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IBM Charged With Bribing Korean, Chinese Officials

Posted by timothy on from the conditions-on-the-ground-called-for-it dept.

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."

33 of 263 comments (clear)

  1. Bribery fines are funny by MartinSchou · · Score: 5, Insightful

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

    1. Re:Bribery fines are funny by phantomfive · · Score: 5, Insightful

      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!

      --
      "First they came for the slanderers and i said nothing."
    2. Re:Bribery fines are funny by tnk1 · · Score: 4, Interesting

      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.

    3. Re:Bribery fines are funny by rolfwind · · Score: 4, Informative

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

    4. Re:Bribery fines are funny by rolfwind · · Score: 5, Insightful

      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.

    5. Re:Bribery fines are funny by gestalt_n_pepper · · Score: 3, Insightful

      ...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.

      --
      Please do not read this sig. Thank you.
    6. Re:Bribery fines are funny by Doc+Ruby · · Score: 3

      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.

      --

      --
      make install -not war

    7. Re:Bribery fines are funny by Coeurderoy · · Score: 3, Interesting

      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..

    8. Re:Bribery fines are funny by tibit · · Score: 3, Interesting

      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?

      --
      A successful API design takes a mixture of software design and pedagogy.
    9. Re:Bribery fines are funny by NiceGeek · · Score: 3

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

    10. Re:Bribery fines are funny by vertinox · · Score: 4, Informative

      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.

      --
      "I am the king of the Romans, and am superior to rules of grammar!"
      -Sigismund, Holy Roman Emperor (1368-1437)
    11. Re:Bribery fines are funny by MasaMuneCyrus · · Score: 3, Insightful

      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.

    12. Re:Bribery fines are funny by mjwx · · Score: 4, Insightful

      He wasn't hung for bribery,

      He was shot for getting caught.

      --
      Calling someone a "hater" only means you can not rationally rebut their argument.
    13. Re:Bribery fines are funny by thoughtsatthemoment · · Score: 3, Insightful

      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".

    14. Re:Bribery fines are funny by thoughtsatthemoment · · Score: 4, Insightful

      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.

    15. Re:Bribery fines are funny by DNS-and-BIND · · Score: 3, Insightful
      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

      --
      Shutting down free speech with violence isn't fighting fascism. It IS fascism!
    16. Re:Bribery fines are funny by gartogg · · Score: 3, Interesting

      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.

      --
      I'm a concientious .sig objector.
  2. They just got caught is all. by pro151 · · Score: 5, Insightful

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

  3. We should get rid of that law. by elucido · · Score: 3, Insightful

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

  4. I have mod points by Anonymous Coward · · Score: 5, Funny

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

  5. Re:Why is this illegal? by Lord_of_the_nerf · · Score: 5, Insightful

    What if we called it 'lobbying'?

  6. the US Gov is jealous by FudRucker · · Score: 4, Insightful

    a fine is just a bribe in reverse...

    --
    Politics is Treachery, Religion is Brainwashing
  7. Maybe ... by arielCo · · Score: 4, Informative

    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.

    --
    This post contains no rudeness or derision of any kind. All arguments are friendly. Terms and exclusions may apply.
    1. Re:Maybe ... by mc6809e · · Score: 3, Insightful

      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".

  8. Proportions? by Haedrian · · Score: 4, Insightful

    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.

  9. Re:Not to get too political... by Anonymous Coward · · Score: 3, Interesting

    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?

  10. That's exactly why not to. by khasim · · Score: 3, Insightful

    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.

    1. Re:That's exactly why not to. by Solandri · · Score: 3, Insightful

      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.

  11. Re:Not to get too political... by MickyTheIdiot · · Score: 5, Insightful

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

  12. Re:Not to get too political... by MickyTheIdiot · · Score: 3, Insightful

    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.

  13. Re:Not to get too political... by tnk1 · · Score: 4, Insightful

    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.

  14. Re:Seize profits and related assets by syousef · · Score: 4, Insightful

    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.

    --
    These posts express my own personal views, not those of my employer
  15. Re:Not to get too political... by NeutronCowboy · · Score: 3, Insightful

    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.

    --
    Those who can, do. Those who can't, sue.