justice. The US case was in turn developed by securing the cooperation of an agent in return for immunity from prosecution. The agent helped the authorities to secure inculpatory evidence against former and current Alstom employees, several of whom pled guilty and agreed to cooperate with the investigation.

This remains one of the largest ever FCPA settlements with the size of the fine reflecting, among other points, the company’s failure to report the issues and initial refusal to cooperate with US investigators. Authorities in Switzerland and the UK have also enforced smaller penalties of $42 million and $21 million respectively. This case is somewhat unusual in that employees at Alstom have also been convicted by US and UK authorities, and in some cases received jail terms. Those convicted included senior executives in Alstom’s product and regional sales teams, some of whom have complained that they were used as scapegoats by the company’s more senior management.

Alstom’s misconduct during the 2000s and the investigations which followed are not limited to these countries. The Swiss investigation found evidence of improper payments by Alstom to civil servants in Latvia, Malaysia, and Tunisia in an investigation concluded in 2011. In 2012, the World Bank debarred the company for three years for an improper payment made to a former government official in Zambia. The UK investigation related to bribery by Alstom subsidiaries in Lithuania and Tunisia. Alstom has also been linked to investigations in Brazil, Italy, and Slovenia, among other jurisdictions. The record has been mixed in ensuring accountability for those involved in these schemes in other countries.

One additional consequence of the Alstom case was increased global scrutiny of France’s track record for prosecuting corporate bribery. The French anti-bribery law, Loi Sapin II, was passed in 2017 to update French law, in part due to this heightened scrutiny stemming from the case.

TS

Further reading

US Department of Justice 2014. Alstom pleads guilty and agrees to pay $772 million criminal penalty to resolve foreign bribery charges. Office of Public Affairs. https://www.justice.gov/opa/pr/alstom-pleads-guilty-and-agrees-pay-772-million-criminal-penalty-resolve-foreign-bribery.

Office of the Swiss Attorney General 2011. Alstom Network Schweiz AG, Summary Punishment Order. https://www.admin.ch/gov/en/start/dokumentation/medienmitteilungen.msg-id-42300.html.

Shipley, T. 2022. Alstom and corporate bribery. In R. Barrington et al. (eds), Understanding Corruption. Newcastle upon Tyne: Agenda Publishing.

Trace Compendium n.d. Alstom SA. https://www.traceinternational.org/TraceCompendium/DetailPDF?id=109&type=1.

Amakudari

A Japanese variant of the revolving door or post-public employment.

Meaning descent from heaven, the term specifically relates to the practice of parachuting senior public officials into new roles towards the end of their career, typically when there are no further promotions available in their existing position. The new roles are sometimes in public service but also frequently in the private sector. This re-employment boosts the pensions or final earnings of individuals and is regarded as a reward for long service. It is controversial because the new appointment is not necessarily based on merit or suitability for the role and,