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July 12, 2021

'Old Corruption' Revived?

Writing about web page https://www.historyandpolicy.org/policy-papers/papers/old-corruption-revived-lessons-from-the-past

Are we living in an age of ‘New Corruption’ and if so, are there any lessons from our past about what to do about it? ‘Not since the Victorians abolished patronage with open competition has any government so ruthlessly ushered its placemen into every nook and cranny of the public realm’, argues Polly Toynbee [Dido Harding to head the NHS? Her position would be untenable | Polly Toynbee | The Guardian]. She implicitly refers to the mid-nineteenth century waning of ‘Old Corruption’ after an intense period of reform, and the recent revival of old practices.

‘Old Corruption’ – a term coined in the 1830s – was characterised by a ‘system’ of corrupt institutions and practices that diverted public money into the pockets of a political and social elite who distributed offices amongst their friends and family in order to advance their own profit. This article for History and Policy explores how far Old and New Corruption resemble each other; what reforms worked in the past; and what lessons can be learnt from this earlier history.

Here is a short summary of some of its conclusions

  • Old Corruption taught us that neither public office nor a contract for outsourced public services should be obtained by patronage, patrimony or partisanship; but also that such forces are remarkably powerful, enduring and difficult to constrain.
  • Both informal and formal restraints are necessary to attempt to do so. We need i) a vigorous and widespread debate on public ethics, particularly around issues of self-interest and accountability ii) robust, formal institutions with a remit for reform that remain independent from the executive iii) leadership demonstrating integrity.
  • Some of the formal architecture of, and principles underlying, restraint already exist, the legacy of the struggle with Old Corruption; but they need to be protected from erosion and we also need to think about how to meet new challenges.
  • We should view corruption not just as an issue of individual moral failing but as a systemic one in which many of our current institutions are interconnected and ripe for wholesale review.
  • Anti-corruption is a long-term and on-going process but there are short-term measures that could help. One would be to increase the barriers and constraints on the ways in which vested interests influence public life and seek to determine the public interest.
  • Crises and large-scale government spending increase both the opportunities for corruption and (with the consequent tax rises necessary to fund it) the public pressures for reform.


Rumbold buying influence

A satire of the ‘nabob’ (an anglicisation of the Indian word for prince), the rapacious Sir Thomas Rumbold, here neutralising his prosecution by showering money into a pot held by a government minister, Henry Dundas. Dundas was himself accused of creating a patronage network of Scottish MPs who would do the government's bidding.© The Trustees of the British Museum


November 28, 2020

Crony Contracts

In the pre-modern period appointments to office and awards of government contracts were often based on patronage, ‘friendship’, nepotism and sometimes straightforward exchanges of money. Are we in danger of slipping back into a seventeenth or eighteenth century world? When even a reporter from the Daily Telegraph thinks that the Tory government emits a ‘stench of corruption’, we should take this question seriously [Madeline Grant, BBC Andrew Marr Show, 22 November 202].

Emergencies, such as wars or pandemics, open the coffers of the state. The need to support the state’s efforts in a moment of need justifies very high levels of spending but then seems to foster loose or self-interested handling of public money that destabilise notions of fair profit, the balance between the public and private interest, and practices of accountability. Cronyism and corrupt contracts become far more possible.

In the seventeenth and eighteenth centuries Britain was engaged in huge expenditure on war. Civil war in the 1640s raised unprecedented sums of money but also headaches about accountability. The parliamentary forces ranged against the royalists created the first system of parliamentary committees scrutinising public expenditure, though there were frequent allegations that money disappeared into the hands of private individuals profiteering from the crisis and officials who abused their power to advantage themselves or their friends.

The second revolution of the seventeenth century, in 1688, propelled Britain into war with France that lasted, more ‘on’ than ‘off’, for the next 125 years. War became increasingly global in nature, as colonisation meant conflict in Europe spread across the world, and consequently state debt increased in leaps each time tensions flared. Contracts were handed out to supply troops with clothing, food and drink, and to financiers to pay the armed forces overseas. But all this was accompanied by what many contemporaries regarded as large-scale corruption. And over a period of several centuries structures were put in place to properly audit the expenditure; to prevent conflicts of interest; to prevent public money from being siphoned off into private hands; and to hold individuals to account for their behaviour in office. The system creaked each time it was put under strain by largescale emergencies; and often further measures were put it place.

Ironically it was the early Tory party, which emerged in the later Stuart period, that worried about the corrosive effect of large-scale state funding that they saw as disappearing into the pockets of their Whig rivals. The first Tory party was in part formed around hatred of Whig profiteering and cronyism. Thus in 1712, towards the end of a long war with France that had seen the national debt rise to unprecedented levels, the Tories argued that partisan self-interest was undermining the national interest. Money, they argued, was being purloined by Whiggish City financiers who became wealthy on the backs of the taxpayer. The Tories prosecuted one of the leaders of the Whigs, the future Prime Minister Robert Walpole, for a corrupt contract awarded to cronies and with built-in kick-backs. Walpole was also said to have presided over an unaccounted hole in the public finances of £35 million. Walpole was slung into the Tower of London for 'a high breach of trust and notorious corruption'. Indeed, throughout his long tenure as prime minister the Tory rallying cry against him was that he corrupted government and the political system. Anti-corruption was a key part of what it meant to be a Tory.

walpole_idol_worship.jpg

This Tory satire of 1740 depicts Walpole as an overblown idol whose arse had to be kissed if one wanted to get a public office and who was associated, as the words underline, with ‘Corruption’, ‘Venality’, ‘Folly’, ‘Vanity’ and ‘Pride’. © The Trustees of the British Museum.

So it’s somewhat ironic that the Tories today should be the subject of numerous accusations that they award excessively lucrative contracts to cronies without proper scrutiny and fast-track deals for insiders; that they appoint officials to important posts without any public competition; and that ministers are allowed to breach the codes designed to ensure high standards in public life and may even have broken the law in the way they have disregarded due process.

Emergencies always test the systems of the state to prevent corruption, and historically those systems have needed adjustment if they are found wanting. Indeed, after most periods of emergency in the seventeenth and eighteenth centuries there was a period of review and reform, and often of significant public anger. We seem to be approaching one such moment again.

For a good discussion about the current dangers of corruption see the Mile End Institute discussion at https://www.youtube.com/watch?v=k27w9VRE1gI.

For a warning, from the former director of Transparency International, about the dangers of corruption in Britain see https://www.qmul.ac.uk/mei/news-and-opinion/items/corruption-in-modern-britain-the-warning-lights-are-flashing-red--professor-robert-barrington-.html

For the National Audit Office report on government procurement during the Covid crisis see Investigation into government procurement during the COVID-19 pandemic - National Audit Office (NAO) Report

Boris Johnson ‘acted illegally’ over jobs for top anti-Covid staff | Politics | The Guardian


May 24, 2015

Murdoch's Madras ancestor


In February 2015 the US Justice Department dropped an investigation into possible corruption at News Corp, after the UK phone-hacking and accusations that public officials had been paid for news stories. In May 2015 stories about alleged corruption in Nepal were the subject of a BBC documentary, in which it was suggested that money intended for relief efforts after the earthquake might be siphoned off. These two apparently unconnected stories are linked by an early nineteenth century scandal, involving News Corp’s boss Rupert Murdoch’s great great great grandfather, Robert Sherson, an East India Company official who was accused of embezzling money from a relief effort after a famine and then violent storms hit Madras in 1807. We have Sherson’s side of the story, since he had access to the press, and published several vindications of his conduct.

Madras in 1807 by Edward Orme © Trustees of the British Museum

Robert Sherson had been appointed as Superior in the Grain Department, and supervised the food intended for the relief of 300,000 inhabitants affected by a famine. On 10 and 11 Dec. 1807 a violent storm tore the roof off the grain store, leaving it vulnerable to ‘the depradations of the starving multitude’. Sherson ordered a survey of what was left and ‘incautiously’ signed the estimate, ‘not suspecting public servants in whom he himself had been in the habit of confiding largely upwards of six years’. But the estimate was not believed by Sherson’s bitter enemy in Madras, Mungo Dick, with whom he had a long-standing dispute and, unluckily for Sherson, Dick had power over him as one of the members of the Committee overseeing his actions. Dick’s investigations concluded that the estimate of losses had been deliberately inflated and refused to accept that the mistake was an honest one. A Committee of Enquiry was set up by Governor Sir George Barlow, who, ‘the dupe of designing men’, appointed Dick as its chairman. The result was that on 10 Feb. 1808 Sherson was dismissed from his offices (he was deputy Customs Master, Assay Master, Director of the Government Bank, posts worth £4800 pa) under the charge of having fraudulently sold grain to the value of £12,000. Sherson was also accused of selling grain at higher prices than were authorised by the government and hence profiteering from the famine; and there were later accusations that he had attempted to bribe his assistant, a Mr Clarke.

Sherson’s defence was that he had done all he could to ensure an accurate estimate of the store had been made as quickly as possible after the story; and he refuted the charge of embezzlement, which rested on accounts drawn up by ‘the Mutsuddee or Hindoo Accountant’ who was Dick’s ‘creature’ and had allegedly doctored the accounts: ‘every one …knows the facility with which they may be mutilated. That nothing is more easy than by a dot or a scratch to add an hundred or a thousand even’ to the sums.’

When Sherson's case eventually came to court in 1814, the Supreme Court in Madras threw it out, arguing that frauds might have been perpetrated without his knowledge and that, in the opinion of the Lord chief Justice, ‘the whole amounted to nothing'. Another justice declared that if the matter had come before a British court Dick would have been jailed ‘as a perverter of justice’ and that he strongly suspected the accounts used against Sherson had been forged. Indeed, he thought it ‘astonishing, that [the Indian] Government could have listened to such a charge against a good and worthy servant, founded on infamy, fraud and conspiracy’. A third judge thought there was ‘not a scintilla of evidence beyond the opinion of Mr Cooke, founded on hearsay’. Sherson should leave court, he said, ‘freed from all suspicion of having failed in any manner whatever in his duty to his employers’. He was eventually reinstated and in 1815 the East India Company even voted him a present of 20,000 pagodas as recompense for his protracted suspension from office, and sent him back to India ‘with credit’.

The accusation against Sherson has all the hallmarks of a man with a personal grudge using a good opportunity to strike at a rival. The smear of corruption hung over him for a long time before being dispelled (and even after the judges’ ringing endorsement, suspicions about his earlier corrupt activity continued to circulate). On the other hand, Sherson had access to the press to clear his name and he also had powerful backers in the British Parliament. Seven years after he had been suspended, a Member of Parliament, Alexander Novell, waged a sustained campaign to have Sherson’s name cleared. The importance of access to politicians and the press may have been a lesson the family learnt well.


The Monster of Corruption, a detail from a satire of 1819

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