OUR THOUGHTS ON:

"PA Breeding Ground for Corruption"?

Business Advisors|Fraud/Investigative & Forensic Accounting

By Tom Pratt

What? 

A headline in the August 2, 2015 Pittsburgh Tribune-Review says, “PA Breeding Ground for Corruption, Experts Say.”

Can that be true – is Pennsylvania really a breeding ground for corruption?

The Tribune-Review article goes on to cite some troubling statistics for Pennsylvania – by mid-2012, eight of Pennsylvania’s former legislative leaders were in prison – among more than 30 public officials with ties to the state capital who had been convicted of corruption charges by state, federal and local prosecutors.  In addition, the article identified 11 state officials, including five former legislators, the former state Treasurer and a former Supreme Court Justice, who have been convicted in cases ranging from bribery and extortion to theft since 2013.

Forms of Corruption

  • Conflicts of interest, including both purchasing schemes and sales schemes;
  • Bribery in the form of kickbacks or bid-rigging; and,
  • Illegal gifts and gratuities such as vacations or sporting tickets.

Fortunately, or unfortunately, the Pennsylvania government does not have a monopoly on corruption.  According to a recent survey – 41% of C-Suite business executives said they were willing to offer gifts, entertainment or cash to win or retain business.  In another study, 53% of corruption cases involved corporate management or CEOs.   Additionally, research has indicated that industry sectors at the highest risk of potential corruption are extractive; construction; transportation and information and communication.   

Questions to Ask Yourself to Identify and Prevent Corruption

  • Would you recognize corruption, bribery or a conflict of interest in your organization? 
  • What is your organization doing to identify and mitigate the risks of corruption that may be occurring? 
  • Is your organization in an industry sector that is at a high risk for corruption? 
  • Has your organization performed a Fraud Risk Assessment recently, or at all?

Experience has shown that there are many ways to siphon money out of any system, public or private.  We have performed forensic accounting analyses concerning allegations of corruption, conflict of interest and misuse of funds involving several public officials in Pennsylvania.  We have also investigated allegations of corruption, fraud and theft in many for-profit and not-for-profit organizations, as well.

Whether your organization is located in Pennsylvania, or another potential “breeding ground,” we are available to assist in a Fraud Risk Assessment or an investigation of specific issues to mitigate or remediate potential corruption risks.  Contact us to discuss a fraud risk assessment and visit our Business Advisory webpage to learn about other services that the Schneider Downs Business Advisors offer.

You’ve heard our thoughts… We’d like to hear yours

The Schneider Downs Our Thoughts On blog exists to create a dialogue on issues that are important to organizations and individuals. While we enjoy sharing our ideas and insights, we’re especially interested in what you may have to say. If you have a question or a comment about this article – or any article from the Our Thoughts On blog – we hope you’ll share it with us. After all, a dialogue is an exchange of ideas, and we’d like to hear from you. Email us at contactSD@schneiderdowns.com.

Material discussed is meant for informational purposes only, and it is not to be construed as investment, tax, or legal advice. Please note that individual situations can vary. Therefore, this information should be relied upon when coordinated with individual professional advice.

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