Those annual trainings are there to show compliance. This prevents pro active investigations by authorities into business conduct. Without those corporations are free to engage in all kinda of shady business behaviour. And when something turns sideways, the offending employees passed the training, so the company is shielded, to an extend.
People downplay such training, but imagine the environment without it. Imagine if nobody officially talked about corrupt practices: it would create a very dark place for such things to occur, nobody would know what the rules are or what to do, and especially the silence would speak very loudly.
Edit: By training everyone, not just the people directly involved with such situations, anyone considering corrupt acts will know that everyone - from the tech support person who helps them send the corrupt message to the receptionist who takes the corrupt call to the finance underling who mails the check - everyone will recognize it. There is no talking the rube into helping them; there are eyes everywhere, all the time.
People know that what they hear in the training videos and how they must really act are two different things. If you find out that your boss's boss is corrupting goverment officials in Poland to get a $100m contract (a real case BTW, involving one of MS's big competitors), do you really think the company wants you to raise alarm and blow that contract? What good does it do to your boss's boss career, or the shareholders?
> People know that what they hear in the training videos and how they must really act are two different things
It also shifts culpability to the individuals; aka CYA for the org. Corporate counsel will say "We have training for this every year; they knew they were not supposed to do that,and we weren't aware they were doing that, so it's not our fault"
Very important to highlight this; since joining a different big tech company I have quickly realized how much the internal processes (everything from expenses to security posture) are structured to put the maximum responsibility on the person furthest down the totem pole.
In small European companies I've worked for this would be considered a big red flag and a sign of broken company culture, but for US companies it is seemingly the norm.
> In small European companies I've worked for this would be considered a big red flag and a sign of broken company culture, but for US companies it is seemingly the norm.
Try working for a big European company, it’s no different.
Do you mean large EU companies are more similar to large US companies, or more similar to small EU companies? I presume the former, which would be a shame but not entirely unexpected since I imagine (in the tech industry at least) there is a lot of emulation.
As soon as you do business interbationally, especially in the US, you have to follow the same anti corruption laws, business conduct and so on. I guess that's one of the reasons big corps are so similar with regards to those trainings.
It's not a perfect solution, but nothing is. The training shifts the equation significantly relative to no training (as described in the GP). Our alternative to perfect solutions, if that's what we require, is to do nothing.
> What good does it do ... the shareholders?
Note that we commonly talk as if people will naturally care about the interests of one group of humans they don't know, the shareholders, but not another group, the public. Various rules say you should care about both (and there are many more rules regarding the latter).
> Enron would have been better off if someone had blown the whistle early
Blown the whistle to who and about what. As I understand it, Enron's brilliance was breaking up the actions so each low ranking employee was looking at legal things and you had to be quite high up to see the issues
Not when you have a deadline and your stuff is behind, you don't :-)
Happily, it was better than that. Most of these courses were online, and you could just let the videos of actors working through scenarios run in the background and then answer some simple questions. The questions never varied and the correct answer was usually pretty obvious (e.g., don't pick any answer that includes hiding a body).
> The questions never varied and the correct answer was usually pretty obvious
Siemens ask different questions in reruns of end tests, vary the order the questions are in, and also ask questions you can’t answer from understanding the topic. Eg ‘what colour was the background of the graph demonstrating the effect?”
If I have a deadline and stuff is behind, it's my job to tell my boss. It's their job to get an exception so I take the training after the deadline. Also probably their job to get some of my tasks reassigned.
Watching company policy videos wears thin after about 2 minutes, but I wasn’t paid anything like $100/hr…
My method was to open another browser tab, then you can play several at the same time. The next company I was at prevented that somehow.
So I opened a few different web browsers. Then they broke that and also made each clip about 2 mins long and had loads of them, so you can’t even queue them up in one browser.
It's not about the videos. The main point it enforces is that you're supposed to hold hour tongue as your company engages in a kinds of intrinsically abusive and unethical practices (as long as you, personally, are not breaking the law). Still sound like $100/hr of fun?
It's effective in its real goal (preventing fines), just not in its stated goal (preventing bribery). Of course this means that it's at best a half-truth to call it training (a more accurate name would be e.g. "indemnity procedure").
My thoughts exactly. Every year, the Standards of Business Conduct training talks about not bribing foreign officials and devs are like “who the hell is ever in that position anyway?”.
If it helps, I had to sit through all that stuff at Amazon as well. I was in the bit that makes consumer electronics and never dealt with contracts in any way, yet still had to spend time learning not to make or take bribes from wholesalers or international businesses or governments. Every. Single. Year.
Initially the training software was badly written so you could just open up DevTools and type "v = document.querySelector('video'); v.currentTime = v.duration - 1000;" or similar and just bop through the sections. Later they seemed to track time on the server, so really the most I could do is turn off the window focus check and leave the tab open in a second monitor. So annoying.
Yea, those simple times have passed. Ours require clicks at various points ("Next" and testing questions at the end of sections), so i accumulate them until there are 4-5 of such mandatory crap due and do them simultaneously. I suppose in time they will catch onto that too, and you'd be able to run only one at a time.
Yeah I just mute the tabs and set video speed to as fast as it’ll let me. Ours has little quiz sections but you pretty much always get infinite tries and it doesn’t take a genius to guess the answers.
I worked somewhere that had a fire safety online test each year.
One staff member would be nominated to do all the tests and would sit down with everyone’s logins and spent the whole day sitting the test again and again. The other staff provided food and drink.
Me desperately trying to get a decent repro case for a bizarre networking bug in Halo: "Oh man, gotta remember, better not bribe any foreign officials while I sort this out."
On the other hand, if network errors could be debugged by bribing foreign officials, I'm assuming there would be a lot of rather rich foreign officials.
How many MSFT devs do you think travel to foreign countries to close deals? I do not think one has to have worked there to come up with, "mmm, probably not very many", and thus devs are like, "WTF do I have to watch this?"
Many years ago, another division of my employer got caught bribing Nigeria. As a result, a bunch of people who were never in a position to do so had to sit through hours of ethics training. Some of it came with oddly specific examples. Halfway through one such lecture, in which we were being admonished to never accept a car from a customer, some engineer in the back did some quick mental arithmetic on his own salary versus costs of cars and asked "Which customers were giving out cars?"
Being that Instructor is 100% bullshit job. I.e. you're doing something entirely pointless, day in-day out, just so your company can later say to some lawyers that it was done. I feel bad for people who work those jobs.
I read a story yesterday[1] how the policy inside Google is to cc their legal department on any emails that you think could make the company look bad in any future legal proceedings. As I understand it, this shields the email from discovery.
As one there before, during, after that little DoJ/IE kurfluffle, I recall the guidelines to be simple: there are things you don't talk about in email[0]. Which is why this Google thing mystifies me: why are you talking about it in email at all? And then to rely on what sounds like some crackpot legal theory? (I mean, maybe it's not, and IANAL, but it reeks of "sovereign citizens don't have to pay taxes".)
[0] Yes, that is a vast oversimplification (though accurate) to make a point.
> Plaintiffs respectfully request the Court to sanction Google LLC (Google) for its extensive and intentional efforts to misuse the attorney-client privilege to hide business documents relevant to this case. Google has explicitly and repeatedly instructed its employees to shield important business communications from discovery by using false requests for legal advice. These efforts directly harmed Plaintiffs, undermined their discovery efforts, and subverted the judicial process. The Court should sanction Google and order the full production of withheld and redacted emails where in-house counsel was included in a communication between non-attorneys and did not respond. Alternatively, the Court should hold these silent-attorney emails are not privileged and immediately order their production.
That's what the DoJ is alleging; it's not clear what "theory Google was operating under". The DoJ may be right or wrong, and separately, they may be on a wild goose chase.
one thing that they teach you in this sort of training (never a Googler but been at at other big names) is that it is not a blank check to shield all emails from discovery by just cc-ing legal.
At my employer, where where everyone has to undergo multiple types of ethics training every year, I think they would view this as "willful ignorance," which they say is not a defense for anything. Plus, they tell us to contact legal only when we think something has been done to violate the ethics guidelines, not to prevent it from happening in the first place.
In almost every country with a dictator and human right abuses, you will find a constitution guarantying civil rights and liberties of the individual...
[1] - "The Constitution of the Russian Federation"
Article 17
1. In the Russian Federation recognition and guarantees shall be provided for the rights and freedoms of man and citizen according to the universally recognized principles and norms of international law and according to the present Constitution.
2. Fundamental human rights and freedoms are inalienable and shall be enjoyed by everyone since the day of birth.
3. The exercise of the rights and freedoms of man and citizen shall not violate the rights and freedoms of other people.
Article 18
The rights and freedoms of man and citizen shall be directly operative. They determine the essence, meaning and implementation of laws, the activities of the legislative and executive authorities, local self-government and shall be ensured by the administration of justice.
Article 19
1. All people shall be equal before the law and court.
2. The State shall guarantee the equality of rights and freedoms of man and citizen, regardless of sex, race, nationality, language, origin, property and official status, place of residence, religion, convictions, membership of public associations, and also of other circumstances. All forms of limitations of human rights on social, racial, national, linguistic or religious grounds shall be banned.
3. Man and woman shall enjoy equal rights and freedoms and have equal possibilities to exercise them.
A gridlocked political system is not guaranteed to create "good legislation" as Scalia puts it, take US as a prime example of that, almost every legislation is packed with pork and other things unrelated to the legalisation itself.
To Scalia defence he might have meant "not awful legislation", like avoid harming a minority, because of the bicameral legislature. But good legislation? No.
It is true that in Europe it is common to mix the legislative and the executive with the same election and thus chamber. However in Sweden the executive power is divided in half, with the elected prime minister with his cabinet (regeringen) on the one hand and the independent government agencies (myndigheter) on the other. This is a separation of powers that US doesn't have.
And it is in the executive that has the highest risk of political corrupt behaviour, because it deals with all the practical details of running a country, therefore separating the executive into two separate branches, the elected and the civil servants, creates better protection against political corruption.
Scalia main argument is that US can't become the Soviet union because of the bicameral gridlock built into the system, however what we have seen in the US when the legislature is politically paralyzed is that the executive, and to some extent the judiciary, has encroached on the legislative powers.
How many of the wars that US has been involved in since the second world war has been formally approved constitutionally by the senate? Zero.
Did President Obama execute a US citizen without a trial? Yes.
This is a gap in Scalias argument, the executive power is too unrestricted, hence it is the US executive power that will be removing citizen rights from the citizenry, not the legislature.
Let's remember that Scalia was a judge, not a political theorist or a legislative expert. Scalia's expertise would be the operation of the judiciary, courtrooms, etc.
> However in Sweden the executive power is divided in half, with the elected prime minister with his cabinet (regeringen) on the one hand and the independent government agencies (myndigheter) on the other. This is a separation of powers that US doesn't have.
The US does have not have this. That's why Biden couldn't fire the postmaster general, or the fed chair, or numerous other posts. Yes, the
President fills the leadership roles when they are available, but they don't totally control many agencies.
Compare the US Department of Justice with the equivalent in Sweden, in Sweden that would be split in multiple different organisations first with Departement of Justice, headed by the minister of Justice (elected politician) and a staff of civil servants, but they don't handle any criminal cases.
Thus there is several other government agencies like Riksåklagare (Prosecutor-General), Polismyndigheten (Police Authority), Säkerhetspolisen (Security Service), Ekobrottsmyndigheten (Economic Crime Authority) etc all independently governed by civil servants.
This is a central part of the Swedish constitution and is tradition that dates back several hundred years.
Maybe they just kept the Soviet one with some edits of the nation's name. That one was also wonderfully progressive and respecting of human rights... On paper. Come to think of it, did the Soviet Union really "go under"? Only in the sense of losing all its peripheral territories, AFAICS; the core remains. In several senses.
In the banks we have the same. As IT guy, the amount of quarterly trainings and their focus is a bit crazy, most topics I will never ever touch since I don't work in ie Legal and I am so far from ever interacting or even seeing any client.
Most of the trainings are about a fine we got due to being caught doing something bad, say 10 years ago, and part of legal settlement is apart from direct fine, a nice 30-60 min training where they tell you that stealing and lying and cheating is bad.
Those trainings keep re-appearing quite consistently so they are really not that effective.
When i was at Microsoft, i recall an engineer saying that corporate puts that in there so that when somebody is caught giving bribes they can point to them and say they're a lone wolf, bad actor, etc., because clearly the policy is not to give bribes, and they took the training course in this, we documented that...
Implication: they can fire that employee and continue to give bribes.
Ps. Full disclosure, I never witnessed anybody giving bribes, nor worked with anyone who would be in a position to do so.
"Conservatism consists of exactly one proposition, to wit: There must be in-groups whom the law protects but does not bind, alongside out-groups whom the law binds but does not protect."
A surprisingly vacuous quote that continues the conservative/right-wing as pejorative quote while obfuscating the real problem. The real problem is elitism and corruption.
Compare the treatment of Donald Trump versus Hillary Clinton or Joe Biden. Why is the conservative in the out group and the liberal in the in group?
No need to take a shot at the other comment; maybe they just don't understand you. I didn't know who you meant; 'lower classes' is a vague term, especially in context of foreign corrupt practices.
standards of business conduct. annual training. With remarkably high production standards and costs, I might add. I'm a big fan of Nelson, the lovable everyman developer.
If its true that microsoft were doling out 40k bribes, that would be less than five minutes of what an sbc episode must cost to produce. The irony.
At another big corp the training videos had a scenario where I would be on site with accommodations provided by the client. It asked whether I could accept a cook offered by the client.
I'm infuriated that I'm being offered t-shirts and maybe a lunch and someone else out there is getting a cook for a month. Damn right I'm taking the cook.
I was prepared to get my pitchfork out, but after reading I'm struggling to connect the dots. This article is scant on details of what illegal or favorable behavior Microsoft is expecting in exchange for money. The only concrete mention is a previous SEC filing that has nothing to do with this whistleblower. The first example about $40k doesn't seem to explain what Microsoft was actually thinking it would get for that money, let alone whether that money was illegal. At worst, it seemed to violate corporate policy, which I can understand if that got missed in an initial review. The other examples don't sound like bribery on Microsoft's part so much as resellers squeezing as much out of a deal as they can get away with. I call that a problem with the reseller model.
I imagine Microsoft looks the other way while resellers make lots of money because, realistically, being in some of the markets mentioned is impossible unless you're connected with the right person. While not necessarily efficient, I wouldn't call that illegal or even unethical without a lot more detail than this article provides.
But maybe I'm missing something. This article reads as poorly researched, and the whistleblower comes off as disgruntled more than ethical.
Edit: It's worth noting that the whistleblower's original words are a little more well-written than this article [1]. However, it makes the contrast clearer between what is factual vs what is only insinuated.
The Foreign Corrupt Practices Act of 1977, as amended, 15 U.S.C. §§ 78dd-1, et seq. ("FCPA"), was enacted for the purpose of making it unlawful for certain classes of persons and entities to make payments to foreign government officials to assist in obtaining or retaining business. Specifically, the anti-bribery provisions of the FCPA prohibit the willful use of the mails or any means of instrumentality of interstate commerce corruptly in furtherance of any offer, payment, promise to pay, or authorization of the payment of money or anything of value to any person, while knowing that all or a portion of such money or thing of value will be offered, given or promised, directly or indirectly, to a foreign official to influence the foreign official in his or her official capacity, induce the foreign official to do or omit to do an act in violation of his or her lawful duty, or to secure any improper advantage in order to assist in obtaining or retaining business for or with, or directing business to, any person.
Since 1977, the anti-bribery provisions of the FCPA have applied to all U.S. persons and certain foreign issuers of securities. With the enactment of certain amendments in 1998, the anti-bribery provisions of the FCPA now also apply to foreign firms and persons who cause, directly or through agents, an act in furtherance of such a corrupt payment to take place within the territory of the United States.
The FCPA also requires companies whose securities are listed in the United States to meet its accounting provisions. See 15 U.S.C. § 78m. These accounting provisions, which were designed to operate in tandem with the anti-bribery provisions of the FCPA, require corporations covered by the provisions to (a) make and keep books and records that accurately and fairly reflect the transactions of the corporation and (b) devise and maintain an adequate system of internal accounting controls.[1]
I'm not a lawyer, but at worst it's starkly clear to me that this runs afoul of the law. Might I suggest it may be the awareness of it is the something you are missing?
You'll need to draw that line a little clearer, because it's not starkly clear to me. I'm aware of the definition of bribery. I don't think anything mentioned here describes graft as much as it describes the reseller business unless there is some law that limits the amount of money a reseller makes on a deal, or that a purchaser is required to use all of said purchase. In the Saudi example, the contractor got a great deal, but that's hardly illegal. In the Qatar example, buying more seats than you use is a common problem and any company that sells based on seats is guilty of this on some level.
For me to take this farther than "that's how reselling works," there'd need to be some signs that Microsoft employees or government officials were seeing kickbacks from these inefficient deals...basically, the resellers were the ones doing the bribing. The whistleblower seems to be insinuating that's happening, and maybe it is, but there's no hard evidence of it here or that it's something systemic that Microsoft is promoting (indeed, Microsoft would be one of the victims in that case). Without more detail on what exactly Microsoft was extracting out of these circumstances I find the whole thing vague.
> Without more detail on what exactly Microsoft was extracting out of these circumstances I find the whole thing vague.
I think the big problem here is that you've misunderstood why bribery is a criminal matter. The fact you're talking about Microsoft being "one of the victims in that case" is another sign you do not get it. Corruption itself is the problem, we're not trying to ensure Microsoft gets their $$$.
To root out corruption, the relatively less corrupt major industrialised nations agreed rules forbidding their business entities from having anything to do with such practices even via a third party. When Microsoft realises that their guy in Saudi is involved in something dodgy, their duty isn't "hide it so the big bosses don't know" or even "pay the guy off and find somebody else" but to report this corruption to the government.
These are leaches, they have to be starved, and that won't be effective so long as, like in this story, there are nods and winks and everybody pretends it's fine so long as they got paid.
If that is happening, then you're absolutely correct. However, there's no evidence that's happening...either in the Verge article or in the whistleblower's own words. All the whistleblower has presented is Microsoft's own PWC audits that resellers have been pocketing more money than policy says they should and that there are cases where company policy was violated. The leap from this evidence to bribery is, frankly, pandering to the reader's prior beliefs.
If you're saying the resellers themselves are corrupt to make a score in, say, the Saudi case, well, that's the reseller business and it's all a question of degree. There is no law that if a reseller negotiates a better rate from the vendor that they're required to pass those savings on. It's skeevy and a reason the reseller business should disappear, but it's not any different from a car salesman.
I'm in this camp here. The article does a poor job framing the actual involvement Microsoft had and the whistleblower's writeup doesn't do a good job either. They did provide instances in the original whistleblowing that bad things did happen.. but they also showed that a lot of them actually got some sort of punishment/reaction instead of just pretending situation normal. A buyer, a reseller, and a seller working together to find a price that works by lowering the cost of goods is not a bribe since you know nobody is getting paid. They seemed to be heavily extrapolating that the buyer, reseller, and the Microsoft rep are splitting the proceeds of the cost mismatch regularly outside of normal revenues for the reseller and Microsoft. There needed to be a lot more sensible storytelling from the whistleblower pointing a finger and blowing the whistle at specific people who were doing the accused tactic.
There's a lot more extrapolation of facts into a narrative from the original whistleblower post. Trying to say that licenses that were bought that never were used was bribery is just confusing. Even I have licenses for things kicking around that I never installed but intended to someday. Whole projects can get planned, licenses purchased, and then for one reason or another scrapped but the licenses (or other material from vendors) are still 'bought.' For the bribery to mean anything (or like that other commenter who tried to whip out FCPA randomly) someone has to get enriched by the experience other than the reseller selling something and paying Microsoft its share. The whistleblower post didn't do that well.
There is just not a lot of good information that was provided by the whistleblower to actually connect all of this money that he estimates at $200 million to any sort of reality. Do I think he has enough beef for a employment law retaliation case (if he was in jurisdiction US law)? Probably. Did some people commit bribes and Microsoft was fined/Microsoft fired people? Probably. Do some resellers who are external to Microsoft end up violating the FCPA or 'normal US business ethics' in some regions? Definitely. But they aren't in the US, so the right venue for whistleblowing the activity is in whatever-country-in-question under their laws. Just based on the article and whistleblower post it sounds like there is just an assumption that micro problems in his local leadership were macro problems. I am not convinced.
>A buyer, a reseller, and a seller working together to find a price that works by lowering the cost of goods is not a bribe since you know nobody is getting paid.
They're not lowering the price of goods. The non-discounted amount is still charged to the end customer. The difference in the amount charged to the customer and what's paid in licensing to MS is used as a slush fund to bribe the decision maker.
>Trying to say that licenses that were bought that never were used was bribery is just confusing.
Come on, it's not that confusing. They're inflating the value of the contract so that they can skim more off.
>Do some resellers who are external to Microsoft end up violating the FCPA or 'normal US business ethics' in some regions? Definitely. But they aren't in the US, so the right venue for whistleblowing the activity is in whatever-country-in-question under their laws. Just based on the article and whistleblower post it sounds like there is just an assumption that micro problems in his local leadership were macro problems. I am not convinced.
I don't understand how you're not convinced. MS has paid a fine for the exact same behavior across multiple countries in different regions. And here is a person who has been in the thick of it for 20 years alleging the exact same scheme with documents to back it up. It's a slam dunk case.
I'm responding directly to what the whistleblower was alleging and they really didn't support an argument of their case. "I have damning information" doesn't mean anything without explaining more clearly what the damning information actually contains. Since they didn't I just can respond only to what the whistleblower wrote, and they didn't make a good case. They did not connect that their personal experience turned into an obvious out-of-channel enrichment of the buyer or the Microsoft person in cash or in kind. Asking your suppliers to reduce costs so that you can sell for the same price is normal, it happens in pretty much all industries. They are merely alleging that it was the path to nefarious acts.
If you go into the whistleblower's complaint and remove everything that is not his firsthand account there's shockingly little there around bribery. I do think that this individual has an HR legal case for being mistreated based on their writing but that has little to do with the alleged bribery. Reading an audit report that they didn't pen doesn't mean much and the findings could have been made right without their knowledge. Nobody goes back and marks findings on an original audit report 'fixed.' There is also a lot of jumping to conclusions. The only thing in the whistleblower post that I can see that they provided as concrete issue that they were firsthand involved with was a sum of $40,000 which is a great distance away from the $200 MM they are suggesting. If it was as prevalent they would have multiple transactions they were directly aware of and the sum would be much higher than $40,000. There is an assumption laden in the article that the only outcome for any discrepancy are bad actors enriching themselves instead of negligence or incompetence. Bringing in other cases where Microsoft was fined is irrelevant for the purpose of their whistleblowing, nobody cares about the other crimes we already know about we care about the crime you saw.
Too much of this sounds like a jilted employee on a PIP and not enough of it was just straight facts and clear cause for action. You don't need to craft a narrative, just whistleblow on what you saw.
The problem with your argument, which has been pointed out to you already, is that these allegations are based on nothing more than circumstances that look abnormal. Overselling or underusing seats is not proof that bribery took place. The shear $ amount of unused software looks particularly bad until you realize those are all the licenses that were purchased for all of the schools, and all school government related work for a country with millions of people. What's more, those licenses could have been purchased as part of an initiative that ran out of funding before it could be completed. Poor government planning is so ordinary as to be boring.
This so called whistle blower is pointing to virtually public information and saying, "but I think it's obvious!" The problem is that it only looks obvious to someone who hasn't thought about what else could be going on. Maybe it's impossible for so many suspicious events, but it's at least equally possible that if bribes are going on, Microsoft has no knowledge of it.
Allegedly, a foreign employee of Microsoft bribed a foreign official off US soil. The transaction was reported to accounting and controlled by some budget, and no one in the US was aware of the bribery. Which rule was broken, and by which person under the jurisdiction of the law?
The same article says to maintain counsel or ask the DOJ for advice if you want to operate in a gray area of the law, implying such behavior is common.
Last I checked, Microsoft had an army of lawyers and also a good relationship with parts of the DOJ.
It's not "resellers" making money, it's apparent that MS' employees and salespeople are using fake contracts and "discounts" to funnel money to decision makers. What MS got out of it at the end of the day — a contract or perhaps some personal earmark for a salesperson — doesn't matter. Their bribes distorted the market, entrenched corruption, and made the lives of people living in these countries worse. It should be punished to the fullest extent of the law.
This section in particular is damning,
> In another instance, he saw a contractor for the Saudi interior ministry receive a $13 million discount on its software — but the discount never made it back to the end customer. In another case, Qatar’s ministry of education was paying $9.5 million a year for Office and Windows licenses that were never installed. One way or another, money would end up leaking out of the contracting process, most likely split between the government, the subcontractor, and any Microsoft employees in on the deal.
These "subcontractors" are usually relatives of people in Government, and they're bribing these officials, then splitting money between all of them in exchange for contracts. This is illegal under the Foreign Corrupt Practices Act.
> In 2016, a request came through in the amount of $40,000 to accelerate closing a deal in one African country. [...] On top of that, the partner in the deal was underqualified for the project’s outlined scope, and he wasn’t even supposed to be doing business with Microsoft: he had been terminated four months earlier for poor performance on the sales team, and corporate policy prohibits former employees from working as partners for six months from their departure without special approval.
> I brought these issues up with the Microsoft services architect who wrote the request, asking why she didn’t take the work in this case to our very capable in-house team, Microsoft Services. She said our in-house daily rate is very expensive, and she needed a less expensive team to handle the pilot.
and then,
> Meanwhile, the woman’s manager sought me out, angry that I had bypassed him; I told him I was only following company policy. Soon after, he was promoted and became my manager. He immediately scheduled a one-on-one meeting, in which he told me our job is to bring as much revenue as we can to Microsoft. He added, “I don’t want you to be a blocker. If any of the subsidiaries in the Middle East or Africa are doing something, you have to turn your head and leave it as is. If anything happens, they will pay the price, not you.” When I said I would not block anything unless it violated company policy, his tone took a sharp turn. He shouted that I was not capable of doing this business and couldn’t close deals. But my 18-year track record spoke for me.
He escalates, but no one does anything, so he writes to the CEO.
> The aforementioned vice president immediately got back in touch with me, to say that by escalating the matter to Nadella, I had just “booked a one-way ticket out of Microsoft.”
> A general manager told me people panicked when I came to the subsidiary offices, and I had become “one of the most hated persons in Africa.” Only later did I realize this was because I asked too many questions; I was stopping people from skimming money off their deals.
This is a classic culture of corruption. It doesn't get starker than this.
> Examining an audit of several partners conducted by PricewaterhouseCoopers, I discovered that when agreeing to terms of sale for a product or contract, a Microsoft executive or salesperson would propose a side agreement with the partner and the decision maker at the entity making the purchase. This decision maker on the customer side would send an email to Microsoft requesting a discount, which would be granted, but the end customer would pay the full fee anyway. The amount of the discount would then be distributed among the parties in cahoots: the Microsoft employee(s) involved in the scheme, the partner, and the decision maker at the purchasing entity—often a government official.
I get that's the insinuation, but there's a leap the reader is expected to make between "this middleman made a lot of money" and "bribes were clearly happening" without further investigation. If a car salesman convinces me to pay more for a car than someone else pays that doesn't mean someone was bribed; the rest is a matter of degree.
I get that bribery happens, and I get that the SEC stepped on Microsoft employees for bribery in Hungary. I also get the impact that bribery and corruption has on lives. None of that is material to what's being said about this situation. In fact, it's relying on the reader's passion to make these leaps.
> For five (5) of 12 sample enrollments, complete End Customer pricing information was not provided and therefore we were unable to determine whether the related discounts were passed through. We requested Exceed IT Services to obtain end customer purchase order, contract, invoicing and payment proof from the additional resellers, however after multiple requests and follow ups during the audit, these documents were not made available.
And it shows $13,693,903 in discounts as "missing" for one customer. Why do you think that the "documents were not made available"?
And why do you think that MS looked the other way?
I am unsure why you're going to bat for MS here. But it's not just "passion" and "leaps", there's millions of missing dollars at play and MS isn't the least bit concerned. Why do you think that is? Does MS not care that money is magically disappearing between it and Government customers?
Are they that irresponsible?
There are two explanations here, corruption or stupidity. They're either too stupid to read the reports that the auditors wrote about the missing money, or they're corrupt and that missing money is buying them something.
This is going to be my last word on the topic, because as you say my original comment is being painted into going to bat for MS, which hasn't been my intention. I've read the Verge article, the whistleblower's original words, and looked at the PWC slides. I understand the numbers involved. You ask me why I think MS looked the other way. I don't know. This article is already speculating enough, and my comment was to call that out. I've already put more effort into clarifying myself than my investment into the issue should really dictate.
As you say, this is down to corruption or stupidity, and as Hanlon's razor goes, "never blame on malice what can be explained by stupidity." I look forward to the SEC investigating the whistleblower's accusations. Whether there's bribery or not, it's worth looking into. I don't think there's enough to convict anyone on based on what's offered here. I hope to be reading more detail on what exactly has been happening here at some point. However, I do see a world where this was stupidity. It happens quite often.
I think the other commenters have raised valid points that you seem to be willfully disregarding. It’s actually similar to when you've denied Amazon has a “hire to fire” policy, or a toxic PIP culture.
I guess engineering managers like us are trained to turn a blind eye to bad ethics. We spend most of our work time slavishly rationalizing the power structure so we build an instinct for bending the knee outside of work.
I'm not quite sure where you get those ideas. I've only ever said that Amazon absolutely has a comp structure designed to kick people out within four years, and that I thought their stated pip failure rate of ~30% was low based on my personal experience there and elsewhere.
I do tend to think individual managers are people. This is true.
We are, however, so off the plot of this thread getting into ad hominem territory now that we're moments away from Godwin's Law. Best to leave it here.
It's not uncommon for corporations to pay money in bribes because in many countries it's a cost of doing business; it would be otherwise impossible to get anything done.
If a company is required to pay, say, $3,000 to a corrupt official to pass a checkpoint and get access to an area where they have some business to tend to, then scale that economically to a multinational conglomerate like Microsoft who might do business in that same area 35 times in a week for various reasons and the amount of bribe money flowing out of their coffers increases to scale.
Pretty much all of the public system uses windows as OS, and most of the times it's just to use a browser to access a webapp. But there are actual windows lock-ins (due to people training and existing workflow/infrastructure that has no incentive to change), such as MS Office and Adobe Reader.
So there was no reason for Microsoft to bribe decision-making people to use windows, windows was already firmly locked in, they did it just so they can overprice licenses and for them to accept leased licenses instead of a permanent one time pay windows license. Big win for MS and bribe takers, big loss to common decency and public spending availability.
A sign of a healthy democratic government can be seen in the decisions to build future public software infrastructure on open source technology, and use Linux as client/server OS (as it's pretty much the only other alternative offering similar ease of use/maintenance/compatibility with existing software).
edit: wrote this to show it's not necessarily the cost of doing business, in most places, because the software ecosystem is already locked in and can't be replaced overnight and without considerable spending. It's just the cost of extracting more public money. And sometimes it's the cost to keep the business safe from decisions to steer towards Opensource: https://en.wikipedia.org/wiki/LiMux
My work involves a public sector organization in Brazil. In the last years there was a big push towards microsoft products at my workplace, to a point where emails with announcements from corporate IT sometimes looks and sounds like spam pushing MS products. Now I'm left wondering if that's related to bribes here too, or if it's just bad judgement/taste from IT leadership.
No need to wonder. Of course it's bribery. Most likely not by Microsoft, but by their local VARs, with tacit corporate approval.
All the blood, sweat and tears we gave during the early 2000's to make FLOSS the standard, how we advocated for it on grounds of openness and auditability, how it would - and did! - help foster a local industry... All this work and see it being undone by the current government and their cronies.
As a note, São Paulo state, where I lived, was a very reliable income source for Microsoft.
A bit like any time a local government makes a concerted effort to move to Linux, suddenly Microsoft magically finds a way to deeply discount Windows and Office just for them.
Or even not discount it, but some magical requirements about compatibility with existing software that was never used pop up while others, about security and auditability disappear…
Truly sad. Even if eventually FLOSS regain traction in the Brazilian government, I think it will be trickier to extricate government data and systems from proprietary blackboxes this time, when compared to the 2000's. I think Microsoft is making their products interlocking more tightly between themselves, so it's harder to fight lock-in by replacing one piece at time. Now it's becoming like a card castle that will crumble if you try to pull any single card.
it is well documented in the 1990s antitrust documents against Microsoft Corp. that attorneys under contract with Microsoft, paid money to senior management at the Brazilian national phone system to adopt Microsoft Office as standard, and remove any other system internally, IIR
They just had the advantage of having the only viable GUI-based OS on mass market computers. Linux has only begun to be usable on the desktop around 2005-ish, Mac always was expensive because you had to buy Macs.
In 1995 the Windows GUI was complete trash The Linux GUI much better.
I was the sole Linux guy (Microsoft Windows 95 mostly plus a HP Unix workstation the boss controlled fromOS/2 desktop). The windows machine constantly crashed and ran like a steam roller in two feet of mud. Lots of mess, not much speed.
It was not the quality of the operating system that made Microsoft successful. They were successful despite having the worst operating system in that room. Significantly worse.
* Backward compatibility: Ripping out everything and starting over is very expensive; what is the return on this investment for the company's bottom line?
* Applications: Everything in business, perhaps outside creative arts, is compatible with Windows; much is only compatible with Windows.
* Management: Active Directory is by far the leading tool for managing thousands of computers efficiently. That has a network effect: Other management tools, including for specific applications, integrate with AD. This automation greatly reduces labor costs and improves quality.
If the company is public traded, the IT manager is hurting the investors by accepting the bribes. If the company is owned by a family but big enough to have an IT department, well, they might solve their problems the Corleone way.
Ah, fair enough...I didn't realize that was something that happened, though I suppose I should not be surprised; I'm now reasonably convinced that is the reason that anyone signed off on the use of Sharepoint.
The old rule about having to justify acquiring proprietary services or using proprietary formats disappeared. It was there by decree, so it could vanish from one day to another.
The rules about open formats for data disclosure are written in law, and the decrees about data interchange require open formats too.
As a consequence, the most people-facing roles of governments reverted to old habits (or maybe there were bribes involved, I wouldn't know, but it surely didn't require bribes, those people never stopped using Word for everything), while the more central roles are migrating into web-systems and open formats.
I’m disappointed but not surprised that the title is editorialized. It specifically leaves off “whistleblower alleges”. It’s literally one disgruntled former employee claiming this. But as usual for HN these days a tiny populations claim - in this case a population of one - is stated as fact.
I think this is an excellent document that should really be the main article.
One of the things I think this really highlights, and that absolutely infuriated me during the Trump impeachment hearings, was that categorizing a whistleblower as a "disgruntled former employee" does not negate the evidence that they show of malfeasance.
I mean, of course whistleblowers are usually disgruntled about something, but a major point of whistleblower protection laws is that the motives of the whistleblower do not matter. To the GP comment's point, it's true we shouldn't just take accusations as proof, but the whole role of a whistleblower is to provide the "thread" that investigators can then pull on to get detailed evidence of what was going on. And, given the links to documents in the above post, I think this looks really, really bad for Microsoft.
What’s your point? One whistleblower alleged the NSA of the US was illegally conducting bulk surveillance across the entire world, including its own citizens. A court later ruled this program was illegal and unconstitutional.
Are you saying we should discount all whistleblowers because it doesn’t fit some preset narrative?
Did you expect an army of whistleblowers? Aren't most whisteblowers solitary and generally disgruntled former employees? Your first point has some merit but is diminished by your attack on the whisteblower. Whistleblower laws exist to encourage disgruntled employees to expose wrongdoing in corporations/governments/etc. Not sure why you are so quick to dismiss the whistleblower in this case.
Bribery is pretty common. In many countries you almost cannot do anything without greasing wheels. My Father was a head of publicly traded pharma. Stories he had about China and India in particular were fascinating and sad at the same time. One time he was told that somebody dumped a huge pile of paper trash in front of his newly opened drug packaging facility in China. He investigated to find there culprit. It turns out it was from a paper factory owner nearby. Asked why he did it, his answer was : “you didn’t use my company as your paper supplier”. My fathers response: “how was I supposed to know there was a paper supplier nearby!! And why didn’t you come and introduce yourself before ?!?!”
He ended up using the supplier and they did haul away the mountains of trash.
Western countries look the other way when their companies exploit poor countries. Then let the same corrupt money to be be taken out from those poor countries and hidden in their banks and property markets. Microsoft is not alone in this many other companies do the same. I personally feel the biggest hate from the west for the chinese so called road and belt initiative is not that China is exploiting these countries rather China has pushed them out and taken over their scam.
Well there is a geopolitical perspective to this as well right? Wouldn't want our biggest adversary to have strategic influence over these nations. Not to mention the potential intelligence capabilities from installing our equipment rather than theirs. Whether one country is more righteous than the other doesn't matter at this point - you should be rooting for the country that your survival depends on.
People like to imagine that international relations are completely amoral; it's a sort of thrilling, Game-of-Thrones type fantasy. But that's not the case at all.
Look at the EU, NATO and other US alliances (e.g., with Japan). They are connected held together by values. They are very imperfect and corrupt, but these alliances have lasted so long because there is no way, for example, Germany is attacking France again. It just doesn't make any sense, because of the values.
International relations are fundamentally (but certainly not wholly) anarchy, but anarchy doesn't exclude values - perhaps it makes them even more powerful, relatively. As some have said, to a great degree, right makes might.
In practice, blowback is one result of ignoring it: The US supported the Shah, a brutal dictator in Iran. When the Shah lost power in ~1979 - well, you can see that the US is still paying a price. The US supported some unsavory people to fight the Soviets in Afganistan; some of those people became Al Qaeda. The US armed and trained brutal right-wing militias in Central America to suppress enemies; some of them became today's Central American drug gangs. Meanwhile, while the US promotes democracy and freedom, it draws many, many into its orbit around the world.
> Meanwhile, while the US promotes democracy and freedom
Didn't the US overthrow many democratically-elected governments (usually because they were leaning towards communism/the Soviets) and install undemocratic dictators in their place?
I pointed out times the US has done 'right' and when they have done 'wrong'. Promoting democracy and freedom in some times and places is not incompatible with overthrowing it in others. Right isn't incompatible with wrong; you can't find a single individual who doesn't contain both, much less an entire government. We can't wait for purity to start doing right, or we might as well withdraw to a monestary and pray.
at least you're honest, most people don't get this far. but doesn't make your stance moral, I cannot justify keeping poor countries poor because of petty concerns like "we must remain #1"
I spent 7 years working with digitalisation in the Danish public sector and it depends on what you mean, and what you want to pay for it. Basically the short answer is that it is impossible.
What is often forgotten about non-tech enterprise here on HN is that a typical public sector organisation has a ratio of 20-50 IT people (this is everyone, from the network and operations people to developers and project managers) per 10.000 employees in organisation where almost every employee uses some form of IT system to perform their duty.
Some users will not be capable of telling you if they are on an iOS or Android devices, and almost all of them know Microsoft Office and Outlook because that is what every place they have ever worked and will ever work uses. Or to frame it differently, the change management and retraining of 10000 employees is going to crush you, very, very quickly. On top of that your IT staff is certified and trained with Microsoft technologies, and most of them are likely happy about that to the point where they will leave your organisation if you push them toward Linux.
That is the employees. There is also the technology, and all the IT systems that only works on windows and have no competitors. This can be everything from your million dollar MRI machine to the dentist program (dentists are part of the public sector in Denmark). Cutting ties with Microsoft completely, would mean you’d need someone to develop alternatives to these things. (Yes, your million dollar MRI machine shouldn’t depend on windows XP, but it does).
So obviously it’s not impossible, nothing is, it’s just really, really, expensive. It’s so expensive that it will likely be it would be political suicide because the money you need to pay for the transition is going to come from firing nurses, school teachers, and other primary functions.
That being said, a lot of public sector organisations do take open source seriously. Especially here in Europe. But there isn’t a clean way to cut ties with Microsoft, and it’s actually become harder and harder. Because where is the Linux alternative to office365?
Disclaimer: I consider Microsoft to be the best external business partner that I’ve worked with while I was in the public sector.
The other challenge in the public sector is that the "business" itself is so heterogeneous that the IT management tends to be siloed, while people in these siloed orgs need to work with people in other siloed orgs. You can't switch the whole government wholesale; you'll get some fraction of business units to adopt something else and hope other units will slowly switch too, but in the meantime, you've got people trying to share documents with some intricate set of track changes, comments or some other special feature across orgs using different tech, and the roundtripping with different software causes some of that to be messed up and then you've got an ongoing IT support problem and dissatisfied stakeholders.
I think the biggest issue will be finding an organisation that actually wants to replace Microsoft.
I know there are a few examples of it happening, but one of the reasons Microsoft is so successful is because they actually sell a really nice product with some really good support. This isn’t true for you or me as private customers, but when I was working in an average sized Danish City our IT department had a direct line to Seattle, and not only would they sometimes change Office365 or Azure in ways that we suggested, they would call you every hour with updates during major incidents. Part of what Microsoft sells to enterprise organisations is the ability for IT management to tell their organisation that Microsoft is giving them personal hourly updates while outlook is down.
As bad as bribes are, I don’t think they are going to move public opinion enough for politicians (or anyone else really) to push for alternatives. In fact, I doubt I’ll be reading about this outside of HN, as sad as that may be.
I do use Office365 on linux, I even develop Office plugins under Linux. So it would seem like a transition to cloud software would be the enabler of Linux based operating systems?
It sounds like it's always gonna be a messy migration, but I wonder if you can somewhat simplify it by moving all users to web apps? Basically as an intermediate transition step to first decouple usage from the underlying OS.
I don't think govs are different from your average company.
Having a Linux based business is hard, for a few reasons:
- Destkop Linux sucks
- You need experienced sysadmins. There is no Linux equivalent to AD / Azure AD in terms of simplicity, as far as I know. Also true for other stuff like app management.
- User resistance, as few people use Linux as their daily OSes
But on the other hand they have a much bigger incentive than a company to be able to have a system they control and can use throughout different public administrations.
And the Microsoft came calling again - guess what they use now?
It is the example I used to tell clients about how if your organization is big enough, publicly visible enough and open to being in the news/or a case study) and has great lawyers, you can probably get Microsoft licensing for essentially "free".
And those "nearly free" licenses will increase over the next 2-5 years.
The cynic in me says that Germany did this to get better bargaining leverage with Microsoft...
(Apparently they are cycling around back again, over the last couple years trying to transition away from Microsoft for some states/groups/municipalities within Germany)
Not hard technically, but hard because people associate free things with cheap and there's a lot of experience momentum that really upsets people if they think they're being forced to do something even slightly differently.
And yes it's a viable alternative and has been for decades.
I have been reading the comments about bribing foreign companies. Very interesting
I think it is pertinent to remind people here, especially subjects of the USA, that in the USA bribing politicians is a formal and accepted practise. Records are kept, they are publicly available.
The hypocrisy of those politicians is legendary for all sorts of reasons, this is just a minor point. Bribery is only illegal if done informally in foreign countries or the private sector.
This is very misleading particularly for those not familiar US laws. If you want to say publicly disclosed campaign contributions with no quid pro quo is bribery than say so but that's not most people's definition of bribery. Democracy requires campaigns and campaigns require money.
> If you want to say publicly disclosed campaign contributions with no quid pro quo is bribery than say so but that's not most people's definition of bribery.
No. It is the "I will vote for this law if you contribute this much". In my country (New Zealand) that would get you jail time. Because it is bribery
I reckon Microsoft and others haven't learned from Lockheed in the 70s. It'll only be a matter of time before we hear about other charges regarding Apple and Google
Looks like it was "..the whistleblower platform Lioness.." that released it today. Interesting that you point out it would have been more effective in the news cycle if it had landed another day.
Perhaps this is a case of Hanlon's Razor and the whistleblowers need to get more savvy.
The only way to stop this is to give the whistleblower a large cut of the fine: say, 50%. That will drive up the incentive to whistleblow; otherwise, all you get is a pink slip and a spot in the soup kitchen line.
The US SEC started a similar program in 2012, but with a smaller cut (10-30%). It's been quite successful, with $1 billion+ in whistleblower awards so far
I bet this is normal procedure for most companies that do business in countries where bribes are common. In Germany foreign bribes used to be even deductible.
This is my takeaway too. Want to do business at a country where this is normal? You either play this game, or do do business there with a serious disadvantage. In this regard, it's not that different from visiting places like this as a tourist. Where bribes are common with border guards, cops stopping you in the middle of nowhere, etc you either go there and pay the bribes, or don't visit at all.
Problem is that foreign entities bribing in foreign cultures is an even worse form of imperialism. Big corporations with deep pockets could totally distort the market in these countries by bribing generously instead of competing by merit. It’s bad enough that lobbying (some may call it bribing) money plays such a big role in US economic policy so let’s not make it even worse. Especially large scale bribing corrupts countries and their culture.
Capitalism is only useful if there is honest competition in the market.
> Big corporations with deep pockets could totally distort the market in these countries by bribing generously instead of competing by merit.
As opposed to the market in these countries already being distorted due to domestic bribes?
> Capitalism is only useful if there is honest competition in the market.
It's therefore not clear to me how a market under such a corrupt regulatory regime is already well-served without the supply-side bribing one's way in, when the cost for an enlightened business owner to be a legitimate player is already bribery. On the flip side, with bribery, the bribery cost to do business for well capitalized foreign players is higher, so there are dynamics that work against the foreign imperialist in a corrupt regime.
> why don't the criminals openly advertise their prices and what they are doing?
That is what politicians in the USA do, as I point ed out elsewhere
I agree bribes are bad. But in my culture, with very low bribary and very high trust it is OK to put a solo mother out into the street with her children because she has been unable to pay inflated rents.
For some countries, where bribery is accepted, that treatment of a fellow human would not be. If those countries had economic power they might pass laws that sanctioned our landlords.
So we need to be careful when we defend other's economic practices. We should be aware, at least, of our own sins
> But in my culture, with very low bribary and very high trust it is OK to put a solo mother out into the street with her children because she has been unable to pay inflated rents.
> For some countries, where bribery is accepted, that treatment of a fellow human would not be. If those countries had economic power they might pass laws that sanctioned our landlords.
Where does the idea come from that countries with more bribery are more humanitarian? Usually, corruption extends to morality, IMHO, and brutal dictatorships tend to be the most corrupt.
He is an anomaly, and we are lucky that people like him exist. The system incentivizes pretentious, artifice people who trick people via skulduggery. And, M$ should realize that committing such unforgivable sins like corruption in Africa means they are responsible for hunger and poverty in Africa.
If the atrocities were committed by Chinese/Indian companies, the media would have vehemently criticized those countries and companies. But, as long as US and EU are involved media seems to be silent which I don't like.
> If the atrocities were committed by Chinese/Indian companies, the media would have vehemently criticized those countries and companies. But, as long as US and EU are involved media seems to be silent which I don't like.
That's ridiculous. Compare Ericsson to ZTE/Huawei, for example. Of course it'll get coverage in the US media though, it's mainly the US DOJ that will prosecute those foreign companies for bribery - not their own governments.
Everytime something like this comes up, westerners pretend that they are shocked, which I find hard to believe.
Western aid agencies and humanitarian agencies work closely with corporations and third world governments to get their way. Oftentimes, these bribes are not as direct as alleged here. Instead, the corporations donate to humanitarian agencies, which then allocate it as budget in the target country in exchange for business deals. Most of the aid disappears in "admin expenses" i.e. it goes to fill the pockets of people making these deals with these corporations.
I am just so sick of all the cheating. Every time you turn around, some business, politician, or wealthy person is corrupt as f** and everyone who can do anything about it won't.
Every human being, organization, institution, software project, and democracy is corrupted to some degree. It's right their in the foundations of every philosophy and religion - it got us kicked out of Eden. If we do anything in life, it's with and through these human institutions, which are corrupt to some degree. It's up to us to make them less corrupt and to do things for humanity - there's nobody else who does anything; no alien cavalry is coming; it's just us.
To be clear, this is not (just) a matter of ethics. If true, these acts are in violation of the US Foreign Corrupt Practices Act. Each violation can be up to 5 years in prison.
I've been working in the tech industry for 25 years. I've probably watched 10 different corporate ethics training videos that cover bribery and inappropriate gifts. At the end we have to answer a quiz to prove we weren't asleep.
In all my time I have never had any control over money and no way to bribe someone even if I wanted to.
About 5 years ago I check my email in the morning and there are emails from the corporate legal and PR teams about not answering any questions from reporters about a certain employee. They state this person is no longer an employee.
I immediately google his name and find that he has been arrested on foreign bribery charges.
Everyone in our team was laughing that he must have forgotten to take the mandatory corporate ethics and anti bribery training.
What is the point of making us watch all these videos when we have no budget authority anyway while the C-level execs bribe people?
Highly skeptical of this take. Lots of allegations claiming various payments are really bribes When all is said and done there will be few true bribes found and those will likely be by rogue relatively lower level or little supervised employees Suspect this is a disgruntled employee with a good lawyer who dreamed up a way to squeeze Microsoft. Who doesn't hate or want to hate Microsoft ? Big companies are well aware of the massive liability and associated legal costs under US federal law for bribery (domestic and foreign) and no way are they going to conspire systemically to destroy themselves. There have already been well documented and publicized federal bribery cases against companies such as Walmart. No legal department is going to tolerate bribery
They also have habit of saying, "If we don't do this, Chinese company will do this and so what we are doing is clearly a benevolent act on humanity. To erase this blemish Microsoft shall donate 5 computer to Nigeria to help those poor kids to draw something in MS Paint"
I worked briefly for a startup that wanted a .sy domain. That's Syria. They had to get the State Dept. involved (Hillary Clinton had to sign one of the documents, she was Sec. of State at the time.) The package they sent to Syria was a kind of Matryoshka doll: a package with some grease (cash!) and another package inside, that in turn had the grease for the next level of the bureaucracy and another package for them to pass on, which contained more grease and another package... All in all four or five layers of payments and bureaucracy. They got the domain name but then abandoned it for some reason I don't know (I suspect it was just more trouble than it was worth to have "foo.sy" and deal with Syrian government rather than just "foosy.com".) US$20,000 down the drain. FWIW this was all official enough that it wasn't legally bribery.
And in many other parts of the world. It is so bad that businesses in n the US did adopt it as a practice. The ballooned to such epic porportions that the US Senate sponsored a bill to make it in illegal. If it had been kept down to a mild roar the law would still be missing from the books.
It is still bad because the incentives are still in place. Throw a little bit of money at a few people, get your business locked in. If you get caught you pay a very small portion of the profits and get to keep your business deal in place.
The fines are a joke, and the rules are indeed for the little people.
"We ordered them to not accept bribes! Never mind that we also ordered them to somehow convince these governments to run licensed copies of Windows instead of cracked copies, and since it costs them money while buying them nothing, the only way it could possibly be done is bribery. It's not our fault because we told them not to!"
Why do Americans think that the rest of the world operates according to the illusion that America pretends to follow? Payoffs aren't always bribes. They're more like a tax.
Right... the PACs SuperPACs and other payments from private companies to lawmakers would be highly illegal in my country. Yet in the USA they are promoted and celebrated.
There is a lot of supposition from the article based on a single source that these payments were bribes. These kinds of articles are really calling wolf when there are none. And potentially downplay instances when actual wolves are spotted. This is a hit piece from a potential competitor trying to do business in the same market.
Going to add further the article has way too much fluff. It’s a play on reader psychology to turn them against Microsoft.
Agreed. Reminds me of the payments of as much as $183K a month from a Ukrainian natgas company to a man with no energy sector experience that just happened to be the son of the US Vice President. There's no evidence it was a bribe, just a hit piece, probably from a competitor like Russia
Ah, yeah, company ethic lectures,pamphlets and statements. I love those on webpages.. right beside the company locations world map.
Love it, when they then have branch offices, that "exclude" one another - as in you can not be active in both countries, without violating a law of one, and obviously bribing yourselves out of that to be active in both.
At least they prevent some moral philosopher from starving, who got bribed to write this.
I was very interested in ESG until I saw that pretty much all ESG funds had Facebook in the top handful of holdings. Because they're easy on the environment compared to an aluminum smelter, and somehow destroying democracy around the world doesn't count as a social or governance issue. I've changed my focus to owning shares via funds that will vote my shares with some sort of conscience. (Vanguard is the rock bottom on that metric, btw.)
Unfortunately, we are left with the problem that it can be very hard to tell the difference between a bribe and a grease payment. The latter are an unfortunate reality that companies can't realistically function without--and not just in the third world.
A bribe is a payment to get them to do something improper.
A grease payment is to get them to do what they should have done anyway.
They look the same on the surface but they're very different underneath. The former is illegal, the latter is legal (but good luck trying to show it's not a bribe when it happens in the US.)
If you're paying an official personally to "fast track" an official process, that's a bribe. Grease payments are just a subset of bribery. Just because it's normalised in some countries, doesn't make it a different thing.
I think almost with any common sense would recognize this. It happens a lot in the US as well and in academia, but most of all government services. People get kickbacks, Microsoft helps with marketing... so and so switched to Microsoft, here is what they have to say about how it helped the organization. Except, they never talked to the employees who would have told you how they hate it and it actually makes their jobs worse. People realize they are powerless and just leave or accept it as a normal part of business and the practice continues.
> "What is a shock: This time around, the SEC and DOJ have both declined to investigate Microsoft over the same types of bribes in the Middle East and Africa. They acknowledged my evidence (which I submitted three times) yet did not take up the case, claiming that the current pandemic has prevented them from gathering more evidence from abroad—even though I have already provided documentation that I believe shows Microsoft is in breach of the 2019 agreement and is still participating in corrupt business practices in direct violation of U.S. law."
I have no words for this one. I guess being a trillion dollar company comes with a lot of benefits.
More likely that Microsoft learned a very good lesson from their 1990s encounter with the DOJ, but it wasn't the hoped for "stop doing illegal and unethical things" but instead "make more and better targeted political contributions."
Are the bribes being directed by MS US or are these things taking place in overseas offices where customs are different? One example was Hungary --I imagine Ukraine and Nigeria too would have executives there who are part of the local culture where they do things differently.
While the actions go afoul of US law, they may be in line with local customs culture and practices --that is harder to root out as now you are trying to change another culture (cultural imperialism as it was called).
If this is being directed from the US, then it's easier to root out.
I live in Kazakhstan and while I don't have any evidence, I'm pretty sure that many huge western companies operating here bribed officials.
I don't think that's necessary part of local culture. Of course in poor country officials with $200/month salary are happy to get $1000 gift for signing $100 000 agreement. Western companies are huge part of corruption source here. That's my opinion.
I've heard that Ikea decided not to bribe officials, so they didn't get approval to build their shops here. I kind of applaud them if that's true and I wish every so-called civilized company took that stance. But money doesn't stink I guess.
> I live in Kazakhstan and while I don't have any evidence, I'm pretty sure that many huge western companies operating here bribed officials.
If the country requires bribes to operate in, and the western companies are operating in that country, then you can just do some simple logic to derive that they are bribing people.
However, a lot of western companies will simply just form legitimate contracts with local companies that will then "fix" everything for them. Things get even murkier when the western company forms a join venture with a controlling share local company.
Yup, it is mindbogglingly unimaginable to people who spent their whole lives living in the west, but as someone who moved out of Russia over a decade ago, it is the exact same thing there. Extremely normalized in every single aspect.
Applying for a passport? Well, you can do it normally, wait 9-12 months, hope papers don't get lost in the process (again), and maybe eventually you will be able to get it after a 2nd or 3rd try. Maybe not, who knows, you might just give up.
Or, instead, you could give "little something" to the passport clerk and their boss, and your passport will get reliably done in 3-4 months. And this "little something" is pretty much expected, and most people who can afford will pay it. A lot of governmental services are just built with an expectation of a bribe. If a bribe isn't present, then the process will almost definitely go wrong in every single way possible.
Same with cops, except worse, because much more is at stake. Routine "ID check stops" are expected, and you better have a bribe ready, unless you want to get in trouble for "insubordination" or something much worse.
Pretty much any interaction with government or anything even tangentially related, where you need to get something done, you are going to be almost ostracized and make your life miserable if you don't bribe. Bribing gets truly awful and scary when it is an everyday expectation on even the most routine levels.
EDIT: People in comments have pointed out that India isn't like that at all. My comment wasn't meant to have anything to do with India. I have never been there, so I cannot make a statement on it either way. I was only trying to describe the realities of "bribes are the expected norm in everyday life" experience using the place I was personally familiar with, which was Russia.
Absolutely this.. Things in India have changed a lot in the last decade. Passports are one example. It used to take months when I was a kid. My first passport took 3 months from application to getting it in hand and needed an "agent". My last one was through "taktal" - expedited application by paying extra fees and I got an SMS that the passport was sent to the printers by the time I walked out of the passport office. Another sms that it was dispatched next day and the day after I had it in my hand. No bribes, no agents, super smooth.
For the common person, the most corrupt organizations they would encounter is around land and house registration, cops and maybe the DMV. If you work for the government, then it gets even worse as you are expected to pay for the job, pay for transfer to a nicer place etc. However, it is getting better every year.
I suspect things may have improved in Russia since then, there is plenty of screwed up stuff but in my adult life I (and as far as I know my friends) had never been forced to bribe someone to accomplish something (passport, driving license, etc.), much less routinely do so. But then I was a small self-employed fish, and in fact due to my expectation of bribery I chose not to execute any business ideas in Russia. (Which so far seems not to have been a bad decision.)
It might also depend on where in Russia specifically. Moscow and Saint Petersburg are its own thing pretty much, so I can totally believe that things have improved there. But imo the further away you go from those two largest cities and the smaller the population is, the worse it would get.
I lived in a city of about half a million people about 800 miles east of Moscow (still in the European part of it though, not past-the-mountains regions), and it was definitely still the case there as of a few years ago (because my dad moved back there a while ago).
Not European part. I agree it matters where, but it does not seem to be so black and white that the country works on bribes anymore.
Perhaps that is why that foul regime enjoys popular support: people see is it not so awful anymore, but to consider it could have been even better is not acceptable.
> public officials are paid very little with the expectation that they will supplement their income with bribes.
I'd like to offer my own perspective on this issue, having spent a lot of time in the third-world, that may not be obvious to many of us in the western world or from more developed economies.
Many countries that are struggling with i.e. building robust transportation and energy infrastructure, are also struggling with the infrastructure that enables the reliable collection and enforcement of taxes. These issues happen to be related. Tax collection in the US isn't perfect, but it generally works. What do you do when huge parts of your economy runs on cash or when huge swaths of your population don't even have bank accounts?
There's a joke that bribes in the third-world are "directly paid taxes". There's a kernel of truth there. If Microsoft pays $100 in tax that's paid to a govt salary, versus that tax not existing and them paying it to the same official, what's the difference? Loss of accountability and oversight, yes.
BUT -- the reason bribery is so egregious in the West is that the officials taking the bribes are already fairly compensated. Also, the Western system of government is filled with unethical bribe-analogues, in for example the lobbying system we have, worse in some sense is that this unethical behavior is codified into law in a way the general public may not agree with but has no real way of changing (refer to Princeton voter preference study).
Consider all that when these "corruption index" lists are published where the US are the good guys with a green-colored country and countries in the third-world are red-colored bad guys. /rant
Even in that light bribes are still bad. With a tax I can look at the law and know exactly how much I need to pay, and also how much my competition paid. That later is a big deal, if my competitor different from me, then they have an advantage over me (sometimes this is a larger bribe ensuring better service, sometimes it is a cheaper bribe would have done the same).
Also, bribes are not always money. Many are paid in sex. Not only does this exploit women (as if that isn't bad enough), but it also means it may not be every possible for me to compete so long as the woman my competitor got is willing.
If it's anything like eastern Europe it's really not that bad, just different. It just means the state has less direct control over its employees. In some cases this is good for the populace. In some cases this is bad for the populace.
If the people in the building permitting offices in CA got paid the way they do in India there probably wouldn't be a housing crisis there.
One could argue it’s more efficient. If you need to get something done, at least there is a way to receive service whereas in the US because there is little bribery, you’re at the mercy of the bureaucrat who doesn’t depend on your bribe to survive and so has lost the incentive to serve you.
In the west we simply don't recognize that system as democracy. For your officials to not take bribes means their relatives get offended that the office doesn't get them special treatment. That is feudalism. It means you built nothing together and have nothing to be proud of.
The irony is the bribes are, of course, a requirement to operate in the US as a large corporation, but here they’re laundered as “lobbying” and “campaign donations.”
> If you believe lobbying is harmful to our democratic processes please present that argument directly.
Not OP, but it is easy to understand how lobbying is too close to a quid pro quo scheme. If a politician receives donations in any form, in order to push for legislation that may benefit the donors, how is it any different from bribery?
So there is a subtle difference. Take a commission for example. Sounds pretty similar to a bribe right? Difference is, bribe makes for a hostage / preferential treatment situation (give me something extra sweet or else no deal/guarantee), whereas a commission is a cut based upon a predetermined price that a salesmen can't really change (e.g. getting a 2% cut for every car you sell at some dealer). Salesmen can negotiate sell price to some extent, affecting their cut, but they can't make demands to the buyer to pay them an extra side deal first (otherwise, if he does, it's a bribe). The buyer, is free to give him an additional tip if he'd like, after the deal is done, but not if it was coerced prior by the seller.
As far as lobbying, there is still the same difference. If a politician said they would promise to personally do X for someone only if given Y dollars, it's a bribe. Instead, if a politician said they would do X if elected, and some random person heard this and liked their cause and so decided to donate them Y dollars, it's not a bribe, because the politician wasn't going to give preferential treatment due to the donation, and the donor wasn't coerced. And it works in reverse. If a donor said there will be extra X money if you do Y personally for me when elected, it's a bribe. See the difference now?
Subtlety matters. Calling lobbying bribery is apathy, which is uninteresting. Even worse, it’s ineffective.
> If a politician receives donations in any form, in order to push for legislation that may benefit the donors, how is it any different from bribery?
So, should I donate to a mayoral campaign that aligns with my beliefs? Is all money in politics evil, or is it just a matter of degrees? What if that mayoral candidate is a “political outsider” who relies on “grassroots support” to enable them to quit their job and focus on the campaign?
I’m an expert in my field. Should I inform my elected leaders on the nuances of that field when they write legislation that relates to it? Or should laws only be written by the ignorant? How ignorant should they be?
Trade is a quid pro quo scheme. Pretending all exchanges of value are the same is, again, uninteresting. How can such a position be engaged? And to what end?
Where’s the line between bribery and democracy?
It’s not easy to draw. Calling lobbying bribery is an apathetic oversimplification. It’s uninteresting and isn’t a position that can be engaged constructively.
> So, should I donate to a mayoral campaign that aligns with my beliefs?
There is a very clear distinction between donating and lobbying. Political donations are typically not driven to any specific end, whereas lobbying seeks to influence specific legislation.
Saying that lobbyists look to “inform” the “ignorant” legislators is naive and disregards the fact that congress and senate people have enough staff at their disposal to do the necessary research to pass legislation.
Lobbyists aren’t experts. They are marketers. It seems that to you, a lobbyist is an expert in a field, like a doctor is an expert in medicine. In reality, a lobbyist is more akin to a drug sales rep, a marketer. Do sales reps accurately inform doctors about drugs, or do they try to get them to prescribe a certain brand?
Lobbying is then legalised bribery. In fact, the US is one of the few developed countries where blatant private enterprise interference is allowed at all levels of government.
Don't for a second suggest that this is about 'foreign companies bribing their way into something'.
It's 100% powerful officials 'demanding kickbacks' for contracts and business - which is exactly 'the culture' that goes on in literally most of the world.
The comments here are (and I don't mean to be denigrating) naive.
Imagine that for all major contracts, say 10% will split between the buyer, possibly the 'local official' making the sale, possibly a 3rd party connection. It's been like that 'always'.
The only way this will change, is if local government require it to happen.
IKEA tried to hold out in Russia and they did for years. Until they caved paid the local mafia-ish guy his cut. And then Moscow got IKEAS. That's it. No cut, no IKEA.
IKEA does not bribe people in US, Canada, Germany. (or at least not in any systematic way)
MS has also been involved in bribery scandals all over Europe. Sometimes they were found guilty, sometimes the other party to the corruption charge found a way to make it all go away (more corruption). But when you do this all over the place the "it's the way things are done there" changes to "it's the way you do things". Every time MS is firing a couple of "rogue employees" because they got caught, not because they did it. And nothing changes at leadership level.
Their way of doing things certainly extends to the SEC and DOJ via more convoluted and corrupt influencing paths.
I can tell you that on a "small" scale that's not something required, at least I did not pay bribes in my little life, although sometimes it could make things faster or cheaper I guess, but that's my principles as I hate corruption.
Now Ikea-scale that could be unavoidable but I prefer not to have Ikea rather than living with corrupt officials around riding in their Mercedeses, showing off that living a honest life is strictly worse than living a criminal life. So children learn that you have to demand bribes to be successful in this life. That's never-ending circle. And worse of all it's partially fueled by foreign companies.
There is an important distinction in this law. Paying an official to do something he would have done anyway is not a bribe, even if in the absence of it they might have never "gotten around to it".
It's specifically things like this article alleges, kickbacks to officials involved in procurement decisions.
Now if only people in the west would apply this same logic to their own communities.
Whole Foods isn't donating money to the private school that the children of some local politician to attend because of their belief in the school's mission. They're doing it because they want to redevelop a strip mall and a new soccer field costs less than anything that involves a courtroom.
I know you are trying to make an example of bribes, politicians, and private schooling, but honestly Whole Foods donating funds for a new playing field for a school and also redeveloping a strip mall instead of paying a bunch of attorneys to occupy space in a public courtroom sounds like... a win win win?
Interesting fact: this used to be the case in Ukraine (IKEA negotiated for years and I believe publicly alleged corruption); yet finally in 2021 they opened the first small-format physical store. Knowing how things were actually improving lately makes the invasion doubly devastating...
Of course the US considers it illegal. But if you’re a Bulgarian executive running the Bulgarian subsidiary of a US company, they may do things closer to local custom despite US corporate directives. You’re demanding that foreigners extirpate their foreignness while they are employees of a US company. It’s not going to happen 100%.
By enforcing anti corruption on the parent company in the US, the parent company should in turn communicate and enforce their own anti corruption stance and policies on their foreign subsidiaries or branches. If there is no consequence for the parent company then the opposite might happen: extra money used for bribes is provided to the foreign subsidiaries with a wink; now the corruption is increasing.
You have to consider that local competitors and other foreign competitors may not have any issues with bribery, maybe they’re both from cultures where bribery is normal.
Now you’re asking a local executive to paddle up river while their competitors go down river.
Unless you have a somewhat leveled playing field it’ll be an uphill battle.
I believe there were espionage scandals in Europe by US intelligence where US companies were given confidential info on other negotiations —this was ab attempt to level the field in the face of what the US saw as unfair competition brought on by bribery.
Microsoft is more than big enough to not play the game. We are not talking some little company against a big one here, we are talking about a big company, if they don't pay bribes what is the country going to do, they have more to lose than Microsoft.
Agreed that the US Supreme Court decision on the Citizens United case was terrible and we are suffering the consequences of an an alternate indirect form of bribery as you point out. But this is head and shoulders above direct bribery which we still thankfully classify as illegal. The US has room to improve but let’s not regress just because we’re not 100% of the way there.
I don't think I'm demanding anything. But what I would like is for US businesses not to encourage or reward corruption, which harms the citizenry and diminishes the sort of strong competition that makes markets work well.
I also think it's both ridiculous and insulting to suggest that corruption is some intrinsic property of Bulgarians and their "foreignness". Or anybody.
While working as an executive for eBay in Germany, the company made it totally clear on many occasions what illegal behaviour is and that they would take action. And the standards were the higher US standards not the lower German ones.
I consider the associated penalty in the US as a bribe of public officials and cost of doing business. It takes a special level of hubris for Americans to go “noo, its different because we have due process”, when the user experience of a simpler bribe and slightly more convoluted bribe is 1:1
this is a formal fallacy - joining something substantial, serious and a matter of public law, to something personal, of little consequence, and governed at a local level. please reconsider this as this important public discussion evolves on YNews?
Keep in mind that in countries like Cambodia and Yemen, something like 70% of public companies receive bribes. It is very much common practice and culturally acceptable.
It probably is illegal but the countries have weak rule of law (if rule of law is even a thing in those countries at all). Note that there are differences between fees and bribery, if something can be legally presented as a fee, it is no longer considered a bribe (important if you are an American or American company).
This is why I brought up the example of pre-tipping. It is clearly not a fee but it is generally accepted. If you hand the Valet a $20 and say please park it close, is it a tip, fee, or bribe?
How about at a bar, can you tell the bar tender "I have an extra $5 if you make it a heavy pour"?
How about attending the Salesforce conference but it's mostly because you want to visit SF and see Metallica/Chainsmokers?
We have bribes in the US, we just don't think of them as bribes.
Sure it is, tipping a bartender for a heavy pour can be interpreted as colluding with the bartender to steal alcohol from the bar owner. Both illegal and dishonest.
Asking your company to send you to Salesforce just to see Metallica/Chainsmokers is clearly dishonest, the expectation is that your primary reason for going is to network and learn + represent your company.
At least when we did anti corruption training for Microsoft China, the emphasis was on government employees, but that could also apply to grad students with stipends and anyone working for an SOE. So you can tip the doorman as long as they aren't working for the state, but you can't buy a grad student lunch (without pre-clearance anyways).
There are laws around transparency in lobbying in the US. It would be bribery if you didn't abide by those laws when conducting your lobbying activities.
Not Poster, but I agree to a degree. It’s defined as such but in practice it can have the effects of bribery. If so, is it then legal bribery?
Politicians set up foundations and then people or organizations coincidentally benefiting from some legislation donate or underwrite these foundations…
LMAO, surely you jest! The US is one of the most corrupt societies in the world. Where else is it not only accepted practice, but enshrined in law with "money is speech".
Even in the most unfree society in the world you can go in your shower and whisper anything you want. Nobody will know you said anything though so it won't do anything. To make a difference in a society as large as the US you need a lot of money to pay for things. You can print and mail flyers (money for paper, printing, and postage), you can take out ads on prime time TV... It all comes down to money is needed to make your message get someplace. There for limiting money is limiting speech.
If limiting money is limiting speech, why is Microsoft in trouble here, and why can't I bribe a cop to let me off the hook for speeding?
You know damn well that limiting speech is normal and accepted everywhere (eg. hate speech or crying "Fire!" in a theatre). But somehow, the rich have convinced Americans that their speech can't be limited. That their bribery ought to be legal.
I place strict scrutiny on limits to speech. I don't limit hate speech even though I disagree with it. Even fire is only limited to ways that cause a stampede
I work in government, and I remember a story told to me by a federal official who was involved in the arrest of a former member of congress for bribery. The official told me that, essentially what the congressman did was illegal under federal law, but it was what you had to do in order to "do business" in "those parts of the world."
I found that interesting. With what is going on today in the world, between nations committing human rights abuse and war, America still does business with them. Money exchanges hands, which furthers human rights abuses' and war because that's what our policymakers believe we needed to do to achieve our goals.
One is breaking the law to achieve a goal, but what is the other called?
While in India once, I ran into a friend from Google who was out there trying to build a data center. Total coincidence that we were both there at the same time. I was there to hire and train for another company and he was there to break ground. He'd been there for week and they'd yet to start doing more than some bare minimums related to surveys and permits. I was surprised that he was there at all, given the current state of construction.
It turns out, they were way off target and they thought there was more progress already. Every time he spoke to anyone about permits and approvals, they'd say it was almost done and then there would be a delay. Amazon and Microsoft had been building in the area already and they had started the process much later. The difference? Google has a very strict policy on bribes. If you pay one, you won't be reimbursed and if they do and out, you won't be employed any longer. Microsoft and Amazon had no such policy and the conversations my friend had with his counterparts at those companies were pretty forthcoming about it. It's just how business is done there and if you don't play ball, you will have a hard time.
Of course they paid. You have to. If you don't, things will happen eventually but that timeline is unpredictable. I'm sure Google found ways to ethically encourage progress eventually.
Here in America when you want to accomplish something like open a new facility you basically force the potential municipalities into competing with each other to win your favor.
A big company will go to all the Chambers of Commerce in a given area and basically say "we're considering opening a 100,000 Sq ft facility and hiring 300 people. What incentives can you offer me if I build it here?"
Then the towns will bend over backwards, gut their taxes, ease their planning zones, and basically contort everything they can to become the most appealing location.
Is it just cheaper to skip this step and bribe the city in other parts of the world? Why doesn't this practice work or take place overseas?
One issue in India is that local governance at level of cities and towns is very weak(very few know who the equivalent of the mayor of their city is). The state(as in say US states, not federal level) government basically runs the show.
So, the state government does woo corporations with incentives to come to their state, but once the company reaches the level of permissions and deals with local officials who are looking for a cut(and in general, it is hard to fire these officials), the companies have to face the bribes process.
You can transfer bureaucrats even if you cant fire them(and this does happen though sometimes for the wrong reasons). But the bribe network also involves local politicians.
The intractable issue is that the journey to power of the top leaders in the state government involves taking support of local level leaders who either have some local support base or money which can be used for campaigning. In return, these local leaders demand a cut of bribe money which the top leader is obliged to allow or else risk losing their support.
Of course, this is not an all encompassing explanation and some leaders are much worse(corrupt far beyond any political necessity) and some better.
I'm originally from a small part of India, and the logic is quite simple. In your example, 300 jobs = 300 votes. But it would require millions in incentives to the company. But the local politician can just "buy" 300 votes with 300,000 INR (indian currency; 1000 rupees for 1 vote). So there is no point spending so much money on a facility when you can simply buy all the votes you need.
Election money is important but the role it plays is somewhat different.
Politicians do often woo companies to come to their sate.
A job (particulary a well paying one) creates a lot of economic activity and can make that region prosperous. Politicians want this both for votes created due to prosperity but more importantly, once the region becomes rich, they have more money for their social schemes and freebies which is a prominent part of how they come to power. Not to speak of more bribes obtained in richer areas.
> What incentives can you offer me if I build it here?". Then the towns will bend over backwards, gut their taxes, ease their planning zones, and basically contort everything they can to become the most appealing location.
I mean, that's basically a bribe too, we just don't call it a bribe when we do it on our side.
"Woah, woah, woah. You can't just hand government officials money! That's bribery! You have to do business within their specific jurisdiction and trade favours on the planning and setup of your business (favours none of your competitors or existing other business will receive) all on the promise of future increases in tax revenues in exchange, *that's* how you hand government officials money!"
Except they're not really close because in one case, the government is handing you tax payer money in exchange for potential growth and revenue for the city whereas in the other case you are paying a specific government official for personal gain.
Parts of the world that require bribes have nothing close to the governmental system of regulations and permitting that America does. It’s not that it’s cheaper, it’s that the system is so mismanaged and corrupt in its entirety, that the only way to achieve a goal without delays, cost overruns, sabotage, and violence, is to just pay the bribe..or else.
Yeah it's happened like that in local communities where I live. Big company says to city government "if you don't give us a big tax break we'll move our [headquarters|factory|operations|etc] to our branch in [that other town]".
More often than not the city relents and the tax breaks are enacted. No city officials are paid off, it's all about arm-twisting.
Seems to me this is a form of extortion not bribery. Of course extortion is no more ethical than bribery, but it's not illegal to use the threat to take one's business elsewhere. Call it "negotiating", it happens all the time.
Meanwhile in America and the entire west to an extent, you have the government trying to "bribe" businesses to open in their jurisdiction through tax incentives and so forth.
In India the projects are blocked by individual officials seeking to line their pockets, they don’t care if that causes their area to lose out on the project.
Corruption does terrible things to a society. I look at how Russia, Mexico, Greece and others were/are absolutely crippled by wide-spread, run-of-the-mill corruption at all levels of government. We have always been our best in the USA when corruption has been the least prevalent. The "legalized bribery" from campaign donations and regulatory capture, while not as bad as in those other countries, does not do our system justice.
US authorities don't investigate about MS (hopefully they will), but they use the extraterritoriality of US laws to sue foreign companies who corrupted in a foreign country. The French company Alstom (rolling stock and gas/nuke turbines manufacturer) was prosecuted for corruption… in Indonesia [1].
I'm all for fighting against corruption everywhere, but here it looks like the case was allegedly used to force to sell the power division to General Electric. These turbines are used by the nuclear plants in France, so they are quite critical and could have been used by the US authorities to negotiate something with France. I would have preferred if those guys were sued in France in the first place.
This is how business is done in most of the world.
If it's a 'standard practice' - then it is 'accounted for' and effectively part of the equation.
How else do you think think the states vast wealth trickles out to it's citizens?
The $10M Bribe to the Minister of Education goes t pay for the construction of his Mansion, staff, services.
What 'mostly matters' in these kinds of situations frankly is de facto transparency and efficacy.
If the ration are 'understood' and actually well-strutted, then there's a kind of de-facto transparency. In the case of a rich state like Qatar, it might actually be better than simply having nothing.
You could argue the 'lack of competitiveness' from MSFT bids given alternatives, but in many cases it really might not matter, the 'winner' was a fait-accompli anyhow.
When this is Nigeria, and the state is providing it's citizens with nothing, then it's much more of a problem.
I should also note that this is a function of the regional system, not MS.
MS is playing the game that's handed to them. Their alternative choice is to pull out of all of those markets, and hand them over to other businesses who operate that way.
The 'problem' should mostly be directed at state agencies setting up the system.
There should be more analysis and journalism on this kind of stuff, particularly because it does happen in countries wherein 'regular people' do end up paying the price, but the focus should on the agencies, not businesses who would otherwise play fairly.
This is a nuanced issue and we should not be 'shocked and horrified' by it, this almost implies a serious kind of naivte.
We need to recognise that it's complicated before just trying to 'blame MSFT'.
With one major difference: in Africa, in general in the third world countries, whom to bribe, how much to bribe, who is the intermediary who handles the bribes, etc--are common knowledge. In the developed word, that is secret--only accessible to the super wealthy.
The military industrial complex, and the intelligence communities are above the government. Investigations would never take place, unless they were fake and only to placate the public.
Lots of our dark foreign policy, is orchestrated through NGO's like the National Endowment for Democracy, where they then go on to do all kinds of illegal things in other countries. All is legal in the name of "national security".
You say that but that’s basically what happened with US v. Microsoft and they never moved onto the next. Apple is doing far worse with Safari on iOS and the DOJ refuses to apply the same standard.
This seems like reverse rule of “if you’re going to bring food, you have to bring enough for the whole class”.
No, Apple has a tiny lobbying operation and does not do corporate PAC contributions at all.
The real explanation is that Apple makes computers so they can legally control software however they want. When Microsoft got in trouble in the 1990s, they did not make computers, they were only a supplier. So they got in trouble for interfering with other suppliers. This is one reason Microsoft now makes and sells computers directly to consumers.
If a US employee wires the money, is aware of / ordered the bribe or the bribery takes place on US soil, it is definitely illegal.
Hire a lawyer or ask us before putting foreign employees in a position where they might engage in bribery of foreign officials that don't violate these rules.
Be sure to perform thorough accounting in any case.
Based on the allegations in the article, Microsoft seems to have been following the rules until the whistleblower started screwing up the "is aware of" part.
We have to abolish corporations. Nationalize them. The concept of an entity which spares directors from liability is ridiculous... It's a financial instrument designed for scams and nothing else.
I like how there is a ton of commentary on how to skip ethics training. If you are thinking of skipping ethics training... That training might be targeted at you.
Let's see how The Verge falls out of Microsoft's grace moving forward. The Verge had (what feels like) direct access to top MS execs for all product launches. I guess those days are over.
Don't get me wrong, if this was picked up by the SEC or DOJ - I'd take it more seriously, but it sounds like accusations with no real proof.
Wouldn't that be evidence that they have less reason to lie about this? This is potentially burning a bridge, which could potentially cost them financially long term.
The Foreign Corrupt Practices Act should be repealed and American companies should be allowed to compete on equal footing with their foreign competitors. No other country, even if it technically has an FCPA-like law on the books, actually enforces it to the extent the US does. It means that everyone is free to openly participate in bribery to win foreign markets, markets where bribery is just how business is done, while American companies have their hands tied behind their backs. This has overall been a major hamper on American competitiveness while being a huge boon to middle-men and white collar criminal defense lawyers who specialize in working around the laws and defending against prosecutions.
It's not about our laws, it's about their laws. Whether bribery is legal or otherwise tolerated seems to be a question properly for the country whose officials are being bribed. It may be hard to imagine, but this is just how it works in some countries. They don't pay their public officials enough, and everyone expects that they pad their inadequate official salaries with corruption. I certainly wouldn't want my country to be run that way, but it's just how some societies work.
Yes, the bribery is technically illegal in most of those countries, but thinking that is is of primary importance is mistaking western legalism for a universal ethos. In many other places, the technical requirements of the law are much less important. The real law in all cases is what is actually practiced, which in these societies can be quite different from what's on the books.
> mistaking western legalism for a universal ethos.
If our laws aren't reflecting a "universal ethos," then it seems to me we need to change our own laws. If, on the other hand, our laws are tuned to reflect our judgment that bribery is universally ethically and economically problematic for a multitude of defensible reasons (regardless of whether it's a common practice elsewhere), then perhaps we are doing the right thing.
Sometimes theory and practice come into conflict. Persuading others to adopt our policies, which we believe to be grounded in universally applicable ethics, through economic pressure is the best thing we know how to do that doesn't involve going to war.
Sounds right to me. In fact that’s one of the main reasons why we have different nations and borders in the first place. We should not assume our WEIRD values are universal.
> In fact that’s one of the main reasons why we have different nations and borders in the first place.
I'm not so sure about that. We have different cultures, to be sure, and certainly different governments to which we pledge allegiance, each with limited reach. But the modern concept of statehood and universally-recognized, clearly-delineated borders is a relatively new phenomenon, dating only back to the 20th century. Borders and distinctions between territories before then were rather blurry. See, e.g., http://www.dpi.inpe.br/gilberto/references/robinson_boundari....
But I don’t think this refutes the notion that ethics and morals are not universal.
Sure, rigid borders are relatively new but I don’t think we should get bogged down in terminology. Maybe I should have said “government” instead of nation and “territory” instead of “borders”.
I think the question is more about whether you have the same ethical framework when dealing with other cultures as when dealing with your own, not whether other cultures tend toward different ethical standards themselves.
Your consistent ethical framework can be to respect the laws (the de facto laws) of the places you operate in. For a whole country, part of any reasonable ethical code is something like not interfering in the internal affairs of other countries, which means not exercising legal jurisdiction over actions that take place in other countries and don't really concern you.
I am against that. The result could be that US companies would go all in on bribing and make the countries even more corrupt. It would make the US even more hypocritical when they preach ethics to the world.
No, this reeks of putting money over ethics, and would likely increase corruption in the US. IMO, we shouldn't do business with countries via practices we view as corrupt, even if we were following their laws and would mean losing their business.
Yes. It's not our governments job to prosecute foreign bribery. It's the foreign government's job. And if they don't do their job, I don't see how that's my problem.
After all the business ethics training videos I had to sit through, I am infuriated by this.