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Walmart Pleads Guilty After a Decade of Bribes (nytimes.com)
289 points by rrego on June 20, 2019 | hide | past | favorite | 206 comments

I suspect people cynically demanding that CEOs be put in jail haven’t really dug into the facts of this or other FCPA cases. Holding the CEO liable for employee misdeeds is like holding teachers responsible for teenagers getting into fights or having sex. It’s a strong moral position to take (holding teachers accountable), but it’s wholly impractical and unfair.

In a company with a million employees, it’s guaranteed that hundreds if not thousands are doing things that are illegal. That’s just statistics applied to human nature. When the company is multi-national the problem is worse. Conduct like bribery or tax evasion that is condemned in the US is socially accepted in many other countries. When some store manager in Mexico bribes an inspector, the CEO of Wal-Mart has absolutely no idea that it happened. You can probably go several layers down before you find someone who knew.

The touchstone of criminal law is a guilty mind. When someone’s conduct is mharmful, we hold them liable for monetary damages. But only where there is personal moral culpability do we impose criminal sanctions. It’s the difference between wrongful death and murder. Ordinary negligence, and criminal negligence. This is an easy, bright line rule, and shouldn’t be compromised for anything.

From the article:

"But even as employees frequently raised alarm, the company’s top leaders did little to prevent Walmart from being involved in bribery and corruption schemes."

Which means the "top leaders" knew of the problem, and choose to ignore it. It would be a different story if they put real effort into self policing and there was evidence they pushed the guilty contractors/etc but again:

"The plea agreement, which was technically related to the company’s improper record-keeping, ... Federal regulators said Walmart looked the other way as subsidiaries on three continents paid millions of dollars to middlemen who helped the company obtain permits and other government approvals from July 2000 to April 2011."

Which sounds more like a coverup to me.

As an individual citizen, if I intentionally failed to file my taxes properly, report crimes I knew of, or even fire a housekeeper or other low level employee I knew had been committing crimes that benefited me you can be sure I would be getting more than the equivalent of a parking fine.

That is why people are demanding someone be held responsible. It seems those that are reaping the rewards and knew of the crimes are simply being given a free pass.

So the part right before your quote says: “For more than a decade, Walmart used middlemen to make dubious payments to governments around the globe in order to open new locations, United States prosecutors and securities regulators said in a settlement agreement on Thursday.”

The parts you quote are the NYT reporting the prosecutor’s allegations as fact. But the passage you quoted also explains everything you need to know about why nobody went to jail.

“The plea agreement, which was technically based on the company’s improper record keeping....”

Wait—so Wal-Mart did all these bad things (they must have, the NYT reported them as fact), but the plea agreement is “technically” based on “improper record keeping?”

If you actually read the facts section of the SEC submission linked from the article, it’s a real snooze fest. There were issues here and there, people were fired, several rounds of compliance programs were instituted, etc. But little to substantiate the prosecution narrative recounted as fact by the NYT. There is a reason Wal-Mart spent a billion dollars investigating this case but the government agreed to settle for less than $300 million—once prosecutors dug in, there wasn’t much of a story there.

I’ll also add:

> As an individual citizen, if I intentionally failed to file my taxes properly, report crimes I knew of, or even fire a housekeeper or other low level employee I knew had been committing crimes that benefited me you can be sure I would be getting more than the equivalent of a parking fine

The IRS’s response to people who intentionally don’t file tax returns—unless the conduct is really outrageous—almost always is to just tell them to file, and pay the deficiency with interest. Except in special circumstances, such as lawyers reporting on other lawyers, ordinary individuals don’t have an obligation to report crimes they’re aware of. Finally, unless it can be argued that you encouraged your housekeeper to commit crimes, or somehow facilitated them, I don’t think there would be anything illegal about not firing him either. Like, you probably can’t criminally prosecute someone for accepting gifts from someone they know is a drug dealer and purchased the gifts with ill-gotten money.

But that is how this works, the Government has a hard time proving intent without a smoking gun. The Walmart execs are smart enough not to incriminate themselves with any emails/phone calls. So the government has a fairly strong case, but Walmart gets to plea agreement which wipes one of the main pieces of evidence (effectively the bookkeeping coverup) in exchange for paying the fine and closing the case.

Both sides are happy, no one at walmart goes to jail, they pay some trivial fine, and the prosecutors get a raise and a bullet point on their resume. The public gets to see justice in action...

If you don’t have good evidence of intent, you don’t have “a fairly strong case.” Intent is the lynchpin of criminal law, especially when you’re trying to hold someone liable who didn’t do the actual illegal act. You know what gets you a gold star as a prosecutor? Putting people in prison. The guy who put Raj Rajaratnam in prison is now a partner at one of the top law firms.

You know there's a difference between what is most likely true and what's provable in court, right? It's perfectly reasonable to see all the facts, many of which aren't permitted to be considered by a jury, and then say, "wow,these laws are messed up, they let the powerful people get away with crimes. We should change that and hold them accountable."

Likewise, it's not logically consistent to say " well, yeah it looks really bad but because a court can't prove it, I'm going to advocate they they are morally innocent. " Moral and legal aren't the same thing.

> Moral and legal aren't the same thing.

Correct, but you shouldn't go to jail for immoral behaviour.

> It's perfectly reasonable to see all the facts, many of which aren't permitted to be considered by a jury, and then say, "wow,these laws are messed up, they let the powerful people get away with crimes. We should change that and hold them accountable."

The IRS does this, and it's horrible, but the accountability comes in the form of an increased tax obligation and not jail time.

Going to jail for doing something that was legal, but has become illegal after the fact, isn't something that benefits anyone but the ruling class, and isn't something that I would advocate for.

My dude/tte, please look at who you're trying to educate about law.

Let's just say employees raise alarm and they're intentionally ignored to sweep things under the rug, I feel it'd be incredibly easy to claim that nothing happened due to improper record keeping

Also, if Walmart wasn't in the wrong then why would they agree to a $330M settlement?

A $330 million settlement for a company with a $500 billion per year business. That's a business nearly the size of Poland's entire economy. It's a very small settlement. It's entirely plausible that what they did was not as bad as what the mob would like to believe, and that also they're not innocent.

“$500 billion per year business” is a sort of meaningless term, especially in retail, when you compare to the fine.

Walmart’s operating income was “just” $22M with a final net income of “just” $6.7B (in the ballpark of large tech company quarterly profits).

It’s still true that a $330M settlement is then just 5% of their annual profit (and thus looks like that’s how the number was chosen), but comparing to their $500B revenue isn’t directly meaningful (though it is for your Polish GDP, sort of!).

> But little to substantiate the prosecution narrative recounted as fact by the NYT.

I think you missed the part where they settled.

> There is a reason Wal-Mart spent a billion dollars investigating this case but the government agreed to settle for less than $300 million—once prosecutors dug in, there wasn’t much of a story there.

Wouldn't that rather suggest that they feared they could be liable for much, much more than a billion, and they jumped at the chance to make it all go away for just a "paltry" $300 million?

>If you actually read the facts section of the SEC submission linked from the article, it’s a real snooze fest. There were issues here and there, people were fired, several rounds of compliance programs were instituted, etc. But little to substantiate the prosecution narrative recounted as fact by the NYT. There is a reason Wal-Mart spent a billion dollars investigating this case but the government agreed to settle for less than $300 million—once prosecutors dug in, there wasn’t much of a story there.

Of course. What do we think Walmart level players are? Amateurs? Those kind of jobs never leave much paper trail or proof...

As the PM in one of the most corrupt governments in a small country used to say, to brush off allegations of bribery and other corruption against members of government, "Let he who has proof take it to the prosecutors"...

As in "yeah, good luck trying to prove what we did"...

(Only 2 decades later, when that party had declined, and their influence wasn't as strong, would several top officials, ex ministers etc, end up in jail for those things. Had it still be going strong, there would not be anything done...)

I'm not an apologist for Walmart, kind of the opposite actually, but in a lot of places bribes are not seen as malicious or corrupt just unspoken rules.

A friend of mine from Nepal said something along the lines of "bribes are just a lubricate to an intentionally slow and unorganized bureaucracy". Places like China, India, Vietnam, & Taiwan all have pretty well know backdoor policies of this.

Its a bit old but https://www.forbes.com/sites/richardlevick/2015/01/21/new-da... and https://www.nytimes.com/2019/06/14/business/china-ge-siemens... are both good read for this.

I've also known of UN project directors who had to convince governmental ministers that the UN's no bribe policy was not just a bargaining method.

The FCPA (the law Walmart violated) specifically allows such "lubrication" bribes, where you're basically just paying a lowly government official a small amount to do his/her job a little faster. The forbidden bribes happen when you pay a higher-level official to make a decision in your favor that they otherwise might not have made. Huge difference in the eyes of the law.

I've worked somewhere that the policy was you don't pay bribes. You hire a local company capable of navigating the nuances of the local permitting process.

And what happens when your consultant bills you for a big but vaguely described fee?

I am sure that everyone involved knows what it is about. Eventually they will get caught and squeal. The local guys have immunity from local prosecution but FBI is a different story.

Usually a leader's family member or a trusted person will create a consulting business and help you "navigate" local rules and obtain permits. As soon as money is exchanged a phone call is made and you're untouchable. You call it a bribe, they call it their money. Just like their salary, bribes are part of their compensation.

Say, Russia, can close any business, any time they want. It's impossible to comply with all their rules and regs (by design) and even if you could, no court will rule in your favor. So...enter middlemen.

Top leaders knew the problem and they will use bribes again, or close shop. Very simple is a lot of countries. Pay up or go home.

Yeah but should the US be using taxpayer resources on this at all?

The result of policing kickbacks is a kickback?

Overhead cost

> Holding the CEO liable for employee misdeeds is like holding teachers responsible for teenagers getting into fights or having sex.

This analogy doesn't hold for a lot of reasons, but the most obvious is that teachers don't get to choose their students. CEOs can (and should) fire employees that don't live up to their ethical responsibilities.

A better analogy:

Holding the CEO liable for employee misdeeds is like holding a principal responsible for teachers getting into fights or having sex.

Or, whatever problems teachers cause

When teachers end up physically fighting among themselves often, yes principal is responsible. Absolutely. Principal should have deal with the problem when it appeared first time. Principal is responsible for school culture.

But, teachers are allowed to have sex.

A betterer analogy:

Holding the CEO liable for employee misdeeds is like holding a principal responsible for students getting into fights or having sex.

Just like the principal doesn’t choose the students, management often only hires their direct subordinates. The principal/CEO could expel students/employees directly, but it’s often met with opposition, more the further down the hierarchy they reach.

Should my local Walmart’s store manager be arrested because the cashier he hired was pocketing money from the till?

What about if he knew the cashier was stealing the money, was intentionally ignoring it, and maybe even cooking the books a little, to cover for that employee? Does lit change if the manager was benefiting from the theft in some way?

That sounds a lot closer to what happened.

Show me in the SEC filing where it suggests Wal-Mart’s executive leadership did anything like that: https://int.nyt.com/data/documenthelper/1331-walmart-sec-set...

It notes in there that they were aware their anti-corruption policies were inadequate, but then it took them like 7 years to really get a handle on it. There is certainly benefit gained by execs letting business growth continue, people rarely get promoted or bonuses for stifling growth. There is often little incentive for ethics, and their slow response seems to reinforce this notion.

Did you read it? The bits I just read do nothing to invalidate the basic story here.

Try page 6...

Nice bits all over from walmarts own investigation:

"The final report that was sent to Walmart in December 2004 omitted references, contained in earlier versions, to MXN $45.6 million (approximately USD $4 million) paid to one of the gestores that Mexico Subsidiary Lawyer A alleged was corrupt."

Then there pieces where it talks about how the invoices are just lump sums rather than properly broken down and employees are claiming the the money is being given to the MX government officials..

"Investigator circulated a report concerning the Mexico Subsidiary allegations that stated that laws had been potentially violated, and recommended several additional investigative steps."

"Walmart did not follow the investigators’ proposed action plans. On or around February 7, 2006, Walmart tasked Mexico Subsidiary Lawyer B with leading the remainder of the investigation."

Of course none of this is going to be an email that says "hey this contractor is paying the government to speed up our permits, lets keep doing business with them."

No its all just looking the other way and doing the minimum to follow the letter of the law and using back channels to cut out the really incriminating parts.

As to the first quote, you’re omitting the very next sentence: “While the draft report stated that the transactions reviewed were reasonably appropriate, complied with documentation and classification standards, and were compliant with local policies, legislation and generally accepted accounting principles, it also described “unusual” and “facilitating” payments made in connection with Mexico Subsidiary’s use of gestores.”

Note that the SEC filing specifically quotes the term “facilitating.” “Facilitating” payments—paying officials to do a non-discretionary duty faster—is not illegal under the FCPA. Bribery under the FCPA only includes payments to induce officials to exercise discretion in your favor.

That example isn't relevant here because a cashier pocketing money hurts the company.

The behavior you want to penalize the company for is a cashier quietly doing something illegal that helps the company - and the only reason they would do that is if the company is expecting performance out of them that is difficult to achieve without illegal behavior.

A classic example of this is the Wells Fargo fake account scandal. Managers who set impossible quotas for their salespeople, such that the salespeople felt compelled to steal their customers identities, should be arrested for identity theft, yes.

If a manager knows about an employee bribing a fire inspector, that's equivalent...since the topic is having a priori knowledge of bribery and failing to act (not the bribery itself) and not the simple case of wholesale theft, which is already a crime.

> In a company with a million employees, it’s guaranteed

So then the CEO had to know this behavior was occurring. Did the CEO and management attempt to do anything about it or did they just maintain plausible deniability, knowing that not having a guilty mind was sufficient to prevent management from being liable?

If the NYT, an external organization, was able to uncover this behavior, why couldn't Walmart have had its own internal investigators tasked with maintaining ethical behavior?

We're not asking for the CEO's heads because they broke the strict letter of the law. We're saying that not breaking he law is the bare minimum the CEO should be responsible for.

Your defense of Walmart's CEO rings hollow for me because it's exactly the argument I'd expect from a lawyer.

Not every company behaves this way, even others with millions of employees. Feel free to call me naive and tell me the others just haven't been caught yet.

>> So then the CEO had to know this behavior was occurring.

Why does this naturally follow?

Because it is their responsibility and constructed ignorance is not an excuse for "mere mortals" it is reasonable to demand the same standard apply to them.

A bartender can't claim they didn't know the cient they served from behind a screened conveyor belt was too drunk. Thus the law should either allow the same sort of bullshit loopholes for all (a real headache) or they should be held to the same standard.

rayiner said it was guaranteed, not me. I was just following up on his claim.

Why do you think that there's no guilty mind here?

I do agree that there is a distinction between a company committing a crime because some individual is screwing things up against the policy of the company and a company committing a crime because it sets out to commit crimes. I don't agree that because a company has no brain that it cannot have a guilty mind. If it incentivizes thousands of its employees to do illegal things, including by putting them in situations where illegal behavior is usual and expecting the usual results, that's on the company.

How do you hold an immortal, amoral entity that can’t be thrown in jail accountable, then? Trivial fines amounting to 0.1% of EBITDA are not the answer.

You increase the fines to the point it becomes a fiduciary requirement to behave properly.

If fines are low, companies will continue to behave poorly because it may be profitable to do so.

Companies (even purely algorithmic ones) are not amoral because they are directly impacted by the ethical and unethical behaviors that they choose. So they are not “unconcerned” with the morality of their actions.

Versus for example “technology” which is amoral, because it is itself a tool unaware of the purpose for which it is even being used.

Of course companies are also not immortal, companies “die” all the time.

However, companies certainly can and do act unethically, particularly when there are economic incentives to do so.

A 0.1% of EBITDA fine to Walmart would be hundreds of millions of dollars. They would certainly care about that, and they likely have teams of people who work to ensure compliance for a whole host of regulations which could result in fines at that order of magnitude.

.1% of EBITDA is a “cost of doing business” if it makes them .1% + X. Even if it doesn’t, it’s an annoyance. It doesn’t hurt any more than you or me getting a parking fine. You have to make it really, truly hurt the bottom line, because that’s the only language they speak.

Even then, it's not even a cost of 0.1% EBITDA. It's a cost of 0.1% * p, where p is the probability of actually being caught. How many companies behave unethically because they know full well the will likely get away with it.

Companies are profit-seeking automatons. They evolve and change in response to their environment, but as entities they are not encumbered by human moral impulses or other embarrassments.

Humans operating within companies may experience moral impulses, but the company as an entity constantly urges its humans to act amorally in service of its profit-seeking.

Financial paperclip maximizers, you might say.

Like we do now: you hit it in the pocketbook with massive fines.

Also, the CEO may not go to jail, but the local people actually doing the bribery should.

That’s the problem: we’re not doing that.

Per the friendly article, Walmart has spent over $1 billion total on this (fine, legal fees, investigation), which is a noticeable number even by megacorp standards.

Legal and investigative fees are not “massive fines.” Those are optional. They could have admitted guilt 10 years ago and not had to pay them.

And, speaking of 10 years, they had that long to spread that billion dollars over. They’ve probably made $300B in that time. $1B is a drop in the bucket.

1 billion is pittance to Walmart

Hold them/the company responsible.

They should have internal policing. When there are billions at stake, I don't understand why these kind of things aren't torn open by lawyers.

This is a conventional view of culpability of corporate officers. It is, however, not the least bit aspirational or innovative. People demanding that CEOs be put in prison are for the most part misunderstanding the legal system, but they are also looking clear-eyed at a system that rewards extra-judicial risk-taking by corporate officers. The fines that come with negligence are typically undersized compared to the deterrent effect that the public expects. (The public also remains unaware at the enormous auditing burden that comes with fines from government agencies).

The solution for corporations and officers to avoid legal consequences is to have standard compliance programs in effect. Failing to account for the inevitable misdeeds of agents is similar to the teacher who leaves his classroom for hours and is surprised to see his students engaged in misconduct.

Yes, reporting the misdeeds of contractors has been part of every companie's yearly legal training i've worked for in the past couple decades. The fact that those reports apparently weren't acted upon means that the upper mgmt is responsible.

Of course the whole thing puts companies in a bad place, the law itself is highly problematic. That is why whole thing just sounds like the usual US government trying to get its cut.

It's the Rumpelstiltskin scenario. If someone is spinning gold from proverbial flax you should goddamn well ask how they're doing it before you start agreeing to things.

Or put less fancifully, receiving stolen goods is a crime. Where's the line between 'too good to be true' and assuming willful ignorance in a corruption case?

There's also the case of the executives claiming responsibility for all of the success of the company. If the success is theirs, not ours, then the rest of us don't want them to cherry pick. The failure and corruption is theirs too. It's a package deal.

If you want to talk about fixing the quasi-feudalist state we are moving toward and start thinking of companies more like a team, working together, then I'd love to discuss shared responsibilities as part of that reconciliation.

> The touchstone of criminal law is a guilty mind.

Corporate structures are designed to obfuscate decisions by executives which lead to misdeeds by underlings. Carrie Tolstedt, who designed the Wells Fargo incentive systems which led to the creation of umpteen bogus accounts, ended her career tens of millions of dollars ahead, even after clawbacks.

Since it is impractical to hold individuals accountable because it is so difficult to see inside their minds, the collective corporate entity should be punished. Maleficent companies like Wells Fargo should be dismantled.

Also, narcisists and sociopaths don't feel guilt the way the rest of us do.

And what do you find disproportionately represented in the board room?

I refuse to believe that the solution to this is to throw our hands up and just accept that things like this will continue to happen. If large, multibillion-dollar corporations have such a hard time with complying with the law, and if we can’t seem to find a solution to that, then maybe we have to question the utility that these entities actually serve modern society. Maybe they shouldn’t exist at all if they’re hotbeds or criminal activity.

>I suspect people cynically demanding that CEOs be put in jail haven’t really dug into the facts of this or other FCPA cases. Holding the CEO liable for employee misdeeds is like holding teachers responsible for teenagers getting into fights or having sex.

Or, you know, like putting in jail the person directly responsible both for the deeds and the culture that promoted them...

How are the people demanding CEOs to be jailed cynical? I'm really confused by why you chose that word.

The CEO should be jailed for bribes in Mexico, Saudi Arabia, Russia etc. The CEO should be jailed for Walmart hiring "illegals" with fake Social Security cards in California. (example) The CEO of this 500 BILLION company, with 2.2 Million employees, should be jailed for not making a store in Ohio wheelchair friendly. The CEO should be jailed for signing off on the gazillion pages long financial statement that took 100 lawyers and accountants to prepare.

etc etc etc. Unless the CEO knew or directed them to do so, he is one person with 24 hour days like all of us. And Walmart has thousands and thousands of top level managers to manage all aspects of his business.

No employee is breaking laws in an effort to further the objectives of a company in a vacuum. A CEO is absolutely not absolved of crimes committed in the name of the company, especially over the span of a decade.

> No employee is breaking the law...

That's absolutely absurd. Would a teenaged cashier be absolved of all guilt for murdering a troublesome customer? But the CEO should be held accountable?

If I literally cannot break a law as long as I'm working for a company, then why don't bank robbers get a job at Walmart first and claim robbing banks was for the benefit of Walmart? How could you ever convict anyone if the excuse "my boss implied that this might possibly be beneficial" gets you off Scott free?

People are always responsible for their own actions. As an extreme example, the nazis were all "just following orders". Do you think they are guilty and should be held accountable for their actions, even though someone else asked them to do what they did?

> murdering a troublesome customer

This furthers the interests of the company?

Getting rid of a troublesome customer that wastes employees time and scares off other customers is definitely in the interest of the company.

calling the cops and charging him with trespassing next time, might be a better way to do this ;)

GP isn't saying that employees can't break the law. They're saying that if an employee breaks the law for the benefit of the company, it's probably because they know the company will reward them for it somehow.

> People are always responsible for their own actions.

Leaders also bear some responsibility for the actions of those within their purview. Why do CEOs get paid so much? Because they get credit (and blame) for the aggregate actions of everyone in the company.

Responsibility isn't zero sum. If the CEO orders a cashier to murder someone, they're an accomplice. If your boss knows you're robbing banks at work and says nothing, they're an accessory.

Let's flip the Nazi analogy around. The foot soldiers should certainly be held accountable for their actions. But — given that all he did was ask others to carry out his wishes — should Hitler?

You've not read the comment I responded to.

> No employee is breaking laws in an effort to further the objectives of a company

That's am absolute statement that employees are not to be held accountable.

> Responsibility isn't zero sum.

I totally agree. Doing a bad thing is bad. Ordering someone to do something bad is bad. Absolving someone who did something bad to fulfill your own twisted worldview is also bad.

Yes I have. The full sentence, emphasis added:

> No employee is breaking laws in an effort to further the objectives of a company in a vacuum.

In other words: "in a vacuum" (i.e. without any influence or incentives from the company), employees will not break the law for the benefit of the company (as opposed to their own benefit). It's describing their behavior, not absolving them of guilt.

Sure they can. There might for example be sales people who are operating in countries where bribes are common and despite clearly stated no bribes policies they will still bribe or behave unethically to win deals and further their career/compensation.

If it is reasonable to think that the leadership should have known about it then sure they can be blamed as well but often that is not something that is reasonable to expect.

Except in the US it's legal via lobbying.

I thought part of the reason for the enormouse CEO paychecks was they were ultimatly responsible for things like this?

After they took the money, they want to say "even thought i was paid to run the company, i had no idea this was going on?" not sure it works that way.

So are you just against FCPA cases in general then? I think it's one of the most important laws in the US and its extraterritoriality reduces corruption everywhere in the world.

I think the FCPA is tremendously important. But I don’t believe in bending basic principles of criminal law just because we’re mad at corporate CEOs.

But isn't the main reason they get all the big money that huuuge responsibility?

Your opinion would make more sense if teacher’s yearly bonus would be directly sized based on how much unprotected sex his students are having.

No, he can’t make them have less sex if they want to. Yes he also gets paid more if they do.

So, now its the US governments chance to hold out its hand.

These are so trivial for a company like Walmart, and no-one is being individually held responsible. So it just looks like an official bit of us gov bribery, just like the fee's to avoid the security line at the airport. Cloak it in a bit of legal mumble jumbo and the us government gets its payout too.

Frankly though too, these foreign anti-bribery laws seem so antiquated. Every year I have to sit through training for them as part of the corporate hand waving (we can't be responsible we trained our employees). Yet really it pales in comparison to the damage actually being done, and in the cases where the officials will actually take bribes just puts us based companies at a disadvantage to other foreign companies willing to pay the bribes. Especially in cases where the companies from other countries will waltz in with "infrastructure improvements", "cheap loans" whatever...

What comprises the “mind” of a corporation? I would argue that the board and senior officers make up that mind and it’s their failure to demand or instill strong ethics allowed for these crimes to occur.

In this case, yes that appears to be what happened. The low level employees reportedly raised the issues.

From TFA:

"But even as employees frequently raised alarm, the company’s top leaders did little to prevent Walmart from being involved in bribery and corruption schemes."

Which is why no-one is going to jail, if it were just a low level employee you can bet they would be charged/fired and jailed. But since it went high in the mgmt chain, they likely can't just pin it on someone. The records likely got looked at, discussed off the record, and then got ignored without anyone's fingerprints on them.

I'm sorry, It's an unpopular opinion to hold, but the overseas bribery thing is a ridiculous standard to hold. [These opinions are just mine, and while I have them as opinions I would never act on them as a representative of my company, not that I would ever have the chance, and I don't work for Walmart]

Over the course of human history, bribery has been the norm. I would dare to say that today, by population, it is the norm. It has obvious dirtiness in the US and Western Europe. And the US and Western Europe have tried to force this view on other nations, which have created laws that they don't pursue or prosecute.

But criminalizing actions performed in another country based on morality in the US feels equally dirty. I don't mind the US handing evidence over to another sovereign nation for them to deal with, but prosecuting a crime on another countries soil over something that may not be seen as a crime in that country just doesn't make sense.

I know, Walmart is "evil". It's southern US, and hits rural towns, takes advantage of US laws at scale (which would have been taken advantage of in small chunks that added up to the near total), etc.

But, Amazon which is worse on the Walmart issues (low wages, overworked employees, stressed vendors, killing jobs) and then adds on to it traditional "antitrust" problems of vertical integration, and somehow gets a pass in our community because they're a tech company and "we" shop there. Can we get past the rhetoric and move on to the actual arguments?

I disagree. US companies can have such an outsized impact by the volume of money they bring, that it can create a moral vacuum that sucks up all the air in a place. Everyone has a price, and when the price is in dollars it may be surprisingly low for the less well off. Someone ought to police it.

Furthermore, bribery abroad may undermine US interests and policies. It’s easy to see why companies would want to pay a bribe to build a store in Brazil (mentioned in the article). Compared to the other costs involved it’s probably pretty cheap and can really speed things up. But that million dollars (or whatever) feeds a system that seeks its own remuneration over serving it’s constituents. It’s not just someone else’s problem. It helps to paper over the enormous drag this rent seeking behavior has on everyone.

Furthermore, the law gives employees a basis to stand on to say no. Now I don’t know if there’s really much to that- I’ve never been propositioned for a bribe, but I imagine that being able to say I can’t, it’s illegal, would help me to say no.

Have you thought through the implications of companies not being held accountable to the home countries laws and morals? This invites creating colonial regimes by bribing local dictators and creating something of the likes of Belgian Kongo. The step to enabling and starting warcrimes is a rather short one. A good example would be Daimler Benz and the Argentinian military dictatorship, where the local Daimler leadership got their workers' council disappeared by the secret police.

> low wages, overworked employees, stressed vendors, killing jobs

I'm not defending Amazon here, but Walmart has literally been criticized for all of the exact same things...

I've seen many sorry excuses for dishonest business practices. They all fall apart when investigated closely.

Bribes and cheating are punished because "trust" is a very important thing a society. The disadvantages are plain as day in corruption-infested countries: unreliable and untrustworthy police, criminals getting away with almost anything, the government is openly working on enriching itself at the expense of the population, etc.

There is a very legitimate interest in the state banning bribe for international behavior. The US already face accusations of imperialism rightly or wrongly for trade involvement.

While it could be argued as "respectful of local customs/the fault of the host nation" being involved it taints the image of US as a trading partner as a whole and gives a reason for rational actor countries to refuse international businesses from the US for fear they will spread corruption because it worked for them before. By holding them all to the standard of "no bribes ever" it makes it clear that such practices tainting businesses are unacceptable.

If other states are worried about bribery (as opposed to liking it) then it gives them a reason to trust the extranationals - if they report bribery they won't get "Not illegal here" as a reaction but "It is a serious crime thanks for reporting it."

Essentially not doing so could harm the spread of US business which is not good for US economic power from which the rest of the nation's power stems.

So, just to understand, would you be against prosecuting pedophiles that go abroad in a country where having underage sex is not a crime to rape children? Over the course of human history it was perfectly normal to have sex with underage people, so it seems a rather fitting comparison.

That becomes a way more interesting hypothetical if you strip away the emotionally charged language.

Let's say a twenty-year-old Californian goes to Canada, meets a 16-year-old, and they have sex. This is (according to wikipedia, don't rely on me for legal advice!) illegal in California and legal in Canada.

Do you think someone should go to jail?

I was clearly speaking about pedophiles. Do you know the difference between pedophilia and ephebophilia?

Well said

I live in Africa and pay bribes on a weekly and sometimes daily basis. It’s hard to do anything at all without bribes here, and I am certainly sympathetic of it.

People who don’t have experience with 3rd world countriss often think it’s a big deal bribing someone. But it’s not, it’s a simple fact of life. I don’t really see anything wrong with a company doing it either.

In fact, I kind of like paying bribes. Unlike in the US, I don’t really have to worry about doing anything illegal. I can have weed in the car, I can have out of date permits, I can really just do anything I please. I have money, so it’s all good.

Of course, it’s worse if you’re poor. But then again, in America being stopped by the police when you’re poor is probably worse.

Can't tell if joking or antisocial. Especially the line about "I can really just do anything I please. I have money, so it's all good."

Obviously if everyone with money can do whatever they want, the trust in institutions plummets and more and more people start cheating, so one ends up with a society of cheaters who think it's normal to bribe.

Yea but not everyone has money, and those with money are saying that corruption is in a lot of way better for them.

In some places, you can be drunk, or even kill someone and the cops will let you go for $$. If they take you in, it's not too late, just the price increases, the prosecutor and judge want their cut. A lot of mafia people have sentences cut or charges thrown out.

I'm not arguing that it's not a problem. I'm just saying it's good for me, and I like it. I think it's entirely possible to believe something is suboptimal and wrong while also being happy that it benefits me.

Sounds nice, in certain ways.

Which country?

Sounds like Tanzania from post history.

I will preface this by saying I am not defending Wal-Mart. However, it is somewhat a cost of doing business in many countries. I have spoken with close friends from both Brazil, Mexico, and India, and it is very much part of how business is done there. I have also heard from numerous acquaintances that this is the case in China, including people who did business there. This does perhaps not justify Wal-Mart's behavior, but it provides some context and reminds us that companies (even those the size of Wal-Mart) have few options. Besides, promising to bring jobs to a certain area leads to more tax revenue, which in turn leads to fatter pockets for politicians. We delude ourselves to pretend we are perfect.

However, America has the Foreign Corrupt Practices Act, which does mean this could be more complicated. We recognize that someone else jumping off a bridge does not justify our doing so. And though we still have problems at home, we do try to police them. When a corruption scandal breaks, politicians usually are forced out of office; compared to many other places, this is good.

I worked at a place where the anti-bribery training covered corner cases where US law not only allows for bribery but you can write it off as a business expense. I was pretty shocked by this.

> Regarding payments to foreign officials, the act draws a distinction between bribery and facilitation or "grease payments", which may be permissible under the FCPA, but may still violate local laws. The primary distinction is that grease payments or facilitation payments are made to an official to expedite his performance of the routine duties he is already bound to perform.

Interesting, I wasn't aware of that. That seems somewhat like a reasonable loop hole, though I can easily see how it could be abused. I appreciate the information.

I see this happen in Western institutions as well where if you want faster processing you have to pay some extra fee.

Question: What does the United States gain by disallowing US companies to bribe government officials outside the United States? From a purely logistical standpoint, it seems like it would make more sense for those other countries to police these activities, or for the US to give the information they have to those governments to fine the companies as they see fit in their own countries.

Why does the US fine US companies for illegal behavior outside the US? Is it just moral reasons? Or is there a diplomatic reason for it? Or a treaty that requires us to do so?

Moral and economic reasons. Without making it illegal for US companies to do it, there would be strong competitive pressures for companies to engage in bribery abroad, and honest US companies couldn’t compete.

Stepping back and thinking about the bigger picture, the FCPA is an example of a law that enforces economically beneficial morality. One of the things that makes America a good place to live, and economically successful, is that it’s not a bribe-based society. Bribery is a tax on economically productive activity, and it’s good for the economy as a whole to stamp it out.

Citing wikipedia. https://en.m.wikipedia.org/wiki/Foreign_Corrupt_Practices_Ac...

>In response to these high profile revelations, Congress enacted the FCPA to bring a halt to the bribery of foreign officials and to restore public confidence in the integrity of the American business system.

Because it doesn't look good - like it makes us look like an imperial nation - when we go around buying up governments through our corporations.

Yea it seems stupid now, but there was a time when America looked at the history of Europe and thought "that doesn't look like a good idea".

The US was the first country to make this illegal in 1977, eventually other countries did as well and the OECD Anti-Bribery Convention was eventually established.

The original 1977 law arose in response to investigations in the wake of the Watergate scandal and public outcry over corruption.

Beyond the public perceptions of corruption, there were significant foreign policy impacts. The US gov was actively working against communists in many countries, but those communists were sometimes being funded by bribes from US companies.

When the law was passed, the goal was to push other countries into implementing and enforcing similar laws to reduce any negative impact on US companies.

Hard to complain about foreign companies bribing people in your own government, if you are happy for your own companies to do that to other governments. It would be hypocritical.

<sarcasm> It would be like the U.S. having nuclear weapons and then complaining about other countries trying to develop them. Or if the U.S. promoted democracy but then used the C.I.A in South America to overthrow democracies. </sarcasm>

The US is also fining foreign companies that are involve in bribery scandals but does business in the US.

I try to be careful with what is defined as bribery.

It’s very easy to prance around on a high horse and cast out moral judgements when you’ve never had to open offices internationally.

It sounds like no doubt some pockets were unapologetically made fat. It also sounds like they didn’t do a very good job of hiding it. I wonder if that’s because their then line of thinking was “paying to pay” is simply normalized in business.

As I think about where the boundary is drawn for bribery, it’s interesting to see “offering cars and computers to governments” is framed as bribery, while somehow what local municipalities are demanding from giant tech co’s (ie Mt View / Google) is not.

You obviously can't jail a corporation as you would a person in this situation. However, a person would absolutely be subject to asset forfeiture and proceeds of crime law in such a situation - do the same here.

A paltry fine such as this is never going to prevent this behaviour. Determine as part of the investigation any revenue the company made from engaging in the behaviour and take it off them, in addition to the fine.

Is 280M just a speeding ticket? I wonder if they are met ahead or behind because of the policy.

It's just a speeding ticket. They are ahead.

It's 3.67% of that number - if you were a software engineer making $100,000 / year in the US, it would be like paying a speeding ticket of $3670, which is an order of magnitude greater than most speeding tickets in the US

100,000 is gross revenue. Walmart's was $514B. 280M is then equivalent to $55.

$7.659B is the quarterly number, so divide your fine by four -> $917, which would still be quite an expensive speeding ticket, but within the max possible fines in my state.

It kind of would be like getting a ticket when you account the total cost with your insurance going up and that staying on your record for ~4 years.

Walmart’s EBITDA for the quarter ending April 30, 2019 was $7.659B. I’d call $280M a very minor annoyance.

That's roughly ~3.5% of their income. If I took 3.5% of your income, you would be much more than minorly annoyed.

You can make the argument that 3.5% isn't high enough, but it's not nothing.

The fine covers 10 years of activity.

Your 3.5% uses 3 months of income as the denominator.

I haven't looked up Walmart's past income, but there are 40 quarters in 10 years, so it's possible they've been fined <0.1% of their income (3.5% / 40).

Just a fine of ~280 mil, no jail time for any responsible. If corporations are people, why can't we jail walmart?

We can't jail Walmart, but we should be able to jail its CEO. Perhaps if being CEO meant taking the risk of jail for the corporation's misdeeds, the job would actually be worth the ridiculous salary it pays out, and provide a much stronger incentive for the CEO to police illegal conduct internally.

Well, the CEO can be jailed, but if HSBC case is illustrative then the the very top tier of the DOJ/FBI/ETC ordered any US Attorneys who’d be amenable to doing something like that to stand down.

Why not the entire C-suite and the board? Then you’d get some real accountability.

Strange this is so far outside the Overton window that it can be read as a joke.

In cases involving lower valued assets, the owner is almost always punishable: his dog bites you, it's his fault. His contractor lays bad wiring that burns down your house, it's his fault. His kids misdeeds are often legally his fault. And even if he loans his car to someone who crashes into it's legally his fault.

But behind a corporate shield, nothing is ever the owners fault. The more value the company has, the less possibility any owner is to receive legally blame. Not that there's much possibility in the first place.

This remarkable and thoroughly ingrained inconsistency does consistently benefit a certain category of person.

A very practice and effective solution would be to seize some chunk of the shares/value based on the size of the crime and auction them off. The proceeds going to victims or the like and weakening or removing irresponsible investors in favor of someone else. But this option is simply unthinkable and instead there's endless debate on the CEO's culpability.

Your examples are flawed. In two of the cases, the "assets"(children and dog) are specifically not deemed responsible due to their lack of maturity/lack of understanding of societal norms - so we instead find the "owner"(or more properly named, parent/guardian) at fault - they are supposed to keep the children or pet in line.

In the case of a loaned car, you are not liable for damages that the person you loaned the car to causes(perhaps you're confusing it with insurance liability?). I don't know about the contractor case.

How is your "practical and effective" solution any different from a fine? You fine the company $300 mil, or you seize $300 mil of shares and sell them.

A fine is simply passed on to customers or employees. If the fine is great enough, it could result in bankruptcy which harms employees and potentially customers.

Asset seizure targets the ones culpable rather than just transferring some or all of that burden. And regardless of the size of the penalty, there is no danger to third parties like employees, customers or other organizations along the supply chain.

If the above examples are inadequate, I will add civil asset forfeiture which is applied widely to crimes on the low end of the economic spectrum, even without convictions, but with great parsimony to crimes on the upper end even with conviction.

I can't quite follow what you're arguing.

Are you saying that anyone who owns Wal-Mart stock should go to jail? That's who the owners of Wal-Mart are.

They should pay the price in proportion to their share. Jail time for 1e-9 ownership is ludicrous, but something like the following might actually be a proportional deterrent.

> A very practice and effective solution would be to seize some chunk of the shares/value based on the size of the crime and auction them off. The proceeds going to victims or the like and weakening or removing irresponsible investors in favor of someone else. But this option is simply unthinkable and instead there's endless debate on the CEO's culpability.

Why not every shareholder? Or every shopper too?

Or at the very least, every person who has ever shopped at Walmart has to now spend their first turn of Monopoly in jail. THEN we'll see real change.

I'm pretty much a free market capitalist and I'm all for that. Mandatory minimums should be established for when companies violate the law in ways that seriously harm people, things like this should have you spend at least a few months in jail even if you "didn't have knowledge". Perhaps a lifetime ban from working at any publicly traded company as well, sort of like registering as a sex offender.

Corporations aren't people. You're misrepresenting Citizens United

The gp comment doesn’t seem to mention citizens united ... why bring it up in response to a comment about corporate personhood? It is almost completely non sequitur

Almost every modern reference to "Corporations are now people!" is a callback to Citizens United. If the commenter I replied to is not aware of and was not referring to that, I apologize. But... he probably was. A simple search for "corporation are people" or "corporate personhood" will bring up articles that immediately and extensively focus on Citizens United.

And/or to Mitt Romney saying "corporations are people, my friend" which happened around the same time and this was a big political topic. The idea of corporate personhood became popularized around this time.

Citizen's United is not the only case relevant to the idea of corporate personhood. There's a whole history of corporations earning rights usually reserved for people.

You can read the wikipedia page for "corporate personhood" if you want to learn more about the history of it and specific cases and rights afforded to corporations.

Since I just read about this in a course, the main reference (at least for Canada/UK/Commonwealth) is the Salomon case from 1895: https://en.wikipedia.org/wiki/Salomon_v_A_Salomon_%26_Co_Ltd

So, not new.

I think people overreact to hearing that corporations are (legal) "persons" when in fact they are not anything like natural persons (no body, no constitutional rights). As I understand it, directors and officers are the ones held personally liable in criminal matters, but corporations can still be liable for negligence and breach of contract etc. IANAL.

Sounds like it is different in the US. Does citizens united somehow make corporations more like people?

It did not, in the sense that it only clarified a constitutional issue. The crux is that while corporations are complex legal fictions, they are still ultimately property owned and managed by actual people with constitutional rights. Corporations inherit on incorporation the constitutional protections that the incorporators would have if they were acting directly. In the words used in the majority opinion of the court, "If the First Amendment has any force, it prohibits Congress from fining or jailing citizens, or associations of citizens, for simply engaging in political speech."

> Corporations aren't people.

As per a former presidential candidate, they are, my friend.


How should one interpret it then?

From the Wikipedia page: "Although the decision does not address "corporate personhood," a long-established judicial and constitutional concept, much attention has focused on that issue."[0]

"How should one interpret [the case] then?" Recognize that Citizen's United is _not_ about corporate personhood, and actually read what the case was about. The number of times I've heard people making snarky remarks about Citizen's United without having read anything about the case is amazing.

In the US, corporate personhood is about:

(1) Corporations having equal protection under the law as persons (ie the 14th amendment applies to corporations).

(2) Coporations having the same rights as persons to draft and enforce contracts, making them "legal entities". This is related to (3).

(3) "Person" as a concept applies to associations of people rather than just individuals; associations of individuals includes corporations. See here: [1]

None of these things were decided in Citizen's United and further, it had no legal bearing on the case law surrounding these things.

Instead Citizen's United was about whether a particular law violated the 1st Amendment. Specifically the law prohibited corporations from releasing media 60 days before an election if it could impact the results of that election by reaching 50,000 or more people in the electorate. But the 1st Amendment makes no distinction between e.g. newspaper companies and other corporations, so the majority opinion was that this law and other laws that limit speech of associations of people infringe on the 1st Amendment.

From the opinion: "If the First Amendment has any force, it prohibits Congress from fining or jailing citizens, or associations of citizens, for simply engaging in political speech."

[0] https://en.wikipedia.org/wiki/Citizens_United_v._FEC

[1] https://en.wikipedia.org/wiki/Legal_person

That's all well and good, but 'frequentnapper did not actually say anything about Citizens United in the first place.

If corporations are people, we should jail them. If corporations aren't people, why do they have legal rights independent of the individual, jailable people who constitute them?

Seriously corporations have the right to pay fines with other peoples money instead of being jailed or executed. People of flesh and blood don't have those rights.

Compare Walmart committing bribery to me attempting to bribe my way out of speeding ticket.

>Compare Walmart committing bribery to me attempting to bribe my way out of speeding ticket.

But that is how the ticket industry works...you get the ticket, hire a lawyer, the lawyer “negotiates” a deal to plead no contest in exchange for no points and a lower $ penalty or at your option take traffic school ( a local private company that no doubt “bribes” its way in to those chushy exclusive county government contracts) and the court will dismiss your ticket like it never happened.

Read harder. You try to bribe a cop, you get arrested and you go to jail. If you have a buttload of money you can avoid jail. If not, you serve time. Then you are branded a criminal, forever.

Unlike Walmart which gets to stay a corporation in good standing. And it's executives who suffer no personal harm.

Read harder? Don’t resort to ad hominem attacks because you don’t know or understand the law.

Walmart allegedly bribed foreign officials they didn’t try to bribe the “cops” for bringing the bribery charges. Although you can’t distinguish the legal difference, it doesn’t mean there isn’t one.

Executives do go to jail quite regularly for bribery and companies can and are judicially dissolved also.

For example I was in Las Vegas during the Shot Show when the FBI rolled right into the convention center and arrested executives/VPs of Smith and Wesson for bribing an undercover FBI agent, posing as a African delegate, for a large government contract.

Or how about the VW executives arrested (and convicted) for the emissions scandal?

Or the drug company Executives and CEO recently charged with conspiracy to distribute controlled substances and defraud the US?

Except corporations don’t have equal protection under law. They have more protection than individuals because they’re a device for absolving individuals of personal liability. The only penalty we seem to want to subject them to for any kind of wrongdoing is a fine, which is often not enough to deter the activity that caused them to receive said fine.

We need to make fines meaningful, start holding C-level execs personally responsible in some cases, and bring back the only penalty that matters to an immortal and amoral legal entity: the death penalty, via revocation of the corporate charter. Only then will we see the behavior of corporations start to change.

Personally I suspect the corporate death penalty will be even more worthless than the actual one for deterrence. The corporate shield isn't supposed to apply to criminal conduct for participants in the first place.

Any investor should already treat them as disposable sources of revenue so crooked business actors would do the same. It would be like sentencing the gun to the death penalty and letting the robber go free. Instead pursue all those with actual power and liability who don't do the right thing and leave those who did alone as possible (it shouldn't stop enforcement) or reward them.

Otherwise they will be encouraged to "3S" (shoot, shovel, and shut up) their problems instead of cooperating or reporting.

OK, but the whole argument rests entirely on corporate personhood. Without it, the 1st amendment isn't even in play.

You’ve got it backward. It was the law that tried to use corporate personhood to subvert the first amendment. What Citizens United said is that you can’t deny groups of people their first amendment rights just because they’re acting through a corporation.

Human beings are allowed to organize for the purposes of political action and whether or not they decide to form a corporation doesn't matter because "corporation" isn't a constitutional concept.

Further, "personhood" means you can sue the corporation, it can hold property, etc. Lawyers usual call "corporate personhood" "legal entity."

> Human beings are allowed to organize for the purposes of political action and whether or not they decide to form a corporation doesn't matter because "corporation" isn't a constitutional concept

Sure it does - if I am killed by a natural person due to negligence, the state can imprison the person who killed me. If I am killed by a corporation due to negligence, the state generally does not imprison any individual, because of the "corporate veil." If you get rid of the corporate veil, then that's totally fine with me. (It's just like, if human beings wish to organize for political action, they don't get any more votes that way - they still only vote as humans.)

> Further, "personhood" means you can sue the corporation, it can hold property, etc. Lawyers usual call "corporate personhood" "legal entity."

So, one of the common effects of prison is deprivation of the right to property - you don't get to access your house or the stuff in it while you're in prison. This is generally considered to be an important part of the deterrence. Why don't we do the same to corporations? Let's say that Walmart doesn't lose any of the property it owns, but for a period of a couple of years, it loses access to it.

Another side effect of jail is a loss or at least serious restriction on communications privileges with the outside world, which we can also equally well apply to corporations. Why don't we say that this applies to corporations too? While Walmart is imprisoned, no communications on behalf of the company can occur, except for access to its lawyer.

You're still making the mistake that legal personhood is literally being a person. People can go to prison. Abstract concepts cannot.

I literally just gave two ways in which we can meaningfully apply the concept of prison to corporations. If you insist on corporations being axiomatically unable to go to prison despite having a separate existence before the law from the natural people who comprise them, just admit that I'm a second-class citizen in your eyes, and then we can debate the way I's debate anyone who thinks I'm axiomatically a second-class citizen.

(Or get rid of prison for natural persons, I'm on board with that.)

Then how can you apply rights usually reserved for people to a abstract concept?

You don't. That was the point of my post. Citizens United didn't grant corporations the rights of people and "corporate personhood" doesn't mean that anyway.

Nobody is talking about Citizens United (other than the people dragging it into the conversation just to point out that Citizens United is irrelevant).

Corporations already have the rights of people, because when corporations do crimes, the corporation, and not the people who constitute the corporation, is held legally responsible. What we are objecting to is that corporations are exempt from forms of punishment that are applied to natural persons. Either figure out how to make the punishment apply to corporations, remove that form of punishment from consideration for natural persons, or ignore the corporation for legal purposes and punish the humans behind the abstraction layer. It's pretty straightforward.

Unfortunately, the way that corporations can own other corporations would render this moot, or at most, a mere matter of paperwork. Control of corporate assets would fall to the next highest "Corporation" in the chain, or, and this is a big or, if you went the more extreme route of forcing the assets/business into the stewardship of the State for the imprisonment term, the "life" of the corporation would need to continue as normal to meet the obligations the Corporation has toward vendors/shareholders, otherwise, they are out of what is rightfully theirs "without due process".

To meaningfully create a deterrent effect, there has to be a set of people who cannot avail themselves of the Corporate veil. That group of people would most reasonably be at a minimum the C-Suite, but frankly, I'm not sure you'd do anything but end up creating a practice whereby the "C-Suite" people end up becoming sacrificial, or are specifically structured into having some form of plausible deniability via isolation from information by underlings.

Corporations as a concept were extremely controversial, and rarely granted at first due to concerns of being able to absolve people of legal responsibility for actions undertaken under the flag of the Corp.

I think that a good middle ground would be that upon being judged against, a Corporation must for a period submit to serving a period in which their ability to operate is contingent upon the presence of State agents/regulators tasked with ensuring the previous behavior is remedied and no other problems exist. This includes all results of investigations into potentially illegal behavior becoming a matter of public record. This would have a satisfying parity with the practice of submitting to supervision by a parole officer.

There is some potential for abuse; but seeing as that system works just fine for petty crimes, I don't see why it wouldn't work for corporations.

There's also the bonus that it also in a way "punishes" shareholders by decreasing the opportunity for abnormal growth rates fostered by shady business practices.

Oh, one more thing.

Something may need to be done to prevent corporate engineering where assets are sold to other corporations, owned by a holding company, established for the purpose of buying out the sanctioned corporation's assets, poaching the employees, and effectively picking up where the last Corp left off, but cleaned of the government oversight. I'm thinking any liquidation or selling off of assets has to be handled through bankruptcy court.

You wouldn't necessarily want everyone staying, but I have the feeling no one would be comfortable with taking away the authority and mandate to clean up house from the Board of Directors, but I think the contents of their communique's w.r.t. the sanctioned corporation could become a (sealed for a time) matter of public record, with a State representative as a non-voting, or only tie-breaking vote on the Board

Anyway... My two cents.

> if you went the more extreme route of forcing the assets/business into the stewardship of the State for the imprisonment term, the "life" of the corporation would need to continue as normal to meet the obligations the Corporation has toward vendors/shareholders, otherwise, they are out of what is rightfully theirs "without due process".

This doesn't apply to imprisonment of humans, right? If I go to prison tomorrow, my employer is deprived of my labor, my skills, and my knowledge without due process and through no fault of their own. Sure, they don't have to pay me, but they're also not going to get back their investment in training me and the institutional knowledge I have of how stuff happens at my company. (I am at-will, as it happens, but I'm pretty sure this is not different if I had a fixed-term contract.)

If you make a deal with someone who goes to prison, and they can't execute on that deal, it's your own problem that you made a bad choice of deal partner. Sure, you can sue for breach of contract, but it won't actually get them to do the thing you were hoping they'd do anytime soon. Why is it different when the corporation is the person with whom you made that deal?

I wouldn't want to jail Walmart. That doesn't benefit anyone, it's just punitive. Jail the executives responsible under the usual criminal law.

so maybe sanction walmart to sell everything for a 20% discount for a month so that the benefits of punitive action accrue to its customers?

This arguably also punishes their competitors.

In a corrupt country, paying bribes to get licenses and permits is often necessary for the copmany and beneficial for the citizens. India was known for having a "License Raj", which has done far more to keep India poor than any foreign company.

Thank you.

Somehow I just don't see this as a scandal, bribery is common in those countries and it would be out of place to _not_ bribe officials to get permits if everyone else is.

Does the US government offer any support to US companies that are tempted to engage in bribery overseas (other than attempting to level the playing field, among US companies, by outlawing any of them doing it)?

That sounds potentially very delicate, for a variety of reasons, and interesting.

I don't see the problem. Overseas, in many third-world and developing countries, bribery is how business gets done. If you don't participate, you don't do business.

Strange - WalMart used to be hell on bribes, years ago. The WalMart Engineer that visited our site would put a quarter on the counter when taking coffee from the free machine - because it could mean his job to appear to take any freebies whatsoever from any vendor/supplier! How the mighty have fallen.

Top 7 comments, with the exception of the 4th, all defending Walmart. The levels of bootlicking on this site can be too much for me to read at times. If Walmart was a tech company I would have only assumed this was their doing but it's nice to know the community provides this service free of charge.

I wonder if any of these payments were a fraction of a percent of the donations made to political candidates in the US?

> Walmart was able to negotiate a lower fine after President Trump, who had previously criticized the Foreign Corrupt Practices Act, took office.

Can anyone explain a reason why someone who isn't a cad might not agree with the FCPA (ie. for reasons that aren't "money good, ethics bad")? This isn't a dig at Trump. I just don't understand the law well enough to know how angry I should be.

I will just play devil's advocate. Sometimes different cultures have very different ideas about what is an ethical way of doing things. If you're passing judgement on Walmart here, I think you're also passing judgement on Brazilian culture. Of course, you're welcome to do so, and I might even agree with you. But if you want to fine Walmart for doing things the "Brazilian way" while operating in Brazil, then I think if you are going to be a principled person you must also advocate for trade sanctions or other barriers to doing business with Brazil since you think their way of doing things is naughty. I hope you're prepared for a long battle though, because once you get done fussing at the Brazilian people and their culture you've got a very, very long list of other countries you need to be prepared to harass.

That assumes corruption exists in these countries because people are OK with it, but that doesn't square with everything I've read about corruption. It exists because corrupt systems are difficult to dismantle.

By analogy, imagine someone from outside the US making the argument that it's "just our culture" that makes it OK for a lobbyist to walk into a senator's office with a $20,000 check in hand ready to discuss policy. That's a situation almost nobody is happy with here - it's not a "cultural difference" but a difference in how power structures have been built up over time through a concerted effort by very small groups in a larger society.

If the people in power are abusive in some way, then advocate sanctions or something. Fining Walmart because a Brazilian Walmart employee living and working in Brazil greased few palms to get building permits seems like a fool's errand.

> OK for a lobbyist to walk into a senator's office with a $20,000 check in hand ready to discuss policy

Or maybe your wife is Secretary of State and OK's a Uranium deal right after you get paid hundreds of thousands of dollars to give a speech to an empty room.

Does you advocacy extend to other “cultural differences” like child labour, age of consent laws, or indentured servitude?

There are some types of culturally accepted behaviors that I would and do get on my soap box and say we shouldn't do business with those places. A little grifting for building permits is not one of those.

> But if you want to fine Walmart for doing things the "Brazilian way"

Is this "Brazilian way" legal in Brazil? If so, there is a decent chance that it is allowed under the FCPA.

There are a number of court cases currently in Brazil that suggest that the "Brazilian Way" is not in fact in accord with Brazilian law. https://en.wikipedia.org/wiki/Operation_Car_Wash

Parent may argue that Brazilians themselves are thereby insensitive to the "Brazilian way" and should be educated by US corporations as to the social values they should hold.

On the contrary. If Brazil doesn't think this is the way things should be done, Brazil should fine, arrest, or whatever is relevant to Brazilian custom and law. If the US government wants to report to Brazilian government some findings of wrongdoing, then so be it. But it doesn't make sense for the US to fine a US corporation for the wrongdoings of a Brazilian committing a crime in Brazil.

And let's not pretend that there's no difference between the letter of the law and the cultural norm. Selective enforcement of laws that are out of sync with cultural norms couldn't be more common. There are places in the world where low level corruption is so common that tourists are recommended to carry some cash to pay off police or other grifters so that the tourist can avoid pretty awful consequences when they're totally innocent. Should the US fine those tourists? It doesn't make sense to me.

>you've got a very, very long list of other countries you need to be prepared to harass.

Starting perhaps with US briber- cough cough - campaign financing practices.

Yes, imagine Japan fining Honda for its US component participating in lobbying "the American way." To me, it seems ridiculous.

Personally it sounds like a diplomatic and moral superiority coup to position themselves strongly in the future.

If it was done by a foreign superpower which wouldn't be obvious massive hypocrites I would be very afraid for future diplomatic and trade impacts if I was in the US government - especially if reforming wasn't in "my department".


In theory it could unfairly handicap American companies relative to foreign companies.

This doesn’t seem to have happened much in practice though so I support the FCPA. Corruption is a big scourge in many countries and it is a really good thing American money is prohibited from exacerbating the issue.

> In theory it could unfairly handicap American companies relative to foreign companies.

Seems like it would be sensible for the US to push the rest of the world to adopt the same law. We're able to push other countries to adopt our war on drugs laws, why not war on corruption?

Many countries do have laws against corruption, but it's so institutionalized that the laws are functionally toothless.

In many (most?) countries in the world, the rule of law is not strong enough that you could expect these laws to be meaningfully enforced.

With no personal punishment for the execs, they’re probably gearing up for Decade #2 as I write this.

Someone please pass a law making it impossible to charge corporations with crimes. People commit crimes not limited liability ownership structures.

The fish rots from the head.

If your company is too big to keep its own employees from committing crimes, it's too big.

The more important thing isn't the number per say (although they should be concerned) but how they are respond to it when they find out - and willfull ignorance is the same as knowing.

If say the Catholic Church's response to their sex abuse scandal was to turn over all evidence to the authorities and maybe make own judgements in parallel to defrock or excommunicate based upon the evidence they would be morally upstanding even if their judgement differed in some cases as "not enough evidence by our standard / not enough to be illegal but violates our scriptural standards".

Because they sheltered them for decades their moral authority is a joke and all priests being pedophiles is a dark comedy cliche.

No company bigger than 100 people is capable of such a thing. Do you seriously think that companies larger than 100 people should not exist?

I’d argue that no company bigger than 1 person is capable of such a thing.

I kind of agree, but I was being generous with 100.

I tried reading this in incognito and on outline and neither worked. Oh well.

You can use the NY Times onion service if you want to read it privately.


fyi, Chrome 76 in beta with undetectable incognito mode. https://twitter.com/paul_irish/status/1138471166115368960

shiny, thanks!

You can get it working by blocking www.nytimes.com from using JavaScript

Brave browser will do the trick

“Culture is the foundation of everything we do at Walmart. We define culture as our values in action..

Service to the customer

Respect for the individual

Strive for excellence

Act with integrity”

-Wal Mart’s horseshit values statement, the same as the value statement of every other corporation. Why does every company bother doing this again?

"Money before people," that's the company motto. Engraved on the lobby floor. It just looks more heroic in Latin.

-- Veronica Palmer in TV series 'Better off Ted'

Pretty much every corporation only has one value: make money for execs and shareholders. Everything and everyone else is secondary.

Everything else is a facade

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