
The company that bribed the world - dmagee
http://www.theage.com.au/interactive/2016/the-bribe-factory/day-1/the-company-that-bribed-the-world.html
======
joshjkim
Cynical reaction: well, we all knew someone was doing it, now we've identified
a few.

One thing I can't help think here is: this is just another uncomfortable truth
re: what a truly global economy looks like (frankly, similar the factory jobs
leaving the US for cheaper labor countries, etc.). The bottom line is that in
many developing countries, bribery is part of the economy, and if western
companies want to engage in the economies of those countries, then it's not
surprising that they need to participate wholly. Because of western anti-
corruption laws, they of course can't engage directly, so these Unaoil folks
found a solid business opportunity to exploit.

What sucks of course is that western companies often have funds to overpay vs.
the local bribery market, so they end up reducing local economic competition,
slowing internal development, flooding incumbents with cash, keep incumbents
in power longer than they would be otherwise, and contribute to their
illegitimacy.

They still should stop, I guess my point is that corrupt systems (usually)
pre-existed western corp. participation. If I'm being optimistic, stories like
this hopefully will motivate the US and other western gov. to recognize this
reality, and then actually develop and enforce international laws to handle
this effectively - though I wouldn't hold my breath =)

(Of course, the involvement of western governments in colonization and in
creating this atmosphere is a whole other discussion, which I won't start
here..ha)

~~~
jonstokes
I think you've missed one of the big points of the article, which is that
Unaoil was the vehicle by which western companies introduced totally new
levels of corruption into developing economies. They'd start the bribees (is
that a word?) out small with minor stuff, and then they'd move on to full-
blown bribery.

In other words, one of the big points of the piece is that the idea that
"these countries are just that way and you have to pay to play" is actually
not true across the board, and that in cases where the country wasn't that
way, Unaoil and their clients made it that way.

~~~
joshjkim
ah yes - that is right. I attempted to say something like this when I
mentioned western corp's ability to "overpay vs. the local bribery market" and
all that, though I admit I didn't flush it very well out. here's a try: this
is the natural result of massive western corps having access to economies that
rely on bribery wide-scale, and what sucks is that, due to the western
companies massive resources relative to the local economy, the bribery gets
much further out of hand and continues longer vs. if the local economy had
remained isolated.

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rwmj
Are all these companies (Rolls Royce, Samsung etc) going to get in trouble
under FCPA / Bribery Act? If I remember from my corporate anti-bribery
training [very necessary for a low-level computer programmer!] you can't get
away with it just because it was done through a third party.

~~~
dba7dba
Rolls Royce and Samsung are not American corporations? Or does the law
penalize American subsidiaries of them?

~~~
maerF0x0
The american justice system can judge wether or not they're allowed to
continue to operate in america.

~~~
dba7dba
The American justice system that hasn't punished Wall Street?

But let's assume American justice system works. But still it seems arbitrary
and not clear cut.

If Rolls-Royce is banned from operating in US, does that mean Boeing won't
install Rolls-Royce engines on airliners they make for their customers?

Samsung is composed of many subsidiaries that do not look out for each other
and it may be that just one or few of the Samsung subsidiaries are involved in
bribing. Samsung phone division buys chips from qualcomm instead of Samsung
chip division because qualcomm is cheaper (or whatever reason). Will US court
ban Samsung from US? Then what happens to the billion dollar chip plant in
Austin, Dallas that supplies CPU chips for Apple iDevices?

I don't condone bribing but to me I'm not surprised bribe was needed to get
anything done in the nations listed. I'm pretty sure anyone and everyone who
has any kind of influence in the said nations require bribe before doing
anything. A billion + dollar from US went into Iraq that can't be traced.
What's a few hundred thousand or a few million dollars? I highly doubt these
companies eagerly bribed people, but they to get anything done in those so
called nations, they probably had to bribe.

~~~
maerF0x0
I was commenting on jurisdiction, not likelihood

------
brudgers
The Huffington Post story reads a bit more concretely, [perhaps due to
differences is liable laws?].

[http://www.huffingtonpost.com.au/entry/unaoil-bribery-
scanda...](http://www.huffingtonpost.com.au/entry/unaoil-bribery-scandal-
corruption_us_56fa2b06e4b014d3fe2408b9?utm_hp_ref=australia)

~~~
burkaman
Yeah, awful title, but it's a much better article.

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SeanDav
I don't see a lot of difference between bribery to get something done and
lobbying to get the law changed so you can get something done.

Note that I am equally disgusted at both of these.

~~~
rayiner
What do you think lobbying involves?

~~~
SeanDav
Here is an interesting article:
[http://www.theatlantic.com/business/archive/2015/04/how-
corp...](http://www.theatlantic.com/business/archive/2015/04/how-corporate-
lobbyists-conquered-american-democracy/390822/)

~~~
ryao
That does not explain how they get their results.

By the way, is it illegal if the bribes are called campaign contributions or
are sent to places the target wants money to go, like a charity that helps
their political ambitions?

~~~
rayiner
If there is a quid pro quo, then it's illegal, regardless of how the payment
is characterized.

~~~
ryao
Then how do lobbyists achieve results? The idea of a lobbyist seems like an
impossibility to me without quid pro quo.

~~~
rayiner
Lobbyists: 1) get issues on politicians' radars; 2) provide them with data,
arguments, and sample legislation to advocate for a position; and 3) convince
politicians that particular measures will be favored by relevant
constituencies.

It's almost never going to be the case that a lobbyist will convince a
politician to support a measure they wouldn't otherwise support. Politicians
all have agendas and preconceived notions. The most important thing lobbyists
do is help politicians filter through he universe of proposals and convince
them that particular ones fit within their preconceived worldview and
platform.

I think many people have a hard time even conceiving that politicians could
support big companies without getting some sort of kickback or campaign
contribution for doing so. But a politician's first, second, and third top
priorities are jobs. Big companies control the jobs, and for better or worse
what's bad for big companies is often, at least in the short term, bad for
jobs.

~~~
ced
I upvoted because it's an interesting perspective, but I'd like to know where
you get this information from. Is it a first-hand account? It makes sense that
jobs are a priority and that politicians prioritize helping companies. And I'm
sure that "a lobbyist will convince a politician to support a measure they
wouldn't otherwise support" happens at least some of the time, but I don't
have a sense of how frequent that is vs. legalized bribery and regulatory
capture.

And besides, if a politician passed a bad law thinking he did a great thing
for society because corporate marketing was very convincing, does that make a
difference?

~~~
rayiner
My wife was a lobbyist. I wish I had quantitative evidence, but my impression
is that lobbying is mostly just reinforcing favorable narratives. I think
phrases like "legalized bribery" and "regulatory capture" are thrown around
casually without much supporting evidence.

As to your last point: what is a "bad law?" Does anybody really have any idea
what works and what doesn't? Did the repeal of Glass-Steagall cause the 2008
crash? We really have no idea. Did NAFTA leave consumers better off? Who
knows? Do minimum wages increase unemployment? Experts disagree. It's
effectively impossible to determine what impact laws really have, especially
on the economy. Laws and policies aren't judged as "good" or "bad" except in
history books. They're judged based on whether they fit into ideological
frameworks and prevailing narratives. And voters are part of that. They want
politicians who will vote for laws that fit their preferred narrative.

------
justsaysmthng
The world is extremely corrupt. Widespread corruption is yet another issue
hanging over our civilization which we've never had to deal with before in our
history.

People in the western world usually don't realize just how deep the rabbit
holes go everywhere around the world and it's very sad.

I've lived in many countries and I speak 6 languages, including Russian,
Spanish and Portuguese, which gives me access to local press in many parts of
the world.

From Brazil to Turkey, to former Soviet Union to India to China to Latin
America, to Africa and the Middle East - the press is teeming with corruption
scandals and political unrest triggered by corruption everywhere.

All this fantastic economic growth that we've experienced in the last 20 years
- all those titanic infrastructure projects, olympic stadiums, high speed
trains, highways, new factories, gold mines, oil fields.... had the effect of
producing a kleptocratic global "elite", which currently sits on piles of
offshore bank accounts and "own" the power in most of the world, including
military.

The western companies have gained a lot from this status quo, having shown
positive growth year after year, much of it from expansion into foreign
markets, which made investors and regulators happy, yet all that growth helped
feed and grow the corruption monster to an incredible size.

Russia is so corrupt that people have stopped perceiving it as something
wrong, rather they internalized it as something unavoidable and "part of the
culture" \- they've long lost hope of fixing it, given that the political
elite owns the legal system, police, armed forces and any dissent or attempt
of uncovering the scale of corruption, is quickly eliminated, as was the case
of Boris Nemtsov last year.

In Moldova, corrupt politicians allowed a group of criminals to extract $1
billion or 1/8th of the country's GDP into offshore companies and that money
was never recovered. It was both sad and comic to see the people on the
streets shouting "we want our billion back". Yeah, right.

A former Romanian minister was sentenced to prison in the Microsoft licensing
corruption scandal just two days ago. More than $50 million have been paid in
bribes in that scandal. Note that we're talking about a small country and just
one company.

Kazakstan, Uzbekistan, Belarus, Ukraine, in fact most of the former USSR
(except maybe the Baltic states) are corrupt beyond imagination.

People in Brazil are rioting on the streets right now because the current
president gave immunity to the former president, accused of huge corruption
and money laundering allegations.

Venezuela is currently a failed state mainly because of the corruption on all
levels.

Afghanistan, Iraq, Syria are failed states with terminal corruption, which
inevitably leads to war.

Africa .. I can just guess.

I don't know many details about Asia, but I wouldn't wonder if the picture is
similar as in the rest of the 'developing' world.

Corruption is injust, it leads to cynisism and criminal political interest
groups, it strengthens the criminal organizations and people loose hope.
Eventually it reaches a boiling point, which results in rioting and war, the
radical method of reshuffling the power structure.

Sorry for the long comment, but I feel like this issue is on par with climate
change - and actually a cause of the latter, so there, I've said it.

~~~
marcosdumay
> Widespread corruption is yet another issue hanging over our civilization
> which we've never had to deal with before in our history.

I do disagree with that. It may be true for somebody living at the US and a
few more countries that used to be more honest, but in general, corruption was
always about as widespread as it is now.

You are seeing a lot of it recently because it is getting uncovered. It is
even hard to find a corruption scandal that is new (but I don't speech as many
languages), and has not been going on since forever. And corruption getting
uncovered is a good thing - it is how it ends.

~~~
rm_-rf_slash
I see points on both sides. Corruption has existed as long as lying - since
forever.

But the scale of corruption is greater than ever before possible, as
globalization allows moneyed, corrupt, and powerful players to pull up the
ladder for entire countries. The Internet and modern transportation means you
could move you in a day and your and entire stash in a moment - to whatever
end of the earth you choose. It's a big planet. Not so easy for the fleeing
nobles of the French Revolution.

And here in the States - and my home state of New York in particular - the
line between corruption and expected business is very blurry. For example,
lawmakers in Albany are allowed to make money on outside income, but what if
that outside income relies on your legislation? Obviously that is corrupt (and
has seen two prominent assemblymen convicted of felonies recently), but what
if a lawmaker the next office over - a respected geologist - consults for
fracking firms looking to drill in NY while working with other senators to get
Governor Cuomo's fracking ban overturned? I'm sure many people would say yes,
but what if instead that same lawmaker consulted environmental groups (for
pay) about the risks and dangers of fracking while staunchly siding with
Cuomo's moratorium? Is that also corrupt, even if we like that course of
action more than the other?

Unfortunately, the more these things get brought to light, the more people
call for transparency, and the powers that be work ever harder to obfuscate
their actions. Even Barack Obama is guilty of this: he came into office
promising the most transparent administration in US history, and has since set
the record for classifications and federal charges under the Espionage Act (of
1917! As in, more than anyone else during the whole Cold War!).

Sorry to end on a bummer. I don't really know how to fix such a system from
top to bottom.

~~~
scotty79
> Corruption has existed as long as lying - since forever.

I think rather as long as power over other people. Corruption only exists if
some people can decide about other peoples money (resources in general).

~~~
oska
Good point. Hard to imagine much corruption in a hunter-gatherer society. In
fact, I think status in those societies was often gained by sharing (e.g.
sharing the meat from a kill).

------
kelvin0
TL;DR : Vast amounts of money for natural resources bring about vast
corruption in unstable states.

~~~
nickkline
Which creates an environment that extremist groups use to successfully
radicalize large groups of people frustrated by the rampant & immoral
corruption. (At least that was my biggest takeaway)

~~~
kelvin0
In turn these Extremist groups are funded by the CIA and Pentagon and fight
each other.

[http://www.latimes.com/world/middleeast/la-fg-cia-
pentagon-i...](http://www.latimes.com/world/middleeast/la-fg-cia-pentagon-
isis-20160327-story.html)

It's the circle of (a corrupt) life ...

~~~
TeMPOraL
I.e. if extremism is flammable and tends to explode, the US figured out how to
harness it and built an internal combustion engine fueled by it...

~~~
alanwatts
the "machine", _man_

------
randomgyatwork
The worst part is that most people probably figure stuff like this is already
happening, so we become cynical, when we find out its true our outrage is used
up, then we see our powerlessness and realize that our leaders are probably in
on the game already.

~~~
ArkyBeagle
Hate the game, not the player.

We're not powerless, but trying to create a Perfect System out of such crooked
timber as Man may be utterly futile. To think you can design such a system
looks like Hubris to me.

That's probably more Stoic than Cynical.

"They can take my silver or take my lead" said Pablo Escobar ( paraphrased ).
It's like that.

~~~
seangrant
Yeah we're operating at a level never before seen in sociology. It's
inevitable we'll have some hiccups and bumps along the way before we reach a
system that uniformly benefits everyone. And even then, the ability for such a
system to exist is debated.

------
narrator
I think this kind of thing makes a strong case for paying bureaucrats higher
salaries. People who are in charge of huge decisions are usually paid
pathetically and everyone complains that integrity should rule, but it never
happens. The amount of revenue lost to the government due to corruption is
quite large and governments would save a lot of money by paying bureaucrats in
charge of these major decisions well.

Singapore, which pays its bureaucrats multi-million dollar salaries, has one
of the least corrupt governments in the world according to Transparency
International.

~~~
ACow_Adonis
Does transparency international include the appointment of those bureaucrats
in its measurement of corruption? (I honestly don't know).

The cynic/economist in me says that this would be a classic case of "waterbed"
economics. That is to say, any pressure pushing down in one part of the system
results in a subsequent rise somewhere else. If you define corruption as a
particular localised phenomenon, then pushing down in one area and measuring
that area looks like things have gone down.

But there are many undesirable things in our societies (network effects, self
censorship, rich ruling families, artificial barriers and rent seeking,etc). I
know I've had many conversations with my wife where I've said "if this
happened in any other society/market, we'd call it corruption, but here it's
just "the way things are/our governance system".

So to bring it back to Singapore and economic theory, I would posit that the
appointment to those highly paid positions would become the point of
corruption as the wages/power/connections increase, though we'd probably start
to call it something else (having the right connections, belonging to the
right families, going to the right schools).

I know, incidentally, very little about Singapore...I'm just making general
theoretical predictions here...

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harry8
The link from the bottom of the page is down.
[https://fraudsec.com/reports/add/NickMcKenzieFairfaxMedia](https://fraudsec.com/reports/add/NickMcKenzieFairfaxMedia)
I wonder why? I wonder if fairfax know what they're doing setting up anonymous
dropboxes or if they're encouraging sources into taking unnecessary risks.

------
ccarter84
Good thing DoJ staffed up that kleptocracy unit

------
aryehof
For me, reading this was a sad salute to human greed.

