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Bribery in business in Brazil: would you pay it to obtain a large contract?

Case: I am is trying to secure a contract for the sale of auto parts worth $30 million to the transport ministry of Brazil. Many European firms are also eager to seek the contract. A local accountant who has been working with me in the past suggests that my company can receive the contract if I am willing to deposit $1 million in the Swiss bank account of the person in charge of the ministry.

Question: Would you? Will your answer differ if you worked for a European firm?

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No, I would not pay the bribe.

Recently, leading corporate, academic and government ethics experts from across the country came together in Washington DC, under the auspices of the Ethics Resource Center (ERC) Fellows Program, and concluded that the time has come to encourage all U.S. corporations to prohibit facilitation payments in their global operations. I would not pay the bribe to the Brazilian official.

The ERC Fellows believe these payments undermine the ethics of the corporate payer, while having a negative impact on developing countries, their governments and their governance institutions. The Western "legality" of these payments potentially creates a situation for governments in which they calculate salaries for government employees based on expected gratuities.

For many years the U.S. was the only country with a FCPA, but in the course of the last decade a major drive, led by the U.S. Department of State, was successfully made to convince other leading industrial nations to enact laws very similar to the U.S. one. Now, 34 countries have passed national laws that make it a criminal offense for their corporations to pay bribes to foreign officials. But, some countries went further than the rest. For example, several months ago the U.K. passed a law that mirrors the FCPA, except that it makes no exception for "facilitation payments." Thus, the bribery loophole has been closed in Britain. Britain is in Europe and so a British company will not pay a bribe to the Brazillian.

BP is one company that has publicly prohibited facilitation ...

Solution Summary

The 950 word solution explains the ramifications of paying a bribe and expresses a supported opinion.