We are facing an unprecedented medical crisis that is already applying pressure on all corners of the global economy and on individuals and families around the world. Mandatory stay-at-home orders have resulted in record high unemployment, jeopardized the sustainability of small and large businesses, and left many uneasy with their own mortality.
Unfortunately, corruption, which, put simply, is the use of one’s official position for personal gain, thrives in times of tragedy, especially in areas with limited transparency, high levels of pre-crisis corruption, limited free press, poor education, and/or weak law enforcement and anti-corruption measures. Much like COVID-19, corruption doesn’t discriminate: It impacts everyone regardless of social class, economic status, color, creed, or religion.
Disasters and outbreaks create an opportunity for corruption through the exploitation of fear, suffering, and a sense of urgency. Addressing the emergency post-haste often supersedes the need for ensuring compliance and oversight. And this foments opportunity for those with nefarious intent, which is, unfortunately, all too often applicable to government employees with authority over the distribution of funds and contracts. Even more unfortunate under our current circumstance, it is also exceedingly relevant in healthcare industries during times of outbreak where equipment and resources are limited. Consider what it takes to obtain FDA approval for pharmaceutical test kits or vaccines. And now consider the value to the company obtaining the coveted “sole” approval. This is but one example to highlight the opportunity, not to suggest this actually occurred.
Anyone with an imagination will wonder about the behind-the-scenes awarding of lucrative contracts for beds, ventilators, and masks in places like New York and Los Angeles. But no imagination is necessary to contemplate the contract acquisition process in infamously corrupt countries like Venezuela, Iran, and Nigeria.
Opportunities for bribery, extortion, and embezzlement are extensive right now. But for the first time, the prevalence of this massive threat is occurring simultaneously around the world at the local and federal levels.
Corruption can significantly reduce dollars that should flow to the people needing those dollars most, but it will also diminish the quality of products provided by companies having illicitly won contracts. Training and experience suggest corruptly acquired government deals tend to result in the production of a lower quality product, which is exceedingly problematic when viewed through the lens of someone in need of medical aid. And at a time where effective measures will be needed to ensure a more timely recovery, corruption is a major threat to the world’s economic and medical rehabilitation.
There is ample historical evidence to support the claim that outbreak and disaster relief is pillaged by those with sufficient access: Ebola virus outbreak (2014-2016), flood relief in Bulgaria (2004-2005), and, of course, Hurricane Katrina (2005), of which I have some experience.
In early 2006, I arrived in New Orleans as the first FBI Agent assigned out of Quantico to that field office since Hurricane Katrina decimated the area. Hurricane Katrina, which made landfall on Aug. 29, 2005, left in its wake an estimated $161 billion in damage and 1,833 fatalities. The local economy was eviscerated, and the lives of countless were forever changed as approximately one million people were displaced from the storm.
One element of the government’s response to the storm was the rapid distribution of funds to those impacted. By June 2006, the Government Accountability Office estimated approximately $1 billion was improperly distributed and potentially fraudulently obtained. By 2011, 1,439 people spanning 41 federal districts were federally charged with hurricane related fraud against the government.
Fraud wasn’t the only major obstacle to recovery in the Gulf region. By 2014, the seventeenth New Orleans area public official had been arrested on federal corruption related charges since Hurricane Katrina, including a school board member, both a state senator and a representative, a judge, multiple city council members, a coroner, and multiple mayors (including New Orleans Mayor Ray Nagin). To this day, it is unclear how much aid from Hurricane Katrina was lost to fraud and corruption.
This is the result of massive exploitation in just one small city in the United States. What might it look like around the world — simultaneously?
Foreign aid, stimulus and bail outs, charitable donations, medical devices and other health related equipment — money and resources are going to be flying around the world for humanitarian purposes, and while much of that will be mismanaged, much of it will also be syphoned, stolen and corruptly misdirected.
Politicians and unelected government and health officials are uniquely positioned to gain inside information that they can leverage into “dirty deals,” lining their own pockets at the expense of those they are employed to serve. Recently, for example, four U.S. Senators (Sens. Kelly Loeffler (R-Ga.), Diane Feinstein (D-Calif.), Richard Burr (R-N.C.), and James Inhofe (R-Okla.)) were publicly being accused of insider trading after it appeared that they personally profited from trades following a private all-senators coronavirus briefing. It’s unclear at this point if the senators violated any laws, but the Justice Department is said to be reviewing the activity.
Corruption investigations can be difficult for a number of reasons, not the least of which is the fact that it can be a challenge to distinguish between corruption and gross mismanagement. There is an added burden on corruption enforcement given not all corruption is actually illegal, assuming it is even discovered and investigated by law enforcement. But in a global crisis, priorities and resources are often diverted, paving the way for the fringe to move into the mainstream through legal and illegal acts of corruption. Otherwise incomprehensible behavior can quickly become the new normal under the guise of an emergency response measure.
Intolerance is the key to overcoming corruption. Community education and awareness, transparency, the strategic placement and execution of proper oversight, a competitive bid process, and a commitment to the ethical distribution of funds is a critical first step to curbing corruption before it occurs.
But it is equally important for law enforcement to foster an environment of trust and confidence within their communities to encourage citizens to report allegations of corruption. This is best achieved by enforcing anti-corruption laws in an equitable and consistent fashion against all bad actors, regardless of their position or status. Prosecuting only low-level officials for corruption is a miscarriage of justice. It’s also the quickest way to destroy trust within a community, as it completely undermines all confidence in the system.
Communities around the world are suffering from a pandemic. And a prescription of unabashed integrity by leadership and a vigilant posture against corruption by all is critical to saving livelihoods and saving lives.
Jeff Cortese, a financial crimes manager in the private sector, is the former acting chief of the FBI’s Public Corruption Unit. Before his 11-year career with the bureau, he worked as a dignitary protection agent with the U.S. Capitol Police and served on the security detail for the Speaker of the House. Follow him on Twitter @jeffreycortese or find him at his website www.jeffcortese.com.