The headline read "U.S. Law Barring Bribes Blamed for Millions in Lost Sales in Asia." This should not come as a big surprise to anybody. Even a Harvard Business School professor will tell you that payoffs for large contracts are the milk of commerce in 99.6 percent of all the countries in the world.
An ambassador from one of the Third World powers stationed in Washington told me over lunch the other day: "The trouble with your law is that you consider it a bribe when a payment is made to someone in order to get a contract. In our country it is a gift of friendship that cements the ties between the company in question and our leaders."
"Our SEC always sees the dark side of every issue," I told him.
"It isn't as if this gift is going to the president of our country, who is considered a most honorable man. It goes to his wife for her charitable foundation."
"What does the foundation do?"
"It gives out contracts for schools and hospitals and orphanages."
"Who build them?" I wanted to know.
"The president's brother-in-law. He is the largest contractor in our country."
"There doesn't seem to be anything wrong with that," I told him.
Does the charitable foundation do anything else?"
"It invests its surplus money in bottling plants, fisheries, real estate and hotels. The profits from these enterprises are then distributed to the wives of cabinet members and high-ranking military officers who have their own charitable foundations."
"Then as I see it, the bribes - I mean gifts - that an American company is expected to donate to your officials are just part of your method of raising money to provide for the poor people of your country."
"That is what we've been trying to explain to your Commerce Department, but to no avail. Let me give you an example. Suppose our country wants to order 1,000 bulldozers at a cost of $50,000 each. We have our choice of buying French bulldozers, British bulldozers, Italian bulldozers or American bulldozers. As you know, there is no difference in bulldozers. If you've seen one, you've seen them all. The French will offer to sell them to us and set aside $5,000 per bulldozer for our president's children's education. The British might sell them to us and donate $7,000 per bulldozer to the president's sister, who lives in Switzerland. The Italians will say they'll give us the bulldozers and allot $10,000 on each one to build a summer palace for our president in Liechtenstein. But the Americans will tell us that they don't want to give us anything but the bulldozers. What kind of way of doing business is that?"
"It's a stupid way," I said.
"Of course, we'd rather have the American bulldozers, but if we bought them under those conditions our president would become the laughing stock of Asia, and his wife would be ridiculed by everyone in our country becuase her charitable foundation had no funds.
"What is the solution?"
"Your Congress must amend its ridiculous law and exempt American companies from your law barring cash gifts for charity to foreign cabinet ministers, military officials, blood relatives of heads of state, designated agents of ruling political parties, and first ladies whose husbands are presently in power."
"That doesn't seem unreasonable when you're talking megabucks."
"We have a saying in our country: 'Nrum epherm ladai rahahm.'"
"Never do business with a man who says, 'I gave already at the office.'"