Who Isn't Accused Of Bribery In China?

Microsoft has been accused of bribing officials in China, Italy and Romania to receive favorable treatment. That's not really news. Given the long list of companies accused of bribery in these countries, particularly China, it's actually more newsworthy to report on who isn't allegedly doling out bribes.

After all, some pretty amazing brands are under fire for alleged bribery in China. Rolls-Royce, The Wall Street JournalIBM, Siemens, Wal-Mart, Hollywood and many tech firms have all been accused of bribery. Some may even be guilty.

Or not. As Microsoft Vice President & Deputy General Counsel John Frank notes, "It is also important to remember that it is not unusual for such reviews to find that an allegation was without merit."

Just Doing Business?

My hunch, however, is that none of these corporations would risk their reputations over a few yuan. Or even a billion yuan. More likely is that isolated individuals within these corporations may have felt the pressure of doing business in a culture that accepts bribery as a default, where even a front-row seat in one's elementary school class is up for sale, according to a report by The New York Times. 

Or maybe they simply didn't know better?

I don't mean that in any naive way. While attorney Dan Harris makes it clear that bribery is not a requirement for succeeding in China, for a newbie this might not be readily apparent.

As an example, several years ago my wife and I were driving to church in Costa Rica, where we were vacationing. I was speeding (it happens), and got pulled over. I don't speak Spanish, so was struggling to understand the officer as he explained how much I owed, and where to pay it. Finally it became clear that I'd owe something like $100, and would have to pay it at a bank (or post office or something - I couldn't understand him very well) before leaving the country. I had no idea where I could find a bank, or how to pay the ticket, but he very helpfully explained to me in broken English: "You pay $100 at bank. Or you pay me $50. You choose." I'm not very bright, so it took me repeating him a few times ("So, if I go to the bank, I need to pay $100, but I can pay you $50 right now and be done with it?") to finally grasp his meaning, pull out the $50, and drive on.

Was I dishonest? I suppose so. But I wasn't really trying to avoid a $100 fine. I simply had no idea how to find a bank (we were in a remote coastal area), and didn't think I'd be able to do so before catching our flight a day later. I wasn't trying to evade the law: I was trying to pay the ticket in the only way I thought feasible.

It's Complicated

I'm in no way trying to defend bribery or dishonesty in any form. I just wonder if so many good companies could be caught up in intentional, illegal activity.

Yes, even Microsoft, which has a history of competing hard and running afoul of antitrust measures, and more recently has been accused of buying favor with the European Parliament by giving away free software licenses:

I know a few of the Microsoft executives who would be involved in acquiescing to bribery in China or elsewhere, and I simply don't believe them capable of it. These are good people. These are not criminals.

Yes, good people sometimes do bad things. But I struggle to believe that the companies accused of bribery in China - some of the best brands in the U.S. and Europe - would bless bribery in China or elsewhere. It's possible that a few bad actors within these companies succumbed to the temptation of buying favor, and it's also possible that these or others simply thought there was no other way to do business in China. 

Again, Dan Harris points to a better way:

"I am convinced that there are companies that almost want to pay bribes so they can act like they 'really know the system.'  I am also convinced that there are companies that make clear from day one that they will never ever ever under any circumstances pay a bribe so don’t even bother asking.  Which of those two types of companies becomes most susceptible to being hit up for a bribe?  I am not saying that all companies can function in China without paying a bribe at some point, but I am saying that most foreign companies can and do function in China just fine without ever paying a bribe."

"Most foreign companies can and do...", but even an expert China watcher like Harris acknowledges some may not be able to escape demands for bribes in China.

Which, of course, means they shouldn't be doing business there. That's the solution, but the temptation to make it work, to live within the system, may be too great for some companies. That's a pity, albeit an understandable one.

Image courtesy of Shutterstock.