Corruption and fraud

Corruption is a global and interdisciplinary phenomenon that includes three key elements:

• Universality: corruption is not limited to state institutions – it can also occur in other environments: business, media, public organizations.
• Abuse of power: a person uses their official authority for personal purposes, and not in the interests of the state, society, organization, or company.
• Obtaining undue benefit: a situation where a person receives private gain without legal grounds for it.

Corruption manifests in various forms, including:

Bribery – a situation in which a person entrusted with certain power through their position takes or requests an undue advantage (money, services, or other valuables) for performing work they would have done anyway, or for carrying out their function in a certain way. Bribery can be active and passive:

• Active bribery – the promise or direct giving of a bribe. This term does not mean that the active briber took the initiative, as the recipient could, in turn, have demanded it.
• Passive bribery – the receipt of a bribe. This does not mean that the passive briber did not take the initiative – in many cases, they might have been the first to demand the bribe.

Favoritism, cronyism – biased allocation of resources due to personal preferences. Forms of favoritism: nepotism, kinship favoritism, cronyism.

Nepotism, kinship favoritism – granting advantages to family members or close relatives (godparents/kin) regardless of their competence. Employees are treated favorably due to personal relationships, rather than professional and objective assessment of their skills and qualifications.

Cronyism – preferential treatment of friends and associates in the allocation of resources and positions.

Kickback – an illegal financial scheme in which a portion of money allocated for a specific purpose (e.g., a project or procurement) is returned as a bribe to the person making decisions or controlling the process.

Extortion – an act of direct or indirect use of access to power or knowledge, involving coercion and threats to obtain something desired (money/property, undeserved cooperation, compensation, etc.). Extortion may include threats of physical or material harm, threats to accuse someone of a crime, or threats to disclose certain information undesirable for disclosure.

Facilitation payments – technically a bribe; relatively small individual amounts paid outside of official fees to expedite the provision of certain services.

Informal facilitation payments – an unofficial reward in the form of a sum of money or a gift, paid to ease or expedite bureaucratic procedures that would be performed anyway. The purpose of such a reward is to accelerate the decision-making process, simplify bureaucratic procedures; reduce documentation requirements necessary for decision-making, create other undue favorable conditions for a positive decision.

Embezzlement, misappropriation – unlawful appropriation or misuse of property or funds. This occurs by using one’s position for personal enrichment.

Trading in influence – a corrupt practice in which an individual uses their position, status, connections, or authority to influence the decisions of another individual or body, usually in exchange for material or intangible gain. The abuse is similar to bribery, but has an important distinction: trading in influence refers to an “intermediary” or a person acting as a go-between for the decision-maker and the party seeking to obtain an undue advantage.

Patronage, sponsorship – support or protection of one person or group by another person who has more power, authority, or influence, for the purpose of appointments to positions, promotions, work contracts, etc.

Corruption related to gifts – covers cases where a gift or other financial remuneration is offered, given, requested, or received with the expectation of receiving a favor in return.

Caritas Ukraine also considers any deliberate misuse of funds, if it contradicts concluded agreements, to be corruption.

Fraud – the appropriation of another’s property or the acquisition of the right to property by deception or abuse of trust. Criminal Code of Ukraine, Art. 190

Fraud is one of the most common crimes that can occur at any time, anywhere, and in all spheres. The main goal of fraudsters is to mislead in order to gain access to money, property, or important information and achieve their own mercenary motives. Both individuals and organizations can suffer from such a violation.

In the work environment, fraud can also take various forms. For example:

• unlawful appropriation or use of the organization’s funds or other resources (embezzlement, invoicing for non-existent materials or unperformed work, payroll for non-existent employees);
• misuse of charitable assistance, funds, or other property;
• deception in the supply of goods and services (use of fictitious agreements or non-compliance with contract terms);
• falsification (forgery of reports, invoices, or other financial documents, etc.), concealment or destruction of documents;
• abuse of information (improper use of confidential data or its disclosure without permission);
• deliberate distortion, omission, or destruction of information;
• fraud via phone and internet (phishing, malicious software, spam).

Fraud and corruption do not always mean immediate financial gain for the perpetrators, but can cause financial, property, or reputational damage to member organizations of the Caritas Ukraine network, our partners and contractors, donor organizations, personnel, and beneficiaries.

Intolerance to Corruption and Fraud

“Caritas Ukraine adheres to a zero-tolerance approach and does not permit any corrupt or fraudulent abuses in the network’s operations. Caritas Ukraine undertakes to treat any allegations of corruption and fraud concerning Personnel, Affiliates, and beneficiaries with due care, seriousness, and responsibility, and strives, on its part, to apply appropriate and effective procedures in accordance with the Anti-Corruption and Anti-Fraud Policy for investigation and response in each individual case.”Anti-Corruption and Anti-Fraud Policy“, para. 2.1.