SCANDALS: THE BIG PAYOFF

(10 of 10)

What can be done to stop the bribery? The most obvious possibility is the one urged by Arthur Burns: passage of a law that would make bribery of foreign officials a crime in the U.S., punishable by heavy fines and jail sentences for offending executives. There would be many difficulties in framing and enforcing such a law. For one thing, a definition of just what constitutes bribery would have to be written—and that could be tricky, especially in the case of fees to agents who mix unethical operations with standard business practice.

Proving a case of bribery against an executive might well require evidence from foreign sources that U.S. courts have no power to compel. Then too, as one Washington official states, "We will not clean up the Indonesian civil service by American law. It will take a bribe to place a telephone call from Surabaya to Jakarta, as far as I can tell, for the next 50 years. Do you send an American businessman to jail for that?" The answer is, of course, no: enforcement would have to focus on the big payoffs.

For all its problems, an anti-bribery law may be the best answer. Its mere presence on the books ought to constitute a powerful deterrent. The prospect of being branded a criminal and sent to jail would give pause to even the most sorely tempted executive. And if enough U.S. companies were impelled to say no to bribery demands, they might indeed find, after some initial loss of sales, that foreign countries had to do business with them anyway because of the U.S.'s long lead in technology.

Some form of anti-bribery legislation would also open the way for much more vigorous probes into company books by such agencies as the SEC, the Justice Department and the IRS. Company records relating to possible bribery would be much easier to obtain. Accountants might well be prompted to be much more inquisitive about overseas payments by companies they audit and to report any evidence of bribery. They seem to have been singularly incurious about the foreign accounts of some companies that were later found to have made payoffs; they would have an incentive to look harder if they knew they might be accused of helping the company to conceal a crime. Successful prosecutions of some American executives for bribery might even embarrass foreign governments into tightening up on the venal practices of their own businessmen.

Laws, however, can be broken—as the law against political contributions in the U.S. has been. So in the end, the responsibility for stopping bribery rests with the chief executives of companies that do business abroad. Says Najeeb E. Halaby, who as head until 1972 of Pan American World Airways resisted both bagmen for Richard Nixon and bribetakers overseas: "The top guy has to set the ethical standards." He is right. Companies may draft codes of ethical behavior forbidding bribery, as many are doing now, but those codes are unlikely to be observed unless the chief lets it be known that violators will be fired—starting with himself. In spreading that word, chief executives could be helped by legislation that enabled them to tell employees that bribery is not only unethical but criminal.