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Airbus ran ‘massive’ bribery scheme to win orders
- neonate 7y agohttp://archive.md/MIVp8 http://archive.md/MIVp8
- lucasverra 7y agoThanks. How do you go from paywall to archive.org link ? Or i was your action having access behind FT's paywall ?
- 333c 7y agoThe link isn't archive.org. It's a different service.
- jariel 7y agoIn Canada SNC Lavalin same things. This is not an easy thing though: the countries in which bribes are paid are run by corrupt people who expect kickbacks as part of doing business, and there's no other way about it. If the West wants to play morally superior on this - then 100% of Airbus, Boeing, SNC, Halliburton and massive industrials will full-on go out of business. This issue is not part of the current round of negotiations with China and it's too bad, because without a level playing field - many industries will be wiped out and other countries will be happy to pick up the slack. This stuff is quite common, we need a comprehensive solution. One indirect approach might be to invest and push for open journalism in places like Malaysia, so as to force their own hand on corruption though that may be asking too much.
- fennecfoxen 7y agoI question the premise. The US has the Foreign Corrupt Practices Act of 1977 has already made it illegal to make payments to foreign government officials to assist in obtaining or retaining business. Somehow, Boeing, SNC, Halliburton, and many other massive industrials have survived so far.
- markdown 7y ago"Don't spend your money bribing foreign governments, keep that money for lobbying in your own country. Lobbying of course is not bribery."
- kortilla 7y agoBecause it’s not. You know that lobbyists can’t pay politicians, right? The meme that “lobbying == bribery” needs to die.
- m0zg 7y agoThey can set up the politicians' children and relatives with lucrative government contracts and positions on the boards of investment funds and foreign oil and gas companies, though. The meme that this is somehow OK needs to die.
- olliej 7y agoIf that were the case lobbying would not cost billions of dollars. Lobbying doesn’t have to be bribery, but in America it absolutely is.
- aj7 7y agoThe lobbyists are expensive lawyers. Their publically reported fees are the tip of an iceberg, where the bulk of valuable considerations is hidden from view.
- refurb 7y agoIndeed. I work with the government affairs team in my company, of which, many are lobbyists. There are no bribes happening, just very expensive people who know how to time with politicians to argue their side.
- brennanpeterson 7y agoNice dinners, catered events, golf meetings, game.tickets, 'free' staff to work on projects isn't quite bribery. A wink and a nudge showing that politicians and senior staff can have a job making millions isn't quite an offer either..no one would.be so gauche. But it sure gets close. You can also just forgive debt, or anonymously pay it off. There is no bribery, but I guess the practical difference seems pretty tiny.
- deleted 7y ago[deleted]
- mmhsieh 7y agosystems of bribery operate differently in each country. i have yet to see one that does not have one.
- K0SM0S 7y agoI don't know who downvoted this but come on. jariel has a point and it's not going away because we bury our heads in the sand. At a basic level I think it falls down to fundamentally different conceptions of what is a "business" versus individuals, families, organizations of many types. What we call "lie" and "theft" in the West might be innocuous or praised in the East (think "great poker player", "bold move"), and no regulation will make each side suddenly re-order their hierarchy of values, and the centennial legal system that surely goes with it. I don't know where the solution lies, if any, but that's one hell of a cultural clash. That is not the same as more coincidental, opportunistic bribery the likes of dictatorships or local lords, the chaos tax. That's more of a temporary friction that can (and should) be dealt with more swiftly — had we the global political will to do so. It's nowhere near as hard a problem as the above cultural matter. Edit: self-censored a bad initial
- KarlKemp 7y agoCorruption has already massively improved since the heydays of the 60s and 70s, so I doubt your cynicism. But of all the industries, big planes should be among the easiest to clean up: there’s only two participants in this prisoners‘ dilemma, and they are both, theoretically, under the purview of rigorous enforcement in countries governed by law.
- jariel 7y ago"there’s only two participants in this prisoners‘ dilemma, and they are both, theoretically, under the purview of rigorous enforcement in countries governed by law." What? No. There are 1000's of participants, and few of them are under the purview of the law. 1. Someone wants access to a Malaysian Air exec at some hotel event. Bribe someone for info. 2. Someone is overseeing the aircraft regulatory body, their findings will sway one way or another. Bribe them. 3. Someone is drafting legislation to support the state-sponsored purchase of aircraft. Bribe them. 4. The brother of the 'deciding individual' at Malaysian Air hints he can help access. Bribe them. 5. The people responsible for lower-level contractual affairs are putting up a fuss over some little details? Bribe them. 6. The 'respected international consultancy' is putting together the business plan for the national airline strategy. Bribe them. 7. The executives making the purchase want a kickback. Bribe them. These bribes come in all forms, some of them more or less legal, or more or less ethical - depending on the law. Does giving the son of the Malay MP drafting relevant legislation a job at Airbus constitute a bribe? Or just congeniality? Does flying in a team of officials for an all-expenses-paid, swanky getaway at a high-end swiss resort for 'a meeting' constitute a bribe? In the West, a lot of this happens in fuzzier ways, borderline ethical. In other countries, it's just how business is done. In other places, like Nigeria, it's pretty straight forward. Once you get to the Nigerian Minister of Natural Resources, he will have spelled out for you by people in his periphery beforehand nature and expected size of the bribe, how it gets transmuted so that nothing 'impolite' happens directly in his presence. If you're an American IT company that has support offices in the Middle East and Africa that subcontracts the work to local companies, but then wants to end such contracts in favor of direct hires ... and said subcontractors are connected - you will 'pay a bribe' out of the sunshine fund. If you're IKEA and want to open a store in Moscow, you will pay x% of your revenue to a local 'businessman/thug'. If not - no store! So you wait a decade and realize you have no choice, and so you just pay the appropriate tributes. Again - the issue is how the plebes in the West are going to react when they start to learn how everything is working. The only way to 'end' this is to have a lot of various powers on board, and it's going to be different in every country. It might work out differently in every country, and maybe at different levels of scale, or happen in a different way, i.e. instead of 'kickbacks', execs get lucrative contracts somewhere else or some other kind of benefit. This will take a few centuries to sort out. Edit: to be clear I'm not advocating at all for any of these shenanigans.
- emmelaich 7y agoPeople are shooting (downvoting) the messenger (you). Not only are you describing the situation accurately, you are not advocating that the West just pay bribes as well.
- fnord77 7y ago> Airbus for years conducted a “massive scheme to offer and pay bribes”, involving very senior executives, according to disclosures in courts in Washington DC, Paris and London, as Europe’s aerospace champion agreed to pay €3.6bn in penalties to regulators in France, the UK and the US. So nobody went to jail, though
- tehwebguy 7y agoYeah, I guess the punishment for a bunch of bribes is just having to pay one more bribe?
- Gibbon1 7y agoThat's the way it work now. If they get caught it just means they pay the government a bribe[1] to stay out of jail. With the other peoples money no less. They themselves never pay a cent.
- justinclift 7y ago> US and UK authorities are considering prosecutions against individuals. Perhaps it'll happen. :)
- ekianjo 7y agoKeyword is "considering"
- ekianjo 7y agoNobody goes to jail for "lobbying" in the US while it is clearly about the same thing as bribery. Just a legal form of it.
- manfredo 7y agoWhile lobbyists have sometimes bribed officials through gifts and perks, which is illegal, lobbying is not bribery. Say you're interesting in promoting renewable energy. You and like minded people put together resources to promote renewable energy to politicians, explaining its benefits. This activity is lobbying for renewable energy.
- agumonkey 7y agojournaliasts are bored by Boeing topics?
- bigiain 7y agoAirbus might well be paying them to appear so...
- stkdump 7y agoHas Airbus also caused Boeing plane crashes using bribes?
- heisenbit 7y agoConsidering that Boeing is in deep, deep trouble Airbus has stayed very quiet and deliberately so. Their only major competitor collapsing can't be good for the strategically. Just imagine Boeing going bankrupt and being split up with China buying some parts...
- propogandist 7y agoUS government will never let this happen, as a matter of national security. They'll bleed and may be bought by a US company, but never international interests
- jdkee 7y agoBribery or MCAS? Your choice.
- bobbydroptables 7y agoOption 3: start jailing these fraudsters for criminal fraud. Jail corporate profits for 6 months. Claw back any and all executive pay since the fraud began and distribute it to low level employees or other victims of the fraud. If you can't survive as an honest company you don't deserve to survive. And there are very few people that give the government as many screws as executives to modify their behavior.
- Ididntdothis 7y agoIn medical devices when you screw up they can stop you from selling in a country for a while. That usually wakes people up. Stopping them from doing business for a while would wake up a lot of companies. But they can always hold their employees hostage since they would take most of the suffering.
- bobbydroptables 7y agoYep. Restrict their access to countries, markets, permits, approvals, private jets, the list goes on. There's a lot we can do short of jailing. And we can and should jail.
- monadic2 7y agoUnless of course the screw up is “normal”, like leaving your device unsecured and open to the internet (which is wide spread in the medical device community, at least in practice).
- Ididntdothis 7y agoI guess with “screw up” I meant things the regulatory organization doesn’t like. This could mean just wrong paperwork. As far as security goes things are improving. Five years ago you got brushed off if you pointed out how easily hackable the devices were. Now people are listening and the FDA also seems to understand issues better.
- hogFeast 7y agoThank god. A particularly nasty aspect of this story, alluded to at the bottom but not made explicit, is that Airbus was taking massive export credits (in the UK, they got the lion's share of the budget). It was only in the UK that Airbus was required to actually required to produce documentation about the customer, and the scheme was only uncovered when someone at UKEF realised that Airbus wasn't doing this and the govt had been giving out hundreds of millions to corrupt politicians. Also, the timeline here is incredible. As soon as the UK announced their investigation, and Airbus was banned from receiving credits...they were in negotiations to resume funding, and (somehow) Enders only lost his job 3 years later (and even the UK has turned back on the money spigot...although this time with sheepish promises about trying to fund a company other than Airbus through UKEF). Airbus is everything that is wrong with the corporate world. Run by politicians, hopelessly corrupt, always spinning, and receiving massive subsidies by dint of their impact on local job markets.
- gdy 7y ago"Airbus is everything that is wrong with the corporate world." But it makes planes that don't crash like Boeings.
- sojournerc 7y agohttp://www.airsafe.com/events/models/rate_mod.htm http://www.airsafe.com/events/models/rate_mod.htm Not exactly...
- hogFeast 7y ago
- LaserToy 7y agoAnyone here actually believes it is only Airbus???
- tus88 7y agoSeems like international trade and bribery go hand in hand.
- jejei992o 7y agoRight, international trade. There’s absolutely no bribery going on in corporate America internally. Somehow, this one nation state has found perfect immunity within its borders to a behavior known to human society since they began. That immunity? Willful ignorance.
- dehrmann 7y agoThe EXIM bank can be viewed as a subsidy (and unfair trade advantage) for companies like Boeing. I assume there's an EU version of it that will do everything it can to put you in an Airbus today.
- raverbashing 7y agoLet's say, international trade in low enforcement/low transparency jurisdictions Then it's an issue of "complying" with the informal regulations or not selling
- clSTophEjUdRanu 7y agoIs there evidence of others?
- pinkfoot 7y agoWell, in the UK no less than PM Blair personally interfered to get to SFO to drop the in investigation into BAE bribery on the Eurofighter Typhoon project in Saudi Arabia. Something about 5,000 jobs, ₤6 billion, and - of course - upset Saudi princes. https://en.wikipedia.org/wiki/Al-Yamamah_arms_deal#Serious_Fraud_Office_investigation https://en.wikipedia.org/wiki/Al-Yamamah_arms_deal#Serious_F...
- yalogin 7y agoEvery company doles out bribes. In many countries bribery is the way to go. Things don’t happen without it. They just find creative ways to make it legal that’s all.
- dboreham 7y agoExcept it's illegal to pay bribes (for now, anyway) for US companies (to foreigners): https://www.justice.gov/criminal-fraud/foreign-corrupt-practices-act https://www.justice.gov/criminal-fraud/foreign-corrupt-pract...
- p1esk 7y agoYet it's 100% legal to pay bribes to US government officials (aka lobbying and campaign contributions).
- roywiggins 7y agoIt's not entirely for lack of trying on behalf of prosecutors. The courts have narrowed the definition of bribery. https://www.lexology.com/library/detail.aspx?g=c6c23d55-f451-4a0b-ba31-40d77dabc962 https://www.lexology.com/library/detail.aspx?g=c6c23d55-f451...
- p1esk 7y agoSo if I'm a Senator/Congressman and Comcast came to me promising $500k for my re-election campaign if only I could help them slow down Google Fiber rollout in some town, is it illegal for me to agree? I mean, this is a bribe, isn't it?
- dehrmann 7y agoI think corporate donors are held to the same limits as individuals: $2,800 per election to the candidate, $5,000 to their reelection committee. The rest (which still totals less than $500k) goes to state and federal party committees. Where the unlimited contributions come in (think Citizens United) are Super PACs, but those aren't technically affiliated with candidates, and they can't contribute to the candidates. The freedom of speech angle on this is that corporations or individuals can spend this money on political ads, but it has to be independent of the candidates. > is it illegal for me to agree? Yes, or it was illegal for them; this exceeds campaign contribution limits.
- JohnnyHerz 7y agoI find it irritating that this link is paywalled. the news about this topic is readily available elsewhere.
- aj7 7y agoSomeone put a pdf on Drive, please.
- pauljurczak 7y agoGoogle "Airbus ran ‘massive’ bribery scheme to win orders".
- pg_is_a_butt 7y agoHow many people died when they rushed a MAX redesign?
- ggm 7y agoLockheed. https://en.wikipedia.org/wiki/Lockheed_bribery_scandals https://en.wikipedia.org/wiki/Lockheed_bribery_scandals
- avocado4 7y agoDon't try to change the subject.
- wrnu 7y agoWouldn't be the first time. In Canada our former PM was accused of accepting 'kickbacks' in 1995. https://en.m.wikipedia.org/wiki/Airbus_affair https://en.m.wikipedia.org/wiki/Airbus_affair
- thrower123 7y agoYawn. This is how this works.
- yawaramin 7y agoArticle is paywalled, what was the timeline of the bribes happening? Would it be fair to say: Airbus runs 'massive' bribery scheme -> Airbus wins more orders -> Boeing feels pressure of losing orders -> Boeing execs pressure engineers to cut corners -> Boeing aircraft develop various major safety issues
- Haga 7y agoIf not. Ribed decently recently, instigate a scandal.
- philprx 7y agoOh, very surprising, this news comes at the exact right timing for Boeing during the 737 max debacle ;-)
- Iv 7y agoReminds me of an old story: https://www.economist.com/special-report/2003/06/12/airbuss-secret-past https://www.economist.com/special-report/2003/06/12/airbuss-... Maybe people here have never heard the EU point of view on it, so let me sum it up: Airbus bribed Saudi officials in the 90s to get a 6 billion contracts. It was "whistleblowed" by this then little-known agency: NSA and in the end Boeing got the contract. It triggered a EU investigation in what was then called ECHELON. A Cold-war era spying network that was being repurposed for economic intelligence. Airbus defense was that in Saudi Arabia, nothing gets done without corruption and Boeing probably did the same, but of course, EU had no interceptions to prove it. I often argue that Snowden told us very little new information and that the EU kney most of this since 2001. I don't understand why it took 15 years to become a public concern. https://www.europarl.europa.eu/EPRS/EPRS_STUDY_538877_AffaireEchelon-EN.pdf https://www.europarl.europa.eu/EPRS/EPRS_STUDY_538877_Affair...
- Findeton 7y agoI agree with all you've said, including that probably the US bribes (or threatens) as much or more than the EU. But being even more cynical about it, this is just the way the free market sneaks in, including these big government deals: one party has money, the other party has power. Say Airbus bribes Saudi Arabia Officials. The officials don't have that much money, but they surely have power, and Airbus doesn't have the power to decide on the deal but they surely have some cash. A transaction is agreed and done and both parties reach a win-win situation. Of course the losing part is the citizens, but a capitalistic view of this is that corruption is just anything that breaks the fairy tale idea that the people that work in government seek the interests of the general public and not their very own private interests. Citizens were already on the losing side when the government forced them to pay taxes.
- 7y ago
- Haga 7y agoJust another trade war front.
- nixass 7y agoBribery? Don't Americans call it lobbying?
- pxtail 7y agoIt would be lobbying if involved company would have name 'Boeing' otherwise it's clearly bribery!
- Havoc 7y agoAs a flyer: Do their planes fall out of the sky due to pervasive dysfunctional corporate culture? Nope. So yeah not great & but relatively speaking I can't say I particularly care
- kumarvvr 7y agoThe correct answer is : Eventually. So yeah, everyone should care.
- mcv 7y agoStill, tolerating bribes could lead to a dysunctional corporate culture where technical obstacles are solved with money instead of engineering. Airbus isn't as bad as Boeing, but it'd be nice if they didn't go down a similar road.
- potatochup 7y agoUntil they start bribing the FAA to certify their unsafe planes
- drno123 7y agoAs a business flyer - at this moment I am willing to pay 10-15% more for my tickets provided I fly only airbus equipment.
- thefounder 7y agoThis is really US taking down strategic competitors. It's nothing new. It's foreign policy, america first, double standard or whatever you want to name it.
- easytiger 7y agoThe US with the power of various DAs etc attacked the european banking industry whilst completely ignoring the american banking industry over almost nothing in some cases.
- heisenbit 7y agoThe selective enforcement is really a competitive advantage for the US and it is mind-boggling that Trump has suggested to openly allow bribery.
- trekrich 7y agoso not happy with making loads of cash with boeing loosing business they want to make even more. What happened to just making money, when did they become so greedy they want to make all the money!
- dman 7y agoWhat is the etiquette about posting links that are behind paywalls?
- ksec 7y agoThe one thing I am happy to see if how many "realist" has suddenly appeared and not try to deny any wrong doing or non- existent of bribery. And this happen just when Boeing is in trouble.
- bumblebritches5 7y agoThat's how it works over there in second world shithole europe. see dieselgate for more evidence.
- manicdee 7y agoEvery year we learn more about how suit-wearers do business: nepotism, bribery, kickbacks, back scratching, quid pro quo … but we continue to believe the myth of the “self made man,” who raised themselves to success by hard work and thorough understanding of their technical field.