Steve Chapman
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Until 1977, there was no country that criminalized the practice of bribery abroad. But that year, President Jimmy Carter signed a law making the United States the very first. In due course, this measure eliminated corruption from every nation where our corporations operate.

Yes, it did -- right after Carter got a tattoo and a Harley. In fact, bribery remains a way of life in much of the world, including rapidly developing countries where American multinationals need to be. These firms often are forced to choose between following age-old local custom in order to compete and obeying U.S. law, which may leave them high and dry.

That could be the explanation behind the behavior attributed to Wal-Mart in its effort to expand in Mexico. The New York Times reports that the company's internal inquiry found "evidence of widespread bribery" and "suspect payments totaling more than $24 million" -- in apparent violation of the Foreign Corrupt Practices Act.

The scandal hit the world's biggest retailer like a ton of bricks. It lost $10 billion of market value literally overnight. The Justice Department had already launched an investigation, and congressional committees may not be far behind.

If you think this is a case of greedy Americans corrupting innocents abroad, think again. In its annual Corruption Perceptions Index, the watchdog group Transparency International ranks Mexico 100th from the top, out of 183 nations and territories. On a scale of zero ("highly corrupt") to 10 ("very clean"), it gets a score of 3, which I would read as "pretty sleazy." (The U.S. was 24th, at 7.1.)

If you want to reach the Mexican consumer, you may have little choice but to grease some palms. The Times interviewed a former high executive of Wal-Mart de Mexico who offered insight: "Bribes, he explained, accelerated growth. They got zoning maps changed. ... Permits that typically took months to process magically materialized in days. 'What we were buying was time,' he said."

Sure, executives can refuse to pay bribes. But while they get old waiting for permits to clear, they will lose business. They may also get to watch less scrupulous competitors swoop in. Those rivals may not have to fear the possible legal consequences quite so much, if they hail from countries with more permissive standards.

China, for example, didn't get around to passing its law making it a crime to bribe foreign officials until last year. But a spokesman for the British anti-corruption group Global Witness told the South China Morning Post, "It remains unclear whether the Chinese government is serious about prosecuting individuals and companies who have broken the law." Not a sure thing, since China is rated only slightly cleaner than Mexico.

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Steve Chapman

Steve Chapman is a columnist and editorial writer for the Chicago Tribune.
 

 
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