Sun Microsystems May Have Violated Bribery Law

Afforess writes "In a new file submitted to the Securities and Exchange Commission, Sun Microsystems admitted that 'we have identified potential violations of the Foreign Corrupt Practices Act, the resolution of which could possibly have a material effect on our business.' The Foreign Corrupt Practices Act makes it 'unlawful to make a payment to a foreign official for the purpose of obtaining or retaining business for or with, or directing business to, any person.' Yet, Sun would not release further details, only that it 'took remedial action.' Oracle, the new owner of Sun Microsystems, also said that they had prior knowledge of the infraction, yet also refused to release any details."

Comments

Since most people don't RTFA

[rackserverdeals]

For those of you that won't RTFA, this may not be a big deal and is fairly common.

For example, in 2007, networking provider Alcatel-Lucent agreed to pay $2.5 million to settle charges that Lucent Technologies, before it was bought by Alcatel SA in 2006, illegally paid for hundreds of trips for Chinese officials to win contracts. In a separate case, IBM Corp. agreed in 2000 to pay $300,000 to settle allegations that its Argentina subsidiary was involved in bribing officials of a government-owned bank to win a contract to upgrade the bank's computer systems.

Funny story about bribery

[cptnapalm]

In my home state there are laws against bribery and corruption of course. One of them pertains to gifts. Included in the banned gifts are food. The rule is that you cannot accept food (usually cookies) from anyone unless you eat it in front of them.

Now that last bit sounds odd, doesn't it. Obviously, the rules do allow you to accept a gift of food if you eat in front of them. So, in practice, this means that if you accept cookies for going the extra mile for somebody, you are CORRUPT and UNETHICAL!!! If, on the other hand, you are a politician and getting bought dinner by a lobbyist, you are a force for righteousness.

Apparently.

Re:Funny story about bribery

[Anonymous Coward]

I would imagine that the rule was written with the idea that politicians could go out and eat dinner or get a cup of coffee and not pick up the tab, and that's fine- as well as the various big get togethers and fundraisers with finger food.

As opposed to, say, receiving a 'food gift' that consists of an entire wine cellar.

Standard operating procedures- someone wrote a law with one specific thing in mind, didn't think of any other way to interpret it, and it gets passed without anyone bothering to read it. Then it's on the books and the lobbyists find more loopholes than if it was written in cursive.

Re:Funny story about bribery

[T Murphy]

Maybe change it so the only acceptable food is in the form of one cookie. That way people are free to show their appreciation, but it would be difficult for a lobbyist to do much since there is only so much someone is willing to do for an Oreo.

Re:par for the course

[value_added]

There are quite a few countries who's culture is substantially different from the United States in which bribery is considered standard business practice. If you dont bribe an official in one of those countries, you dont get anything done.

No doubt true, but what's standard business practices today may not be the same tomorrow. Banking secrecy laws in countries like Switzerland, for example, have long been considered inviolate, but that's hardly the case today, is it? Chances are good that even more changes are coming.

As for corruption, I'd suggest that the choices made by businesses are just that: choices. You can debate their relative merits and/or provide rationalisations, but ultimately, those choices remain subject to law. The overarching issue, then, becomes one of enforcement.

For those who aren't news junkies or C-SPAN fans, the following, taken from a randomly selected link, may offer some insight as to the direction the new administration may be headed:

To the extent there is a shift in prosecutorial priorities by the new administration, it is likely that this shift will not be felt in 2009. This is largely because the current leaders of DOJ, SEC and FBI already have declared their intention to step up FCPA enforcement in 2009. For example, DOJ recently announced that it expects the trend of increased enforcement to increase in 2009, "given the significant number of matters that we have under investigation. The number of individual prosecutions has risen, and that is not an accident. It is our view that to have a credible deterrent effect, people have to go to jail. People have to be prosecuted where appropriate. This is a federal crime, it's not fun and games." 54/ Federal agencies such as the FBI have budgeted increased expenditures for FCPA enforcement in 2009. 55/ If there is relief in sight from the new administration, it is not readily apparent for 2009.

Frontline Covered this Recently

[CodeBuster]

For those of you who are interested and have not already seen it, the Foreign Corrupt Practices act and international bribery by large corporations and wealthy individuals was covered in the "Black Money" episode on Frontline. Obviously the Sun case, coming to light more recently and being much smaller than the frauds discussed in the documentary, is not mentioned, but the Sun case is just another smaller instance of a much larger problem.

Re:In many countries, no bribery = no business

[toppavak]

Universal nut shellers in Uganda. I worked with an NGO to create a self-sustaining social enterprise that manufactures and sells nut shellers (at profit) to peanut growers in the country. We never gave a single bribe (we couldn't afford to even if we needed to!). Its hard, yes, but its not impossible.

Corruption == Poor Government

[sirwired]

This is not an instance of "cultural arrogance." It has absolutely nothing to do with the modern exportation of democracy. Instead, it is the exportation of the Rule of Law (at least, in instances where it is in our best economic and political interests.)

Corruption by government officials has been a problem as long as there has been government. There are certainly many countries in which bribery of the bureaucracy is endemic and pragmatically accepted as a fact of life, but I know of none where it is considered harmless. I know of no government, period, that does not have a law against domestic bribery of the bureaucracy.

Unstable and corruption-ridden foreign government makes international trade very difficult and expensive for both parties.