US Companies: Bribery Probe
It’s illegal but who gives a damn. As if we abided by the law these days. People annex countries when they want to so why worry about a little bit of bribery? Why worry about bestowing favoritism on somebody, patronage to those in the places that decide? It’s no longer just the Papal nephews that get a look in from the nepotism being practiced around the world today. Now, it’s the children of high-flying officials in China that are getting the best seats in US companies. Really, let’s agree, they’re all doing it. Today, we’re just admitting that it’s happening, that’s the only difference. There’ll be a few that stand up and cry for freedom and democracy but most will just wave a few papers in the air and breath out hot bunk so that it makes it look as if they are really trying to clear it up.
The Securities and Exchange Commission as well as the Justice Department in the US have been enquiring about the dealings of certain companies that are now hiring children of high-level Chinese officials. Jobs for the boys? Not, quite; but, most certainly jobs for the kids of the boys. We all know it’s a corrupt world. We all know that it’s who you know rather than what you know that will get you to the top. It won’t necessarily keep you there unless you are the son or daughter of somebody that is so high up that they could do whatever they wanted.
Just last week the mobile chip manufacturer Qualsomm Inc. announced that it was facing civil action over bribery of officials of state-owned companies and agencies. A spokesperson stated that they were filing a rebuttal since they believed that they were not in violation of the Foreign Corrupt Practices Act. If found to have carried out illegal practices and bribery of officials the company will face fines for having used preferential hiring, the giving of gifts and providing other benefits amounting to a total value of $250,000. Hardly anything to write home about and probably the tip of the iceberg, but nonetheless corrupt. It doesn’t mean because it’s not a lot, that we shouldn’t put an end to preferential hiring. It’s fine if you are the child of the rich and famous or the government official; tough if you aren’t.
Action taken against Qualcomm might also lead to giving up profits made during that time. China is a major target for growth of the US company and their revenue increased by 4% year-on-year in the second quarter to$6.37 billion. Net income was also up by 5% year-on-year to $1.96 billion.
There were complaints last year regarding the company from industry groups to the Chinese government (allegedly because Qualcomm were using their market position, charging higher fees for patent licenses). The Chinese authorities carried out two surprise raids and took documents away. Isn’t that always the way? While you’re small and insignificant, nobody could give a damn who and how you bribe. By the time you get bigger and have a lion’s share of the market, the bribery has become so much part and parcel of the road you took to get to that top-spot, that you can’t stop doing it. You’re addicted and so it carries on. The competition is ready to pounce and take a chunk by any which way they can. So, complaints are lodged against you. Fines could reach between 1 and 10% of the company’s revenue for last year.
The Justice Department and the SEC believe that Qualcomm may have taken advantage of its market position and bribed officials to maintain that lion’s share and keep revenues. If they (and others that are being investigated) are shown to have employed children of officials or giving preferential treatment to people in return for turning a blind eye to certain practices, then they will be in violation of the Foreign Corrupt Practices Act. Apparently, it has been illegal to bribe a foreign government official since the law was enacted in the1970s. But, as Qualcomm defense lawyers suggest proving that corruption took place on both the company’s part and also on the side of the government official will be hard to do.
They could always bribe the US government officials with a few benefits in kind or preferential treatment, couldn’t they? Everybody has their price!
Originally posted: US Companies: Bribery Probe
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