Corruption taints reputations, impacts development progress
It is my observation that there are more investigations into corruption being conducted in various parts of the Pacific. Why is this happening? Do citizens care more? Are the media and non-government groups like Transparency International and others exposing more wrongdoing? Are younger, overseas-educated islanders standing up for ethics in government? Are some government elected leaders, civil servants or private citizens blowing the whistle?
Where we see corruption reports spilling into the press, such as in Papua New Guinea and in the Marshall Islands, it is often because the situation has become so obvious and destructive, people at lower echelons are coming forward to provide evidence that gives investigators a foundation for successful investigations. Despite allegations and investigations, however, often few prosecutions are mounted and fewer people still end up paying a penalty. There are, of course, many reasons for this. Bottom line, however, is that in the Pacific, corruption generally pays with few consequences to the people involved—but the consequences to the country are many and serious: lack of public service in government offices and an inability to meet development, health and education goals.
In the Marshall Islands, investigations in late 2010 and 2011 into theft of United States grants to the Ministry of Health resulted in a series of successful prosecutions of low-to-mid-level Ministry of Health and Ministry of Finance staff. The scam involved using fake invoices to generate government purchase orders and checks that were cashed and distributed among the co-conspirators. No goods or services were received by the Ministry for the hundreds of thousands of dollars that was stolen. But an underlying problem was never addressed in these investigations: bid (tender) fraud. This was so even though Deloitte audits have shown multiple violations of the government procurement law over many years.
The depth of the problem became evident when the FY2010 audit was issued. It showed, for example, ‘potentially altered purchase requisitions, potentially altered price quotations, missing grant files/disbursement files, payments for goods that have been represented as not being received, and payments for services that have been represented as not being performed’ for USD 1,621,565 of government spending. The Marshall Islands Journal in its September 30, 2011 edition headlined a two-page spread on this audit of government operations: ‘How much money was stolen in 2010?’
Fast-forward to January this year, and eight government workers, including seven at the Ministry of Health, have been put on leave as a major investigation by the Auditor General and police continues piling up evidence that is expected to result in a series of prosecutions this month. The corruption issue surrounds allegations that a local company bribed government employees to win bids for hospital equipment and supply contracts.
Despite the investigations in 2011 and 2014 showing theft and fraudulent use of large chunks of U.S. funding for health services, the U.S. government has not taken any specific action on what is being shown as a long-term, ingrained corruption problem—although the U.S. Government Accountability Office issued a recent report on U.S. funding to the Marshall Islands and Federated States of Micronesia calling on the U.S. Interior Department to strengthen oversight of grants.
In contrast, Australia appears to be taking a tougher line on its approximately AUD 500 million a year aid program to Papua New Guinea. Australian Foreign Minister Julie Bishop singled out PNG as a particularly poor performer as an aid recipient. ‘I find it distressing to know that despite the fact that Australia invests about half a billion dollars every year into Papua New Guinea, it will not meet one of its Millennium Development Goals (MDGs)—in fact it is going backwards,’ said Bishop on February 14.
In a recent action, Australia cut $38 million from PNG because of corrupt practices in the tendering process for hospital medical kits. Last December, the PNG Supreme Court approved publication of an 812-page commission of inquiry into false compensation scams that cost the country more than AUD 300 million after a three-year hold up. ‘This move, following other recent events, points to a possible turning of the tide against one of PNG’s most pervasive problems, with the country ranked 150th by Transparency International out of 176 countries on its corruption index last year,’ wrote The Australian after the court overturned an injunction that had prevented publication in PNG of this extensive corruption inquiry. ‘The commission of inquiry found that a nexus of prominent officials, lawyers and others, stole AUD 300 million by inventing claims for compensation from the government, which highly placed members of the conspiracy then paid out. The report recommends the criminal prosecution of 57 prominent people, many still in top positions.’
The fact that people in government and connected to government in the two countries mentioned here have been able to engage in corrupt practices for many years demonstrates the challenge to bringing greater transparency and accountability to government operations. No doubt, there are similar practices evident in many other island nations.
There are people in governments around the region who see ‘government money’ or aid funds from other nations as simply a pot of money waiting for anyone who is smart to get their hands on. This, I believe, is especially so in relation to donor funding. People bent on manipulating government finance systems for their own benefit—as demonstrated by the PNG commission of inquiry report and the most recent hospital bid fraud investigation in the Marshall Islands—outnumber the people attempting to enforce accountability and rule of law.
It goes far beyond thievery. Political level leaders and personnel in government ministries and agencies are responsible to deliver performance on MDGs, development plans, and a host of other government services. When large numbers are engaged in fraud, the results show not only in loss of money but in lack of performance. In early February, Marshall Islands President Christopher Loeak complained in a parliament session about the lack of service in government offices.
A review of progress among the 14 independent Pacific nations in meeting MDGs shows that PNG is not on track to meet a single one, while the Marshall Islands is on track on only two of seven. While a handful of countries are showing good MDG progress (Cook Islands and Niue, for example, are on track to meet all seven goals, and Palau is meeting six of seven), the average for the independent nations in the region is less than three out of the seven MDGs.
Every dollar that some government officials put in their pockets for personal use is a dollar not available for government services or supplies. Every hour spent hatching and implementing corrupt schemes (or even just showing up to work late and leaving early) is time not spent on public service. If government officials engaged in these practices, or turning a blind eye to them, think the results of corrupt practices are not evident, they are wrong: it is increasingly obvious, both from development performance reports and investigations into alleged wrongdoing as well as day-to-day problems island residents encounter when dealing with government offices, how corruption undermines national development progress.
