"Corruption! Corruption is our protection, corruption
is what keeps us safe and warm, and corruption is why we win."
Those lines from the movie Syriana spoken by a Texas oilman character who
thinks nothing of offering bribes to successfully do business in the Middle
East are supposed to provoke moral revulsion in film-going audiences.
They shouldn't. Not if you care about the United
States being able to compete effectively in the global marketplace.
Here's the truth: Many countries with a long history
of global business, including France and Germany, even permit bribes and
gratuities to be tax deducted as a cost of doing business.
Like it or not, offering a bribe to gain a contract,
speed up a procedure or ensure better service is a common and expected
practice in the vast majority of the international business world.
Yet, under U.S. law, we make it a crime for an
American businessman to do what is expected and common in a host country,
literally forcing American businessmen to operate in the shadows if they want
to compete.
Talk about moronic.
If it's OK to drive 95 miles per hour in the Middle
East, and a Houston oilman visiting there does so, should Texas state troopers
give a speeding ticket to him if they find out about it because you can't go
over 70 on Houston freeways?
That's how goofy the Foreign Corrupt Practices Act of
1977 is. It made giving gifts, money or anything of value to influence foreign
officials illegal in countries where there is no objection to the
practice.
The exasperation of a fictional Texas oil company
owner over that act came through loud and clear in Syriana: "We've all got the foreign corrupt practices
act committed to memory I've got a copy of it taped to the wall of my
head."
That 1977 act was amended by the Ombudsman Trade and
Competitiveness Act of 1988, known as OCTA, which defined more specifically
types of business acts not permitted under the law and provided for
substantially increased fines for violations.
Together, those acts make it extremely difficult at
best and impossible at the worst for the United States to be truly
cross-culturally competent and location-sensitive; therefore, and perhaps
unintentionally, retarding the development of American ibusiness
internationally.
In 2004, it is estimated, U.S. firms lost more than
50 contracts worth $25 billion to rivals, such as the French and German
corporations whose governments endorse business bribes.
A case in point is the story of a U.S. manufacturing
firm that wanted to establish an assembly operation in Turkey. Located in a
remote part of Turkey to stimulate economic development, the plant needed a
railroad spur constructed so it could operate efficiently. The Turks expected
a little something to grease their palms. But the Americans didn't fork over
anything.
After three years, the spur still was not built, and
the irked Americans sold the company to a German firm. Immediately after the
sale, the railroad spur was completed. The Germans knew how to do business in
Turkey.
An insidious side effect of these congressional acts
is our cultural arrogance as we try to impose our values, our business
practices and our way of doing things upon other countries. Imperialism with
guns and troops is easily identified and countered.
Imperialism of values, such as these congressional
acts, is treacherous because it is indirect, subtle, cumulative and destroys
the sovereignty of countries.
The United States, in its cultural arrogance, was the
driving force behind the 1997 international agreement called the Treaty On
Combating Bribery of Foreign Public Officials in International Business
Transactions.
The United States and 32 other countries, including
Germany and France, signed the treaty. But the only way countries would sign
is if the treaty was so watered down that it had no enforcement teeth.
So it isn't worth the paper it's printed on.
But that didn't stop the then-U.S. commerce
secretary, William Daley, from putting a good moralistic spin his hard work
when the agreement was signed: "This will level the playing field. For 20
years our companies played fair, and now the rest of the world will have to
play by the same rules."
What a joke.
Bates is dean of the
University of Houston-Downtown College of Business. Prior to arriving in
Houston last summer, he was dean of the College of Business and Economics at
the national university in the oil rich country of United Arab
Emirates.
