Corruption abounds everywhere

TWO FORMER executives of WorldCom, a big US business, have been charged with fraud.WorldCom handled a large portion of the world’s Internet operations before the accounting scandal that ended in the largest bankruptcy in American history brought it down.The two managers are being charged with, among others, conspiracy that involved hiding billions of dollars of company expenses. They had been sacked in June after the company revealed that it had discrepancies on its books amounting to $3.8billion. WorldCom is also said to have registered single sales over and over again, inflating its volume of business.There have been other cases of corporate fraud recently. One of the world’s biggest energy companies, Enron, collapsed earlier this year. Its auditors, Arthur Andersen, who helped falsify its accounts, are now struggling. Xerox, the photocopier giant, admitted last month that in an effort to push sales, it had made “improper payments” to government officials in India. Uganda is also looking into allegations that a British affiliate of a Norwegian contractor for the Bujagali dam made an “unauthorised payment” to a Ugandan official. What all this shows is that corruption is not the preserve of poorly organised developing countries like Uganda. It is, as US corporate fraud shows, a culture that grows out of both little and big things.The big test is how the affected societies react to revelations of fraud. Apart from the arrest and prosecution of complicit company executives, the US is also drawing up a tough corporate reform bill for audit regulation and spelling out penalties for corporate wrongdoing. Zero-tolerance is one approach that is still short in Uganda.