“EACH of you, in doing what you did, helped secure an important contract which benefited, financially, society as a whole; but the ends never justify the means,” an English judge remarked in January 1978.
He was sentencing two persons to prison terms for giving bribes to capture lucrative business with the Shah’s Iran. It involved a £4 million deal for the supply of Chieftain tanks.
The court of appeal dismissed their appeals against their conviction saying “the courts must do what they can to stop the spread of corruption in public and commercial life … the giving and accepting of bribes will not be tolerated in this realm”.
But tolerated it was by the British government itself, for reasons widely shared by other governments as well.
Brian Sedgemore MP revealed in his memoirs, published in 1980, his experience of that connivance when he went to see a treasury minister over allegations of a public corporation’s contributions to Italian parties. He was told “in the nicest possible manner, not to be naïve and that, of course, British companies, including publicly owned companies, bribed foreigners to get business. They always had done so and would continue to do so. Morality should not be mixed up with trade”.
The three decades that have elapsed since have witnessed a disturbing growth of corruption internationally, the spread of multinationals in the developing world and charges of corruption which cannot all be dismissed as being groundless.
On Nov 17 this year, the global retail giant Walmart announced that it was probing alleged violations of US bribery law in India, China and Brazil. It said: “Since the implementation of the global review and the enhanced anti-corruption compliance programmes, we have identified, or been made aware of, additional allegations regarding violations of the Foreign Corrupt Practices Act, 1977.”
This statute was enacted soon after Jimmy Carter became president of the United States and pledged to stamp out the corruption of the Nixon era.
The affected country must maintain a level playing field. If it fails to do so, the honest suffer; but they learn fast enough to join the pack which makes its way by bribery.
At a conference earlier this month in Prague one business executive said that in a corrupt country “You are only as good as your last bribe”. Fortunately, awareness of the speed of corruption is growing, which is why Dec 9 was celebrated as International Anti-Corruption Day with considerable enthusiasm.
As it happened, on this very day Walmart, which has been waiting for years to open its supermarkets in India, revealed that since 2008 it had been lobbying with senators and Congressmen to facilitate its entry into India’s highly lucrative market.
The lobbying extended also to the US trade representative and the State Department. The name of the game was “enhanced market access for investment in India”. Lobbying for this was part of the nearly $25m which Walmart has spent since 2008. The exercise included “discussions related to FDI in India”. India’s retail market is estimated to be worth around $500 billion and is likely to cross $1 trillion in the next seven years.
The disclosure could not have come at a worse time for the government of India which has been trying to secure wide support for its FDI policy in the retail sector. Later, both houses of parliament endorsed the policy but not before the government promised “an inquiry into this in as much as it concerns India to get to [sic] the facts of the matter”.
America’s ambassador to India, Ms Nancy J. Powell, sought desperately to explain that in her country lobbying is perfectly legal while bribery is not. Lobbying is regulated by the law. She said that the US Department of Justice and the Securities Exchange Commission “will look into that” (the allegations). They are unlikely to disagree with her emphatic verdict on a TV interview: “What has happened is that accusations [were made] that this money was bribery. What it is, is lobbying. In the US those are two very separate things.”
Perhaps, perhaps not. Where do you draw the line between lobbying and bribery? The cumbrous Foreign Corrupt Practices Act, 1977 is a lawyer’s delight. Section 104 defines the offence and makes it punishable with a fine up to a million dollars in the case of corporations and in the case of individuals $10,000 plus imprisonment up to five years.
The offence consists in corruptly making, offering or promising, payment of money or gift to “any foreign official” or “any foreign political party” for the purposes of “influencing any act or decision of such foreign official in his official capacity, or inducing such foreign official to do or omit to do any act in violation of the lawful duty of such official, or inducing such foreign official to use his influence with a foreign government or instrumentality thereof to affect or influence any act or decision of such government or instrumentality.”
In the first week of this month, the Las Vegas Casino magnate, Sheldon Adelson, described as “the Republicans’ biggest sugar daddy” descended on Republican members of the Congress “possibly to discuss changes to the anti-bribery Foreign Corrupt Practices Act. His company is under investigation by the Justice Department and Securities and Exchange Commission for possible violations of the law by his casinos in Macau”.
And on Dec 18, it was reported that Walmart had used bribery in Mexico to secure changes in a 2003 zoning map which prohibited commercial development on a site dooming Walmart’s plans.
The writer is an author and a lawyer.