In a company with a million employees, it’s guaranteed that hundreds if not thousands are doing things that are illegal. That’s just statistics applied to human nature. When the company is multi-national the problem is worse. Conduct like bribery or tax evasion that is condemned in the US is socially accepted in many other countries. When some store manager in Mexico bribes an inspector, the CEO of Wal-Mart has absolutely no idea that it happened. You can probably go several layers down before you find someone who knew.
The touchstone of criminal law is a guilty mind. When someone’s conduct is mharmful, we hold them liable for monetary damages. But only where there is personal moral culpability do we impose criminal sanctions. It’s the difference between wrongful death and murder. Ordinary negligence, and criminal negligence. This is an easy, bright line rule, and shouldn’t be compromised for anything.
"But even as employees frequently raised alarm, the company’s top leaders did little to prevent Walmart from being involved in bribery and corruption schemes."
Which means the "top leaders" knew of the problem, and choose to ignore it. It would be a different story if they put real effort into self policing and there was evidence they pushed the guilty contractors/etc but again:
"The plea agreement, which was technically related to the company’s improper record-keeping, ... Federal regulators said Walmart looked the other way as subsidiaries on three continents paid millions of dollars to middlemen who helped the company obtain permits and other government approvals from July 2000 to April 2011."
Which sounds more like a coverup to me.
As an individual citizen, if I intentionally failed to file my taxes properly, report crimes I knew of, or even fire a housekeeper or other low level employee I knew had been committing crimes that benefited me you can be sure I would be getting more than the equivalent of a parking fine.
That is why people are demanding someone be held responsible. It seems those that are reaping the rewards and knew of the crimes are simply being given a free pass.
The parts you quote are the NYT reporting the prosecutor’s allegations as fact. But the passage you quoted also explains everything you need to know about why nobody went to jail.
“The plea agreement, which was technically based on the company’s improper record keeping....”
Wait—so Wal-Mart did all these bad things (they must have, the NYT reported them as fact), but the plea agreement is “technically” based on “improper record keeping?”
If you actually read the facts section of the SEC submission linked from the article, it’s a real snooze fest. There were issues here and there, people were fired, several rounds of compliance programs were instituted, etc. But little to substantiate the prosecution narrative recounted as fact by the NYT. There is a reason Wal-Mart spent a billion dollars investigating this case but the government agreed to settle for less than $300 million—once prosecutors dug in, there wasn’t much of a story there.
I’ll also add:
> As an individual citizen, if I intentionally failed to file my taxes properly, report crimes I knew of, or even fire a housekeeper or other low level employee I knew had been committing crimes that benefited me you can be sure I would be getting more than the equivalent of a parking fine
The IRS’s response to people who intentionally don’t file tax returns—unless the conduct is really outrageous—almost always is to just tell them to file, and pay the deficiency with interest. Except in special circumstances, such as lawyers reporting on other lawyers, ordinary individuals don’t have an obligation to report crimes they’re aware of. Finally, unless it can be argued that you encouraged your housekeeper to commit crimes, or somehow facilitated them, I don’t think there would be anything illegal about not firing him either. Like, you probably can’t criminally prosecute someone for accepting gifts from someone they know is a drug dealer and purchased the gifts with ill-gotten money.
A friend of mine from Nepal said something along the lines of "bribes are just a lubricate to an intentionally slow and unorganized bureaucracy". Places like China, India, Vietnam, & Taiwan all have pretty well know backdoor policies of this.
Its a bit old but https://www.forbes.com/sites/richardlevick/2015/01/21/new-da... and https://www.nytimes.com/2019/06/14/business/china-ge-siemens... are both good read for this.
I've also known of UN project directors who had to convince governmental ministers that the UN's no bribe policy was not just a bargaining method.
The result of policing kickbacks is a kickback?
Overhead cost
This analogy doesn't hold for a lot of reasons, but the most obvious is that teachers don't get to choose their students. CEOs can (and should) fire employees that don't live up to their ethical responsibilities.
Holding the CEO liable for employee misdeeds is like holding a principal responsible for teachers getting into fights or having sex.
Or, whatever problems teachers cause
So then the CEO had to know this behavior was occurring. Did the CEO and management attempt to do anything about it or did they just maintain plausible deniability, knowing that not having a guilty mind was sufficient to prevent management from being liable?
If the NYT, an external organization, was able to uncover this behavior, why couldn't Walmart have had its own internal investigators tasked with maintaining ethical behavior?
We're not asking for the CEO's heads because they broke the strict letter of the law. We're saying that not breaking he law is the bare minimum the CEO should be responsible for.
Your defense of Walmart's CEO rings hollow for me because it's exactly the argument I'd expect from a lawyer.
Not every company behaves this way, even others with millions of employees. Feel free to call me naive and tell me the others just haven't been caught yet.
Why does this naturally follow?
I do agree that there is a distinction between a company committing a crime because some individual is screwing things up against the policy of the company and a company committing a crime because it sets out to commit crimes. I don't agree that because a company has no brain that it cannot have a guilty mind. If it incentivizes thousands of its employees to do illegal things, including by putting them in situations where illegal behavior is usual and expecting the usual results, that's on the company.
If fines are low, companies will continue to behave poorly because it may be profitable to do so.
Versus for example “technology” which is amoral, because it is itself a tool unaware of the purpose for which it is even being used.
Of course companies are also not immortal, companies “die” all the time.
However, companies certainly can and do act unethically, particularly when there are economic incentives to do so.
A 0.1% of EBITDA fine to Walmart would be hundreds of millions of dollars. They would certainly care about that, and they likely have teams of people who work to ensure compliance for a whole host of regulations which could result in fines at that order of magnitude.
Also, the CEO may not go to jail, but the local people actually doing the bribery should.
They should have internal policing. When there are billions at stake, I don't understand why these kind of things aren't torn open by lawyers.
The solution for corporations and officers to avoid legal consequences is to have standard compliance programs in effect. Failing to account for the inevitable misdeeds of agents is similar to the teacher who leaves his classroom for hours and is surprised to see his students engaged in misconduct.
Of course the whole thing puts companies in a bad place, the law itself is highly problematic. That is why whole thing just sounds like the usual US government trying to get its cut.
Or put less fancifully, receiving stolen goods is a crime. Where's the line between 'too good to be true' and assuming willful ignorance in a corruption case?
There's also the case of the executives claiming responsibility for all of the success of the company. If the success is theirs, not ours, then the rest of us don't want them to cherry pick. The failure and corruption is theirs too. It's a package deal.
If you want to talk about fixing the quasi-feudalist state we are moving toward and start thinking of companies more like a team, working together, then I'd love to discuss shared responsibilities as part of that reconciliation.
Corporate structures are designed to obfuscate decisions by executives which lead to misdeeds by underlings. Carrie Tolstedt, who designed the Wells Fargo incentive systems which led to the creation of umpteen bogus accounts, ended her career tens of millions of dollars ahead, even after clawbacks.
Since it is impractical to hold individuals accountable because it is so difficult to see inside their minds, the collective corporate entity should be punished. Maleficent companies like Wells Fargo should be dismantled.
And what do you find disproportionately represented in the board room?
Or, you know, like putting in jail the person directly responsible both for the deeds and the culture that promoted them...
etc etc etc. Unless the CEO knew or directed them to do so, he is one person with 24 hour days like all of us. And Walmart has thousands and thousands of top level managers to manage all aspects of his business.
That's absolutely absurd. Would a teenaged cashier be absolved of all guilt for murdering a troublesome customer? But the CEO should be held accountable?
If I literally cannot break a law as long as I'm working for a company, then why don't bank robbers get a job at Walmart first and claim robbing banks was for the benefit of Walmart? How could you ever convict anyone if the excuse "my boss implied that this might possibly be beneficial" gets you off Scott free?
People are always responsible for their own actions. As an extreme example, the nazis were all "just following orders". Do you think they are guilty and should be held accountable for their actions, even though someone else asked them to do what they did?
If it is reasonable to think that the leadership should have known about it then sure they can be blamed as well but often that is not something that is reasonable to expect.
After they took the money, they want to say "even thought i was paid to run the company, i had no idea this was going on?" not sure it works that way.
No, he can’t make them have less sex if they want to. Yes he also gets paid more if they do.
These are so trivial for a company like Walmart, and no-one is being individually held responsible. So it just looks like an official bit of us gov bribery, just like the fee's to avoid the security line at the airport. Cloak it in a bit of legal mumble jumbo and the us government gets its payout too.
Frankly though too, these foreign anti-bribery laws seem so antiquated. Every year I have to sit through training for them as part of the corporate hand waving (we can't be responsible we trained our employees). Yet really it pales in comparison to the damage actually being done, and in the cases where the officials will actually take bribes just puts us based companies at a disadvantage to other foreign companies willing to pay the bribes. Especially in cases where the companies from other countries will waltz in with "infrastructure improvements", "cheap loans" whatever...
From TFA:
"But even as employees frequently raised alarm, the company’s top leaders did little to prevent Walmart from being involved in bribery and corruption schemes."
Which is why no-one is going to jail, if it were just a low level employee you can bet they would be charged/fired and jailed. But since it went high in the mgmt chain, they likely can't just pin it on someone. The records likely got looked at, discussed off the record, and then got ignored without anyone's fingerprints on them.
Over the course of human history, bribery has been the norm. I would dare to say that today, by population, it is the norm. It has obvious dirtiness in the US and Western Europe. And the US and Western Europe have tried to force this view on other nations, which have created laws that they don't pursue or prosecute.
But criminalizing actions performed in another country based on morality in the US feels equally dirty. I don't mind the US handing evidence over to another sovereign nation for them to deal with, but prosecuting a crime on another countries soil over something that may not be seen as a crime in that country just doesn't make sense.
I know, Walmart is "evil". It's southern US, and hits rural towns, takes advantage of US laws at scale (which would have been taken advantage of in small chunks that added up to the near total), etc.
But, Amazon which is worse on the Walmart issues (low wages, overworked employees, stressed vendors, killing jobs) and then adds on to it traditional "antitrust" problems of vertical integration, and somehow gets a pass in our community because they're a tech company and "we" shop there. Can we get past the rhetoric and move on to the actual arguments?
Furthermore, bribery abroad may undermine US interests and policies. It’s easy to see why companies would want to pay a bribe to build a store in Brazil (mentioned in the article). Compared to the other costs involved it’s probably pretty cheap and can really speed things up. But that million dollars (or whatever) feeds a system that seeks its own remuneration over serving it’s constituents. It’s not just someone else’s problem. It helps to paper over the enormous drag this rent seeking behavior has on everyone.
Furthermore, the law gives employees a basis to stand on to say no. Now I don’t know if there’s really much to that- I’ve never been propositioned for a bribe, but I imagine that being able to say I can’t, it’s illegal, would help me to say no.
I'm not defending Amazon here, but Walmart has literally been criticized for all of the exact same things...
Bribes and cheating are punished because "trust" is a very important thing a society. The disadvantages are plain as day in corruption-infested countries: unreliable and untrustworthy police, criminals getting away with almost anything, the government is openly working on enriching itself at the expense of the population, etc.
While it could be argued as "respectful of local customs/the fault of the host nation" being involved it taints the image of US as a trading partner as a whole and gives a reason for rational actor countries to refuse international businesses from the US for fear they will spread corruption because it worked for them before. By holding them all to the standard of "no bribes ever" it makes it clear that such practices tainting businesses are unacceptable.
If other states are worried about bribery (as opposed to liking it) then it gives them a reason to trust the extranationals - if they report bribery they won't get "Not illegal here" as a reaction but "It is a serious crime thanks for reporting it."
Essentially not doing so could harm the spread of US business which is not good for US economic power from which the rest of the nation's power stems.
Let's say a twenty-year-old Californian goes to Canada, meets a 16-year-old, and they have sex. This is (according to wikipedia, don't rely on me for legal advice!) illegal in California and legal in Canada.
Do you think someone should go to jail?
People who don’t have experience with 3rd world countriss often think it’s a big deal bribing someone. But it’s not, it’s a simple fact of life. I don’t really see anything wrong with a company doing it either.
In fact, I kind of like paying bribes. Unlike in the US, I don’t really have to worry about doing anything illegal. I can have weed in the car, I can have out of date permits, I can really just do anything I please. I have money, so it’s all good.
Of course, it’s worse if you’re poor. But then again, in America being stopped by the police when you’re poor is probably worse.
Obviously if everyone with money can do whatever they want, the trust in institutions plummets and more and more people start cheating, so one ends up with a society of cheaters who think it's normal to bribe.
In some places, you can be drunk, or even kill someone and the cops will let you go for $$. If they take you in, it's not too late, just the price increases, the prosecutor and judge want their cut. A lot of mafia people have sentences cut or charges thrown out.
However, America has the Foreign Corrupt Practices Act, which does mean this could be more complicated. We recognize that someone else jumping off a bridge does not justify our doing so. And though we still have problems at home, we do try to police them. When a corruption scandal breaks, politicians usually are forced out of office; compared to many other places, this is good.
> Regarding payments to foreign officials, the act draws a distinction between bribery and facilitation or "grease payments", which may be permissible under the FCPA, but may still violate local laws. The primary distinction is that grease payments or facilitation payments are made to an official to expedite his performance of the routine duties he is already bound to perform.
Why does the US fine US companies for illegal behavior outside the US? Is it just moral reasons? Or is there a diplomatic reason for it? Or a treaty that requires us to do so?
Stepping back and thinking about the bigger picture, the FCPA is an example of a law that enforces economically beneficial morality. One of the things that makes America a good place to live, and economically successful, is that it’s not a bribe-based society. Bribery is a tax on economically productive activity, and it’s good for the economy as a whole to stamp it out.
>In response to these high profile revelations, Congress enacted the FCPA to bring a halt to the bribery of foreign officials and to restore public confidence in the integrity of the American business system.
Yea it seems stupid now, but there was a time when America looked at the history of Europe and thought "that doesn't look like a good idea".
The original 1977 law arose in response to investigations in the wake of the Watergate scandal and public outcry over corruption.
Beyond the public perceptions of corruption, there were significant foreign policy impacts. The US gov was actively working against communists in many countries, but those communists were sometimes being funded by bribes from US companies.
When the law was passed, the goal was to push other countries into implementing and enforcing similar laws to reduce any negative impact on US companies.
<sarcasm> It would be like the U.S. having nuclear weapons and then complaining about other countries trying to develop them. Or if the U.S. promoted democracy but then used the C.I.A in South America to overthrow democracies. </sarcasm>
It’s very easy to prance around on a high horse and cast out moral judgements when you’ve never had to open offices internationally.
It sounds like no doubt some pockets were unapologetically made fat. It also sounds like they didn’t do a very good job of hiding it. I wonder if that’s because their then line of thinking was “paying to pay” is simply normalized in business.
As I think about where the boundary is drawn for bribery, it’s interesting to see “offering cars and computers to governments” is framed as bribery, while somehow what local municipalities are demanding from giant tech co’s (ie Mt View / Google) is not.
A paltry fine such as this is never going to prevent this behaviour. Determine as part of the investigation any revenue the company made from engaging in the behaviour and take it off them, in addition to the fine.
You can make the argument that 3.5% isn't high enough, but it's not nothing.
https://www.spiegel.de/international/business/suspicions-of-...
https://www.economist.com/business/2018/02/08/airbus-executi...
That sounds potentially very delicate, for a variety of reasons, and interesting.
Can anyone explain a reason why someone who isn't a cad might not agree with the FCPA (ie. for reasons that aren't "money good, ethics bad")? This isn't a dig at Trump. I just don't understand the law well enough to know how angry I should be.
By analogy, imagine someone from outside the US making the argument that it's "just our culture" that makes it OK for a lobbyist to walk into a senator's office with a $20,000 check in hand ready to discuss policy. That's a situation almost nobody is happy with here - it's not a "cultural difference" but a difference in how power structures have been built up over time through a concerted effort by very small groups in a larger society.
Is this "Brazilian way" legal in Brazil? If so, there is a decent chance that it is allowed under the FCPA.
Starting perhaps with US briber- cough cough - campaign financing practices.
This doesn’t seem to have happened much in practice though so I support the FCPA. Corruption is a big scourge in many countries and it is a really good thing American money is prohibited from exacerbating the issue.
Seems like it would be sensible for the US to push the rest of the world to adopt the same law. We're able to push other countries to adopt our war on drugs laws, why not war on corruption?
If say the Catholic Church's response to their sex abuse scandal was to turn over all evidence to the authorities and maybe make own judgements in parallel to defrock or excommunicate based upon the evidence they would be morally upstanding even if their judgement differed in some cases as "not enough evidence by our standard / not enough to be illegal but violates our scriptural standards".
Because they sheltered them for decades their moral authority is a joke and all priests being pedophiles is a dark comedy cliche.
Service to the customer
Respect for the individual
Strive for excellence
Act with integrity”
-Wal Mart’s horseshit values statement, the same as the value statement of every other corporation. Why does every company bother doing this again?
-- Veronica Palmer in TV series 'Better off Ted'
