Bribery
Posted in Plain Politics on April 29th, 2005My old law professor, Phillip Johnson, wrote a book on bribery. I never thought too much about bribery before he mentioned some of the issues addressed in his book.
An unsolicited bribe offered to an official and refused, is how we generally view the crime. That is the picture in our mind of a briber and a bribe. The person offering the bribe is a wrongdoer, probably compounding some other wrong he committed or seeking some unfair gain for himself. The official being solicited is a victim of the crime. It is a solicitation of the official to commit a crime himself and the incentive is probably seriously enticing to the official, or it would not be offered. If you would not be tempted by the five crisp hundreds offered to forget a possible DUI, imagine a starlet who offers a sexual favor. If the official accepts the bribe, the other victim is the public, for if an official misuses a public trust for personal gain; well, the public trust has been misused. Rule of graft is plainly less efficient and less just than rule of law.
When I was younger, there was a huge “US domestic corporations bribe foreign governments” scandal. When the press (MSM) was finished with the story of large corporations giving money to oily foreign officials in order to get contracts or permission to sell or permission to develop in foreign lands, well they just painted the perfect picture of the general view of the crime.
There were even changes to the accounting standards for public corporations. FASB (federal accounting standards board) required corporations to list in their financial statements the amount of bribes paid to foreign government officials. Since paying bribes is illegal, well, you either paid the bribe and confessed in your financial statements, paid the bribe and lied in your financial statements or did not pay the bribe. The same number of corporations reported foreign bribes as the number of people purchasing marijuana tax stamps.
This was great because, apart from the stringent, relatively clean, and wholly domestic controls applied to accounting violations, the operations of foreign subsidiaries and the foreign officials who had power over them were corrupt and opaque. Frankly, you did not do business of any sort in these countries without a bribe, and if you were too Donny Osmond to learn these facts pretty rapidly, you would be advised in a totally deniable way. Every US Corporation and every foreign headquartered corporation paid bribes. The FASB could hold US corporations’ feet to the fire easily with no reform of the sphere of actual operations by turning a foreign bribe into a domestic financial non-disclosure.
Digression: the US corporations answering to the FASB lost foreign business to all non-US corporations, because the non-US entities were not so foolish as to think that cracking down effectively on their bribe offers was a reform. The non-FASB corporations continued to offer bribes as a cost of doing business and gained more market share at our expense.
I’ve finally got to my point. There is a non-usual subset of the crime of bribery.
Sometimes the law or regulation or rule is not expected to be followed, or it does not even matter if it is followed or not. In too many countries, the day your enterprise makes money, an official arrives and states that you need a permit to do something you have been doing for years while there were no profits. In too many countries, you can not start a profit making and job creating enterprise until you pay off the local magistrate. In some situations, you know you have done nothing wrong and a bribe is being implicitly solicited by the official standing before you. You see with your own eyes the next person cross the border after slipping a payment to an official while you wait day after day for permission which is never forthcoming. Then the crime of bribery, while having the same name is a totally different monster.
The malefactor is the government official, who uses discretion or unwillingness to follow the rule of law to hinder your lawful and positive actions. The intention is to prevent no wrong but to convince you to pay a bribe so that you can go about your business. The victim is the briber, who recognizes the scam going on. The other victim is the public; because, once again, the public trust is being subverted to personally benefit an official at the expense of the public at large.
Through subtle variations, all the parties are ethically reversed.
Were the US corporations who paid third world officials bribes in order to do business in their countries satanic corruptors or complying with the local cultural norms? Was the FASB rule change a bombastic cultural imperialistic reaction of the US elite?
Please turn your attention to the US government. Let us suppose that one line in the tax code about timber depreciation rules could turn a huge corporation losing money into a huge corporation with a high profit margin, as is certainly true. When a line of tax code means more to the profitability of a dozen thousand person enterprise than any cost controls, execution improvements, marketing plans, merger, &etc, where do you expect the corporation to apply its efforts? If any political contributions made by the corporation are legal, some would nevertheless call it corporate America bribing Congress, but which type of bribe are we talking about? Perhaps we are so much a banana republic that optional payments to government officials are now the key to success.
Microsoft became a huge economic entity while totally ignoring Washington. Former President Clinton met with many CEO’s of companies who thought Microsoft was a bar to their success. Some of the other CEO’s came out in public in favor of President Clinton. Even gave President Clinton a reputation as a politician supported by members of the new economy. An antitrust enforcement action against Microsoft followed. This was later followed by Microsoft entry into lobbying and political action on a large scale.
Does anyone think that Microsoft suddenly needed the political force, laws and guns of Washington to make money?