Daily Archives: October 19, 2007

America Talks Tough About US Companies That Use Bribery In Foreign Countries

Several of our readers sent us a Financial Times article on the US Government crackdown upon American companies who use bribery in foreign countries. If there is a new US standard against bribery, no doubt Barbadian politicians who had anything to do with VECO and the oil terminal & prison, or 3S with the flyovers will be a little worried…

Bribery is too much like hard work

By Patti Waldmeir

Bribery is not what it used to be: these days it is too much like hard work. The man in the safari suit can no longer just hand over a bagful of cash; corruption has had to get creative.

Paying for prostitutes is obviously outré, and Swiss bank accounts are so 1970s. For most even half-reputable US multinationals, paying a bribe these days means evading armies of accountants and auditors, deceiving dozens of lawyers and compliance officers, and fooling the born-again anti-bribery fundamentalists who enforce America’s dreaded Foreign Corrupt Practices Act (not to mention the Chinese or Nigerian fraud squads).

For oil companies in some countries, there may be no reasonable alternative to bakshish; but other companies in other countries must ask themselves: is corruption worth the cost? This is not a moral question – on a strict calculus of risks and rewards, bribery may be too high a cost of doing business.

That, at least, was the message earlier this month when the top US anti-bribery police met senior US businesspeople at a forum hosted by the Directors Roundtable in Washington, DC: just say No to bribery, in all its many-splendoured forms.

When that African official asks for help getting the son of his second cousin twice removed into an elite American private school, just say No – who cares if he is paying the tuition; the cost of admission is priceless. When a rogue provincial official tries to shake you down for protection money, refuse – try to get the US embassy or powerful officials in the capital to help; but the answer must still be negative. And do not think you can hide behind the corrupt misdeeds of a joint venture or minority local partner: American companies, or those with even the most tenuous links to the US, will pay for what their local agents or contractors or subcontractors do to guarantee them business. The top cops on the foreign corruption beat made it amply clear: when it comes to foreign bribery, they are taking no prisoners.

The consternation in the room was palpable, as Mark Mendelsohn, the top FCPA enforcement official at the US justice department, and Cheryl Scarboro, who holds the same position at the Securities and Exchange Commission, outlined the new rules for companies operating in the world’s corruption hot-spots. One plaintive questioner asked: what is a company to do if it operates in a country where corruption is a way of doing business? “Maybe that’s a place you shouldn’t be doing business,” said Ms Scarboro, provoking an aggrieved splutter about naive bureaucrats with no experience of commercial realpolitik from the businessman sitting next to me.

… continue reading this article link here


Filed under Barbados, Business, Crime & Law, Political Corruption, Politics & Corruption