Anti-fraud and anti-corruption initiatives to achieve the Sustainable Development Goals

16.11.2023

by Diana Radoane

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This week marks the official Fraud Awareness Week. While many companies focus on raising awareness about organizational fraud (which usually causes a median loss of 150.000 euros per organization), thorugh Strategy and Performance Solutions (SPS) I will take concrete actions to address the most dangerous type of fraud - systemic corruption or private-public-government fraud.

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My commitment to this social cause centers on pro-bono efforts to expose the wrongdoing, craft holistic strategic and anti-corruption systems, and suggest solutions to address systemic issues and corruption. This involves gathering information from EU decision-makers related to recurring billion-dollar public procurement fraud and systemic corruption. Additionally, I will advocate for the incorporation of a new Sustainable Development Goal (SDG 18: Reduction of Corruption and Discrimination) because I identified systemic corruption as being the root cause that impedes humanity's progress toward achieving its sustainable development goals. 

​Corruption costs nations $2 trillion annualy, and public procurement fraud leads to $1 trillion in damages, as outlined in the research "Anti-corruption Systems for a Meritocratic Democracy." An additional $1 trillion is extracted yearly from nations through aggressive tax optimization schemes.

According to the latest UN Conference on Trade & Development World Investment Report 2023, developing countries face an annual funding gap of $4 trillion for the Sustainable Development Goals from which $2.2 trillion annually for the energy transition. 

What has this to do with fraud? Well, where is the money that should finance the sustainable development goals? Lost to corruption.

Solving systemic corruption and aggressive tax avoidance schemes practiced by mega-corporations could unlock $3 trillion annually, a vital amount for achieving Sustainable Development Goals (SDGs), including zero hunger, no poverty, quality education, and reduced inequalities. Achieving the SDGs is in the end the essential mission that a presumed evolved humanity should aim for. 

Developing countries count on developed countries to help them in the fight against corruption and injustices. But in developed countries, high-level corruption may not be as blatant as in developing nations and takes forms like cronyism, shadow lobbying, and regulatory capture in two versions:

1. Financial or Materialist Capture: the regulator's motivation is rooted in material self-interest, influenced by bribery, revolving doors, or political contributions, often manifesting as political corruption.

2. Cognitive or Non-materialist Capture: the regulator adopts the mindset of the regulated industry, influenced by interest groups lobbying within. In highly specialized technical sectors, cultural capture risks exist as regulatory agencies often employ experts from the regulated industry.

The issues of regulatory capture, crony capitalism, and various methods of competition subversion by special interest groups remain unaddressed. The $2 trillion lost to corruption annually represents a significant obstacle to achieving SDGs.

In this context, to combat fraud and systemic corruption, Strategy and Performance Solutions SRL will not only strategize and write anti-fraud and anti-corruption articles but will also extend the anti-fraud pro-bono campaign until 10 December 2023, the Global Human Rights Day. This extension is necessary because it takes a lot of effort to document the systemic corruption factors (also the drivers behind not achieving the SDGs), to design new solutions that haven’t been yet recommended, and write communication letters to the decision-making parties:

1. Pitch UN decision-makers to include "SDG 18: Reduced Corruption and Discrimination" in the Sustainable Development Goals, crucial for addressing global challenges. Addressing systemic corruption, particularly at high levels, is crucial to alleviating significant global challenges such as human suffering, poverty, inequality, and conflicts.

2. Question EU decision-makers regarding the annual $4 billion in public procurement fraud at the EU level and discriminatory practices related to the hiring process, favoring incompetents biased toward corrupt parties. Additionally, tender procedures that privilege consulting and audit corporations sentenced for billion-dollar proven frauds at a global level. The findings and solutions are outlined in "Anti-corruption Systems for a Meritocratic Democracy."

3. Disseminate information about a recent high-level corruption case in the Romanian market, revealing illicit awards of over €130 million to a corporation implicated in money laundering and transferring the public funds to tax heavens. Hold public officials accountable for misappropriating public funds and abusing their positions, contributing to the annual increase in the wealth of corrupt groups, and exposing the grim reality of captured states and justice systems.

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So how do we recover the $3 trillion lost yearly to corruption and to aggressive tax optimization schemes and cover the annual $4 trillion funding gap for the Sustainable Development Goals?

• Initiatives aimed at combating fraud and corruption for the realization of Sustainable Development Goals (SDGs) involve a multi-faceted approach, including defining strategic risk mitigation initiatives such as the reassessment of decision-makers and those responsible for strategy execution.

• The failure to achieve sustainable development goals is attributed not only to country leaders but also to individuals remunerated for executing strategies created at decision-making levels. 

• This decision-making process is influenced by salaried employees and paid external consultants from consulting firms. 

• The irony is that the decision-making process in these vital institutions is strictly limited to these people who sabotage the public interest and are even paid billions of euros yearly from the money of the populations they are causing damage.

• Over the past decade, the public procurement criteria (for the consulting services that fundaments the decision making process in the EU institutions) have unlawfully favored companies with a paid portfolio in specific areas, 50% of which engage in providing fraudulent audit services, aggressive tax optimisation schemes, and money laundering. These entities are contracted based on their turnover, without questioning them for their lack of performance in achieving goals, the unattained assumed impacts, and the fraudulent audits they performed.

• Corrupt evaluation criteria and processes are evident in tender assessments and evaluations of experts, candidates, and individual professionals, perpetuating corruption in both hiring processes and public procurement tenders. Rectification requires a substantial modification of qualification and evaluation criteria.

• To counter this systemic corruption risk, the institution responsible for the evaluation and award criteria for public procurement contracts should assign higher scores or ratings to the portfolio of projects with TANGIBLE RESULTS ACHIEVED AT THE MINIMUM (OR ZERO) EXPENDITURE OF PUBLIC FUNDS, rather than privileging the company with the highest turnover from state contracts/projects portfolio that offered zero positive impact and zero real benefits for the stakeholders and have a proven track record of public procurement frauds. In most cases, state contracts are obtained through systemic corruption, and the post-implementation evaluation is fraudulent.

• Humanity needs a supra-global power to address these injustices, especially because the individual states are captured by corrupt interest groups. 95% of the global population wants their governments to invest in the achievement of SDGs. But you see, these special corrupt interest groups keep robbing the 99% population through regulatory capture, buying the majority in the Parliament, the government, the decision-makers among the bureaucrats, and influencing the justice system. The decision-makers at the United Nations must include "SDG 18: Reduction of Corruption and Discrimination" into the framework of the Sustainable Development Goals. 

• Addressing systemic corruption, especially at the highest levels, is indispensable in mitigating significant global challenges, such as human suffering, poverty, inequality, conflicts and wars. 

• In addition to the imperative of focusing on SDG "Reduced Corruption and Discrimination," there arises a need for the United Nations to enforce mandatory international laws, under the human rights laws and nondiscrimination laws, to identify and monitor from 1980 until present the amount each human being has received from public funds (state contracts, salaries, exploitation of a country’s resources) because in this manner (e.g.: human beings receiving from public funds 1.000 times more the value they bring and they deserve, especially through state contracts) the theft is happening from the 83% enslaved global population, and more than $4 trillion (the funding gap for SDGs) are lost to this theft from public funds. 

There is no simpler solution than this one. In the same manner, there is a carbon tax, there must be a tax on the wealth created at the individual level from public funds/ state contracts, especially above 1 million euros, plus extra taxes on the profits made from the business where those money were invested. States created national debts to enrich above limit certain individuals, through state contracts. They must pay the national debt.

• There arises a need for the United Nations to enforce a mandatory international law that emphasizes the principle of "Fair distribution and redistribution of Public Funds on a Per Capita Basis" in all public procurement processes and evaluation criteria / due diligence. This would involve evaluating individuals based on individual merit and redistributing public funds according to their contributions and results, rectifying past injustices. In many cases, it is a theft of millions of euros per individual from public funds obtained through state contracts and bid tailoring, money robbed from other professionals.

• The principle of "Thinking in Terms of the Individual Beneficiary" means considering the specific individual (shareholder) who will receive the public funds, for instance from an IT or consulting state contract, and the importance of evaluating their profile, including education, qualifications, and social contributions, to assess meritocracy, instead of the portfolio of state contracts (as it is happening now) when those contracts were obtained through fraudulent means creating a never-ending systemic corruption and discriminatory framework. This evaluation should consider the efforts and results demonstrated by the individual to deserve the allocated amount. In many instances, the current system leads to the misappropriation of millions of euros per individual from public funds through state contracts and bid tailoring, disadvantaging the honest professionals.

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To address this issue, there is a need for the 'Redistributing Public Funds on a Per Capita Basis' principle in all public procurement processes and evaluation criteria. This approach involves assessing individuals based on merit and reallocating public funds according to their contributions and results, correcting past injustices where others may have received more.

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The principles of 'Thinking in Terms of Human Beings' and 'Redistributing Public Funds on a Per Capita Basis' aim to establish a meritocratic distribution of public funds, aligning with the Declaration of Human Rights. These principles offer solutions to eliminate corrupt evaluation and award criteria in public procurement processes."

and "Redistributing Public Funds on a Per Capita Basis" align with the Declaration of Human Rights and offer solutions to eliminate corrupt evaluation and award criteria in public procurement, such as prioritizing turnover figures that unduly favor certain corrupt corporations. This leads to some individuals receiving ten times more than they deserve for their actual work and results, and more than their individual contributions. This practice minimizes discrimination against individuals who are more educated, intelligent, and capable of delivering results but refuse to be associated with corrupt corporations.

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The principles of 'Thinking in Terms of Human Beings' and 'Redistributing Public Funds on a Per Capita Basis' aim to establish a meritocratic distribution of public funds, aligning with the Declaration of Human Rights. These principles offer solutions to eliminate corrupt evaluation criteria in public procurement processes, such as prioritizing turnover figures that unduly favor certain corrupt corporations, firms, and shareholders behind them whose capital was built most of the time through corrupt practices. Their corrupt capital is used as an evaluation and award criteria in public procurement that robs the wealth of people and nations through the taxes they pay and and enriches the corrupts who provide only 10% back and take 100%. This leads to some individuals receiving hundreds or ten times more than they deserve for their actual work and results, and more than their individual contributions. 

Monitoring what amount from public funds a human being has received in their life, including the inheritances built on profits made on fraudulent state contracts, and what that human being has provided individually back (not exploiting other people, taking credit for their work, or robbing communities) minimizes the probability and impact of discrimination against individuals who are more educated, intelligent, and capable of delivering results but refuse to be associated with corrupt corporations. This is the first step to take so that 90% of the robbed global population does not start wars because the theft is visible, protected by 1% of corrupt bureaucrats. 

 Addressing global poverty, reducing inequality and hunger are not the sole significant sustainable global objectives. Climate action to minimize humanity's substantial environmental impact is another crucial goal. Achieving both objectives simultaneously is challenging, and it's essential to recognize the difficulty of this task. 
 

The challenge is to reduce corruption, recover and redistribute to the victims the $trillions lost to corruption, reduce inequalities, end poverty (through increased economic growth), separate economic growth from environmental damage, and transition to sustainable production methods for essential goods and services.

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