A Billion Calls Later . . .

We admit it. Praise for China’s perennial anti-corruption campaigns doesn’t fall easily from our lips. There are always questions about the numbers the central government tosses around (“prosecutors nationwide prosecuted 8,939 officials for duty dereliction in 2008, up 5.4 percent year on year”). And the practice of putting corrupt officials to death leaves us more than a little queasy. But here’s some China news we can get behind.

The government has set up a nationwide anti-corruption hotline. There’s one phone number that operates 24 hours a day — (0086-10) 12309, and a corresponding web site at www.12309.gov.cn.

The China Journal says, “Citizens who report corruption will receive up to 10% of the funds recovered by the government, according to new national guidelines (in Chinese here). Awards will generally be capped at 100,000 yuan ($14,600) , though with provincial approval the amount can be increased up to 200,000 yuan. The new measures also include commissions for reporting other crimes as well, including rights violations.”

Will it work? Hard to say. Positive signs are that the hotline’s operators have promised to protect the confidentiality of informants. And there are criminal and civil penalties for anyone who retaliates against them.

Are hotlines working in the U.S.? They seem to be. A story in the June 23 edition of Compliance Week by Melissa Klein Aguilar makes the case by citing numbers from The Network, a third-party hotline operator, and BDO Consulting. They analyzed “477,940 reports from 1,328 organizations with more than 12 million employees from 2004 through 2008.”

Their findings:

• Hotline complaints rose last year to 9.4 incidents per 1,000 employees, up from 9 in 2007 and 8.3 in 2006;

• 70% of those making hotline complaints didn’t notify management first, and a majority of the complainants chose to remain anonymous;

• In 2008, 71% of all hotline fraud complaints warranted an investigation; and

• Reports on corruption and fraud, misuse of assets or information, conflicts of interest and Foreign Corrupt Practices Act violations increased from 10.9 percent of all complaints in 2006 to 21 percent in 2009.

Our reading: Most hotline complaints aren’t frivolous. They increase an organization’s accountability for legal compliance. That means there’s more chance of those involved with bribes, either giving or receiving, to be caught and punished.

Compliance Week is by subscription only. The 2009 Corporate Governance and Compliance Hotline Benchmarking Report can be downloaded from The Network after registering here.
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