Thursday, December 6, 2007

Bribery

Bribery

Bribery is a crime implying a sum or gift given that alters the behavior of the person in ways not consistent with the duties of that person. It is defined by Black's Law Dictionary as the offering, giving, receiving, or soliciting of any item of value to influence the actions as an official or other person in discharge of a public or legal duty. The bribe is the gift bestowed to influence the receiver's conduct. It may be any money, good, right in action, property, preferment, privilege, emolument, object of value, advantage, or any promise or undertaking to induce or influence the action, vote, or influence of a person in an official or public capacity.

It is a form of political corruption and is generally considered unethical. In most jurisdictions it is illegal, or at least cause for sanctions from one's employer or professional organization.

Bribery around the world is estimated at about $1 trillion (£494bn) and the burden of corruption falls disproportionately on the bottom billion people living in extreme poverty.[1]

For example, a motorist may bribe a police officer not to issue a ticket for speeding, a citizen seeking paperwork or utility line connections may bribe a functionary for faster service, a construction company may bribe a civil servant to award a contract, or a narcotics smuggler may bribe a judge to lessen criminal penalties.

In some cases, the briber holds a powerful role and controls the transaction; in other cases, a bribe may be effectively extracted from the person paying it.

Expectations of when a monetary transaction is appropriate can also differ: tipping, for example, is considered bribery in some societies, while in others the two concepts may be interchangeable. In Spanish, bribes are referred to as "la mordida" (literally, "the bite"), in middle eastern countries they are Backshish or Bakshish.

The offence may be divided into two great classes—the one where a person invested with power is induced by payment to use it unjustly; the other, where power is obtained by purchasing the suffrages of those who can impart it.

Bribery may also take the form of a secret commission, a profit made by an agent, in the course of his employment, without the knowledge of his principal.

The level of non-monetary favours that constitute an incentive to unethical behaviour is variable and may constitute a matter of opinion in a given field:


Music

Payola is the commonplace practice where record companies buy air time from radio and television stations for songs they are promoting.


Government

A grey area may exist when payments to smooth transactions are made. United States law is particularly strict in limiting the ability of businesses to pay for the awarding of contracts by foreign governments; however, the Foreign Corrupt Practices Act contains an exception for "grease payments"; very basically, this allows payments to officials in order to obtain the performance of ministerial acts which they are legally required to do, but may delay in the absence of such payment. In some countries, this practice is the norm, often resulting from a developing nation not having the tax structure to pay civil servants an adequate salary. Nevertheless, most economists regard bribery as a bad thing because it encourages rent seeking behaviour. A state where bribery has become a way of life is a kleptocracy.


Tax Treatment of Bribes

The tax status of bribes is an issue for governments since the bribery of government officials impedes the democratic process and may interfere with good government. In some countries, such bribes are considered tax-deductible payments. However, in 1996, in an effort to discourage bribery, the OECD Council recommended to that member countries cease to allow the tax-deductibility of bribes to foreign officials. This was followed by the signing of the Anti-Bribery Convention. Since that time, the majority of the OECD countries which are signatories of the convention have revised their tax policies according to this recommendation and some have extended the measures to bribes paid to any official, sending the message that bribery will no longer be tolerated in the operations of the government.[2]


Medicine

Pharmaceutical corporations may seek to reward doctors for heavy prescription of their drugs through gifts. The American Medical Association has published ethical guidelines for gifts from industry which include the tenet that physicians should not accept gifts if they are given in relation to the physician’s prescribing practices. [1] Doubtful cases include grants for travelling to medical conventions that double as tourist trips.

Dentists often receive samples of home dental care products such as toothpaste, which are of negligible value; somewhat ironically, dentists in a television commercial will often state that they get these samples but pay to use the sponsor's product.


Politics

Politicians receive campaign contributions and other payoffs from powerful corporations or individuals when making choices in the interests of those parties, or in anticipation of favorable policy. However, such a relationship does not meet the legal standards for bribery without evidence of a quid pro quo. See also influence peddling and political corruption.


Business

Employees, managers, or salespeople of a business may offer money or gifts to a potential client in exchange for business. For instance, the service company Aramark was recently accused of offering gifts to an assistant warden in the New Mexico Prison System in exchange for a contract allowing Aramark to provide the food services in the state's prisons.

More recently, in 2006 German prosecutors conducted a wide-ranging investigation of Siemens AG to determine if Siemens employees paid bribes in exchange for business.
In some cases where the system of law is not well implemented, bribes may be a way for companies to continue their businesses. In the case, for example where custom officials harass a certain firm or production plant, officially stating to check for irregularities, may halt production and stall other normal activities of a firm. The disruption may cause losses to the firm that exceed the amount of money to pay off the official. Bribing the officials is a common way to deal with this issue in countries where there exists no firm system of reporting these semi-illegal activities. The third party, known as the White Glove may be involed to act as a clean middleman.

Specialists consultancies such as Interchange Solutions Limited (UK) have been set up to help multinational companies and SMEs, with a commitment to anti-corruption, to trade more ethically and benefit from compliance with the law.


Sport

Referees, and scoring judges may be offered money, gifts, or other compensation to guarantee a specific outcome in an athletic competition. A well-known example of this manner of bribery in sport would be the 2002 Olympic Winter Games figure skating scandal, where the French judge in the pairs competition voted for the Russian skaters in order to secure an advantage for the French skaters in the ice dancing competition.

Additionally, bribes may be offered by cities in order to secure athletic franchises, or even competitions, as happened with the 2002 Winter Olympics. It is common practice for cities to "bid" against each other with stadiums, tax benefits, and licensing deals to secure or keep professional sports franchises.

Athletes themselves can be paid to under-perform, generally so that a gambler or gambling syndicate can secure a winning bet. A classic example of this is the 1919 World Series, better known as the Black Sox Scandal.

Finally, in some sports, elements of the game may be tampered with -- the classic example being from horse racing, where a groom or other person with access to the horses before the race may be bribed to over-feed an animal, or even administer a sedative to reduce a horse's chances of winning. This is another type of bribery done for financial gain through gambling -- bet against a clear favorite, and ensure that the favorite has an "off day."


See also

Conflict of interest

Bribe Payers Index



External links

Report requests for bribes at www.BRIBEline.org

TRACE

Transparency International

Business Principles for Countering Bribery

OECD Centre for Tax Policy and Administration: Tax Treatment of Bribes

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