Minnesota Repossessor Don Mashak's Perspective on the Culture of Business Bribes
INTRODUCTION TO CULTURE OF BRIBES
This Hubpage provides Don Mashak 's perspectives & insights into employee bribery in US Business Corporate Culture. As one of Minnesota 's Repossessors , most of Don Mashak's knowledge and perspectives come from his 20 years in the repossession business and, therefore, are based on the repossession industry and the many repossessors and financial institutions with which his company has done business. Most of the concepts and insights are identifiable and applicable to other industries and their respective employees, vendors and clients. The purpose of this hubpage is to make all businesses aware of the adverse consequences of a Culture of Bribery. In so doing, we hope it encourages them to be more vigilant to the existence of employee bribes by Vendors, Competitors and other detractors. This Hub will touch on such topics as Compromised Employee Loyalty, Diminished Quality of Vendor Services and Products, Economic Loss Caused by the Bribe Payer, Economic Loss due to Unrecognized Victim Employer Subsidization of the Bribes, and finally possibly Unforeseen Legal Issues. Our intended Audience is Executives and Owners of any size Business. We encourage these persons to forward this Hubpage to their Security Departments, Upper and Middle Management and trusted Supervisors. [STANDARD DISCLAIMER - DO NOT ACT UPON OR RELY UPON ANY OF THE INFORMATION CONTAINED HERE WITHOUT FIRST CONSULTING YOUR OWN ATTORNEY]
TABLE OF CONTENTS
INTRODUCTION TO CULTURE OF BRIBES
TABLE OF CONTENTS
Module 1 - BRIBES: FREEWILL VERSUS CHAOS THEORY
Module 2 - FREE WILL AND CHAOS THEORY LINKS
Module 3 - SHORT STORY: CAPTAIN CHAOS & THE CULTURE OF BRIBES
Module 4 - CAPTAIN CHAOS EPILOGUE
Module 5 - THE ECONOMIC & SOCIAL DYNAMICS OF THE CULTURE OF BRIBES
Module 6 - ECONOMIC AND SOCIAL DYNAMICS OF A CULTURE OF BRIBES LINKS
Module 7 - ECONOMIC LOSSES: HOW BRIBES COST THE EMPLOYER
Module 8 - HOW DO EMPLOYERS DETECT A CULTURE OF BRIBES?
Module 9 - DETECTING AND IDENTIFYING A CULTURE OF BRIBES LINKS
Module 10 - HOW DO EMPLOYER'S COMBAT THE CULTURE OF BRIBES
Module 11 - COMBAT THE CULTURE OF BRIBES LINKS
Module 12 - CONCLUSION
Module 13 - BOOKS, MOVIES AND RESOURCES OF POSSIBLE INTEREST
Module 14 - Gratuitous Links to Author Don Mashak's Business Interests
Module 15 - READER COMMENTS AND SUGGESTIONS
BRIBES : FREEWILL VERSUS CHAOS THEORY
The Culture of Bribes is perhaps best understood from the perspective of Free Will versus Chaos Theory. And, from this perspective, it should be easy to understand why the presence of a Culture of Bribes is often difficult detect and inherently self-preservative.
A Brief Introduction to Free Will versus Chaos Theory
Free Will is easy to Define; Each of us makes choices of our own free will and we can therefore determine our own destiny. CHAOS THEORY is a little more complex. Greatly Simplified, as it applies to people, it states that any decision an individual makes is the result of the external factors and influences acting up the individual. Any action or decision a person makes appears to be random or freewill to the individual and/or anyone observing them, but in reality the individual had no choice but to decide and/or act as they do because external forces predetermined the choice or action.
How do the Concepts of Free Will & Chaos Theory Relate to Business and Bribes
To the average business owner, manager or supervisor the presumption is that each employee is acting of their own freewill with the expectation that the employee seeks promotion/raises, will comply with company policies and therefore will act in the best interest of the company. But external bribes add an element of Chaos to the business environment, and while it may appear to the boss that employees are making logical free will choices, the Victim Employer Target Employee (VETE) has in fact been compromised, is no longer completely loyal to the employer and may not necessarily act in the best interest of their employer. [We will examine how in fact the chaotic nature of the bribe makes the compromised employee more loyal to the bribe payer than the employee's own employer in the section entitle "The Economic and Social Dynamics of the Culture of Bribes"]. For now, suffice to say, the compromised VETE must comply with the bribe Payer's demands to get additional bribes and, therefore, no longer works for the best interest of their employer. Instead, the compromised VETE works for the best interests of the bribe payer. For this reason, for the rest of this Hub Page, we will refer to our hypothetical briber as "CAPTAIN CHAOS".
FREE WILL AND CHAOS THEORY LINKS
- Free Will Versus Chaos Theory
Most people’s belief falls into one of two categories. Some believe in fate and say that everything is ordained by God and we can hardly change anything. There are others who talk of free will i.e. whatever we are is because of our actions or Karma.
- Free Will Definition
- Chaos Theory
SHORT STORY : CAPTAIN CHAOS & THE CULTURE OF BRIBES
For our example, Captain Chaos owns a repossession company, Chaos, Inc. and is one of many repossessors in the USA. Captain Chaos decides that it is better to scheme to pay bribes than develop a legitimate business plan to improve Chaos, Inc.'s business practices, provide a better product, reduce prices or cut costs, etc.
CHAPTER 1 - Captain Chaos's First Victims
Captain Chaos goes to a large bank and selects a target employee and invites them to a lavish lunch. A while later Captain Chaos invites the target employee to attend a professional football game, free to the target employee of course. After Captain Chaos feels out the Victim Employer target employee (VETE) and determines the initial Victim Employer Target Employee (VETE) is ripe to be compromised, Captain Chaos offers the initial VETE $50.00 (fifty dollars) for each repossession the VETE sends Chaos, Inc. The money may be palmed, handed to the VETE as paperwork, or left anonymously in the VETE's home mail box. With this incentive, the VETE sends every one of their repo assignments to Chaos, Inc. Delighted by the success of the bribe, Captain Chaos offers the initial VETE, $25.00 (twenty five dollars) for every repo order the VETE can get fellow employees to send Chaos, Inc. Pretty soon, the great majority of the bank's employee's are all sending all of the repo orders they are responsible for to Chaos, Inc. But, now some of the other VETEs suspect or know the deal the initial VETE had and they want the same deal... Ergo, the bank's once loyal employees have slipped a little further down the slippery employer loyalty slope. And the bank's supervisor just thinks the VETE's are acting of their own free will and that the Chaos, Inc. must just be the best repossession company in the USA!
CHAPTER 2 - Captain Chaos gets the Victim Employer (Bank) to Unknowingly Subsidize the Bribes
But now, thinks Captain Chaos, "How do I pay for this?" Captain Chaos thinks hard and comes up with a new angle to the scheme. Captain Chaos tells the original VETE, "Hey, I can't afford to pay all these people out of my pocket. Here is what I want you to do, every third or fourth invoice; I am going to add an extra $100.00 (one hundred dollars) to my invoice. Just tell your supervisor that it was an especially hard repo and the extra money requested is justified. Tell your coworkers to do the same." One more slip of the VETE's down the slippery employer loyalty slope; Now the bank's employees are actually acting to the detriment of their employer, the bank.
CHAPTER 3 - Expenses Always Rise to Meet Income
Why does the initial VETE comply? By now the original target employee has gotten used to their extra $500.00 to $1500.00 (five hundred to fifteen hundred dollars) a month. (How much is the Employer bank paying them again?) As we all know, expenses always rise to meet income. The target employee has bought a nice car, upgraded their home or apartment, and got use to fine dining. Not to mention the social comradery of their seemingly good friend, the Bribe Payer. And so the initial VETE soon others VETE's are submitting inflated invoices to the detriment of their employer, the victim bank. And the bribe, being much more volatile in that it can be revoked without recourse, becomes the biggest motivator in all of the VETEs' Professional lives.
CHAPTER 4 - Every Point of Refuge Has its Price
And then comes the day that Chaos, Inc. really screws up a repo order and the customer is legitimately upset. Captain Chaos is worried Chaos, Inc. might lose the bank's business, Captain Chaos asks the VETEs to cover up the incident. And they do, so they don't lose their extra bribe income. With a cunning that Mafioso Al Capone would appreciate, to any VETEs that balk, Captain Chaos hints that the VETE's boss will be told that they have been extorting Chaos, Inc. and approving fraudulent invoices. After the cover up is complete, to sooth ruffled feathers, Captain Chaos hosts a big party in a Suite at a Professional Football game, complete with booze, drugs and hookers. And the bank's employees slip a little farther down the slippery employer loyalty slope.
CHAPTER 5 - VETEs Are Expendable
Business is good. Chaos Inc. has VETEs at 4-5 large banks compromised with bribes. But Greedy Captain Chaos is questioning having to pay all that money out. After all, Captain Chaos owns Chaos, Inc.; duty requires cost cutting. But how to do it? Let's see now - ultimately, the supervisor determines which repo company the individual employees submit repo assignments to... If Captain Chaos controls the supervisor, Chaos, Inc. will still control all the bank's repossessions, the supervisor determines which repossession company employees can send assignments to and requires a lot less effort. And with many fewer people involved, Chaos is less likely to get caught and it will likely cost substantially less. (1 guy $1000.00 (thousand dollars) per month instead of $50.00 per repossession assignment. And Captain Chaos gets more bang for the buck because the supervisor is a one stop shop, they control assignments, authorizes surcharges, can foil the competition and can cover up Chaos, Inc. "shortcomings.) Captain Chaos begins his seduction of the Supervisor. A few business lunches, a couple of social events, a hunting trip, and another party in a stadium suite with booze, drugs and hookers and the Supervisor is the newest VETE. Captain Chaos then lies to all the previous VETEs and says they almost got caught by the supervisor or security and greatly cuts back on the amount of the bribes until one day Captain Chaos stops paying all but the supervisor. Great time saver too, 1 guy to wine and dine instead of an entire department of VETEs. "Life is good" Captain Chaos thinks to himself.
CHAPTER 6 - Another slip Down the Slippery Employer Loyalty Slope
Captain Chaos is always looking to make a buck. The bribed Supervisor VETE at one of Captain Chaos's banks has learned of an impending acquisition of their employer bank by another bank. Together they scheme to buy stock options with this insider information. Life is good. Another Sports Suite party, this time at the Super bowl. Captain Chaos and the Supervisor VETE celebrate their good Fortune.
PHASE 7 - Perception Becomes Reality
Captain Chaos learns that a new repo company has started. Drunk with the perception of power the Culture of Bribes has bestowed, Captain Chaos takes this as personal affront. Captain Chaos gets the bribed supervisor VETEs at Chaos, Inc.'s several Zombie Client banks to make sure the new guy is froze out. Despite this, the new repo company gets its foot in the door at a few banks. Captain Chaos is furious, How dare the VETE's do any business with another repo company after all the bribes that have been paid. Captain Chaos offers various VETEs to talk badly about the new repossession company. He also pays bribes his VETE's at other repossession industry related companies, like the Auto Auction to find out who the new repo company's clients are and to also badmouth the new repo company to other people. Captain Chaos also has the auto auction VETEs providing him with a list of his competitor's clients. Despite all this, the new repossession is growing by utilizing a legitimate business plan and providing better service. "Darn it", Captain Chaos says to himself, there must be something I can do.... I will bribe the new repo company's past and current employees to make up false derogatory stories about the new repo company. Captain Chaos tells VETE's at the new competitor, Post some bad stuff about your old employer anonymously on the internet and I will give you a big bribe. And the chaos created by Captain Chaos and Chaos, inc. continues to escalate.
CHAPTER 8 - Power Corrupts and Absolute Power Corrupts Absolutely
Emboldened by his successful Culture of Bribes scheme, Captain Chaos begins bribing public officials to cover up Chaos, Inc.'s mistake and ignore Chaos's various transgressions. Captain Chaos starts hiring law enforcement officers as repo agents. In effect, these officers become VETEs within their law enforcement agency. With a certain Quid Pro Quo, Captain Chaos now has influence over police officers who by position alone are gifted with instant credibility. Any violation of law that Chaos Inc.'s agents commit in the course of repossession can easily be covered up by Captain Chaos's new friends. Chaos Repossessions now become a whole less civil and more ruthless. And, now Captain Chaos has access to the entire state database of information on debtors and his competitors. Captain Chaos begins to use the police to freeze out Chaos, Inc.'s competitors. VETE Law Enforcement call Cal Captain Chaos and tell the Captain the clients of Chaos's Competitors from information reported to law enforcement by competitor repo agents as a matter of policy after repossessions are complete. Breaking and Entering and other acts of Wrongful Repossession are never recorded buy the VETE Law Enforcement, more Quid Pro Quo. Captain Chaos is on top of the world. The incident with Cocaine and Hookers in the Chaos Inc. Offices are covered up. The legal incident with a relative/employee in Hawaii is covered up.
CHAPTER 9 - Class Action Lawsuits
CLASS ACTION LAWSUIT - It seems the pattern of abuse was discovered by some darn private attorney. All those Chaos, Inc. transgressions that were covered up by VETEs and bribed government official VETEs - Well the advent of the internet allowed this darn attorney to find all the people ever wronged by the original Victim Bank and Chaos, Inc. All the debtors are suing the original victim Employer bank for failure to exercise due diligence in monitoring and supervising their sub-contractor repo company Chaos, Inc. [Self help repossession is a non-delegable duty pursuant to established Federal case law] And through the Discovery process, the Class Action Attorney finds that the debtors payoff balances were fraudulently increased to cover the cost of the bribes to the VETEs. It looks like on top of the expense of subsidizing all those bribes, Chaos's victim client bank is going to get sued because it's bribed and compromised employees failed to properly monitor and supervise Chaos Inc. The Victim Banks management calls an emergency meeting to discuss the issues with Chaos, Inc.
Chapter 10 - Those Pesky Bank Examiners
The Original Victim Bank's President is on the phone to Chaos, Inc. He sounds stressed. The Bank President tells Captain Chaos that the Federal Bank Examiners want to examine every file of every debtor that had their vehicle repossessed by Chaos, Inc. Captain Chaos says. "Don't worry, let me make a phone call to my Political VETEs and I will fix the problem." Captain Chaos makes a phone call to his VETE Senator and VETE Congressman that Chaos has made large campaign bribes/contributions to. (The Taxpayers and Voters are the Victim Employers in this Scenario) The VETE Senator and the VETE Congressman make a phone call to the Bank Examiners Supervisor. They tell the Bank Examiners Supervisor to get the Examiner in charge to back off from their investigation in Chaos, Inc. and the Original Victim Bank. A person of integrity, the actual Federal Bank Examiner in Charge refuses and provides facts and statistics to back that position. A couple of weeks later the Bank Examiner is transferred to Alaska to do Bank Examinations there. (Note the similarity of this political interference to the political interference with bank examiners that led to the US Banking Crisis of 2008). Captain Chaos Culture of Bribes has survived another potentially catastrophic turn of events.
CHAPTER 11 - IRS and the FBI?
IRS AUDIT - The IRS noticed the fancy car and nice house all the bribed bank supervisor VETEs had. Problem is the VETEs did not include the bribes in their tax statements. Oops, now the bribed VETE's Victim Employer Bank's are all getting audited to see if they improperly recorded withholdings. And then the VETEs are forced to tell the IRS where there extra income came from. And now the new Federal Bank Examiner in charge is asking to see files of the debtors involved in the class action lawsuit. Wait, Is that the FBI on the other line? [Time to call another emergency Management Meeting to discuss Chaos, Inc., How much were the Victim Bank's attorney fees on the last Chaos, Inc. Issue? How much customer confidence did the Victim Bank lose?] And now the Class Action Lawsuit from Chapter 9 widens to include all of Chaos, inc.'s Client/Victim Employer Banks.
CHAPTER 12 - Securities and Exchange Commission
The original Victim Bank's President gets a call from the SEC. - The Bank President thinks to himself, "What could they want? Insider Trading? What insider trading? The repo supervisor, the repoman and their friends did what?" Time for another emergency management meeting, more attorneys' fees and more lost customer confidence.
CHAPTER 13 - REPEAT
Unfortunately, wiley Captain Chaos survives. Captain Chaos position to all the investigators is that Chaos, Inc. was forced to pay extortion money by all the VETEs in order to keep the business. Captain Chaos claims Chaos, Inc. had no choice but to accede to the VETE's demands. The VETE supervisors and some VETE employees go to jail, get charged with insider trading and tax fraud, and the Client/Victim Employer Zombie banks have to sell or liquidate themselves at a great loss to avoid bankruptcy. Wiley Captain Chaos agrees to testify the Bank employers in the SEC Insider trading matter, and gets to plea guilty to the reduced charge of Civil Insider Trading. Then wiley Captain Chaos makes use of Chaos's Political VETEs, pays some more bribes/campaign contributions and talks Chaos, Inc.'s way out of serious consequence. (Al Capone would be jealous) And no one leaves a public record, so Captain Chaos is free to start the Culture of Bribes all over again. Free to look for the next Victim Bank Target Employee - VETE to you and me. And the Culture of Bribes Crime repeats itself again.
CAPTAIN CHAOS EPILOGUE
From the story of Captain Chaos, we see how seemingly harmless initial gratuities led to a Culture of Bribes with dire consequences to the Victim Employer Banks and Victim Employer Target Employees (VETEs). Instead of Employees using their free will to advance their own careers and, as direct result, the goals of the Employer, the Chaos injected into the Employer's Environment by the bribes causes the VETEs to act to the detriment of their Employer. The Chaos that the Culture of Bribes brought to Corporate Culture ultimately spun out of control and caused the Victim Employer Bank Economic Losses, Employee Disloyalty, Government Examinations and penalties, needless litigation and attorney's fees and ultimately caused the demise of the Victim Employer Bank. Clearly, this scenario can happen to any Employer and all Employers need to be made aware and be vigilant of any Culture of Bribes developing within its employee base.
THE ECONOMIC & SOCIAL DYNAMICS OF THE CULTURE OF BRIBES
HOW AND WHY BRIBES COMPROMISE EMPLOYEE LOYALTY.
As we have seen from the example of Captain Chaos, the Culture of Bribes is a seduction of targeted employees (VETEs) with initial small gratuities, gifts, seeming social acceptance, comradery and ego stroking. Otherwise loyal and honest employees are seduced into a financial, social, legal and economic conundrum that is difficult to escape from even if the Target Employee recognizes the predicament he has found himself in. But what are the dynamics of how this Culture of Bribes compromises Employer loyalty to the Employer.
The Economic Dynamics of the Culture of Bribes - The Bribe Payer Giveth and the Bribe Payer Taketh Away, Immediately and without VETE recourse..
Sooner or later, the VETE becomes dependant on the bribes. Expenses always rise to meet Income. And that is the Trump Card the Bribe Payer holds. As an Employer, we have to jump through all sorts of hoops to fire an employee; 3 documented incidents, etc. And, even then, employers generally are forced to pay unemployment insurance. A far less powerful position than the Bribe Payer holds.
The Bribe Payer has no such notice and severance requirements. In short, the Bribe Payer has ultimate power - the ability to immediately cut the bribed employee off financially. An Employer does not. The Bribe Payer can withhold Bribe Payments at will, with the employee having no recourse. What is the Bribed employee going to do, report the Bribe payer to his Employer? To Law Enforcement? No, by virtue of coming to rely upon the bribes to be able to pay bills, the VETE must be loyal to the Bribe Payer or risk immediate personal financial disaster. (The same applies to intangible social benefits - invites to parties, free football tickets, etc.) It is as simple as that.
The Social Dynamics of a Culture of Bribes - Social Acceptance, Comradery & Ego Stroking
Like a smooth crime organization boss, along with the payment of bribes, the bribe payer (e.g. Captain Chaos), uses his charm to ingratiate himself to the Bribe Recipient VETE. Please see the link "Ego Stroking To Influence Others To Get More Of What You Want" in the Combat the Culture of Bribes Links Module.
The Bribe Payer plays to the basic needs and desire of the average VETE. The Bribe Payer gives them recognition, social acceptance, validation and strokes the VETE's Ego. The VETE usually does realize that all of this is just another way the Bribe Payer is manipulating them. Being praised for being a great person in front of a large group at a celebration is very hard to resist, unless the VETE is made aware the praise and recognition is just part of a greater scheme to manipulate them. And who doesn't want to be able to say they were at a "See and Be Seen" event like the Super Bowl, the World Series, a prestigious Social Club or an exclusive private party. The Bribe Payer supplies more than just money to the VETE, he supplies the recognition and ego-stroking that the VETE craves and that the VETE perceives the Employer, personal friends and General Society are not giving the VETE. Please also See "Differential social organization, collective action, and crime" in the Economic and Social Dynamics of the Culture of Bribes Links Module.
ECONOMIC AND SOCIAL DYNAMICS OF A CULTURE OF BRIBES LINKS
- Differential social organization, collective action, and Crime
The crime rate of a group is determined by extent to which the group is organized in favor of crime versus organized against crime. 2nd definitions favorable to crime.. rationalizations make crime justified Cressey’s “verbalizations” of Embezzlers.
ECONOMIC LOSSES : HOW BRIBES COST THE EMPLOYER
There are many ways that bribes cost employers, some obvious, some less obvious.
Unintended Subsidization of Bribes by the Employer.
In the repossession business, not all repossessions are the same. Some equipment is larger and more difficult to transport than others, Some debtors are more difficult to find than others, some are found in Police and Mechanics impounds, etc. etc. This necessitates giving some authority to authorize additional funds to accommodate these differences. When the person paying the bribes asks the recipient of the bribes to pad invoices, either the recipient employee agrees or bribes and social comradery come to an end. If you have 20 employees with 20 repo assignments per month with each invoice padded $50.00 (fifty dollars) that is $20,000.00 (twenty grand) per month or (1/4 million per year) . And what if some smart attorney finds out about this padding and starts a class action law suit. How much will that cost in attorney's fees and settlement costs?
Economic Losses Related to Diminish Vendor Quality Due to Compromised Loyalty of Bribed Employees
The Decreased Loyalty to the Employer caused by bribes causes the bribed employees to overlook Quality issues in Products and Services provided by the Bribe payer. In the instance of a repo company, examples of decreased quality can be damage to the repossessed vehicle during towing and storage. Another Service that might be diminished in quality is the sale of repossessed vehicles. When lenders sell repossessed collateral, they are required to attempted to minimize the loss, act in a commercially reasonable manner and exercise due diligence. As might be reasonable to conclude the Bribe Payers ethics are compromised in other areas. In selling the vehicles, the bribe paying Repo Company may engage in bid-rigging in exchange for kickbacks from his Co-conspirators. In other industries, reduced quality might mean relaxed quality control standards, accepting a lower quality of raw material than specified, accepting contaminated raw material, or accepting raw material whose freshness has expired. In any case, without random checks and balances, these economic losses can go unnoticed until significant financial damage, product recalls, or lost customer confidence has occurred.
Other Sources of Economic Losses caused by a Culture of Bribes
The bribed employees primary concern becomes pleasing the Bribe Payer because the consequence for disappointment is quicker and without recourse (except fast appeasement). Therefore, other priorities that should be the concern of the employee are overlooked because of the attention required to appease the Bribe Payer. The various oversights begin snowballing until either an internal or external "audit" catches the inconsistencies. In the repo business, various issues can come to the attention of private attorneys, IRS, the FBI. the SEC and Bank Examiners. I do not believe it necessary to spell out the economic losses that can occur from such legal or regulatory encounters, Litigation, Product Recalls, criminal investigations, civil penalties and intensive audits can stressful and financially devastating. And they often occur because bribed employees actively work to keep management from discovering the issue until it becomes unmanageable.
Still, other sources of economic loss resulting from bribes are industrial sabotage and the theft of company intellectual property and trade secrets.
HOW DO EMPLOYERS DETECT A CULTURE OF BRIBES
TYPES AND METHODS OF BRIBES AND CONSIDERATION
There are many types and forms of bribes and consideration in the repossession business in particular and the business in general. A common form of bribe is cash in an envelope that shows up mysteriously in the target employee's mail box. The Repo Company paying the bribe obtains the VETE home address under the pretext of mailing a Christmas card or for the unstated purposes of paying the bribe. The envelope is cash, untraceable and virtually undetectable by the employee's employer. "For every repo you send me, I will be you 50-100 dollars" is generally the standard. Alternate bribe consideration can come in the form of paid vacations like hunting trips, fishing trips or just payment of the hotel bill. Again, the employee's (VETE) employer is unlikely to know that their employee is receiving the bribes and being compromised. Other bribe compensation can be expensive watches, liquor, gift certificates, shopping sprees, and other expensive gifts. And this compensation can even include discounts on the purchase of repossessed vehicles via illegal bid rigging. Another less tangible consideration is perceived comradery, recognition and validation the bribed employee is made to feel like one of the guys amongst the bribers confederates. Events like football games, hunting trips, trips to strip clubs, invites to lavish boat parties are all arenas in which the target employee's loyalties are further compromised. In the next Module, we will discuss ways to discover if your employees are being bribed.
What are the problems in Detecting Bribes?
The major problem is that no assets are stolen and no entries are made in the records of the business. These transactions are outside the record keeping system. Detection of these frauds usually starts with suspicions increasing when the prices of supplies increase above what is expected, or quality issues become more frequent. Investigators will trace the source of these problems back to a supplier or a contract. [See "Bribery Frauds in the Combating the Culture of Bribes Links Module.]
Methods and Strategies to Detect a Culture of Bribes.
Most of the methods and strategies of Detecting a Culture of Bribes are simply intuitive and obvious.
Sudden changes in a VETE's behavior especially as it relates to changes in vendors, or changes in distribution of purchases from Vendors is the most obvious indicator. Random Audits of the Quality of Purchases and Invoices is another lead to detecting a culture of bribes.
A Policy of Random Questioning of Employees with Purchasing or Contracting authority can yield valuable information. Questions like asking to justify various decisions vulnerable to bribes, in this manner, without alarming the employee in question, nor the general employee population. Where did you go on your last vacation? How long were you saving for that vacation? Also noting whether a potential VETE is wearing an expensive watch, jewelry or clothing out of their pay grade can give important clues. During an employee review would be an ideal time to ask these questions without causing alarm. Living Arrangements and Expensive cars seeming above the employee's means are other indicators of unexplained income. A policy of opening all inbound mail by persons other than the recipients is a way to intercept cash payments by the lazy bribe payer.
High Tech Methods - This presupposes your Employee Policy manual notifies your employees of your right to monitor company phone calls, emails and correspondence so they are aware they have no expectation of privacy. (Trust me, the vast majority of employees quickly forget that sentence in the Employee Policy Manual, but as long as you gave them the manual and you have their signature acknowledging they have read and understand, you are covered) Quite simply, read the email and list to the phone conversations of any suspected VETE. Take note of meetings with vendors outside of normal business parameters. Take note of invitations to sporting events, parties etc. with Vendors.
Implement a Reward System - Allow fellow employees to remain anonymous yet be able to collect rewards for reporting suspected and verified bribes to VETEs
Please suggest any other methods or strategies you have in the comments section.
DETECTING AND IDENTIFYING A CULTURE OF BRIBES LINKS
- Bribery Frauds
This is a fraud committed against someone or some business by people other than their employees. They can be committed against individuals, businesses, companies, governments etc. Third party frauds are not as common as occupational frauds, but on av
HOW DO EMPLOYER'S COMBAT THE CULTURE OF BRIBES
Methods and Strategies to Combat the Culture of Bribes can be divided in 4 basic, sometimes overlapping areas, Corporate Social Culture, Penalties and Rewards, Economic Incentives and lastly actual Implementation of the Detection Methods and Strategies previously addressed.
Corporate Social Culture
There is a reason I refer to it as "Culture of Bribes" instead of just "Bribes" The most effective and least expensive strategy to combat the Culture of bribes involve minimizing potential VETE vulnerability by giving employees recognition, validation, comradery and ego stroking and by defining and emphasizing that the Culture of Criminal Bribes is unacceptable in the Employer's Corporate Culture.
Minimizing Potential VETE Vulnerability
All People, that means employees too, crave and desire praise, approval and appreciation. The same TWO questions that were asked of Six Thousand, Six Hundred people (6,600). 1. "Do you receive as much praise, approval, and appreciation on your job as you feel you deserve?" 2. "Would you likely perform your job better if you received more praise, approval and appreciation?"
Answers: "97.2 percent of the people answered no to question 1, and 98.4 percent answered yes to question 2." [Credits: Please see the link "Ego Stroking To Influence Others To Get More Of What You Want" in the Combat the Culture of Bribes Links Module.]
Employer Policies that fulfill employee needs for praise, approval, appreciation, Comradery, Social Interaction, Social Acceptance, Positive Personal interactions, ego stroking make a vast difference in the Vulnerability of Employees.
Awards Programs, Employee Recognition Programs and formal and informal Employer Sponsored Social Functions fulfill many intangible needs of employees.
Instilling in managers and supervisors an attitude of friendliness, fairness, comradery, praise, approval and consideration is perhaps the most cost effective strategy to combat a Culture of Bribes.
Make sure Employees know you define Bribes and excessive gifts unfavorably [See "Differential social organization, collective action, and crime" in the Economic and Social Dynamics of the Culture of Bribes Links Module Page 3]. "Sutherland recognized that definitions favorable to crime can be offset by definitions unfavorable to crime, and therefore, that criminal behavior is determined by the ratio of definitions favorable to crime versus unfavorable to crime. Furthermore, he recognized that definitions are not all equal; some are more important. Sutherland identified at least four dimensions (or modalities) on which definitions vary in importance or weight: frequency (the number of times a definition is presented), duration (the length of time a person is exposed to a definition), priority (the earlier a definition is presented in a person's life), and intensity (the more intense relationship or prestigious the person presenting the definition)".
Penalties and Rewards
Make sure your Employee Policy states serious consequences for any person accepting bribes and acting to the detriment of the Employer, including explicit description of termination probabilities. Also include language indicating the acceptance of bribes and acting to the detriment of the Employer is cause for forfeitures of matching 401K contributions, accrued vacation time, etc. This language has the added benefit that reinforces in all employees minds that bribe acceptance is viewed extremely unfavorably by the Employer.
Make sure your Employee manual Offers Rewards for reporting of suspected and verified bribe acceptance and resulting acts detrimental to the Employer. This has the added benefit of the psychological effect of putting the all employees on notice that bribes acceptance will not be tolerated.
Pay structure to counter balance susceptibility to bribing, Profit sharing, bonus for cost containment as appropriate to position, bonus program. Employee policy stating forfeiture of benefits of vacation time, 401k programs, etc if caught accepting bribes. - implement some system of immediate consequences to offset the immediacy the Bribe payer has.
Implement the Detection Procedures and Strategies to Detect the Culture of Bribes.
Don't just talk the talk, Walk the Walk. Make sure you regularly remind your Security Department of the Culture of Bribes issue. Perform Random Audits. And Implement the rest of the methods and strategies delineated in the module HOW DO EMPLOYERS DETECT A CULTURE OF BRIBES
COMBAT THE CULTURE OF BRIBES LINKS
- Ego Stroking To Influence Others To Get More Of What You Want
I have TWO critically significant questions for you! These 2 questions were asked of 6600 people. 1."Do you receive as much praise, approval,& appreciation on your job as you feel you deserve?" 2."Would you perform better if received more praise...
- Business Approaches to Combating Bribery: A Study of Codes of Conduct
Abstract The question of what firms do internally in the fight against bribery is probably as important to the successful outcome of that fight as formal anti-bribery law and enforcement.
Through our example of Captain Chaos we have seen how seemingly harmless small gifts can lead to outright bribes and compromise an Employee's Loyalty to their employer. We have seen how these bribes can lead to VETEs being loyal to the Bribe Payer to the detriment of the Employer, Economically, Legally and in terms of Reputation. For these reasons, All Employers need to be vigilant to the development of a Culture of Bribes within their organization.
As we head into these even more trying economic times, it is even more important for any Employer Business to look for ways to improve its bottom line. The chaos of an unbridled Culture of Bribes can destroy an Employer in many ways, yet perhaps is the least controlled cost of most businesses Therefore, it is even more important to eliminate losses caused by a Culture of Bribes in these trying times.
BOOKS, MOVIES AND RESOURCES OF POSSIBLE INTEREST
Greed is Good. Story of Rags to Riches to Rags as success causes young stock broker to abandon his ethics and values.
Story of how Elliot Ness Brought down Gangster Al Capone. Al Capone came to control the City of Chicago during Prohibition with bribes, influence, terror, violence and killing of persons that threatened his empire.
Gratuitous Links to Author Don Mashak's Business Interests
- 1st National Repossessors, Inc.
America's Asset Recovery Professionals Since 1988. Repossession and Remarketing - Professional, Fast, Economical, Bonded and Insured Repossessors Nationwide in the USA since 1988.
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