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The Impact of the Size of Bribes on Criminal Sanctions: An Integrated Philosophical and Economic Analysis

Published online by Cambridge University Press:  17 April 2024

Leora Dahan Katz
Affiliation:
Hebrew University of Jerusalem, Israel
Adi Libson
Affiliation:
Bar Ilan University, Israel
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Abstract

This article analyzes the question of how the size of bribes should impact criminal sanctions. In contrast to the commonly held view that punishment should increase with the size of the bribe, we argue to the contrary: that the punishment of the bribee should decrease with the size of the bribe. Our conclusion is based both on a philosophical argument and an economic argument. We argue that all else being equal, as an agent’s reservation price for selling public interests decreases, the culpability of the agent willing to receive a bribe increases. In addition, from an economic perspective, the expected social harm of an official acting with a low reservation price for bribes is much greater than one acting with a high reservation price: both the susceptibility of being bribed as well as the potential for social harm is much greater when the reservation price is low.

Type
Research Article
Copyright
© The Author(s), 2024. Published by Cambridge University Press on behalf of University of Western Ontario (Faculty of Law)

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References

1 This is the case, for example, in the US, Canada, Spain, and China. In addition, the UN Convention against Corruption presumes that the size of the bribe acts as a standard aggravating factor in the determination of sanctions. See United Nations Convention against Corruption, UNODC OR, 4th Year, Annex, UN Doc A/58/422 (2003). In the case of the US, the Sentencing Commission Guidelines Manual attributes significant weight to the size of a bribe in determining the appropriate criminal sanction. While it classifies the base offense level of bribery at level 14 for bribes under $6,500, which requires a jail period of between 15-21 months, the recommended sanction for bribery increases with the size of bribe, up to a life (!) imprisonment sentence for bribes of over 0.55 billion dollars. See United States Sentencing Commission, Guidelines Manual, §2C1.1, §2C1.5(a) (November 2021), online: https://www.ussc.gov/sites/default/files/pdf/guidelines-manual/2021/GLMFull.pdf. In Canada, the Canadian Criminal Code does not provide a set of detailed sentencing guidelines, and sentencing principles have been developed by courts. See Criminal Code, RSC 1985, c C-46. Courts have considered the size of bribes to be an aggravating factor: see Gerry Ferguson, Global corruption: Law, theory & practice, 3rd ed (University of Victoria Press, 2019) at 693. For instance, in R v. Kozitsyn, Justice Bourque justified a relatively harsh sentence of five months imprisonment and two years of probation on grounds of the significant amounts involved in the bribe (though the sentence was mitigated based on other factors). See R v Kozitsyn, 2009 ONCJ 455 at 26 (wherein a police officer was offered a significant percentage of the revenues of a massage parlor in exchange for not issuing the parlor any tickets). In R v. Gyles, Justice Wein of the Ontario Superior Court explained the variation in penalties imposed on public officers by referencing the size of bribes. See R v Gyles, [2003] OJ No 6249 at para 21. See also Maria Perrotta Berlin, Giancarlo Spagnolo & Bei Qin, “Leniency, Asymmetric Punishment and Corruption: Evidence from China” (2017) Stockholm School of Economics (Institute of Transition Economics) Working Paper No 34; Christine Siew-Pyng Chong & Suresh Narayanan, “The Size and Costs of Bribes in Malaysia: An Analysis Based on Convicted Bribe Givers” (2017) 16:1 Asian Economic Papers 66 at 75; Malaysian Anti-Corruption Commission Act 2009; Criminal Code (Spain), 2013/281, Article 420; Council of Europe, GRECO, 62nd Sess, Texts Adopted, Eval IV Rep (2013) at 5E; Tilman Hoppe, “Effective sanctions for corruption offenses Specialized anti-corruption courts/panels” (2021) UNDP. The Finnish penal code distinguishes between the crime of “[a]cceptance of a bribe” punishable by up to two years imprisonment and “[a]ggravated acceptance of a bribe” punishable by up to four years imprisonment, inter alia, where “the value of the gift or benefit is considerable” (if considered aggravated “when assessed as a whole”). The Penal Code of Finland, 1889, c 40, s 1-2. Beyond the formal legal tacking of sanctions to the size of bribes, studies have shown, for example in a study conducted on penalties imposed in bribery cases in the UK, that there is a correlation between the size of the bribe paid and the size of the total financial penalty imposed. See Ernst & Young, “Size of bribes and financial penalties” (2019) 13 UK Bribery Digest at 11. See also Christine Chong Siew Pyng, The Size and Cost of Bribe Given and Solicited: Analyses Based on Convicted Offenders in Malaysia (PhD Thesis, Universiti Sains Malaysia, 2017) at 85-86, online: https://core.ac.uk/download/pdf/228095815.pdf (finding a positive correlation in Malaysia between the size of bribes and the criminal sanction imposed on both briber and bribee).

2 See e.g. Susan Rose-Ackerman, “The Law and Economics of Bribery and Extortion” (2010) 6 Annual Review of Law & Social Science 217 at 224 (defending increasing penalties or risk of apprehension with bribe size on an efficiency analysis); Steven R Salbu, “A Delicate Balance: Legislation, Institutional Change and Transnational Bribery” (2000) 33:3 Cornell Int’l LJ 657, pointing to the fact that at the international level, there is almost no enforcement by the DOJ in cases of small bribes: “The cases prosecuted to date, however, are all relatively large-scale bribes, ranging from tens of thousands to millions of dollars. Enforcement for lesser violations is almost non-existent.” Ibid at 682 [citations omitted]. Salbu also argues that such distinction is desirable from a normative perspective (ibid at 688). See also David C Weiss, “The Foreign Corrupt Practices Act, Sec Disgorgement of Profits, and the Evolving International Bribery Regime: Weighing Proportionality, Retribution, and Deterrence” (2009) 30:2 Mich J Intl L 471 (representatively, presuming that proportionality requires adjusting penalties to bribe size, owing to its relation to wrongfulness, though without defending this proposition).

3 This framework is borrowed from Stuart P Green, Lying, Cheating, and Stealing: A Moral Theory of White Collar Crime (Oxford University Press, 2007) at 194. See also 18 USC § 201; Public Bodies Corrupt Practices Act 1889 (UK); Prevention of Corruption Act 1988 (UK); Israeli Penal Law—1977 § 290-95.

4 See Green, supra note 3.

5 See e.g. Andrew von Hirsch, “Proportionality in the Philosophy of Punishment” (1992) 16 Crime & Justice 55 at 81-82.

6 See ibid. See also Andrew Ashworth & Lucia Zedner, “Prevention and Criminalization: Justifications and Limits” (2012) 15:4 New Criminal L Rev 542 at 544. The Model Penal Code has adopted the term ‘culpability’ to refer to the mental states required for the commission of an offense. See United States Model Penal Code §2.02 Explanatory note at 24 (Am L Inst, Official Draft & Revised Commentaries, Pt II, Vol 1, 1980) [Model Penal Code]. Yet in its broad sense, culpability depends upon further elements that are relevant to the offender’s subjective fault (including questions of insanity, duress, etc.). On mens rea, see Paul H Robinson, “Mens Rea” in Joshua Dressler, ed, Encyclopedia of Crime and Justice (Macmillan Reference, 2002) 995.

7 See qualification in the next paragraph regarding the value of money. Bribes, of course, need not be monetary: other goods given in exchange for the bribee’s acting on the briber’s behalf include “offers of future employment, unsecured short-term (and subsequently repaid) loans, restaurant meals and tickets for athletic events, ostensibly valuable (but actually worthless) stock certificates, and even sexual favors.” Stuart Green, “What’s Wrong With Bribery” in R A Duff & Stuart Green, Defining Crimes: Essays on The Special Part of the Criminal Law (Oxford University Press, 2005) 143 at 149. See also Green, supra note 3 at 199. For simplicity, his analysis and examples all refer to monetary ‘sums’, yet this can be translated to accommodate all forms of goods exchanged, though it may be harder to compare the value of these, introducing some complications.

8 To clarify, we do not mean to imply that this argument holds if all else is not equal. If, for example, owing to the differing positions of the bribees, one’s willingness to accept a lower price is reflective of one’s relatively dire financial situation and need, rather than one’s relative susceptibility to corrupt propositions, the proposed argument in favor of increased penalties will not apply. The argument thus presents an important factor that has received no attention in the law and theory of bribery to date, and which may have a significant impact in important cases. Yet it does not automatically translate into greater penalties for smaller bribes, as other factors must be considered before the implications of the sum of the bribe may be deduced.

9 This can be expected to be the case where a bribe is solicited or where the ‘price’ is negotiated (rather than merely offered and accepted without the possibility of negotiation).

10 It should be noted that the social harm in this case is not equal to the harm to the government. The funds stolen were transferred to a different pocket, and thus do not represent a pure welfare loss. Yet the social harm may be even greater than the value of the funds. The social harm may be comprised of the loss of trust, damage to banking institutions, etc., caused by the robbery. Even though the social harm cannot be equated with the funds stolen from the national bank, it is easier to convert the stolen amount into the social cost that has resulted, while the sum of the bribe is not helpful in this respect.

11 Cf Larry Alexander, Kimberly Kessler Ferzan & Stephen J Morse, Crime and Culpability: A Theory of Criminal Law (Cambridge University Press, 2009).

12 See e.g. Model Penal Code, supra note 6 at §211.1.

13 An interesting question arises as to what happens when the public official is willing to corrupt public decision-making for nothing in exchange (i.e., when their reservation price decreases to zero). We thank an anonymous reviewer for raising this question. Notice, however, that in such cases—a paradigm instance of which might be ‘favors’ (presuming there is no anticipated future exchange)—the relevant wrongness no longer inheres in the official’s openness or willingness to be ‘bought.’ Rather, a different form of corruption is at stake, (i.e. to the extent that one is culpable, culpability will be for a different wrong, e.g. unjust partiality), which is outside the scope of bribery (see Section 2 A), both from a moral and legal perspective. It stands to reason that some cases in which the relevant ‘bribe’ tends to zero are in fact better understood as favors rather than low-reservation price bribes with high levels of culpability.

14 Once again, this holds all else being equal, including with respect to the value of money—that is, assuming no great disparity in the value of money for each bribee.

15 The values violated may include preserving the trust of the public in officials, integrity of public decision making, and the interests that officials are responsible to promote.

16 Asymmetric treatment of briber and bribee is also justified from an economic perspective. Kaushik Basu has argued for exempting the briber from any legal responsibility for a specific type of bribe: the “harassment [bribe]”, in which an agent bribes to receive that to which they are already legally entitled. Kaushik Basu, “Why, for a Class of Bribes, the Act of Giving a Bribe should be Treated as Legal” (2011) Ministry of Finance Government of India Working Paper No 1/2001 at 4, online: https://mpra.ub.uni-muenchen.de/50335/. The rationale behind such asymmetric treatment is that the interests of the briber and the bribee will diverge: after paying the bribe, the briber will be willing to cooperate in bringing the briber to justice. Knowing this, the bribee will be deterred from taking a bribe. But see Christoph Engel, Sebastian J Goerg & Gaoneng Yu, “Symmetric vs Asymmetric Punishment Regimes for Bribery” (last modified 10 June 2013), online: Social Science Research Network, https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1983969 . From experimental data, Engel et al found that asymmetric punishment leads to a higher level of execution of bribery deals. It assists in overcoming the enforcement problem of bribe deals: the asymmetric punishment generates a credible threat from the side of the briber, that if the bribee won’t deliver the former may take the latter to court.

17 See Green, supra note 3.

18 See Gary S Becker, “Crime and Punishment: An Economic Approach” (1968) 76:2 J Political Economy 169 at 172-73 (social harm is a key variable in his model for the optimal punishment for crime). See also A Mitchell Polinsky & Steven Shavell, “The Optimal Tradeoff between the Probability and Magnitude of Fines” (1979) 69:5 Am Economic Rev 880 at 880: “If it were costless to ‘catch’ or ‘observe’ individuals (or firms) when they engage in an externality creating activity, presumably everyone would be caught and fined an amount equal to the external cost of the activity. This is simply the traditional Pigouvian tax solution.”

19 See Becker, supra note 18 at 172-73, 201.

20 This approach of focusing on the benefit to the criminal and not the social harm is rooted in Jeremy Bentham’s utilitarian principles for punishment: “The value of the punishment must not be less in any case than what is sufficient to outweigh that of the profit of the offence.” Jeremy Bentham, An Introduction to the Principles of Morals and Legislation (Courier, 2007) at 179.

21 See Becker, supra note 18.

22 See ibid at 176.

23 Richard Posner explicitly rejects this notion of ‘efficient transgressions.’ In his view, any transgressions should be deterred irrespective of the utility an individual may derive from their transgression. This is due to the systematic harm of bypassing market mechanisms. See Richard A Posner, “An Economic Theory of the Criminal Law” (1985) 85 Colum L Rev 1193 at 1196.

24 See Steven Shavell, Foundations of Economic Analysis of Law (Belknap Press, 2004) at 519.

25 See ibid.

26 See ibid at 477: “[T]he rule of sanctions equal to gains is peculiarly vulnerable to judicial error in assessment of gains, and for that reason tends to be inferior to fault-based liability with sanctions equal to harm.”

27 See ibid at 520-21.

28 It should be noted that this applies only to monetary sanctions. If the sanction is imprisonment, a higher sanction will not only entail a distributive effect but will have other allocational effects and thus efficiency costs tied to it. Note also that this particular argument can be appealed to by the optimal deterrence view that pegs the sanction to the size of the bribe.

29 See Becker, supra note 18.