Offshoring at Home? Domestic Use of Shell Companies for Corruption. (2nd January 2017)

• Record Type: Journal Article
• Authors: Jancsics, David
• Is Part Of: Public integrity. Volume 19:Number 1(2017)
• Page Start: 4
• Page End: 21
• Publication Date: 2017-01-02
• Subjects: brokerage -- central and eastern Europe -- corrupt public policy -- Panama Papers -- shell company; Civil service ethics -- United States -- Periodicals; Public administration -- Moral and ethical aspects -- United States -- Periodicals; Political ethics -- United States -- Periodicals; Civil service ethics -- Periodicals; Public administration -- Moral and ethical aspects -- Periodicals; Political ethics -- Periodicals; Civil service ethics; Political ethics; Public administration -- Moral and ethical aspects; United States; PUBLIC ADMINISTRATION; CIVIL SERVICE; MORAL ASPECTS; POLITICAL ETHICS; Periodicals; 172
• DOI: 10.1080/10999922.2016.1200412
• Languages: English
• ISSNs: 1099-9922

Abstract

Abstract : The recent "Panama Papers" leak has revealed that public figures in several countries use offshore shell companies in order to hide their real wealth behind murky foreign ownership structures. Less well known is the fact that corrupt policy makers also use shell companies in their own home countries that function as intermediaries to divert public resources for private benefit. Based on a qualitative empirical analysis, this paper describes how corporate vehicles are used by corrupt government officials in contemporary Hungary. One can distinguish "live" shell and "empty" shell companies. Live shells are used by governing elites to build clientele networks or to provide monopolistic market positions for oligarchs. Empty shells are technical vehicles used by local government actors to create valuable assets that can be sold for extra profit. Onshore shell entities are shown to be essential organizational structures supporting governmental corruption.