In The Atlantic, Ben W. Heineman, Jr., the illustrious former general counsel of General Electric, pens a strongly worded criticism of the state of corruption in global business and the state of developed world commitment to combating it.
Of the recent BAE settlement, Heineman notes the years of stonewalling and denials, and the decision by the British government not to pursue the massive bribery case involving BAE sales to Saudi Arabia after key Saudi officials threatened to diminish terrorism cooperation–but also motivated Heineman says by an underlying reason: to protect British jobs and trade. He notes that only after the US initiated its own prosecution did the British act, and says that in spite of the “technical” nature of the charges to which BAE pled, “BAE would not pay $450 million for technical offenses”.
The BAE and Siemens cases are symbols of pervasive corruption across the globe and lack of senior leadership making anti-corruption an international imperative. Bribery and extortion in public sector activities–especially in the developing world–distorts competition, erodes legitimacy and rule of law, impedes economic growth, thwarts building of institutional infrastructure, injures the poor and supports criminals and terrorists who pose a threat to world order. Corruption thus directly and seriously implicates foreign policy, national security, economic, developmental and humanitarian concerns.
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The BAE and Siemens settlements are cases in point. If these iconic developed world companies had such widespread issues, it is reasonable to think that they are hardly alone. Although both Germany and the U.K. have had laws prohibiting foreign bribery by their multinational corporations since at least 1999, there had been little national enforcement prior to these cases. In both BAE and Siemens, the U.S. (which has a history of strong enforcing laws against foreign bribery) was deeply involved and helped push the companies to a major resolution because of their dependence on the U.S. market. . . .
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More importantly, a 2009 report by Transparency International, evaluated the enforcement activities of 36 nations which had signed the 1997 OECD Convention on Combating Bribery of Foreign Public Officials and enacted national laws giving it effect. (Disclosure: I am on the board of Transparency International-USA.) That report concluded that only 4 out of 36 countries evaluated are actively enforcing the OECD Anti-Bribery Convention, with moderate enforcement in 11 other countries and little to no enforcement in 21 or more than half. Among the obstacles noted by the report were: antiquated bribery laws, outright political obstruction of investigations, lack of adequate funding for prosecutors or curtailing the powers of investigative magistrates.
This problem is in the developed world (!!), not in the developing world ,where anti-corruption efforts are infinitely more complex given the varying histories and cultures of individual nations. . . .
Heineman identifies committed global leadership, by someone such as the US Secretary of State or the President of the World Bank, as the necessary step to move the developed world to act.