Moral Hazard

By Cox, Rob | Newsweek, May 7, 2012 | Go to article overview
Save to active project

Moral Hazard


Cox, Rob, Newsweek


Byline: Rob Cox

Can American companies compete abroad without bribing?

National Notebook: How to succeed in emerging markets without really bribing is not the title of a new Broadway musical but the vexing question du jour in the boardrooms of multinational corporations. Companies are wrangling like mad with how to effectively push their wares abroad without running afoul of the Foreign Corrupt Practices Act. This 35-year-old legislation was designed to prohibit firms operating in the United States from bribing government officials around the world to win business. From a strictly moral perspective, it's hard to argue with holding companies to a code of proper conduct wherever they operate. But as the act has been given new oomph by the Justice Department and the Securities and Exchange Commission under the Obama administration, the bright line between what is acceptable behavior and what is not has become muddled. Ironically the law itself, and the way the government enforces the rules, has made matters worse. It may be time to give the FCPA a revamp.

Consider last week's Walmart shocker. According to The New York Times, the mega-retailer's Mexican unit sprinkled some $24 million of baksheesh into the pockets of local worthies to enable its store expansion. The alleged cover-up of its own 2005 investigation into the matter suggests a deceptive corporate culture at Bentonville HQ. What Walmart actually did in Mexico, though, may not have been illegal. The Justice Department says the law aims to make "it unlawful for certain classes of persons and entities to make payments to foreign government officials to assist in obtaining or retaining business.

The rest of this article is only available to active members of Questia

Sign up now for a free, 1-day trial and receive full access to:

  • Questia's entire collection
  • Automatic bibliography creation
  • More helpful research tools like notes, citations, and highlights
  • Ad-free environment

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
Loading One moment ...
Project items
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

Cited article

Moral Hazard
Settings

Settings

Typeface
Text size Smaller Larger
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

While we understand printed pages are helpful to our users, this limitation is necessary to help protect our publishers' copyrighted material and prevent its unlawful distribution. We are sorry for any inconvenience.
Full screen

matching results for page

Cited passage

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

Cited passage

Welcome to the new Questia Reader

The Questia Reader has been updated to provide you with an even better online reading experience.  It is now 100% Responsive, which means you can read our books and articles on any sized device you wish.  All of your favorite tools like notes, highlights, and citations are still here, but the way you select text has been updated to be easier to use, especially on touchscreen devices.  Here's how:

1. Click or tap the first word you want to select.
2. Click or tap the last word you want to select.

OK, got it!

Thanks for trying Questia!

Please continue trying out our research tools, but please note, full functionality is available only to our active members.

Your work will be lost once you leave this Web page.

For full access in an ad-free environment, sign up now for a FREE, 1-day trial.

Already a member? Log in now.

Are you sure you want to delete this highlight?