Examples of corruption

Corruption occurs at all levels of society and in many different sectors.

Below you can find a few examples of how corruption occurs in Finland. They do not directly describe any real-life events, but they do bear resemblances to real cases.

Dual roles and partial criteria distort competition

A government agency is going to invite tenders for one of its services.

The public official responsible for public procurements at the agency is a shareholder in a company that provides the service in question. The public official enters an unreasonable reference requirement in the invitation to tender: the tenderers are required to have a certain number of projects with a specific value and extent, even though this does not have any relevance to the provision of the service in question.

The requirement prevents almost all prospective tenderers from participating in the tender process. The only company that can make a tender is the one where the public official is a shareholder.

If an employee representing a public-sector client and operating in a dual capacity gets to influence the specifications and selection criteria in a competitive tender process, the person has a possibility to give a certain operator preference in the process and thereby distort competition. These situations may directly affect the competitive positions and impede the market entry of new operators, for example. Another risk is that the constant selection and use of a familiar company without any real competition may, in the long run, lead to a decline in the service level and quality.

Unreasonable reference requirements alone are enough to distort competition. The criteria applied in the assessment of tenders must be objective and non-discriminating – favouring a familiar company is considered corruption.

Bribery occurs in many forms

A general contractor operating in the construction sector is constantly awarded public construction contracts in competitive tender processes because of its exceptionally low prices.

The general contractor often hires subcontractors to carry out the projects. A site manager employed by the general contractor is responsible for the competitive tender processes when selecting subcontractors.

Employees of the selected subcontractor work at the site manager's own construction site, building a house for the manager. The site manager is never billed for the work performed by the subcontractor in his personal construction site.

Bribes or undue advantages may be given in a variety of forms. In some cases, a bribe may be set as a requirement for being awarded a future contract.

In the example case, the work carried out in the site manager's own construction site may be billed from the site manager's employer (i.e. the general contractor) in connection with some other project. If so, the procedure involves both corruption and swindling against the general contractor.

In construction contracts, bribery distorts competition and creates favourable conditions also for other criminal activities and grey economy.

If the prices of a given contractor are always lower than those of other contractors, this may be an indication of the contractor unlawfully receiving advance information about the other tenderers' prices. The tendering companies may also have pre-agreed among themselves that others will always submit a more expensive tender to a given client than one of the companies. If so, the case concerns a cartel in breach of the Competition Act. Read more about cartels on the website of The Finnish Competition and Consumer Authority.

Considerably low prices may also be a sign that the companies involved in a contract have neglected their statutory duties. Persons who decide on procurements and contracts are often in a position where they can influence financially significant projects. This is why someone may strive to exert inappropriate influence over them. When it comes to these persons, it is important to invest in measures that prevent corruption, such as transparent decision-making processes, declaration of private interests and supervision.

Read more about grey economy on the website Grey economy & economic crime.

Favouritism: the end does not justify the means

An agency is recruiting a new expert to one of its units.

The field is very competitive, and the agency receives a three-digit number of applications. The director of the unit notices that a daughter of a friend is among the applicants.

The director knows that the friend's daughter is in desperate need of income because her life situation. The daughter is selected to the position, even though she is not, for her merits and competence, among the best applicants.

Favouring friends and family members in connection with recruitments, procurements or other decision-making, among other things, constitutes corruption. Favouring of family members is also called nepotism.

A public agency must always act impartially and as openly as possible. Nevertheless, favouritism and unethical decision-making occurring in 'small circles' are very common forms of corruption in Finland.

Transfer of a policy-maker to business life weakens trust

A member of parliament is also a local councillor in her municipality of residence and a member of the social services and health committee.

In Parliament, the member of parliament actively participates in the debate on the forthcoming health and social services reform. Also in public, she is a strong advocate of private business operators and their interests.

In the middle of her parliamentary term, the member of parliament announces that she will vacate her parliamentary seat and take up a position of development director in a major healthcare service provider company.

The 'revolving door phenomenon' refers to this kind of movement of individuals between positions of public office and jobs in the private sector, in either direction. In certain cases, corruption may be involved.

A former politician may be hired to a company just for his or her potential to influence future public procurements, for example. This is problematic from the perspective of openness and credibility of the administration. The revolving door phenomenon may erode citizens' trust in politicians' and authorities' decision-making processes.

Sometimes, the revolving door phenomenon may seem to include an element of rewarding. For instance, if a politician has actively advocated the interests of a certain private company or its field of activity and is subsequently employed by a company in the same field, this may seem, from outside, like the politician has acted out of self-interest and accepted a bribe-like advantage.