GT33M - Contemporary Issues in the Politics of Industrial Societies.

Topic Five

Lecture 4

February 16, 2001.                     Corruption.

The Issue.

In 1960, three out of every four Americans felt their politicians in Congress could be trusted. In the 1990's, three out of four believe they could not be.

Just before the 1997 elections, people in Britain were asked which of their party they felt was more disreputable and sleazy. Nineteen percent said the Labour Party and 67% said the Conservative party. In January 2000, the same question got a response of 49% for the BLP and 47% for the BCP.

In a study of industrial countries, F. Ridley and Alan Doig ( Sleaze: Politicians, Private Interests and Public Perception, 1995), used the British term >sleaze= to refer to corrupt and immoral behaviour, meaning the unacceptable behaviour by politicians that defy the trust placed in them by citizens. They view the problem primarily as one of the quality of politicians which undermines confidence in democratic politics.

The issue turns on:

(1)  integrity in public life, and

(2)  the effectiveness of democratic controls against using the powers and privileges of office for personal gain.

In relation to the above, the editors note that, A Liberal democratic constitutions are intended to prevent, or at least minimize, corruption, patronage and other such malpractices, while simultaneously encouraging integrity among elected or appointed public officials: both aims have been central elements in the framing of democratic constitutions.@ (p.5).

But, according to them, the perception prevails that sleaze in British politics appears to be more widespread than previously thought, and that scandals are as extensive, or as bad, or worse elsewhere in the western world, that is, in other industrial democracies.

There is demand for standards of decency in public life to be higher with each new  scandal. This shows that democracy is a system which must continuously improve to address new and more insidious forms of corruption and to satisfy ever increasing standards demanded in the integrity of public officials if the system is to retain public trust.


What is sleaze?

It includes:

- conflict of interest between one=s public duty and his private interests;

- the misuse of inside knowledge to gain economic advantages;

- using public office to provide private services to lobbies;

- covering up misdeeds and preventing evidence from reaching courts and committees investigating malpractices and culpability;

- sexual indiscretions that bring the reputation for responsible conduct of officials into question;

- financial wrongdoings and questionable deals;

- patronage, that is, appointing friends to offices and using state resources to provide benefits to supporters for personal political gain;

- using political connections to win favour with business in order to secure future employment in the private sector upon retirement from politics;

- questionable or illegal methods of raising finances for party campaigns.

Examples of corruption in the 1990's were cited by the editors:

- In Italy, scandals have revealed the close relations between a dominant party and the Mafia. But the Mafia exists elsewhere too, in the US, Russia and Japan. In Italy too, criminal charges were made against the senior executives of a recent Prime Minister, Silvio Berlusconi, who himself was one of the richest men in Italy and who became prime minister after great public disaffection from other parties tainted by the perception of corruption. Berlusconi is a good example of the business politicians referred to by Susan Rose-Ackerman in her study of Corruption and Government (1999).

- In France, former president, Francois Mitterand=s government was plagued by numerous scandals that he had used his influence and high office to shield friends and close political associates from adverse publicity and possible prosecution for political and economic crimes. The current president=s party was the subject of charges that it had received bribes from companies in return for awarding building contracts to them.

- In Spain, the government was shaken by scandals that it authorized the illegal phonetapping of leading personalities, including King Juan Carlos.

- In the United States, the authors say, pork-barrel politics has constituted an essential and accepted element in government allocations. Scandals have plagued a number of presidents and congressmen. In the Reagan administration, allegations of corruption were made against over 100 persons. Clinton=s financial dealings as Governor of Arkansas, campaign soliciting, and sexual behaviour were subjects of controversy. Already the Bush presidency has been tainted by the fact that his original nominee for Secretary of Labour was rejected because she had hired an illegal immigrant as a babysitter for years. Clinton=s last act of his presidency was to grant a pardon to Marc Rich, a financial fugitive who had renounced his citizenship in 1983, and who for years was on the FBI and Interpol=s most wanted list. Right now, the pardon is being investigated by congress. It is said that Rich had been giving money to the democratic party through his wife. Being a non-citizen this raises other questions about American parties accepting contributions from non-citizens. (Rich was also controversially linked with the Seaga government in the 1980's as an underground broker through whom bauxite/alumina was to apartheid South Africa).

- In Sweden and Belgium, politicians have been named in connection with questionable arms dealing, and payments to party funds in return for approving contracts.

- In Japan the leader of a political party was accused of taking a bribe in exchange for ensuring that a bill favourable to bankers was passed. He was also said to have been having an extra-marital affair with a much younger woman. Corruption is so bad in Japan that a party was formed calling itself the Clean Government Party.


The Political Class.

A number of surveys have shown that public trust in government and respect for politicians has fallen to dangerously low levels. And, the problem of sleaze has gotten worse since the 1990's. Why?

Many explanations revolve around the nature of politicians as a political class. This class is often a full-time, professional set of party men and ministers who control or seek to control the resources and privileges of the state. These resources and privileges are used to advance the personal and professional interests of this class or party factions of the overall class competing against each other.

The political class is prone to corruption because of:

(1) Human nature:

Greed for wealth, the need for status, and the lust for power are a part of human nature and the political class, because it is directly involved in the competition for public power, has more opportunities and is more greatly suspected of pursuing these goals, even corruptly.

As such, the public has and seeks to establish unrealistic standards of public behaviour. In 1994, Britain established a Committee on Standards in Public Life (The Nolan Committee/Report) which called for public officials to display qualities of selflessness, integrity, accountability, honesty and leadership, to a degree that is unrealistic. Although politicians are ranked low on these qualities they are not the only groups who are.

A survey done in Britain in 1995, ranked professions on the question of which ones could be trusted to tell the truth:

The >ordinary man or woman= was ranked 7th out of 15 groups. Those ranked above (in descending order of truthfulness) were: teachers, doctors, clergymen, TV news readers, professors, judges.

Those ranked below (again in order) were: the police, pollsters, civil servants, trade union officials, business leaders, politicians generally, government ministers, journalists. (p.38).

While the political class ranked towards the bottom, they were not the only one. Fifty percent or more of the respondents ranked the groups from civil servants to journalists as low in truthfulness. Business leaders were just above politicians and journalists were perceived to be less truthful than the political class. Interestingly, it is these journalists who form public opinion and perception about the truthfulness of politicians.

Another question asking which groups respondents had the most respect for ranked Members of Parliament 13th out of 15, with journalists and real estate agents below them. 

A survey in November 2000 showed that most people in England don=t trust the government to tell them the truth about the safety of the food the English eat (73%); the safety of nuclear installations (74%); safe sex and AIDS (46%); the safety of foods and crops (73%); the safety of British beef (66%); the safety of medicines (54%).

The survey also showed that 48% felt financial sleaze in government was a major problem and 40% thought it was a minor problem. Those who felt that government appointed friends to important public posts was 86%; it manipulated the media (87%), and appointed to government committees people who made large donations to their parties (88%), grant honours and privileges to people who made large donations to their party (86%), favoured major private interests before the interests of the ordinary people (88%).(icmresearch). (These figures combine the percentages who saw these as major and minor problems, but the former response was always greater than the latter).

(2) Structural opportunity.

The political class, journalists, and businessmen have in common extraordinary opportunities by the nature of their enterprise to abuse trust and moral standards. They reach large amounts of people, network amongst the powerful, have power themselves, and have access to those with wealth and power. Teachers, doctors, clergymen etc., have professions with prestige but not directly linked to power.

The political class, for example, structures its opportunities for privilege and power:

- parliamentary privilege in Britain is based on the principle that the freedom of speech and debates of Parliament are not to be called in question in any court or place outside of Parliament. Special rights, powers and immunities conferred by parliamentary privilege are deemed necessary for legislators to carry out their constitutional duties effectively. In Britain parliament is supreme and can make and unmake any law it wants.

- in France, each time a president is elected, he passes an Amnesty Law which pardons all offences to do with elections, such as the funding of elections. Elsewhere, election laws are made by politicians with enough loopholes for them to be circumvented. (p.118).

- legislators can grant themselves pay increases. In Germany in 1991, senate members of a German state awarded themselves a 100% salary increase and the House members of another state gave themselves a rise of 75,000 pounds a year which was only a little less than what the British Prime Minister was receiving.

- in Greece, Members of Parliament give themselves a tax exemption of 50% of their salary. Other privileges supposedly help MP=s to serve their constituents better: extra pay to sit on parliamentary committees, free telephone calls up to a certain amount, the right to buy a car (up to 2000cc) every four years, free of tax and customs duties, five secretaries paid for by the state and a police guard, a number of airplane tickets to visit constituencies, special housing allowance in the city for attending parliamentary sessions, a pension after serving one term in parliament, immunity from legal action for behaviour falling outside of their political activities. (p.147).

Most people in Britain, according to a 2000 survey, felt that politicians could not be trusted to regulate themselves and that independent commissions should be appointed to deal with serious accusations made about professional misconduct by government ministers. (Icmresearch).

Politicians have things to say in their defense. The chief executives of governments do not earn a salary near to that earned by the chief executive of a medium size company. Many politicians are close to businessmen because the public does not want them to be anti-business and expects them to be knowledgeable about and sensitive to the conditions businessmen want if the economy is to do well. Many perceptions of corruption are just that - perceptions. Many, sometimes a majority of constituents cannot even name their MP=s, much less any specific act of corruption MPs collectively are engaged in. The word, >corruption= has become a part of the language of anti-politics, a word-formula used indiscriminately by the public, to express discontent or anger, sometimes just for partisan purposes.

There is truth in these defenses. But in Britain, unacceptable situations have developed where MPs use politics as a service commodity to sell for profit to those who can pay and over two-thirds of the British public want these activities banned.

They include:

- Asking questions in parliament for money;

- Receiving fees from private companies in return for lobbying government on their behalf;

- Speaking or voting on issues where they stand to gain financially;

- Receiving fees from specialist lobbying companies to promote the interests of the lobby=s clients in government;

- Speaking or voting on issues which affect commercial interests or private companies from which they receive payment.

Another 40% to 50% of respondents other activities banned:

- Having sponsorship and campaign costs being paid for by a trade union;

- Having any paid job outside of Parliament;

- Being the paid representative of any non-commercial group, like the Police Federation;

- Being paid to write articles for newspapers and magazines.

Even one-third of respondents felt that an MP must not be allowed to carry on any other profession, like being a farmer, while he is an MP.

And, over 70% said that MP=s and civil servants should not be allowed to take a job with a company after they have left office, if they had dealt with that company within two years previously.

Certainly these last two views are harsh. It is understandable that the public should want to restrain corruption but people in politics must be allowed to have other interests and to be able to take jobs after they have left politics too.

Because public trust in politicians have eroded, their good standing in civil society has declined. Some argue that as the political class becomes more resented a gap develops between it and civil society. As politicians have less public goodwill on which to stand they use the state and their privileges more to survive. Their use of patronage increases, their dependence on corporate money to substitute for people also become greater. This increases sleaze and the deficit of trust between them and  society.

(3) Media attention.

There was a time in the 1950's and early 1960's when journalistic culture respected the private lives and tolerated shortcomings of politicians. There was an unwritten code of conduct and a >gentleman=s agreement= within the media that for certain things the politician could be taken at his word and he would be allowed to deny sexual indiscretions. Today, that culture no longer exists. The competitiveness of the media marketplace and the >soap opera= mentality of the public come together to make gossip and intrigue affecting the lives of the rich and powerful good commercial value to the media. The rise of tabloids and the >gutter press= mean seeking out and blowing up any item, even of minor gossip value. Even the British Monarchy is not exempt. The Clinton-Lewinsky affair of the 1990's was nowhere as bad as John Kennedy=s affairs with Marilyn Monroe and numerous others in the early 1960's. Yet, Clinton was impeached and Kennedy=s affairs were never written about.

Ironically, although there is a strong view that the media cannot be trusted to tell the truth, its scandals about politicians are often taken to be truthful or at least to mean that there is truth in there somewhere.


Corruption and Political Structure.

Two elements interact in understanding corruption: human nature and political structure.

In America, the Founding Fathers held a dark view of human nature as based on ambitions for power. Their system of checks and balances was to balance ambition with ambition. They felt that blacks were inferior, and the motives of the common white man could not be trusted. But the ambitions of the wealthy and powerful had to be balanced off against each other.

In Europe, the age of enlightenment had produced a thinking that human nature could be rational, scientific and altruistic. Human beings were more perfectible once they were taken out of ignorance. Their was more emphasis on human improvement and human progress and less on political checks and balances. Besides, the stronger socialist and communist traditions in Europe placed the evils of society and men, not on human nature so much, but on capitalism and competition for power and profit.

In Japan, the Confucian ethic held that a society was like a family and the social elites were the fathers of the nation. Good government was possible just like parents took care of their children. Thus, a paternalistic system of politics developed.

Regardless of the philosophy and structure of government, corruption in business and politics was pervasive. When adult suffrage was extended and mass parties emerged, a modern political class came along with those changes. Corruption among government and administrative aristocracies was extended to corrupt behaviour among the party politicians.

Let us look at three quite different systems to show that despite their differences, the problem of corruption remains (although culture and structure provide different forms of legitimization and opportunity for it).

Transparency International=s Y2000 corruption perception index, listed the following industrial countries in order of corruption, (1- least corrupt; 90-most corrupt):

(1) Finland; (2) Denmark; (3) New Zealand/Sweden; (5) Canada; (6) Iceland/Norway; (9) Netherlands; (10) UK; (11) Luxembourg/Switzerland; (13) Australia; (14) USA; (15) Austria; (17) Germany; (19) Ireland; (20) Spain; (21) France; (23) Japan/ Portugal; (25) Belgium; (39) Italy; (82) Russia; (87) Ukraine; (89) Yugoslavia. (Total countries, 90).

This measure tend to focus on >bribe-taking on the part of the public sector. But a new focus is emerging, that on bribe-giving as well by the private sector. An indicative report by Transparency (Y2000) ranks countries on the basis of exporters paying bribes to public officials ( 1- least corrupt; 15-most corrupt).

(1) Sweden; (2) Australia/Canada; (4) Austria; (5) Switzerland; (6) Netherlands; (7) UK; (8) Belgium; (9) Germany/ USA; (12) Spain; (13) France; (14) Japan; (15) Italy. (Total countries, 19).

Both reports show that:

- Japan and Italy are amongst the most corrupt of the traditional democracies;

- The model civic culture democracies, the UK and US, ranked towards the middle of the top 24 countries.

- The former communist countries are ravaged by corruption, and there are strong mafias in those countries too.

- Political structures and cultures do no correlate with degrees of corruption. Anglo-American and continental systems seem as likely to be corrupt; large and small societies; European, North American and Asia-pacific.

- Interestingly, some of the fastest growing >miracle= economies after World War Two, have ranked high on corruption, notably Germany and Japan.  

A more detailed look at three very different countries will help.


The American separation of powers model, proved not to be a solution at all. First, it accepts that human nature is corrupt or capable of corruption. Second, it failed to see that although powers might be separated, all branches of government were at one in being controlled by men ambitious for power. Third, it has failed to separate the power of wealth from the power of politics.

Robert Williams has made the following statements about corruption in America:

- APolitics in the United States has long had a reputation for sleaze. Scandals of both the financial and sexual varieties seem endemic and have contributed to a political environment in which politicians are held in low esteem.@ (p.84).

- APatronage politics developed in the early nineteenth century and it became an established fact of American political life that the winner of a presidential election would reward his friends, supporters and campaign contributors with jobs in the federal government.@ (p.86).

- AThe slogan >to the victors belong the spoils=...had taken a firm grip on American politics,@ by the 1860's. (p.86).

- AThe links between business and politics...have always played a role in defining the nature of sleaze in the United States. It is more than coincidental that the greatest period of untrammeled economic enterprise and growth coincided with unparalleled levels of corruption and sleaze.@ (p.87).

It was probably after the assassination of John Kennedy in 1963 and the Vietnam War debacle (1965-1975), that political innocence by the American public ended. The 1970's revealed high level corruption. A Vice-President, Spiro Agnew, was forced to resign in 1973 after charges of accepting bribes from contractors while Governor of Maryland. In 1974, Richard Nixon was resigned when faced with impeachment on charges of criminal conspiracy to obstruct justice, that is, investigating charges that he knew of an illegal break-in democratic party headquarters at the Watergate hotel in 1972, to steal campaign documents. In 1981, seven congressmen were caught on camera by an FBI agent impersonating an Arab businessman accepting bribes for agreeing to help to evade immigration restrictions.

In 1987, five senators met with bank regulators to ask for special favours for a banking friend. Loose bank regulations subsequently led to that person=s bank failure and a series of savings and loans failures that cost taxpayers US$2 billion.

In 1994, the chairman of the powerful Ways and Means Committee, Dan Rostenkowski was indicted on 17 counts of fraud and embezzlement.

It might sound rather cynical, but some believe that the American system of bipartisanship in committees and congressional confirmations of presidential appointees are examples of a system structured so that all the players have a say in providing patronage or making sure that appointees are acceptable to all for their purposes, noble and devious.



Japan=s Airon triangle@ is a triumvirate of politicians, bureaucrats and business executives - a power elite - that collude to pursue common and mutual interests which has become the main feature of governance in Japan. The system has been typified by patterned pluralism, bureaucratic dominance and the Keiretsu (conglomerates like Mitsubishi and Toshiba, working like Japan Incorporated).

The philosophy behind this collusion was that strength lay in a unity of the powerful and this would bring more power, wealth and influence.

This was projected as putting group interests over individualist ones, promoting a consensus-building approach to decision making and harmonious relations over competitive ones and that government and business must act as allies rather than as adversaries.

The powerful intermediary between business and politicians is the bureaucracy. Retired bureaucrats work with the private sector and use their knowledge of the system to open doors for the private sector. The private sector gives campaign money to politicians to influence bureaucratic agencies on their behalf. The legislature in Japan is not as powerful as, say in the US. It is subject to the powerful Japanese bureaucracy. Effectively, the bureaucracy writes the laws and the legislature passes them. Politicians provide Agifts@ to bureaucrats to smooth the passage of influence.

Japanese culture, more than any western industrial culture, places particular emphasis on >old school ties= for building and maintaining personal relationships in business and politics.

The iron triangle works hidden behind walls of secrecy and privilege on the belief that whatever was good for them and their particular agency was good for the country as a whole. The system was supported by the Liberal Democratic Party=s dominance from 1953 to 1993, and then since 1996. The party was immune to its image as being scandal prone and money-driven. It could count on electoral support of between 40% and 50%, from a largely passive electorate, grateful for years of Japan=s economic miracle.

The business community provided the LDP with political funds and the bureaucratic elite was drawn from the top graduates of  Tokyo university who were held in high esteem by a fairly docile public. The Japanese were content with their society, seeing it as well-run, ordered and safe. They truly believed it to be the best compared to western=s society=s social decay, drugs, violence and indiscipline. But since about 1991 the economy lost its robustness, culminating in a major collapse in the mid-1990's from which it is still recovering. Suddenly, the Japanese public was less secure and more critical. It responded to the LDP=s scandals and the economic downturn by voting the party out in 1993.

The image of the bureaucracy also suffered. It is blamed for the financial crisis and bank failures, by corruption scandals and personal greed.     

Japan remains a corporate state in which government works hand-in-glove with large corporations to ensure their strength and protect their interests over consumers, workers and other stakeholders in the system.

Many governments have fallen in Japan due to corruption. A prime minister was convicted in 1983 for taking bribes. Another resigned in 1989 after scandals hampered his party in elections. The LDP lost elections in 1993 when a leading member was reported to have accepted millions of yen in unreported financial campaign contributions from a company with connections to a crime syndicate.

When the LDP lost elections in 1993, a coalition of seven political parties came to power saying they would break up the iron triangle which they called the >hotbed of political corruption. They introduced new finance campaign laws, new banking laws, and partially changed the system from PR to FTP. A new law in 1999 was designed to stop bureaucrats from accepting excessive amounts of gifts.

But these and other reforms have not worked. Japanese governments continue to fall regularly. There were six in the past seven years and none have had the time or the will to enforce the changes. Established interests continue to resist anything that is more than cosmetic change.


Some political scientists describe the Italian political system as a >particracy,= one that encourages the party politician to seek advantage over competitors through corrupt practices. Parties operate on the basis of patronage. This is deeply embedded in a tradition where the ordinary Italian depends on a system of favours that reach into the heart of the state. The dominant party, the Christian Democratic Party (CDP) which had dominated government through coalitions, also controlled the system of patronage. Up to the 1990's, the CDP was Aable to use the resources of the buy the vote of the southern poor in exchange for jobs or benefits and to establish the south as its main electoral heartland.@ (p.164).

The difference with Italian patronage is that it works by special laws. Most of the people recruited to public administration were recruited without regard to special procedures such as examinations, a vast majority of the top civil servants being born or educated in the south. Southern electors were only loosely inspected for income and business tax payments.

Proportional representation also aided and abetted >particracy.= The CDP and a number of small parties formed coalitions to keep out the large communist party. This was their only real ground of commonality and because each coalition party knew it was important for this, its members could get away with corruption and be protected.

Partridge explains how the system worked:

AIn this situation...,with the entrenchment of a group of >acceptable= parties in permanent power but in a permanent condition of internal rivalry, there was increasing pressure to control state agencies in order to gain access to their resources. As the frontiers of the state were expanded, so more and more areas were taken into the public sector, allowing further possibilities to exchange public resources for the party financing which was so necessary to generate votes in increasingly expensive electoral campaigns, or sometimes simply to enrich individual politicians or their supporters. The parties of government appointed supporters to manage public firms. These >apparatchiks= would then use state companies to channel funds to the parties, often syphoning off a proportion of the proceeds for their own use. The money was raised mainly through the award of contracts in return for kickbacks, a mechanism facilitated in Italy where, since 1919, public sector companies were able to reach agreements with suppliers without competitive bidding. Companies wishing to undertake work on foreign aid projects were required to make payments for >consultations= amounting to 3 or 4% of the total cost.@ (p.166).

It might sound too sweeping but Partridge says, A If corruption in Italy had become systemic - the rule rather than the exception in politics and in business, in the public and in the private sector - so its use was condoned or at least tolerated at every level of society, including those institutions charged with the role of watchdog of the public interest.@ (p. 167).

The system came under severe pressure after the cold war ended. The communist party was no longer a threat and moderated its programme. The other parties felt freer to attack the CDP rather than coalesce with it and even the press and judiciary became bolder. Riding the public mood, investigations were launched in 1993 and revealed a grand scale of corruption.

In an effort to change the particracy that had brought PR into disrepute, a referendum voted to elect 25% of the seats under PR and 75% under FTP in 1993. A new coalition of business and professional elites came to power. But immediately, it was tarnished with corruption scandals. The Businessman - politician, prime minister Silvio Burlosconi, created a company to hide >slush= funds which would be used off-the-books, to offer bribes, kickbacks and illegal party financing.

A AClean Hands= investigation followed, numerous arrests and some suicides followed. In the first two years, investigations revealed that bribes amounting to 75 billion pounds were being investigated. Burlosconi was forced to resign.



The above cases show that:

1. Modern democracies, whatever their political structures and however much their constitutions claim to demand transparency, still suffer from corruption.

2. Corruption follows from the structures that had established themselves in pre-democratic phases (examples, strong, authoritarian bureaucracies in Japan and Italy before World War Two), or through parallel political processes running alongside democratic ones and sometimes overriding them).

3. Since the mid-1990's, sleaze has attracted a lot more attention, probably because the obsession with communism ended. New politics is being promised in Italy and Japan but the immediate signs show that it will take time for this to come through.    

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