Why is it that if I bribe government officials for myself I get jail time but if I do it for my business I just get a small fine?
Edit: This is an honest question. I understand that there can be prosecutorial discretion and that most 'crimes' go un-prosecuted -- I'm not likely to be "caught" for personal bribes. But given that this reached the threshold of administrative attention I'm curious why the DOJ doesn't coordinate efforts with SEC in cases like this.
While the SEC has extremely broad investigative and enforcement powers, it cannot file criminal charges. It can, and often does, work with the Department of Justice and the United States Attorney's Office to bring criminal charges.
That's just not true, lobbying means in the clearer-cut cases simply talking to someone who's been trusted with power and the advocacy groups you'd like do it as much as any corporation or industry consortium.
"Lobbying" and corruption are inseparable in Washington. Lobbying is how you get access and cut deals. Where there are lobbyists, there's corruption: public interests sacrificed for special private interests (or even foreign interests).
Technically you can have lobbying without corruption, but that is sadly not the reality in Washington.
Also, in countries we consider corrupt, its often done the same way.
There is rarely any bushel of cash being given for a direct political favor. Its more so incenstuous lobbying, booking out all of the rooms of the politicians hotels forever, investments in the advisors hedge funds, a high level position at a big company you helped after leaving public office..
Talk is cheap. The difficult part is getting people to listen. Lobbying is how you get officials to listen and thereby influence their policy in your favor.
Yes you see... you don't pay the official. You pay his good friend, who talks to the official. The good friend benefits handsomely from the wage you pay to talk. Of course the fact that the good friend is the interface to the official, and that you need money to pay the good friend, that the official himself benefits handsomely in social capital from his good friends being paid this way, and that without the good friend talking you are utterly fucked : well that's all totally not bribery.
You are missing the "I can legally give your campaign a lot of money and it's called a campaign donation". There's a per person limit, but you can get all the execs at a company to give, you can bundle money together. Plus the "I have hidden/dark money, and I can support you via buying campaign ads to support you - or go against you if you don't do what I want".
Au contraire - you are the fool. I do know that bribes and lobbying are not the same thing, but that somehow, mysteriously, lobbying is effecting and so is making campaign donations to sway the votes of politicians.
The SEC isn't accusing anyone in the US of bribery. Their concern is that Oracle had inadequate documentation requirements for certain kinds of spending and discounts, allowing subsidiaries in other countries to falsely claim their bribes as legitimate business spending. If there were evidence that anyone in the US told people to pay these bribes, that would be a much bigger deal, and in similar cases people have definitely gone to jail for that.
Is illegal for individual Americans to bribe foreman officials?
The only federal laws I can find reference bribes inside America and companies (Ed: or their agents) bribing foreign officials. I guess individual states might have laws but jurisdiction can be an issue.
That lists “officer, director, employee, or agent” which makes it clear the aim is in terms of business not say a student on vacation bribing their way out of a traffic ticket.
“It shall be unlawful for any issuer which has a class of securities registered pursuant to section 78l of this title or which is required to file reports under section 78o(d) of this title, or for any officer, director, employee, or agent of such issuer or any stockholder thereof acting on behalf of such issuer, to make use of the mails or any means or instrumentality of interstate commerce corruptly in furtherance of an offer, payment, promise to pay, or authorization of the payment of any money, or offer, gift, promise to give, or authorization of the giving of anything of value to--“ https://www.justice.gov/sites/default/files/criminal-fraud/l...
That said, I am not a lawyer so I could be missing something.
Per my understanding it isn’t strictly illegal to bribe people in foreign countries, just that it’s _often_ illegal, under circumstances I’m pretty vague about - no clue about your example. Also NAL
There are places in the world where if you do not bribe an official, you could suffer for your morals. So, yeah, a private citizen only representing themselves is not covered by the foreign corrupt practices act. That said, many US Gov't Officials do bribe foreign actors, though they may not call them bribes.
Why is that if I exclude personal expenses before paying taxes I get jail time, but if I'm a corporation, not only I can do exactly this, IRS will pay me if my expenses had exceeded profits? And how does it square with the claim that corporations are people, legally speaking?
Why do I go to jail for insider trading, but gov officials can exempt themselves from the law and do insider trading "legally"?
Why is working for multiple employers is a contract breach, punishable by law, but board members can sit on multiple competing boards?
Why bribing city officials to direct funds to my pocket company is a crime, but senior execs can have buddies and family members in high rank gov positions that directly affect the business the exec's company?
Because the law is often just a written expression of the will of those who has power over those who doesn't.
I think it's a little bit about corruption and a little bit about the little guy who pays the price even though 4 levels of managers above him would go free because it would be too hard to prove even though they were the ones who leveraged him to do it.
I think allowing the SEC to "jail" a company - to prevent it from conducting any business or processing any funds for some period of time - would be apt.
There are exceptions, but generally US legal mechanisms function on money. More money buys more consideration.
US culture also tends to wink at a lot of what is called "white collar" crime. If whatever you're up to does not involve stealing from specific individuals or rich people, you'll probably get a slap on the wrist. And if you're stealing from the government, a lot of people will commend you, or at least envy you.
Syriana is a terrible movie. The whole Stinger plot device is dumb. The value of a Stinger is the seeker, not the warhead. A chemist with a large copper bowl can build a self-forging warhead that will hole a ship, whereas a Stinger works by flinging a bunch of high energy shrapnel at a lightweight structure.
Syriana is a deftly stitched snapshot of the characters and forces at work as the inexorable power of oil money weaves its way through the political system.
The mechanics of an implied terrorist attack after the movie ends aren’t important. You’re complaining about the eagles at the end of LOTR.
I think you can probably chalk up at least fifty percent of the corporate evil in the world to the fact that choices are personal but consequences are organizational.
"Those who act virtuously in every way, necessarily come to grief by those less virtuous." - Machiavelli
The problem with the FCPA is that it inherently provides an unfair advantage to countries where foreign brides are not criminal or never prosecuted. Moreover, it's created a cottage industry of foreign 'consultants' and foreign attorneys, providing plausible deniability for outsourced bribery.
This would be fine if Treasury, Commerce & DOJ put the screws to foreign countries & companies who engage in this misconduct, but the hard reality is they lack the resources to do so, and are far more concerned with politically charged priorities accruing more public & Congressional attention.
Like environmental/climate policy and many other issues... the US is quite happy to disadvantage US businesses in global competition without any substantive effort to level the playing field through extra-territorial enforcement or policy reform.
For example, we should permit statutory safe harbor for foreign bribery if US companies become confidential informants to DOJ, Treasury or Commerce, enabled via a clear and accessible platform for reporting.
Instead, we live in a magical, feel-good, fantasy land in the US, with very little awareness of how the rest of the world really does business.
I agree with this notion, domestic us restrictions on foreign business policies have paved the way for businesses and institutions of other countries to act on even worse faith.
There's parallels with this happening in the beef industry, where organizations are trying to lower the production of beef for environmental reasons. The result is they're attacking the most efficient beef farmers in the world - because they produce the most beef. If successful, the demand will only be picked up by less efficient farmers elsewhere in the world, causing a worse environmental impact.
This is a very misguided comment. Bribery is a net economic loss — the company has to pay the bribe, and there is a long-term loss as the money gets spent on yachts instead of projects that spur further economic growth.
Companies and their shareholders never wanted to pay out these bribes, and want these laws, because there is little competitive advantage to be gained by being better at bribing. Over time the laws have been extending to most developed countries, including the whole OECD.
Sure, there are still exceptions, and if you’re a corrupt official, you can still select a Chinese engineering firm and pocket bribes. But it’s those excluded countries that are playing the losing game in the long term, ruining their international reputation and funding unproductive infrastructure projects with debt their own banks will be saddled with.
You truly do not understand the comment if you think it's misguided, specifically you don't understand:
- Difference between laws and enforcement of laws.
- Endemic corruption that cares nothing for long-term losses.
- Shareholder emphasis on short-terms financial results and utter disinterest in long-term results or compliance (unless it impacts short term stock price).
- And, most importantly, global competition and how some foreign countries permit or encourage bribery to advance strategic interests.
You live in the fantasyland I described in my earlier comment.
Not sure what your point is. Anti-bribery laws are being expanded around the world. The OECD covers 2/3s of the world’s GDP, and is actively working to bring all its members up to the same standards. It’s not some “feel good” fantasy, it’s good for the bottom line. Banks and investors don’t want their profits skimmed by corruption, and are pushing for higher integrity.
Sure, there still are places like Russia that operate within a Machiavellian worldview, but most of the world has now recognized the value of fair systems that lead to win-win outcomes.
Removing rules against foreign bribery would ultimately result in flows of capital from countries with no rule of law to countries with rule of law. This is especially true if the corrupt officials spend their ill gotten gains in the West. If Glencore can get oil at a 20% discount from Nigeria or Angola why should we be complaining? Given that most of the OECD (except maybe Mexico Turkey and parts of Italy) don’t really have serious corruption problems, it sounds like OECD countries are mostly shooting themselves in the foot. Although America and the UK are the only countries that actually enforce these laws anyways.
> Companies and their shareholders never wanted to pay out these bribes,
Incorrect. A company is incentivized to find the cheapest and easiest way to get what they want, and if that way consists of slipping a year's wages to a corrupt official or executive, it has a reason to do it. The net economic loss to other people does not factor into this calculus.
The whole point of quid-pro-quo is that the person giving the bribe expects to receive a benefit that is worth more to them than the cost of the bribe.
Wrong. Many of the owners of the company — the shareholders — are invested in a diverse group of companies. If those companies in their portfolio are competing to out-bribe each other, there is no gain to the investor.
The gains go mostly to a few corrupt executives who get a bigger bonus, and the corrupt foreign officials. Perhaps a few unscrupulous privately held companies would prefer scrap the laws as well, but the reason the laws exist are because they are broadly seen as good for business by most players.
You don't get it. It's a free for all outside the US, where players seek to line their own pockets, and many a foreign government permits or encourages bribery for strategic or personal gain. FCPA is very well intended, laudable, wonderful, but utterly ineffective at scale and counterproductive to US interests absent meaningful enforcement abroad. Its a fool's errand.
That's no different from the case where two companies with common shareholders compete with each other. A company is not beholden to increase the net worth of any particular shareholder. If a shareholder owns shares in companies with conflicting interests, that's that shareholder's problem.
It makes sense for companies to advocate for fair play laws (because that forces their competitors to play fair), but when those laws are not in place, to play unfairly.
Also, some businesses benefit a lot more from corruption than others. Resource extraction firms, for instance.
>>This would be fine if Treasury, Commerce & DOJ put the screws to foreign countries & companies who engage in this misconduct,
They do, but they level the playing field in other ways:
"That's right, my continental friends, we have spied on you because you bribe. Your companies' products are often more costly, less technically advanced or both, than your American competitors'. As a result you bribe a lot. So complicit are your governments that in several European countries bribes still are tax-deductible.
When we have caught you at it, you might be interested, we haven't said a word to the U.S. companies in the competition. Instead we go to the government you're bribing and tell its officials that we don't take kindly to such corruption. They often respond by giving the most meritorious bid (sometimes American, sometimes not) all or part of the contract. This upsets you, and sometimes creates recriminations between your bribers and the other country's bribees, and this occasionally becomes a public scandal. We love it."
Why We Spy on Our Allies
By R. James Woolsey, a Washington lawyer and a former director of central intelligence.
Big companies might get the benefit of CIA spying on transnational bribery, but small business - where most US jobs are created - is left swinging in the wind.
Making paying a bribe illegal changes the equilibrium. If soliciting a bribe as a government official has the same penalty for paying it, there’s incentives to do it and hide it. However, if soliciting is illegal but paying is not, then it’s more likely that they receiver will get dinged.
The other side of this is offering a bribe to an honest government official: Let them take it (and turn it over to law enforcement) and then turn in the payer.
In both those cases, it’s now riskier to solicit/offer bribes.
It is the view of the current set of people in law enforcement that the United States government has jurisdiction over any person who participates in transactions using dollars.
I think there might also be a consideration here that it's a US company. The FCPA has driven some foreign companies out of business and allowed giants like GE to buy up their assets. Alstom exec's were fined for ordered to either pay 700m or face prison time and instead chose to sell the company to GE. GE itself was fined only 20 for FCPA violations in India. I can't find the list right now, but I believe GE bought a couple of companies this way.
I sat through so many anti-bribery training lessons over the years, I'm convinced companies use these to limit liability and scope the blame to the small guys. "But they were trained and should have known better."
People will just incorporate in Delaware, or other, similarly limp wristed jurisdictions instead of doing something somewhere where they face that type of risk. See current behavior for evidence of that.
It would be helpful if these announcements would include an estimate of how much money was spent to bribe along with estimated revenue impact of the bribe.
These seems like it could still be a profitable position over 5 years given the size of Oracles contracts, no?
From what I've heard, many cases of these kinds of bribery schemes are fairly widely known within the companies themselves. The general attitude is that "everyone is doing it" and any harm is so indirect as to not seem particularly unethical. For example, some government is already set to spend $100 million with X software company, so what's the harm in kicking back $10 million to the person signing the check?
Of course it's wrong but it's very easily rationalized by psychologically normal people.
If the goal is to actually stop this kind of bribery, we should give whistleblowers a 20% reward of the penalties. In other words, we should legally bribe people into reporting illegal bribery because bribery works.
Ah cool, it should be more widely publicized. Maybe I missed it, but I don't recall seeing news about bribery whistleblowers being paid out. Maybe it should be a mandatory part of training programs for global companies.
I can't believe there aren't people at Oracle that would have happily collected on it. Or maybe that's what happened here.
I would prefer if “the fine was so large we nearly went out of business overnight” to be the norm in these situations. The pricetag is so low that it might as well be encouragement to commit more crime in the future.
Here you go. If the fine was significantly more wouldn't Oracle either fire people or raise prices? That only punishes people who had nothing to do with the crime
The violation was in creating secret accounts to use for bribery, not the bribery. It would be bizarre for the US to prosecute for the bribery, since a large part of US (and other countries') diplomacy is to bribe decisionmakers in other countries with favorable treatment in return for them buying from our vendors, and to offer foreign aid in the form of products and services from our vendors.
Oracle is obviously no saint and I’d do my best to not use their services… but, why do governments have extraterritorial jurisdiction to impose domestic laws in international jurisdictions?
Yes, obviously we can control what happens within our borders and we can stretch that and say it applies to US incorporated companies, but it certainly is overreach to apply US law to foreign subsidiaries.
The aggrieved country where the violation happened should be the one who has jurisdiction over these issues, not the law of a foreign country. I think we used to call this “imperialism”.
I'd say the effect sought to be achieved is pretty much opposite of imperialism. In imperialiam (as demonstrated by various histories), colonizer citizens get away with pretty much anything in the colonized countries. FCPA levels the playing field by making colonizers liable in the home country.
India, the UAE, nor Turkey are colonies of the United States.
Also the idea you can be on a level playing fields with citizens in certain countries without bribery is just laughable. The common citizen bribes in a number of third world countries just to get routine service, and if you don't bribe you're left pragmatically a sub-citizen status.
>Chesterton's Fence principle
Exactly. One should study why bribery is often necessary to even be a 'level' participant on the playing field before assuming anyone bribing is a 'colonizer.'
IIRC the FCPA _does_ allow some bribes if they're considered commonplace in that particular country. I have no idea how they determine which ones are okay.
Technically, payments which do not influence an outcome but merely speed up a decision are allowed. So bribing a minister to throw out all competing bids on a contract would be illegal but paying some clerk who’s dragging her feet on incorporation paperwork would be legal. In practice this line is a lot more blurry and they will charge companies even if they bribe for routine services. Walmart for instance paid a pretty big fine for paying to get building permits faster in Brazil. Companies will always settle because they don’t want to report to shareholders that a massive verdict and fine could be coming up.
There’s also a duress exception, like if they start arbitrarily arresting your employees you are allowed to pay to get them out. This is basically what happened to Halotel and Viettel in Tanzania.
Any law with such arbitrary and capricious interpretation should be unconstitutional. This is precisely the kind of reason why extra-territorial jurisdiction is generally a bad idea.
How would you feel if I traveled to other countries a few times a year to molest children openly and proudly, then came back? Do you think charging me with a crime would be imperialism? Would I be denying the agency of the countries that rely on child sex tourism to provide more jewels for the King's Holy Garments?
Does the word imperialism mean controlling or replacing the governments of other countries in order to extract value for the mother country anymore, or is it always going to be an insulting incoherent woke metaphor about telling women how short their skirts can be and how they deserved it from now on?
-----
edit:
Child labor for me and not for thee, maybe: if I punish a US businessman for their open preference for importing products produced with child labor, am I imposing my values on the sources?
If a US businessman opens factories in other countries that employ actual slaves, should the businessman be commended for his cultural sensitivity and openness (and contribution) to the labor practices of other cultures?
Should the US government itself operate by different rules outside its borders? Is a US citizen only deserving of due process until they step over the border, where they can be summarily executed?
There are a lot of obvious questions that can be asked about your position. My curiosity is about whether you allow yourself to ask them, or if you just stop asking questions when you reach the conclusion you prefer.
They should have an extradition treaty and ask you to be extradited so you are tried (see the Roman Polanski case). Also bribery is not rape or murder.
To your later point, we do this all the time. We apply labor laws within US jurisdiction but we do not care if people/companies/governments in India or China use child labor in the manufacture of goods and services --with rare exceptions.
I would be totally for enforcing this prohibition on imported goods and services. At the same time we have no right to tell India and China what they should allow and not allow there within their borders.
I think we should be cognizant that the concept of child labor is a modern western concept --it's something those countries will discover on their own in due time. Enforcing our morals has the potential of making the lives of locals _worse_: their mother, father, siblings may starve because of lack of social services and incapacity of parents/siblings.
It reduces the total global corruption incentive to have laws like FCPA enacted in every country.
I suspect there are some interesting histories of the 1910s through 1950s where foreign development by oil companies led to spiraling corruption practices, for example.
If this were a universal convention of some sort with worldwide signatories, yes, ok. Otherwise this should be up to the discretion and jurisdiction of the local authorities, not a foreign body of law imposing its conventions extraterritorially.
This is true, but that's up to locals to decide what's acceptable in their society and not. Look, Ukraine, Russia and Nigeria are some of the most corrupt countries on the planet -we even have relatives of sitting presidents doing business with a few of the most corrupt governments, do we stop doing business with them, or do we stop aiding them till they adopt our morals?
Edit: This is an honest question. I understand that there can be prosecutorial discretion and that most 'crimes' go un-prosecuted -- I'm not likely to be "caught" for personal bribes. But given that this reached the threshold of administrative attention I'm curious why the DOJ doesn't coordinate efforts with SEC in cases like this.