Government Fraud, Bribery Still Alive and Well

Several recent instances of alleged fraud among local governments show that the problem is still widespread and pervasive. When individuals in positions of power and influence seek to enrich themselves illegally, it represents a betrayal of the public trust.

In Edinburgh, Scotland, two city council workers pleaded guilty this week to accepting bribes in exchange for the awarding of contracts to a building company. According to news reports, the men admitted to the bribery and fraud in what was a complicated scheme that allegedly lined their pockets with tens of thousands of pounds.

The charges stem from the interactions between the two council members, Charles Owenson and Jim Costello, and two staff members from the building company, Kevin Balmer and Brendan Cantwell. The bribery revolved around maintenance contracts for the Edinburgh Council buildings. According to the BBC:

The first charge details how between 6 January 2006 and November 10 2010, Balmer and Cantwell corruptly gave £42,521 to Owenson and Costello at various locations in Edinburgh.

The two ABC Ltd employees also gave Owenson and Costello £30,249 in hospitality as an inducement to secure contracts for the repair and maintenance of Edinburgh City Council buildings.

The second charge states Owenson acted corruptly whilst working as an officer at the local authority's Property Care Services Ltd.

It states that he received £28,387 at various locations in Edinburgh between 2006 and 2010 as a reward for the council awarding contracts to ABC Ltd.

The article also notes that Owenson and Costello purchased cars at various locations during this time as part of money laundering schemes. Their court case is adjourned until Friday.

In Denver, Colorado, U.S., a top city official was accused last month of accepting bribes totaling several thousands of dollars. The alleged bribes from a local businessman were intended to help secure contracts at Denver International Airport in a way that subverts the normal bidding process, according to media reports. Larry Stevenson, who works in the Excise and Licensing Dept., was subsequently placed on leave from the city and a warrant was issued for his arrest.

According to the Denver Post, it was an informant who brought the alleged corruption to light.

These cases just exemplify what is happening in cities everywhere: corruption and bribery are ongoing threats to government and business all over the world. FACT: Studies confirm that in this global economy, at least 50% of organizations worldwide fall prey to unscrupulous business dealings and other outside threats posed by seemingly legitimate business partners.

At CRI Group, we help organizations stay attuned to risks of corruption and bribery and avoid getting entangled in a bad situation. In addition to legal ramifications, being involved on either side of a bribery case also leads to a damaged reputation and loss of trust among investors, clients and employees. Learn more about our due diligence and compliance services, and help lessen the risk level at your organization.