The subjects are extremely corrupt countries like India, Ghana, etc. where it seems a majority of people are expected to bribe public officials on a regular basis. Obviously, it is simpler/safer/often necessary just to pay them off.
However, what kind of consequences does a typical person face if he or she decides enough is enough and refuses to distribute bribes? The scope is pretty wide here, anything from cops stopping your car to officials licensing your business, so personal anecdotes are valued. Also opinions on useful ways to combat endemic corruption.
As I understand it, most of this is baksheesh. As PastTense describes, you pay it to get the service you want. Don’t pay it and you don’t get anything. Not the same as blackmail or extortion, it’s just an additional service fee. Here in the US it’s called a campaign contribution.
If you represent a US or UK company and you pay bribes in a foreign country to get things done over there, then your company could be subject to various fines and penalties under the US Foreign Corrupt Practices Act or the UK Bribery Act.
Typically fines are not based upon the amount of the bribe, but can be multiples of the amount of revenue generated by your company because the bribing action.
So a US company is wanting to get a new plant built in India. They bribe various officials to get permits completed by paying them a total of $150,000. But the permits enable the company to get the plant built a year sooner and they have $100 million of sales in the first year. The US government could decide to fine the Company under the FCPA several hundred million, and result in the company incurring substantial legal fees.
In the real world of operations in the frontier markets, there is the informal understanding between the “small money” you have to pay - usually it is the “pocket money” of the courrier agent - to get what the stupid Functionnaire is legally required to do like stamp your papers or give you a formulaire you need to give to another horrible little tyrant in the next building. All your legal right but if you are so stupid to say that in front of them… haha. So a café is bought and a lunch and you get what the law says you are entitled to by right but the little tyrants refuse.
then there is the big money, that is the bribes paid to get what is not or what is doubtfully your right.
yes, there is the grey areas, but mostly it is quite clear the difference and the morality.
and of course for the little money you can sometimes decide - if you do not mind wasting days, weeks, etc to be stubborn and just wear down the little tyrant by persisting…
we never pay big money, but our coursiers, they have a pocket money budget and we know in reality why.
I suppose the Americans make no difference between the payment to get what you are legally entitled to without questions and the payment to get something that you might not be legally entitled to or want to get without the proper review…
In America we tend to bribe indirectly, we invite the inspectors on weekend fishing trips, golf, etc. as a friend. Usually what we are hoping for is not waving any rules but quicker inspections and softer warnings, on occasion taking our word for something being fixed if we demonstrated that we were good for our word.
My experience concerns representing a client in Venezuela who was trying to get forms he needed from the Venezuelan government to complete a business transaction. As others have said, the cost of not paying the proper bribe was simply not getting the forms processed or any resolution; the paperwork would just stay in limbo. Fortunately, the client had a lawyer in Venezuela who knew who to pay off to get the process completed.
It left a lasting impression on me concerning why the U.S. is such a great place for business investment and development: for all the people who grumble about government regulations or requirements, at least the U.S. offers a stable and consistent process for getting things done. Follow the requirements, fill out the forms, pay the fees - you’ll get the result you expect, and in just about the same time as everyone else. It’s not like in countries where every request generates a subjective response largely dependent on who you know and what favors you have done. Predictability and stability are crucial to fostering a welcoming business environment.
Which is a good reason for rules to prohibit this, because it can quickly cross lines into what happened to my friend when he started up a business. The inspector let them know that a bribe would be nice. When he refused, the inspector went with really ticky tack violations and made sure my friend paid heavily for not coughing up the $50.
In theory, having good guys become friends with the inspectors so that the inspectors know the good guys are good should be fine, but human nature is such that not-so-good people utilize the same principles for less noble reasons.
As a former director of sales for projects sometimes running into the tens of millions of dollars, we would wine and dine customers. (Normally we only supplied products, but occasionally bid on the entire project, so I was involved in that scale of project only a handful of times.) We never had to pay bribes, but we did try hard to become good friends with the purchasing departments as well as the key decision makers.
All good and fine, but American tax payers should be thankful for federal government rules which prohibit these practices. Japan does not, and the eventual result is about a 3% surcharge on projects: the cost of the bribes. Not much when buying copier paper, but a lot when dams are being constructed. In the article linked by PastTense, it said that only 0.2% of Japanese reported paying bribes. What they didn’t mention is that when the bribes are paid, it’s huge.
A friend is the daughter of a now deceased yazuka member. She was 12 or so when the police raided their home looking for the strictly illegal guns and drugs. In shock, she called her father who said to not worry. He called someone up high in the organization who then called off the local cops.
Here in Taiwan where I’m now working teaching English, I teach at a range of places including kindergartens. In order to combat the overly competitive nature of Taiwanese education, they prohibit foreign languages from being taught to children before first grade. Parents don’t like that so kindergartens still have English lessons. Somehow we know when the inspectors are scheduled to show up and I have a couple of days off.
Have you listened to the podcast Crimetown with the tagline “Welcome to Providence, Rhode Island, where organized crime and corruption infected every aspect of public life”?
In Pakistan a friend’s family refused to pay the bribe to “expedite” the installation of their home phone. This was in 1966. Their phone was installed in 1996 after telecoms company was privatized.
If you’re a business, you’d be out of business if you don’t pay bribes.
The same guy runs a printing business now. He is asked for money by the customers’ procurement officers to get on the approved vendor list, the requesting department to get the order and by accounts payables managers to get paid.
He just avoids doing business with companies where he can’t just go to the owner or controlling family. Extremely limiting for the business, but his family wealth makes it possible for him to afford his scruples. 99.9% have no such choice.
I had to pay a bribe to get a blank form to apply for a passport. I could wait in a queue all day, day after day, and if I was lucky I might get the form in a few days. Or weeks.
You can imagine what it took to actually get the passport issued.
There are some really strict American rules against that these days. I work for an international consulting company in the U.S. and we have to go through anti-corruption training twice a year. Either giving or taking any sort of bribe is one of the few things that will get you instant, incontestable dismissal with possible criminal charges.
The definition of “bribe” is very detailed and the bar is very low as well. We can’t accept even simple gifts worth over $20 even if they are just promotional items like coffee mugs or umbrellas with a company name on them. We can accept meals paid for by our clients if we are on an official business trip but those have dollar limits as well. Anything that doesn’t strictly involve work is right out (that means absolutely no golf outings let alone vacations).
That is becoming very common in the U.S. in my experience. Bribing happens but it is usually at the high levels and strictly forbidden at the lower ones. Ask former Illinois Governor Rod Blagojevich (care of Federal Corrections Institution Englewood) about that if you have any more questions.
This is interesting as all of these departments operate fairly transparently and quickly now. Telecoms are obsolete in this era of mobiles, but getting a passport is extremely easy now online filing and payment is the preferred option or you can go to a local passport office which gives it to you in a few days. Of course, nowadays they have “urgent” and “expedited” fees and they pay the workers additional for every passport they process. Same with our local Building Control Authority. They function fine. Amazingly.
I remember a World Bank study which pointed out that for many colonial era systems, bribery was a feature, not a bug; you had small, underpaid and overworked staff, with large amounts of discretion, it was a way to keep costs down. :rolleyes: Explains a lot.
We had to have this training once per year in China, but I’m certain that it had no effect, at least within the joint venture. It’s hard to appreciate our culture lacking corruption and bribery until you’re exposed to the scale of it in a corrupt society.
We’re allowed up to $50 in swag, and can attend golf or sports once per quarter per supplier as long as the supplier is with us, and of course, vacations are right out. Meals aren’t prohibited, and are usually in the context of work in any case. Given a typical engineer salary, this is all de minimis, anyway, and the real risk isn’t the financial incentive but the relationship building.
But I’ve got to ask, what risk of bribery exists that a client can’t pay too much for a meal? Is there a risk of you performing unbilled work for them or something? Typically I’d worry about you trying to bribe the client!