Corruption in public life and how to keep procurement clean

Some of the largest alleged frauds ever seen in the world have come from the sale of assets by Governments over the last few years. It’s now fairly commonly acknowledged that Russian oligarchs got state assets at knock down prices in return for – well, who knows. Certainly they reciprocated by supporting certain politicians, and there was probably more.

A. Raja, India's former Telecom Minister

Then we have the Indian sale of mobile phone 2G spectrums, which has ended up in the prosecution of India’s then Telecom Minister, A. Raja, and the suggestion that the scandal has cost the Indian taxpayer some $34 billion. Yes, that’s billions.

Now in India again, there are stories (here’s Reuters take on it) that the sale of coalfields was done in a manner that may have cost the taxpayer (or perhaps more accurately lost the taxpayer) some £211 billion!

These may be sales rather than procurement exercises, but the process is very similar – it’s just the other side of the coin really. And while the numbers may not be so large, there are plenty of cases of (alleged or proven) procurement fraud and corruption around as well.  Recently we’ve had the Northern Ireland MOD case, and the Kent energy procurement trial is currently underway. And the Times this week featured a strange UK case where “An accountant wrongly convicted of a fraud allegedly connected to the bribery of civil servants is demanding to see the secret evidence which saved him from a lengthy prison sentence”.

Now, combine this with the UK’s “cash for access” furore this week - the Conservative Party co- treasurer offering access to the Prime Minister and the chance to influence – or try to influence - government policy in return for donations to the party.  It’s easy to see why we as taxpayers and procurement professionals have to be vigilant about public procurement, and frankly, keep the politicians out of decisions on awarding contracts as far as possible! There is, unfortunately, always scope, even in less corrupt countries, for that access to top politicians to turn into discussions about how my firm deserves to win that contract or be awarded that licence.

Which is why the advice from Francis Maude, Cabinet Office Minister, that buyers should have more “early engagement” with suppliers needs to be clarified. I support what he’s trying to get at  - understanding what the market can offer is key and talking to suppliers is a useful way of achieving that. But the way he’s presented it to date sounds altogether too much like cosy fireside chats – just like Mr Cruddas was offering in return for donations.

I know that’s not what Maude means, but you can see a situation where a procurement person comes under pressure from a politician, councillor or Chief Constable to “just go and have a chat with my friend the supplier about how they can help / what specification suits them. Of course it’s OK - Cabinet Office says so”.

We wrote about this here, but we need some guidance I believe now from Maude and his team on how early and informal supplier engagement can be done properly, legally and fairly. Otherwise we’re going to see some issues at some point. That may be challenges from unsuccessful bidders, who didn’t get the cosy chats, or more corruption in our public procurement activities.

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