Unjust Enrichment: How Government and Private Corruption Create Unfair Wealth Distribution

Today's investigation reveals how systemic corruption and flawed government policies create vast wealth disparities, where the poor face crushing penalties while the wealthy benefit from bailouts and fraudulent schemes. Evidence from recent court cases, academic research, and policy analysis demonstrates that both government systems and private sector corruption systematically funnel resources upward, creating a two-tiered justice system that treats individuals differently based on their economic status.

Podcast: "The Injustice Economy"

HOST: Welcome to "Hamed's Podcast" where we investigate how money, power, and corruption create unfair advantages for some while devastating others. I'm your host, and today we're diving deep into a troubling reality: why some people and organizations earn unjust amounts while others are crushed by the very systems meant to serve justice.

HOST: Picture this: You're too poor to pay a traffic fine, so you get thrown in jail for 16 months. Meanwhile, executives who crashed major banks walk away with golden parachutes while taxpayers foot the bill for their failures. This isn't fiction – it's happening right now, and we have the evidence to prove it.

Segment 1: When Justice Becomes a Luxury Good

HOST: Let's start with one of the most egregious examples of how our justice system creates unfair wealth transfers – the criminalization of poverty through court fees and fines.

HOST: According to the Equal Justice Initiative, despite Supreme Court rulings that explicitly ban debtor's prisons, hundreds of people are jailed each year in Alabama alone because they simply cannot afford to pay court fees and fines1. Think about that for a moment – we have constitutional protections against imprisoning people for debt, yet it's happening every single day.

HOST: Here's how this unjust system works: Towns and counties across America are increasingly funding their courts, police, and local services by imposing steep fines and court fees for traffic tickets and other minor offenses1. For people with financial means, these are minor inconveniences. Pay the fine, move on with your life. But for low-income individuals, these fees quickly snowball into crushing debt burdens they cannot possibly pay.

HOST: The problem is particularly acute in Alabama, where structural poverty forces municipalities to rely heavily on court fees and fines because they're barred from imposing new local taxes for basic services1. This creates a perverse incentive system where local governments essentially prey on their poorest residents to fund operations.

HOST: But here's where it gets truly unjust: While the law clearly states that individuals who have the financial means to pay but refuse to do so may be incarcerated for willful nonpayment, the government absolutely cannot imprison someone solely because of their inability to pay1. Yet that's exactly what's happening. People are being imprisoned for as many as 16 months simply because they were too poor to pay court fees and fines1.

HOST: The Equal Justice Initiative has documented how their re-entry clients can have their probation or parole revoked and face years of incarceration for missing a single monthly payment on their court debt1. This creates a vicious cycle where poverty becomes criminalized, and the poor get poorer while enriching a system that's supposed to serve justice equally.

Segment 2: The Procurement Pyramid Scheme

HOST: Now let's turn to how corruption in government procurement creates massive wealth transfers to well-connected private entities. This is where billions of taxpayer dollars get funneled to undeserving recipients through elaborate schemes.

HOST: Public procurement – the process by which governments buy everything from military aircraft to office supplies – should follow principles of International Competitive Bidding to ensure fairness and value for money2. But corruption in this system occurs when there's clear misuse of public office for private gain, and the consequences are staggering.

HOST: According to research from the Chr. Michelsen Institute, corruption in procurement can impede economic development, distort market mechanisms, and create inefficiencies that reduce competitiveness, trade, and foreign direct investment2. But more importantly for our discussion today, it systematically transfers wealth from taxpayers to corrupt businesses and officials.

HOST: Here's a real-world example that just happened this year: In April 2025, the European Public Prosecutor's Office charged four individuals in a €4.4 million EU subsidy fraud scheme3. The suspects allegedly manipulated public procurement procedures to fraudulently obtain EU subsidies from the European Regional Development Fund for purchasing industrial machinery.

HOST: But here's the sophisticated part of their scheme: They artificially inflated the price of machinery multiple times through a chain of companies, including entities based in the United States3. Even more audaciously, evidence shows they misled the managing authority about the true nature of the transaction – the recipient of EU funds was actually purchasing machinery from themselves3.

HOST: When authorities raided the operation, they seized cars, houses, and cash worth €2.6 million3. These individuals face five to ten years in prison if convicted, but think about how many similar schemes go undetected. This represents just one case that was caught – imagine the scale of wealth transfers happening through procurement corruption worldwide.

HOST: The research shows that procurement corruption particularly affects the quality of public goods, as contracts go to the best briber rather than the best provider2. This means taxpayers pay inflated prices for inferior goods and services, while corrupt businesses and officials pocket the difference.

Segment 3: Private Sector Collusion and State Capture

HOST: But government isn't the only source of unjust enrichment. The private sector creates its own forms of corrupt wealth transfers, often in collusion with public officials.

HOST: According to anti-corruption experts, the most common practice involves private agents paying bribes to public officials to take actions favoring their businesses5. This includes bid-rigging in procurement processes, administrative corruption to obtain licenses, and economic crimes involving both public and private actors for financial gain, including money laundering and tax evasion5.

HOST: Perhaps even more concerning is what researchers call "state capture" – when private companies, particularly powerful multinational corporations, subvert government policy and decision-making in their favor5. These companies exert undue influence on decision makers to create unfair advantages for themselves or their entire industry.

HOST: Consider the "revolving door" phenomenon: high-level public officials get lucrative private sector jobs after leaving government, and vice versa5. This creates conflicts of interest and supports corporate interests instead of the common good. Former regulators become industry lobbyists, former industry executives become government regulators – all while maintaining the same networks and relationships.

HOST: Private-to-private corruption is also a major source of unjust enrichment. The Unaoil scandal revealed how private companies bribed middlemen to receive lucrative contracts in the oil industry5. Kickbacks, bribes, corporate fraud, and collusion among private entities like insider trading and cartels inflate prices and reduce market access for legitimate competitors.

HOST: What's particularly insidious is how privatization itself becomes a corruption risk. When public services are privatized, it increases contact points between public and private sectors, creating more opportunities for both extractive corruption by the state and bribery by businesses seeking contracts and advantages5.

Segment 4: The Bailout Double Standard

HOST: Nothing illustrates the unjust distribution of risk and reward better than the bailout phenomenon. When ordinary people face financial hardship, they're told to accept personal responsibility. When wealthy institutions face the consequences of their risky behavior, they get rescued with taxpayer money.

HOST: The term "bailout" became politically toxic following the 2008 global financial crisis, fueling backlash among people who felt that the risks and consequences of capitalism didn't apply to big corporations or the wealthy4. Yet here we are again, witnessing the same patterns.

HOST: The recent failures of Silicon Valley Bank and Signature Bank, followed by federal intervention to backstop uninsured depositors, have pushed the bailout debate back to center stage4. While there's semantic debate about whether this intervention constitutes a bailout, it raises fundamental questions about who the government protects during crises and who gets left out.

HOST: As progressive economist Gerald Epstein notes, "Part of what's going on stems from the belief that the system is rigged against the little guy. That's why there's so much debate. People are feeling like, 'Here we go again.'"4 The contrast is stark: when homeowners in California get wiped out by wildfire and receive government assistance, no one calls that a bailout4. But when banks that engaged in risky practices get rescued, it's seen as protecting the wealthy at taxpayer expense.

HOST: This latest banking intervention differs from 2008 in some technical ways, but the fundamental unfairness remains4. Executives who oversaw risky practices faced few repercussions in 2008, while taxpayers funded the rescue. The pattern persists: privatize the profits, socialize the losses.

HOST: The corruption research confirms this dynamic: private companies adapt quickly to government policies and practices, and when corrupt governments are in place, they tend to attract unscrupulous companies, negatively influencing the entire business environment5.

Segment 5: The Systemic Nature of Unjust Enrichment

HOST: What we're seeing isn't just isolated cases of corruption or unfairness – it's a systematic pattern where wealth flows upward through legal and illegal mechanisms, creating what experts call a "two-tiered justice system."

HOST: The drivers for private sector corruption include profit maximization, surviving economic hardship, overcoming competition, accessing new markets, and solving operational problems5. From a company's perspective, corruption represents a cost-benefit calculation where the benefits outweigh the perceived risks.

HOST: But this individual rationality creates collective irrationality. When the Volkswagen and Siemens scandals were studied, researchers found different attitudes toward corruption between management and staff, highlighting how organizational factors like performance pressures, deficient compliance systems, and corruption-prone corporate cultures drive these behaviors5.

HOST: The research shows that curbing private sector corruption is directly related to achieving Sustainable Development Goals, particularly inclusive economic growth, justice and inclusive institutions, and reducing inequalities5. In other words, addressing unjust enrichment isn't just about fairness – it's about creating sustainable, inclusive economic systems.

HOST: Government systems that should provide equal justice instead create wealth transfers that worsen inequality. The Equal Justice Initiative describes our current reality perfectly: "Too many people are menaced by a criminal legal system that tends to treat you better if you're rich and guilty than if you're poor and innocent"1.

Conclusion: Breaking the Cycle

HOST: So what have we learned today? Unjust enrichment isn't an accident or a side effect of otherwise fair systems. It's built into the very structure of how we handle justice, procurement, regulation, and crisis response.

HOST: When poor people can't pay fines, they go to jail, losing their jobs and falling deeper into poverty. When wealthy individuals and corporations face consequences for risky behavior, they get bailouts and golden parachutes. When government contracts are awarded, they too often go to the best connected rather than the best qualified. When regulations are written, they're influenced by the very industries they're supposed to oversee.

HOST: The research shows that addressing these problems requires more than just better rules – it requires political commitment, transparency, and systemic changes in how we organize public procurement, financial regulation, and justice systems2. It requires recognizing that corruption among private companies and collusion between public and private sectors represents a fundamental threat to democracy, public trust, and economic fairness5.

HOST: Most importantly, it requires acknowledging that our current system doesn't just allow unjust enrichment – in many cases, it systematically creates it. Until we address these structural inequalities, we'll continue to live in an economy where justice is a luxury good and where being poor is effectively criminalized while being wealthy provides immunity from consequences.

HOST: Thanks for joining us on "The Injustice Economy." Next week, we'll be investigating how tax havens and offshore financial systems enable wealth extraction on a global scale. Until then, keep questioning who really benefits from the systems we take for granted.

HOST: This has been "The Injustice Economy." I'm your host. Subscribe wherever you get your podcasts, and remember – understanding injustice is the first step toward creating a fairer world.