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Business and Bribery

Notable Examples of Bribery You Should Know

Notable Examples of Bribery You Should Know

Examples of bribery cases in which individuals or companies used bribery in order to secure contracts or otherwise illegitimately advance a corporation abound. From recent bribery cases involving Siemens AG to the 1976 Lockheed bribery cases that led to the inception of the Foreign Corrupt Practices Act, one can find numerous examples displaying both how damaging such bribery cases can be and how important it is that bribery laws be implemented to prevent such bribery cases from occurring in the future.
One such relatively recent bribery case is that of former Representative William Jennings Jefferson of Louisiana. Jefferson was accused of corruption, of taking bribes from a private company in order to advance their interests illegitimately. This is a very basic example of bribery, when a company bribes a public official in order to gain a significant advantage over its competitors. Jefferson took at least $100,000 in bribes and aided a tech company named iGate, Inc., illegally with his political power. 
Specifically, Jefferson was to both recommend iGate’s technology to the U.S. Army and to convince officials in Nigeria, Ghana, and Cameroon to employ it as well. Jefferson was even recorded as saying that he would need $500,000 to give to Nigerian Vice President Atiku Abubakar in order to ensure that they could gain contracts in Nigeria. 
Jefferson was eventually indicted and convicted of 11 of the 16 corruption charges against him. He has since been sentenced to 13 years for bribery, which is the longest sentence that has ever been given to a Congressman for bribery charges. This, at least, is a case where the bribery laws of America worked very well to successfully strike down an individual guilty of bribery. 
Another notable example of a bribery case is that of Siemens AG and its violation of the U.S. Foreign Corrupt Practices Act in bribing foreign officials for contracts. Siemens, a German company, was accused of paying $1.36 billion in bribes to numerous government officials all over the world. To do this, Siemens had to use numerous illicit methods of payment, including creating slush funds, mischaracterizing bribes, and giving “kickbacks”. 
Siemens operates in America and was, therefore, charged under the Foreign Corrupt Practices Act, even though Siemens is technically a German company, in an instance where bribery laws were used to successfully prosecute a non-native company. Siemens ultimately settled, agreeing to pay $800 million as a fine for having violated anti-bribery laws. It will also be heavily monitored to ensure that it continues to comply with anti-bribery laws. 
This second example is significant because it is likely the most common form of bribery case that is brought up. Companies bribing officials in foreign nations for government business contracts is an all too common form of corruption, even more than individual political representatives misusing power, considering that many companies the world over would likely perform such practices, especially in developing nations. 
But every time another company is caught and forced to pay a heavy price for its wrongdoing, the situation becomes a little bit more hopeful. After all, if enough companies are caught and the penalties are severe enough, then perhaps most bribery will be eliminated purely through discouragement.

The Major Concerns of International Bribery

The Major Concerns of International Bribery

Bribery in general is a highly destructive practice. In government, it undermines the most basic systems and values and decreases public trust in government officials. In medicine, it can lead to dangerous endorsements and prescriptions of unnecessary medications. 
In business, however, it can lead to an overall decrease in economic growth and the overturn of fundamental systems of capitalism, as competition becomes utterly unbalanced by bribery. This last consequence of bribery is especially significant to international bribery, as the world becomes smaller each day.
Foreign trade is becoming more and more important to the overall financial success of any given company, as foreign markets offer large areas to be tapped for additional economic growth. Some of the largest markets also lie in developing nations, with major populations in need of any number of manufactured products. But one of the unfortunate consequences of these markets being located in developing nations is simply that international business ethics standards do not necessarily carry over.
Between businesses of two developed nations, international bribery is very unlikely to occur, not least because both nations likely have similar principles and laws concerning bribery and will likely share a similar code of international business ethics. Should a business of one developed nation attempt to bribe an official of another for a contract, then someone in either the foreign nation or the home nation would be likely to find out about the transaction and would then be likely to punish those parties involved.
But in a business dealing between a business of a developed nation and the government of an undeveloped nation, none of the above is necessarily true. It is entirely possible for the government of the undeveloped nation to have no restrictions against such international bribery, or even if it does have such restrictions, it might not enforce them. 
Businesses then often have two sets of international practices, one for developed nations and one for undeveloped nations. For developed nations, businesses will obey the tenets of international business ethics. But for undeveloped nations, businesses will often have no ethical difficulty with stooping to international bribery in order to secure contracts. 
As was mentioned earlier, however, when one business shirks the tenets of international business ethics, it significantly affects the nature of competition under the capitalist system. That one company will then be at a significant advantage as opposed to other companies which still attempt to maintain appropriate, ethical business practices. In order for the other businesses to remain competitive, then they too must indulge in international bribery and completely step outside of the boundaries of international business ethics. 
This is the primary concern facing international bribery. Any given nation can outlaw bribery practices, and it can furthermore outlaw bribery practices towards foreign nations. But there are many nations which, either de facto or de jure, have not outlawed such practices. 
In such markets, a heavy advantage may always be gained by resorting to international bribery, which will then require the other companies to adopt similarly unethical practices in order to remain in the game, as it were. Without a code of international business ethics that is binding on all participants in global trade, this problem will likely always remain.