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Ask HN: How have you dealt with corruption?

91 points by puppetaccount 17y ago

A technical person at a potential large government customer of ours invited me to discuss our technology with him outside the office. This could be a red flag in itself but we had met twice before and I had learned that he graduated from the same school as I and around the same time I did and we knew some people in common. Additionally, he had given me a paper of his to read which was pretty decent and said he would like feedback. In general, he seemed like an enlightened techie who was enthusiastic about our technology and technology in general. There seemed to be no red flags. The first time I met him, we discussed his paper and our project in general and he was generally encouraging, saying his organization could be very bureaucratic but he really believed what we were doing was the future and he would pull for us. He also indicated he was stifled in his job and would be interested in working for us in the future. This was a bit of a red flag but considering our connections outside of this project, it seemed like it could be an innocent thing. I told him that if he decided to leave his employer he should let me know and that we were at least a few months away from thinking seriously about hiring someone with his skills. When I met him the second time, he out and out suggested that we pay him to push our project through and, when I told him his employer would most likely find that objectionable, he suggested various ways of hiding it. I was too shocked to say anything, afraid he would sabotage us if I said no to his face and insulted him and the only thing I could say to him was that my cofounder is very by the book and I really have to run it past him and that he should double check to find if it is actually allowed. I have no intention of paying him or dealing with him again, but I feel dirty for not telling him off on his face. I am just posting this here to vent and see if anyone else has faced similar issues. How did you deal with them? Any advice for me? How could I have handled this better? I am asking this seriously. Although I did not do anything wrong (or so my partner tells me), I feel that not doing anything more assertive than what I did was wrong. :(

gstar 17y ago
I've dealt with this when I had to mop up after a predecessor made a habit of taking bungs at a government department. My advice to you is that you should have absolutely nothing to do with this. You should forget the sale now (it's a possibility that it was only entertained in the first place because your associate thought the payoff would be likely). If you can anonymously tip off this person's superior one way or another, you'll be doing a good thing for everyone (citizens, colleagues, bung-seeker) in the long run. This advice only applies for government - in private enterprise this kind of thing is pretty much par for the course on very big sales, but in modern times it normally takes the form of valuable free stuff rather than cash.
- puppetaccount 17y ago
  The dilemma is clearly between the larger good and my selfish interest in not seeing my company hurt. The industry we operate in is very narrow and while losing thus customer alone would hurt us a lot, having someone there say negative things about us could destroy us. I have already written off this customer, because if nothing else, the stress of having to manage a corrupt person while not indulging in corruption is not worth whatever money we make off them. But we would prefer to not get vilified in the industry because of someone else's character flaws. I will find out about how to anonymously report this. I am thinking I could do it at least after a few months so at the very least it's not obvious who did it.
  - gstar 17y ago
    I understand, managing this for you has got to be really, really delicate. There's potential downsides in doing nothing as well. I'd still say it is worth having a word with someone more senior if you are able to. He'll likely lose his job, which is a horrible thing to have on your conscience - but if your sale goes through anyway, and he championed it - you could still end up on the hook. You'll either get tarred with his brush, or outright investigated for colluding with him, which may or may not be a crime where you are. On the basis that you've written off the sale mentally, talking becomes an upside. It gives you another chance at making the sale on fair terms, and establishes your trustworthiness. I don't envy you though, horrible situation.
    - puppetaccount 17y ago
      Now you have me worried. If I did not offer him anything, how could I be held responsible for colluding with him? I understand the risk of being painted with the same brush. This is all the more infuriating because there are other people, more senior than him at this organization who seemed enthusiastic about the project.
      - dasht 17y ago
        Don't screw around. You've described yourself as the sole witness the commission of a serious crime. Passivity and/or trying to resolve this "politely" in back channels can bite you by making you an accomplice. If it really was as bad as you describe - your next call should be to the FBI and you should prepare for that by writing down every detail you remember, as carefully and accurately as you can.
fiaz 17y ago
You did perfectly fine - seriously. Alternatively, you could have gone the comedic route by making the whole thing into a big joke, but it's not like things would have been better.
- puppetaccount 17y ago
  Having thought about this a bit, I feel like if I had turned a cold shoulder to his proposal to work for us in the future, he would have been discouraged about it. I could also have communicated in some other way that we work by the book. At least then, we would have had the chance of working with other (possibly non corrupt) people in the organization to get our project through. I mean there are other people there who are enthusiastic about it. Anyway, that's just me ranting. Thank you for your words.
zackattack 17y ago
http://www.youtube.com/watch?v=fRcamEx7EmA http://www.youtube.com/watch?v=fRcamEx7EmA Just kidding.
percept 17y ago
http://www.washingtonpost.com/wp-dyn/content/article/2009/03/12/AR2009031201426.html http://www.washingtonpost.com/wp-dyn/content/article/2009/03...
Mz 17y ago
I don't see any benefit to taking a strong stand face-to-face. It's not like he would see the light or something. It would only ensure that he has a heads up, putting you in a seriously dangerous position.
dasht 17y ago
So, really and truly this government guy hit you up for a bribe? Tonight, write down every detail, sign and date (ideally with witnesses). Tomorrow morning, call the FBI. After speaking with the FBI, unless they advise otherwise, brief your CEO. Only do these things if you are really, really sure the guy actually hit you up for a bribe but if you are - I think you should do these things. -t
- puppetaccount 17y ago
  Already briefed my partner. Calling him again in a few minutes. Calling the FBI is tricky. I don't have any proof and as a small company, I would prefer not to have a scandal (even with us on the right side of it) be our first introductiion to the rest of the small community. In essence, what I am saying is doing the perfectly right thing would hurt us. I am thinking seriously about anonymously reporting this though. I don't know if that even works but at least I can say I tried.
  - dasht 17y ago
    You don't need proof. Proof is their job, not yours. Yes, it will hurt your firm, short term, odds are. Tough it out. Adhere to the rule of law. Protect your longer term interests.
  - deleted 17y ago
    [deleted]
  - bcl 17y ago
    Do the country a service and stand up for what is right. You may lose this sale, but you will have your honor and integrity.
    - puppetaccount 17y ago
      At this point I do not care about the sale. As I mentioned elsewhere, having to 'manage' this person without paying him a dime is going to be a task. It's not like I can bar him from meetings. I will be dead before he sees a rusty penny from us though. There are other concerns, outlined in my other comments. Doing anything has implications on people other than myself. And an anonymous tip, while not the most surefire way of getting this guy caught, is also an approach to doing the right thing.
edw519 17y ago
You nailed it. If you had not stood your ground, you would have sacrificed all your hard work for nothing. If you had pushed any more than you did, you would have created an unnecessary drama that would have diverted your focus. You feel badly right now because you're normal. This shall pass. Even the fact that you registered a puppet account to discuss this clearly demonstrates that you know how to handle a delicate business matter. If the quality of your product matches the integrity of your character, you have great success awaiting you. Respect.
- puppetaccount 17y ago
  Thank you for your kind words.
alecco 17y ago
Watch out! Go to a lawyer first. Always lawyer. And a good one. FBI might squeeze you to do things you don't want to do. Also the accused will retaliate in some way to discredit you and your company. Never deal with law enforcement without going to a lawyer first, unless it's an emergency (911 first, lawyer 2nd.) Lawyer first, always. Not even your co-founder as he could mess things up (Unless he is a lawyer.)
- puppetaccount 17y ago
  My cofounder is a solid guy. I would trust him with my life. So I have already shared this with him. The advice to get a lawyer is sound though. Unfortunately we don't have a lot of money and what money we do, we would prefer to pay our handful of employees with. We are not profitable. But I do have some friends who went to law school. So I'll ask a friend pro bono. As you can imagine, any legal step would be a huge distraction, and as a startup that really hurts us.
  - alecco 17y ago
    Cool. > My cofounder is a solid guy. I would trust him with my life. Good guys can mess things up unintentionally. Consequences on things this big can affect your life forever. > Unfortunately we don't have a lot of money and what money we do, we would prefer to pay our handful of employees with. We are not profitable. If you are in US there have to be several organizations to give you free advice on similar matters. I bet they even have 1-800 numbers. > But I do have some friends who went to law school. So I'll ask a friend pro bono. Good start. > As you can imagine, any legal step would be a huge distraction, and as a startup that really hurts us. Take this as training. Surfing the legal ecosystem is part of entrepreneurship. Ignoring this costs (in both time an money) can cost you more than your investment. Be smart. I dealt with exactly the same situation but not in US. People doing that in the open tend to have a network of support. Do not underestimate the consequences of your (or your cofounder's) actions. Watch out.
    - puppetaccount 17y ago
      The point about organizations is a good one. I will look them up. The advice to be very careful is also on the money. I appreciate it and will do so. Certainly, one of the things worrying me is that he might not be alone. Hope your situation turned out o.k.
jhg 17y ago
Welcome to the real world, Neo. Kickbacks is what drives business deals in many countries, including the US, Canada and you name it. That's an integral part of business culture. In some places to a lesser degree, in some - to greater. Government contracts are especially lucrative type of deals, and I would very surprised if you somehow waltzed in from the street without any prior connections and got a contract. You have to "know" people, you have to have "contacts" and you have to work to keep these "contacts" alive. Take a guess what it usually translates to. Just say, no, can't do and walk away.
- lucifer 17y ago
  "Just say, no, can't do and walk away." Yes, but talk to a lawyer first before talking to ANYONE else.
gojomo 17y ago
Without prematurely compromising your identity or giving more details than you're comfortable sharing, can you say (1) which country; (2) which level of government (fed, state, city, etc.); (3) anything else about the geographic region or field-of-work?
justlearning 17y ago
If I may ask - which country?
dkokelley 17y ago
My only non-professional advice is do not in any way do business with the firm he works with until after the situation is dealt with. Even if you get the contract through normal channels, it could blow up in your face later if this guy was found out. Report it, and get a record of you reporting it. That way, if anything happens, you can pull out your record and say 'we already reported this'. Also, assuming this is a US department, this site may be the way to go: http://www.gao.gov/fraudnet/fraudnet.htm http://www.gao.gov/fraudnet/fraudnet.htm I'm not sure if it's how you report bribe solicitors, but if it isn't I'm sure there are similar government sites set up for that. Good luck. I don't envy your situation.
raffi 17y ago
Wow. Just wow. I don't know what agency/department you're dealing with and I'm making an assumption that you're in the US. Try searching for "fraud, waste, and abuse" and your agency's name in Google. If you're dealing with the DoD, try these folks: http://www.dodig.mil/HOTLINE/fwacompl.htm http://www.dodig.mil/HOTLINE/fwacompl.htm Not sure if this falls under FWA but if you talk to someone at the IG (Inspector General) office, they'll point you in the right direction. The other option is to go to your boss and see how your company wants to handle this.
- puppetaccount 17y ago
  No boss. This is my company. Have a cofounder who knows. Appreciate the links.
deleted 17y ago
[deleted]
zaidf 17y ago
I don't know who to hate for the repeated advice to talk to lawyers for anything half-legal. Hey, when people ask legal questions, they have already considered seeing a lawyer.
jason_tko 17y ago
Running an IT service business for 7 years, I've run into a number of dubious situations. Heres a couple. A client introduced me to a salesperson who works for a competitor company. We sat down for coffee, and his opening line was that he has a million dollars of deals in the pipeline (which would have been a very welcome addition to the bottom line), and he was interested in bringing all these customers to my business. Immediately after this, he asked for a very large base salary, which was a bit surprising given the time passed in the interview, but I suppose within general norms. In any case, I was interested in bringing him on board, but since we're a smaller company, I'm very careful with my hiring decisions. As you all know, a wrong hiring decision can cause all sorts of problems and headaches for a small focused team. So I started by asking him some more questions about his background, and some typical interview questions. Then he says : "Actually, I know a good way we can start our relationship. There's a guy at work I really hate - a total prick. What if I were to give you all of his leads before he closes them? I can't give you an introduction or anything of course, but I can give you the client information, and the decision makers names, and you would have to sell them yourself! What do you think?" I was taken back, and I responded : "Well, I'd need to examine the ethics and legality of that arrangement." He responded : "Hey - we're all ethical here. This is just a way for us to start collaborating." I ended the interview, already decided that I wouldn't hire him. If he was offering me this deal after knowing me for 20 minutes, how could I trust him as my salesperson once I hired him? After this interview, I called a mentor to get his take. His immediate response was "Here's what you do. You call the CEO of the company he works for. Say 'I know we're competitors, but some information directly relevant to your company has come my way.' Meet up with him, and tell him exactly what happened. He'll be fired on the spot." I didn't end up doing that. The salesperson was not the most moral of people, but he had a family to support, and it's very difficult to find a job in this down-market. Another unrelated story - a customer manager who was a friend came to me and asked me for a kickback from the project he awarded me. Thinking back, he might not have realised how difficult a situation he put me in. Providing him with any kind of monetary payment would have been a touchy situation for many reasons, so I sat down with him and said something along the lines of : "Actually, we're already running right against our profit margins for this project. Since you're a friend, I gave you a much bigger discount than I normally would give. I'd end up losing money here if I gave you a finders fee for this particular project. The fee I'd be able to pay probably wouldn't be worth your risk in accepting that kind of fee, or my risk in paying it. But, if you come across any other opportunities in different companies, I regularly provide finders fees for those situations so I'm happy to organise that for you." By framing any kind of payment as risky, and by telling him we're not making much from this project because of our friendship, he dropped the issue, and everything turned out alright. In summary - I tend to deal with corruption by avoiding it or deflecting it wherever possible. I don't tend to take the aggressive route of reporting it, or going after people.
ratsbane 17y ago
I've been trying to compose a response to this, describing a similar situation I was involved with. I just can't do it without saying more than is prudent. I was slow to catch on to what was going on but I did the right thing when I did and the guilty weren't punished. I don't mind talking more about it privately. The lesson I learned was that there are a lot of good, honest, and competent people around but there a few who aren't and I wish I hadn't wasted time and frustration with people who were willing to put up with that corrupt few. You've got a tough problem but it sounds like you have good judgment. I hope it works out well for you.
- puppetaccount 17y ago
  I understand not wanting to share specifics. Thanks for sharing your experience, your good wishes and your offer of advice. At this point I think I am done thinking about this for the day. If I come back to this I will definitely reply to your latest comment to ask for advice. (Wish HN had private messaging).
elviejo 17y ago
An effective way to deal with corruption is to make it clear that you don't participate in it. It only takes for you to fail once and then everybody will know that you are ready to de "business" with them. Whereas if you make a name for yourself as a clean contractor, you will also attract other kind of customers. Even inside government itself, but from other branches. Government is such a big beast, that there is plenty of honest people inside of it too.
- puppetaccount 17y ago
  Not being honest is not, and has never been, an option I would consider.
9oliYQjP 17y ago
You need to withdraw your product/service from consideration by this customer. In other words, refuse to sell to them. Come up with any reason. This guy sounds like your typical corrupt politician or organized criminal. They typically do you a "favour" that you didn't even ask for, one that is executed in such a way as to break some rules/laws however petty. Having preemptively performed a favour for you, they have you on their books for when they want to call on you for a return favour. Even though you don't think you owe them one, the shady nature of that first favour is always a dark cloud hanging over your head. They're master manipulators and blackmailers with a balance sheet of favours. It's simply warped. You shouldn't be afraid that he'll sabotage your bid. You should be afraid that he'll give you the bid anyway, then call you up later saying, "look I did this favour for you, now I need you to do X for me." From there it's a slippery slope. The only way I've found to deal with these folks is not to deal with them at all and deny any favours from them. I wouldn't accept a glass of water from them if I were dying of thirst.
visitor4rmindia 17y ago
It makes me sad to realize I read the OP and thought "Isn't this normal?" Then I read all your comments and realized just how different the US is from India and how far we still have to go. Sigh
seven 17y ago
Do not put yourself into a position in where you are susceptible to blackmail. This is a big risk when dealing with dubious stuff. (edit: s/the biggest/a big/)
fauigerzigerk 17y ago
You did the right thing. You are the victim in this situation. Nobody, especially not yourself, should expect that you damage your own cause beyond not participating in the crime. If everybody acted like you did, corruption would not exist.
Edinburger 17y ago
I worked for a small company in Europe selling software into much larger companies. I am pleased to say that over four years, there were only a couple of times when I think we lost a sale because of corrupt tactics by a competitor and even then, I can't be sure. Certainly, we sold a fair amount of software and didn't have to bribe anyone. These were small deal sizes though, less than ~$50k and I think corruption probably gets more prevalent with larger deals. Certainly I have seen much more questionable behavior in other businesses such as consulting and outsourcing which is why I wouldn't want to spend my days selling those kinds of services.
paulcarey 17y ago
A contrasting approach - when Mo Ibrahim set up a mobile network in African counties he knew a no-bribe approach wouldn't fly, so bribes were limited $30,000. http://www.guardian.co.uk/lifeandstyle/2009/feb/01/mo-ibrahim http://www.guardian.co.uk/lifeandstyle/2009/feb/01/mo-ibrahi...
- Edinburger 17y ago
  I didn't read it that way, I read it that because he set things up in the way he did, "Effectively, no one could now pay a bribe."