THE NECESSARY DISTINCTION IN TREATMENT OF PUBLIC AND PRIVATE CORRUPTION BASED ON THE ECONOMICAL IMPACT TO THE SOCIETY - AN INTERNATIONAL CONSTITUTIONAL PERSPECTIVE

Mário Baracho Thibau[1] ; Paulo Marajá Mares Guimarães** & Arthur Magno e Silva Guerra***

ABSTRACT: This paper presents prospects for the necessity of dual treatment of corruption between the private and the public sphere. The review of the academic research so far concludes that there is efficiency in fighting the corruption in the private sphere by applying the compliance doctrine, therefore the corruption in the public sphere is more dangerous for the economic development of a country. The review of the corruption phenomenon is done from a Brazilian perspective, by showing that only recently such issue is being solved within the country and the economic impacts it withstands.

     Brazil is a country ravaged by corruption probes, as they unraveled in the light of the global legal community something good come out of it. The legal system of Brazil, from the early 2008, has been rapidly evolving and searching for new ground-breaking anti-corruption laws that may be applied by its pairs in the emerging markets legal systems. The misuses of power in the public sphere in Brazil generate more widespread economic damages, being more offensive to the Rule of Law principle, then the private corruption sphere even though the equivalence of the concept of corruption in the dual perspectives. Therefore, there is relevance in the public/private divide in anti-corruption law.

KEYWORDS: distinctive treatment of public and private corruption; dual perspectives of corruption treatment; economic impact of corruption in societies; corruption and democracy; corruption and economic growth; Brazilian anti-corruption instruments.

I. INTRODUCTION

Astonished by the “Mensalão” corruption probe the Brazilian society used a direct democratic mechanism know as popular legislative initiative, signed by 1.6 million citizens, to enact an anti-corruption law, bill number 135 of 2010, that became known as Clean Files Law. Such bill prevents convicted corrupt politicians from running for office. Never the less, Brazil fostered a major economic crisis that lead the country into a recession by late 2013, caused by corrupt practices in the government administration. Such economic turmoil had its roots in political schemes that jeopardized the sustainability of growth in trade and consumption of goods. The Brazilian scholars and lawmakers then initiated a series of studies in anti-corruption practices aimed at solving the social and political troubles.

The importance of researching the phenomenon of corruption is of paramount importance for emerging markets, since it is a natural cornerstone for the transition to a developed economy and society. This review’s aim is to justify the need for more harsh legislation and punishments for corrupt practices that take place in the public sphere. In order to do so we must conceptualize corruption and differ the public and the private branches of it.

One of the most interesting legislations we may be drawn upon is the compliance guidelines, from the United States of America, created by official documents reviewed by the Foreign Corrupt Practices Act (FCPA) judicators such as the Department of Justice (DOJ), the Securities and Exchange Commission (SEC) and the Resource Guide to the US Foreign Practices Act (Resource Guide). With such bills in mind, Brazil enacted legislation number 12.846 of august of 2013[2], this is the country standard of administrative responsibilities of private enterprises facing corrupt practices charges against public authorities, Brazilian or Foreign.    Also, the other law number 12.850 of 2013, is known as the Brazilian plea-bargaining law, it was inspired by a study of the United States of America (USA) legal system. With this new legislations Brazil had the first anti-corruption laws declared constitutionality supported. Furthermore, the Supreme Court had the mechanisms to begin big criminal investigations that shocked the world by the size of the corruption scope and its consequences, such as a political and economic shift inside its domestic jurisdiction. In this paper we explain such scholarly awaken and look forward for the further development of anti-corrupt mechanisms under law.

II. THE CONCEPT OF CORRUPTION

Once upon a time a PhD scholar in Salamanca spent more than two hundred pages seeking a definition for corruption. His research only stopped because he was warned by an advisor that this obsession would not be feasible in the way he meant to. Fonseca[3] points out that corruption, besides being classified as one of the oldest activities in the world, is currently a social problem that jeopardizes the stability and security of society, threatening to jeopardize the social, economic and political development, both in the national and international levels.

Defining or conceptualizing corruption, like the great majority of social phenomena, is not an easy task. It seems more appropriate to seek its description through analytical situations, from the notion that it is always related to the idea of the abuse of power, of misuse of public resources for personal purposes.[4] Well, historically, the idea of corruption was seen as a manifestation in physical bodies, including those of animal origin. There was talk of "corpse corruption," with the onset of putrefaction. Later, with early thinkers, this stage of the corpse was associated with political and social structures and even with human behavior. There are many records in history about corruption, always acknowledged as an injury that could incur in a great evil.

Over time, modern state scholars have altered some elements of the original concept of corruption calling it, even in an ideal form of government, an illicit practice for the benefit of the few in detriment of the common good. As discussed above, the concept of corruption varied over time, having traveled through various paths and groups of definitions. We can find a concept of corruption born in dictionaries, social sciences, law, economics, sociology and public opinion.

Corruption in dictionaries has plentiful explanations and yet, it is never the less insufficient to mold a solid definition. An interesting meaning for corruption is: the practice of dishonest or fraudulent conduct by those in power, usually involving bribery or kickbacks. Such definition is also found among social scientists who analyze the theme. However, if we observe those dictionaries contained defines, the major difficulty to consolidation of concept lies in the fact that each researcher can consider a certain aspect to be more relevant. It may also be the result of the excessive ambition or greed of the corrupt agent, flaws and loopholes that are quite peculiar to the state bureaucracy, as well as its multiple obstacles to the flow of business in general.

The concept of corruption is known to vary in time and space, which shows that corruption is a fluid but constant issue. Each society, in its own time, has its set of rules of conduct in law, moral and ethical terms. The society ends up accepting certain reprehensible practices as normal depending on the time they occur or in the culture of its outlying society. In the field of law, corruption is classified as a crime. A crime defined by criminal law both in an inner state jurisdiction as in the international law. In order to protect the correct mechanism of the state bureaucracy, corruption is considered a crime and fighting it through legal prosecutions may bring a regular operation of state fulfilling the general interest of the common citizens. On the economic side, corruption is not objectively conceptualized. It is understood that it can’t be attributed exclusively to the behavior of the individual, as Its causes are sometimes structural.

Corruption is also influenced by other economic variables, in particular: a) lack of transparency in public and private business; b) high discretionary power in the hands of a few and exclusive of public officials; c) excessive regulation from the State; d) public prices given and determined by government officials, jeopardizing the free market economy; e) monopoly in government concessions, contractors, licenses, permissions and authorizations to the exercise of private activities; f) inefficient and oversized state bureaucracy. For sociology, corruption is seen as behavioral pattern in a given environment. It is conditioned by the dominant culture and customs. In this perspective the human being has as motif for this corrupt behavior or to the acceptance of such practice in public sphere, his own well-being, that of his family and his personal relationships. Finally, for public opinion corruption are practices that generate benefits for an individual of a small group to the detriment of the community or the broader society.[5]

A. THE ACADEMIC DIVIDE OF PUBLIC/PRIVATE CORRUPTION

The division between public and private corruption that was once more marked by globalization today is bound to disappear, since the definition of what is public as opposed to private has ceased to exist so clearly.[6] In this sense, it is the lessons of Günther Teubner[7]:

I would not like to suggest only the rejection of the separation of the public and private sectors as a gross oversimplification of the current social structure, but would also propose the abandonment of all ideas of a fusion of public and private aspects. Instead, the simple public / private dichotomy means that the activities of society can no longer be analyzed with the help of a single binary classification; rather, the current fragmentation of society into a multiplicity of social sectors requires a multiplicity of perspectives of self-description. Analogously, the simple state / society dualism, reflected in the division of law in public and private, must be replaced by a plurality of social sectors reproducing, in turn, in law.

Although it is no longer clear what public or private corruption is, in the traditional view which is now widely criticized by the way, in practice this division still persists, taking into account the nature of its agents, the origin of goods, advantages or money. According to this perspective, only abuse or deviance in the exercise of public powers related to the economic or political activity of the public authorities and their use for the benefit of private interests could raise the issue of corruption. Taking this premise into account, corrupt behavior presupposes the conflict between public and private interests and the unlawful use or misappropriation by public agents of their public functions.[8] Although not specifically conceptualizing public corruption, Affonso Ghizzo Neto[9], in defining corruption, demonstrates his traditionalist view of the subject, hence restricting his concept to the public sphere. In Neto’s own words:

Corruption can be identified with the voluntary willingness in certain social groups and individuals to disrespect or manipulate the current legal system, being undeniably associated, as a rule, with political power and public activities. The reference is not absurd, since the ideal of corruption is much more elaborate, complex and articulated than it superficially presents. In addition to directly targeting politicians and public servants, corruption contaminates a large part of society and its constituents with the tendency of total destruction.

Likewise, is the understanding of the World Bank which, in conceptualizing corruption, establishes that it is the abuse of public power for private benefit. With regard to private corruption, the need to redefine the notion of corruption, bringing to its scope hypothesis where public authorities are not clearly involved. Such hypothesis have been leading scholars to turn their eyes to the private sector. The social subsidy, through the allocation of public funds to non-governmental organizations (NGOs); the delegation, concession, granting of public services to private companies; the habitual use of typical legal instruments of private law by the public power; have resulted in creating a nebulous scenario to define what is public and what is private.

It has been realized that frauds are occurring in large corporations. The use of privileged information in businesses involving the capital market and the deviations verified in the financial system, can generate negative effects on the economy of a country or, in some cases, even on global finance, directly affecting the interest of the whole community.[10] The unequivocal conclusion reached is that corruption can no longer be related only to situations in which a deviation from the public interest to the benefit of private interests occurs. It is also necessary to speak of a diversion of private interests in the private sector that cause prejudice to the interests of the community.

In such an interdependent society, situations in the public sector interfere with the private sector and situations in the private sector, even if restricted to two business societies, reverberates in the public sector. Therefore, the dichotomy between public and private corruption, as emphasized by Günther Teubner[11], should no longer exist. It should not be concluded, however, that the solution is state interventionism. Casuistically, the State must use its power to fight private corruption, thus allowing free enterprise. Such distinguish between spheres of corruption were a legal innovation of the French lawmakers during the XIX century.

B. THE FRENCH PENAL CODE DISTINGUISH OF PUBLIC AND PRIVATE CORRUPTION

Contrary to the criminalization of public corruption, which appeared very early in French criminal law, private corruption was incriminated at the time of the legislative reform on December 16, 1919, by which new provisions were introduced in articles 177 and 179 of the French Constitution. The French Criminal Code of 1810 came to typify corruption. This premature typification of the crime of corruption among private individuals in French law is directly related to the environment experienced by the European nations after World War I.

As a result of the military confrontations, the great majority of European nations, including France, were plagued by a huge crisis of shortages, including primary products. It was quite common for company officials, responsible for the production or marketing of these products, to manipulate the market prices in order to receive bribes and kickbacks from the beneficiaries, failing to comply with their obligations.[12] Only those who were willing to make undue payments were able to enter the market. Therefore, it can be assumed that when French legislation was amended to typify corruption among individuals, it was sought to reestablish the regularity of economic processes, necessary for social development.

In order to protect the public interest in the regular distribution of scarce products, which was caused by the catastrophic post-war environment, obligations were created for employees in the private sector institutions which became punishable, as with public officials, by the celebration of sceleris pactus at the core of their activities.[13] At Gontijo’s explanation (De la corruption des functionnaires publics et des employés de entreprise privées) any employer, employees or agents who solicit or accept donations, gifts, bribery, kickbacks, commissions, discounts or prizes to practice, or abstain, from acts of their own functions configure the crime of corruption in the private sphere. Corruption committed in the private sphere by means of a misuse of power was punishable under French Law with a prison term of one to three years with additional payment of a fine.

From the analysis of article 177 of the old French Criminal Code, it appears that the ordinary legislator contemplated only the passive modality of corruption in the private sector. Therefore, authors, employers, employees or agents, who accept or receive an undue advantage, corrupt, are punished in the condition of author, without the possibility that they would be punishable autonomously as corruptors, who promised or donated gifts, commissions, discounts or premiums.[14] After that critical moment in French history, as the market come to produce a reasonable quantity of resources and products to supplying the basic needs of the common, as the chaotic events of the post-war period have been surpassed, the public concern with the distribution of commodities was transferred to the protection of the integrity of the relations of trust, loyalty and good faith between employees and employers.

It was considered that the deviant behavior of the employee and the rupture of the relationship of trust with his employer were the focal points of the crime of corruption among individuals.[15] Based on the assumption that abusive conduct by employees would primarily violate the employer's private rights the acts outlined in article 177 were then moved to the French Labor Code in 1994, with the reform of the French Penal Code. As quoted:

Article 152-6. The fact of any director or employee request of approve, direct or indirectly, without previous allowance or knowledge of it’s employer, offerings or promisses, donations, presents, discounts or bonuses, in order to act or abstain from acting of its function or facilitated by it, is punishable with two years of imprisonment and a fine of 30.000 euros.

It is punishable with the same penalties, the fact, by whomever which cedes to such solicitations refered to at the previous line or taking the innitiative in order to do so.

At the predicted cases of this article, the court may equally condem, as a compliementary penalty, for a deadline of no more then five years, the withdraw of the civic rights, politic rights or family rights, as mentions article 131-26 of the Criminal Code.[16]

Broadly speaking, the old French “Code du Travail” sanctioned the conduct of the individual who, on the one hand, offers, promises, delivers or pays an undue advantage, so that the employee, in the framework of his professional or business activity, without knowledge or permission from his employer or abusing his or her good faith, carry out or refrain from carrying out acts proper to his or her office, aiming at the perception of this undue benefit.[17]Given the construction of the respective criminal types and considering that what is intended to protect through them are the relations of fidelity and good faith existing between employees and employers, it is possible to conclude that, according to this model, the nerve center of the crime of private corruption refers to the fact that the employee acts without knowledge or permission of the employer, abusing his good faith.

To sum up those intents, we could argue that the planned reprehensible conduct, by means of criminal typification, is that of the employee who fails to perform his duties of office, in violation of the confidence in him deposited, incurring at the abuse of the good faith and trust they were given by the employer, thereby violating the rules of governance that regulate the subordination of the employee, more specifically those related to fiduciary duties and employee loyalty to its employer.[18] It was thus at the private disposal of the employer to initiate prosecution of a corruption crime and to freely decide whether the state's repressive power would act in the face of an employee who practiced any of the behaviors typified in article 152-6 of the French Labor Code. Based on the analysis of the behaviors outlawed by the French Labor Code, we can say that employees, lato sensu, were punishable with the signing a sceleris pactus with a corruptor in detriment of their employer in order to conduct behaviors that were incompatible with their work duties, to receive donations, pledges of prizes or any undue benefits.[19]

Although the practice of acts of misuse of power in private sphere relations was limited, the concrete situations in which these issues were taken into account by the Judiciary branch were few. This can be explained by the fact that the typical figure is little known, both by the employers and by the employees. Because of this low effectiveness, and also the advent of international texts that required the treatment of acts of private corruption under a publicity and not a secrecy bias, as was the case in the French Labor Code. A new model of repression to the crimes of corruption in the French legal system, by means of which it was unsuccessfully intended to create criminal offenses that would comply with the content of Council of Europe Framework Decision 2003/568 / JHA.[20]

Over the course of years it became clear that the prediction of the crime of corruption among private individuals, contained in article 152-6 of the French Labor Code, did not meet the international demands regarding the repression of this criminal modality, since the typification model of criminal law, hitherto adopted, housed only the interests of the employer as regards of loyalty and trust in and of its employees. Indeed, there was no concern for the protection of competition. In this context, in a legislative reform process, Law no. 2005-750 was adopted, on July 4, 2005, which revoked the former Article 152-6 of the French Labor Code.

A legislative change has become necessary in view of the adoption of the Framework Decision of the Council of the European Union of 22 July 2003 on the fight against corruption in the private sector, which has tended to harmonize the offenses and penalties provided for in legislation criminal law in the Member States on active and passive bribery in the private sector. This European text is an extension of the Community legal instruments. It incorporates the will of the states of the European Union affirmed in a joint action on corruption of the private sector, adopted on December 22, 1998, to provide an international response to the favoritism that could distort competition, the formation of monopolies and attacks against free competition. A new Chapter has been inserted in the Penal Code. In its article 445, the typical figures of the crimes of active and passive corruption in the private sector, inscribed in an autonomous way in the French legal system, in the terms transcribed below: [21]

Article 445-1. It is punishable with five years in prison and a fine of 75.000 euros, the fact, by whomever, of proposing, without the right or unlawfully, at any moment, directly or indirectly, to a person which, without being invested with the public authority, neither in charge of a mission of public service, neither invested with a public elective mandate which exerts, in the context of a professional or social activity, a position of management or a job to a company,  entrepreneur or a organization, offerings, promises, donations, presents or advantages whichever, to itself or to another, in order to act or abstain from acting, or because it has acted or abstained from acted, that is proper to its position or made easier by such action at that position, in a direct violation to its lawful duties, contractual or professional obligations.

Article 445-2. It is punishable with five years in prison and a fine of 75.000 euros, the fact, by whomever, of soliciting or accepting, without being invested with the public authority, neither in charge of a mission of a public service, neither invested with a public elective mandate which exerts, in the context of a professional or social activity, a position of management or a job to a company,  entrepreneur or a organization, offerings, promises, donations, presents or advantages whichever, to itself or to another, in order to act or abstain from acting, or because it has acted or abstained from acted, that is proper to its position or made easier by such action at that position, in a direct violation to its lawful duties, contractual or professional obligations.[22]

Analyzing the legal predictions quoted, it is interesting to note that, unlike what happened with the typification model previously adopted, corruption in the private sector was treated differently in its two modalities. Autonomy was given to behaviors of active and passive corruption, and linkage between them was dispensable. Such circumstance allowed the isolated practice of crime in the active modality, for example, without the corresponding act of acceptance of the advantage; the passive corruption, in turn, would be configured, even if the extraneus did not agree to the payment of undue advantages to the intraneus.[23] The verification of the constituent elements of the criminal type shows that the corruptor, when offering or giving advantage to the individual who intends to corrupt, acts with the purpose of fomenting the professional action deviated from the corrupted, which is stimulated to practice or refrain from practicing act functional, in violation of its legal, contractual or professional obligations lato sensu (un acte de son activité ou de sa fonctions ou facilité par son activité ou sa fonction, en violation de ses obligations légales, contractualles ou professionnalles).[24]

C. ADOPTED CONCEPT OF CORRUPTION IN THIS PAPER

As already explained in the previous topic, there is no longer a clear border delimiting what would be public and what would be private. The discussion about the framing of acts. private partnerships under what until very recently was understood by corruption is still not pacified among the scholars of the subject. However, as stated by Diogo de Figueiredo Moreira Neto and Rafael Veras de Freitas[25], corruption is the antithesis of democracy, since, after all, this social plague is nothing more than the denial of both these golden civilizing rules, the old and the new.

Since a corrupt democracy produces nothing more than a grotesque simulacrum of justice hence the importance and urgency of its eradication in all countries. Thus, using the words of Alvaro Ricardo de Souza Cruz[26], we can conceptualize corruption as any legal act or business, through the autonomy of the will, whether public or private, that generates social effects, inducing a third to error, having a social character, and may be illegal or just immoral.

III. DOCTRINES OF COMPLIANCE AND AUDIT AS ANTI CORRUPTION INSTRUMENTS IN THE PRIVATE SPHERE

The share of government spending as a percentage of global GDP has been steadily increasing since the 1.960’s as according to data compiled by the World Bank, Table 26, as such the problem of corruption in the public sphere has been worsening gradually in a global level since more share of wealth is being exposed to such a risk. Never the less, the corruption is a phenomenon that not only affects the public sphere, but also affects the private sphere of the market in a global level.

In order to address the private corruption, we must recognize it as a fundamental flaw in the human nature and in the capitalist system. Also known as the big corruption the corruption in the private sphere may affect or relate to the public sphere or not, but as always, the corruption causes negative impacts to the larger societies. Private corruption actors may be big corporations, corrupt investors, capitalist scammers, pyramid scammers, con-artists, banks and entrepreneurs, that take advantage of their large amount of economic power, credibility or charisma to establish monopolies, commit fraud, steal money, abuse the masses and often incurring in the practices of: dumping; cartel (market, international or biddings); predatory prices; Influence of uniform conduct; Territorial and customer base restrictions; Exclusive agreements; Married sale; Abuse of dominant position; Refusal to hire; or sham litigation. In Brazil such conducts are illegal under the article 36 of the bill number 12.529 of 2.011.

But there can be smaller actors in the private corruption sphere such as private employees that steal money, products, take kickbacks, offer illegal or immoral advantages, offer bribery, incur in harmful practices for consumers or investors, etc. inside their own employer’s establishment, in business negotiations or in the general market, harming the free trade in markets, making them less fair and even. Such small private corruption practices are also very harmful to society as the distort the natural market conditions, operating outside the scope of Law and regulations. To cope with the private sphere corruption phenomenon in the United Kingdom was created the doctrine of compliance and audit, which later spread around the globe since it was a successful experience for the local British society.

Such doctrine consists in creating mechanisms of self-regulation inside private institutions, to achieve more transparency, accountability and corporation governance practices, that not only have the forensic aspect of investigating all the harm that was done to a private institution, but to discover how it happened, who committed the harmful deeds, how to avoid further damage, how to improve the functioning production methods of the institution, how to make it more fast, efficient and effective, etc. The doctrine of compliance evolved to not only fight against corruption, but also to ensure the institution is operating in accordance to law and at its best operating methods. The compliance program generally involves a series of audits, under independent auditors, compliance officers and dashboards, that are not directly related to the company of institution audited. As defined by researchers in the University of Trento, Italy:

Compliance is a term generally used to refer to the conformance to a set of laws, regulations, policies, or best practices. Compliance governance refers to the set of procedures, methodologies, and technologies put in place by a corporation to carry out, monitor, and manage compliance. [27]

    The Anglo-American doctrine of compliance and audit has been influential in all other legal systems, in a sense that it has become a common institution in most if not all of top global market economy societies and legal systems, that enable a fight against corruption in the private sphere. As seen at the study conducted by the University of Trento, Italy, in partnership with Deloitte Counsel, Paris, PricewaterhouseCoopers Accountants, Rotterdam, Netherlands, more and more enterprises invest big sums of money into the development of compliance dashboards.[28]

A. THE CORPORATE GOVERNANCE AS A FACTOR OF VALUE CREATION, ITS ANTI-CORRUPTION IMPACT IN SOCIETY AND ECONOMY

As we refer to compliance governance as an anti-corruption practice in the private sphere, we may conclude that the justice system must not have such an incisive approach into the private sphere, other than to guarantee a fairness and level ground in which consumers, competitors and enterprises can coexist harmoniously. By its definition the private corruption takes place outside the state boundaries as such it plays a certain role in the capitalistic society, as we may see the rationality behind the theory of “grease of the wheels”, table 17, it may open previously closed markets to new consumer goods and end up having a positive effect in a society, such as seen in some African countries with high corruption perspective levels and big percentage of economic growth as measured by the World Bank. Private corruption levels are also related to levels of morality and respect to others inside a society.

The great Scottish philosopher Adam Smith mentions, in one of its great works “Theory of Moral Sentiments” (1.759), that social psychology is a better guide to moral action then reason. It identifies the basic rules of prudence and justice that are needed for society to survive, and explains the additional, beneficent, actions that enable it to flourish. As seen in its reviews by the Adam Smith Institute.[29] Adam Smith[30] also ads that individuals in a society can better self-regulate their relations then a higher organizer would, since they know better their own aspirations and rules of motion, just like chess pieces in a chessboard.

Corruption is a deviance in the moral sentiments and fairness inside a society, but as pointed out by Smith, society itself can fight private corruptions, and such institutions to fight it appear expontaneously in it. The only commandment for Law is to ensure the firm execution of the justice and mechanisms created in the private sphere to self-correct. As private enterprises fight corruption they gain value in the eyes of the public, often translating into monetizing gains, stock build ups, more consumer confidence in that enterprise and positive side effects in that venue.

Little else is requisite to carry a state to the highest degree of opulence from the lowest barbarism, but peace, easy taxes, and a tolerable administration of justice: all the rest being brought about by the natural course of things.[31]

     Based on the ideas expressed by Adam Smith it is arguable that private corruption has limited negative effects in society. The private sphere itself tend to self-organize and repulse its flaws, as long as it has the full support of an independent system of Law to assist its endeavors.

B. THE REASON THE INSTITUTION OF COMPLIANCE AND AUDIT IS BEST TO FIGHT PRIVATE CORRUPTION, BASED IN THE RULE OF LAW AND UNITY OF ACTION

This paper follows the classical logic of Adam Smith in its book “Theory Of Moral Sentiments” to point out that the best way to fight corruption is to avoid it by preventing the misuses and abuses of power in both public and private sphere. The general morality and cultural standard of empathy inside a society is the most efficient way to prevent corruption in the private sphere since it comes from an innate sense of ingenuity and solidarity between individuals. It prevents corruption at the point that one person will abstain from misleading others and taking personal benefits if it worries and cares about the others, and does not wish that certain practices happen to its own prejudice.

Morality and the Rule of Law, are principles under Law and Social norms that have overlapping effects and great influence within society, they refer to the constraint upon behavior, including behavior of government officials. In the private sphere morality and the notion of a system that abides under the Rule of Law is a major push to prevent corruption practices. Never the less, such concepts aren’t always enough to constrain corruption.

Corruption in the private sphere don’t shift the general notion of the impartial spectator, since it may come to general conclusion that corruption in these terms can be an isolated case. But it must also be punished under the standards of Morality, Rule of Law and Unity of Action, by the Legal Institutions, the International Law, State Prosecutors and the Common people. As such, the misuse of power in private sphere can be effectively prevented and corrected with the regular administration of Justice and Law counting with the help of anti-corruption institutions like Compliance and Audits. In the realm of Law, the joint action of the principles of Rule of Law and Unity of Action, applied under Compliance and Audit programs, have been a successful tactic against corruption, in the private sphere more than in the public sphere.

IV. FINAL CONSIDERATIONS

Based in the research and the data collected in this paper we can assert that public corruption has broader negative effects then the private corruption.  Therefore, the corruption in the public sphere needs to be more harshly punished and prosecuted by the countries, its institutions as well as the comparative legal systems must converge to the best practices experienced in countries that are tackling the issue with good transparency and fierce energetically spending resources into developing new legal doctrines and norms in order to do so. Another conclusion that can be pointed out is that, with the globalization of the markets and a push to free trade policies, local corruption scandals can assert broader economic distress in countries unaffected into such schemes. Taking the Brazilian case, it reveals that domestic corruption and political struggles have asserted a negative growth effect into all other Latin American countries, also causing mistrust in the broader Emerging Market spectrum, causing a risk off or risk avert, making developed world class investors to have less appetite for undeveloped countries businesses opportunities.

The institution of compliance and audit in the Comparative International Law branch has had effective results both in developed and in undeveloped private corruption probe solutions, therefore even if is still a problem it is under management and dwindling.   As seen on table 26, the share of state public funds as a percentage of global GDP has been on trend to continue rising, proving a point that the global economic order is more and more in the hands of state affairs, public sphere, depressing private economical relevance. As such the public corruption sphere is indeed becoming a Paramount issue of enormous global and international consequences, even causing social distress that lead to war and famine in more unstable systems.

The final assertion is that public corruption is a rampant problem that needs to be handled in an international cooperation of countries basis more seriously. It deserves a doctrine of International Law that can be applied in a comparative constitutional perspective to consolidate practices of anti-corruption and punishment for the misuses of power.

A. COMPARATIVE RESULTS PERSPECTIVE

The establishment of a Rule of Law leads to reflections on its claim. This is because the elements of structuring a Democracy solidify, not only, as to its preliminary concepts, such as "citizenship", "political rights", "political regime"; but they advance to the deepening of other questions specific to the problems of the functioning of the state machine. Democracy, by the way, is formed of the plurality of issues surrounding it and end up being debated in the public space. It is quite true that it, some say, brings with it awkward reflexes, especially of those who dispute the governmental positions. 

If the gears work well, the perfection of their institutions leads to the strengthening of the legal order, and consequently of the Constitution and, finally, Democracy itself. Apparently, there is a persistence in the notion that the structural objectives of the State are being achieved. However, it should be noted that not only the crucial elements of a Democracy - without observing other secondary ones at an early stage - are necessary for its real consolidation. One of the issues that most disturbs this evolution is the tangent to corruption. Its recognition has been thematic that overwhelmed the countries.

Several denunciations that surround the rulers have caused the necessary annoyance to those who, in one way or another, end up getting involved in the great number of accusations denounced. It is therefore important that research opportunities are opened up. One cannot, by any means, want to curtail these deep quarrels that have been established, whether they are a mere confrontation between government and opposition; are useful to the full explanation of the backstage of politics. Corruption is a phenomenon that is coming, more and more, on a world scale, spreading to the countries. At the same time, poverty and inequality are also multidimensional and complex problems, known to be aggravated by frauds, deviations, damages and inconsistencies in the application of public resources. Extinguishing poverty has been a challenge for governments and for humanity in general. Yet, misery has been impeding the development and strengthening of state institutions.

In its day-to-day operations, the Government submits to the supremacy of the public interest over the private, and should be governed as a rule by the "Principle of legality". In this construction of the relations, the paradigms of Public Law, in a general way, have been rethought, in order to allow some flexibilization, as far as their concepts, traditional institutes and elements of public interest reach are concerned. Knowing that a Republic is guided by principles such as Responsibility, Transparency, Publicity, Equality of Opportunities, Impersonality and, finally, Morality, new outlines must be drawn, so that, in a democratic state that is intended to be sustainable, of the achievement of the final interest of public policies, bidding and contracting, inspection, political-electoral relationship, budget and taxation. However, the intra-institutional and extra-institutional relationships of the Public Administration have sometimes been corrupted by diverse forms and elements that prevent the full development of the state's objectives and the fulfillment of the primary public interest. Treated as a "social pathology", corruption needs to be addressed, no longer by frozen preconceptions that prevent its full recognition and appropriate treatment.

It is very common to hear that its cause is social, historical and / or cultural. However, the findings need to be intensively researched, addressed by data, research, more in-depth historical studies, interdisciplinarity, and other real data-enabling elements to understand, treat, and combat such a disease. Although the expectation of fighting corruption is the basic principle of administrative morality in all legal science, the theory is still far from practical. Thus, the study carried out, related to the action of the Federal Supreme Court, regarding the treatment given to Corruption, has as its primary objective the understanding of the possible negotiating limits to the Public Power, so as to establish, within justified legal standards, mechanisms discourse. It is necessary to evaluate doctrinal and jurisprudential positions on the subject of Corruption. Only then, it is possible to systematize, in a responsible manner, the study of "anticorruption practices", from aspects of prevention, treatment and fight against Corruption, with mechanisms of innovation and transformative initiatives regarding transparency. Therefore, being open to the constant exchange of ideas with what is being done and produced in Brazil and in the world is a fundamental condition for a more transparent and more effective State in the treatment of this "Social Pathology”.

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Rossetto, Patrícia Carraro; Prado, Luiz Regis. “Contributo ao estudo da corrução delitiva entre parcitulares: a study on corruption offenses between individuals”. Revista Brasileira de Ciências Criminais, vol. 14, maio-junho 2015. at 1-100.Brazil.

Salomão, Ribas Junior. “Corrupção Pública e Privada: quatro aspectos: ética no serviço público, contratos, financiamento eleitoral e controle”. Salomão Ribas Junior. Belo Horizonte: Editora Fórum (2014). at 1-100. Brazil.

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[1] Master of Law’s (LL.M) degree scholar by Faculdade de Direito Milton Campos, Belo Horizonte, Brazil, email: srg_mthibau@hotmail.com.

** Master of Law’s (LL.M) degree scholar by Faculdade de Direito Milton Campos, Belo Horizonte, Brazil, email: pmaraja@gmail.com.

***Doctor’s degree in Public Law by Pontifícia Universidade Católica de Minas Gerais. Master of Law’s (LL.M) degree by Universidade Federal de Minas Gerais. Post-Graduate’s degree in Municipal Public Law. email: arthurguerra@colenpeixotoguerra.com.br

[2] RESENDE, Mariana Barbosa Araújo. Mestranda pela UFMG. Apud. FÉRES, Marcelo Andrade, CHAVES, Nathália Cristina [orgs.]. Sistema Anticorrupção e Empresa. 1ª reimp. Belo Horizonte: D’Placido, 2018. at 278-279. Brazil.

[3] FONSECA, Anderson Freitas da. O combate à corrupção sob a perspectiva internacional. Disponível em:< https://revista.ufrr.br/textosedebates/article/view/1185/960>. at 1. (visited 08 february 2018).

[4] FURTADO, Lucas Rocha. As raízes da corrupção no Brasil – estudos de casos e lições para o futuro. 1ª edição – Reimpressão. Belo Horizonte: Editora Fórum, 2014. Apud. RIBAS JÚNIOR, Salomão. Corrupção pública e privada – quatro aspectos. Belo Horizonte: Editora Fórum, 2014. at 27. Brazil.

[5] FURTADO, Lucas Rocha. As raízes da corrupção no Brasil – estudos de casos e lições para o futuro. 1ª edição – Reimpressão. Belo Horizonte: Editora Fórum, 2014. at 1-100. Apud

RIBAS JÚNIOR, Salomão. Corrupção pública e privada – quatro aspectos. Belo Horizonte: Editora Fórum, 2014.

[6] Ibid. at 31.

[7] TEUBNER, Günther. Após a privatização: conflitos de discurso no Direito Privado. In: Direito, sistema e policontextualidade. Trad. de Jürgen Volker Dittberner. Piracicaba: Unimep; 2005, at 237. Brasil.

[8] See Furtado, above n 7, at 30.

[9] GUIZZO NETO, Afonso. Corrupção, Estado Democrático de Direito e Educação. 2008. Dissertação (Mestrado em Direito) – Faculdade de Direito, Universidade Federal de Santa Catarina, Florianópolis, 2008 at 99. Brazil.

[10] See Furtado, above n 7, at 32.

[11] See Teubner, above n 9.

[12] GONTIJO, Conrado de Almeida Corrêa. O crime de corrupção no setor privado: estudo de direito comparado e a necessidade de tipificação do delito no ordenamento jurídico brasileiro. São Paulo: USP/Faculdade de Direito, 2014. at 111. Brazil.

[13] GONTIJO, Conrado de Almeida Corrêa. O crime de corrupção no setor privado: estudo de direito comparado e a necessidade de tipificação do delito no ordenamento jurídico brasileiro. São Paulo: USP/Faculdade de Direito, 2014. at 111. Brazil.

[14] Ibid, at 112.

[15] See Gontijo, above n 15.

[16] See http://www.senat.fr/rap/l07-051/l07-0512.html. the text in French is:

Article 152-6. Le fait, par tout directeur ou salarié, de solliciter ou d'agréer, directement ou indirectement, à l'insu et sans l'autorisation de son employeur, des offres ou des promesses, des dons, présents, escomptes ou primes pour accomplir ou s'abstenir d'accomplir un acte de sa fonction ou facilité par sa fonction, est puni de deux ans d'emprisonnement et de 30000 euros (1) d'amende.

Est puni des mêmes peines le fait, par quiconque, de céder aux sollicitations définies à l'alinéa précédent ou d'en prendre l'initiative.

Dans les cas prévus au présent article, le tribunal peut également prononcer, à titre de peine complémentaire, pour une durée de cinq ans au plus, l'interdiction des droits civiques, civils et de famille prévue par l'article 131-26 du code pénal.

[17] ROSSETTO, Patrícia Carraro; PRADO, Luiz Regis. Contributo ao estudo da corrução delitiva entre parcitulares: a study on corruption offenses between individuals. Revista Brasileira de Ciências Criminais, vol. 14. at 05. maio-junho 2015. Brazil.

[18] See Prado, above n 18.

[19] See Gontijo, above n 15, at 144.

[20] See Gontijo, above n 15, at. 115.

[21] French Senate. http://www.senat.fr/rap/l07-051/l07-0512.html. (visited 02 February 2018).

[22] See http://www.senat.fr/rap/l07-051/l07-0512.html. the text in French is:

Article 445-1. Est puni de cinq ans d'emprisonnement et de 75 000 euros d'amende le fait, par quiconque, de proposer, sans droit, à tout moment, directement ou indirectement, à une personne qui, sans être dépositaire de l'autorité publique, ni chargée d'une mission de service public, ni investie d'un mandat électif public exerce, dans le cadre d'une activité professionnelle ou sociale, une fonction de direction ou un travail pour une personne physique ou morale ou pour un organisme quelconque, des offres, des promesses, des dons, des présents ou des avantages quelconques, pour elle-même ou pour autrui, pour qu'elle accomplisse ou s'abstienne d'accomplir, ou parce qu'elle a accompli ou s'est abstenue d'accomplir un acte de son activité ou de sa fonction ou facilité par son activité ou sa fonction, en violation de ses obligations légales, contractuelles ou professionnelles.

Est puni des mêmes peines le fait, par quiconque, de céder à une personne visée au premier alinéa qui sollicite, sans droit, à tout moment, directement ou indirectement, des offres, des promesses, des dons, des présents ou des avantages quelconques, pour elle-même ou pour autrui, pour accomplir ou avoir accompli, pour s'abstenir ou s'être abstenue d'accomplir un acte visé audit alinéa, en violation de ses obligations légales, contractuelles ou professionnelles.

Article 445-2. Est puni de cinq ans d'emprisonnement et de 75 000 euros d'amende le fait, par une personne qui, sans être dépositaire de l'autorité publique, ni chargée d'une mission de service public, ni investie d'un mandat électif public exerce, dans le cadre d'une activité professionnelle ou sociale, une fonction de direction ou un travail pour une personne physique ou morale ou pour un organisme quelconque, de solliciter ou d'agréer, sans droit, à tout moment, directement ou indirectement, des offres, des promesses, des dons, des présents ou des avantages quelconques, pour elle-même ou pour autrui, pour accomplir ou avoir accompli, pour s'abstenir ou s'être abstenue d'accomplir un acte de son activité ou de sa fonction ou facilité par son activité ou sa fonction, en violation de ses obligations légales, contractuelles ou professionnelles. at 1(visited 02 February 2018).

[23] See Gontijo, above n 15, at 118.

[24] See Gontijo, above n 15, at 119.

[25] MOREIRA NETO, Diogo de Figueiredo; FREITAS, Rafael Veras de. A juridicidade da Lei Anticorrupção: reflexões e interpretações prospectivas. Fórum administrativo – FA. ano 14. n. 156. at 9-20. Belo Horizonte. fev. 2014. Brazil.

[26] Apud MOREIRA NETO, Diogo de Figueiredo; FREITAS, Rafael Veras de. A juridicidade da Lei Anticorrupção: reflexões e interpretações prospectivas. Fórum administrativo – FA. ano 14. n. 156. at 9-20. Belo Horizonte. fev. 2014. Brazil.

[27] SILVEIRA P. et al. (2010) On the Design of Compliance Governance Dashboards for Effective Compliance and Audit Management. In: Dan A., Gittler F., Toumani F. (eds) Service-Oriented Computing. ICSOC/ServiceWave 2009 Workshops. Lecture Notes in Computer Science, vol 6275. Springer, Berlin, Heidelberg. at 208.

[28] Ibid. at 209.

[29]  SMITH Adam. Theory of Moral Sentiments. 1.759. Adam Smith Institute, 23 Great Smith Street, London SW1P 3DJ, United Kingdom, https://www.adamsmith.org/the-theory-of-moral-sentiments/. at 1. (visited 05 November 2018)

[30] SMITH Adam. Theory of Moral Sentiments. 1.759. http://www.earlymoderntexts.com/assets/pdfs/smith1759.pdf. at 1. (visited 05 November 2018)

[31] SMITH Adam. Theory of Moral Sentiments, 1.759. Part II Section II Chapter III, at 86, paragraph.4.