Posts tagged with: corruption

Kris Mauren (far right) and African guests get ready to visit GFS.

Acton University is now well underway, and on Wednesday a group of seven African attendees joined Kris Mauren on a visit to Gordon Food Service’s Grand Rapids headquarters for an up-close look at ethical capitalism. Mauren called it a great opportunity for people from countries with barren and corrupt markets to see an efficient, principled business for themselves. “The management of GFS also has a strong concern for philanthropy and international missions,” he said. “So it’s a great model of the capitalist ideal to hold up for these folks, who are used to a much more hostile economic climate.”

The group met with Gordon Food Service management for a luncheon, then toured the company’s office and factory area. Harry Ayile, formerly from Ghana and now residing in Norway, was completely blown away by what he observed. “It was like … wow,” Ayile commented with a smile. He was struck by the dedication shown by the company’s workers. “At every level, the workers are extremely well-organized, focused, and committed to doing their jobs excellently,” he said.

Ayile was astonished at how the “energetic” GFS employees took pains to avoid mistakes in the orders they were filling. “The business has a good system of checks and balances, and most of the employees have been there for fifteen years or more,” he said. “They take true satisfaction in their work.”

Comparing Gordon Food Service’s methods to the way business is done in Africa and even in Europe, Ayile said his visit couldn’t have been more of an eye-opener. “Before I came to Acton, I thought all people who did business were evil,” he said.

Ayile recalled one food-production company in Ghana that deliberately had been selling expired grain infested with maggots. “They would just sift out the maggots, package the grain, and sell it at full price,” he said. “Finally one employee caught on to what was happening and was able to produce evidence and pictures, but it went on for awhile.” Ayile called the incident typical of business practices in much of Africa, which lacks the institutional support necessary for free enterprise to flourish. When the rule of law is unreliable, incentives for greedy and corrupt behavior often outweigh the benefits of integrity. He added that many businesses “show very little respect for the consumer, as opposed to the way American businesses like Gordon Food Service care about their customers.”

Ayile and others from the group — which included visitors from the Congo, Kenya, and other African countries — all said they were very impressed with the way GFS invested in its employees and how these employees, in turn, were invested in the success of the company. Although Africa has a long way to go, Ayile said his visit was inspiring and gave him hope for the future of Ghana and other developing countries in Africa.

Check out Global Integrity, “an independent, non-profit organization tracking governance and corruption trends around the world. Global Integrity uses local teams of researchers and journalists to monitor openness and accountability” (HT: Librarians’ Internet Index: New This Week).

There are limitations, of course, such that countries such as Venezuela or China are not listed as of yet. But Global Integrity might be one valuable tool to add to your “global citizen’s” toolkit.

And while we’re on the topic, don’t forget to add this to your toolkit as well: A Theory of Corruption, by Osvaldo Schenone and Samuel Gregg.

Blog author: jspalink
posted by on Wednesday, December 6, 2006

Delta Airlines has rejected a hostile $8.53 billion takeover bid from U.S. Airways, saying that it much prefers to remain independent. But Delta, and a lot of other airlines, might be doing consumers a favor by joining a consolidation push, says Anthony Bradley. “Given the nature of the industry today, proper stewardship of commercial airlines implies reform,” he writes.

Read the commentary here.

Blog author: jmorse
posted by on Tuesday, November 28, 2006

Transparency International is a group devoted to exposing corruption of all kinds. One of the most sickening forms of corruption in many poor countries is health care corruption. One sort of corruption is absentee-ism: medical personel bill for their services even when they aren’t at work, but are doing another job.

The increasingly large and legal market for pharmaceutical drugs is attracting criminal activity. Pharmaceuticals are high value and easily portable, and the penalty for stealing or smuggling them is far lower than for narcotics, so trade is brisk. This is especially the case in Africa where borders are porous to those prepared to pay bribes. Furthermore pharmaceutical markets are segmented internationally since companies recouping research and development costs want to charge efficient prices in vastly different settings for products with very low marginal costs. Antiretrovirals (ARVs) to treat HIV have 20-fold price differentials between western and African countries, which mean illegal but massive arbitrage possibilities exist for smugglers.

Once again, lack of virtue retards economic development.

Blog author: jballor
posted by on Tuesday, October 3, 2006

Reading through the narrative of king Saul in 1 Samuel, it occurs to me that it is in part an object lesson of Lord Acton’s dictum about the corrupting influence of power, in this case political. The story begins in 1 Samuel 8, when Israel asks for a king.

When Samuel was old and had passed on his rulership of Israel to his sons, who did “not walk” in Samuel’s faithful ways, the people of Israel clamor for a king. They say to Samuel, “You are old, and your sons do not walk in your ways; now appoint a king to lead us, such as all the other nations have.” Samuel is taken aback. He sees the request as an indictment of his ability to lead.

When he takes the request before the Lord, however, Samuel is set straight: “Listen to all that the people are saying to you; it is not you they have rejected, but they have rejected me as their king. As they have done from the day I brought them up out of Egypt until this day, forsaking me and serving other gods, so they are doing to you. Now listen to them; but warn them solemnly and let them know what the king who will reign over them will do.”

God then proceeds to enumerate some of the differences in authority and the exercise of power that will distinguish the period of the judges from that of a monarchy. “This is what the king who will reign over you will do,” says Samuel:

  • He will take your sons and make them serve with his chariots and horses, and they will run in front of his chariots. Some he will assign to be commanders of thousands and commanders of fifties, and others to plow his ground and reap his harvest, and still others to make weapons of war and equipment for his chariots.

  • He will take your daughters to be perfumers and cooks and bakers.
  • He will take the best of your fields and vineyards and olive groves and give them to his attendants.
  • He will take a tenth of your grain and of your vintage and give it to his officials and attendants.
  • Your menservants and maidservants and the best of your cattle and donkeys he will take for his own use.
  • He will take a tenth of your flocks, and you yourselves will become his slaves.

That doesn’t sound very good, does it? Samuel warns that all these things will happen, and “when that day comes, you will cry out for relief from the king you have chosen, and the LORD will not answer you in that day.”

Why do the people still insist on having a king? Do they not believe Samuel? Or do they simply not care? “But the people refused to listen to Samuel. ‘No!’ they said. ‘We want a king over us. Then we will be like all the other nations, with a king to lead us and to go out before us and fight our battles.’” Here we get to the crux of the issue. The people were willing to sacrifice many of their freedoms and rights in order to feel secure.

Isn’t this a perennial tension? In 1755, Benjamin Franklin noted, “Those who would give up essential Liberty, to purchase a little temporary Safety, deserve neither Liberty nor Safety.”

Duly warned, the people get what they want. God gives them Saul as their first king. And the safety they receive, especially from tyrannical rule, is certainly short-lived (and deservedly so, at least according to Franklin). At first, Saul is a good king, and successfully leads the people against their enemies, the Philistines.

As Saul takes up his kingship, there are a number of references to the divine blessing on him. For instance, in chapter 10, the text says that “God changed Saul’s heart,” and later on, before battle, “the Spirit of God came upon him in power.”

In time, however, Saul began to fulfill some of the prophecies that Samuel had predicted: “All the days of Saul there was bitter war with the Philistines, and whenever Saul saw a mighty or brave man, he took him into his service.”

When fighting the Amalekites, Saul does not listen to God’s command to destroy all the spoils of war. Instead, “Saul and the army spared Agag and the best of the sheep and cattle, the fat calves and lambs—everything that was good. These they were unwilling to destroy completely, but everything that was despised and weak they totally destroyed.”

Because Saul sins he is rejected as king. He admits and repents his sin, blaming his own weakness and fear of the people (only after claiming that he was disobedient out of piety). God indicts Saul’s motives, however, noting that following the battle he had “set up a monument in his own honor.”

After Saul’s disobedience, the tyranny degenerates and he becomes more and more corrupt: “The Spirit of the LORD had departed from Saul, and an evil spirit from the LORD tormented him.”

Even under the previous system of rulership, by means of judges, evil and corruption was possible. Despite a rule of fairness and justice under his own administration, Samuel’s own two sons were wicked and corrupt. But the extent of their authority was limited when compared to that of Saul. And not even Israel’s true king David was immune to corruption, as his covetousness of Bathsheba and murder of Uriah illustrate.

These kinds of stories make me sick, and they are all too common. In today’s Washington Post, a lengthy article examines the Livestock Compensation Program, which ran from 2002-2003, and cost over $1.2 billion.

In “No Drought Required For Federal Drought Aid,” Gilbert M. Gaul, Dan Morgan and Sarah Cohen report that over half of that money, “$635 million went to ranchers and dairy farmers in areas where there was moderate drought or none at all, according to an analysis of government records by The Washington Post. None of the ranchers were required to prove they suffered an actual loss. The government simply sent each of them a check based on the number of cattle they owned.”

Texas rancher Nico de Boer says, “The livestock program was a joke. We had no losses,” de Boer said. “I don’t know what Congress is thinking sometimes.” On the $40,000 he received, de Boer continues, “If there is money available, you might as well take it. You would be a fool not to.”

But the story doesn’t just stop there. The moral ambiguity of simply taking the money that is offered to you is eventually replaced by the incentives to actively seek out and campaign for more funds, effectively defrauding the government.

Under the original terms of the plan, “a rancher had to be in a county that was suffering from a drought and declared a disaster by the agriculture secretary in 2001 or 2002. More than 2,000 counties had such declarations at the time, including many with only modest dry spells.” But once the pork started flowing out of Washington, everyone wanted to get a spot at the trough.

Increasing pressure from lobbyists and special interests eventually made even the original flimsy requirements too onerous. Speaking of 2002, “There was pressure that year to grow emergency declarations for drought,” recalled Hunt Shipman, a former top USDA official who now works as a lobbyist in Washington.

The results? “Under Congress’s new version of the program in 2003, livestock owners could qualify as a result of any type of weather-related disaster declaration by the secretary of agriculture. Or they could become eligible if their county was included in a presidential disaster declaration. Under the new rules, the time period covered also was extended, to Feb. 20, 2003. One rule remained the same: Livestock owners still did not have to prove a loss.”

And under that new situation, “With the rules relaxed by Congress, federal agriculture officials pushed their local offices to find disasters that would make more livestock owners eligible, records and interviews show. It didn’t matter if it was a cold snap or a storm that was two years old.”

There’s not much else to say, I think, besides recognizing the truth that “the love of money is a root of all kinds of evil” (1 Timothy 6:10 NIV).

The Vatican recently concluded a conference on corruption (insert joke about ‘knowing whereof they speak’). It was an impressive array of speakers, including World Bank president Paul Wolfowitz, and many sensible things were said. But one is tempted to respond, “That’s all well and good; but what is anybody *doing* about it?”

Which is why it’s encouraging to see, coincidentally, another story on the same day, detailing the grassroots efforts of Catholic schools in Cameroon to nip corruption in the bud.

As the immigration debate continues, commentators dig deeper in the search for the “sources of the problem.” Many have rightly pointed out that a healthier Mexican economy would alleviate the need that spurs many Mexicans to seek financial recourse across the border. Whatever one’s views on the current debate, we ought to be able to agree that a more prosperous Mexico would be beneficial for everyone. But then others have correctly noted that talk about the Mexican economy is really a diversion from the US immigration reform issue: We need to figure out what to do about the large number of illegal immigrants currently here regardless of what happens in the Mexican economy.

Nonetheless, for anyone concerned about Mexicans, Americans, and Mexican-Americans, the issue of the Mexican economy is an important one. And on that issue, William P. Kucewicz offers a helpful analysis at NRO. I wanted to focus on one extraordinary line at the end of the piece:

Another analysis found Mexico’s level of government corruption has the same negative effect on inward foreign direct investment as raising the marginal tax rate by 42 percentage points.

Sam Gregg and Osvaldo Schenone wrote a while back about the pernicious effects of corruption in their contribution to Acton’s Christian Social Thought Series. Kucewicz’s citation above dramatically illustrates the impact that moral turpitude can have on economic wellbeing. No single magic bullet can bring prosperity to Mexico or anywhere else, of course. But any progress down that road will have to involve coming to terms with corruption, the long arm of which erodes the common good in diverse and significant ways—among them compelling migrants to leave their homelands.

Blog author: jballor
posted by on Friday, February 10, 2006

Forbes is featuring a slideshow highlighting a series of the most corrupt countries around the world, based on findings from Transparency International. The list of the “The Most Corrupt Countries” includes Chad, Bangladesh, Turkmenistan, Myanmar, Haiti, Nigeria, Equatorial Guinea, Cote D’Ivoire, Angola, Tajikistan, Sudan, Somalia, Paraguay, Pakistan, Kenya, and the Democratic Republic of Congo.

(Jacob Silberberg/AFP/Getty Images)

“Under its current president, Nigeria is making a determined effort to clean up its act. President Olusegun Obasanjo has surrounded himself with a dozen senior government officials who are firmly opposed to the corruption that remains rampant. The president has begun issuing a monthly list of the amounts doled out to each of 33 states and more than 600 municipalities, so the funds can be monitored at the grassroots level. So far, it hasn’t had much impact.”