Glossary term
Grand Corruption
Subject: Financial Crime, Bribery and Corruption
Also known as: High-level corruption
Grand corruption is the abuse of high-level public office by senior politicians or officials for large private gain, typically involving major contracts, state assets or public budgets and causing serious harm to citizens.
Explanation
The scale and the seniority separate it from everyday bribery. Those involved are ministers, heads of state-owned companies, senior judges or top civil servants, and the sums are often millions. Typical forms are bribes on large infrastructure, defence or energy deals, rigged privatisations, and diverting public funds. The cost falls on whole populations as lost public revenue and the roads and hospitals it would have paid for. Proceeds are usually moved abroad through shell companies, nominees and property, which draws in banks, lawyers and company-formation agents. The term is set against petty corruption, though no fixed monetary line divides the two and one system can have both. Banks give closer scrutiny to senior public figures, called politically exposed persons, and recovering stolen assets across borders depends on international cooperation. Asset tracing in these cases turns on whether a bank can show who stood behind an account.
Example
A large road-building contract, signed by a minister, goes to a consortium that quoted well above the market price. The consortium pays 5% of the contract value into an account held by a company registered offshore, owned through a nominee for the minister's relative. A bank screening the incoming funds sees the minister's link to the beneficial owner and files a suspicious report.
Not to be confused with
- Petty corruption
- Petty corruption is small payments to low-level officials in daily dealings. Grand corruption involves senior figures and large sums.