Blog ››› ››› BRIAN POWELL
"Economic growth is a good thing, even when it's lubricated by graft."
So argued Chicago Tribune columnist Steve Chapman, dismissing concerns about corporate bribery raised amid reports that Wal-Mart officials have covered up evidence tying the company to bribery in Mexico. Chapman's Sunday column defended Wal-Mart, whose largest subsidiary (Wal-Mart de Mexico), is under investigation by the Justice Department (DOJ). The New York Times reported:
In September 2005, a senior Wal-Mart lawyer received an alarming e-mail from a former executive at the company's largest foreign subsidiary, Wal-Mart de Mexico. In the e-mail and follow-up conversations, the former executive described how Wal-Mart de Mexico had orchestrated a campaign of bribery to win market dominance. In its rush to build stores, he said, the company had paid bribes to obtain permits in virtually every corner of the country.
The allegations of illicit payments put Wal-Mart under the jurisdiction of DOJ, which is investigating potential violations of the Foreign Corrupt Practices Act of 1977, a law that has been described as an "anti-bribery, anti-corruption measure enacted...to prohibit American companies from paying off foreign officials and to create an international example for ethical business practices."
The law has been in effect for 35 years, but Chapman questioned the wisdom of using U.S. law to govern corporate behavior overseas:
The question is why it's the duty of the U.S. government to dictate business practices in nations with very different business climates. You would think the Justice Department has plenty to do enforcing American laws on American soil without trying to sanitize the rest of the world.
Our idea of appropriate business practices ought to prevail in America, but less developed countries are entitled to do things their own way. If Mexico doesn't police bribery and can't change its economic culture, why should Uncle Sam take on the job? [...]
By deterring American companies from investing in such places, we deprive their citizens of goods and jobs that would improve their lives.
When extortionate officials block Wal-Mart from opening stores in Mexico, ordinary Mexicans suffer. Economic growth is a good thing, even when it's lubricated by graft.