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The Bribe

Xerxes Bribes Ephialtes with women and gold to betray the Spartans to the Persians.

Olympics – The first recorded publicly disgraced cheat was Eupholus of Thessaly who, in 388 B.C., bribed three boxers to lose intentionally.

It was only 30 pieces of silver for Judas to betray Jesus.

Arguably, the most famous Olympic controversy involved Roman Emperor Nero in the Games of A.D. 67. Not only did Nero bribe Olympic officials to postpone the Games by two years, he bribed his way to several Olympic laurels. Most notably, Nero competed in the chariot races with a 10-horse team, only to be thrown from his chariot. While he did not finish the race, he was still proclaimed the winner on the grounds that he would have won had he been able to complete the race.

US government officials getting discount loans from Country Wide Bank for the “Friends of Angelo” received discounted loans for influential persons of power, and no your editors did not get one of these loans, drat!

If you wish to see a whirlwind – look to FIFA and the work of Andrew Jennings on it and their leaders.

So, why offer and why take a bribe.

Its a lot like looking at a horse race – you know you can make some good money – if you just knew the winner in advance.  So why gamble, fix the race so you do know the winner.

It’s no different in business, in fact in industries were there is a high barrier to entry be it regulatory, capital, complexity etc… there is a strong incentive to fix the race.

In many parts of Latin America to set up a business legally it can take hundreds of permits, thousands of dollars and take over a year.  So why bother to get permits. It makes more economic sense to pay the few pesos, bolivars, sucres, etc… to the inspector when he comes by and be done with it.  These over restrictive laws underscore a concept I call Legislation For Facilitation – the laws and their construct encourage the illegal requests for and voluntary payment of bribes.

In many parts of the world people in power are paid next to nothing for their efforts.  Lets get real if you pretend to pay someone a living wage they will pretend to be honest and pretend to offer fidelity to the organization.  So someone who is in charge of telephone hook ups, power connections, water for the farm, credit for your business, of law enforcement for you community are paid next to nothing it is rational to expect they will withhold or discharge their duties in such a way to supplement their income with bribes.

The same could be said for developed nations.  We also erect huge barriers to contracts with detailed Requests For Proposals, RFPs and Scope of Work descriptions that are at best – drafted by well intentioned dolts.  We have been submitting RFP for work in many different parts of the world, and the RFPs take hundreds of hours and tens of thousands of dollars to prepare.  Has the though crossed my mind about who I need to incentivize to insure we get the work? Of course it has.  Yet I know I’ll be the first one caught.  I did learn that one of the judges for a bids we were seeking to secure despised cigar smoke. If I could have figured out who was bidding against us – I would have sent the judge a box of cigars with the opponent’s card – but it was not to be, and I am sure that is for the better.

Bribery is about fixing the race, fixing the outcome of an unknown to insure it is a known.  When companies are forced into bid processes that require a significant percentage of their time and resources – they want to make sure that their efforts are rewarded.  All of the bids are uncompensated work looking for compensation, just like a bet at a horse race.

There has to be a better understanding by those who make laws as to why companies bribe.  The FCPA and the UK laws will do nothing to curb bribery – nothing at all – a few show trials from those who were a bit to negligent in their actions and the rest – the more sophisticated, will continue to let the emoluments flow.  What to say that your children cannot win fantastic scholarships to schools of their choice.  Who to say who get this or that award, or paid research project, who is to say who get a subsidized below market loan or not, who’s to say what investments are pre-ordained to be fortuitous….

Making bribery illegal misses the point.  Just like making speeding illegal has not stopped speeding. The laws in actuality launched an entire industry designed around defeating radar and speed cameras…  One is already growing on how to pass the emoluments in such a way that the rewards are virtually undetectable.

Yet again the floor fills with water, so the janitor continues to design a better mop and a more efficient mopping protocols.  When if some one would just get off their butt and turn off the water – all would be fine.

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