10 ms·

Airbus Corruption Scandal May Lead Straight to the Top

170 points by imartin2k 9y ago

wallace_f 9y ago
Corruption is everywhere in business, but it's selectively enforced. No finance execs went to jail for the financial crisis.(0) Perhaps the most frustrating thing about the current political climate is that while fighting corruption headlined presidential campaigns of the long-ago past, it never headlines them today even though almost all of our country's problems are direct results of corruption. Jobs is a headline issue, but corporate corruption is endless. The financial sector has not been punished, in fact, Goldman Sachs has an influential post in Trump's cabinet(1). The auto industry was awarded bail outs for its corruption. This list goes on forever. Healthcare could not be fixed, despite the desires of a popular President that wanted to make it his trademark legislation, because of corruption. We have spent trillions on the War on Poverty, but it's hard to say Americans have much of a social safety net. The War on Drugs has created endless misery and violence, while the journalist who accurately exposed CIA drug running somehow suicided by two gunshot wounds to the head. We have endless wars, police murdering people without punishment, unconstitutional three letter agencies, and useless government bureaucracies. All the while growing socieconomic inequality. As developers, we are builders, and so it is in our self interest, and not just moral interest, to fight corruption. And personally, I'd much rather live in a world ruled by innovators and builders than by thugs and thieves. But every election cycle it feels like there is a divide and conquer to distract us from threatening the plutocracy. Goldman and Wall St win every time. The military wins every time. Healthcare finance execs win every time, etc... 0- https://www.bloomberg.com/view/articles/2017-07-26/why-no-one-went-to-jail-in-the-financial-crisis https://www.bloomberg.com/view/articles/2017-07-26/why-no-on... 1-https://theintercept.com/2016/12/09/trump-makes-america-goldmans-again-maga/ https://theintercept.com/2016/12/09/trump-makes-america-gold... 2-https://en.m.wikipedia.org/wiki/Gary_Webb https://en.m.wikipedia.org/wiki/Gary_Webb
- matt4077 9y ago
  It must be said that corruption of the sort alleged at Airbus has become rather rare. The US' Foreign Corrupt Practices Act[0] has, for example, done wonders. The US had decided that it wouldn't allow its domestic companies to bribe foreign officials. And because they were (legitimately) afraid of losing business to countries with lax standards, they expanded its power to foreign companies. Until the late 90s, for example, most European countries allowed the tax deduction of foreign bribes. Yeah, it wasn't just legal, but tax-supported. That changed dramatically with the FCPA, and actions such as Airbus' are now the exception rather than the norm. It's similar in politics, where I think people vastly overestimate the number of money-filled suitcases changing hands. The problem today is a different form of political corruption, namely that which has been legalised by Citizens United. [0] https://en.wikipedia.org/wiki/Foreign_Corrupt_Practices_Act https://en.wikipedia.org/wiki/Foreign_Corrupt_Practices_Act
  - wallace_f 9y ago
    >The US' Foreign Corrupt Practices Act[0] has, for example, done wonders >Until the late 90s, for example, most European countries allowed the tax deduction of foreign bribes Very fair points However, what I would say is that without perverse incentives, the only thing between humanity and solving all of these problems, is incompetence. I think that for the most part, these people do know what they're doing. Also, you are right only so far that ostensibly this sort of corruption is rare. You don't hear about the people who were not caught. Just look at what is coming out of hollywood, and how long that took to come out, and yes there were figurative brief cases filled with money, one of them even discovered(1). 1-www.vulture.com/2017/10/harvey-weinstein-lawyer-david-boies-money-to-da-after-dropped-assault-case.html
  - charlesdm 9y ago
    Not sure I believe that, but it might have. It seems these companies are mostly using middle men now, for example, see Unaoil: https://en.wikipedia.org/wiki/Unaoil https://en.wikipedia.org/wiki/Unaoil. I'm not pro corruption, but I'm also aware that in many parts of the world, if you want to operate in a certain market, there will always be a need for some "greasing of the wheels". I would assume that, as a country develops and grows, the amount of corruption will generally naturally decline.
- jokoon 9y ago
  I view corruption as some kind of a necessary evil to protect and defend national interests. I mean you can't always allow corruption at a micro level because it would be inefficient, but it's always allowed at the higher level. I view corruption as a mean to keep the control of a social structure in the hands of certain interests so that it cannot be hijacked by strangers. https://www.youtube.com/watch?v=apM0d3M-sps https://www.youtube.com/watch?v=apM0d3M-sps Frankly, the mafia exists because some people don't trust the government or outside/remote political power to gain influence on them. So this way corruption allows people to take back things they think are owed to them. People call this corruption, but I think people can act in their own interest and as long as we consent to it, it's not corruption, it's just public consent. I mean there are countless ways that the public benefits from overseas corruption. For example nobody complains that gas is cheap enough. That's a form of corruption, to me. You call that corruption, I call that consent and a balance of self interest. As long as people are happy enough, everything is good.
  - saimiam 9y ago
    This type of doublethink is what undermines confidence in the global order and rule of law. When some European/Western companies indulges in corruption and out-and-out egregious behavior, it's "just boys being boys" and "too big to fail." A Chinese company indulges in some industrial espionage or uses that country's diplomatic levers and suddenly the sky is falling down. E.g., why is Volkswagen still in business after literally setting fire to the world? Why should Airbus not be summarily be liquidated in found guilty of corruption? Back in the day, news of such corruption would percolate slowly into the rest of world. That is no longer the case. News spreads quickly. People (like me) are watching and hoping that the standards get applied equally and if they don't, I like to think the strength in numbers and youth lies in the East, not the West.
    - deleted 9y ago
      [deleted]
    - nerdponx 9y ago
      FWIW this phenomenon has been happening since before the dawn of industrialization. If anything it's probably less of a problem in 2017 than it's ever been. That doesn't mean we should stop treating it like a problem. It just means we should look back on our sordid history as a species and take that as encouragement that we can keep improving. And it starts with awareness. Who today talks about the BP oil and Exxon Valdez oil spills, or Love Canal, or Enron†? †Execs only got prosecuted and convicted here because more powerful people lost money because of them.
- samstave 9y ago
  I agree with everything you say, however I am pessimistic on your view of builders; look at those who are "builders" and have money and political ambitions: thiel and zuck for example. Corrupt as hell. Sure they have built stuff but I wouldn't trust them. Heck at this point the only builders I think we could trust would be musk and gates...
  - astrobe_ 9y ago
    Plus, this article ( https://www.theguardian.com/technology/2017/oct/05/smartphone-addiction-silicon-valley-dystopia https://www.theguardian.com/technology/2017/oct/05/smartphon... ) was on top of HN last week; innovators and builders feeling guilt about what they have made, even though it was all good intentions.
    - radiorental 9y ago
      Power corrupts; absolute power corrupts absolutely
  - wallace_f 9y ago
    zuck obviously has never been one to carry a moral compass, but what's so bad about Thiel? Anyways, the problem with politicians is their ability to get themselves elected already disqualifies them from the job. At least doctors, engineers, and scientists from the hard sciences seem to have to show some kind of positive merit, even if they're still not a perfect lot.
- marcoperaza 9y ago
  You keep conflating corruption with views different than your own.
- peoplewindow 9y ago
  Goldman Sachs has never been accused of paying bribes. The worst it got for them during the crisis was the accusation that it misled investors and profited from the crash in the mortgage market. But that's (a) not the same thing as paying bribes and (b) not a well defined accusation to begin with (Goldman claimed its customers were aware of its bets against the mortgage market but its customers still get to pick what they invest in).
  - wallace_f 9y ago
    >Goldman Sachs has never been accused of paying bribes In fact, they have(0). But winners getting away with it happens all the time. Winners sometimes win on merit, sometimes by rule, and sometimes simply because they don't get caught. I would argue Wall St is mostly the last two. During WWII Curtis LeMay was distraught with his position as leader of the firebombings of innocents in Tokyo. He said "if we lose the war, I will be tried and executed as a war criminal." It's the same thing here. No one has been indicted for in the financial crisis. No one for Iraq WMD lies, either. The ruling class go to great lengths to not let thenselves be tried as criminals. It doesn't mean they're not owning you. Case in point: Reasonable people have put the cost of the financial crisis at 6-30 trillion, or more (6 being the lower bound of the Fed's very own estimate). The higher figure is $93,000/per citizen, and it very will could be more than that.(1) After this, any sane person would have overhauled Wall St, but no one did. We will see big shake ups in Airbus, but not Wall St. So the corruption in Wall St is either legal, or people don't have enough power to indict them. 0 - https://www.theguardian.com/business/2016/jun/13/goldman-sachs-hired-prostitutes-to-win-libyan-business-court-told https://www.theguardian.com/business/2016/jun/13/goldman-sac... 1 - https://www.cnbc.com/id/101022718 https://www.cnbc.com/id/101022718
    - marcoperaza 9y ago
      This is frankly a non-response. You're defining corruption as "things I don't like". If you're going to argue that someone is corrupt, you need to be specific as to what you're accusing them of, and how that fits into a theory of corruption. Your "case in point" points out the obvious: that people lost a lot of money in a market crash and economic downturn. But market crashes don't require any wrongdoing. In this case there is in fact evidence that some people were criminally dishonest. Some mortgage brokers who were complicit in applicants' lies, for example. But it's not readily apparent that investment banks did anything wrong, other than make bad decisions for themselves and their customers.
- matwood 9y ago
  > The financial sector has not been punished, in fact, Goldman Sachs has an influential post in Trump's cabinet(1). Not defending Trump, but GS current and ex-employees have held high level positions in every administration for years. I'm sure GS employees are likely some of the best in their field, but it does leave one wondering when hard decisions get made will they do what is in the best interest of the country even if it is somehow detrimental to GS. With that said, I hope that when Trump leaves office that people still pay this much attention to what is happening in the government. No matter what your personal views are, holding government accountable is key to a good functioning government.
  - r00fus 9y ago
    Dunno about wallace_f but I was critical of Obama putting Geithner as Secretary of Treasury, despite my support for Obama himself. The corruptive influence of corporations and the wealthy extend beyond parties. However, individuals in a party can still fight corruption.
    - matwood 9y ago
      HN typically lets critical thought rule, which is one of the main reasons I post here. Although it is not perfect, HN is still one of the best online places to have nuanced discussions. The problem is that the public at large seems to ignore many issues as long as their person is the one in charge.
      - dmix 9y ago
        > The problem is that the public at large seems to ignore many issues as long as their person is the one in charge. Could this ultimately mean that corruption will be a natural side effect of extensive government power? A vigilant press/populace would be useful and may be what's missing today... but in these niche industries the mega-corporations are still the one with the deepest pockets and the most motivation as they have the most to win/lose. I'm not trying to make this ideological and anti-government, it's just an interesting thought to consider, that it's possible the only power that can't be exploit is either one severely limited and inherently closely (which may defeat the utility of such a power) or having not power at all.
- pasbesoin 9y ago
  If financial executives had been investigated and prosecuted to the fullest extent, it might have sent a much needed message -- and beyond just the financial sector itself. White collar, "banker's stripes" crime has too little attendant risk, and what risk does exist, is too often a financial risk that is dwarfed by the profits and furthermore paid by the institution rather than the individual. Imagine if you could rob a bank, and when caught, pay 5 or 10% of what you gained and walk away. Bank robbery would be a growth sector.
- bogomipz 9y ago
  >"As developers, we are builders, and so it is in our self interest, and not just moral interest, to fight corruption. And personally, I'd much rather live in a world ruled by innovators and builders than by thugs and thieves." Fighting corruption is in society's best interest period. It's no more important to one specific profession than it is another. That's really an odd thing to say. Also you realize that Wall Street Banks and Aerospace companies either are or were innovators and builders and thats how they got to where they are correct? Also the technology sector is no way impervious to corruption.
  - wallace_f 9y ago
    I wonder how much value modern financial innovations actually add to the economy. Certainly CDSs, CMOs and others haven't added any. By the way I'm fine with financial firms that risk their own money. Global banking empires risking other people's money and insured by the American citizen have proven to take more from the economy than they add though. Without the Fed pumping them full of easy money, and with Glass Steagall, they wouldn't even exist. And yes, power corrupts no matter which industry you come from, but at least in engineering, science, medicine, or even sports, etc there is ostensibly some kind of respectable merit required in success. Just look at the richest tech moguls in the world, and it's clear what they contributed. What exactly did the richest financiers like Jeffrey Epstein, Jamie Dimon, or George Soros contribute? It's hard to put a finger on it. If anything it appears they profit off of others demise.
    - bogomipz 9y ago
      >"I wonder how much value modern financial innovations actually add to the economy." Money market funds and mutual funds are innovations which have helped people save for retirement. Venture Capital funds have enabled many tech companies to flourish. The Commercial paper market has made payroll at large corporation much more efficient. Securitization of debt although it can obviously be abused is what allows people to get financing to buy homes and get car loans. These were all innovations. I am no defender of the banking industry but to say that there hasn't been value added by any of these innovation seems pretty silly.
throwaway7645 9y ago
What was the deal with the Dacia Duster? I found this article difficult to follow.
- dessant 9y ago
  The owner of a Romanian company has recently bought a car by taking a loan, while his company received millions from EADS. They seem to suggest that the company was used to channel money for bribes, in exchange for a modest dividend for the owner.
  - oulu2006 9y ago
    Thanks for that -- I had the same problem as the OP, I found the article hard to follow.
    - throwaway7645 9y ago
      Lol glad to know I'm not the only one. Still confused on what accepting millions in bribes has to do with a car loan.
      - saimiam 9y ago
        The guy who bought the Duster was living in the Gulf and became friends with the nephew of someone in the royal family of the country he was living in. The Bullshit Castle guys knew the buyer of the Duster and channeled money thru him to the royal family presumably in exchange for favorable treatment at the time of contract negotiation. The Duster guy got a haircut for making the connection with which he bought the Duster and subsequently, an apparently crummy apartment somewhere.
        jaclaz 9y ago
        But till now we don't know for sure if (and the article - confusing as it might be does state this) the Romanian guy's identity has been used without him knowing. It could be a simple identity theft of some kind.
geetfun 9y ago
Buffering of the leadership is part of any top down culture. The hint that corruption may lead to the top is naive, as it almost always does. Plausible deniability often comes into play.
dgut 9y ago
Airbus is the epitome of crony capitalism. The company receives billions in "loans" from the EU, without any requirement to repay.
- raverbashing 9y ago
  As opposed to jet planes that cost billions of dollars payed with a smile by the US government?
  - unremarkable9 9y ago
    This is such a ridiculous comparison and shows a severe lack of understanding of how these companies operate. The defense and commercial sides of Boeing operate very differently and have limited overlap, in terms of people, budget, and location. For example, nearly all of the commercial work is performed in Seattle at the plant, while the defense work is spread around the country at numerous sites. There is of course overlap in terms that they share common infrastructure (HR, training, some office space, IT services, facilities, etc.), but by and large, of the 120,000 employees out of 140,000, you are either working in the commercial side or the defense side. Now, anyone can tell you that government contracting works very differently than commercial business. There is a large, large set of laws in place and all sorts of processes that must be followed to comply, and how you charge the government for things and account for them is _very_ strict. Working on commercial products and charging a government contract for it will put you in jail. Even using government funds for things not called out in the contract will put you in jail. Furthermore, if you are on the defense side, you are almost always working on specific projects. You bid on a contract, you win it, and you work on it. If the contract is canceled or not extended, those people usually get canned. If the project is classified, you cannot share with anyone else, even on the defense side. You can't use commercial money, and you can't use the money you get for anything except what is explicitly called out in the contract. It is all very much a silo. And believe me, there are many audits, and they are painful. The government doesn't fuck around with these things. If you are an employee working on the defense side, you may work on commercial projects, and vice versa, but you are only doing one or the other at any time, and you rarely switch. Most people will switch from commercial to defense once _in their careers_, if at all. If you work at these types of companies, this separation of assets, budget, and people is very obvious, even down to the physical nature of it. You can visit any office in Seattle and it will be much nicer than an office in a defense site; the government does not look kindly on buying big screen TVs with their money! The people are different, the terminology is different, the restrictions and processes are VERY different (how you handle government property, classified or ITAR information, how you charge to contracts, etc.), the unions are different, the payscales are different, etc. Even down to what types of computers the employees use. Sometimes it is like the two wings of these companies are completely different creatures. I would also point out that the defense side is under constant pressure to lower their costs. These companies win and lose contracts all the time, and no one is safe; just ask anyone who got fired after they lost a bid. The vast majority of these contracts are competetive, they are not cost-plus, and there is severe pressure to keep the costs down from all sides. You are constantly being audited and being held accountable. And even making a plane, for example, is no guarantee that you get any of the other business (maintenance, upgrades, training, etc.). Defense companies can and do "steal" projects from others, unlike in the past. The defense and commercial sides of Boeing exist to be counter-cyclical. They don't exist to share money, or for a back-door for the government, and the contracts, obviously, are used to produce goods that are actually used (planes, bombs, etc.), and are completely different from a government "loan" that is never intended to be paid back. There are _plenty_ of criticisms one can level at the defense industry in America, and Boeing in particular, but using government funds to prop up their commercial business is not one of them.
Findeton 9y ago
It's interesting to think about what we call corruption. If a company bribes someone in the government with decision-making power, it's corruption. If a company pays money to a person in another company with decision-making power within his company (not gov. related), it's usually more difficult to qualify that as corruption. One could argue that political corruption only arises when someone breaks the illusion of the State being some kind of entity that seeks the well-being of every citizen. I mean, the crime doesn't appear to be about receiving money, but about breaking the illusion (by seeking your own well-being).
- gok 9y ago
  > If a company pays money to a person in another company with decision-making power within his company (not gov. related), it's usually more difficult to qualify that as corruption. That is indisputably corruption. It’s call commercial bribery.
  - Findeton 9y ago
    That may be illegal in the US, but I don't know if it is in other countries.
    - deleted 9y ago
      [deleted]
    - gok 9y ago
      Sure but there are also countries where bribing government officials is legal. It’s still corruption.
- pault 9y ago
  > political corruption only arises when someone breaks the illusion of the State being some kind of entity that seeks the well-being of every citizen. Corruption is when the state fails to enforce rule of law, which is its purpose.
- deleted 9y ago
  [deleted]
bitL 9y ago
What is the best strategy to deal with corruption? I mean in case I run my own company, others expecting bribes, I want to be a moral rock, coping with loss of business due to these principles etc. What is a survivable strategy for this?
merraksh 9y ago
In describing what the business climate at EADS International does to newcomers, a person with knowledge of the company says: "If you put Mother Teresa in a neighborhood with rampant drug use, she wouldn't remain a saint for long, either." Not exactly a good analogy. From the Wikipedia page on Mother Teresa [0]: She began missionary work with the poor in 1948 [...] adopted Indian citizenship, spent several months in Patna to receive basic medical training at Holy Family Hospital and ventured into the slums. She founded a school in Motijhil, Kolkata, before she began tending to the poor and hungry. [0] https://en.wikipedia.org/wiki/Mother_Teresa https://en.wikipedia.org/wiki/Mother_Teresa
othersideofcoin 9y ago
I'm writing this as a thought experiment, so please don't respond if what I say angers you. I'm hoping to possibly seed an interesting conversation from which I can learn, not trying to make any specific points. --- why is corruption bad? Well, it definitely feels dirty, and it probably usually directly harms someone (who has to pay, doesn't pay, etc.) But what if we looked at it from a trust based perspective? Single incidents of corruption have an outsized impact on the overall trust a society has in itself, and others. So, what if the cost isn't created by the act of corruption, but by the perception / dissemination of corrupt events? From that perspective, the best overall utility to society after the VW scandal was both to make it appear like someone is watching (disincentivize others) but also downplay the size of it (maximally maintain trust). This isn't particularly thought through, but I was hoping to invoke Cunningham's Law to learn more about something I know very little about.

170 points by imartin2k 9y ago

Corruption is everywhere in business, but it's selectively enforced. No finance execs went to jail for the financial crisis.(0) Perhaps the most frustrating thing about the current political climate is that while fighting corruption headlined presidential campaigns of the long-ago past, it never headlines them today even though almost all of our country's problems are direct results of corruption. Jobs is a headline issue, but corporate corruption is endless. The financial sector has not been punished, in fact, Goldman Sachs has an influential post in Trump's cabinet(1). The auto industry was awarded bail outs for its corruption. This list goes on forever. Healthcare could not be fixed, despite the desires of a popular President that wanted to make it his trademark legislation, because of corruption. We have spent trillions on the War on Poverty, but it's hard to say Americans have much of a social safety net. The War on Drugs has created endless misery and violence, while the journalist who accurately exposed CIA drug running somehow suicided by two gunshot wounds to the head. We have endless wars, police murdering people without punishment, unconstitutional three letter agencies, and useless government bureaucracies. All the while growing socieconomic inequality. As developers, we are builders, and so it is in our self interest, and not just moral interest, to fight corruption. And personally, I'd much rather live in a world ruled by innovators and builders than by thugs and thieves. But every election cycle it feels like there is a divide and conquer to distract us from threatening the plutocracy. Goldman and Wall St win every time. The military wins every time. Healthcare finance execs win every time, etc... 0- https://www.bloomberg.com/view/articles/2017-07-26/why-no-one-went-to-jail-in-the-financial-crisis https://www.bloomberg.com/view/articles/2017-07-26/why-no-on... 1-https://theintercept.com/2016/12/09/trump-makes-america-goldmans-again-maga/ https://theintercept.com/2016/12/09/trump-makes-america-gold... 2-https://en.m.wikipedia.org/wiki/Gary_Webb https://en.m.wikipedia.org/wiki/Gary_Webb

matt4077 9y ago
It must be said that corruption of the sort alleged at Airbus has become rather rare. The US' Foreign Corrupt Practices Act[0] has, for example, done wonders. The US had decided that it wouldn't allow its domestic companies to bribe foreign officials. And because they were (legitimately) afraid of losing business to countries with lax standards, they expanded its power to foreign companies. Until the late 90s, for example, most European countries allowed the tax deduction of foreign bribes. Yeah, it wasn't just legal, but tax-supported. That changed dramatically with the FCPA, and actions such as Airbus' are now the exception rather than the norm. It's similar in politics, where I think people vastly overestimate the number of money-filled suitcases changing hands. The problem today is a different form of political corruption, namely that which has been legalised by Citizens United. [0] https://en.wikipedia.org/wiki/Foreign_Corrupt_Practices_Act https://en.wikipedia.org/wiki/Foreign_Corrupt_Practices_Act
- wallace_f 9y ago
  >The US' Foreign Corrupt Practices Act[0] has, for example, done wonders >Until the late 90s, for example, most European countries allowed the tax deduction of foreign bribes Very fair points However, what I would say is that without perverse incentives, the only thing between humanity and solving all of these problems, is incompetence. I think that for the most part, these people do know what they're doing. Also, you are right only so far that ostensibly this sort of corruption is rare. You don't hear about the people who were not caught. Just look at what is coming out of hollywood, and how long that took to come out, and yes there were figurative brief cases filled with money, one of them even discovered(1). 1-www.vulture.com/2017/10/harvey-weinstein-lawyer-david-boies-money-to-da-after-dropped-assault-case.html
- charlesdm 9y ago
  Not sure I believe that, but it might have. It seems these companies are mostly using middle men now, for example, see Unaoil: https://en.wikipedia.org/wiki/Unaoil https://en.wikipedia.org/wiki/Unaoil. I'm not pro corruption, but I'm also aware that in many parts of the world, if you want to operate in a certain market, there will always be a need for some "greasing of the wheels". I would assume that, as a country develops and grows, the amount of corruption will generally naturally decline.
jokoon 9y ago
I view corruption as some kind of a necessary evil to protect and defend national interests. I mean you can't always allow corruption at a micro level because it would be inefficient, but it's always allowed at the higher level. I view corruption as a mean to keep the control of a social structure in the hands of certain interests so that it cannot be hijacked by strangers. https://www.youtube.com/watch?v=apM0d3M-sps https://www.youtube.com/watch?v=apM0d3M-sps Frankly, the mafia exists because some people don't trust the government or outside/remote political power to gain influence on them. So this way corruption allows people to take back things they think are owed to them. People call this corruption, but I think people can act in their own interest and as long as we consent to it, it's not corruption, it's just public consent. I mean there are countless ways that the public benefits from overseas corruption. For example nobody complains that gas is cheap enough. That's a form of corruption, to me. You call that corruption, I call that consent and a balance of self interest. As long as people are happy enough, everything is good.
- saimiam 9y ago
  This type of doublethink is what undermines confidence in the global order and rule of law. When some European/Western companies indulges in corruption and out-and-out egregious behavior, it's "just boys being boys" and "too big to fail." A Chinese company indulges in some industrial espionage or uses that country's diplomatic levers and suddenly the sky is falling down. E.g., why is Volkswagen still in business after literally setting fire to the world? Why should Airbus not be summarily be liquidated in found guilty of corruption? Back in the day, news of such corruption would percolate slowly into the rest of world. That is no longer the case. News spreads quickly. People (like me) are watching and hoping that the standards get applied equally and if they don't, I like to think the strength in numbers and youth lies in the East, not the West.
  - deleted 9y ago
    [deleted]
  - nerdponx 9y ago
    FWIW this phenomenon has been happening since before the dawn of industrialization. If anything it's probably less of a problem in 2017 than it's ever been. That doesn't mean we should stop treating it like a problem. It just means we should look back on our sordid history as a species and take that as encouragement that we can keep improving. And it starts with awareness. Who today talks about the BP oil and Exxon Valdez oil spills, or Love Canal, or Enron†? †Execs only got prosecuted and convicted here because more powerful people lost money because of them.
samstave 9y ago
I agree with everything you say, however I am pessimistic on your view of builders; look at those who are "builders" and have money and political ambitions: thiel and zuck for example. Corrupt as hell. Sure they have built stuff but I wouldn't trust them. Heck at this point the only builders I think we could trust would be musk and gates...
- astrobe_ 9y ago
  Plus, this article ( https://www.theguardian.com/technology/2017/oct/05/smartphone-addiction-silicon-valley-dystopia https://www.theguardian.com/technology/2017/oct/05/smartphon... ) was on top of HN last week; innovators and builders feeling guilt about what they have made, even though it was all good intentions.
  - radiorental 9y ago
    Power corrupts; absolute power corrupts absolutely
- wallace_f 9y ago
  zuck obviously has never been one to carry a moral compass, but what's so bad about Thiel? Anyways, the problem with politicians is their ability to get themselves elected already disqualifies them from the job. At least doctors, engineers, and scientists from the hard sciences seem to have to show some kind of positive merit, even if they're still not a perfect lot.
marcoperaza 9y ago
You keep conflating corruption with views different than your own.
peoplewindow 9y ago
Goldman Sachs has never been accused of paying bribes. The worst it got for them during the crisis was the accusation that it misled investors and profited from the crash in the mortgage market. But that's (a) not the same thing as paying bribes and (b) not a well defined accusation to begin with (Goldman claimed its customers were aware of its bets against the mortgage market but its customers still get to pick what they invest in).
- wallace_f 9y ago
  >Goldman Sachs has never been accused of paying bribes In fact, they have(0). But winners getting away with it happens all the time. Winners sometimes win on merit, sometimes by rule, and sometimes simply because they don't get caught. I would argue Wall St is mostly the last two. During WWII Curtis LeMay was distraught with his position as leader of the firebombings of innocents in Tokyo. He said "if we lose the war, I will be tried and executed as a war criminal." It's the same thing here. No one has been indicted for in the financial crisis. No one for Iraq WMD lies, either. The ruling class go to great lengths to not let thenselves be tried as criminals. It doesn't mean they're not owning you. Case in point: Reasonable people have put the cost of the financial crisis at 6-30 trillion, or more (6 being the lower bound of the Fed's very own estimate). The higher figure is $93,000/per citizen, and it very will could be more than that.(1) After this, any sane person would have overhauled Wall St, but no one did. We will see big shake ups in Airbus, but not Wall St. So the corruption in Wall St is either legal, or people don't have enough power to indict them. 0 - https://www.theguardian.com/business/2016/jun/13/goldman-sachs-hired-prostitutes-to-win-libyan-business-court-told https://www.theguardian.com/business/2016/jun/13/goldman-sac... 1 - https://www.cnbc.com/id/101022718 https://www.cnbc.com/id/101022718
  - marcoperaza 9y ago
    This is frankly a non-response. You're defining corruption as "things I don't like". If you're going to argue that someone is corrupt, you need to be specific as to what you're accusing them of, and how that fits into a theory of corruption. Your "case in point" points out the obvious: that people lost a lot of money in a market crash and economic downturn. But market crashes don't require any wrongdoing. In this case there is in fact evidence that some people were criminally dishonest. Some mortgage brokers who were complicit in applicants' lies, for example. But it's not readily apparent that investment banks did anything wrong, other than make bad decisions for themselves and their customers.
matwood 9y ago
> The financial sector has not been punished, in fact, Goldman Sachs has an influential post in Trump's cabinet(1). Not defending Trump, but GS current and ex-employees have held high level positions in every administration for years. I'm sure GS employees are likely some of the best in their field, but it does leave one wondering when hard decisions get made will they do what is in the best interest of the country even if it is somehow detrimental to GS. With that said, I hope that when Trump leaves office that people still pay this much attention to what is happening in the government. No matter what your personal views are, holding government accountable is key to a good functioning government.
- r00fus 9y ago
  Dunno about wallace_f but I was critical of Obama putting Geithner as Secretary of Treasury, despite my support for Obama himself. The corruptive influence of corporations and the wealthy extend beyond parties. However, individuals in a party can still fight corruption.
  - matwood 9y ago
    HN typically lets critical thought rule, which is one of the main reasons I post here. Although it is not perfect, HN is still one of the best online places to have nuanced discussions. The problem is that the public at large seems to ignore many issues as long as their person is the one in charge.
    - dmix 9y ago
      > The problem is that the public at large seems to ignore many issues as long as their person is the one in charge. Could this ultimately mean that corruption will be a natural side effect of extensive government power? A vigilant press/populace would be useful and may be what's missing today... but in these niche industries the mega-corporations are still the one with the deepest pockets and the most motivation as they have the most to win/lose. I'm not trying to make this ideological and anti-government, it's just an interesting thought to consider, that it's possible the only power that can't be exploit is either one severely limited and inherently closely (which may defeat the utility of such a power) or having not power at all.
pasbesoin 9y ago
If financial executives had been investigated and prosecuted to the fullest extent, it might have sent a much needed message -- and beyond just the financial sector itself. White collar, "banker's stripes" crime has too little attendant risk, and what risk does exist, is too often a financial risk that is dwarfed by the profits and furthermore paid by the institution rather than the individual. Imagine if you could rob a bank, and when caught, pay 5 or 10% of what you gained and walk away. Bank robbery would be a growth sector.
bogomipz 9y ago
>"As developers, we are builders, and so it is in our self interest, and not just moral interest, to fight corruption. And personally, I'd much rather live in a world ruled by innovators and builders than by thugs and thieves." Fighting corruption is in society's best interest period. It's no more important to one specific profession than it is another. That's really an odd thing to say. Also you realize that Wall Street Banks and Aerospace companies either are or were innovators and builders and thats how they got to where they are correct? Also the technology sector is no way impervious to corruption.
- wallace_f 9y ago
  I wonder how much value modern financial innovations actually add to the economy. Certainly CDSs, CMOs and others haven't added any. By the way I'm fine with financial firms that risk their own money. Global banking empires risking other people's money and insured by the American citizen have proven to take more from the economy than they add though. Without the Fed pumping them full of easy money, and with Glass Steagall, they wouldn't even exist. And yes, power corrupts no matter which industry you come from, but at least in engineering, science, medicine, or even sports, etc there is ostensibly some kind of respectable merit required in success. Just look at the richest tech moguls in the world, and it's clear what they contributed. What exactly did the richest financiers like Jeffrey Epstein, Jamie Dimon, or George Soros contribute? It's hard to put a finger on it. If anything it appears they profit off of others demise.
  - bogomipz 9y ago
    >"I wonder how much value modern financial innovations actually add to the economy." Money market funds and mutual funds are innovations which have helped people save for retirement. Venture Capital funds have enabled many tech companies to flourish. The Commercial paper market has made payroll at large corporation much more efficient. Securitization of debt although it can obviously be abused is what allows people to get financing to buy homes and get car loans. These were all innovations. I am no defender of the banking industry but to say that there hasn't been value added by any of these innovation seems pretty silly.

throwaway7645 9y ago

What was the deal with the Dacia Duster? I found this article difficult to follow.

dessant 9y ago
The owner of a Romanian company has recently bought a car by taking a loan, while his company received millions from EADS. They seem to suggest that the company was used to channel money for bribes, in exchange for a modest dividend for the owner.
- oulu2006 9y ago
  Thanks for that -- I had the same problem as the OP, I found the article hard to follow.
  - throwaway7645 9y ago
    Lol glad to know I'm not the only one. Still confused on what accepting millions in bribes has to do with a car loan.
    - saimiam 9y ago
      The guy who bought the Duster was living in the Gulf and became friends with the nephew of someone in the royal family of the country he was living in. The Bullshit Castle guys knew the buyer of the Duster and channeled money thru him to the royal family presumably in exchange for favorable treatment at the time of contract negotiation. The Duster guy got a haircut for making the connection with which he bought the Duster and subsequently, an apparently crummy apartment somewhere.
      - jaclaz 9y ago
        But till now we don't know for sure if (and the article - confusing as it might be does state this) the Romanian guy's identity has been used without him knowing. It could be a simple identity theft of some kind.

geetfun 9y ago

Buffering of the leadership is part of any top down culture. The hint that corruption may lead to the top is naive, as it almost always does. Plausible deniability often comes into play.

dgut 9y ago

Airbus is the epitome of crony capitalism. The company receives billions in "loans" from the EU, without any requirement to repay.

raverbashing 9y ago
As opposed to jet planes that cost billions of dollars payed with a smile by the US government?
- unremarkable9 9y ago
  This is such a ridiculous comparison and shows a severe lack of understanding of how these companies operate. The defense and commercial sides of Boeing operate very differently and have limited overlap, in terms of people, budget, and location. For example, nearly all of the commercial work is performed in Seattle at the plant, while the defense work is spread around the country at numerous sites. There is of course overlap in terms that they share common infrastructure (HR, training, some office space, IT services, facilities, etc.), but by and large, of the 120,000 employees out of 140,000, you are either working in the commercial side or the defense side. Now, anyone can tell you that government contracting works very differently than commercial business. There is a large, large set of laws in place and all sorts of processes that must be followed to comply, and how you charge the government for things and account for them is _very_ strict. Working on commercial products and charging a government contract for it will put you in jail. Even using government funds for things not called out in the contract will put you in jail. Furthermore, if you are on the defense side, you are almost always working on specific projects. You bid on a contract, you win it, and you work on it. If the contract is canceled or not extended, those people usually get canned. If the project is classified, you cannot share with anyone else, even on the defense side. You can't use commercial money, and you can't use the money you get for anything except what is explicitly called out in the contract. It is all very much a silo. And believe me, there are many audits, and they are painful. The government doesn't fuck around with these things. If you are an employee working on the defense side, you may work on commercial projects, and vice versa, but you are only doing one or the other at any time, and you rarely switch. Most people will switch from commercial to defense once _in their careers_, if at all. If you work at these types of companies, this separation of assets, budget, and people is very obvious, even down to the physical nature of it. You can visit any office in Seattle and it will be much nicer than an office in a defense site; the government does not look kindly on buying big screen TVs with their money! The people are different, the terminology is different, the restrictions and processes are VERY different (how you handle government property, classified or ITAR information, how you charge to contracts, etc.), the unions are different, the payscales are different, etc. Even down to what types of computers the employees use. Sometimes it is like the two wings of these companies are completely different creatures. I would also point out that the defense side is under constant pressure to lower their costs. These companies win and lose contracts all the time, and no one is safe; just ask anyone who got fired after they lost a bid. The vast majority of these contracts are competetive, they are not cost-plus, and there is severe pressure to keep the costs down from all sides. You are constantly being audited and being held accountable. And even making a plane, for example, is no guarantee that you get any of the other business (maintenance, upgrades, training, etc.). Defense companies can and do "steal" projects from others, unlike in the past. The defense and commercial sides of Boeing exist to be counter-cyclical. They don't exist to share money, or for a back-door for the government, and the contracts, obviously, are used to produce goods that are actually used (planes, bombs, etc.), and are completely different from a government "loan" that is never intended to be paid back. There are _plenty_ of criticisms one can level at the defense industry in America, and Boeing in particular, but using government funds to prop up their commercial business is not one of them.

Findeton 9y ago

It's interesting to think about what we call corruption. If a company bribes someone in the government with decision-making power, it's corruption. If a company pays money to a person in another company with decision-making power within his company (not gov. related), it's usually more difficult to qualify that as corruption. One could argue that political corruption only arises when someone breaks the illusion of the State being some kind of entity that seeks the well-being of every citizen. I mean, the crime doesn't appear to be about receiving money, but about breaking the illusion (by seeking your own well-being).

gok 9y ago
> If a company pays money to a person in another company with decision-making power within his company (not gov. related), it's usually more difficult to qualify that as corruption. That is indisputably corruption. It’s call commercial bribery.
- Findeton 9y ago
  That may be illegal in the US, but I don't know if it is in other countries.
  - deleted 9y ago
    [deleted]
  - gok 9y ago
    Sure but there are also countries where bribing government officials is legal. It’s still corruption.
pault 9y ago
> political corruption only arises when someone breaks the illusion of the State being some kind of entity that seeks the well-being of every citizen. Corruption is when the state fails to enforce rule of law, which is its purpose.
deleted 9y ago
[deleted]

bitL 9y ago

What is the best strategy to deal with corruption? I mean in case I run my own company, others expecting bribes, I want to be a moral rock, coping with loss of business due to these principles etc. What is a survivable strategy for this?

merraksh 9y ago

In describing what the business climate at EADS International does to newcomers, a person with knowledge of the company says: "If you put Mother Teresa in a neighborhood with rampant drug use, she wouldn't remain a saint for long, either." Not exactly a good analogy. From the Wikipedia page on Mother Teresa [0]: She began missionary work with the poor in 1948 [...] adopted Indian citizenship, spent several months in Patna to receive basic medical training at Holy Family Hospital and ventured into the slums. She founded a school in Motijhil, Kolkata, before she began tending to the poor and hungry. [0] https://en.wikipedia.org/wiki/Mother_Teresa https://en.wikipedia.org/wiki/Mother_Teresa

othersideofcoin 9y ago

I'm writing this as a thought experiment, so please don't respond if what I say angers you. I'm hoping to possibly seed an interesting conversation from which I can learn, not trying to make any specific points. --- why is corruption bad? Well, it definitely feels dirty, and it probably usually directly harms someone (who has to pay, doesn't pay, etc.) But what if we looked at it from a trust based perspective? Single incidents of corruption have an outsized impact on the overall trust a society has in itself, and others. So, what if the cost isn't created by the act of corruption, but by the perception / dissemination of corrupt events? From that perspective, the best overall utility to society after the VW scandal was both to make it appear like someone is watching (disincentivize others) but also downplay the size of it (maximally maintain trust). This isn't particularly thought through, but I was hoping to invoke Cunningham's Law to learn more about something I know very little about.