- Category: Politics
- Published: Sunday, 20 August 2017 01:27
- Written by Admin
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Bribery is the act of giving compensation in various forms (it may be through money, goods, or services) for a change in the behavior of a particular recipient, ultimately resulting to the fulfillment of some request which is to the interest and/or benefit of the giver.
In the United States, bribery has been evident most especially in the corporate arena. The act of bribery often occurs when companies make payments in order to expedite a process, obtain a contract, or retain business. These payments are usually made to foreign government officials or any person who is in a position of power to alter something within a process. Practices of bribery in the U.S. have been recorded dating back to the 1800’s.
Even though there were already allegations on officials involved in bribery even during the 1800’s, these cases were not officially investigated and no reports have actually been made. It has only been in the late 1990’s and early 2000’s that bribery cases involving large sums of money and massive companies and conglomerates were submitted to thorough and formal probes and queries.
The primary catalyst for the formulation of legislative laws against bribery in the United States was the 1973 Watergate political scandal which ultimately led to the Former U.S. President Richard Nixon’s resignation. Through investigations made by the U. S. Securities and Exchange Commission (SEC) and the United States Department of Justice (DOJ), the scandal revealed quite a number of U.S. companies who have admitted that they have made suspicious or illegal payments to different foreign government officials and politicians. Due to this, the U.S. government has enacted the Foreign Corrupt Practices Act (FCPA) in 1977 which accordingly bans these companies from making payments and or offering any form of compensation in order to influence foreign officials.
Although the Foreign Corrupt Practices Act has been in implementation since 1977 and has been amended a few times, this hasn’t stopped some companies from committing acts of bribery all the way to the 2016 snapsex case. In fact, below are three of some bribery cases committed by companies in the history of the United States.
- KBR and Halliburton Case
In 2008, a formal investigation by the U.S. SEC alongside the U.S. DOJ found significant evidences of FCPA violations made by Texas-based engineering and construction company Kellogg Brown and Root (KBR), along with parent company Halliburton.
It was evident in the case that KBR and Halliburton made payments closely amounting to the sum of $200 million to the various-ranking officials in the Nigerian Government in order to obtain engineering, procurement and construction contracts.
By 2009, the companies pleaded guilty and were fined a sum of nearly $600 million in order to settle the FCPA charges. Additionally, former president Albert ‘Jack’ Stanley was sentenced to seven years in jail.
- Siemens AG
Siemens AG is a large German conglomerate, and possibly Europe’s biggest engineering company, embroiled in what was arguably the largest bribery case recorded in history. The company’s bribery payments made across four continents, in order to secure government contracts, totaled to a massive $1.4 billion. These payments were made to foreign officials from the years spanning 2001 to 2007.
When the company pleaded guilty in 2008, its fines amounted to $1.6 billion paid to Germany and the U.S. This not yet including the $1 billion paid to the prosecutors and accountants in charge of the investigation.
What is actually a relief to note though is that following the results of the prosecution, the Siemens conglomerate had undergone a sort of transformation and cleansing process in the leadership of Chief Executive Officer Peter Löscher with the aid of Peter Solmssen. Ironically, the massively-fined scandal has paved the way for Siemens to be recognized as one of the most transparent firms globally, implementing a corporate compliance program that is debatably top in its ranks.
- BAE Systems
BAE Systems is a defence company considered to be one of the largest in the world with services comprising technology-led defence, aerospace and security solutions. In 2007, the company was submitted to several investigations regarding formal accusations involving bribery. Allegedly, the company had made payments to foreign officials in order to secure defence contracts from Hungary, Saudi Arabia and numerous other countries in the 1980’s and 1990’s.
Three years after U.S. investigations, the company admitted to issuing false statements of FCPA compliance. The company was fined a sum nearly amounting to $500 million.
The abovementioned cases are only small representations of how rampant bribery has become especially in the corporate world. The FCPA enforces civil penalties including fines depending on the flagrancy of the violation and forbiddance of continuing and/or conducting business with the government to those found to be guilty of bribery. One can only hope that these penalties and sanctions are enough to discourage companies from ever engaging in the illegal act.