Bribery

US Government Gets Serious about Preventing Bribery by US Companies Operating Overseas. The Trinidad and Tobago Transparency Institute is a Chapter of Transparency International. Boyd Reid is its Secretary. A few days ago he circulated a very interesting article published by the Financial Times on 16 October. It reads as follows:

Bribery is too much like hard work
By Patti Waldmeir
Financial Times - FT.com Europe, October 16 2007

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.

Anyone who has ever run into a drunken soldier on an African back road at night knows that in some countries, No is not the right answer. And abandoning those markets altogether - for an oil company in Nigeria or a gold company in South Africa - is simply not feasible. As Sharie Brown, an FCPA compliance expert at law firm Foley & Lardner, points out: "Most companies can't just walk away from a very lucrative business environment because they might have to deal with local corruption. If that were the case, US companies would have to just stay in the US and not pursue overseas markets."

Ms Scarboro made clear afterwards that giving up on corrupt countries was not the only option: the wise company will structure its relationships with foreign public officials to avoid any suggestion of impropriety. But, in the end, the board may have to decide "if that's a place where they want to do business". If the country is dispensable to the company's operations, the best answer might be to pull out.

"The government is not completely unrealistic about what it's like to do business in some parts of the world," says Bruce Yannett of law firm Debevoise & Plimpton. The consensus among the legal experts at the conference was: spend lots of money training employees, monitoring local business partners, auditing foreign operations, launching dawn raids and surprise audits to make sure no one is disguising bribes as travel expenses - and you should just about survive. Paying bribes these days is just too costly.

<http://www.ft.com/servicestools/help/copyright>Copyright
The Financial Times Limited 2007

I do not know about you, but I was tremendously relieved by what this article revealed. For too long, US law enforcement authorities have turned a blind eye at their citizens venturing overseas and brazenly offering to pay bribes to local officials. It has been notorious around the world for decades. They often shelter behind the excuse that that is the way business is done in the Third World. If the report about the enforcement of the US Foreign Corrupt Practices Act is true, such US individuals and corporations will now be tracked down and brought to justice.

Now, for the protection of all of us in the Overseas Territories, we just need the British and French authorities to take similar measures.