Had a boss that got drunk every single day at work. He didn't hide it too much. During sit down meetings in his office, I'd sometimes catch a glimpse of his garbage can which was brimming with empty Coors lite cans. In the evenings, he often offered me a beer and I occasionally accepted. Ironically, he was the most productive , brilliant engineer to cross my path. Management never showed him the door. Eventually, he checked himself into rehab and I think there was a happy ending.

I have heard a similar story from an HR consultant, minus the whole "criminal" element. It far less likely at a public company but think of something like a call center or factory, a smallish business, ~30-100 employees, where the owner has hired managers running it. If someone devious gets in a position of hiring power they use favoritism and undisclosed relationships to build a fiefdom. It might not go as far as stealing money, but they could be creating extra jobs for their friends and fobbing the actual work off to underlings, basically just freeloading off the business. If the owner doesn't know the clique exists it could be hard to see the signs.

I'm pretty far OT here WRT drug testing, but anyway a good HR department should be more than a cover-your-ass paperwork machine.