Why Corruption Always Requires a Conflict of Interest

When it comes to corruption, there is almost always a common denominator: a conflict of interest. A conflict of interest exists when an individual or corporation has the opportunity – real or perceived – to exploit their position for personal or corporate benefit. Corruption occurs when the individual or corporation takes advantage of that opportunity and indeed abuses their position for private gain. The good news is, if conflicts of interest can be controlled, the risk of corruption can be minimized.

Because of this, it is important for management teams within organizations – public or private – to be alerted to the connection between conflicts of interest and corruption. Understanding this relationship can lead to the prevention and detection of misconduct and fraudulent activity. While this relationship can be confusing, a simple way to remember the difference between conflicts of interest and corruption is could vs. does. While conflicts of interest do not always lead to corruption, corruption almost always requires a conflict of interest.

Conflicts of interest are often closely associated with procurement positions; however, it can be anyone in a position to influence the award of business, control payments or abuse supplier relationships. Examples include a purchasing employee who secretively gives business to another company under his control, an employee who gives business to a company in exchange for a gift or other kickback, or an employee who starts a company that provides similar services to the clients or potential clients of their employer.

To prevent conflicts of interest from morphing into corruption, there are preventive steps that can, and should, be taken. Offer training to all employees so they, too, can understand this relationship and the significance of conflicts of interest. Management should be intentional in creating an environment where the staff is comfortable declaring annually in writing any potential, perceived or actual conflicts.  Finally, management should be educated on the procedures for handling conflicts of interest.

If there is an actual conflict of interest, management has options. Sometimes, it’s as simple as removing the conflicted employee from the situation. Other times, it can be more complicated – steps that can be taken include: restricting job-relevant conflicting interests; removing the employee from the conflicted decision-making responsibility; or, if the employee has a business relationship with a third-party, the employee could resign from the position.

Management should remember that the mere act of having a present conflict of interest is not necessarily inappropriate – it’s the knowledge of and response to the conflict that is crucial, and reduces the risk of corruption.

If you are interested in learning more about how the relationship between conflicts of interest and corruption, or want to learn more about our services and our team, please contact us.

Social Media Evidence: Where to Look and Protocols to Follow

As a digital technology expert, it is fascinating to observe how today’s technology-centric world obsesses over anything and everything digital – especially social media. From sharing locations on Instagram and Facebook to live tweeting events, people constantly update their friends – and strangers, if their account is public – on their every movement.

Social media networks are an exceptional method to stay connected with friends and family, but to a forensic investigator social media is a treasure trove of intelligence in a fraud investigation. From the basic share of information, such as a status update or photo, to the searchable metadata connected to social media posts, like time-stamps and geo-locations, the forensic examiner can dive deep to connect the dots. Other publicly available information to aid in the search includes the suspect’s check-ins, comments, reactions (likes or Facebook emotions), re-tweets, locations, photos and friends or followers.

An abundance of information is available on social media that can be useful to an investigation, but two hurdles are important to note: the easily editable format of social media, and the ethics of obtaining the information legally. The volatile nature of social media makes it relatively easy to edit or delete the content. While numerous online archive sites preserve the original content they do not capture all social media accounts.  A letter of preservation is critical to decrease the opportunity for the suspect to delete any evidence.  One or more of the many available tools to capture and authenticate suspicious activities and content on relevant social media accounts can also be helpful.

Evidence from social media should only be obtained ethically and legally, otherwise it may be deemed inadmissible in a court of law.  It is unethical to “follow” or “friend” the suspect or their acquaintances.  Likewise, any information obtained should only be publicly available.  To ensure the evidence is obtained ethically and legally, it is wise to employ a forensic technology expert to assist in the capture and authentication of any sensitive and fragile data.

If you are interested in learning more about how fraud examiners can use social media in investigations, or want to learn more about our services and our team, please contact us.