Business Ethics Now 3rd Edition by Andrew Ghillyer

Exercise 34

In 1997, 35 countries signed the convention of the Organization for Economic Cooperation and Development (OECD) to make it a crime to bribe foreign officials. However, in the last half of 2004:
• Bristol-Myers Squibb revealed that the Securities and Exchange Commission launched an investigation into some of the company's German units for possible violations of the FCPA.
• Three former Lucent Corp. employees were alleged to have bribed Saudi Arabia's former telecommunications minister with cash and gifts worth up to $21 million.
• Halliburton Corp., under investigation by both the Department of Justice and the SEC, disclosed that it may have bribed Nigerian officials to secure favorable tax treatment for a liquefied natural gas facility.
• The SEC hit the U.S. unit of Swiss-based ABB Ltd. with a $16.4 million judgment reflecting information on bribery and accounting improprieties. The charges, which ABB settled without admitting or denying guilt, were that ABB's U.S. and foreign units paid $1.1 billion in bribes to officials in Nigeria, Angola, and Kazakhstan between 1998 and 2003. In one instance, the SEC alleged, ABB's country manager for Angola gave out $21,000 in a paper bag to five officials of the state-owned oil company.

American companies operating under increasing federal and regulatory scrutiny face real consequences from trying to do business in a global business environment in which foreign business seems to function on the basis of "gifts" at every stage of the transaction:
• During the 12 months ended April 30, 2004, according to a U.S. Commerce Department report, competition for 47 contracts worth $18 billion may have been affected by bribes that foreign firms paid to foreign officials. Because U.S. companies wouldn't participate in the tainted deals, the department estimates, at least 8 of those contracts, worth $3 billion, were lost to them.
• For Lockheed Martin Corp., a $2.4 billion merger agreement with Titan Corp. eventually fell through in 2004 after what Titan [documents] described as "allegations that improper payments were made, or items of value were provided by consultants for Titan or its subsidiaries."
It would seem that the playing field will never be level-someone will always be looking for a bribe, and someone will always be willing to pay it if she or he wants the business badly enough. If that's true, why bother to put legislation in place at all
Source: David M. Katz, "The Bribery Gap," CFO 21, no. 1 (January 2005), p. 59.