Easter Eggs and Chocolate Bunnies – Child Labour in the Chocolate Industry

By Markus Pohlmann

Source: Pixabay

Easter is drawing near and with this we ask, which sweets we are to give as a present. Answers to these questions have lost ease over the last decades because the use of child labour on cocoa plantations remains a persistent problem. According to a recent study by Tulane University in New Orleans, the use of child labour has continued to increase in recent years with the expansion of cocoa production. Anyway, who wants to give as a present something that has been produced with child labour?

Let us take Côte d’Ivoire and Ghana as examples. Together, the two countries account for a large part of the world’s cocoa production, and are known for frequent use of child labour to harvest cocoa as well as for the trade in child slaves. According to the estimates of Tulane University’s study, around 3.6 million children worked in 2013/14, which is almost 2/3 of all children in these two countries. Despite the statements of the chocolate producers, the number of child labour has even increased by 5 percent since the last study in 2008/09. Even in the case of 5-to-11-year old children, more than half of them are carrying out child labour, including using sharp machetes to harvest cocoa. . Back in 2001, the leading chocolate producers have already agreed to “eliminate the worst forms of child labour” on cocoa plantations in Ghana and Côte d’Ivoire (Harkin/Engel Protocol 2001), only to water down this target again in a framework agreement in 2010. Now the worst forms of child labour are to be reduced by 70 percent by 2020 (Joint Declaration 2010). But probably this agreement won’t be worth the paper it’s written on. And the violation of this voluntary agreement still carries no legal or political consequences, even though the US Supreme Court endorsed litigations under America’s foreign liability law (the Alien Tort Claims Act, ATCA) in the case of Nestlé (Kitkat, Smarties, Lions etc.) in 2016. Stephen Wilson, the judge in charge of the case, dismissed the lawsuit against Nestlé and Cargill over child slavery on 2 March 2017 on the grounds that “the former child slaves had failed to show that any domestic conduct by the two companies was linked to the use of forced labor at their overseas supplier” (Bloomberg 10.3.2017; Doe v. Nestle SA, 05-05133, U.S. District Court, Central District of California). The Lawyers of the child slaves have appealed. Whatever the case turns out to be in court, the damage to the image of chocolate producers and their Easter bunnies persists.

What is the problem with the abolition of child labour?

If the chocolate producers now keep attracting the attention of justice, the entire system of chocolate production is rolled up from behind. Certainly, chocolate producers do not pick up their goods directly in Côte d’Ivoire or Ghana. Neither do they perform purchasing there themselves. Rather, innumerable small farmers, using their own children and other people’s children to grow cocoa, sell their crops at low prices to intermediaries, who in turn sell them on to exporters. These exporters then ship harvested cocoa to, for instance, the US or Europe, where a part of the cocoa are sold on commodity futures exchanges (e.g. New York, London) to suppliers and producers in the food industry. It is not uncommon for this market, which supplies chocolate producers with cocoa beans, to be interposed with much speculation. Like other markets, this market does not play by the principles of fairness either. In principle, it is a value chain characterized by the legacy of colonialism (Zündorf 2001), with corresponding exploitation of the farmers as immediate producers of raw material. In this neo-colonial capitalism these farmers do not get enough money for their cocoa beans to pay for the workforce. Their own children must work. And if this is not enough, other people’s children and child slaves from Mali, Burkina Faso or Nigeria join in. Although, for example, Côte d’Ivoire has ratified all laws against child labour, the containment thereof is not a priority in this corruption-riddled country. Why? Because they would put the existence of their farmers at risk. Thus, since Côte d’Ivoire is hardly able to prosecute child labour abuses and child traffickers corrupt the political system by paying bribes, a state regulation of the problem on the local level is not yet in sight. With the exception of the farmers, everyone earns handsomely and the farmers cannot do without, because this would endanger their existence. Moreover, time and again there is political turmoil, and civil wars or civil war-related situations make any political regulation even more difficult.

Corporate Social Responsibility – decoration of the corporate facade?

As for the producers of Easter eggs and chocolate bunnies, even if they are well-intentioned, it is not easy to fulfil enterprises’ social responsibility in this situation. On the one hand they benefit from this system. On the other hand, it is difficult to assume sweeping responsibility in the fight against child labour beyond lip services and social initiatives. The most radical alternative, which is to end cocoa cultivation once and for all in Côte d’Ivoire and Ghana, would have substantial consequences for both countries. Likewise, alternative cultivation regions, such as Brazil, do not appear significantly different in these aspects. The other radical alternative – chocolate producers carry out cocoa production locally on their own plantations or to organize everything on their own – looks colonial. The road in between, which most producers now slowly and hesitantly pursue, is no less stony. Even certifications, such as UTZ (UTZ is a programme and seal of quality for the sustainable cultivation of agricultural produces and has been run since 2002 by a foundation of the same name headquartered in Amsterdam), have shown that these are by no means a guarantee that no child labour will take place. In the quagmire of systemic corruption and human trafficking, in countries often plagued by civil wars and political turmoil, controls are difficult and compliance with regulations is often itself the subject of corrupt negotiation processes. The companies do not have to wait a long time for the next journalist to film the children at work on certified plantations. If the producers in this case are serious about “Corporate Social Responsibility” rather than regard it merely as a decoration of the corporate facade, they must turn the entire business model upside down. However, there is no sign that this is what the majority of chocolate producers are doing right now. Even our supermarkets and discount stores still react too little to the sustainability of child labour.

What about exclusively fair trade and product boycott? The economists Mattias Döpke and Fabrizio Zilibotti have already pointed out in 2009 that this form of assuming social responsibility by us, the consumers, unfortunately often has the opposite effect of what is to be achieved. Many families are becoming impoverished, slipping even deeper into the corrupt and criminal shadow economy, and local politicians continue to lose possibilities of regulation. The result is: child labour is increasing instead of decreasing. They therefore propose a different solution based on Mexico’s state programme of PROGRESA: “In 1998, the then government decided to stop subsidizing the price of tortillas – and thereby support rich families indirectly, but rather to directly support poor households financially. The decisive point: money is only given to those who send their children to school rather than to work in the field. Numerous scientific studies have confirmed the success of these direct economic incentives: in regions where the programme has been introduced, child labour has declined significantly, and more children, especially elderly ones, attend school. The Grameen Bank in Bangladesh, founded by the Nobel Peace Prize laureate Muhammad Yunus, also awards micro credits only to women who send their children to school”. (Döpke, Hilft Fairtrade wirklich?)

That seems reasonable, but then which sweets should we give as a present now? The best is not to give any, but for many of us it would be too radical. We advocate the lesser evil: the more we succeed in making fair trade become our standard, the more producers and discount markets are able to orient themselves towards it.

Happy Easter!



Doepke, Matthias, and Fabrizio Zilibotti. “INTERNATIONAL LABOR STANDARDS AND THE POLITICAL ECONOMY OF CHILD‐LABOR REGULATION.” Journal of the European Economic Association 7.2‐3 (2009): 508-518.

Framework of Action to Support Implementation of the Harkin-Engel Protocol: http://chocolatechildlabour.weebly.com/harkinengel-protocol.html

„Harkin-Engel-Protokoll“: Protocol for the growing and processing of Cacao Beans and their derivative products in a manner that complies with ILO Convention 182 concerning the Prohibition and immediate Action for the Elimination of the Worst Forms of Child Labor

John Nestlé, et al. v. Nestlé, S.A., et al.: Case 2:05-cv-05133-SVW-MRW Document 249 Filed 03/02/17 Page 1 of 12 Page ID #:2202, United States District Court Central District of California.

Welthandel: Hilft Fairtrade wirklich? http://www.geo.de/natur/nachhaltigkeit/3066-rtkl-welthandel-hilft-fairtrade-wirklich.

School of Public Health and Tropical Medicine Tulane University. “Survey Research on Child Labor in West African Cocoa Growing Areas”. FINAL REPORT 2013/14. Tulane University 2015.

Zündorf, Lutz. “Nachwirkender Kolonialismus und intersektorale Verknüpfung im Spektrum von Markt und Hierarchie. Austauschbeziehungen zwischen Industrie- und Entwicklungsländern in der Weltwirtschaft des Tabaks”. (The Aftermath of Colonization and Forms of Transactions between Agriculture and Industry Exchange Relations between Industrialized and Developing Countries in the World Economy of Tobacco). Zeitschrift für Soziologie, Jg. 30, Heft 4, August 2001, S. 247–266.


Corruption in Football – FIFA, the German Football Association and Summer Fairy Tales

By Markus Pohlmann

As British television host and comedian John Oliver has already pointed out in his satirical show: football is like sausages. If you love something, never find out how it's made. In this respect, we are scoring an own goal. If you look at the current accusations against FIFA officials, you do not have to ask anymore who or what was for sale, but vice versa: who and what was not?

Source: Pixabay

Money scores goals

Certainly, we all know that success in football is also bought in a legal manner. Money scores goals. Uwe Wilkesmann recently highlighted the link between players' salary and league table position of the Bundesliga clubs in an article: the more the Bundesliga clubs can pay their players, the more points they realize. Admittedly, sometimes the situation looks different in the midrange of the Bundesliga table and creates suspense, but overall this connection can be clearly demonstrated in line with Wilkesmann's calculations over the last 15 years. The revenues from the Champions League significantly increased this legal inequality in the starting conditions of the Bundesliga clubs over the last few years.

This is, however, by no means the end of our story on the purchasability of football as a sport. Let us turn to the illegal, corrupt actions, and thus to FIFA. So far, 42 FIFA officials have either been charged or convicted under anti-Mafia laws (The Racketeer Influenced and Corrupt Organizations Act, RICO) in the US as members of a criminal organization. Chuck Blazer, a former member of FIFA's Executive Committee and former Vice President of the United States Soccer Federation, has been working as an informer for the FBI since 2011, and contributed as the principal witness to the exposing of the whole system. To date, the US judiciary has imposed fines of over US$ 190 million on the accused. More than US$ 100 million have been frozen. Some of them have pleaded guilty. This makes us wonder to what extent this enormous degree of corruption has been fostered by the organizational form of FIFA, and to what extent it has to do with organizational deviance. What is surprising about the legal actions that the U.S. Department of Justice and FIFA had taken against these corrupt officials in 2015, is not so much the corruption itself, but the extent and variety of illegal activities.

It has thus been convincingly demonstrated that one can buy votes both for awarding World Cups and for presidential elections. For instance, around US$ 100 million were paid in bribes for three votes from FIFA's Executive Committee in the awarding of the 2010 World Cup to South Africa. From the 1998 World Cup in France to the 2022 World Cup in Qatar, according to the charges and guilty pleas, all electoral procedures turned out to have been influenced by the bribery of some FIFA officials. The prosecution also stated that a vote cast in the right ballot box in the 2011 FIFA presidential election could fetch around US$ 1.6 million. Likewise, millions of US dollars, according to the guilty pleas of some officials, were redirected into their own pockets in the awarding of media rights. The then President of the Caribbean Union (CFU) alone solicited US$ 3 million in bribes for the transfer of media rights to one of several companies. Sponsorship contracts were also awarded by means of bribery. And these are just the most common examples on a long list of corrupt behaviours of FIFA officials.

Organized Irresponsibility

A look into the environment of FIFA reveals that for decades regulations and controls by the Swiss authorities were extremely lax. Significantly, it is the investigation and prosecution authorities in the US that began the legal reappraisal of the corrupt structures, whereas Switzerland, the official seat of FIFA, slowly launched their investigations afterwards. Internally, experts speak of organized irresponsibility. Doors were wide open for corrupt behaviours. FIFA's management (President and the Executive Committee) on the one hand had relatively little sway over the legally independent national football associations, and on the other hand is itself difficult to be held accountable. Apparently, its interest in the internal control of such a meta-organization was markedly low. As a supranational umbrella organization with 209 national, legally independent member organizations and six regional  associations, FIFA's organizational form itself appears to be particularly susceptible to corruption. As a global monopolist, this umbrella organization has used an environment often extraordinarily hospitable to corruption to create its own community of football, and has thereby imported, as it were, corrupt structures. Since the sums of investment involved in the case of the awarding of World Cup are very high and largely borne by tax-payers, lucrative rent-seeking opportunities opened up that prompted vote-buying with millions in bribes. Since the bribed mostly came from countries where bribery is part of everyday life, the risk of being exposed, in particularly, must hence have appeared low, too. This aided and abetted a "normalization" of corrupt structures.

Source: Pixabay

While the bribed themselves had caused damage by offsetting FIFA’s profits and FIFA consequently filed a tort claim in 2015, it looks rather different on the side of bribe-payers. As is typical for organizational deviance, they have acted primarily in the interest of their respective national football association without illegal personal enrichment, according to the previous investigation. According to reports of the German Federal Government, the German Football Association made a profit of €28,25 million. For the central organizers, career perks were connected to expense allowances (see also the master thesis of Jennifer Helbig). According to an investigation report by the law firm Freshfields Bruckhaus Deringer on behalf of the German Football Association, however, illegal personal enrichment of the organizers barely played a role or one that could not be proven with necessary certainty. These officials, normally long-standing and high-ranking insiders, testified that they adjusted themselves to the prevailing informal rules of the game at FIFA in order not to jeopardize their organizational goal. To date, it is not clear in this case who was actively involved in the alleged bribery process and had access to background information. However, four members of FIFA’s Executive Committee responsible for the awarding of the 2006 World Cup to Germany have also been accused of corruption.

Looking more closely at FIFA, one sees in any case an umbrella organization which operated in a thinly regulated environment with few internal controls or compliance efforts and tolerated corruption - whether intentionally or not - in its global network. Its organizational form and its environment gradually invited it to this end. Too few and too many regulations obviously have the same effect: they increase the risk of corruption. Though many football fans have expected nothing else from FIFA, now the accusations, guilty pleas and evidence are there and illustrate that it was even worse than expected. But should we draw similar conclusions as with the sausages and simply by and large give up on football? I don’t think so. Even if our appetite for football dies away with the thought that the next World Cups will be held in Russia and Qatar, FIFA is restructuring itself. Let us give it a chance, even against our better judgement.



Uwe Wilkesmann (2017): Social inequality in German football. Does money score goals?, Working Paper, February 2017

Jennifer Helbig (2016): Aktive Korruption im Rahmen des Vergabeverfahrens der FIFA-Fußballweltmeisterschaft 2006 – ein Fall von organisationaler Devianz? Eine soziologische Einzelfallstudie, unveröffentl. Masterarbeit, Soziologie, Universität Heidelberg

Freshfields, Bruckhaus, Deringer, Deutscher Fußballbund e.V. (2016): Interne Untersuchung – Untersuchungsbericht, 4. März 2016

Can you buy off laws and politicians in Brazil? The testimonies of Brazilian top managers

By Elizangela Valarini and Markus Pohlmann

Source: Pixabay

Teori Zavascki, one of the 11 Ministers of the Supreme Federal Court of Brazil, was killed on 19 January 2017 in an aircraft crash. Teori Zavascki was the justice presiding over the trials resulting from Operation Car Wash. He was in charge of the legal proceedings of Petrobras Scandal and the intertwining relations between economic and political corruptions in Brazil it helped to unearth. His successor, Luiz Edson Fachin, has now assumed the mantle.

Since the beginning of Operation Car Wash, dozens of Brazilian politicians, members of government and high-ranking officials, as well as top executives and entrepreneurs of many big companies have been investigated. Roughly 67 politicians and members of government are presently the targets of investigations and legal proceedings; in addition, the donation list of Marcelo Odebrecht, an entrepreneur in the construction business, was made public and helped to bring another 280 politicians to the attention of the Brazilian judiciary. In the ongoing trials, twelve politicians have already been sentenced to an average of 15 years in prison. A ‘Leniency Agreement’ was concluded with Mr Odebrecht’s construction group to ensure its full co-operation. The testimonies of corporate managers and executives who were implicated shed more and more light onto the dubious entanglements between politics and businesses in Brazil.

Entanglements between politics and businesses

One of the first testimonies under the framework of this agreement came from Claudio Melo Filho, a senior manager of the construction group. His testimonies - whatever judicial value they may turn out to have - suggest that in Brazil, the relations between big companies and politicians who hold the lever of state power go far beyond bestowing simple favours and minor legal backings. According to Melo Filho, Odebrecht and other companies were able to ensure that certain laws were bended in their favor. As part of this Brazilian favoritism in politics and legislation, according to Melo Filho, companies like Mr. Odebrecht‘s returned the favour of influential politicians, candidates and parties in their clique by meeting their political interest and personal wishes. Mr. Odebrecht‘s manager describes how, over a twelve-year period, his company managed to build a network of inroads to cover many high-ranking politicians.

Filho lists payments by Mr. Odebrecht‘s construction group to various politicians who are now the subject of many investigations and legal proceedings. According to his testimonies, these payments, to the tune of millions of US dollars, were supposed to change certain laws in favour of Mr. Odebrecht‘s and other companies. This included, for example, a modification to the legislation on tax preferential treatment of corporate profits of Brazilian companies operating abroad (MP 627/13). Mr. Odebrecht‘s manager also mentions nine other legislative reforms and legislative proposals that have been influenced by political donations and payment of bribes over the last decade.
These testimonies on political corruption in Brazil, among others, make it clear that this way of funding politicians and parties has been systematically performed by all major political parties. According to the current investigation, 51 percent of the accused and convicted come from the PP party (Partido Progressista), 22 percent from the PMDB party (Partido do Movimento Democrático Brasileiro), 18 percent from the PT party (Partido dos Trabalhadores), around 3 percent from the PSDB party (Partido da Social Democracia Brasileira) and 6 percent from other parties. Admittedly, these results ​​are now changing on a daily basis. What we now know is that Mr.  Odebrecht‘s construction group handed out approximately US$ 14.4 million to 15 different political parties during the 2014 presidential and gubernatorial elections alone. According to João Vaccari, a former accountant of the PT party, he had received roughly US$ 200 million for the PT party alone between 2003 and 2013. As evidenced by the previous investigations, the Petrobras bribery system paid out somewhere between US$ 3 and 6 billion as political donations and bribes over the last 10 to 15 years.

Political corruption served various purposes

So far, investigations of Operation Car Wash show that political corruption served various purposes in Brazil. It facilitated personal enrichment, funded election campaigns and political parties, and influenced legislations. The case of José Dirceu of the PT party, who was the former presidential minister and has been sentenced to more than 23 years in prison on charges of bribery, money laundering and membership in a criminal organization, makes clear the connections between personal enrichment and party interest. In one of these criminal trials, it became apparent that he had received from Petrobras' then-chairman of the board bribes worth US$ 3.9 million, part of which he then handed over to the PT party. However, he retained around US$ 1 million for himself, which he then invested, for example, in real estate properties.

Those who have hitherto been ignorant or have had no capacity to estimate the extent of political corruption are now being provided with more and more evidence by the Brazilian judiciary: a system of political corruption existed in Brazil, the extent of which is becoming increasingly evident with each additional legal proceeding. It is striking that none of Brazil‘s political leaders is willing to take the political responsibility. All of them are waiting and washing their hands in innocence, until they are taken to court or happily escape condemnation. This is also part of a political system which, as now becomes more and more apparent, is characterized by organized irresponsibility and graft. It is to be hoped that no more judges will tragically lose their lives, and that the new era of fighting against corruption.



Netto, Vladimir (2016): Lava Jato. O Juiz Sergio Moro e os Bastidores da Operação que abalou o Brasil. Rio de Janeiro: Primeira Pessoa

Strafprozess N 5045241-84.2015.4.04.7000/PR

Dokument: N 22854/2016 – GTLJlPGR

Dokument: Anexo pessoal von Claudio Melo Filho, Acordo de Leniencia Odebrecht




Chinese managers, functionaires and their mistresses. Old symbols of power, potency and wealth in the spotlight of China’s ongoing anti-corruption campaign

By Markus Pohlmann

Source: Pixabay

The anti-corruption campaign in China today has many faces. One is that the Communist Party of China (CPC) is now putting in crosshairs some of its officials’ beloved playthings, which are also cultivated by the state's economic leaders and managers. One eminent victim is the practice of concubinage among high-ranking officials as well as senior managers of state-owned enterprises (SoEs). Whoever believes that concubines were part of China’s feudal past is wrong. Although concubinage was outlawed in China in 1950 when the first Marriage Law took effect, ‘secondary wives’ are part of everyday lives of many high-ranking officials and senior managers in contemporary Communist China. Polygamy, particularly polygyny, has a history of millennia in China. Despite its legal prohibition, the tradition itself remains in good order. Some ethnic minorities in mainland China, as well as residents in Hong Kong and Macao, have practiced it rather uninterruptedly. For example, Stanley Ho, the 95-year-old billionaire casino baron from Macau, maintains intimate relations and fathers children with four women at the same time. Since the 1980s, many Hongkongese have had concubines in nearby Shenzhen and Dongguan.

A widely practiced custom in some quarters of society

Now this custom has re-established itself in the mainland and is de facto widely practiced in some quarters of society. Many SoE managers have wasted no time following the lead of their private-sector counterparts in having one or more concubines. For example, Lin Song, top manager of the state-owned Fortune-500 behemoth China Resources (Holdings) Co., Ltd. (better known as Hua’run in Chinese), was accused of money laundering with the help of his concubines. The famous private entrepreneur Shiyi Pan of SOHO China also succumbed, when an illegitimate child he had out of wedlock came to light and placed him in the eye of a storm of public scandal. ‘Mistress Villages’ are an excess of this ‘concubine culture’ Chinese managers and officials have helped to foster. In the suburb of Chinese metropolis or even in places as far afield as the US, settlements for the secondary wives of Chinese elites have quietly emerged, where Chinese managers and officials rent or purchase houses and luxury apartments for their concubines. Arcadia and Rowland Heights in California, in particular, are widely regarded as ‘Mistress Villages’, as more and more rich Chinese entrepreneurs, managers and functionaries have resettled there not only with their families, but also their concubines.

Source: Pixabay

With the end of Cultural Revolution and the transition to a ‘socialist market economy’ in China, the ‘concubine culture’ of Chinese elites regained momentum. First, draconian sanctions were withdrawn and social tolerance increased - partly due to the role-model set up by successful businessmen from Hong Kong and Macau. The fashion of keeping mistresses has consequently been able to spread nationwide since the 1990s. Having concubines has once again become a powerful symbol of the social status of government officials and state economic leaders who are mostly party members. Yang Feng, a former deputy party secretary of Xuancheng, a prefecture-level city in southeastern China’s Anhui Province, had by the official account seven mistresses. In order to avoid conflict between the women and to harmonize the relations with them, he assigned his first concubine, Ms. Zhou, with the human resource management function to lead the other six concubines efficiently. Ms Zhou then gave them different roles, in accordance with her assessment of their character traits. Subsequently some even took over the task of fostering relations with various top-ranking officials in the city, others in charge of running businesses. According to official sources, Qiyao Xu, the former head of the construction department of Jiangsu Province, has decorated himself with more than 140 mistresses. Weizhi Jin, a former CEO of the state-owned Nanjing Dairy Products Group Co., dissented: ‘Who, among cadres with the same rank as mine, does not have a few mistresses? It is not just a physiological need, but also a symbol of social status, for without a mistress one loses his face.’

According to a study by the Renmin University in Beijing, 95 percent of Chinese government officials convicted of corruption in 2012 had at least one mistress. Therefore, cracking down on concubinage is also a useful tool in the fight against corruption that China’s president, Xi Jinping, champions. In order to salvage the ‘morality’ of party members, the Central Commission for Discipline Inspection of the CPC re-introduced the stigmatizing word ‘adultery’ in public communications in 2012. On top of that, ‘illicit sexual relations’ was added to the prohibition list as the latest disciplinary measures by the Party in 2015. From the Party’s point of view, having mistresses is not merely a ‘moral’ issue, but is closely linked to the political struggle against corruption. From a Western perspective, it is a deeply cultural aspect of this anti-corruption campaign, which has now taken hold of the entire country.

The ‘possession’ of one or more mistresses equally appeals to the top managers in modern China, because it serves as a symbolic expression of their power, potency and social status - an allegedly indispensable accessory of economic, political and masculine capacity.  At the same time, keeping many concubines at the same time also requires a lot of money. Thus, the number of mistresses reflects the wealth of their owners, be they managers or officials.

True or not, the formula of ‘Tell me how many concubines you have and I tell you how corrupt you are’ nevertheless appears questionable, and the current struggle against the system of keeping mistresses must be understood as a means of political campaign. It seems appropriate to the Communist Party, not least because it receives applause of approval among the general public and, needless to say, “primary” wives of these officials and managers.

The Christmas Story – A Not-always-serious Retelling from a Sociological-Criminological Perspective

By Markus Pohlmann

Source: Pixabay

The story that we are about to tell is well-known. Nevertheless, it became obvious to us that from a sociological-criminological point of view, some of the important details have been left out. In the following, not-always-serious narration, we are about to change this. We start our tale with the life of Herod I, the Roman client king of Judea, Galilee, Samaria and neighbouring areas.

Gaius Iulius Herod, better known as Herod the Great, was the ruler of a client state of the Roman Republic in what is today the conflict-stricken Palestinian region. He lived in patchwork conditions that were typical for contemporary Romans, having seen off ten marriages in the course of his life. His impressive body mass index (BMI) was obviously no obstacle to his popularity on the Roman-Judean partnership market. With his ten wives, he had fathered somewhere between 15 (officially recognized) and 30 children. They and their mothers, except for those, who were executed, were well integrated into the Herodian patchwork family. Although the cultural emancipation of the surviving women was well advanced in everyday life, women were still highly underrepresented among the rulers, and the introduction of a female quota among Roman statesmen had been intensely controversial since Cleopatra of Jerusalem, the fifth wife of Herod I.

Imbued with the spirit of capitalism, Herod had built large-scale port facilities to promote free trade in Judea. We do not know whether there were any bribes involved, but experts on classical antiquity believe this to be the case. In the Roman Republic, legislations against voter bribery had already been well in place, and there were spectacular trials on corruption as well. In addition to vote-buying, bribery of judges and civil servants were rampant. In this regard Rome was similar to the modern world. Corrupt judges were a plague in ancient Rome. Cicero reports that it was common practice to coddle them "not only with money, but also by the provision of girls and boys". Above all, in the provinces, tax collectors, financial officials, governors, and court clerks had mastered the arts of self-enrichment - the farther away from Rome, the more blatant they were. On the other hand, attempts were repeatedly made to put an end to all the hustle and bustle: anti-bribery laws existed as early as the second century BC.

It was not for bribery and corruption, however, that Herod I came off badly in the Judean "media". On top of the atrocities, of which he was rightly accused, they foisted on him the Massacre of the Innocents - the execution of all newly born male children - fake journalism that became all the more powerful as an ever-growing world religion used its social media to spread it globally.

The other characters in our story also show how they had to deal with casualization of work and decline of the middle class in the contemporary Roman world. Thus, Joseph worked as a semi-skilled carpenter on construction sites. The working conditions were poor and his wage was only slightly above the poverty line. He first tried himself as an innovative founder of a start-up and when this enterprise failed, he joined the legion of economic refugees bound for Egypt. He knew that in Egypt he had to face the hostilities from the "Patriotic Egyptians against Judaization and Davidization of the Orient" (PEAJDO), but at the same time, he successfully withdrew himself from a biometric registration by the Roman equivalent to NSA, i.e. the state security authorities. Joseph lifted himself up from a destitute social background. He first lived in free partnership with Mary, an unskilled person who belonged to a sect and committed to the temple service at the age of three. At the age of fifteen, she became pregnant with Jesus. Since then, the couple slipped below the poverty level. The hardship of Mary and Joseph was not untypical for their contemporaries under the Roman rule.

Source: Pixabay

At first, this couple of economic refugees could not find any shelter, so they ended up in a scarcely furnished upper floor with their relatives. It was autumn and the impoverished shepherds slept with their sheep. In the footsteps of the Jupiter-Venus conjunction, three astronomers who were actually scientists from Persia also gathered there. They belonged to a new transnational class of advisors and prophets. This new stratum of analysts, fostered by the knowledge community of the time, is still revered today.

As the upper floor was inadequately furnished, a feeding crib instead of a children's bed had to be installed for the newborn. Eight days after birth, the naming and circumcision took place (Lukasevangelium 2, 21). Jesus emancipated himself rather early from his parental home, and from his mother.

Now there was at least a wandering preacher and freak in the world, who, as the founder of an emerging religion and a charismatic leader, involuntarily opposed the existing ruling order. We still admire him today, among other deeds, for his fight against corruption. But, according to Nietzsche and the canonized faith, the organized church as well as the notion of guiltiness and atonement was not Jesus' cause. To quote Nietzsche: “With a little freedom in the use of words, one might actually call Jesus a “free spirit”—he cares nothing for what is established … and has no belief that an article of faith, a “truth,” may be established by proofs (—his proofs are inner “lights,” subjective sensations of happiness and self-approval, simple “proofs of power”—). [...] In the whole psychology of the “Gospels” the concepts of guilt and punishment are lacking, and so is that of reward. “Sin”, which means anything that puts a distance between God and man, is abolished—this is precisely the “glad tidings.” Eternal bliss is not merely promised, nor is it bound up with conditions: it is conceived as the only reality—what remains consists merely of signs useful in speaking of it.” (Friedrich W. Nietzsche [1888/1923]: The Antichrist. Translated from German with an introduction by H. L. MENCKEN, New York: Alfred Knopf, pp. 100 ff.)

Merry Christmas

Source: Pixabay

Statement by the Heidelberg Group for Organization Studies (HeiGOS) on the presentation by Sérgio Moro on 9th December 2016

The Brazilian federal judge Sérgio Moro hold a public lecture “Corruption and law enforcement in Brazil: The Petrobras case” at the University of Heidelberg

Heidelberg, 12th December 2016 // The presentation by Sérgio Moro, the Brazilian federal judge, attracted about 400 guests. There were many Brazilians from other cities in Germany, from Switzerland and Austria in the audience. Mr. Moro’s speech was received with much approval as well as with protests. After his speech, the discussion was opened to the press and the public. Many questions were asked and critical comments were made, at the same time it was a very democratic event. The lecture was not disturbed and Sérgio Moro answered all questions within the given time frame.

We are glad for the Brazilians and those who are interested in Brazil, that they have been able to lead this conflict openly and without violence. Universities are excellent places to discuss critical issues peacefully. On the part of the organizers, there was no political statement attached and we are convinced that the event promoted the peaceful conflict. At the same time, Moro intensively discussed with us and our international guests – scientists from the USA, Australia, Italy, England, Brazil, Argentina, and China. Thus, the event was not only about Brazil, but rather related to a comparative perspective on criminal prosecutions in Italy, Argentina, the USA and Germany, with regard to cases of corruption. His lecture was relevant to our international guests, and so was the criticism that he received. In this view, it was a successful event, both scientifically and democratically.

The research program “Organizational Deviance Studies” is embedded in an interdisciplinary team that comprises sociologists, criminologists and legal scholars. The team receives the support of medical practitioners, scholars of Chinese Studies, Political Science and Economics. It is headed by Professor Markus Pohlmann.

Lula, Moro and the Top Managers – „Operation Car Wash“ and the Fight Against Corruption in Brazil

By Elizangela Valarini und Markus Pohlmann

"Car wash"
Quelle: Pixabay

Despite the fanfare of the Rio Olympics had subsided, Brazil is no longer politically calm. Sérgio Moro, a fededal judge, detonated a political tinderbox when he lashed out against Luiz Inácio Lula da Silva, a former president, and political corruption in the Workers’ Party (PT) Lula had helped found. Not only have the accusations against two-term ex-President Lula, the impeachment against his successor Dilma Roussef, the arrest of the President of the Parliament, Eduardo Cunha (PMDB) and current proceedings against 279 politicians robbed the Brazilians of their sleep, the multitude of corruption scandals in the economy keeps them in suspense. Since the “Operação LAVA JATO” (“Operation Car Wash”) started in July 2013, politics, business and the judiciary have been in great turmoil. Having ensnared the construction industry and Petrobrás, the state-run oil company, the spectre of corruption is threatening to envelop the rest of energy industry and even the construction of nuclear power plants. For example, Otavio Marquez Azevedo, head of the Brazilian multinational conglomerate Andrade Gutierrez, who was arrested for corruption, had only enjoyed a five-day release for his co-operation before he had to face charges in another court that accused his company of bribery in the bidding process for the construction contract of nuclear power plants in Rio de Janeiro.

What’s going on in Brazil? And what is behind these scandals?

In any case, we are currently witnessing a turning point in the tolerance of corruption in Brazil. Whereas legal condemnations, if ever occurred, was precious little and were only pronounced with the exclusion of the general public, they come fast and furious, hit hard and are well publicized.
Anyone who is curious enough and has a bit of free time can easily follow some of the trials on Youtube. Punishment is substantial. For example, Marcello Odebrecht, a descendant from a German immigrant family, received a sentence of 19.4 years by a ruling of the first instance for bribery, cartel training and money laundering. Sérgio Moro, the judge presiding over the case, has carried out the proceedings quickly and along clear lines.

But what do car wash systems have to do with all that? The name Operação LAVA JATO ( “Operation Car Wash”) has two meanings in this context. First, the comprehensive corruption scheme was unearthed by the initial suspicion of money laundering that was linked to a chain of gas stations and car wash systems. Hence, the code name LAVA JATO. Secondly, LAVA JATO has a symbolic meaning, as lavar means ‘to clean up’ in the Portuguese language. Thus, the aim was to use the LAVA JATO investigations to clean up the messy corruption cases swiftly and decisively. At present, bribery payments of US$1.9 billion have been discovered, of which about 825 million have been retrieved. 113 suspects have been arrested, and 15 top managers and entrepreneurs were given an average sentence of 15 years. A total of 43 criminal prosecutions against 212 individuals, and 7 corruption charges against 16 major construction companies and 38 individuals are being processed. These accusations are directed against the top management of the largest private construction companies and the state-owned oil company Petrobrás. Their presidents, managers and employees face charges of corruption (Article 33, Section 4, CP), money laundering with document forgery (Article 1, caput, inciso V, da Lei nº 9.613 / 1998), as well as for the formation of a criminal organization, specifically of a cartel (Article 2º da Lei nº 12.850 / 2013).

The cartel

The history of this cartel dates back to 1997, when the managers of 9 – later increasing to 16 – construction companies began to meet on a regular basis to plot to cartelize the market for building projects which were of interest among them. Once a company had decided to acquire a particular project, all others were forbidden from bidding for the same project or they would have to submit a higher bid to the PETROBRÁS construction project. “The efficiency of this group rose since 2003/2004 with the new CEO of Petrobrás,” testified Augusto Ribeiro de Mendonça Neto before the court. The cartel had not only helped participating companies become more competitive while bidding for Petrobrás contracts, and vis-a-vis both international and other domestic competitors who were not part of the secret “club”, it also enabled them to increase the tender prices of their projects through overpricing bids and hereby helped determine the profit of their companies by inflating the value of the construction projects.

A system of bribery and corruption

The rationale behind this modus operandi was not just the greed of managers and entrepreneurs. Rather, it points us to the systematic nature of corrupt practices. The control of the market with the help of a large state-owned enterprise, which often acts like a quasi public authority in Brazil, and the regular “greasing” of relations with political parties, constituted an interlocked system of bribery and corruption. Like a tithe, a certain percentage of the order had to be handed over to the Petrobras managers and laundered beforehand. Anyone who was acceded into the exclusive club had contributed to it, and all the others were left out. According to previous court trials, the participating managers and entrepreneurs had not acted purely for personal gains, but also took care of their companies’ interest and thus indirectly served their own careers. The unwritten rules of the system were very well known within the club and were fully accepted by its members. This is not only a case of corporate crime but also closely relates to “structural corruption”: a firmly established system with informally acknowledged unwritten rules, governed by an inner circle of high-ranking managers, entrepreneurs, politicians who benefitted from these rules. Compared to the the situation in Germany, which has also seen lots of cartels, this cartel formation distinguishes itself by its close relationship with political corruption, a feature rarely seen in Germany. The fact that this cartel was discovered and smashed reflects a remarkable turnaround in the approach to corruption in Brazil, and we can only hope that it will outlive the current political turmoil without losing momentum. In any case, Brazil’s top managers, entrepreneurs and politicians have to brace themselves for a strong headwind, as a younger generation of  judges such as Sérgio Moro no longer idly stand by, but take firm actions. That’s what they’ve learned from lessons in the USA and Italy. The presently still fresh glimmer of hope in an economically troubled Brazil is that this anti-corruption campaign may eventually lead to less corruption and a more independent judiciary – even though there are already signs of a political counter-attack.

Cling together, swing together? VW and Audi: Why companies cheat

By Markus Pohlmann

VW and Audi would have had to know it. As early as 1973, the Volkswagen Group had courted controversy because its most famous car at that time, the beetle, had temperature sensors installed – to adjust emissions – without specifying this adaptation during the approval. Back then, VW got away with a penalty of US$ 120,000. Forty-three years later, it is not so cheap anymore. Initial compensation settlements have costed VW some $ 15 billion. Now Audi also find itself in the pillory, when the state of New York makes serious allegations against both Audi and VW.

Audi and VW are typical examples of a phenomenon that has been termed ‘organizational deviance’ in sociology and criminology. All the ingredients are included. Organizational deviance means that employees of a company deviate from formal laws, rules and regulations to the advantage of the company and in doing so follow the informal, unwritten rules and expectations of the company. Organizational deviance is a familiar aspect of any organization, but not every organization draws on illegal means. Audi and VW have tricked and tampered in their own ways, and have long shirked their responsibility. It was not until September 20, 2015, that the Volkswagen Group confessed – eleven years after the introduction of the defeat device and almost one year and a half after the US authorities (the U.S. Environmental Protection Agency and the California Environmental Protection Agency Air Resources Board) launched an investigation in view of a study by the ICCT (International Council on Clean Transportation) in May 2014.

What are the ingredients of organizational deviance, which, even in the case of Audi – and apart from the technical reasons – have made the organization deviate from the rules?

1.The ‘normalization’ in the industry
Audi and VW operated in an environment where manipulations were common. Red flags had been raised as early as 1974, and VW was by no means the only spot on the radar screen. Suspicions have also engulfed other major auto manufacturers such as Chrysler, Ford, GM and Toyota who were suspected of installing similar temperature sensors. In 1995, it was GM’s turn to stand in the spotlight, when its use of disabling software was exposed and the fine, now reaching US$20 million, was significantly higher than that in the earlier VW case. Three years later, the club of the disgraced had new members: Ford was caught using disabling software too, and received a penalty of US$7.8 million; Honda paid US$17.1 million for the same offense; the commercial vehicle industry (Caterpillar, Renault, Volvo, etc.) was sanctioned for its use of defeat devices and was collectively fined US$83.4 million on top of approximately US$1 billion for retrofits (Source: Wikipedia.de). According to complaints from New York State authorities, Audi had developed defeat devices since 2004 and disguised them as “acoustic functions”. Apparently, Volkswagen had taken over these devices for its cars at the end of 2006 (see Complaint, Supreme Court of the State of New York, July 19, 2016). According to investigative journalists, Opel has also come under suspicion of having played the same trick. Even Daimler is criticized for the apparent disparity between the emissions measured on the road and in the lab (ZDF, Frontal21, June 7, 2016).

2. The benefits for the company
In the U.S., Audi has increased its sales figures from 82,000 cars in 2009 to 202,000 cars in 2015. The share of diesel-powered vehicles has risen, too. In 2015, diesel vehicles accounted for approximately 6% of Audi’s sales in the United States. The use of defeat device seemed helpful on its way to better sales – at least until its detection. In all likelihood, the software engineers, developers and their managers were motivated by these benefits. At the moment, they are not at all suspected of having personally enriched themselves through the manipulations.

3. The hierarchy
When a company finds itself derailed from the legal path, it rarely occurs because of the greed and cunningness of a few ‘rotten apples’. Very often “subcultures” or “social cocoons” are formed in the organization – the ‘rotten barrels’ – in which the deviation is tolerated or even justified. One does not have to assume a “willful and systematic scheme of cheating by dozens of employees at all levels of the company about emissions” (Complaint, Supreme Court of the State of New York, July 19, 2016). But, without the knowledge and acquiescence of the top management, such extensive manipulations are hardly conceivable. Jones Day, the biggest law firm in the US,  alleges in a report that as early as 2007 an Audi engineer had informed a larger circle of Audi executives in an e-mail that its diesel vehicles would not be able to comply with U.S. emissions limits “completely without cheating”. And it is well known that the pressure on the engineers to get this done, one way or another, was great.

4. Socialization, or ‘We have grown up with this’
Repeatedly, it is not managers and employees who bring new experiences from companies outside the Group, but very loyal insiders who have long tenures within the corporation that take great personal risks for the benefit of the company. Usually, they do not realize any personal gains beyond the legitimate incentives of the company. Instead, they win recognition and reinforce their affiliation to the ‘inner circle’ of the Group with their deviant behavior. They have not only accumulated superior knowledge of the unwritten rules that are valid within the group, but also internalized them over the years. Conspicuously among these are unwritten rules that deviate from formal regulations or even laws. In the case of Volkswagen and Audi, we have noted especially long tenures of the Chief Engineers and Managers responsible for the development of new engines, and we must not ignore the fact that they have worked for the Group for more than 20 years. The top engineers, who are named by the prosecutors, also have long careers at their respective employers. However, we do not yet know whether the staff members who have been accused in the complaint were actually involved or informed.

At the time of writing, there are still no undisputable findings from the investigations. The pattern behind this scandal, however, would be typical for organizational deviance, if the allegations turn out to be true. It is not an uncommon finding that organizational deviance is mainly the brainchild of an inner circle of long-standing members who have ‘grown up’ with the unwritten rules of the corporation. For them, deviance on behalf of the corporation may become business as usual.
German politics have certainly played a part, by giving the industry mixed signals, but messages from the U.S. were pretty clear. The complaint alleges that VW and Audi continued to operate defeat devices even after the investigation had been launched (Complaint, Supreme Court of the State of New York, July 19, 2016: 8). Cling together, swing together. All that remains is to wait and see how much Audi and Volkswagen will have to pay. Sometimes even the large corporations have to learn ‘compliance’ from painful and expensive litigations.