Forensic Accounting and Fraud Examination, 2nd Edition

6Corruption and the Human Factor

Black’s Law Dictionary defines corruption as “an act done with an intent to give some advantage inconsistent with official duty and the rights of others. The act of an official or fiduciary person who unlawfully and wrongfully uses his station or character to procure some benefit for himself or for another person, contrary to duty and the rights of others.”¹ This definition strikes at the heart of what corruption is: an act in which a person uses his or her position to gain some personal advantage at the expense of the organization they represent.

Case Study: Why Is This Furniture Falling Apart?

A number of years ago, the Washington Post ran a series of articles detailing charges of waste, fraud, and abuse in the General Services Administration (GSA), the federal government’s housekeeping agency. In particular, for more than a decade a furniture manufacturer in New Jersey had churned out $200 million worth of defective and useless furniture that GSA purchased.

Despite years of complaints from GSA’s customers about the shoddiness of the furniture and equipment, the GSA had done little to investigate the contractor, Art Metal U.S.A. Government agencies that received the furniture, such as the Internal Revenue Service, the Central Intelligence Agency, and the State Department, told horror stories about furniture that fell apart, desks that collapsed, and chairs with one leg shorter than the others.

Several names have been changed to preserve anonymity. ...