Corruption costs.

• Author: Heffes, Ellen M.
• Position: Fraud - Brief article

Government stimulus funding totaling $5 trillion has unintentionally introduced new opportunities for fraud and corruption worldwide, noted the latest edition of Kroll Global Fund Report, by risk-consulting firm Kroll.

The report coincides with Federal Bureau of Investigation Director Robert Mueller's recent announcement that corruption and fraud tied to stimulus spending may be the "next wave" in financial fraud cases, notes the firm's press release.

Data from Transparency International, the global coalition against corruption, says that corruption can raise procurement contract costs by at least 10 percent in a stable economy--an equivalent of $500 billion in corrupt gains; in emergency situations, these costs can rise as high as 30 percent of the cost of the contract.

Government spending is targeted because of the nature of the projects; the large sums of investment coupled with complex procurement processes provide both the motive and the means for opportunists to take advantage.

Richard Abbey, managing...