Unjust allocation of government contracts

Government contracts may be allocated to favourites or supporters by people in public office, or public office and public money may be used for private transactions or investments.

In many countries one of the principal areas of fraud and corrupt practice is associated with the allocation of public works contracts, whether for the personal enrichment of the official responsible or to augment the campaign funds of the governing political party, or both. In 1993 in Brazil it was revealed that the criterion for financing many public works had been the percentages that could be transferred to politicians, government officials and the engineering companies involved. Much of the corruption scandal in 1993 in Italy revolved around the public sector contracts, such as the receipt by deputies in Naples of millions of dollars in bribes in return for contracts to privatize the garbage collection system.