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«The Good Bribe Philip M. Nichols* Bribery is justifiably condemned, and is the object of a global legal campaign. This article asks whether payment ...»

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Although widely condemned and criminalized, arguments are sometimes made to justify the payment of a bribe. These arguments generally fall into one of two different categories. The first of these, that a bribe must be paid to conduct business, is easily dismissed. The other, that the optimal level of controlling bribery is not zero, is not really a justification of bribery and certainly does not justify any particular bribe.

http://www.cgdev.org/files/5967_file_WP_78.pdf (arguing that corruption is a factor inhibiting good governance, which in turn hinders effective healthcare).

98 See Lorenzo Pellegrini & Reyer Gerlagh, Corruption, Democracy, and Environmental Policy: An Empirical Contribution to the Debate, 15 J. ENV’T. & DEV. 332, 333 (2006).

99 See Nejat Anbarci, Monica Escaleras & Charles Register, Traffic Fatalities and Public Sector Corruption, 59 KYKLOS INT’L REV. SOC. SCI. 327, 331, 341 (2006).

100 See generally Rachel Brewster, The Domestic and International Enforcement of the OECD Anti-Bribery Convention, 15 CHI. J. INT’L L. 84, 95 (2014) (“Thus, in addition to any ethical, social, or moral justifications, one of the background justifications for adopting anti-corruption measures is an economic one: decreasing corruption will increase economic growth and national welfare, particularly in developing countries where the problems of corruption are the worst.”).

101 Roger P. Alford, A Broken Windows Theory of International Corruption, 73 OHIO ST. L.J. 1253, 1254-55 (2012).

102 See Nichols, The Myth, supra note 4, at 635-39 (describing transnational treaties working to criminalize bribery).

103 Elizabeth K. Spahn, Multijurisdictional Bribery Law Enforcement: The OECD Anti-Bribery Convention, 53 VA. J. INT’L L. 1, 43 (2012).

University of California, Davis 666 [Vol. 49:647 A. The “Necessity” to Pay to Do Business It is sometimes claimed that a business firm must pay a bribe to be able to do business in a particular jurisdiction. James Adonis, a

business reporter in Australia, makes a sweeping claim:

In essence, the bribery debate is not about whether the practice is good or bad.... The argument has more to do with whether it’s avoidable. And in many cases it’s not. In some places, a deal isn’t sealed with the shaking of hands. It’s sealed with the handing over of a bulky envelope.104 Former Italian Prime Minister Silvio Berlusconi, in defending the head of an Italian state-controlled firm accused of bribery, makes a similar claim: “Bribes are a phenomenon that exists and it’s useless to deny the existence of these necessary situations when you are negotiating with third world countries and regimes.”105 Berlusconi went on to proclaim “If you want to make moralisms like that, you can’t be an entrepreneur on a global scale.”106 While pleading guilty to violation of bribery laws, Vicente Eduardo Garcia, a regional director with SAP International, said that “he believed paying such bribes was necessary to secure both the initial contract and additional Panamanian government contracts.”107 Others make similar claims.108 104 James Adonis, Bribery: A necessary evil?, SYDNEY MORNING HERALD (Oct. 11, 2013), http://www.smh.com.au/small-business/managing/work-in-progress/bribery-anecessary-evil-20131010-2vb8s.html#ixzz3riFDm5Jt.

105 Guy Dinmore & Ferdinando Giugliano, Berlusconi Defends Need for Bribery, FT.COM (February 14, 2013), http://www.ft.com/cms/s/0/be7b2b5c-76bb-11e2-ac91feabdc0.html#axzz3riNbJyIY.

106 Andrew Frye, Berlusconi Tells Italian Firms to Keep Bribing After Orsi Arrest, BLOOMBERGBUSINESS (Feb. 14, 2013), http://www.bloomberg.com/news/articles/2013berlusconi-tells-italian-firms-to-keep-bribing-after-orsi-arrest.

107 Press Release, Fed. Bureau of Investigation, Former Executive Pleads Guilty to Conspiring to Bribe Panamanian Officials (Aug. 12, 2015), available at https://www.fbi.gov/miami/press-releases/2015/former-executive-pleads-guilty-toconspiring-to-bribe-panamanian-officials.

108 See Frank Anechiarico, Prosecution as Corruption Control: Paradigms of Public Integrity in Context, 52 WAYNE L. REV. 1415, 1416 (2006) (claiming that bribes must be paid in New Jersey, Rhode Island, Maryland, Nevada and West Virginia by

contractors or those seeking permits); Carl Pacini, The Foreign Corrupt Practices Act:

Taking a Bite Out of Bribery in International Business Transactions, 17 FORDHAM J. CORP.

& FIN. L. 545, 554 (2012) (making the general claim that U.S. corporations pay bribes out of necessity despite the United States’s Foreign Corrupt Practices Act); see also Stanley Sporkin, The Worldwide Banning of Schmiergeld: A Look at the Foreign Corrupt Practices Act on Its Twentieth Birthday, 18 NW. J. INT’L L. & BUS. 269, 279 (1998) (discussing the claim that U.S. corporations needed to pay bribes to compete on equal footing with foreign entities).

The Good Bribe 2015] 667 The claim that a bribe must be paid in order to conduct business in a particular polity implies that the paying of the bribe is permissible or at least understandable, and further implies that the payer of the bribe is excused from blame. Neither the empirical nor the moral claim survive scrutiny. The empirical basis of such claims is rarely if ever offered, and seems to rely more on some shared wisdom than on actual fact. Even if such a business environment existed, however, the moral logic of this claim is perilously weak.

1. The Empirical Claim That bribe requests constitute a serious challenge for transnational businesspeople cannot be gainsaid. Survey after survey find that transnational businesspeople identify bribe requests as one of if not the primary challenges that they face in creating business relationships.109 Nonetheless, the claim that bribes must be paid in order to engage in business must be treated with some skepticism. Surveys do suggest


SENTIMENT AND OUTLOOK QUARTER 2, 5 (2013) (reporting that private equity investors continue to identify corruption as one of the three greatest obstacles to investment);

Erin Sheley, Perceptual Harm and the Corporate Criminal, 81 U. CIN. L. REV. 225, 251 (2012) (reporting a 2005 World Bank survey that found “that 71% of businesses considered corruption the biggest barrier to foreign investment” in Russia); Jelena Budak & Edo Rajh, Corruption as an Obstacle for Doing Business in the Western Balkans: A Business Sector Perspective 14-15 (Ekonomski Institut Zagreb, Working Paper No. 1104, 2011), http://hrcak.srce.hr/index.php?show=clanak&id_clanak_ jezik=112046 (reporting survey of businesspeople in Balkans showing bribery is serious obstacle to entering into business relationships); Press Release, United Nations Office on Drugs & Crime, EU, UNODC and EFCC Partner with the National Bureau of Statistics in the Conduct of the First Ever Business Crime and Corruption Survey in Nigeria (July 1, 2010), http://www.unodc.org/nigeria/en/press-release_business-crimeand-corruption-survey-in-nigeria.html (“The survey reveals that for more than 70% of Nigerian businesses, crime and corruption constitute the most serious obstacles to

conducting business in Nigeria.”); Press Release, World Bank, Kyrgyz Republic:

Business Climate Improved, But Corruption Remains Key Problem—New World Bank-EBRD Study (Apr. 2, 2014), http://www.worldbank.org/en/news/press-release/ 2014/04/02/kyrgyz-republic-business-climate-improved-but-corruption-remains-keyproblem-new-world-bank-ebrd-study (noting that, even as other business barriers recede, corruption is considered by businesspeople the second-greatest barrier to engaging in business relationships in Kyrgyzstan); Press Release, The Business Environment and Enterprise Performance Survey, The Russian Regions: Results 1 (May 2013), http://www.ebrd.com/documents/comms-and-bis/business-environmentand-enterprise-performance-survey-the-russian-regions.pdf (“The 2012 BEEPS results show that most enterprises in Russia identify corruption, access to finance and workforce skills as the main constraints.”).

University of California, Davis 668 [Vol. 49:647 that bribery is a pernicious problem, but generally do not suggest that it is a problem that is faced by every businessperson in every situation.

Jason Yockey, for example, reviews two surveys analyzing “data on the frequency of bribe solicitation.”110 He acknowledges that the data presents difficulties and may understate the frequency of solicitation requests.111 Yockey finds that in some countries businesses frequently face bribe requests and that business firms are understandably concerned; it is important, however, to note that neither of the surveys he reviews suggest that all business firms face bribe requests.112 While the seriousness of endemic bribery must not be minimized, it is important to understand that even in endemically corrupt polities some firms find a way to avoid bribe requests or the payment of bribes.113 There may be, for the sake of argument, polities in which it truly is impossible to conduct business without paying bribes. The mere fact that paying bribes might be an absolute requirement to engage in business would not itself end the inquiry. The ends themselves do not justify the means. It is doubtful, for example, that society would excuse a business that engaged in slavery, even if slavery were required to conduct business in a polity.114 Ultimately, the moral claim must be examined.

110 See Joseph W. Yockey, Solicitation, Extortion, and the FCPA, 87 NOTRE DAME L.

REV. 781, 797 (2011).

111 See id.

112 See id.

113 In 2013 the author attended a conference on corruption at the University of Yaroslavl, in Yaroslavl, Russia. While conversing with a group of scholars from Russia and from Western Europe, a graduate student joined the group saying that he had just heard a disturbing paper about Russia. The paper presented the findings from a long term study, including the finding that over a two-year period around twenty-five percent of the firms studied had at least once paid a bribe. Each of the members of the group of scholars was shocked and skeptical. The Russian scholars were shocked that the number was so high and expressed concerns for what such a high number meant for their country. The Western European scholars were shocked because they simply assumed that any such survey would find that every Russian business paid bribes as a matter of course. Even though the members of this informal group had long experience studying issues of corruption, the incident revealed the biases that can distort clear thinking about the actual incidence of corruption, as well as the fact that even small amounts of corruption are a cause for great concern.

114 See Kyron Huigens, Solving the Apprendi Puzzle, 90 GEO. L.J. 387, 438 n.279 (2002) (describing the universal condemnation of slavery even though slavery still exists); see also NOONAN, supra note 19, at 706 (predicting that just as slavery is no longer accepted nor practiced, so too will bribery “become obsolete”).

The Good Bribe 2015] 669

2. The Moral Claim The claim that one must pay a bribe in order to engage in business hides a moral claim. That claim is that a person has a right to engage in business, and therefore clearing the way to exercise that right through bribery is permissible. Such a claim requires scrutiny.

Substantial evidence supports the observation that humans traded long before written history.115 The earliest written records also refer to trade and to business.116 Richard Smith concludes, “Trade, like art and religion, appears to be characteristic of our species.”117 Nonetheless, there is little argument for an inalienable right to engage in business.

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