High level corruption
What do cranes and planes have in common ? Safety standards and officials checking those standards. And companies willing to pay a bribe in order to pass those reviews without any trouble… Troublesome business; corruption can be deadly in several ways…
Manhattan was shocked by a second deadly collapse of a crane on a construction site in a short term. After an investigation a NY city crane inspector was arrested for taking bribes. A company that operates 13 cranes in Manhattan allegedly paid the official $ 10.000 over a period of 8 years to have their cranes pass inspection and ensure that their staff got through the safety exams. The inspector also admitted that he sold the answers to the crane (safety) exam for $ 3,000. The corrupt official was said not to have been involved in inspecting the collapsed cranes by the way.
A striking example how the market mechanism and allocation of goods is disrupted by corruption. In this case, companies that did not want to take the effort and cost to let their cranes operate according to all (safety) standards were able to take on jobs that would have been out of reach without them bribing officials. Companies working at a higher safety level perhaps price themselves out of the market.
Now we all don’t operate cranes on a regular basis and hopefully do not live close to a site where a ‘crane with bought safety licence’ operates. But we probably do regularly fly. How about safety here ? FAA officials have occasionally been accused of taking bribes, allegedly resulting in suboptimal choices from an air safety point of view. How about the concrete on the landing strip ? Built by the company with the lowest bid given the needed quality, right (see links)?
When supply and demand of official licenses not match, some companies and officials match up ease out the differences. A relatively small fee paid by a company to an official can safeguard its operations. Officials use the relatively small amount of money to do what ? Ease their minds ? Or fly to their favourite holiday destination….. Believe in karma ?
http://cityroom.blogs.nytimes.com/2008/06/06/citys-top-crane-inspector-is-arrested/index.html?hp
http://www.oig.dot.gov/item.jsp?id=2240
http://www.rockymountainnews.com/drmn/local/article/0,1299,DRMN_15_4846480,00.html
http://www.thelastinspector.com/
http://www.huffingtonpost.com/2008/04/04/faa-managers-actions-agai_n_94999.html
http://www.msnbc.msn.com/id/23942137/
http://www.startribune.com/politics/national/house/17208731.html
http://query.nytimes.com/gst/fullpage.html?res=9C0CE0DE113CF932A1575BC0A966958260
http://query.nytimes.com/gst/fullpage.html?res=9F0CE1D81539F932A35753C1A965958260&sec=&spon=
