IBM Charged With Bribing Korean, Chinese Officials

angry tapir writes "The US Securities and Exchange Commission has charged IBM with giving hundreds of thousands of dollars in bribes to South Korean and Chinese officials starting in the late 1990s, according to court documents. IBM has agreed to pay US$10 million to settle the SEC lawsuit."

Comments

Bribery fines are funny

[MartinSchou]

"We're sorry we bribed these guys over there. How much do we have to pay you guys to make this problem go away?"

Re:Bribery fines are funny

[phantomfive]

Seriously, doesn't it seem like the US SEC just wanted in on the deal? I'm against bribery because living in a culture of bribery is miserable. If China wants to have a system of bribes necessary to get anything done, let them do so. I don't want the SEC to import that culture over here!

Re:Bribery fines are funny

[tnk1]

I know what you mean, but what else can you do other than levy a fine? It looks like from the article that the problem was with subsidiaries in other countries creating slush funds and IBM simply did not have controls in place to prevent that. I don't know if you could convict any US employee of the actual bribes or even for looking the other way. Some of them might have known about it, but good luck proving that. They could prove the company was liable, but they can't throw anyone in jail for it. They could prove IBM did not have sufficient controls, but they couldn't prove that the reason wasn't that their accounting group just plain sucked. Last I checked you can be fired, but it is much, much harder to convict someone for being bad at their job.

Re:Bribery fines are funny

[mirix]

This is one of the fundamental problems with legal persons, accountability.

Re:Bribery fines are funny

[rolfwind]

No, they're hypocritical. US Govt uses bribery and extortion all the time.

Re:Bribery fines are funny

[rolfwind]

If China wants to have a system of bribes necessary to get anything done, let them do so. I don't want the SEC to import that culture over here!

What, are you fucking ignorant?

Haven't you seen how Congress is controlled yet? Via campaign contributions. And you don't think that it's filtered down to the state and local level?

My town only lets tow truck company with town specific permits pick up cars within limits, they even apply this to the highway which technically is federal and should be illegal, and they only let one company have the permits even though there are many others in the area.

Re:Bribery fines are funny

[gestalt_n_pepper]

...what else can you do other than levy a fine?
You can throw the top executives who made the decisions in jail with the general prison population. Of course, executive hanging would more effectively reduce recidivism, particularly if done publicly on the nightly news.

Re:Bribery fines are funny

[oldhack]

Are they made to pay any to S. Korean authority?

Re:Bribery fines are funny

[Doc Ruby]

There is no legal or ethical reason the SEC cannot have laws that penalize this kind of bribery with jail time by the people in the corporation who did the illegal acts. There is also no legal or ethical reason the SEC cannot require the kind of auditable bookkeeping that would make "looking the other way" a crime actively committed, rather than merely an obligation passively neglected.

The only reason we do not have those laws and enforce them is that corporations own the legislators and regulators the people put in charge of these consequences. And that the corporations competing with each other accept the unfair competition, instead of using the legislators and regulators they own to make and enforce such laws properly.

And of course the only reason any of that is the situation is because we the people accept it, even insist on it.

Re:Bribery fines are funny

[Fluffeh]

I don't know if you could convict any US employee of the actual bribes or even for looking the other way. Some of them might have known about it, but good luck proving that. They could prove the company was liable, but they can't throw anyone in jail for it.

Why not? If you can't find Joe Fatpockets who handed the cash over, get his boss. Seeing as it was more likely a cheque or transfer of money, I am sure that there is a lovely audit trail of who authorised that and who requested it.

If I can go to jail for bribing someone, I don't see why the same shouldn't apply just because a COMPANY did it. IBM bribed a few (or many) hundred thousand dollars. They likely gained many (or a few) millions from those bribes in return business. A $10 mill fine isn't going to mean anything. They have likely made a heck of a lot more in return anyhow. Make an example if you want to start teaching your companies to trade above board. $10 million fine AND someone goes to jail for bribery. Start at the top of the food chain - I am sure the CEO will track it down the chain to find the dodgy guy - or throw him in jail, that's what CEOs get paid the big bucks for at the end of the day right? THEY ARE RESPONSIBLE FOR THE COMPANY.

Re:Bribery fines are funny

[Coeurderoy]

You do not have/need a joe fatpockets, what you need is a willingness to have agents whose accounts you do not review..., and that is much harder to prosecute, and moreover many american would not like to loose the salary that the cash obtained this way brings in..

so of course it is "nice" to have the fantasy of punishing the bad CEO's, but changing the way you consume is a more efficient step..

Re:Bribery fines are funny

[tibit]

Does SEC, or anyone in the U.S. for that matter, have jurisdiction over supposedly illegal acts outside of the country? Is it even SEC's business that officials abroad were bribed? Shouldn't the Chinese slap them with, say, imprisonment of responsible persons?

Re:Bribery fines are funny

[NiceGeek]

Hanging for bribery? A little harsh don't you think?

Re:Bribery fines are funny

[RewriteQuran]

And they're paying tax payers/share holders money.

Re:Bribery fines are funny

[CodeBuster]

Does SEC, or anyone in the U.S. for that matter, have jurisdiction over supposedly illegal acts outside of the country?

Apparently, if the companies or subsidiaries responsible are owned by a US corporation, yes.

Shouldn't the Chinese slap them with, say, imprisonment of responsible persons?

Chinese do what they like in China, but imprisoning foreigners, especially executives, looks bad and is bad for business. It's hard to convince foreigners to invest in your country if you lock them when the set foot on your soil after all.

Re:Bribery fines are funny

[Hecatonchires]

I know what you mean, but what else can you do other than levy a fine?

Set the fines as a % of annual revenue, or some other legally required, stockmarket linked reporting number.
Company A found guilty, earnt a million dollars, fined 85%. $850000 fine.
Company I(B)M, earnt a hojillion dollars - 85% of a hojillion is a lot.

The trick is using the same number that they use to justify their senior exec bonuses.

Re:Bribery fines are funny

[vertinox]

Hanging for bribery? A little harsh don't you think?

The Chinese don't think so.

Well.... They shot him rather than hanged, but I suppose its close enough.

Re:Bribery fines are funny

[mug funky]

if these charges were pressed in China, there'd be more than just fines... people would die.

Re:Bribery fines are funny

[MasaMuneCyrus]

Chinese do what they like in China, but imprisoning foreigners, especially executives, looks bad and is bad for business. It's hard to convince foreigners to invest in your country if you lock them when the set foot on your soil after all.

One of the things China likes is bribes. Bribes aren't a way to get ahead in business over there, they are the way to do business. Maybe it's changing, maybe its not -- depending on who you ask -- but I'd guess that Intel not only bribed officials a ton, but they were probably expected to bribe a ton, and it probably wasn't looked down upon as long as the culturally-proper chain of bribes was maintained.

I'm not sure about South Korea nowadays, but they also certainly have a history of bribery as a way to do business, and I bet that it was were pretty damn common in the early 90's.

Re:Bribery fines are funny

[Anonymous Coward]

As the original poster said, what else can you do that isn't just more bribery? I mean, for fuck's sake, this isn't even a full play-to-the-end of the legal system. They're settling out. If this isn't legalized bribery then what is? Answer the fucking question, what else is there to do?

Re:Bribery fines are funny

[suso]

I'd say its not nearly as bad as in other countries. Generally people are against bribery in the U.S. In other countries, its a way of life.

Re:Bribery fines are funny

[Nyder]

"We're sorry we bribed these guys over there. How much do we have to pay you guys to make this problem go away?"

Ya, reminds me when I was in High School and I got kicked out for 3 days for missing too many days and being late.

I was like, cool. Didn't come back to school for 2 weeks, though I did keep up with my work.

So, no, this shit doesn't surprise me in the least bit.

Re:Bribery fines are funny

[mjwx]

He wasn't hung for bribery,

He was shot for getting caught.

Re:Bribery fines are funny

[Swampash]

I don't want the SEC to import that culture over here!

Taken a look at Congress any time in the past twenty years? Waaaaay too late.

Re:Bribery fines are funny

[Anonymous Coward]

The IBM executives who broke the rules should at least have all been sacked. There's nothing in the reports to say those involved got any kind of punishment.

IBM has business conduct guidelines every employee has to sign off on and mandatory training which points out you can't do stuff like bribe government officials.

It seems by omission of these details IBM is condoning the activity. Just payed the 10 million get of jail and now back to business as usual.

Re:Bribery fines are funny

[phantomfive]

It's not anywhere near the same. At least in America we don't have to pay a bribe to the police when we get pulled over, like they do in many countries.

Re:Bribery fines are funny

[thoughtsatthemoment]

Not quite accurate. It's not that hard to find a corrupted official at any level in China. He was shot because he lost his political "umbrella".

Re:Bribery fines are funny

[Anonymous Coward]

You're kidding right? You mean there is no bribery in the US? Oh my gosh! You're right! After all where would large military contractors put all the money they need to spend on those small "black female veteran owned" sub contracting companies?

Gimme a break. The only reason we don't have bribery here like in Asia is because in Asia its considered just part of business and here its just no spoken about.

Re:Bribery fines are funny

[Anonymous Coward]

In other news: The SEC has been uncovered taking bribes of up to US$10 million from IBM to allow covert dealings with South Korean and Chinese officials.

Re:Bribery fines are funny

[Demena]

Umm.. That has not stopped them doing precisely that to Australian executives.

Re:Bribery fines are funny

[dryeo]

I often hear about smalltown USA where they get most of their income from speed traps and such which target out of towners. From what I hear it sounds like bribery except you pay the Judge instead of the Police Officer.

Re:Bribery fines are funny

[lennier1]

At least they have the courtesy of calling it "campaign donations" and other names.

Re:Bribery fines are funny

[Anonymous Coward]

It is probably close to impossible to find someone not corrupt in China. They have a long tradition of misuse of power and "gifts". It is normal to give strategic gifts trough their whole life. This is seen as important to build up a security network if needed.

Re:Bribery fines are funny

[Anonymous Coward]

There is no legal or ethical reason the SEC cannot have laws that penalize this kind of bribery with jail time by the people in the corporation who did the illegal acts. There is also no legal or ethical reason the SEC cannot require the kind of auditable bookkeeping that would make "looking the other way" a crime actively committed, rather than merely an obligation passively neglected.

The only reason we do not have those laws and enforce them...

WTF are you talking about, Doc? We do have "those laws", and this article is about them being enforced.

It's called the Foreign Corrupt Practices Act.
http://www.justice.gov/criminal/fraud/fcpa/

And it's got plenty of penalties for individuals. Hell, even shareholders are liable. This law is serious business. Read the DoJ's lay person's guide:
http://www.justice.gov/criminal/fraud/fcpa/docs/lay-persons-guide.pdf

The following criminal penalties may be imposed for violations of the FCPA's anti-bribery
provisions: corporations and other business entities are subject to a fine of up to $2,000,000;
officers, directors, stockholders, employees, and agents are subject to a fine of up to
$100,000 and imprisonment for up to five years. Moreover, under the Alternative Fines Act,
these fines may be actually quite higher -- the actual fine may be up to twice the benefit that
the defendant sought to obtain by making the corrupt payment. You should also be aware that
fines imposed on individuals may not be paid by their employer or principal.

I'd bold sections of that but it's all good.

They can also go after you in a civil suit, where the burden of proof is lower:

The Attorney General or the SEC, as appropriate, may bring a civil action for a fine of up to
$10,000 against any firm as well as any officer, director, employee, or agent of a firm, or
stockholder acting on behalf of the firm, who violates the anti-bribery provisions. In addition,
in an SEC enforcement action, the court may impose an additional fine ...

That's what they did in this case (hence no prison terms) according to TFA, and as you can see those "additional fines" can be rather high.

Speaking of burden of proof, payments are assumed to be unlawful until proven otherwise:

...because these defenses are "affirmative defenses," the defendant is required to
show in the first instance that the payment met these requirements. The prosecution does not
bear the burden of demonstrating in the first instance that the payments did not constitute
this type of payment.

Not quite "guilty until proven innocent", but getting there.

Seriously, read the DoJ's website. It addresses every point you brought up. It includes a chronological list of criminal cases (you will recognize some company names):
http://www.justice.gov/criminal/fraud/fcpa/cases/2010.html

Lots of people plead guilty when facing jail time, it seems. I'll leave it to you to go through the judgments and see how often prison, rather than probation, are handed down.

[FWIW, I'm not in any way associated with the DoJ. I simply got some FPCA training at work, and I know how to use a search engine.]

Re:Bribery fines are funny

[ThunderThor53]

Does SEC, or anyone in the U.S. for that matter, have jurisdiction over supposedly illegal acts outside of the country? Is it even SEC's business that officials abroad were bribed? Shouldn't the Chinese slap them with, say, imprisonment of responsible persons?

Thanks to the Foreign Corrupt Practices Act, foreign bribery is the SEC's business.

Re:Bribery fines are funny

[thoughtsatthemoment]

It is probably close to impossible to find someone not corrupt in China.

Isn't that too strong for a billion people. Actually I grew up in China but somehow in my childhood I had problems accepting gifts, as for some reason I didn't want other people's stuff. You might say there is a prevailing culture, but a billion people can develop a lot of varieties.

Re:Bribery fines are funny

[DNS-and-BIND]

Wrong, wrong, wrong. Where do you get your news about China, the New York Times? China doesn't "like" bribes more than anywhere else. You can get things done by the rule of law.

"One of the things I have always found troubling about Westerners doing business in emerging market countries is that they sometimes take an almost perverse pride in discussing payoffs to government officials. It is as though their having paid a bribe is a symbol of their international sophistication and insider knowledge. Yet, countless times when I am told of the bribe, I know the very same thing could almost certainly have been accomplished without a bribe."
--Dan Harris, chinalawblog.com

Re:Bribery fines are funny

[CaptainZapp]

Seriously, doesn't it seem like the US SEC just wanted in on the deal? I'm against bribery because living in a culture of bribery is miserable. If China wants to have a system of bribes necessary to get anything done, let them do so. I don't want the SEC to import that culture over here!

So you consider stealing OK?

Bribing officials is nothing else then stealing from the public coffers and thus the population.

In addition it has the nasty tendency to rot away the core of a society.

Re:Bribery fines are funny

[JohnRoss1968]

So what your saying is if a foreign company sets up shop in the USA and bribes a US official it would be the job of the foreign companies government to deal with it.
I hate big corporation as much as the next guy (probably a lot more) but if we want companies as accountable as an individual person is then it goes both ways.
If I go to a foreign land and do something that is not illegal there I shouldn't have to worry about my own government when I get back. If I do something illegal there I should have to worry about that government throwing my ass into jail or prison.

Re:Bribery fines are funny

[Anonymous Coward]

I hate to bring facts into the discussion, but the USA is actually one of the least corrupt countries in the world:

http://en.wikipedia.org/wiki/File:World_Map_Index_of_perception_of_corruption_2010.svg

Re:Bribery fines are funny

[cocoajunkie]

Well, I simply fail to understand why your comment was moderated to Insightful, it should be modded down, for the following reason. According to this line of thought, sexual tourism is just fine, provided the culture of the third world country you are visiting is not "advanced enough" to embrace our modern western values. Unfortunately, there are minimal ethical principles which should always be enacted, towards anyone. Not encouraging corruption, violation of basic human rights are among those. Considering your intervention "insightful" is justifying the same immoral cynicism that led to Abu Graib: provided they don't catch you and you can get away with it, if you have power, anything goes. Lack of ethics is never insightful, is just a form of short sightedness, failing to understand long term consequences of actions.

Re:Bribery fines are funny

[maeka]

The interstate may be "federal", but only in management. It is very common for a local jurisdiction to be responsible for maintenance (potholes, plowing, etc) and traffic law enforcement (including towing). There is not illegal and should not be.

Re:Bribery fines are funny

[Anonymous Coward]

and IBM simply did not have controls in place to prevent that.

IBM used to be an multinational that had a dress code right down to sock garters -- including a few aggressive assholes who would yank up pant legs on new hires to check. I know it's been a long time since then (paper tape), but it's /still/ IBM -- I can't believe they "simply" did not have controls in place. IBM knows control. I'd believe they _chose_ not to have controls in place.

Re:Bribery fines are funny

[Hognoxious]

But ... but ... that would be basing something on the ability to pay! That's exactly the same thing as communism! Why do you hate freedom so much?

Re:Bribery fines are funny

[Hognoxious]

the USA is actually one of the least corrupt countries in the world

You mean it appears to be.

Re:Bribery fines are funny

[Anonymous Coward]

>what you need is a willingness to have agents whose accounts you do not review

I thought "ignorance is no excuse" was the prevailing attitude in the enforcement of laws. Find the person who was supposed to review, or the person who said don't review, or the CFO and throw their ass is jail.

Re:Bribery fines are funny

[SharpFang]

I don't know about SEC and the likes but I'm pretty sure if you go to Thailand to bang a 10yo, and FBI gathers enough evidence that you did, you go to prison, no excuses.

Re:Bribery fines are funny

[gartogg]

Dissolve companies that are caught doing these things; force receivership and sell off the assets. The executives involved would be jailed, and 95% of the workers would continue wherever their particular business ended up.

Re:Bribery fines are funny

[Tom]

Does SEC, or anyone in the U.S. for that matter, have jurisdiction over supposedly illegal acts outside of the country?

Yes, in this case there are international treaties in place. Corruption has been recognized as an international problem and thus the need for international laws became obvious - and was addressed. See http://www.unodc.org/unodc/en/treaties/CAC/index.html

Re:Bribery fines are funny

[gartogg]

Which doesn't mean that we are doing a good job; large governments breed corruption.

I heard about this one guy, he's the skinniest morbidly obese person in the world! Only 400 pounds.

Re:Bribery fines are funny

[JamesP]

Yes, you can do things the proper way.

And then it takes months to do something simple.

Said that, it's good when they don't push for bribes. And I don't disagree with shooting people that ask for bribes.

Re:Bribery fines are funny

[Coeurderoy]

First you would have to find a court that forces you to review resellers, except in very particular business (weapon sales for instance) no enterprise is responsible for the usage their customers do of theirs products.

If you sell ethernet cable and somebody strangles his neighbors with it you will find that it's not your responsibility, and a judge would have to prove that the customer bragged on how much he liked your cables because their hight resilience facilitates strangling...

If you sell hardware to resellers, a judge would have to prove that you knew they where guilty, and by the way if you sell e-government platforms to government who oppress their people and use it keep better track of political opponent and terrorize them, do you expect any law suite against you ?

Re:Bribery fines are funny

[bluefoxlucid]

Seriously, doesn't it seem like the US SEC just wanted in on the deal?

Yes, it does. This is not the business of the US, it's an SEC money grab. China and Korea should be fining IBM; they've done nothing wrong in the US and the SEC just wants some fast cash.

Re:Bribery fines are funny

[bluefoxlucid]

China is too full of people and they need to start emmigrating. America needs more sweet Chinese girls, too many asshole Americans here and plus they're cuter.

Re:Bribery fines are funny

[bluefoxlucid]

WTF are you talking about, Doc? We do have "those laws", and this article is about them being enforced.

It's called the Foreign Corrupt Practices Act. http://www.justice.gov/criminal/fraud/fcpa/

More laws for shit not our jurisdiction. Just like how if you're 18 and you go to Europe and drink a beer, you can be extradited and the USA will criminally charge you for underage drinking. This is a huge problem for American foreign exchange students, who when caught drinking (legally in the country they're studying in) are sent back to America under legal penalty and lose their scholarships and are forced to pay back all the money they got for free sometimes etc.

Re:Bribery fines are funny

[hesaigo999ca]

I love democracy , don't you.....the problem came from giving them money, in which now they are being charged with, and the courts will rule however, or settle out of court for another sum of money, ......it doesn't buy you happiness, but it sure makes the world go round.

Re:Bribery fines are funny

[petermgreen]

Personally I think punishing anyone who bribes is the wrong way to go about fixing things. In a highly corrupt society all it does it push people into a no-win situation, if you don't bribe then you are at a huge disadvantage (possibly unable to do business at all) if you do bribe then you are at risk of someone in power using that as an excuse to throw the book at you.

Re:Bribery fines are funny

[tibit]

18 USC 2423 sec 105 specifically covers U.S. citizens and permanent residents engaging in sex tourism to minors, and it's the only reason why you're right. While I personally agree with the spirit of this law, I think it should be repealed. U.S. has no right to extraterritorial jurisdiction (with very limited exceptions, and this shouldn't be one), and this is exactly what happens here. You go somewhere where prostitution with people under age of 18 is legal, why the heck should U.S. laws prosecute you? Superior moral standards? WTF?! I'm sure there's plenty of U.S. allies and NATO members with ages of consent under 18. Poland would be one such example: 15 is the age of consent there. Heck, in Scotland the age of majority is 16.

Re:Bribery fines are funny

[Kyusaku Natsume]

Oriental girls are really cute, american girls too, but i think that the main difference is that in America being self centered is more accepted than in east asian countries, so east asian girls appear more cute and kind than their american counterparts.

Re:Bribery fines are funny

[Anonymous Coward]

Jurisdiction is a red herring and no treaties or other international agreements are necessary for the Federal government to outlaw bribery internationally.

As an eminent British judge pointed out many years ago, the British parliament has the power to make it illegal for a Frenchman to smoke in Marseilles, and to prosecute any such French outlaws who happen to come to England. Passing laws that have effect in other countries has usually been considered pointless because of the practical difficulties in bringing prosecutions, but such laws are entirely legitimate per se.

Re:Bribery fines are funny

[bluefoxlucid]

It's also the eyes and milky skin. American girls go for so much "beauty product" that their skin is tan, leathery, pockmarked by nasty aggressive soaps and constant tanning.

Re:Bribery fines are funny

[rgviza]

LOL my sentiments exactly. In typical US Government fashion they are applying the ethics of the US government to other governments. Only problem is in a lot of other regimes, bribes are a part of normal day to day business. No bribe = no business, end of story.

Re:Bribery fines are funny

[phantomfive]

You're talking in high, abstract terms, as if things were absolutely good or absolutely evil. You have to look for the reason behind things. Why is bribery bad? Because it creates market distortions, inefficiencies, and in some cases unfairly favors the rich. We don't want that here.

But in countries where bribery already exists, often the greater good is to bribe and provide services, or avoid a long, drawn out process (for example, by bribing police if you get pulled over).

Re:Bribery fines are funny

[braindrainbahrain]

The US already has laws on the books for this. Google the Foreign Corrupt Practices Act.

IANAL, but as I understand it, individuals could be criminally liable and face fines and/or years in prison. At the corporate level, fines can be imposed, but even more threatening is being disbarred from government contracts. For some companies, that can be a serious penalty indeed.

I don't think it likely that that penalty will ever be imposed however, especially not to a large corporation like IBM.

Re:Bribery fines are funny

[kramerd]

So, your town has several towing companies located within it, but only one of them is legally allowed to tow vehicles within it...This would indicate that your town is the only town that has this policy, as the other towing companies must be towing nearby cities/towns.

On the highway note, if my car breaks down on the highway near your town, I call AAA, they are going to tell me they can't tow my car?

It sounds like you are a liar.

Re:Bribery fines are funny

[Creepy]

Yep, and that applies to the US, but IBM is a multinational company based in the US. Laws on bribery differ by country - for instance, in Germany until 1993 (I think) it was not only legal to bribe someone to get business, it was actually considered part of the business deal. It was so much a part of the culture that several companies continued the practice after it was banned causing major scandals. The European Union forbids bribery (and was the main reason for the change in Germany, as I recall), but in many Arabic and African countries it is still part of daily life.

I imagine it is very difficult to compete if the competition is allowed to give bribes but your business is not.

Re:Bribery fines are funny

[phantomfive]

Bribing officials is nothing else then stealing from the public coffers and thus the population.

Ya, and making a copy of a song is stealing the song, blah blah; really, words are just words, and people who make such bad metaphors by redefining words and expecting the redefined words to carry their point emotionally are silly. And by that I mean YOU.

Re:Bribery fines are funny

[Stenchwarrior]

I thought it was their small hands that appealed to the American (or maybe males in general) ego and need to have a large penis.

Re:Bribery fines are funny

[MoeDrippins]

> I know what you mean, but what else can you do other than levy a fine?

The gov't and/or judicial arm has a very big carrot in future contracts they could easily withdraw for some period of time; say 5 years? Or, the corresponding stick of prison as someone else mentioned.

I don't necessarily think either of these is practical, but there are other means available.

Re:Bribery fines are funny

[anyGould]

Just like how if you're 18 and you go to Europe and drink a beer, you can be extradited and the USA will criminally charge you for underage drinking. This is a huge problem for American foreign exchange students, who when caught drinking (legally in the country they're studying in) are sent back to America under legal penalty and lose their scholarships and are forced to pay back all the money they got for free sometimes etc.

Citation? Not saying it's impossible (I can see the theory), but I'd be unpleasantly surprised if the US is actually going through the paperwork to extradite for underage-in-the-US drinking.

Heck, I always thought the reason we had so many American college tourists up here in Canada was *because* you could drink three years earlier...

Re:Bribery fines are funny

[Jim_Maryland]

but they can't throw anyone in jail for it

Foreign Corrupt Practices Act

US DOJ Fraud: Foreign Corrupt Practices Act

Lay Persons Guide to FCPA

Specific section from the PDF:

The following criminal penalties may be imposed for violations of the FCPA's anti-bribery provisions: corporations and other business entities are subject to a fine of up to $2,000,000; officers, directors, stockholders, employees, and agents are subject to a fine of up to $100,000 and imprisonment for up to five years. Moreover, under the Alternative Fines Act, these fines may be actually quite higher -- the actual fine may be up to twice the benefit that the defendant sought to obtain by making the corrupt payment. You should also be aware that fines imposed on individuals may not be paid by their employer or principal.

Additionally, companies can be prohibited from federal contracts, but this probably doesn't happen as often as it should (otherwise I'm sure companies would put in greater effort to avoid this).

Re:Bribery fines are funny

[Danse]

WTF are you talking about, Doc? We do have "those laws", and this article is about them being enforced.

Now we just need penalties that are actually a deterrent to companies violating these laws. Why are the penalties capped? The benefits could be worth billions, yet the penalty is a paltry couple of million. Anyone that can perform simple math wouldn't blink at violating the law. Especially when it seems rather easy to do it in such a way that nobody gets the finger pointed at them and has to serve actual jail time.

Although with a maximum of five years, it is probably worth the risk too. People risk a lot more time for less money all the time. Also, a $10,000 cap for a civil suit against a guy that probably got a half-million or more bonus for the results of the bribery anyway? What kind of joke is this? Why don't we get as tough on crimes dealing with billions as we do with selling a few bucks worth of drugs?

Re:Bribery fines are funny

[Anonymous Coward]

"There is no legal or ethical reason the SEC cannot have laws that penalize this kind of bribery with jail time by the people in the corporation who did the illegal acts."

Actually, the very legal definition of a corporation limits liability. Our government protects just such behavior. The worst that happens is things like this, where IBM gets a wrist slap with one hand and monopoly protection with the other. Worse, it was probably done just because the SEC wanted its cut of the money. So, jailing the people who made the decision won't be possible given our current state-industry merger. Even in the tech industry, which is one of the least fascistic industries in the US, exists in an environment of political rent seeking.

As for the ethical concern, giving money to chinese bureaucrats is not immoral in and of itself. You have to determine what the money is funding. For example, if I bribe some politicians to stop taking quite so much money from each transaction when I trade with some chinese customer, the only immoral action is that of the politicians intruding in the peaceful exchange of our voluntary trade. The article doesn't even hint at what the payments were for. So, in this article, IBM is not yet shown guilty of any (new)immorality. I'd have to get more information on the bribery to know for sure.

Re:Bribery fines are funny

[Tom]

On the contrary, fines are the only solution to the problem we can apply without getting really heavy-handed.

Why? Because it changes the equation for the worst offenders - corporations. A company bribes because it is financially advantageous for it to do so - bribing is easier (which reduces risk, which reduces costs), faster (which reduces costs) and often cheaper than the official channels. All of that boils down to $$$.

Putting a fine on bribing - not on being bribed, but on bribing - adds $$$ (multiplied by the chance of getting caught) to the other side of the equation. If the fine and the chance of getting caught are high enough, bribing stops being the better option. Once that happens, a rational company will stop bribing.

Re:Bribery fines are funny

[Anonymous Coward]

Also, the members who make up the SEC are quite often former executives from places like Goldman Sachs, AIG or other large financial companies. As such, they tend to be VERY pro-business and less pro-law enforcement. The SEC has a mandate from the federal government to regulate accounting rules and practices, but it is NOT an actual federal organization but rather a private one. The accounting industry as a whole does not want a government organization regulating accounting practices for a number of reasons, both good and bad.
The bad reasons are somewhat obvious: potentially stricter enforcement of proper accounting practices, less ability to give favors to their old friends in the companies they used to work for, &c.

The good reasons are that the people who are currently enforcing proper procedure have all worked as accountants in one form or another, and will be familiar with most things they see in a company already. This experience can be an aid while auditing.
Also, the government (Congress in this case) has an extremely poor record in making tax laws. They do not understand tax law themselves, and so when they pass laws regarding it they tend to make a mess of the whole thing. The chances of this NOT being repeated with general accounting practices are slim.

Regardless of the potential bad outcomes of the SEC being made into a public organization, the public as a whole might be better off. It depends on just how corrupt it is, and how much good it is still doing as a private organization. I have not done enough research to be certain one way or another.

Re:Bribery fines are funny

[nobodie]

There is bribery and bribery

When I lived in Thailand and my car registration or insurance or drivers license expired it was no big deal. When I got stopped in a random check (pretty much SOP when the policemen's car payments were due) all i did was pay about half the court fine directly to the cop and go on with a verbal warning to "Always wear your seatbelt!"

But the same cops were running the drug delivery system that provided cheap heroin around the world through the golden triangle. They bought the car/truck/SUV with the drug money, got a bank loan for the difference (anything not made in Thailand--like what everybody wanted to own of course-- was subject to a 100% tariff, so the prices for the stuff the cops buy is insane and they used to make the down payment with drug money and the monthlies with the "working funds")

Now, can you see where all this is going? a 100% tariff to protect domestic manufacturers creates a false demand for consumer products that are "desirable" which feeds the drug system run by "underground" government forces who are grossly underpaid to begin with in order to keep taxes down (wait, what about that 100% tariff? Oh that's not a tax on individuals, only on foreign interests) and they supplement their pitifully inadequate income which has been inflated to unreasonableness by drug income and, and, and

The system feeds the whole damn mess, the cops are just as sucked in as the junkies, you are supporting it by buying the cheapest possible products (where is your HDD made? China or Thailand probably), by supporting drug laws to keep your community "clean" (no i don't want junkies running wild all over my shit either, but think about why they are what they are and who is responsible for the world they are running from) so you are responsible for this as much as the Thai or Chinese people and their government. Those of you who pretend that you can hide behind your border, both the government fallacy of nationalistic border and the individual fallacy of property line or privacy, are living in a dream. this world respects no borders, you are connected and responsible. Accept it, work with it or lie quivering in a heap under your aluminum hat because it is what it is.

Re:Bribery fines are funny

[CodeBuster]

And I don't disagree with shooting people that ask for bribes.

Bribes are rarely asked for directly. Instead, business is transacted faster or slower according to the amount of the bribe. If the business is transacted just about as fasts as it possibly can be, you know that the amount of your bribe was just about right. If your business takes forever to complete and you didn't offer a bribe, you know the reason for that too. There is a marketplace for bribes when different interests compete for the limited amount of time and resources a bottle-necked government agency or official has to offer. Who to bribe and in what amounts comes with experience or through hiring someone with that experience to advise you.

Re:Bribery fines are funny

[CaptainZapp]

How to win the price for dumbest strawman of the year: Congratulations!

Re:Bribery fines are funny

[phantomfive]

At least I didn't win the prize for the dumbest man of the year, like you.

Re:Bribery fines are funny

[Doc Ruby]

Do you have a cited example of an American caught drinking in a foreign country where it's legal, but was extradited, charged in the USA and forced to repay their scholarship?

Re:Bribery fines are funny

[Doc Ruby]

I'm talking about enforcement:

The only reason we do not have those laws and enforce them is that corporations own the legislators and regulators the people put in charge of these consequences. And that the corporations competing with each other accept the unfair competition, instead of using the legislators and regulators they own to make and enforce such laws properly.

Can you give me a cited example of an American actually sent to jail under those laws? You're handy with a search engine and FPCA training, so let's see it in action. Because I've never heard of anyone going to jail.

Re:Bribery fines are funny

[Anonymous Coward]

One in one billion is within acceptable tolerances.

Re:Bribery fines are funny

[RockDoctor]

Are you hanging the briber, or the bribee?

Or, BOTH?

They just got caught is all.

[pro151]

They all do it, IBM just got caught. :-)>

Re:They just got caught is all.

[Nerdfest]

I generally refer to them as BribeBM.

Re:They just got caught is all.

[Anonymous Coward]

IBM shill detected.

Re:They just got caught is all.

[MobileTatsu-NJG]

I generally refer to them as BribeBM.

That actually sounds more like a laxitive. "Try new BribeMB with prescrption-strength analphlox!"

Re:They just got caught is all.

[pro151]

IBM shill detected.

Who me? Boy you missed the mark with that witty remark there Skippy. I could give a shit if IBM tanked tomorrow. :-)

Re:They just got caught is all.

[Anonymous Coward]

That's exactly what a shill would say!

Re:They just got caught is all.

[Anonymous Coward]

I didn't even know that Jack Abramoff worked for IBM !!

Re:They just got caught is all.

[sjames]

If that could actually work, we'd have bribed the hard-core fecal matter out of Congress long ago.

Re:They just got caught is all.

[Anonymous Coward]

Yeah, a non-shill would say that he couldn't give a shit.

Re:They just got caught is all.

[lennier1]

It's that kind of thing that got you crap like ACTA in the first place.

Not to get too political...

[Barrinmw]

But Republicans want to get rid of this law that makes it illegal for our businesses to bribe foreign officials.

Re:Not to get too political...

[phantomfive]

Just out of curiosity, do you consider that a good thing or a bad thing? I could see arguments either way.

Re:Not to get too political...

[Barrinmw]

I see the US as a country of ideals, or at least it was founded that way, and bribery is wrong even if it is with foreign officials.

Re:Not to get too political...

[phantomfive]

Do you feel that way just because you are anti-republican, or would you have felt the same if some democrats were trying to oppose the law?

Re:Not to get too political...

[Anonymous Coward]

Haw?

Why is it then that U.S. tax dollars are going to buying homosexual child sex slaves for Afghan warlords in exchange for getting local police to do their jobs?

Re:Not to get too political...

[MickyTheIdiot]

Well... why not. The Supreme Court already made it legal to bribe officials domestically.

Re:Not to get too political...

[MickyTheIdiot]

I can't answer for the poster, but I can say YES. I am against what the republicans put forth most of the time because they are bad ideas or puppet proposals for their corporate buddies. The democrats do the exact same thing and when they do I'm opposed to it (**AA anyone?). Allowing open bribery is a bad thing... it isn't doing business and it's just another way for these large concentrations of power to step on other smaller businesses.

Re:Not to get too political...

[jmd]

US *was* a country of ideals might be a little more appropriate. Not too long ago when I was young.... we never .. ever...would have considered trading with a communist country. after all *we had principles*. now we just have capitalism running the show. it all comes out in the end.

Re:Not to get too political...

[tnk1]

Well, that does sound shitty, but bribery is pretty much how business is done in certain places. The US intelligence community took some slack a little while ago by providing information that Airbus was bribing officials to get contracts in foreign countries. The criticism was that this information would benefit US businesses who were, apparently, not bribing anyone. Go figure.

For every bribery deal that gets caught, there are probably ten or more times that number go right through. Having a law that prevents bribery sounds nice and all, but when no one else seems to care, you start to wonder if there's really a point to it. If bribery is simply the cost of doing business, then so be it. Is it our job to keep civil servants of foreign governments honest? Presumably it is not, since no one really likes having the US show up in their country with their occupations and such.

Corruption is a corrosive influence on any country, and a lot of them suffer from it. However, the changes that are needed to make that happen probably have to begin from within. I'm not against the law in this case, but I can see why some people in government look around at even our Western countries and wonder if everyone is on the same page.

Re:Not to get too political...

[Charliemopps]

If the law means that 21 years of bribing 2 major countries political officials leads to a $10 million dollar fine, then the law is a joke anyway. After they pay the fine they are likely to throw a party and toast each other for getting such a good deal.

Willful and systemic disregard for the law by a business like this should lead to the business either being shut down by the feds, or fined so heavily that they have to file for bankruptcy. Who authorized the bribes? No jail time? Sad...

Re:Not to get too political...

[Barrinmw]

Since Obama has taken office, the US has collected over 1 billion dollars in fines for these violations.

Re:Not to get too political...

[betterunixthanunix]

Keep in mind that in some countries, bribery is standard practice and failing to bribe would make a business less competitive. If those countries wish to end the practice, they should make it illegal. Why should US law cover actions taken abroad? Why should the US be pushing our set of ethics on other people (yet again)?

Re:Not to get too political...

[Barrinmw]

No, I am against it because bribery is wrong. I have problems with Democrats and Republicans, the only difference is, there are fewer Republicans I can trust to take care of this country than Democrats. An example of a Republican I can semi-trust is Murkowski since here moderation in the last election.

Re:Not to get too political...

[Solandri]

You have to understand that bribery is more or less the expected norm in Asian business. Japan was the first to get away from it but I suspect it still goes on in the form of "gifts" and favors. South Korea started to crack down on it after the Sampoong department store collapse. Incredibly, despite causing over 500 deaths, that in itself probably wasn't enough to force the change in culture. It was one of a spate of building and bridge collapses within a span of a few years, whose cumulative effect was to finally turn public sentiment against the culture of bribery and corruption in business and government. The Chinese government is smart enough to recognize that it's a long-term millstone around the neck of their economic development, and has been cracking down on it. But I suspect at the local level it's still very much entrenched. Basically, if you couldn't/can't bribe, you can't do business, and you might as well pack up your bags and leave the country.

So it's not just a matter of right vs. wrong. There are different standards of normal behavior involved in the debate as well. The same goes true for corporate espionage. In the West it's frowned upon and any company who fired you for refusing to do it would be slapped by a wrongful termination lawsuit. In the East, it's pretty much expected. If you're asked to do it and refuse, you'll probably be fired.

Re:Not to get too political...

[Barrinmw]

We aren't enforcing our morals on other people, we are enforcing our morals on companies that are in our country. That is a big difference. I once heard on NPR describing the wine culture in China that for business meetings, a businessman is expected to supply multi thousand dollar bottles of wine for the meetings, I can see this being okay and should be the extent of the "bribery culture."

Re:Not to get too political...

[mevets]

At some point everyone accepts bellwethers. I don't have Republicans or Democrats to lean on, but there are many others.
If Reverend Phelps states something, I don't have to think much to disagree - history has shown we don't have much in common, and most of what he advocates, I disagree with.
Closer to home, the current PM of Canada has a handy habit of coming out on the wrong side of pretty much everything. It saves time, I don't have to read much to know what is right.

I don't think you can blame him if he comes down on the anti-Republican side - they have committed so many heinous crimes from treason to torture, that it is a safe bet to just oppose them. They tend to be wrong.

Re:Not to get too political...

[Anonymous Coward]

Basic frikkin' ethics.

Make a law that you can't trade here if you're behaving like an evil shit elsewhere. Makes perfect sense to me.

It's not about making other countries do anything, it's about not supporting it yourself and having some basic integrity.

Anonymous because... yeah I work for big blue. Not for much longer.

Re:Not to get too political...

[Eil]

I put it to you: when is bribery ever a good thing?

There is no such thing as a good bribe because the person who accepts the bribe always had the option of acting (or not acting) for free out of some sense of moral or ethical responsibility. (At which point it ceases to be a bribe.) A bribe offer says, "I know you're supposed to do X, but I want to secretly pay you to do Y instead." Bribery is by definition a form of corruption.

Re:Not to get too political...

[AmberBlackCat]

Well... why not. The Supreme Court already made it legal to bribe officials domestically.

I bet they got bribed to do it.

Re:Not to get too political...

[donaggie03]

I put it to you: (just playing devil's advocate here) . . What if sometimes the bribe offer says "you know you are supposed to do X, and I know you are supposed to do X, but you are about to do Y because you are a greedy shit fuck. I want to secretly pay you, and make it worth your while, to do X instead."

Re:Not to get too political...

[Anonymous Coward]

Is it really bribing if they've bought into it?

Re:Not to get too political...

[WrongSizeGlass]

I put it to you: when is bribery ever a good thing?

When you're on the receiving end of the bribe. Duh.

Re:Not to get too political...

[517714]

We are not pushing our ethics, a number of other countries, representing 80% of the world's trade, see bribery as a problem as well. The US signed a treaty with 33 other countries of the OECD and has "arrangements" with others covering bribery. Our statutes covering this are in International Anti-Bribery Act of 1998 Fines of up to $100,000 and terms of up to 5 years are applicable to individuals found guilty of bribery of officials. If the company you work for does international business your sales department has probably been trained in the personal and corporate consequences of violations.

They generally finish with the corporation before they go after the individuals, hopefully we will be hearing about them in a few years.

Re:Not to get too political...

[Anonymous Coward]

>>Allowing open bribery is a bad thing... it isn't doing business and it's just another way for these large concentrations of power to step on other smaller businesses.

Don't worry, small businesses do it too, in China.

The hongbao has a long and honored tradition there.

Typically, companies take a hands-off approach by hiring the son of a prominent party member (with lots of guanxi - connections) to "smooth out the permitting process". IBM (or whoever) pays the 20-something a million dollars, and then, magically, all the permits are taken care of for their new plant.

But the same process takes place for smaller businesses. The fees/bribes are correspondingly lower, of course. I've heard nightmare stories about companies trying to get permitted without any bribes paid. It's unclear, though, if it's illegal from IBM's point of view to hire someone to pad the appropriate pockets, as long as all they're paying them for is to make the permitting process go smoothly.

Posting as an AC because I'd like to go back to China some day.

Re:Not to get too political...

[Anonymous Coward]

much as I hate to be 'that guy', but source? I'm genuinely interested, and wouldn't have the faintest idea where to find out that kind of information.

Re:Not to get too political...

[Barrinmw]

Its not problem, this is from the DoJ. http://www.justice.gov/opa/pr/2011/January/11-crm-085.html

Re:Not to get too political...

[snkiz]

That's kind of the definition of ethics isn't it? that you stand by them even when it gets hard or your not forced to.

Re:Not to get too political...

[couchslug]

International business is war. Why should our side have rules when the enemy doesn't?

Re:Not to get too political...

[Barrinmw]

...and why should we have the Geneva conventions when the other side doesn't. The US should strap bombs to children and send them to the enemy.

Re:Not to get too political...

[phantomfive]

Eh, there are lots of cases, for example, I know someone who bribed her daughter if she would not get pregnant in high school. Turned out to be a motivating factor in her not getting pregnant, and her life was measurably better as a result.

Bribery is not a good thing, but in some countries, there is no other way to get things done other than bribery. Then for the bribe giver it is not a question of good or bad, but rather whether you want to get anything done or not. Your court requests could be stuck in a pile of papers for years because no one wants to go through them without getting paid. IBM choosing not to pay the bribe will not change things in the foreign country, and things will not get done. So it's a practical matter.

On the other hand, if you US officials are accepting bribes, they should be kicked to the street as quick as possible. Frankly that should be true anywhere, but I'm not about to launch an invasion to force another country to improve their bureaucracy.

Re:Not to get too political...

[phantomfive]

I don't think you can blame him if he comes down on the anti-Republican side - they have committed so many heinous crimes from treason to torture, that it is a safe bet to just oppose them. They tend to be wrong.

Politicians tend to be wrong; by this statement you merely show your bias, probably the bias of your news sources as well.

Re:Not to get too political...

[Sir_Lewk]

Why include homosexual in that? How is it at all relevant? I'm pretty sure "child sex slaves" should stands on it's own as utterly despicable without having to resort to homophobia as well.

Re:Not to get too political...

[phantomfive]

Hasn't Murkowski had corruption issues?

Re:Not to get too political...

[Archangel Michael]

Yup.

Then the Left wing said "communists are nice" and the right wing said "okay as long as I make a buck." Both sides sold out the ideal. And you pick on (R) more than (D) because communists are closer to (D) than (R). And it isn't capitolism at all. it is Corporatism.

Re:Not to get too political...

[Archangel Michael]

IBM is a multinational. They aren't in "our country" and have no allegiance to it.

Re:Not to get too political...

[NeutronCowboy]

Bribes are an artificial barrier to entry into a market. As a result, they are by definition a drag on the efficiency of a market. Furthermore, because of how bribes work, barriers to entry can be made arbitrarily high, resulting in the richest players in a market being able to extract monopoly rents without having to compete for customers.

You want me to go over basic free market theory again? I can't believe there's even a question why bribes are a bad idea. Next, someone will ask whether ice is cold, and whether water should be wet.

Re:Not to get too political...

[phantomfive]

It's not about whether bribes are good or bad. That's not a question. The question is whether it's good or bad for congress to try to stop American companies from making bribes in foreign countries; in countries where the only way to do anything is with bribes. If IBM complied with this (I fully expect they will continue to bribe), they would not be able to do business in many countries. Essentially we would be ceding the entire market to Europe or other countries, and would do nothing to change the culture of bribery.

Re:Not to get too political...

[arkenian]

oddly enough, under US law, this is sometimes legal. The anti-bribery law has a specific exception for (foreign) places where a bribe is required to make a public official do their actual jobs. I.e. bribing a police officer to let you off a ticket is illegal. Bribing a police officer to investigate and arrest the guys vandalizing your warehouse every night may not be, depending on the circumstances.

Re:Not to get too political...

[JohnRoss1968]

Because it is part of the story. The story is that US Tax payer's money is going to purchase young BOYS for the male warlords. There is no instance of the buying of young GIRLS in the story. Thus the homosexual remark.
I personally don't have anything against gays.I have had gay roommates in the past. It doesn't bother me a bit. I have a simple rule. If I am not fucking someone, then it is none of my business who they are fucking. (since I'm not gay I'm not having sex with men, therefor who there are having sex with is none of my business.
2 exceptions to that
1. If they are family then that overrides the rule if it is in their best interest.
2.Sex between 2 or more consenting adults is fine..the key words being Consenting, and adults. (and if you have to be told that Baaaaa means no, I wont even talk to you.)

Re:Not to get too political...

[nosferatu1001]

Except most Eurozone countries have the same laws regarding overseas bribery. Certainly the UK does (ref BAE)

It is good for Congress to act to reduce corruption levels. If you end up with all major powers not doing the whole corruption and bribery game, you end up either forcing the countries to change (i.e., they want the business still, so have to accept not getting bribes) or you reduce the distorting, drag effcect those countries have on the world markets by reducing their international influence

Win win, eitgher way.

Re:Not to get too political...

[Anonymous Coward]

I don't think that something like strapping a bomb to a child is something to joke about.
Strapping bombs to our corrupt congress critters and sending them at the enemy though........

Re:Not to get too political...

[dargaud]

But Republicans want to get rid of this law that makes it illegal for our businesses to bribe foreign officials.

So why do they accept bribes from lobbyists in the form of campaign donations ?

Re:Not to get too political...

[martyros]

Yeah, and everyone in the US thought that was perfectly normal.

This is a classic weakness of Western thinking: overclassification (the entire country is one entity, not a gigantic group of different people with different values), and black-and-white thinking (a country is either "good" or "bad"). The fact is that the US, as a whole is not as good as it needs to be. It is not consistently good. There are a lot of bad people, and there are certainly bad elements of the culture. But that doesn't change the fact that ideals are still very important to many Americans. Americans didn't all vote to buy homosexual child sex slaves; in fact, the very idea horrifies most people, including the people in the government who hired the company responsible for it.

Your kind of thinking basically guarantees things cannot get better. They can only get better if we stick with ideals, insist that the ideals are valid, and that they be applied in all cases. Saying, "Well, a handful of poorly-supervised contractors broke the ideals here, so why should we apply the ideals anywhere" is a sure-fire way to bring chaos and anarchy.

Re:Not to get too political...

[temcat]

This is not the whole picture. Bribes can also remove artificial barriers to entry into a market, such as customs levies etc. We are talking about *free market*, aren't we?

Re:Not to get too political...

[dkleinsc]

Well... why not. The Supreme Court already made it legal to bribe officials domestically.

I bet they got bribed to do it.

Very likely, actually, particularly in the case of Clarence Thomas

Re:Not to get too political...

[Tom]

Is it our job to keep civil servants of foreign governments honest?

No if you have no dealing with them.
Yes if you do.

Corruption is a corrosive influence on any country, and a lot of them suffer from it. However, the changes that are needed to make that happen probably have to begin from within. I'm not against the law in this case, but I can see why some people in government look around at even our Western countries and wonder if everyone is on the same page.

That is a very simplistic world view. That corruption does not come out of nothing. Sure, in some countries tips to people aside from waiters and taxi drivers are more common than in others, but the massive corruption we have today is in part due to foreign capital and the huge difference in income - what is a pittance for some manager setting up a new plant in a cheap-labor country is a years' wage for the official doing the paperwork. You can't claim these things are entirely seperate matters.

Re:Not to get too political...

[Sir_Lewk]

It is highly doubtful that they went out of their way to enslave children who self-identified as homosexual. If the intent is just to be more descriptive, simply using the word "male" would be far more accurate.

Re:Not to get too political...

[Infiniti2000]

Because it is part of the story. The story is that US Tax payer's money is going to purchase young BOYS for the male warlords. There is no instance of the buying of young GIRLS in the story. Thus the homosexual remark.

In looking through the story I saw nothing that says that the boys are homosexuals. They seem to simply be sold and raped as slaves. In fact, I don't really see a lot of evidence that the 'masters' are really homosexuals. Even some of them do it simply as a means to 'be competitive' or perhaps not get killed themselves. I guess the really high-level ones might be homosexual, but the one page I was able to read didn't talk about it that much.

Re:Not to get too political...

[NeutronCowboy]

2 reasons, one abstract, one practical.
Abstract: arguing that something is bad and should not be done is a lot harder when you engage in the same behavior.
Practical: once an organization engages in an illegal behavior in one place, it becomes nearly impossible to prevent that behavior from leaking over into other places. Condoning bribing in foreign countries pretty much guarantees that bribes will be paid locally, just through foreign intermediaries.
And I also challenge your assertion that there are many countries with useful markets where everything gets done with bribes. All societies understand that flat out bribes are only useful for people able to afford them, and there are prohibitions on them in one way or another. Some neato exceptions: Somalia, Zimbabwe - countries where the rule of law has broken down, and where even local people know that the place is a shithole.

Re:Not to get too political...

[phantomfive]

I think you underestimate the level of corruption in many countries. Zimbabwe is only one step below China.

Seriously though, imagine you are in Thailand, and a policeman pulls you over. You have a choice between going through a long, corrupt, court process, possibly with time in jail or being prevented from leaving the country, or bribing the policeman and getting it over with right there (while saving money). Which would you do? And in that case, it's not even a matter of necessity, it's a matter of making the process shorter.

Re:Not to get too political...

[Anonymous Coward]

He's not arguing whether or not bribes are bad, he's arguing that it may not be bad to allow Americans (and American companies, by extension) to use bribery in foreign countries.

Considering that these countries are, for the most part, already operating on a system of bribes, this law wouldn't necessarily promote bribery. It would simply allow American companies to (borrowing a phrase) 'play ball' on the same field with some level of transparency.

Unless you think that an anti-bribery USA law somehow:

a) prevents those bribes from being made, or
b) prevents any non-American persons/companies from using bribery.

Re:Not to get too political...

[metrometro]

> bribery is pretty much how business is done in certain places.

At some firms, yes. At other firms, no. See, once a firm gets a name for being a paying firm, they are pretty much locked into that mode of operation. However, if a firm puts everyone on notice that they do not pay, ever, then pretty soon people stop asking. Business still gets done. Permits still get acquired. And along the way, institutions become a little more just.

So, the question for places like the SEC is, how do we reward the firms that do not pay and encourage more places to join them? Fines like this are a part of that.

Re:Not to get too political...

[Anonymous Coward]

Well, to put a blunt point on it: homosexuality is an aberration. That's not to pass judgement - people are what people are - but it is forcing these children further into a minority position (no puns intended).

If you watch the show we are led to believe that what is happening to these kids is going to come as a surprise to them. As such, being violated by someone of the same gender is likely to be yet more traumatic, especially in a society whose social structures says things like such acts are unforgivable sins leading to death by stoning and eternal damnation.

One might further argue that boys typically cannot experience the trauma of rape like girls do, unless that rape is also homosexual. My post is not conjuring homophobia, it is simply a reflection of reality.

Why is this illegal?

[elucido]

I thought bribing foreign officials was a good thing?

Re:Why is this illegal?

[Anonymous Coward]

I thought bribing foreign officials was a good thing?

Not for U.S. persons and companies. It's a violation of federal law:

http://en.wikipedia.org/wiki/Foreign_Corrupt_Practices_Act

Re:Why is this illegal?

[Lord_of_the_nerf]

What if we called it 'lobbying'?

Re:Why is this illegal?

[Anonymous Coward]

That only works domestically.

Re:Why is this illegal?

[Anonymous Coward]

If the foreign officials know that US companies are allowed to bribe them, they'll demand it.

- after reviewing your proposal, we have discovered that this deal cannot be approved, it does not meet our standards for commerce
- huh, why didn't you mention this before? what standards doesn't it meet?
- multiple standards. Too many to discuss, the matter is seen to be hopeless.
- hmm.... suppose we gave you an extra discount?
- it would have to be in the form of American dollars up front, but not officially as part of the deal. $300K and I will see if we can obtain the necessary waivers.

Re:Why is this illegal?

[c0lo]

I thought bribing foreign officials was a good thing?

Only if you think that paying off a blackmailer is a good thing. On short term, maybe. On longer term, you encourage a culture of corruption which will make your future dealing be increasingly based of paying bribes. And guess what... the bribes will always go up.

Re:Why is this illegal?

[JohnRoss1968]

So your saying its like AT&Ts pricing plans?

Re:Why is this illegal?

[Fibe-Piper]

I agree! While we're at it, what if we call cigarette's "health sticks"? I mean as long as we don't say specifically which direction your health will take after using our products.

We should get rid of that law.

[elucido]

Why shouldn't corporations be able to do publicly what they do privately?

Re:We should get rid of that law.

[Barrinmw]

Because of Johnny Mnemonic.

Re:We should get rid of that law.

[Anonymous Coward]

Well, shit, given the whole double irish bidness, we need to tax these guys somehow. Otherwise we'd have to print money to pay for the military, and that would inflate away mah nest egg!

I have mod points

[Anonymous Coward]

So if anyone wants some +1 Insightfuls, well...let's see if we can work out an "agreement."

Re:I have mod points

[mywhitewolf]

This isn't really bribery because I can't be expected to earn my own karma for my own slash dot moderation campaign. and it doesn't give me an unfair advantage because all other Slashdot moderators are entitled to take contributions from lobbyists too.

Re:I have mod points

[Anonymous Coward]

im stuck in negative and can't get out. maybe i can bribe someone?

Re:I have mod points

[An anonymous Frank]

somewhat offtopic, but, I used to get 5 mods points every few days, without fail.
now, perhaps at least since the new look/interface, no more.

(perhaps I should dig into the options and see what I can find.)

You idiots!

[Anonymous Coward]

Don't you know? DON'T GET CAUGHT! Didn't you learn how to cheat in school?

the US Gov is jealous

[FudRucker]

a fine is just a bribe in reverse...

Maybe ...

[arielCo]

Just maybe, that's the normal way to do business with governments in those parts?

Just sayin', based on my experience living in Latin America. Most of the time government offices are so sluggish (sometimes deliberately so), that you HAVE to grease the wheels if you want things done before you lose serious revenue. Clearing customs, currency exchange (where the government controls it), assorted permits... most new providers are shocked to learn how much these things can take.

Re:Maybe ...

[demonlapin]

That's what I thought of the first time I heard of this law. It seems somewhat odd that it can be a violation of US law to do something in another country.

Re:Maybe ...

[mc6809e]

Just maybe, that's the normal way to do business with governments in those parts?

Just sayin', based on my experience living in Latin America. Most of the time government offices are so sluggish (sometimes deliberately so), that you HAVE to grease the wheels if you want things done before you lose serious revenue. Clearing customs, currency exchange (where the government controls it), assorted permits... most new providers are shocked to learn how much these things can take.

Yep. And more often than not, a "bribe" is really an extortion payment, especially if you're an American.

It's not that foreign officials are anti-American, they just know who can afford to pay.

Next it will be the Chinese that get forced to pay these "bribes".

Re:Maybe ...

[Anonymous Coward]

It's illegal to do in this country. Is there some reason a criminal act is ok if it's overseas??

The better answer is...no.

Re:Maybe ...

[c0lo]

Just sayin', based on my experience living in Latin America.

And do you like it?
Assuming you would be willing to bribe someone to get something done, would you be happy of somebody from a foreign country just overbidding your bribe by a higher one? (even if, say, what the foreign party will sell to you and your family is 2-3 times as expensive?)

Re:Maybe ...

[Anonymous Coward]

An American friend of mine wanted to cut and set diamonds using Chinese. Given that his labor costs were 1/10th of what they would be in the USA, his rent was 1/8th, and his utilities were about 1/8th as well, he couldn't help but make money even when his insurance rates doubled to take into account offshoring about US$1 million in rough stones. It was great until his local rep asked for some money to go party with a Chinese official. When my friend refused, his business stopped getting electricity. When he started using a generator to get around that, they cut off his water. When he had a well drilled and installed the required purification system, he found no one still willing to deliver him fuel. He was kind of surprised the official didn't just tell the workers to just stop showing up "or else." He finally relented and asked what the party was going to cost him at that point. He repatriated the stones and now has a shop set up near Houston, because it was cheaper.

Re:Maybe ...

[demonlapin]

Territorial jurisdiction matters. I can't be prosecuted in California courts for a crime committed in Maine. Likewise, things that I do outside the US shouldn't be under US law.

Re:Maybe ...

[Nyder]

Just maybe, that's the normal way to do business with governments in those parts?

Just sayin', based on my experience living in Latin America. Most of the time government offices are so sluggish (sometimes deliberately so), that you HAVE to grease the wheels if you want things done before you lose serious revenue. Clearing customs, currency exchange (where the government controls it), assorted permits... most new providers are shocked to learn how much these things can take.

Yep. And more often than not, a "bribe" is really an extortion payment, especially if you're an American.

It's not that foreign officials are anti-American, they just know who can afford to pay.

Next it will be the Chinese that get forced to pay these "bribes".

Bribes are "taxes". That's the whole problem here. If they, from the get go, kept saying they were paying local 'taxes', no one would bat an eyelash.

Re:Maybe ...

[Anonymous Coward]

Look at what you wrote and tell me that is not at all analogous to the internet and Net Neutrality.

Want to access Google search results? $2. Want Youtube vids to not take forever and a day to download? $15. Decrease latency for WoW? $10.

Re:Maybe ...

[arielCo]

And do you like it?

Long answer: Hell, no

Assuming you would be willing to bribe someone to get something done, would you be happy of somebody from a foreign country just overbidding your bribe by a higher one? (even if, say, what the foreign party will sell to you and your family is 2-3 times as expensive?)

Director's Cut: That's exactly the true source of the losses caused by corruption, not the amount overcharged to bribe corrupt officials. Hopefully you didn't assume that describing a situation somehow implies acceptance. BTW, as others have said, corruption is not some disease brought by foreigners. All you need is underpaid officials handling matters that are valuable to someone else, be it your driver's license or a juicy construction contract.

Re:Maybe ...

[c0lo]

Hopefully you didn't assume that describing a situation somehow implies acceptance

Wasn't born yesterday. Fortunate for the dialog, not sure if so fortunate for me.

BTW, as others have said, corruption is not some disease brought by foreigners.

Almost agreed, with the amendment that if even the foreigners succumbs to infection, the illness has little chances to be cured (other than by bloody revolutions).
Also as a reserve to your statement, there's nothing (at least, theoretically) to exclude situations in which the foreigners actually initiating the corruption (or, rather, fueling it from an almost unobservable/petty level to a societal infection).

All you need is underpaid officials handling matters that are valuable to someone else

While underpaid officials is one of the ways in which corruption creeps in, unfortunately there are also other motivations that may lead to corruption. Anyway, need two to tango.

Re:Maybe ...

[JohnRoss1968]

OK but by that logic...if you go to work for a company in say knoxville tn, that is owned by a foreign company from China. If you were to do something that is illegal in china, then china can charge you with a crime.

Re:Maybe ...

[Tom]

Normal - yes.
Acceptable - no.

That is why laws against corruption are enforced, and why there is an international treaty (one the US signed, for a change) that requires enforcement against companies even if the crime happened in another country.

The problem is that there are other - legal, official - ways to get your paperwork done. They just aren't as convenient. But it is the little guys who usually can not afford to go them, the big guys can and should. IBM can hire a team of lawyers to get that delayed paperwork forced through. Doing so would help a lot to make corruption less normal and give the little guys a signal that it's not the only way. But it's slightly more expensive, slightly more risky, and might take a short while longer.

So, thanks to our capitalism-fanatism that almost forces large companies to do whatever is economically advantageous, no matter what other side-effects it has, that is the route that IBM - and let's be honest, pretty much every other major corporation - will go.

Re:Maybe ...

[Anonymous Coward]

American companies uses agencies that handles those areas. The companies do not ask and the agencies do not tell. Both are happy.

Question

[Superdarion]

Payments from IBM subsidiaries to South Korean officials in the form of gifts, travel and entertainment

Isn't this how business is handled in the private sector?

Re:Question

[Nursie]

I think the answer there is "not any more".

it used to be, in the time before people became interested in competition law, ethics in business and not supporting corrupt governments overseas.

But now we apparently care about all those things. IMHO that is a very good thing.

Re:Question

[ShanghaiBill]

Isn't this how business is handled in the private sector?

Not where I work. Anyone who accepts a gift from a vendor or customer, and fails to report it promptly, is risking getting fired.

Our CFO noticed our shipping costs had gone up, so did an investigation. She found out that more packages were shipping DHL (high rates, crappy service), because the DHL sales rep was buying pizza for the warehouse staff several times a month. The warehouse manager lost his job, and we no longer use DHL at all.

Proportions?

[Haedrian]

Woah, a 10M dollar fine...

Lets see what Wikipedia says about IBM..

Net income US$14.833 billion (2010)

Yeah, that 10M fine will sure show them!

If they really wanted a punishment, they should give IBM's board community service or something. That'd be an interesting way of doing things. Not denying the CEO's paperboy a large tip this week.

Re:Proportions?

[MickyTheIdiot]

but but but but but the CEO knew NOTHING about what was going on!

He EARNS that multi-million dollar salary, but he knows NOTHING about what is going on!

Re:Proportions?

[Anonymous Coward]

What about SOX: the big wigs are criminally responsible for not knowing what is going on ?

Re:Proportions?

[Anonymous Coward]

i don't think any company on earth looks at a ten M I L L I O N dolar fine lightly, regardless if you make 14 bill a year thats still a big fine

Re:Proportions?

[Haedrian]

i don't think any company on earth looks at a ten M I L L I O N dolar fine lightly, regardless if you make 14 bill a year thats still a big fine

Your rounding down had more effect on their net profits than what is essentially a rounding error.

I'm sure they made more than 10 mill from the deals anyway. They still came on top

Re:Proportions?

[Anonymous Coward]

Take it from someone in finance. Fines are just the cost of business. A good business analyst will note these in the business requirements, and they usually do. Things like fines, taxes, bribery, and so on are just the cost of implementation. These issues will be flagged as a compliance issue but the decision to implement will oftentimes be based on the bottom line, particularly for such victimless crimes as an unregulated fee. Take the profit first, and take the hit in the audit later. Amoral? Maybe. Good business? Absolutely.

Re:Proportions?

[Anonymous Coward]

Don't consider it a fine. Consider it local politicians wanting in on the fun.

I'm sure IBM was "encouraged" to donate an additional amount of money to various officials/parties in order to make the problem go away fast and for a nominal fine. Politicians don't want to stop corruption in foreign countries, they just want a mechanism to participate.

Re:Proportions?

[Tom]

Some judges know that. There's a famous work law case here in Germany, where the employer, a major company, refused any and all cooperation with the works council, even though such cooperation is at least to some degree, required by law.
The judge in that case ordered the entire board taken into custody until they at least initiated talks with the workers. Legend has it that a meeting was scheduled within a few hours.

Re:Proportions?

[DarthVain]

Ironically the 10M that was paid out came out of the Intel back account marked "Bribe Fund"....

A spokesman was quoted as saying "Just the price of doing business..."

Re:Proportions?

[weeboo0104]

You don't know the half of how trivial that payment is.
Speaking from first-hand experience with the Danieli v. IBM overtime lawsuit , IBM settled that lawsuit for $7.5 Million. The total amount of time it took them to agree to that amount once the lawyers were all together? 2-3 hours. That's right. For the privilige of claiming no wrong doing, they paid $7.5 Million.

The same bribery thing happened in the late 90's in Argentina. A couple of IBM South America execs were facing prison time over that one. Why isn't there jail time this time around?

That's exactly why not to.

[khasim]

Once corruption is legitimized, those conditions become the norm.

Look at all the countries with the lowest standard of living. You'll see that their governments are based upon bribes and favors.

The money is transfered from public works to private individuals and the entire country suffers.

Re:That's exactly why not to.

[arielCo]

The money is transfered from public works to private individuals and the entire country suffers.

Your observation about correlation seems accurate. But, even though bribes are factored in the quoted price, the amount of money pilfered is peanuts in comparison to the losses due to inefficiency, abandoned projects, deliverables that were left to rot/obsolescence, white elephants, etc.

That's why they call it "corruption" - it rots the system from the inside.

Re:That's exactly why not to.

[arielCo]

But then again, corps are mostly known/accepted as be amoral little critters with a positive tropism for profit.

Re:That's exactly why not to.

[Anonymous Coward]

The money is transfered from public works to private individuals and the entire country suffers.

You mean money confiscated from productive members of society for distribution to the shiftless and lazy is returned to those who actually earned it, rather than waiting for the nanny state to give them goods for free, don't you, comrade ...

Re:That's exactly why not to.

[Solandri]

Once corruption is legitimized, those conditions become the norm.

You're somehow inferring that bribery by foreign corporations is what's causing the corruption and leading to it becoming the norm. That's (usually) not true. In most of these countries, bribery and graft were already the norm before the foreign business even got there. In that situation, a country has two ideological choices:

A) Isoluation and refusal to do business. You basically tell the country to screw off and prohibit any of your corporations from doing any business in that country. That you won't do business with it until it cleans up its act first. Then you sit and wait, and hope the people of the country will on their own spontaneously revolt, clean up government and business, and establish a system more compatible with your moral ideology. This is the approach the U.S. is taking with Cuba.

B) Acceptance of the different standards. You recognize that things are done differently there than here, and continue to conduct business playing by their rules. You do this with the long-term hope that the extra economic velocity generated by your business will lead to a thriving middle class, which will gain enough economic and socio-political clout that they're able to bend their own government into cleaning up its act. A peasant state where 95% of the wealth is controlled by 1% of the population doesn't need to listen to what 99% of its population says. But a middle class of 50% of the population controling 40% of the wealth is a force to be reckoned with. This is the approach the U.S. is taking with China.

I won't argue which method is better. I'm not even sure myself. I will say this though: Uncompromising ideology makes a good goal towards which you want to steer society. But it frequently makes for a lousy method with which to steer society. If you say corruption is bad so you should never do anything which encourage it, you just end up going out of business and your opinion doesn't matter anymore. It's better to compromise, allow a little corruption, gain more power and influence, then use that power to try to steer things for the better.

Re:That's exactly why not to.

[c0lo]

The money is transfered from public works to private individuals and the entire country suffers.

You mean money confiscated from productive members of society for distribution to the shiftless and lazy is returned to those who actually earned it, rather than waiting for the nanny state to give them goods for free, don't you, comrade ...

How insightful you are today!!!

Everybody knows that the govt bureaucrat who won't do a thing for you (even if you are entitled to) unless you pay "his private tax" is working very hard to earn his money, takes enormous risks just to keep the society going towards the greater good. Such individuals are actually the spine of the society, without them everybody will just lazily bake themselves in the sun, paid from the dole.

Re:That's exactly why not to.

[pclminion]

Once corruption is legitimized, those conditions become the norm.

Those conditions have always been the norm. What you see in the world is not a descent into corruption, but an attempt to ascend out of it. Not everyone is caught up yet. Unless you're willing to say that you'll do no business with 90% of the world, this is how it goes.

I have to sign off on company policies on an annual basis. One of the policies I sign off on is a "no bribery" policy, but it has a fairly fat exception for nations where bribery is an expected and necessary part of doing business. The alternative is to not do business there.

Re:That's exactly why not to.

[hackingbear]

Unfortunately, you have to pay one way or the others. Look at some of the cleanest governments in the world -- Singapore and Hong Kong; public servants are given free condos for life; a nice condo there easily worth a million USD or more, thanks to the governments' monopolistic control of land. In the US, we pay government officials with handsome pension benefits; we also make most of that legal by calling the acts "political donation". Money buys cleanness, regardless of political system; at the end, public serving jobs are career and not volunteer works. China is currently trying to clean up ultimately by raising the salary and retirement benefits of public servants too; if they succeed, they will end up being like us -- with trillions in public debts.

Re:That's exactly why not to.

[Anonymous Coward]

I have to sign off on company policies on an annual basis. One of the policies I sign off on is a "no bribery" policy, but it has a fairly fat exception for nations where bribery is an expected and necessary part of doing business. The alternative is to not do business there.

IBMers also have to sign off on company policies on an annual basis. One of the policies they sign off on is a "no bribery" policy, but...

there are no exceptions.

Re:That's exactly why not to.

[crossmr]

Look at all the countries with the lowest standard of living. You'll see that their governments are based upon bribes and favors.

And that happens in a lot of countries where the standard of living is supposedly higher.

Re:That's exactly why not to.

[couchslug]

That's not a reason not to bribe foreign corrupt countries where that's normal, it's a reason to avoid that situation at home.

The world is a bad place where virtue has no rewards.

Re:That's exactly why not to.

[taucross]

Corruption and bribery are not synonyms. What is business at its heart except bribery?

Bribery has become commonplace with the advent of the 'service fee'. Tell me, what is the difference between a service fee and a bribe? The main difference is that a service fee is legitimised and generally subject to a business process. Though this might give you the impression that it creates a fair system, it doesn't really. Golf course deals happen all the time, it's the way of the world.

I live in Australia where everything has a service fee and where service fees are generally waived when a business has a good relationship with a customer. Our standard of living is quite decent considering everything is so expensive.

Sure, when a government employee is stealing from the people to pad the pockets of private corporations, it's corrupt and should be dealt with accordingly. But a lot of the time the line between corruption, bribery, and business is all too blurry.

As we say in finance: Any sufficently advanced scam is indistinguishable from business.

Re:That's exactly why not to.

[pclminion]

IBMers also have to sign off on company policies on an annual basis. One of the policies they sign off on is a "no bribery" policy, but... there are no exceptions.

I really doubt that their policies are significantly different. Here's the relevant text of the policy I mentioned:

This policy does not prohibit properly made and recorded facilitating payments. Sometimes the Company may be required to make facilitating or expediting payments to a low level government official or employee in some countries other than the United States to expedite or secure the performance of routine governmental action by the government official or employee. Such facilitating payments may not be illegal under the FCPA or other applicable laws. Nevertheless, it may be difficult to distinguish a legal facilitating payment from an illegal bribe, kickback, or payoff. Accordingly, facilitating payments must be strictly controlled and every effort must be made to eliminate or minimize such payments. Facilitating payments, if required, will be made only in accordance with the advance guidance of the Legal Department. All facilitating payments must be recorded accurately as facilitating payments in the accounting records of the Company.

Note the use of the term "facilitating payments."

Re:That's exactly why not to.

[Anonymous Coward]

False choice. Here is an alternative:

C) Try to change the standards. Allow companies to do business with the local rules along with reporting requirements of discrepancies. Instead, require companies to publicly report on that information in order to not be penalized. Fight corruption with transparency. Create an incentive for the companies to spend money to fix the system.

Bribes Employee Bonuses

[Anonymous Coward]

Well, that explains where my performance bonus went.

Uh Oh

[Anonymous Coward]

3 billion in Cash.

10 billion in Cocaine.

1 Trillion in Sex Slaves Trafficing.

IBM does't know when or how to quit.

A durnkard meandering down main-street America on any night.

--308

this just in

[Anonymous Coward]

IBM increases the prices of what it sells to the gov't

Normal Business in China

[PureRain]

Don't know about Korea but from what I've heard from Chinese friends, bribery is a regular part of business in China. This will just put IBM at a disadvantage.

Interesting how the US govt doesn't get charged at home for torturing people at prisons it operates in foreign nations, in the same light that IBM is charged here for its conduct offshore.

Anyway I support disciplining businesses who conduct themselves inappropriately, at home or abroad.

Re:Normal Business in China

[Anonymous Coward]

So ? I'm of the opinion that honorable businesses should voluntarily sever dealings with criminal nations. China is no better than the Arab League when it comes to human rights violations. They deserve to be cut off. If they want supercomputers, they can design and deploy them on their own... today's profits will only lead to tomorrow's world war.

Seize profits and related assets

[syousef]

I know what you mean, but what else can you do other than levy a fine?

1) Seize ALL resulting profit AND
2) Seize ALL assets used in commiting the crime (Why should they be treated any better than drug dealers?) AND
3) Levy a fine on top of that AND
4) Investigate individuals for criminal prosecution with a view to banning them from being in similar positions in the future

In other words make it truly not worth anyone's time if they get caught.

If $10 is nothing to IBM, lets see if they're hurt by $200M

Re:Seize profits and related assets

[CodeBuster]

You're familiar with the expression, "Don't bite the hand that feeds you"? It applies here too. Most of us here on Slashdot have jobs and can feed our families because international business exists and chooses to operate here in the United States. We cannot afford to be unfriendly to businesses that we desperately need to stay here and create jobs. So they bribed some Korean officials? Who gives a flying f**ck, that's how they do business outside the United States. If that helps to keep my job here in the United States then frankly, I couldn't care less what goes on in Korea. Like many government agencies set up to protect the "little guy", the SEC has done more to prevent the best investment opportunities from reaching the middle class over the last seventy seven odd years than just about anyone else. The rich are able to make real investments while the rest of us are basically stuck handing our profits over to mutual fund managers in our 401k's because that is what keeps us "safe" from having losses (and gains) and safe from ever having a real retirement. The only real hope for the little guy is to somehow amass enough wealth to become a High Net Worth Individual at which point the real investment opportunities become available.

Re:Seize profits and related assets

[Anonymous Coward]

      There is a fine line between bribery and being extorted.

Re:Seize profits and related assets

[ibsteve2u]

If that helps to keep my job here in the United States then frankly, I couldn't care less what goes on in Korea.

It is highly unlikely that IBM's goal was or is to keep your - or any other American's - job here in the United States. You cost too much - given currency exchange rates.

Re:Seize profits and related assets

[cheekyjohnson]

If it benefits you, let the corruption continue? I can see why many people would want to do that, but it doesn't sound all that appealing to people who aren't in that sort of situation...

Re:Seize profits and related assets

[syousef]

So they bribed some Korean officials? Who gives a flying f**ck, that's how they do business outside the United States.

So they bribed some US officials to let migrant workers do the job at half the price and fired all their staff? So what!? It's an at will state. Those greedy rich Americans can apply at subsistance wages like I did.

See, it cuts both ways. You allow bribery to thrive to suit a corporation, and they'll turn on you. If you allow bribery justice is never carried out and people suffer - anything from death and injury to virtual slavery. I'm alright screw everyone else is a destructive unenlightened attitude.

Re:Seize profits and related assets

[TapeCutter]

If $10 is nothing to IBM, lets see if they're hurt by $200M

IBM has roughly a 20% profit margin, meaning they need to make $50M in revenue to pay the $10M fine. A $50M loss in revenue isn't going to bankrupt IBM but you're kidding yourself if you think it doesn't hurt. Besides, the public officials who accepted (demanded?) the bribes are the real criminals in this story.

Re:Seize profits and related assets

[The1stImmortal]

5) Unincorporate the company

Seriously - it's the equivalent of the death penalty for corporations. Given the death penalty is still in use throughout much (most?) of the US, this would be an appropriate equivalent for use in corporations.

I wonder what the corporate equivalent to inprisonment would be though...? X years working exclusively for the government for free on a fixed rate income and eating into existing capital or something?

Re:Seize profits and related assets

[Hognoxious]

I'm surprised you didn't suggest throwing rocks at them, or at least cutting their hands off.

Re:Seize profits and related assets

[JamesP]

Until the Koreans bribes China and then they buy the Korean crap instead of IBM crap

Re:Seize profits and related assets

[Stargoat]

There is a fine line between bribery and being extorted.

Exactly. Show me a person who has done successful business in China. If that person says he did not bribe anyone, he is a liar. If he did not directly deliver the cash, then one of his subordinates did. It is impossible to do anything in China without bribing people. It is simply the way the culture has evolved there. People bribe. That is what they do. And anyone, business professor, lawyer, State Department Official, who says otherwise is a liar.

Re:Seize profits and related assets

[kokojie]

Actually IBM has shipped almost all their engineering jobs overseas to India and China.

Re:Seize profits and related assets

[ibsteve2u]

Wasn't trying to imply IBM shipped jobs to Korea...their workers are too expensive for IBM's tastes, too.

I.e., I understand that these days IBM is just another Sino-Indian corporation that enjoys enormous competitive advantages due to currency exchange rates and the differing values nations put on the quality and duration of human life.

Re:Seize profits and related assets

[CodeBuster]

I'm alright screw everyone else is a destructive unenlightened attitude.

F**ck enlightenment, that doesn't put food on my family's table. The world is a destructive and unenlightened place and your foreign competition is playing hardball, so take what you can get and make no apologies. That's what I do and I have no regrets.

hahahaha! Sic 'em SEC

[Anonymous Coward]

10 million. That's about what IBM refunds to its employees every year because of that fucked up pop machine in the cafeteria.

Hey, nice work, ya bunch of pussies...

Wait, wait ....

[future assassin]

Bringing down Wall St and getting rewarded with a bail out is ok but bribing foreigners with a few thousands here and there is full on illegal? Only in Bizzaro land called the US of A.

Re:Wait, wait ....

[Anonymous Coward]

this fine is a slap on the wrist.

it's not full-on illegal. what if the CEO had sex with a 12-year-old boy?

Re:Wait, wait ....

[Anubis IV]

A) IBM didn't bring down Wall Street, so there's little reason to compare them against one another, since they are very different situations.
B) I think we can agree that both are wrong. This doesn't have to be a one or the other thing, though clearly some people got away with crimes, while others didn't get away with theirs.

wow

[Anonymous Coward]

Only hundreds of thousads of dollars? they're practically saints!

I love it "entertainment"

[Anonymous Coward]

No one get's laid for free, IBM mainframes are needed in return, LOL!

Yeah ...

[khasim]

First off, I'm not inferring anything.

I'm straight out SAYING that when you legitimize corruption then ALL interactions with the government or other businesses in that country exhibit the characteristics that arialCo identified.

But a middle class of 50% of the population controling 40% of the wealth is a force to be reckoned with.

And totally irrelevant because, as mentioned before, the countries with the most corruption have the lowest standards of living.

There won't be a middle class there because the corruption prevents it from forming. It prevents the middle class from forming by transferring the money from projects that would facilitate the middle class forming into the pockets of those who already have the money and power.

Re:Yeah ...

[MasaMuneCyrus]

There won't be a middle class there because the corruption prevents it from forming. It prevents the middle class from forming by transferring the money from projects that would facilitate the middle class forming into the pockets of those who already have the money and power.

Not every country is Zimbabwe. Every developing and developed Asian nation is an example of a country that started so filthy with corruption you'd want to wash your hands after dealing with them, and each country, on its own pace of development and reform, has been building middle classes and cleaning things up over time.

Japan is an example where corruption is down to first-world levels and the middle class is gigantic.

South Korea and Taiwan are examples of countries where there are still struggles between the younger and more virtuous, and the older and staunchly corrupt generations of politicians, but they're both embarking on the home-stretch towards being world-class, unambiguously first-world highly developed nations.

China is a country that is still firmly in the grasp of endemic corruption but is steadily creating a middle class and is visibly heading in the right direction.

Re:Yeah ...

[Solandri]

I'm straight out SAYING that when you legitimize corruption then ALL interactions with the government or other businesses in that country exhibit the characteristics that arialCo identified.

You've never actually managed a large group of people or a company with a large corruption problem, have you? Fighting corruption is not as simple as waving a magic wand and declaring that nobody is allowed to do anything evil again. Often times, the only people skilled enough to continue running a company or a government are people who are corrupt. The choice then isn't between a functional country with corruption, or a function country without corruption. It's between a functional country with corruption, or a non-functional country without corruption.

You're usually better off gradually transitioning - eliminating the worst of the corruption while keeping the less corrupt people, allowing new people to be trained with the skills necessary to keep things functioning. Then you eliminate the worst and the most corrupt again and bring in more new people. Repeat and the level of corruption drops each iteration.

And totally irrelevant because, as mentioned before, the countries with the most corruption have the lowest standards of living.

There won't be a middle class there because the corruption prevents it from forming.

That's simply wrong. Both Japan and South Korea developed thriving middle classes despite corruption. China's middle class is growing dramatically. All started off corrupt, and are in various stages of becoming less corrupt. South Korea in fact is a perfect example of a country with moderate to high living standards which until recently had rampant corruption.

I'm not saying the Japan/Korea model will work with every country. Some will need a stricter approach more like yours. Some will react better to to gentler nudging. But your absolute "no corruption allowed" approach simply does not work. It's a great goal to work towards, but demanding strict adherence to it from the get-go rarely helps transition a corrupt society to a non-corrupt one. In fact it's more likely to get you a bullet to the back of your head.

It's in the employee guide.

[Anonymous Coward]

Back in the day international firms had sections in their handbooks on how to handle "bribes" when working abroad.

Well obviously,

[Anonymous Coward]

you'd have to pay people to buy the steaming pile of shit that is Lotus Notes.

Lotus Notes - our motto is: "that will be fixed in the next release"

Re:Fuck the World.

[Anonymous Coward]

Good luck, motherfucker.

Don't want to be subject to laws? Stay out.

[Anonymous Coward]

Yeah, and if you stand at the five corners, you can shoot a man (or a boy!) while standing in one state, the bullet passed through one, hits them in a third, they die in the fourth, and their body lands in the fifth!

Totally unprosecutable!

Oh wait, no. It'd be dealt with rather effectively. The respective DA's may argue over it, but if nothing else, the federal government would take over.

In this case, if the company does business in the US, that's the action that subjects them to the jurisdiction of the US. Of course, if you don't want to do any business in the US, then you can make an argument that the US shouldn't care. Likely they won't, unless you start making more trouble that bothers the US, in which case it stops being a legal problem, and becomes a diplomatic problem for somebody else. Then it can become a legal problem for you. Go figure.

This argument also applies to citizens. Some of them will go overseas to do things they can't away with in the US. There are times it is probably understandable such as a medical procedure, but other times...yeah, sex trade is bad, mmkay? If we have to prosecute them in the US to stop it, then we should.

The only way your argument applies is if you let greed trump justice, and that's just not something I can support. You may argue that there's some problem with a given law. I would tell you to get the law changed. If you want, you can argue for breaking it in protest. there are lots of US laws which I'd support resisting.

But you won't be likely to make that kind of argument with regards to bribery. It's just bad policy.

Category Icon

[Anonymous Coward]

I keep seeing this icon and thinking the article is related to Anonymous.

Blood money

[Anonymous Coward]

They probably just wanted to empty out the piggybanks they filled while leasing technology to the nazi's.

Exactly

[symbolset]

It would be newsworthy if IBM managed to do business in China without bribery. Cash is the lubricant that greases the wheels of business in Brazil, Russia, India and China. And I put it like that because these nations are referred to as "BRIC", though there are many other minor markets where approvals to do anything cannot be had without some lube in the form of a grocery bag full of soft folding cash. There's a reason why the US airlifted many pallets of hundred dollar bills into Iraq, Afganistan, and other current ports of interest, and now cannot account for where they went, to the sum of billions of dollars. When in Rome...

Wrong jurisdiction?

[Anonymous Coward]

Why is the USA's SEC administering law on something that happened outside the USA? Isn't this a crime in itself?

Re:Wrong jurisdiction?

[The1stImmortal]

I would suggest that being a US company, its behaviour abroad is still governed at least in part by US law. Much like the behaviour of US citizens abroad would be subject to some US laws.


(Or apparently these days the behaviour of non-US Citizens, if they've ever actually come in contact or so much as seen or even heard of a US citizen ;) )

Just a token effort

[Phrogman]

to make it look like government fights corruption - at home or abroad - while waiting for the next "political contribution" from the same companies. Bribery is the norm in many countries abroad, here its just got a different name...

Actually...

[jvonk]

...and why should we have the Geneva conventions when the other side doesn't.

I perceive the argument you are attempting to make; however, there is a slight point of order here—the Geneva Conventions don't apply if the other side isn't a signatory, unless the other side abides by the Conventions anyway.

Quoth Wikipedia (with actual citation for the fact, amazing!) on the Geneva Conventions article:
The Conventions apply to a signatory nation even if the opposing nation is not a signatory, but only if the opposing nation "accepts and applies the provisions" of the Conventions. (emphasis mine)

If you think about it, this is the only way a cognitively dissonant concept like "laws of war" could even be remotely workable. If "side 1" is violating surrender protocol by detonating suicide bombs strapped to their soldiers, then it really isn't tenable to force "side 2" to grant quarter. So, as nasty as it sounds, if "side 1" is sending children strapped with bombs at "side 2", then it's perfectly reasonable to expect "side 2" to shoot children who match the profile of suicide bombers.

As I said before, the very concept of "laws" in war is highly cognitively dissonant. To wit: "Okay, so, we are going to go our separate ways and then attempt to kill each other in order to force the other side to bend to our will. Oh, but killing strategies x, y, and z aren't cool and are criminal. So, to recap: we agree it's time for mass killing, devious tricks, and depredation of each others' territories, but these certain listed things are offensive!"

Re:Actually...

[Barrinmw]

I think you got my point though that I was trying to make, that even though other people have no qualms about doing things, we do and try to stay "righteous" as best we can.

Bribe ? What Bribe ?

[light_rock]

Sure there must be a line, somewhere... but let's keep it same same. What are the real roots of "trade imbalance" anyway... When in Rome, Beijing, or Seoul... "Business is business" We can all tie our hands behind our back and stand on one leg too... Sign here...

subject

[Legion303]

Yes, $10M for over a decade of concessions from Chinese officials. That will teach IBM! They can take it from petty cash.

What is the world coming to ...

[Anonymous Coward]

When a US Corporation has to resort to bribes? Can't the just call them 'political donations' or something respectible like that? That would end all the corruption.

Ampersand

[Anonymous Coward]

USE IT

"IBM charged with Bribing Korean & Chinese Officials."

Home Advantage

[anorlunda]

IBM seems to be getting off easy. $10 million for hundreds of thousands of dollars in bribes covering multiple incidents over an extended period of time.

ABB, with headquarters in Zurich was recently fined $58 million for only two, relatively small, bribe incidents.
http://www.abb.com/cawp/seitp202/b7aa479846d0fe19c12577ae0017bfa0.aspx

The circumstances suggest favoritism for home team players.

.

Re:Home Advantage

[Anonymous Coward]

Absolutely.

The one implicated in this corruption case in the mexican side is Nestor Moreno, he was put in the post of Operations Director in the national electric company because he was backed up by the previous mexican president, Vicente Fox and the right hand of current president, Felipe Calderon, the spanish mexican Juan Camilo Mouriño, deceased in 2008, despite having being suspended from public service by the internal accounting and anti-corruption office. But far more juicy contracts awarded by corrupt means in the mexican energy sector to american and spanish companies have been kept out of investigation despite having being awarded in no bidding procedures and under terms illegal under Mexican Constitution. If the contracts had been signed in Libya to chinese corps news channels would be broadcasting the news about corrupt libyans and filthy chinese.

Surprised they didn't make the Forbes list

[Anonymous Coward]

Surprised they didn't make the Forbes List of Most Ethical Companies.

$10mil is a drop in the bucket

[bulled]

It is likely an order of magnitude or 2 less than the value of the business earned by this bribe. So what IBM has learned here is that SEC fines are simply another cost of doing business with PRC and South Korea.

Ethics ...

[Bob-taro]

This is sad. During a brief period of employment with IBM (I was "rebadged" instead of laid off from another company) I listened to a presentation about IBM's core values. IBM, they say, was founded on solid core values - things they wouldn't waver on, ever. Why even in the 80s when everyone was laying people off, IBM refused to do so. Then (with a straight face mind you) he said that IBM almost went out of business, and had to re-evaluate their core values. So apparently they now have an evolving set of core values that sometimes have to give way to preserving the company.

IMHO, The real test of your ethics is whether you follow them even when it's bad for you.

Re:Ethics ...

[rgviza]

> So apparently they now have an evolving set of core values that sometimes have to give way to preserving the company.

You need to weigh that against the issue of not having a company. Do we go out of business or feel the sting of our pride fucking with us and stay IN business?

Most people go with the paycheck. Unless you are independently wealthy, that's the smart thing to do, keep a roof over your head and eat. The moral high ground often means bankruptcy once you are squeezed between that rock and the hard place.

Cost of doing biz - they probably made a few $B

[entertainment]

im stuck in negative and can't get out. maybe i can bribe someone?

maxgames.me

[Anonymous Coward]

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