Here’s a strange fact. Some corporate anti-bribery policies give no reason for employees not to pay bribes. Or rather, the only reason they give is that the company doesn’t allow or tolerate bribery. Like parents speaking to children, the reason is “because I said so.”
Novartis’ policy, for example, says, “Our Code of Ethics states that we do not bribe anyone.”
Apple’s says, “At Apple, we do not tolerate any form of corruption in connection with our business dealings.”
Apple and Novartis may say more in their anti-bribery training than what’s written in their policies. If so, great.
But companies sticking with the “because I said so” script should consider saying more. Everyone learns in different ways. Why not give employees a richer understanding? Who knows what will stick in their mind and influence a future decision?
How to explain the reasons why there’s a policy against bribery?
Here are some suggestions:
Reason #1: It’s illegal. Long-arm statutes (like the FCPA and UK Bribery Act) and local laws universally outlaw bribe paying. Anyone who pays bribes anywhere risks prosecution, conviction, and punishment, as well as reputational ruin.
Tesla’s pithy anti-bribery policy says, “Involvement in bribery or corruption can result in lasting damage to our brand and our reputation. It can also result in multi-million-dollar fines and penalties, plus jail time for participants.”
That beats “because I said so” by a mile.
Reason #2: Bribe payers become hostages. Once anyone pays a bribe, they’re forever under the thumb of the bribe taker. Bent officials in profoundly corrupt regimes may be immune from bribery accusations. But bribe payers are always at risk, either in their home country or where they paid the bribe.
Another problem: Most bribes pass through intermediaries who can become blackmailers and extorters. Richard Bistrong described how that happened to him in his remarkable post for the FCPA Blog, “My friend, the agent, blackmailed me.”
Reason #3: No one can know or control the true cost of bribery. Bribes always go into the books as something else — commissions, consultant’s fees, transport and handling charges, and so on. Right off, internal controls are compromised.
It gets worse. Demands for bribes are notoriously “fluid.” Bribe takers first ask for $50,000. A week later, they double or triple the demand “because of forces in the market” or some other nonsensical justification. Once someone reveals a willingness to pay bribes, the bribe taker’s greed is unleashed and unstoppable.
There’s also the risk of fraud. Intermediaries may say the bribe demand is $100,000, but how can the bribe payer know for sure? Maybe the agent plans to skim half the money. Company employees involved with the bribe might also siphon some for themselves.
Reason #4: Bribery spawns more criminal acts. Rationalizing a bribe as “just a small one, just this time” is an intellectual trap. Bribes that help a company enjoy short-term success encourage more bribery for more purposes.
Companies committed to bribery as a business strategy typically move on from winning contracts to blocking competitors. Monopolistic behavior is usually a separate crime.
Most bribes involve money laundering, as well as bank and wire fraud. Violating trade sanctions often has a bribery connection. And on it goes.
Reason #5: Bribery is morally repulsive. The least prosperous countries are the most corrupt. Rich countries can be corrupt too, but corrupt poor countries never become rich countries.
Professor Steve Hanke’s world misery index demonstrates the link between corruption and unemployment, inflation, and bank lending rates.
The FCPA Blog has looked at the correlation between corruption and life expectancy, rule of law, freedom of the press, personal security, air safety, environmental degradation, risks of war, debt problems, road safety, and others.
Yes, graft stinks. No one expressed it better than Yale economist Susan Rose-Ackerman: “Corruption is a moral category that signifies putrefaction and rot.”
Author’s note: Our Editor Emeritus Elizabeth Spahn’s seminal 2010 article in the Georgetown Journal of International Law, “Nobody Gets Hurt,” on which this post is based, takes a deep look into the victimology of corruption.