In the aftermath of the disclosure that WalMart in Mexico paid out $24 million in bribes to speed up the process of building their stores, and the confessions of a few other international retailers, the Department of Justice and the Securities and Exchange Commission are reviewing overseas operations of American retailers. We have an anti-bribery law in America.
The first problem with the way things have been progressing since the revelation of WalMart’s little law defying program in Mexico is that the companies with international operations can’t seem to find the file marked “bribes.”
We are talking about everything from McDonalds restaurants to Apple stores. There are American retailers everywhere. Eighteen months ago, when the Arab Spring was being spread by Twitter and Facebook, there was an incident in China involving a proposed demonstration in front of a McDonalds. American computer companies have set up management and customer service centers in Europe and Asia, and in between in Israel, to handle the needs of the stores on those continents. There are also manufacturing facilities for American companies and movie production set-ups in other countries that are coming under scrutiny now.
The way the industry-based investigations and enforcement have been going is what has prompted the government to decide they need to at least do some prodding. While it is not unusual for companies to come forward to the government when they “discover” they have a problem, it is normally something that happens only after another company has been found out.
There are a great many countries where bribery is the only way to do business. Corruption is so ingrained that it is considered a normal business expense. But our laws don’t permit it, which creates a major conflict for American companies. Unless our companies grease the right palm, the could lose the competitive edge against Chinese companies.
The Department of Justice has a history of prosecuting the persons responsible for the bribery, but not the company that person worked for. This has been presented to companies as a benefit to them if they come forward and confess to briberies instead of letting the government find it out. Still, it only works if they get the lead out and find the “bribery” file.