As I saw the reports this week out of Munich about Siemens pleading guilty to bribing politicians and officials in Nigeria, Russia and Libya, it reminded me that Siemens is a large player in Pakistan. Has any one looked into Siemens engaging in similar corrupt practices in
And, how about the behavior of other American and European companies operating in Pakistan? There are definitely laws on the books in the West such as the Foreign Corrupt Practices Act (FCPA) in the United States. All ethics classes taught in management schools and company training cover this topic. The fact is that there have been serious allegations and at least preliminary evidence to suggest that illegal payments were made to Bhutto-Zardari controlled fronts by companies in France, Switzerland and Poland. There was some action pursued in Switzerland at the request of Pakistani Government. However, France and Poland have not pursued the charges of corruption involving their companies in Pakistan. The only explanation I have heard is that the FCPA style laws did not exist in France prior to the year 2000.
However, the question is whether these laws are really enforced and how often are the companies investigated and prosecuted? Or do they simply rely on the foreign governments to report misbehavior? It made me wonder whether there is an inherent conflict when it comes to German or American government taking action against their own companies. After all, there are jobs in these countries that depend on exports to the developing nations. Would they rather be pristine in their efforts even if it means losing business and jobs to the Japanese, the Koreans and others?
With regard to Pakistan, I saw at least one repor in Forbes Magazine:
"The World Bank is looking at a electrical power plant project in Pakistan concluded in the mid-1990s, which was built and later partially maintained by Siemens and financed by the World Bank.
The World Bank is concerned that Siemens' costs for the project may have been overpriced.
Siemens is currently engulfed in a slush-fund scandal, in which prosecutors allege that managers siphoned off hundreds of millions of euros in company money to obtain foreign contracts.
Siemens' own internal investigation uncovered 420 mln euros in suspicious payments going back to 1999 which may have been made to obtain telecommunications equipment contracts in a range of foreign countries.
The Bavarian State Prosecutors office has said the sum is estimated in the triple-digit millions of euros."Do these reports represent only the tip of the iceberg of political and official corruption in the developing world? Are there more such investigations and prosecutions on the horizon? I certainly hope there are. In my view, serious action by the Western prosecutors seems to be an effective way to reduce the scourge of rampant corruption in developing nations such as Pakistan.