Sun Microsystems May Have Violated Bribery Law

Afforess writes "In a new file submitted to the Securities and Exchange Commission, Sun Microsystems admitted that 'we have identified potential violations of the Foreign Corrupt Practices Act, the resolution of which could possibly have a material effect on our business.' The Foreign Corrupt Practices Act makes it 'unlawful to make a payment to a foreign official for the purpose of obtaining or retaining business for or with, or directing business to, any person.' Yet, Sun would not release further details, only that it 'took remedial action.' Oracle, the new owner of Sun Microsystems, also said that they had prior knowledge of the infraction, yet also refused to release any details."

In many countries, no bribery = no business

[LatencyKills]

And it's naive to think otherwise. You want to do serious governmental business in Saudi Arabia/Egypt/Jordan? Some shiek/prince/royal family member is going to get some quid pro quo. And quite frankly it's more or less true in America as well. You think those Congressional reelection campaign coffers are going to fill themselves?

par for the course

[Pompatus]

There are quite a few countries who's culture is substantially different from the United States in which bribery is considered standard business practice. If you dont bribe an official in one of those countries, you dont get anything done.

Re:Since most people don't RTFA

[Anonymous Coward]

Everybody's doing it. Everybody knows everybody's doing it. There's no jail time and the fines are light, so corporations are happy to break the law and pay the money. The government doesn't actually care about foreign corruption. It's basically a tax on doing business abroad.

Re:In many countries, no bribery = no business

[toppavak]

And that attitude, especially among instructors (I've spoken to several business school faculty espousing this view before), prevents this from ever changing. At some point one has to make a decision about what ideals are worth holding on to. Having spent a lot of time in a country where corruption at every level is rampant (India) and seeing many successful businesses run cleanly, I don't believe your equation is entirely accurate. It is a decision on our part as individuals as to whether we want to actively propagate corruption in developing countries or not. To preach ethical practices in business, engineering and science and yet consider those practices to be naive is nothing short of ludicrous.

With the amount of harm it does to developing economies and the people that live there, doing business this way should be treated as a crime against humanity. It retards the progression of democracy and social justice abroad and creates future demand for corruption. Just because this was the way an older generation operated doesn't mean the new generations of leaders coming out of colleges now have to continue their mistakes. It all starts with the realization that one person can actually change the world- for good or for bad. The question you have to ask yourself is simple: which way do you want to change it?

Re:In many countries, no bribery = no business

[toppavak]

Its definitely a big problem. It takes a certain critical mass to achieve change at the scales we need. I think inevitably its going to start with small companies and individuals, almost certainly in a set of industries where the lack of a "competitive advantage" based on deep pockets doesn't hurt as much. Just because we can be idealists doesn't mean we can't be realistic about achieving our goals as well. Public perception is a big deal and people appreciate honest, transparent efforts on the part of companies and organizations.

Take Nyaya Health [nyayahealth.org] for example. They do an amazing job at maintaining full transparency. Granted, this is not a commercial organization, but the principle is similar. People will back the honest underdog that's being overrun by the corrupt multi-billion dollar company, its a feeling that the general populace (both domestically and abroad) can empathize with. Eventually, public support can reach a critical mass of its own after which the government can no longer ignore the PR that would result from not punishing the corrupt when there's enough business running clean and enough popular support behind the ideals they stand for. Defense may certainly be one of the last industries to escape the corruption (if it ever can!) but I think there are plenty of other industries that act to lead the way- software and healthcare are two big ones that could and should take point on fighting corruption. Software has the advantage of leveraging the FOSS movement and the ideals it represents. The healthcare industry should theoretically represent the most basic needs of people but often is one of the more corrupt. I think a similar movement to FOSS needs to occur in medical tech for developing countries for this to change. The traditional model for medtech breaks down as soon as you leave North America/Europe/Japan/Australia. I'm actually currently working with a scientist in Boston to try to get an open source med-tech group started while I finish my own scientific training.

Its a complicated problem, but I think a few individuals with a little bit of ingenuity will go a long way. We've seen how small groups of people have changed the world before. In the end it takes a strong community willing to stand up for their ideals to turn the tides. Will it happen in the next 5 years? Probably not. But if we don't try now, its never going to just miraculously right itself.

Sorry for the long-winded / ranting response.

Chinese culture?

[Anonymous Coward]

It's a law that is almost never followed by companies that do business overseas. And the reason they cite for doing it? Other companies are not bound by such laws and are free to engage in such practices which gives the other companies a "competitive advantage." It is practically chinese national culture that bribery occurs and is quite expected.

But the other reason I love this law is that charges associated with it often disappear with "healthy contributions" to party and individual campaign funds.

It should be noted that this incident so far has nothing to do with China, nor is bribery or such practices restricted to China.

The way you put it, it sounds like you are making a broad generalization about Chinese culture supporting bribery and that Chinese culture is the cause of all this.
It is particularly unsettling that you have singled out its "national culture" for bashing.

Re:Since most people don't RTFA

[DriedClexler]

Can someone tell me what's wrong with Slashdot's front page? I want my low-bandwidth, dialup-friendly version back but despite changing my preference multiple times, I'm getting some frakked-up yellow-and-white monstrosity.

Ditto. It looks like it's telling my browser to render it by some RSS settings. I see a lot of the tags like "em" "/em".

Is it really that hard for you idiots running slashdot to leave well-enough alone? If it ain't broke, don't sodomize it beyond recognition.

Re:In many countries, no bribery = no business

[cenc]

Sorry, but you miss the fact that most of these economies would not function without bribery. There simply is not sufficient rewards for people to do their job.

For example, an official that only makes a few hundred dollars a month. Are you really expecting them to give a dam when their family is starving?

Corruption in many places is simply market forces at work, where the market does not work.

Re:Since most people don't RTFA

[INT_QRK]

In many (but not limited to) developing countries, especially those with oligarchic societies and institutions, what we in the west may assume to be "bribery" may just be another name for "respect for local authority and traditions" in conformance with local laws and customs. The company that "respects local authority and traditions," may have a chance (license, permission, contract) to do business in that country. Those who don't may complain self-righteously, but from a distance, please. Is there an ethical reward or societal good in just not doing business in that country, all other factors being equal, while your less self-righteous competitor does? This question is worth five extra credit points...

Re:par for the course

[telso]

Culture substantially different? The US only passed a law banning this in 1977, Canada in 1988, while until 1998 Germany made such bribes tax deductible! It's called schmiergelder [www.cbc.ca]:

Schmiergelder was the official name designated under German tax law permitting middlemen to deduct from their incomes bribes or any other payments to foreigners to secure the sale of German products. These deductions were called necessary business expenses. Schmiergelder is translated literally as "grease money".

The practice of paying schmiergelder was permitted until 1998 when Germany joined other European countries in a pact prohibiting the payment of grease money to foreign public officials. Germany expanded the ban in 2002 to include more than just public officials; it now prohibited paying Schmiergelder to anyone in a foreign country in a decision-making role.

So let's not pretend this is just Third World countries and the Western World is completely ethical.

Re:Since most people don't RTFA

[AK Marc]

1) Not a US company. 2) Largest ever doesn't count as "typical" use.