Lubrication and Subornation

Another variation of bribery is the difference between lubrication and subornation. Lubrication involves a relatively small sum of cash, a gift, or a service given to a low ranking official in a country where such offerings are not prohibited by law. The purpose of such a gift is to facilitate or expedite the normal, lawful performance of a duty by that official. This is practice common in many countries of the world. A small payment made to dock workers to speed up their pace so that unloading a truck takes a few hours rather than all day is an example of lubrication.

Subornation on the other hand generally involves giving large sums of money – frequently not properly accounted for – designed to entice an official to commit an illegal act on behalf of the one offering the bribe. Lubrication payments accompany requests for a person to do job more rapidly or more efficiently; subornation is a request for officials to turn their heads to not do their jobs or to break the law.

Agent’s Fees: A third type of payment that can appear to be a bribe but may not be is an agent’s fee. When a businessperson is uncertain of a country’s rules and regulations, an agent may be hired to represent the company in that country. For example, an attorney may be hired to file an appeal for a variance in a building code on the basis that the attorney will do a more efficient and thorough job than someone unfamiliar with such procedures. While this is often a legal and useful procedure, if a part of that of that agent’s fee is used to pay bribes, the intermediary’s fees are being used unlawfully. Under US law an official who knows of an agent’s intention to bribe may risk prosecution and jail time. The Foreign Corrupt Practices Act (FCPA) prohibits US businesses from paying bribes openly or using intermediaries as conduits for a bribe when the US manager knows that part of the intermediary’s payment will be used as bribe. Attorneys, agents, distributors and so forth may function as conduits for illegal payments. The process is further complicated by legal codes that vary from country to country; what is illegal in one country may be winked at in another and be legal in a third.

The answer to the questions of bribery is not an unqualified one. It is easy to generalize about the ethics of political payoffs and other types of payments; it is much more difficult to make the decision to withhold payment of money when the consequences of not making the payment may affect the company’s ability to do business profitability or at all. With the variety of ethical standards and levels of morality that exist in different cultures, the dilemma of ethics and pragmatism that faces international business cannot be resolved until the anticorruption accords among the OECD and OAS members are fully implemented and multinational businesses refuse to pay off bribes.

The Foreign Corrupt practices Act has had a positive effect. According to the latest Department of Commerce figures since 1994 American businesses have bowed out of 294 major overseas commercial contracts valued to $ 145 billion rather than pay a bribe. This information corroborates the academic evidences cited above. Even though there are numerous reports indicating a definite reduction in US firms paying bribes, the lure of contracts is too strong for some companies. Lockheed Corporation made $ 22 million in questionable foreign payments during the 1970s. More recently the company pled guilty to paying $ 1.8 million in bribes to a member of the Egyptian national parliament in exchange for lobbying for three air cargo plans worth $ 79 million to be sold to the military. Lockheed was caught and fined $ 25 million, and cargo plane exports by the company were banned for three years. Lockheed’s actions during the 1970s were a major influence on the passing of the FCPA. The company now maintains one of the most comprehensive ethics and legal training programs of any major corporations in the US.

It would be naïve to assume that laws and the resulting penalties alone will put an end to corruption. Change will come only from more ethically and socially responsible decisions by both buyers and sellers and by government willing to take a stand.

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