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January 30, 2020 By Richard Bowen

Corruption Rules!

Graphic showing the highest six and lowest six corruption index scores. (Top in green: Denmark, 87; New Zealand, 87; Finland, 86; Singapore, 85; Sweden, 85; Switzerland, 85. Bottom in red: Congo, 19; North Korea, 17; Afghanistan, 16; Yemen 15; Syria, 13; Somalia, 9)The recently released 2019 Corruption Perceptions Index produced by Transparency International, the world’s leading anti-corruption coalition, shows some disturbing trends.

The Corruption Perceptions Index (CPI) is an index published annually since 1995 by Transparency International, which ranks countries “by their perceived levels of corruption, as determined by ‘expert assessments’  and opinion surveys.” This year’s study highlighted the relationship between politics, money and corruption.

With a score of 69, the United States has received its lowest score in eight years and marks the first time since 2011 that the U.S. falls outside of the top 20 countries on the CPI list.

In 2018 the U.S had a score of 71; in 2017 it had a score of 75. According to the Pew Center, “With a score of 69, the United States drops two points since last year to earn its lowest score on the CPI in eight years. This comes at a time when Americans’ trust in government is at an historic low of 17 percent.”

With trust in our government being at an all-time low there is certainly cause for concern. In 2017, a public opinion survey published by Transparency International showed nearly six in ten Americans believed that the US was more corrupt than the previous year. Today’s figures emphasize this growing divide in trust.

Red Flag

Last year, before the release of the 2019 index, Zoe Reiter, Acting Representative to the US at TI, commented, “A four point drop in the CPI score is a red flag and comes at a time when the US is experiencing threats to its system of checks and balances, as well as an erosion of ethical norms at the highest levels of power … If this trend continues, it would indicate a serious corruption problem in a country that has taken a lead on the issue globally. This is a bipartisan issue that requires a bipartisan solution.”

Interestingly and worrisome as well, our northern trading partner, Canada has dropped four points since last year to a score of 77, a drop of seven points since 2012.

Using the definition of corruption as “the misuse of public power for private benefit,” the Index currently ranks 180 countries on a scale from 100 (“very clean”) to 0 (“highly corrupt”). The CPI shows that there is little to no improvement in the majority of countries worldwide in tackling corruption.

According to the Index, cross analysis with global democracy data reveals a link between corruption and the health of democracies. Full democracies score an average of 75 on the CPI, with no full democracy scoring less than 50. In 2016, the United States was downgraded from a full to a flawed democracy in the Democracy Index, a gradual downward trend which started in 2008.

The Index relies on expert assessments and public opinion surveys. Its methodology is documented and follows four basic steps: selection of source data, rescaling source data, aggregating the source data and then reporting a measure for uncertainty.

Progress

In the last eight years, only 22 countries have shown significant improvement on the CPI, while almost as many have declined. More than 130 countries have made little to no progress in tackling corruption. Even sadder and more alarming, their research shows that more than two thirds of countries scored below 50, with an average score of 43.

Some of Transparency International’s research for this index points to corruption being even more pervasive in countries where big money flows freely into electoral campaigns and where governments pay more attention to the wealthy and well connected.

This is a huge cause for concern. Patricia Moreira, Managing Director, said “The lack of real progress against corruption in most countries is disappointing and has profound negative effects on citizens around the world. To have any chance of ending corruption and improving peoples’ lives, we must tackle the relationship between politics and big money. All citizens must be represented in decision making.”

Delia Ferreira Rubio, Chair of TI, believes that “Governments must urgently address the corrupting role of big money in political party financing and the undue influence it exerts on our political systems.”

Drawing on 25 years of experience as the world’s leading anti-corruption coalition, Transparency International emphasizes the following as essential pre-requisites for fighting corruption:

  • A robust system of checks and balances on political power.
  • Effective controls against conflicts of interest and private influence over government decisions.
  • Citizen participation in politics and protections against voter suppression and other forms of disenfranchisement.
  • A free, diverse and pluralistic media with regular and equal access to those in power.
Source: PR Newswire

Potential solutions

The trends clearly show corruption is on the rise. And while it may be an uphill battle, there are potential solutions. As a start, Transparency International recommends we take specific actions:

  1. Manage conflicts of interest.  
  2. Control political financing.  
  3. Strengthen electoral integrity.  
  4. Regulate lobbying activities.  
  5. Empower citizens.  
  6. Tackle preferential treatment.  
  7. Reinforce checks and balances. 

“Corruption chips away at democracy to produce a vicious cycle, where corruption undermines democratic institutions, and in turn, weak institutions are less able to control corruption,” said Patricia Moreira, Managing Director.“Around the world, we need to do more to strengthen checks and balances and protect citizens’ rights, and the US is no exception.” (Visit the CPI 2019 report for full recommendations.)

There is no question that corruption undermines trust. Unfortunately, it appears that corruption left unchecked leads to even more corruption, as we can see in many of our business and government institutions.

I believe we are at a turning point in the history of our country. We have a choice. We can go forward toward higher ideals or slide backward and erode the foundation of what our democracy was built upon, trust, accountability, the rule of law and respect for the ideals we base our “democracy” on.

An American Nightmare!
Visiting with the Investments and Wealth Institute

Tagged With: Corruption, Ethics, Perceived Corruption

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Richard Bowen is widely known as the Citigroup whistleblower. As Business Chief Underwriter for Citigroup during the housing bubble financial crisis meltdown, he repeatedly warned Citi executive management and the board about fraudulent behavior within the organization. The company certified poor mortgages as quality mortgages and sold them to Fannie Mae, Freddie Mac and other investors.

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"Richard Bowen is one of my heroes. His is a story of human fortitude at its best and Wall Street at its worst." ~ William D. Cohan, NY Times Best Selling Author
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"Richard's speech at the April Financial Executives International dinner was informative, interesting, riveting, and fast moving.  The feedback from members was overwhelming positive, and Richard received one of the few standing ovations given by our membership." ~ Jim Farrell, Program Chairman, Dallas Chapter, Financial Executives International
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Dennis McCuistion"Richard Bowen has been there, done that, and has the scars to prove it, and his message of corruption at the highest levels of industry and government needs to be heard. I only wish that more bankers had the courage that Bowen exhibits. He is not only one of the most talented bankers I have ever met, he has more integrity than all the bankers on Wall Street put together. If his former employer had listened to him taxpayers would not have had to bail out Citi for the third time in the last 30 years."

~ Dennis McCuistion, Host of the McCuistion TV program
2014-12-28T19:48:06+00:00
"Richard Bowen has been there, done that, and has the scars to prove it, and his message of corruption at the highest levels of industry and government needs to be heard. I only wish that more bankers had the courage that Bowen exhibits. He is not only one of the most talented bankers I have ever met, he has more integrity than all the bankers on Wall Street put together. If his former employer had listened to him taxpayers would not have had to bail out Citi for the third time in the last 30 years." ~ Dennis McCuistion, Host of the McCuistion TV program
https://www.richardmbowen.com/testimonials/533/

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"Richard Bowen is a dynamic, entertaining speaker and story-teller - a CPA with a great personality!" ~ Betty Garrett, Garrett Speakers International
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"I believe Richard Bowen is the only keynote speaker to ever receive a standing ovation from the Texas Society of CPA’s at any of its annual conferences." ~ Fred Timmons, Chairman of The Texas Society of CPA's
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Presentation Topics

Playing for High Stakes: The Principles and Practice of Ethical Leadership

Dark Citi: The Story of a Whistleblower

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Now an ethical leadership speaker, Richard Bowen was Citigroup's Business Chief Underwriter during the housing bubble.

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