1.

GRAFT AND CORRUPTION: corruption triad - attraction, opportunity, rationalization

meaning, causes, measures to minimize
http://www.transparency.org/what-is-corruption/

What is corruption?
How do you define corruption?
Generally speaking as the abuse of entrusted power for private gain. Corruption can be
classified as grand, petty and political, depending on the amounts of money lost and the sector
where it occurs.
Grand corruption consists of acts committed at a high level of government that distort policies or
the central functioning of the state, enabling leaders to benefit at the expense of the public good.
Petty corruption refers to everyday abuse of entrusted power by low- and mid-level public
officials in their interactions with ordinary citizens, who often are trying to access basic goods or
services in places like hospitals, schools, police departments and other agencies.
Political corruption is a manipulation of policies, institutions and rules of procedure in the
allocation of resources and financing by political decision makers, who abuse their position to
sustain their power, status and wealth. See animated definitions of many corruption terms in our
Anti-corruption Glossary.

WHAT IS TRANSPARENCY?
Transparency is about shedding light on rules, plans, processes and actions. It is knowing why,
how, what, and how much. Transparency ensures that public officials, civil servants, managers,
board members and businesspeople act visibly and understandably, and report on their activities.
And it means that the general public can hold them to account. It is the surest way of guarding
against corruption, and helps increase trust in the people and institutions on which our futures
depend. See how transparency can defeat corruption in a range of areas.

WHAT ARE THE COSTS OF CORRUPTION?

Corruption impacts societies in a multitude of ways. In the worst cases, it costs lives. Short of
this, it costs people their freedom, health or money. The cost of corruption can be divided into
four main categories: political, economic, social and environmental.
On the political front, corruption is a major obstacle to democracy and the rule of law. In a
democratic system, offices and institutions lose their legitimacy when theyre misused for private
advantage. This is harmful in established democracies, but even more so in newly emerging
ones. It is extremely challenging to develop accountable political leadership in a corrupt climate.
Economically, corruption depletes national wealth. Corrupt politicians invest scarce public
resources in projects that will line their pockets rather than benefit communities, and prioritise
high-profile projects such as dams, power plants, pipelines and refineries over less spectacular
but more urgent infrastructure projects such as schools, hospitals and roads. Corruption also
hinders the development of fair market structures and distorts competition, which in turn deters
investment.
Corruption corrodes the social fabric of society. It undermines people's trust in the political
system, in its institutions and its leadership. A distrustful or apathetic public can then become yet
another hurdle to challenging corruption.

Environmental degradation is another consequence of corrupt systems. The lack of, or nonenforcement of, environmental regulations and legislation means that precious natural resources
are carelessly exploited, and entire ecological systems are ravaged. From mining, to logging, to
carbon offsets, companies across the globe continue to pay bribes in return for unrestricted
destruction.

What do you do to fight Corruption?

Our three guiding principles are: build partnerships, proceed step-by-step and stay nonconfrontational. We have learned from experience that corruption can only be kept in check if
representatives from government, business and civil society work together to develop standards
and procedures they all support. We also know that corruption cant be rooted out in one big
sweep. Rather, fighting it is a step-by-step, project-by-project process. Our non-confrontational
approach is necessary to get all relevant parties around the negotiating table.
© 2000-2014, Transparency International e.V.
read:https://www.allbusiness.com/the-fraud-triangle-and-what-you-can-do-about-it4968017-1.html

The Corruption Triangle and What You Can

Do About It
Tracy Coenen
AllBusiness.com |
One of the older and more basic concepts in corruption deterrence and detection is the
corruption triangle. While researching his doctoral thesis in the 1950s, famed criminologist
Donald R. Cressey came up with this hypothesis to explain why people commit corruption.
The three key elements in the corruption triangle are opportunity, motivation, and rationalization.
Opportunity is the element over which business owners have the most control. Limiting
opportunities for corruption is one way a company can reduce it.
The opportunity to commit corruption is possible when employees have access to assets and
information that allows them to both commit and conceal corruption. Employees are given
access to records and valuables in the ordinary course of their jobs. Unfortunately, that access
allows people to commit corruption. Over the years, managers have become responsible for a
wider range of employees and functions. This has led to more access for them, as well as more
control over functional areas of companies. Access must be limited to only those systems,
information, and assets that are truly necessary for an employee to complete his or her job.
Motivation, another aspect of the corruption triangle, is a pressure or a need felt by the person
who commits corruption. It might be a real financial or other type of need, such as high medical
bills or debts. Or it could be a perceived financial need, such as a person who has a desire for
material goods but not the means to get them.
Motivators can also be nonfinancial. There may be high pressure for good results at work or a
need to cover up someones poor performance. Addictions such as gambling and drugs may also
motivate someone to commit corruption.
Lastly, employees may rationalize this behavior by determining that committing corruption is
OK for a variety of reasons. For those who are generally dishonest, its probably easier to
2

rationalize a corruption. For those with higher moral standards, its probably not so easy. They
have to convince themselves that corruption is OK with excuses for their behavior.
Common rationalizations include making up for being underpaid or replacing a bonus that was
deserved but not received. A thief may convince himself that he is just borrowing money from
the company and will pay it back one day. Some embezzlers tell themselves that the company
doesnt need the money or wont miss the assets. Others believe that the company deserves to
have money stolen because of bad acts against employees.
Business owners and executives must take control of corruption by working on the portion of the
corruption triangle over which they have the most control: the opportunity to commit corruption.
It may be difficult for management to do anything about an employees needs or rationalizations,
but by limiting opportunities for corruption, the company can reduce it to some extent.

http://www.pctc.gov.ph/papers/graft.htm

PCTC PAPER ON GRAFT AND CORRUPTION

A. INTRODUCTION
In 1988, graft and corruption in the Philippines was considered as the "biggest problem of all" by Jaime
Cardinal Sin, the Archbishop of Manila. Then President Corazon C. Aquino likewise despaired that
corruption has returned. In 1989, public perception was that "corrupt government officials are greater
threat to the country" than the communist guerrillas. In 1992, former President Fidel V. Ramos considered
graft and corruption as the third major hindrance towards attaining his development strategy for the
country.
A decade later, in 1998, the country got good marks from Transparency International and the Political and
Economic Risk Consultancy (PERC), LTD. The Philippines then placed 6th out of the 11 Asian countries
surveyed under the PERC corruption perception index (CPI), a measure of lost development opportunities
in terms of investment.
However, while the anti-corruption landscape in the Philippines has improved, its low score of 6.5 still
placed the Philippines as hig
hly prone to corruption. In general, national and international opinion depict the Philippine as still corrupt
and being unable to effectively fight this problem.
Indeed, today, graft and corruption in the Philippines remains. About 30 % of the national budget is
reportedly lost to graft and corruption every year. Thus, the 1999 budget of P 590 billion pesos
(approximately US$15.5 billion) will stand to lose about P 170 billion pesos (approximately US $ 4.47
billion).
The administration of President Joseph Ejercito Estrada has vowed to reduce graft and corruption by 80
% before the end of his term.
B. SPECIFIC TYPES OF CORRUPTION IN THE PHILIPPINES
There are 8 types of corruption frequently practiced in the Philippines namely: tax evasion, ghost projects
and payrolls, evasion of public bidding in awarding of contracts, passing of contracts, nepotism and
favoritism, extortion, protection money and bribery.
Tax Evasion
This is very rampant, particularly in the private sector due to the refusal of those engaged in private
businesses to honestly declare their annual income and to pay the corresponding taxes to the
government.
Ghost Projects and Payrolls

This is done by high officials of the government whereby non-existing projects are financed by the
government while non-existing personnel or pensioners are being paid salaries and allowances. This
practice is rampant in government agencies involved in formulation and implementation of programs and
projects particularly in infrastructure and in the granting of salaries, allowances and pension benefits.
Evasion of Public Bidding in the Awarding of Contracts
Government offices, particularly bids and awards committees forego the awarding of contracts through
public bidding, or award these contracts to favored business enterprises or contractors. Sometimes,
members of bids and awards committees are very subjective of awarding the contract to those who can
provide them with personal benefits.
To legally evade public bidding, purchasing government agencies would embark on a piece-meal
purchasing strategy whereby small amount of supplies and materials will be bought in a continuous
process. In which case, internal agreements between the buyer and the supplier is done whereby a
certain percentage of the price value will be given to the buyer which sometimes result to overpricing and
the purchase of sub-standard supplies and materials.
The practice of passing contracts from one contractor to another
In the construction of infrastructure projects, contractors have that practice of passing the work from one
contractor to another and in the process certain percentage of the project value is retained by each
contractor and sub-contractors resulting to the use of substandard materials or even unfinished projects.
Nepotism and Favoritism
Government officials particularly those occupying high positions tend to cause the appointment or
employment of relatives and close friends to government positions even if they are not qualified or eligible
to discharge the functions of that office. This is one of the root causes of inefficiency and the overflowing
of government employees in the bureaucracy.
Extortion
This is done by government officials against their clients by demanding money, valuable items, or
services from ordinary citizens who transact business with them or with their office. This is rampant in
agencies issuing clearances and other documents, those involved in the recruitment of personnel, or
those performing services that directly favor ordinary citizens.
Tong or Protection Money
This is a form of bribery which is done by citizens performing illegal activities and operations. They deliver
huge amount of money to government officials particularly to those in-charge of enforcing the law in
exchange for unhampered illegal operation. The law enforcement officer who receives the money will be
duty-bound to protect the citizen concerned together with his illegal activities from other law enforcement
authorities. This is practiced mostly by gambling lords and those engaged in business without the
necessary permits.
The Lagay system or Bribery
The lagay system or the act of citizens to bribe government officials occupying sensitive positions in
government is perpetuated due to bureaucratic red tape. Too much paper requirements, long and arduous
processing of documents, ineffective and inefficient personnel management and the absence of
professionalism in the public service force ordinary citizens to employ extraordinary and illegal methods
for the immediate processing and issuance of required personal documents. The most frequently
employed method is offering a considerable amount of money to a government official who can facilitate
the issuance of the desired documents in agencies issuing licenses, permits, clearances, and those
agencies deputized to make decisions on particular issues.
Another method in this category is the employment of fixers whereby people will pay certain individuals
who may or may not be government employees to process or obtain personal requirements for them.
C. MEASURES EMPLOYED TO CONTROL GRAFT AND CORRUPTION
The government employs legal measures and anti-corruption bodies to combat the problem of graft and
corruption.

1. LEGAL MEASURES
a. The 1987 Philippine Constitution
Article XI of the 1987 Philippine Constitution, titled Accountability of Public Officers,
states in Section 1 that public office is a public trust. Public officers and employees must
at all times be accountable to the people, serve them with utmost responsibility, integrity,
loyalty and efficiency, act with patriotism and justice, and lead modest lives.
Section II of the same article states that the President, Vice-President, members of the
Constitutional Commissions and the Ombudsman may be removed from office on
impeachment for bribery and graft and corruption.
b. Republic Act No. 3019 also known as the Anti-Graft and Corrupt Practices Act of 1960
This law enumerates all corrupt practices of any public officer, declares them unlawful
and provides the corresponding penalties of imprisonment (between 6-15 years)
perpetual disqualification from public office, and confiscation or forfeiture of unexplained
wealth in favor of the government.
c.

Executive Order No. 292 or the Administrative Code of 1987

This order reiterates the provisions embodies in Section 1, Article XI of the 1987
Constitution. It also gives the President the power to institute proceedings to recover
properties unlawfully acquired by public officials and employees.

d. Republic Act No. 6713 also known as the Code of Conduct and Ethical Standards for
Public Officials and Employees of 1989
This act promotes a high standard of ethics and requires all government personnel to
make an accurate statement of assets and liabilities, disclose net worth and financial
connections. It also requires new public officials to divest ownership in any private
enterprise within 30 days from assumption of office to avoid conflict of interest.
e. Republic Act No. 6770 also known as the Ombudsman Act of 1989
This provides the functional and structural organization of the Office of the Ombudsman
which will be discussed later on.
f.

Republic Act No. 7055 also known as An Act Strengthening Civilian Supremacy over the
Military
This law creates two avenues for trying erring members of the Armed Forces of the
Philippines and other members subject to military laws. Crimes penalized by the Revised
Penal Code and other special penal laws and local government ordinances shall be tried
in civil courts. Military courts shall take cognizance of service-oriented crimes only.

g. Republic Act No. 7080 also known as the Act Defining and Penalizing the Crime of
Plunder
This act penalizes any public officer who by himself or in connivance with members of his
family, relatives by affinity or consanguinity, business associates, accumulates or
acquires ill-gotten wealth, through a combination of series of event criminal acts, an
aggregate amount to total value of at least fifty million pesos (P50,000,000).
h. Republic Act No. 8249 also known as the Act Further Defining the Jurisdiction of the
Sandiganbayan
This classifies the Sandiganbayan as a special court and places it at par with the Court of
Appeals.
i.

Presidential Decree No. 46 declares it unlawful for government personnel to receive gifts
and for private persons to give gifts on any occasion including Christmas, regardless of

whether the gift is for past or future favors. It also prohibits entertaining public officials
and their relatives.
j.

Presidential Decree No. 677 requires the Statement of Assets and Liabilities to be
submitted every year.

k.

Presidential Decree No. 749 grants immunity from prosecution to givers of bribes and
other gifts and to their accomplices in bribery charges if they testify against the public
officials or private persons guilty of those offenses.

2. CONSTITUTIONAL ANTI-CORRUPTION BODIES

The 1987 Philippine Constitution has created constitutional bodies to deal on graft and corruption
and to effectively implement the provisions of public accountability. These bodies are granted
fiscal authority to ensure their independence and their actions are appealable only to the
Supreme Court. These constitutional bodies are:
a) The Office of the Ombudsman (OMB)
The Office of the Ombudsman investigates and acts on complaints filed against public officials
and employees, and serves as the peoples watchdog of the government. The Ombudsman and
his deputies (Overall Deputy Ombudsman, Deputy Ombudsman for the Military, One Deputy
Ombudsman each for Luzon, Visayas and Mindanao) are the protectors of the people. This
office:
i) oversees the general and specific performance of official functions so that laws are properly
administered;
ii) ensures the steady and efficient delivery of public services;
iii) initiates the refinement of public procedures and practices; and
iv) imposes administrative sanctions on erring government officials and employees, and
prosecute them for penal violations.
b) The Civil Service Commission (CSC)
The CSC is the central personnel agency of the government which is mandated to establish a
career service and promote moral, efficiency, integrity, responsiveness, progressiveness, and
courtesy in the civil service. It shall also strengthen the merit and rewards system, human
resource development, and public accountability. It has jurisdiction over administrative cases
including graft and corruption brought before it on appeal.
c) The Commission on Audit (COA)
The COA is the watchdog of the financial operations of the government. It is empowered to
examine, audit, and settle all accounts pertaining to the revenue and receipts of, and
expenditures or uses of funds and property under the custody of government agencies and
instrumentalities. It shall promulgate accounting and auditing rules and regulations for the
prevention and disallowance of irregular, unnecessary, excessive, extravagant, or unconscionable
expenditures, or use of government funds and properties.
d) The Sandiganbayan
The Sandiganbayan is the anti-graft court of the Philippines. It has jurisdiction over civil and
criminal cases involving graft and corrupt practices and such other offenses committed by public
officers and employees. It is in charge of maintaining morality, integrity and efficiency in the public
service.
3. OTHER GOVERNMENT ANTI-CORRUPTION BODIES
Other government agencies in the fight against corruption are the following:
a) The Department of Justice (DOJ)
The DOJ conducts preliminary investigations on complaints of a criminal nature against public
officials that are filed with the Department, subject to the approval of the OMB if the offense
investigated was committed by the public official in relation to his office. The DOJ also prosecutes

in these cases if the public officials involved belong to ranks lower than salary grade 27[LOVE1] .
b) The National Bureau of Investigation (NBI) and the Philippine National Police (PNP)
These law enforcement agencies conduct fact-finding investigations on graft cases. They conduct
entrapment operations which, if successful, results in the arrest and filing of criminal complaint
against the perpetrators in the courts. It may issue subpoena and serve warrants of arrest issued
by the courts. The NBI agent or policeman who conducted the investigation also acts as witness
for the prosecution during journal preliminary investigation and the prosecution of the case by the
Ombudsman.
c) The Presidential Commission on Good Government (PCGG)
This was created primarily to go after ill-gotten wealth. It is also tasked to adopt safeguards to
ensure that corruption shall not be repeated and institute measures to prevent the occurrence of
corruption.
d) The Presidential Commission against Graft and Corruption
This was created under Executive Order No. 151 by then President Ramos to investigate graft
and corruption cases in the executive department. It has jurisdiction over corruption cases if the
crime involves:
i) Appointees with rank of or higher than Assistant Regional Director;
ii) At least one million pesos;
iii) An offense that may threaten grievous harm to national interest; and
iv) Cases specifically assigned by the President.
e) The Inter-Agency Anti-Graft Coordinating Council
The council coordinates the government anti-corruption efforts. It is composed of the Commission
on Audit, the Civil Service Commission, the Ombudsman, the Department of Justice, the National
Bureau of Investigation and the Presidential Commission against Graft and Corruption.
D. IMPEDIMENTS TO THE ANTI-CORRUPTION EFFORTS
Despite the existence of these graft and corruption counter measures, this menace remains a major
problem of the Philippine government. This can be attributed to the following factors:
1. Specific culture of Filipinos is enhancing the proliferation of graft and corruption. The strong family
ties justify giving benefits to unqualified recipients which are very evident in employment and
awarding of contracts. This societal phenomenon is adversely affecting professionalism,
efficiency and effectiveness in the government service as well as in the construction of public
infrastructure and procurement of government supplies and materials that are sometimes
substandard and overpriced.
2. The Filipino culture of gift giving justifies bribery and extortion thereby making it hard for law
enforcement and anti-corruption agencies to arrest the problem. This social practice renders
inutile the law prohibiting gift giving thereby further enhancing this corrupt practice.
3. Agencies deputized to fight graft and corruption are not well funded by the government. There is
also lack of recognition, merits, awards and rewards given by the government for the efforts of
anti-corruption bodies. Personnel of these agencies mandated to go against corrupt public
officials are vulnerable to bribery because of lack of financial support, integrity and
professionalism. Measures have to be introduced in the recruitment of anti-corruption personnel
to ensure that they possess morality, honesty, integrity and dedication to duty.
4. Transparency is not religiously observed particularly in government transactions. The public is
denied access to activities of government officials. The people are not informed, in detail, of the
share of each executive department, the legislature and the judiciary, in the national budget and
how these departments spend their financial requirements.

5. Effective monitoring of government programs and projects as well as expenditures are not being
seriously undertaken by those tasked to monitor them. They are also vulnerable to bribery and do
not actually conduct thorough inspection but merely rely on information gathered.
6. The statement of assets and liabilities, which is an effective mechanism to curb graft and
corruption is religiously submitted yearly by all public officials. However, no agency of government
is deputized to examine the veracity of the data entered in those statements. Most public officials
with unexplained wealth can successfully hide the same by paying accountants to make accurate
and official statements for them.
7. Other anti- corruption provisions may work against getting good people in government. One
example is the requirement of divestment, currently, the only approach to the possible conflict of
interest that will be encountered by the entry of well- qualified people in the government. The
current divestment procedure may be too harsh since it could effectively mean that no top
industrialist should be a Secretary of Trade and industry, and no top banker may be Central Bank
Governor. That would be closing to the government a valuable human resource. Besides, the
appointing power must put a person where his expertise is. Others would circumvent the law by
divesting themselves with their direct link to a business enterprise by transferring their interests to
trusted relatives or friends but in reality, they still remains in control of the enterprise.