
Airbus Corruption Scandal May Lead Straight to the Top - imartin2k
http://www.spiegel.de/international/business/airbus-corruption-scandal-threatens-ceo-tom-enders-a-1171533.html
======
wallace_f
Corruption is everywhere in business, but it's selectively enforced. No
finance execs went to jail for the financial crisis.(0)

Perhaps the most frustrating thing about the current political climate is that
while fighting corruption headlined presidential campaigns of the long-ago
past, it never headlines them today even though almost all of our country's
problems are direct results of corruption.

Jobs is a headline issue, but corporate corruption is endless. The financial
sector has not been punished, in fact, Goldman Sachs has an influential post
in Trump's cabinet(1). The auto industry was awarded bail outs for its
corruption. This list goes on forever.

Healthcare could not be fixed, despite the desires of a popular President that
wanted to make it his trademark legislation, because of corruption.

We have spent trillions on the War on Poverty, but it's hard to say Americans
have much of a social safety net. The War on Drugs has created endless misery
and violence, while the journalist who accurately exposed CIA drug running
somehow suicided by two gunshot wounds to the head.

We have endless wars, police murdering people without punishment,
unconstitutional three letter agencies, and useless government bureaucracies.
All the while growing socieconomic inequality.

As developers, we are builders, and so it is in our self interest, and not
just moral interest, to fight corruption. And personally, I'd much rather live
in a world ruled by innovators and builders than by thugs and thieves.

But every election cycle it feels like there is a divide and conquer to
distract us from threatening the plutocracy. Goldman and Wall St win every
time. The military wins every time. Healthcare finance execs win every time,
etc...

0- [https://www.bloomberg.com/view/articles/2017-07-26/why-no-
on...](https://www.bloomberg.com/view/articles/2017-07-26/why-no-one-went-to-
jail-in-the-financial-crisis)

1-[https://theintercept.com/2016/12/09/trump-makes-america-
gold...](https://theintercept.com/2016/12/09/trump-makes-america-goldmans-
again-maga/)

2-[https://en.m.wikipedia.org/wiki/Gary_Webb](https://en.m.wikipedia.org/wiki/Gary_Webb)

~~~
jokoon
I view corruption as some kind of a necessary evil to protect and defend
national interests.

I mean you can't always allow corruption at a micro level because it would be
inefficient, but it's always allowed at the higher level.

I view corruption as a mean to keep the control of a social structure in the
hands of certain interests so that it cannot be hijacked by strangers.

[https://www.youtube.com/watch?v=apM0d3M-sps](https://www.youtube.com/watch?v=apM0d3M-sps)

Frankly, the mafia exists because some people don't trust the government or
outside/remote political power to gain influence on them. So this way
corruption allows people to take back things they think are owed to them.

People call this corruption, but I think people can act in their own interest
and as long as we consent to it, it's not corruption, it's just public
consent.

I mean there are countless ways that the public benefits from overseas
corruption. For example nobody complains that gas is cheap enough. That's a
form of corruption, to me.

You call that corruption, I call that consent and a balance of self interest.
As long as people are happy enough, everything is good.

~~~
saimiam
This type of doublethink is what undermines confidence in the global order and
rule of law.

When some European/Western companies indulges in corruption and out-and-out
egregious behavior, it's "just boys being boys" and "too big to fail."

A Chinese company indulges in some industrial espionage or uses that country's
diplomatic levers and suddenly the sky is falling down.

E.g., why is Volkswagen still in business after literally setting fire to the
world? Why should Airbus not be summarily be liquidated in found guilty of
corruption?

Back in the day, news of such corruption would percolate slowly into the rest
of world. That is no longer the case. News spreads quickly. People (like me)
are watching and hoping that the standards get applied equally and if they
don't, I like to think the strength in numbers and youth lies in the East, not
the West.

~~~
achamayou
Why do you think that liquidating companies that are employing tens of
thousands, and providing transportation mechanisms for billions is a good
idea?

The market for civil airliners is already far too concentrated and
dysfunctional, it'd be even worse with a single player (Boeing).

Finding who's been involved in the decision-making process and punishing them
harshly is fair and does send the right message. Destroying a large
corporation arbitrarily doesn't.

Besides, in both Volkswagen and Airbus cases, they're far from being the sole
bad actors in their respective industries. You'd only hand their marketshare
to others who've been slightly better at not getting caught but were really
doing the same thing all along.

~~~
ryandrake
Destroying companies hurts shareholders, who ultimately allow/encourage/demand
their companies' bad behavior. If you're a fund manager, and the value of your
Xyz Corp stock were at risk of going to $0 due to its execs' bad behavior, you
would be incentivized to make sure the board is actually discouraging bad
behavior.

Without this threat, we have the situation we have today: Companies never get
significantly punished for anything, "because jobs," and corruption is
rampant.

~~~
tormeh
Shareholders don't have much insight or influence on the day-to-day in a
business, so I don't think this would work very well.

~~~
aluhut
I don't think they would have to if anyone involved would face this ultimate
payment for their misbehavior. However, I think that it would lead to even
better mechanisms to hide the corruption and turn the lobby machine on. It's
easy to lobby when a company has to be closed down and many uninvolved people
lose their jobs. Which politician would like to face this anger?

Maybe it's better to start the change from the other side. Make people
understand and feel what it means if they are being cheated of their tax
money.

------
Findeton
It's interesting to think about what we call corruption. If a company bribes
someone in the government with decision-making power, it's corruption. If a
company pays money to a person in another company with decision-making power
within his company (not gov. related), it's usually more difficult to qualify
that as corruption.

One could argue that political corruption only arises when someone breaks the
illusion of the State being some kind of entity that seeks the well-being of
every citizen. I mean, the crime doesn't appear to be about receiving money,
but about breaking the illusion (by seeking your own well-being).

~~~
gok
> If a company pays money to a person in another company with decision-making
> power within his company (not gov. related), it's usually more difficult to
> qualify that as corruption.

That is indisputably corruption. It’s call commercial bribery.

~~~
Findeton
That may be illegal in the US, but I don't know if it is in other countries.

~~~
gok
Sure but there are also countries where bribing government officials is legal.
It’s still corruption.

------
geetfun
Buffering of the leadership is part of any top down culture. The hint that
corruption may lead to the top is naive, as it almost always does. Plausible
deniability often comes into play.

------
throwaway7645
What was the deal with the Dacia Duster? I found this article difficult to
follow.

~~~
dessant
The owner of a Romanian company has recently bought a car by taking a loan,
while his company received millions from EADS. They seem to suggest that the
company was used to channel money for bribes, in exchange for a modest
dividend for the owner.

~~~
oulu2006
Thanks for that -- I had the same problem as the OP, I found the article hard
to follow.

~~~
throwaway7645
Lol glad to know I'm not the only one. Still confused on what accepting
millions in bribes has to do with a car loan.

~~~
saimiam
The guy who bought the Duster was living in the Gulf and became friends with
the nephew of someone in the royal family of the country he was living in. The
Bullshit Castle guys knew the buyer of the Duster and channeled money thru him
to the royal family presumably in exchange for favorable treatment at the time
of contract negotiation.

The Duster guy got a haircut for making the connection with which he bought
the Duster and subsequently, an apparently crummy apartment somewhere.

~~~
jaclaz
But till now we don't know for sure if (and the article - confusing as it
might be does state this) the Romanian guy's identity has been used without
him knowing.

It could be a simple identity theft of some kind.

------
othersideofcoin
I'm writing this as a thought experiment, so please don't respond if what I
say angers you. I'm hoping to possibly seed an interesting conversation from
which I can learn, not trying to make any specific points.

\---

why is corruption bad? Well, it definitely feels dirty, and it probably
usually directly harms someone (who has to pay, doesn't pay, etc.)

But what if we looked at it from a trust based perspective? Single incidents
of corruption have an outsized impact on the overall trust a society has in
itself, and others.

So, what if the cost isn't created by the act of corruption, but by the
perception / dissemination of corrupt events?

From that perspective, the best overall utility to society after the VW
scandal was both to make it appear like someone is watching (disincentivize
others) but also downplay the size of it (maximally maintain trust).

This isn't particularly thought through, but I was hoping to invoke
Cunningham's Law to learn more about something I know very little about.

------
dgut
Airbus is the epitome of crony capitalism. The company receives billions in
"loans" from the EU, without any requirement to repay.

~~~
raverbashing
As opposed to jet planes that cost billions of dollars payed with a smile by
the US government?

~~~
unremarkable9
This is such a ridiculous comparison and shows a severe lack of understanding
of how these companies operate.

The defense and commercial sides of Boeing operate very differently and have
limited overlap, in terms of people, budget, and location. For example, nearly
all of the commercial work is performed in Seattle at the plant, while the
defense work is spread around the country at numerous sites. There is of
course overlap in terms that they share common infrastructure (HR, training,
some office space, IT services, facilities, etc.), but by and large, of the
120,000 employees out of 140,000, you are either working in the commercial
side or the defense side.

Now, anyone can tell you that government contracting works very differently
than commercial business. There is a large, large set of laws in place and all
sorts of processes that must be followed to comply, and how you charge the
government for things and account for them is _very_ strict. Working on
commercial products and charging a government contract for it will put you in
jail. Even using government funds for things not called out in the contract
will put you in jail.

Furthermore, if you are on the defense side, you are almost always working on
specific projects. You bid on a contract, you win it, and you work on it. If
the contract is canceled or not extended, those people usually get canned. If
the project is classified, you cannot share with anyone else, even on the
defense side. You can't use commercial money, and you can't use the money you
get for anything except what is explicitly called out in the contract. It is
all very much a silo. And believe me, there are many audits, and they are
painful. The government doesn't fuck around with these things.

If you are an employee working on the defense side, you may work on commercial
projects, and vice versa, but you are only doing one or the other at any time,
and you rarely switch. Most people will switch from commercial to defense once
_in their careers_, if at all.

If you work at these types of companies, this separation of assets, budget,
and people is very obvious, even down to the physical nature of it. You can
visit any office in Seattle and it will be much nicer than an office in a
defense site; the government does not look kindly on buying big screen TVs
with their money! The people are different, the terminology is different, the
restrictions and processes are VERY different (how you handle government
property, classified or ITAR information, how you charge to contracts, etc.),
the unions are different, the payscales are different, etc. Even down to what
types of computers the employees use. Sometimes it is like the two wings of
these companies are completely different creatures.

I would also point out that the defense side is under constant pressure to
lower their costs. These companies win and lose contracts all the time, and no
one is safe; just ask anyone who got fired after they lost a bid. The vast
majority of these contracts are competetive, they are not cost-plus, and there
is severe pressure to keep the costs down from all sides. You are constantly
being audited and being held accountable. And even making a plane, for
example, is no guarantee that you get any of the other business (maintenance,
upgrades, training, etc.). Defense companies can and do "steal" projects from
others, unlike in the past.

The defense and commercial sides of Boeing exist to be counter-cyclical. They
don't exist to share money, or for a back-door for the government, and the
contracts, obviously, are used to produce goods that are actually used
(planes, bombs, etc.), and are completely different from a government "loan"
that is never intended to be paid back.

There are _plenty_ of criticisms one can level at the defense industry in
America, and Boeing in particular, but using government funds to prop up their
commercial business is not one of them.

~~~
PunchTornado
There is overlap, as you admit it. They should make it 2 completely different
companies, with different owners etc.

At the moment it is clear the Boeing receives state funds.

------
merraksh
_In describing what the business climate at EADS International does to
newcomers, a person with knowledge of the company says: "If you put Mother
Teresa in a neighborhood with rampant drug use, she wouldn't remain a saint
for long, either."_

Not exactly a good analogy. From the Wikipedia page on Mother Teresa [0]:

She began missionary work with the poor in 1948 [...] adopted Indian
citizenship, spent several months in Patna to receive basic medical training
at Holy Family Hospital and ventured into the slums. She founded a school in
Motijhil, Kolkata, before she began tending to the poor and hungry.

[0]
[https://en.wikipedia.org/wiki/Mother_Teresa](https://en.wikipedia.org/wiki/Mother_Teresa)

------
bitL
What is the best strategy to deal with corruption? I mean in case I run my own
company, others expecting bribes, I want to be a moral rock, coping with loss
of business due to these principles etc. What is a survivable strategy for
this?

