The Psychology of Corrupt Practices

At his blog, Richard Bistrong, CEO of Front-Line Anti-Bribery LLC (among other credentials), writes about his experience with the Federal Corrupt Practices Act: "Bribery, Beneficiaries and Guilty Feelings (or lack thereof)." Bistrong has a personal history with this controversial law, having pled guilty to violating it in 2010. The interview he gave last month to Jamie Lee Campbell last month is also instructive: "Culture Corrupts: The Impact of Organizational Silence."

Further information about the FCPA can be found in Chapter 13 of Business Law Basics.  This is an issue that must be borne in mind by any business conducting operations in foreign countries.  As we noted in a prior post:

[T]he Foreign Corrupt Practices Act (FCPA) gives the U.S. government the authority to prosecute businesses and individuals for conduct that is not illegal, and perhaps seen as routine, in other countries. Earlier this year, for example, Wal-Mart was investigated for payments to local authorities in Mexico made to speed up permitting processes.

Critics of the FCPA say that it puts U.S. businesses at a competitive disadvantage where certain payments which would be considered bribes in the U.S. may be expected or even required by officials.

FCPA compliance is a particularly important issue for companies engaging in business in "new economies" like China, where practices uncomfortably similar to (and perhaps indistinguishable from) bribe-taking and bribe-giving are endemic and may be an expected part of business relations.