Essentially, according to the authors of this book, American multinationl corporations do not offer bribes to foreign governments. Instead, foreign officials, from middle-level bureaucrats to heads of state extort illegal payments from our giant corporations. The authors point out that all political payments are not made soley to ensure that new business will be forthcoming. Reducting political risks, avoiding threats and harassment, reducing inflated taxes, inducing foreign government employees to perform their duties, and retaining business are cited. Also such payments are necessary because the United States government allegedly does not adequately protect American firms' property abroad. Thus, gangsterlike protection payments are required.
The authors contend, with apparent justifications, that if American companies refused to make these payments, they simply could not do business in many countries. And they conclude, simply, that the old adage, "when in Rome, "holds true in world business.
Jacoby, Nehemkis and Eells strongly criticize the reporting and enforcement proceedings of federal agencies. The Department of Justice, the Internal Revenue Service and the Securities Exchange Commission are singled out for especially harsh treatment. And Senator Frank Church's Subcommittee on Multinational Corporations is depicted as reflecting knee-jerk do-goodism, at best, and outright folly, at worst.
Moralizing, of course, will not rid the world of corruption via foreign political payoffs. Neither, conclude the authors, will new criminal statutes to be enforced against American companies abroad. (The House recently made it as a crime, carrying stiff penalties, for U.S. companies to bribe foreign officials.) It is ludicrous, if not illegal, they maintain, to direct action against foreign transactions based on American domestic law. Further, they conclude, criminalization would have a deleterious effect on United States foreign policy.
They recommend that voluntary guidelines, not unlike those proposed by the OECD, shoild be adopted. Beefed up, stringent auditing procedures would go a long way toward cleaning up this long-standing, distasteful practice. After all, why try to prevent, or even eliminate, this international malady? Self-administered band-aids have served our companies' need just fine.
Whether or not one agrees with the moral stance taken in this book, it is a work which should be read. Free of the pedantic jargon which characterizes so much academic writing, it is well written and thought-provoking.
And it is particularly timely, given the Korean payoff scandal and an administration which at least professes to conduct itself in a moral, non-corrupt fashion and expects countries everywhere to follow suit. (Macmillian, $12.95)
- Thomas Goldwasser.