“In February 1976, a Lockheed executive revealed in a hearing of the Multinational Corporations Subcommittee of the Senate Foreign Relations Committee that the company had paid bribes to Japanese government officials in the course of trying to sell its aircraft. In June of that year, the Lockheed incident led to the arrest of former Prime Minister Kakuei Tanaka on charges of accepting a portion of those bribes.”(Japan Commerce Association of Washington, D.C., March 2003)
The Lockheed scandal helped bring to light the Watergate-era scandals involving the near-institutionalized corrupt practices of major US companies (especially in the defense sector), at the highest levels of foreign officialdom. A subsequent SEC investigation revealed that >400 US firms (many through voluntary admissions) had engaged in questionable payments to foreign officials of lesser or equivalent status to Mr. Tanaka. The result was the near-unanimous, fast-track enactment of the Foreign Corrupt Practices Act (FCPA) signed into law by President Carter in December, 1977. At present, global anti-bribery initiatives are under active review by individual governments, regional trade agreements partners, by the World Trade Organization (WTO), and by the Organisation for Economic Co-operation and Development (OECD).
Meanwhile, in some countries, and in certain industries more than in others…it’s still business as usual!Background Reading:Pae, P. (2008, Dec 21). A. CARL KOTCHIAN, 1914 – 2008; Ex-Lockheed chief told of paying bribes. Los Angeles Times.http://ezproxy.bellevue.edu:80/login?url=http://search.proquest.com/docview/422209571?accountid=28125Your Task:
1. Research and discuss a specific example of corporate bribery involving U.S corporations, or their international subsidiaries, and foreign officials. Your example may be a recent occurrence, or may also be one of many that, during the early to mid-70s, eventually led to the enactment of the 1977 Foreign Corrupt Practices Act. Does your example reveala. acquiescence or direct involvement by the companyâ€™s senior corporate management, or… b. was the incident the result of behavioral choices by subordinate levels of management?c. Were the violations the result of…(1)A federal investigation, or…(2) The companyâ€™s own internal investigation/audit, and report to the authorities?Your answers will be due by no later thanmidnight, Friday, October 7.
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