The Washington Post reports this morning about how a wide range of companies are being affected by federal prosecutors intent on enforcing the Foreign Corrupt Practices Act (FCPA) of 1977.
Here's how the Post frames the story:
"The U.S. anti-bribery law that Wal-Mart may have violated in Mexico has ensnared leading companies from virtually every sector of the economy as federal prosecutors increasingly crack down on a wide range of transgressions, from improper accounting to giving foreign officials computers and bags of cash.
"The list of those facing federal bribery inquiries stretches well beyond 100 and includes prominent names such as Pfizer, 3M, Goldman Sachs and Alcoa. Even icons of corporate responsibility such as General Electric and IBM have paid hefty sums to settle allegations, part of a broader effort that has netted the government billions in fines in recent years and landed some executives in prison ... The enforcement spike has drawn praise from Secretary of State Hillary Rodham Clinton and other administration officials, who have hailed its impact in fighting corruption overseas. But it also has produced persistent and growing complaints from multinational companies, who argue that the law leaves too much uncertainty about what qualifies as bribery and that the government’s impulse to prosecute threatens to undermine U.S. competitiveness abroad.
"Company officials and their advocates complain about what they see as murky language in the statute on issues such as who qualifies as a foreign official and the liability a parent company has for the behavior of subsidiaries."
These companies have responded to enforcement of the law by lobbying for changes that would clarify the language and put them at less risk.
Here's how the Post frames the story:
"The U.S. anti-bribery law that Wal-Mart may have violated in Mexico has ensnared leading companies from virtually every sector of the economy as federal prosecutors increasingly crack down on a wide range of transgressions, from improper accounting to giving foreign officials computers and bags of cash.
"The list of those facing federal bribery inquiries stretches well beyond 100 and includes prominent names such as Pfizer, 3M, Goldman Sachs and Alcoa. Even icons of corporate responsibility such as General Electric and IBM have paid hefty sums to settle allegations, part of a broader effort that has netted the government billions in fines in recent years and landed some executives in prison ... The enforcement spike has drawn praise from Secretary of State Hillary Rodham Clinton and other administration officials, who have hailed its impact in fighting corruption overseas. But it also has produced persistent and growing complaints from multinational companies, who argue that the law leaves too much uncertainty about what qualifies as bribery and that the government’s impulse to prosecute threatens to undermine U.S. competitiveness abroad.
"Company officials and their advocates complain about what they see as murky language in the statute on issues such as who qualifies as a foreign official and the liability a parent company has for the behavior of subsidiaries."
These companies have responded to enforcement of the law by lobbying for changes that would clarify the language and put them at less risk.
- KC's View:
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I'm reminded of the blind guy back in the seventies who was once appointed to be in charge of censorship for a local town. (A quaint notion, huh?) Asked how he would be able to tell if something was pornographic, he responded, "I know porn when I feel it."
This story may be apocryphal. But I thought of it when people say that they don't know what is bribery and what isn't. Really?
Ultimately, Walmart's biggest problem is going to be the cover-up, not the actual bribery. It is going to be executives who allowed people to investigate their own divisions, who prevented investigations from going forward, and who covered up results when they came to light.
At a personal level, I just get tired of companies and people who are holier-than-thou, and then engage in illegal activities. That kind of selective ethics - whether practiced by business executives, politicians or religious leaders - represent the worst kind of hypocrisy and arrogance. At least IMHO.
