perception and actuality are many times very different in terms of corruption. In this paper, it would be very simple for the author to simply use the reports at Transparency International and pillory or exonerate countries based upon their findings. However, in their research, especially in terms of the United States, things are much more complicated. Indeed, reform in the United States has an incredible continuity with reform elsewhere that is strengthening the nation state to limit and regulate corporate power and corruption.

Unfortunately, in the United States one needs only look as far as the Federal Reserve mess to see that corruption has reached record levels and the Transparency International data is not doing justice to reality. Its rating needs to be adjusted down for America.

Unfortunately, the trillions of dollars being loaned to banks by the Fed raised a lot of eyebrows. If it was doing what it was mandated to, why did the Bloomberg News Service have to file a freedom of information act request to get information with reference to its activities since 2008? In November of 2008, the service sued the Federal Reserve to force them to reveal what sorts of collateral they were accepting their loaning of trillions of dollars to U.S. banks. The request was denied because the Fed is not part of the U.S. government, but rather a quasi-government body, which strictly speaking is a private corporation owned by its member banks. It has been widely accused of accepting low quality, junk assets in order to liquidate the U.S. banking system. According the best estimates, the Fed’s balance sheet rose to $3 trillion by the end of 2008. It was only $900 billion in August of 2010. This meant that there was a rise in the balance sheet from 6% of GDP to more than 20% of GDP in those four intervening months (Harrison).

The Fed finally released information two years later in December of 2010. It certainly had good reason to stall. In the Bloomberg News report that finally revealed the contents of the bailout list, the title of the article says it all: “Fed Emergency Borrowers Ranged from GE to McDonald’s (Torres, & Lanman, 2010).” In addition, another headline states the reality of who the bailout will not help: “State Deficits Will Get No Federal Bailout (Marie, 2011).” To further illustrate how blatant corruption is in 21st century America, then secretary of the treasury Henry Paulson (his alumni credentials include Goldman Sachs CEO and Nixon administration cabinet membership) appointed former Goldman Sachs investment banker to dole out Federal Reserve bailout funds to the Wall Street firm they used to command (“Henry Paulson names,” 2008).” With corruption and conflict of interest this blatant, this author wonders what else Transparency missed in its ratings of the United States.

Comparing the U.S. with Panama, Transparency is definitely on the mark with its low ratings. Businessman Felipe Rodriguez, a member of the group Libertad Ciudadana said of Panamanian corruption that “It is becoming a more normal type of behavior…it seems that cheating is normal, and that is dangerous for the country and its economy (“Panama ranks low,” 2008).” In the context of Panama’s history of caudillismo (the present president Martin Torrijos is the son of former deceased dictator Omar Torrijos. This plus the legacy of the Noriega years illustrates how far up the ladder Panama has to go. The unfortunate part of this is that in 2004 their ranking improved (ibid). Obviously, the country has a very long way to go to confronting its corrupt past and attempting to advance to a less corrupt future. The key to this battle as the Transparency article indicates is of course in the reform of the judiciary.

As the Transparency site also illustrates, small countries can have immaculate records in terms of corruption. This includes Singapore, which in 2010 ranked up with Denmark and New Zealand as the least corrupt regimes according to Transparency’s corruption index (Rubenfeld, 2010). While Singapore has a history of one man rule, they are now part of the region’s trend toward less corruption. According to Jayawardena, this ability to overcome third world status and ethnic tension between Tamil and Chinese was due to:

1. The acquisition of stability and cohesion in society.

2. The cultural drive to achieve a thrifty, hard working people that are always investing in the future.

3. A great reverence for education and knowledge

4. Good clean government

5. Integrity and Meritocracy

6. Anticipate Change: Stay relevant

7. Leadership (Jayawardena, 2010).

What Jayawardena did not mention is that this great performance might have been modeled on a practice introduced during the British period: caning. This punishment consists of beating the offender with a cane rattan rod on the buttocks for offenses as minor as gum chewing. This controversial practice resulted in a diplomatic incident in 1994 when teenager Michael Fay was punished for vandalism and may again if former Florida State University football player Kamari Charlton is punished for overstaying his visa (“Ex-us football player,” 2010). One wonders what will be the fate of Singapore Reform Party Tamil activist Kenneth Jeyaretnam as he challenges the city state’s one man rule with the slogan “truth, justice, freedom, accountability, transparency and inclusion (“The reform party,” 2011).” One also wonders whether or not Mr. Jeyaretnam will have to drop trousers for dissenting and whether Transparency International will notice and speak out in favor of his call for transparency in Singaporean government.

Certainly, in the case of Somalia, Transparency is dead on target with rating it as the most corrupt country in the world (Raedler, 2010). Not only Transparency, but also the United Nations has taken the country to task for its rampant corruption. “The Somalian president denied the UN report that characterized the government’s security forces as ineffective and corrupt and said that as much as half the food aid to the country was routinely stolen (Gettleman, 2010).” The problems in this country are very basic, essentially the mirror opposite of what is represented in Singapore in terms of public order. Decades of civil war and division between the warring factions and the U.N. backed government obviously make life a nightmare for everyone in the country.

So what exactly does Transparency do in terms of analyzing corruption and its effects? The organization reviews crunches a large variety of studies on the consequences and the causes of corruption, including the research on the impact of government corruption on investment, GDP, institutional quality issues, government expenditure, poverty and international flows of capital and goods and aid. This research focuses on the causes of corruption including the absence of competition, policy distortions, political systems, public salaries as well as an examination of colonialism, gender and sundry other cultural dimensions. Prior to the organizations debut in 1999, much of this data was untouched and consisted at best of cross-country analyses). The Transparency corruption index is much more systematic and takes in many more factors. In the Lambdorff study, certain forms of government involvement, poor institutions, inequality and the absence of competition may go along with corruption, complicating the process and its analysis. These indicators and corruption are sometimes inextricably linked. It can be helpful to observe correlations. However one should refrain from drawing iron-clad conclusions in terms of respect to causalities. Transparency maintains a corruption index to connect many factors together to analyze the problem. In addition, Transparency publishes the findings to put pressure on the regimes involved (Lambsdorff, 1999, p. 1).

With the comparison of the above four countries in mind, a number of issues must be answered. Interestingly enough, the following are issues that Transparency may have to reexamine.

1. What are the trends in corruption for these respective countries?

2. What are the major differences between the most and least corrupt countries you selected?

3. What influence does culture play in the countries business ethics?

4. What are the major ethical problems of the least ethical countries?

5. What issues or actions favor the most ethical countries?

6. What are possible ways to lessen the corrupt and unethical behaviors?

7. How does your home country compare with the least and most ethical countries you selected?

Indeed, the trends are actually in the directions that Transparency has posited. In terms of the United States, the graph is going down. In terms of Singapore it is up, but with the Reform Party’s platform, this may be in doubt in the short-term at least temporarily. In Panama and Somalia, the graph is down. The differences between the various countries seem to be a bottom line as to whether there is order or not. Culture has a major role to play in all of the countries and its breakdown brings about a decline. Order and morality affects ethical behavior. Transparency seems to favor less corruption (logically).

In terms of the United States, the results are most disturbing. Transparency seems to think that the process is getting worse in the states where it dropped out of the “top 20” in a global league table of least corrupt nations and tarnished by financial scandals and the influence of money in politics. The world’s largest economy has seen much since the financial crisis of 2008 began the role toward the precipice in terms of the Wall Street corruption. Transparency president Nancy Boswell maintains that it is an “integrity gap “(Graham, 2010).

However, this author will identify a different issue. Indeed, this author’s view is very long and will take a historical approach in order to prevent another Great Depression, the Congress under President Franklin Delano Roosevelt separated Wall Street investment banks and regular depository banks. This took away the potential to make incredible profits from trading mortgage-backed securities whose ratings were artificially high. These encouraged banks to take what otherwise would have been intolerable risks in the form of bad loans that were later termed “toxic debt.” Under this regime, people were obtaining home loans too easily (known derisively as “liars loans”) and that exacerbated the decline once it started (Krugman).

In terms of what to do about the problem, Congress needs to pressure the Federal Reserve to do something to start loaning money to small banks that provide the lion’s share of funding to small businesses and companies that provide the majority of jobs for the people of the United States. In addition, Glass-Steagall needs to be brought back. The whole idea behind the Federal Reserve in the United States to begin with was to provide an elastic currency that could respond to the needs of the country in crisis. Small businesses and banks could get the loans they needed in a time of crisis. Their money in the small commercial banks was meant to be invested in long-term ventures, not short speculative types of gambles. If the Federal Reserve is forced to return to these roots, it is possible to recapture the growth that was seen previously when speculation and responsible investment were kept in different houses and speculation did not have access to cheap loans at the taxpayer’s expense.

What is different between this author’s approach and the approach of Transparency is that the ascendancy of corporate entities and the decline of the power of nation states to regulate them is a major factor. The Federal Reserve is a private company. In other words, it is about as Federal as FedEx. It should be no surprise when the Fed does not act in the interest of the United States, but rather in the interest of corporate corruption and profit. Indeed, it is simply a cipher for the dictates of the corporations that are feasting upon the carcass of what is left of American republican government.

A more basic reform will be to cut the heart out of the beast and return to the days when corporations had a life span. Like human beings, they died when their chartered purposes expired. The famous case of Standard Oil vs. New Jersey in 1911 ruled that corporate entities should be considered as if they were the same as a legal person under the United States Constitution. This effectively gave corporations eternal life. It greatly increased the power of corporations vs. national government (Supreme court).

To recap, this author has had to turn the corruption index of Transparency International on its head and analyze the issues that now limit their findings. This is especially in terms of the United States where things are much more complicated than in many countries due simply to the size and complexity of what is still the world’s biggest economy. Indeed, reform in the United States has an incredible continuity with reform elsewhere that is the key to defeating corruption will be in strengthening the nation state to limit and regulate corporate power and corruption. The repeal of Standard Oil vs. New Jersey of 1911 and the better regulation of the Federal Reserve by the American government is a great start. This then needs to be replicated in every country in the world for complete success.

Works Cited

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