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SEC Charges Oracle a Second Time for Violations of Foreign Corrupt Practices Act
- ada1981 4y agoIt would be helpful if these announcements would include an estimate of how much money was spent to bribe along with estimated revenue impact of the bribe. These seems like it could still be a profitable position over 5 years given the size of Oracles contracts, no?
- mc32 4y agoOracle is obviously no saint and I’d do my best to not use their services… but, why do governments have extraterritorial jurisdiction to impose domestic laws in international jurisdictions? Yes, obviously we can control what happens within our borders and we can stretch that and say it applies to US incorporated companies, but it certainly is overreach to apply US law to foreign subsidiaries. The aggrieved country where the violation happened should be the one who has jurisdiction over these issues, not the law of a foreign country. I think we used to call this “imperialism”.
- xbar 4y agoIt reduces the total global corruption incentive to have laws like FCPA enacted in every country. I suspect there are some interesting histories of the 1910s through 1950s where foreign development by oil companies led to spiraling corruption practices, for example.
- mc32 4y agoIf this were a universal convention of some sort with worldwide signatories, yes, ok. Otherwise this should be up to the discretion and jurisdiction of the local authorities, not a foreign body of law imposing its conventions extraterritorially.
- macintux 4y agoOn the other hand, companies as large as small countries can afford to buy off everyone who could enforce such laws locally.
- mc32 4y agoThis is true, but that's up to locals to decide what's acceptable in their society and not. Look, Ukraine, Russia and Nigeria are some of the most corrupt countries on the planet -we even have relatives of sitting presidents doing business with a few of the most corrupt governments, do we stop doing business with them, or do we stop aiding them till they adopt our morals?
- sfifs 4y agoChesterton's Fence principle - Usually a good idea to read the motivation / History behind the law https://en.m.wikipedia.org/wiki/Foreign_Corrupt_Practices_Act https://en.m.wikipedia.org/wiki/Foreign_Corrupt_Practices_Ac... I'd say the effect sought to be achieved is pretty much opposite of imperialism. In imperialiam (as demonstrated by various histories), colonizer citizens get away with pretty much anything in the colonized countries. FCPA levels the playing field by making colonizers liable in the home country.
- notch656a 4y agoIndia, the UAE, nor Turkey are colonies of the United States. Also the idea you can be on a level playing fields with citizens in certain countries without bribery is just laughable. The common citizen bribes in a number of third world countries just to get routine service, and if you don't bribe you're left pragmatically a sub-citizen status. >Chesterton's Fence principle Exactly. One should study why bribery is often necessary to even be a 'level' participant on the playing field before assuming anyone bribing is a 'colonizer.'
- ajhurliman 4y agoIIRC the FCPA _does_ allow some bribes if they're considered commonplace in that particular country. I have no idea how they determine which ones are okay.
- from 4y agoTechnically, payments which do not influence an outcome but merely speed up a decision are allowed. So bribing a minister to throw out all competing bids on a contract would be illegal but paying some clerk who’s dragging her feet on incorporation paperwork would be legal. In practice this line is a lot more blurry and they will charge companies even if they bribe for routine services. Walmart for instance paid a pretty big fine for paying to get building permits faster in Brazil. Companies will always settle because they don’t want to report to shareholders that a massive verdict and fine could be coming up. There’s also a duress exception, like if they start arbitrarily arresting your employees you are allowed to pay to get them out. This is basically what happened to Halotel and Viettel in Tanzania.
- pessimizer 4y agoHow would you feel if I traveled to other countries a few times a year to molest children openly and proudly, then came back? Do you think charging me with a crime would be imperialism? Would I be denying the agency of the countries that rely on child sex tourism to provide more jewels for the King's Holy Garments? Does the word imperialism mean controlling or replacing the governments of other countries in order to extract value for the mother country anymore, or is it always going to be an insulting incoherent woke metaphor about telling women how short their skirts can be and how they deserved it from now on? ----- edit: Child labor for me and not for thee, maybe: if I punish a US businessman for their open preference for importing products produced with child labor, am I imposing my values on the sources? If a US businessman opens factories in other countries that employ actual slaves, should the businessman be commended for his cultural sensitivity and openness (and contribution) to the labor practices of other cultures? Should the US government itself operate by different rules outside its borders? Is a US citizen only deserving of due process until they step over the border, where they can be summarily executed? There are a lot of obvious questions that can be asked about your position. My curiosity is about whether you allow yourself to ask them, or if you just stop asking questions when you reach the conclusion you prefer.
- mc32 4y agoThey should have an extradition treaty and ask you to be extradited so you are tried (see the Roman Polanski case). Also bribery is not rape or murder. To your later point, we do this all the time. We apply labor laws within US jurisdiction but we do not care if people/companies/governments in India or China use child labor in the manufacture of goods and services --with rare exceptions. I would be totally for enforcing this prohibition on imported goods and services. At the same time we have no right to tell India and China what they should allow and not allow there within their borders. I think we should be cognizant that the concept of child labor is a modern western concept --it's something those countries will discover on their own in due time. Enforcing our morals has the potential of making the lives of locals _worse_: their mother, father, siblings may starve because of lack of social services and incapacity of parents/siblings.
- jmclnx 4y agolooks like "just the cost of doing Business" to me, 23M USD is nothing to Oracle. If it was 1 Billion per offense (+ court costs), maybe Oracle would change
- echelon 4y agoNot fines. Jail time. I sat through so many anti-bribery training lessons over the years, I'm convinced companies use these to limit liability and scope the blame to the small guys. "But they were trained and should have known better." Investigate, find the source, prosecute.
- dkersten 4y agoWhy not both?
- mtgx 4y ago> If it was 1 Billion per offense Good point. Why are sentence times stacked for people, but not corporations? Corporations are people, too!
- noasaservice 4y agoI'll believe corporations are people when the government executes one in Texas. Liquidate all assets via public auction, zero out all stocks, and jail C levels for X days for violations of the public trust. Make it *painful*.
- salawat 4y agoPeople will just incorporate in Delaware, or other, similarly limp wristed jurisdictions instead of doing something somewhere where they face that type of risk. See current behavior for evidence of that.
- rjzzleep 4y agoI think there might also be a consideration here that it's a US company. The FCPA has driven some foreign companies out of business and allowed giants like GE to buy up their assets. Alstom exec's were fined for ordered to either pay 700m or face prison time and instead chose to sell the company to GE. GE itself was fined only 20 for FCPA violations in India. I can't find the list right now, but I believe GE bought a couple of companies this way.
- runnerup 4y agoWhy is it that if I bribe government officials for myself I get jail time but if I do it for my business I just get a small fine? Edit: This is an honest question. I understand that there can be prosecutorial discretion and that most 'crimes' go un-prosecuted -- I'm not likely to be "caught" for personal bribes. But given that this reached the threshold of administrative attention I'm curious why the DOJ doesn't coordinate efforts with SEC in cases like this.
- O__________O 4y agoWhile the SEC has extremely broad investigative and enforcement powers, it cannot file criminal charges. It can, and often does, work with the Department of Justice and the United States Attorney's Office to bring criminal charges.
- deleted 4y ago[deleted]
- dragontamer 4y agoI don't think the SEC has any prisons. Different agencies have different powers. SEC can fine you, or even remove you from public companies. I don't think they can jail you.
- runnerup 4y agoAbsolutely agree, just not sure why the DOJ doesn't work with the SEC on some of these cases.
- endisneigh 4y agoThey do
- anonymousab 4y agoI think allowing the SEC to "jail" a company - to prevent it from conducting any business or processing any funds for some period of time - would be apt.
- Aissen 4y agoHow much were the contracts worth ? Did the SEC just shield Oracle and their staff from having the same charges in those three countries ?
- staunch 4y agoFrom what I've heard, many cases of these kinds of bribery schemes are fairly widely known within the companies themselves. The general attitude is that "everyone is doing it" and any harm is so indirect as to not seem particularly unethical. For example, some government is already set to spend $100 million with X software company, so what's the harm in kicking back $10 million to the person signing the check? Of course it's wrong but it's very easily rationalized by psychologically normal people. If the goal is to actually stop this kind of bribery, we should give whistleblowers a 20% reward of the penalties. In other words, we should legally bribe people into reporting illegal bribery because bribery works.
- minhazm 4y agoThe SEC already has a whistleblower reward between 10-30% of the amount collected. The FCPA is covered under their whistleblower program. https://www.phillipsandcohen.com/sec-and-cftc-whistleblower-info/ https://www.phillipsandcohen.com/sec-and-cftc-whistleblower-...
- staunch 4y agoAh cool, it should be more widely publicized. Maybe I missed it, but I don't recall seeing news about bribery whistleblowers being paid out. Maybe it should be a mandatory part of training programs for global companies. I can't believe there aren't people at Oracle that would have happily collected on it. Or maybe that's what happened here.
- pluc 4y agoIt's not a fine it's a fee
- rychco 4y agoI would prefer if “the fine was so large we nearly went out of business overnight” to be the norm in these situations. The pricetag is so low that it might as well be encouragement to commit more crime in the future.
- howmayiannoyyou 4y ago"Those who act virtuously in every way, necessarily come to grief by those less virtuous." - Machiavelli The problem with the FCPA is that it inherently provides an unfair advantage to countries where foreign brides are not criminal or never prosecuted. Moreover, it's created a cottage industry of foreign 'consultants' and foreign attorneys, providing plausible deniability for outsourced bribery. This would be fine if Treasury, Commerce & DOJ put the screws to foreign countries & companies who engage in this misconduct, but the hard reality is they lack the resources to do so, and are far more concerned with politically charged priorities accruing more public & Congressional attention. Like environmental/climate policy and many other issues... the US is quite happy to disadvantage US businesses in global competition without any substantive effort to level the playing field through extra-territorial enforcement or policy reform. For example, we should permit statutory safe harbor for foreign bribery if US companies become confidential informants to DOJ, Treasury or Commerce, enabled via a clear and accessible platform for reporting. Instead, we live in a magical, feel-good, fantasy land in the US, with very little awareness of how the rest of the world really does business.
- stainablesteel 4y agoI agree with this notion, domestic us restrictions on foreign business policies have paved the way for businesses and institutions of other countries to act on even worse faith. There's parallels with this happening in the beef industry, where organizations are trying to lower the production of beef for environmental reasons. The result is they're attacking the most efficient beef farmers in the world - because they produce the most beef. If successful, the demand will only be picked up by less efficient farmers elsewhere in the world, causing a worse environmental impact.
- akamaka 4y agoThis is a very misguided comment. Bribery is a net economic loss — the company has to pay the bribe, and there is a long-term loss as the money gets spent on yachts instead of projects that spur further economic growth. Companies and their shareholders never wanted to pay out these bribes, and want these laws, because there is little competitive advantage to be gained by being better at bribing. Over time the laws have been extending to most developed countries, including the whole OECD. Sure, there are still exceptions, and if you’re a corrupt official, you can still select a Chinese engineering firm and pocket bribes. But it’s those excluded countries that are playing the losing game in the long term, ruining their international reputation and funding unproductive infrastructure projects with debt their own banks will be saddled with.
- pessimizer 4y agoThe violation was in creating secret accounts to use for bribery, not the bribery. It would be bizarre for the US to prosecute for the bribery, since a large part of US (and other countries') diplomacy is to bribe decisionmakers in other countries with favorable treatment in return for them buying from our vendors, and to offer foreign aid in the form of products and services from our vendors.
- cbm-vic-20 4y agoLooks like some people didn't take the mandatory anti-corruption training course.
- throw45678659 4y agoAh yes, the Java company expands its influence.
- ajsharp 4y agoFor anyone keeping score, 23 million is approximately .05% of Oracle's 43 billion in annual revenue. The only interesting question in these SEC settlements is where the funds go?
- themitigating 4y agohttps://www.investopedia.com/ask/answers/05/secfines.asp https://www.investopedia.com/ask/answers/05/secfines.asp Here you go. If the fine was significantly more wouldn't Oracle either fire people or raise prices? That only punishes people who had nothing to do with the crime