How Political Corruption Works

Former Rep. William Jefferson, a US democrat, accepted more than USD400,000 in bribes and millions more in exchange for brokering business deals in Africa. Jefferson hid his bribes by funneling money disguised as consulting fees through sham companies controlled by his wife and brother. His name does not appear in the deals to avoid implications of impropriety. His defense argues that Jefferson was acting as a private business consultant and that his actions do not constitute bribery. (It's perception! and more on the Jefferson case.) Jefferson’s political-business wiles are common practice in many developing countries.

How Political Corruption Works (In The Simplest Case)

(The individual drawings are courtesy of www.clipartguide.com)

1. The morally grey company identifies a potential business project and some of the key constraints to securing the deal.
2. The company approaches its friendly politician and makes a verbal financial deal with him in exchange for his help.
3. The morally grey company pays off the politician through his stooge company and bogusly writes it off as a marketing expense. In exchange for the money the stooge company fabricates a bill for the provision of marketing consultancy services. Payment is made either in part or in full depending on their arrangement.
4. The politician either personally approaches the relevant personnel in his government to contact the foreign counterpart or uses his rookie to avoid direct association.
5. The stooge company then pays off the politician and possibly the key decision makers (most likely in cash to avoid a paper trail) if necessary.
6. The politician’s contact, if not himself, will then approach the key government official in the foreign country and persuade him/her to remove all bureaucratic obstacles so that the business deal goes through for the morally grey company. That could be quite a complicated process depending on the foreign country’s political system and legislation. Hence, more money might need to change hands in order for the morally grey company to succeed in getting the project.
7. If the foreign politician’s wrangling succeeds, the morally grey company signs a legitimate contract with the final customer.