What Is Bribery And Corruption, And How Can Businesses Combat It?

What Is Bribery And Corruption, And How Can Businesses Combat It?

If you look closely enough, bribery and corruption are everywhere, and the American workplace is no exception.

The team at EasyLlama will talk about bribery and corruption, how they manifest in the private sector, and how to safeguard your company against succumbing to corrupt practices.

Defining Bribery And Corruption

Bribery and corruption go hand-in-hand.

Corruption

Corruption is an umbrella term for dishonest/fraudulent conduct involving the abuse of power and influence. Corruption spans the gamut of unfair and illegals behaviors, from bribery, to embezzlement, to blackmail.

Bribery

Bribery is, by far, the most prevalent type of corruption: chances are, if it's a corrupt act, it involves some sort of bribery in addition to violating other ethical principles.

Generally speaking, bribery is an act of offering or receiving something of value in exchange for an unfair advantage -- from someone in power to "tip the scales" this or that way.

Legally speaking, bribery becomes a criminal offense when it involves the "buying" of favors from a "public official" (someone elected or appointed to a governmental entity or a company wholly or partially owned by the government), specifically when someone :

"directly or indirectly, corruptly gives, offers or promises anything of value to any public official or person who has been selected to be a public official, or offers or promises any public official... to give anything of value to any other person or entity with the intent

-- to influence any official act; or

-- to influence such public official... to commit or aid in committing, or collude in, or allow, any fraud, or make opportunity for the commission of any fraud, on the United States; or

-- to induce such public official... to do or omit to do any act in violation of the lawful duty of such official or person."

The full legal definition of bribery (18 U.S. Code § 201) also forbids public officials from directly or indirectly requesting or accepting bribes.

Even charitable contributions made to an organization at the direct request of a private business partner or government official could be considered an indirect bribe to secure some favor (if "quid pro quo can be clearly demonstrated, that is).

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Criminal Penalties For Bribery

Technically, in every bribery act, there is an active and a passive party:

  • Active Bribery: refers to the person offering the bribe and asking for a favor.
  • Passive Bribery: refers to the person accepting the bribe or asking for one.

When it comes to bribing government officials, the relevant anticorruption laws allow for the prosecution of both the active and the passive parties involved in the bribery act.

In the United States, bribery is punishable by up to 15 years’ imprisonment, a fine of $250,000 (double that for organizations!), or up to three times the value of the bribe. In the case of government officials, being found guilty of bribery results in an instant disqualification from holding any federal office.

What Makes The Business World Vulnerable To Bribery And Corruption?

No American business is immune to corruption, though some private sector categories are much more prone to it than others (among the hardest-hit are the finance & investment, construction, transportation, and fossil fuel extraction industries).

Like people, businesses may have interests that push them to cheat -- to retain business or seek some other improper business advantage. And businesses have more money, favors, and privileges to offer as bribes than a typical individual! A lot of potential for financial gain can be staked on "influencing" the results of a certain safety inspection (petty corruption) or a piece of legislature in government (grand-level corruption).

Third-Party Relationship "Loophole"

Some American companies try to game the system by using third parties' companies or other business associates through which to funnel their less-than-legitimate transactions. This makes them more difficult to catch, but make no mistake: an American company can still be held liable for failing to prevent bribery enacted by third-party business partners (even if no one in the American company had actual knowledge of the bribe). International Business Dealings

A company's chances of falling into corruption increase with doing business abroad.

The United States, the United Kingdom, and some European nations are taking multiple measures to fight corruption at home and abroad (e.g. Foreign Corrupt Practices Act, The UK Bribery Act, the OECD Anti-Bribery Convention, etc.) -- but they have their work cut out for them, as practices considered legally corrupt in the US, UK, and the European Union can be completely normalized in other nations.

Take the so-called facilitation or grease payments, for example. Facilitation payments are informal "fees" one pays to expedite processing paperwork or other routine administrative chores that can get clogged up in the system -- essentially: to cut in line. A facilitation payment may be considered a perfectly normal government bureaucratic function elsewhere, but American businesses (registered and operating in the US) are still held legally liable for any kind of "greasing of palms" by US laws, even if the bribe act technically happens on foreign soil and is not prosecuted by local authorities.

Combatting Corruption, Bribery, And Other Unethical Behaviors At The Workplace

Losing one's reputation as a trustworthy company can happen in a blink of an eye when corruption is involved; rebuilding it takes more money and time than most have -- and it's still not guaranteed!

It pays to take corruption very seriously and be proactive about combatting it. Here is what you should do, if you're just starting out:

  • Evaluate the corruption risk present in your company by conducting an impartial and honest risk assessment.

  • Based on the results of the risk assessment, draft a comprehensive (zero tolerance) anti-bribery and corruption policy for your company, including the following features:

  1. designate an individual or committee (usually the business area's Compliance Director or a legal contact) to whom employees can report concerns.

  2. a clear whistleblower policy (protects employees from retaliation)

  3. a "gift and entertainment policy" employees can check when unsure whether a gift/favor/hospitality they are being offered is appropriate or not

  4. a "government officials laws and officials policy" to guide employees' interactions with the authorities

  • Invest into company-wide, top-to-bottom anti-corruption & bribery workforce training to make sure all your employees know the right and the wrong way to do business as well as comprehend the penalties for violating anti-bribery and anti-corruption laws.

Anti-Bribery And Corruption Training Is Key To Corruption Prevention!

The best way to stop corruption in the workplace is to prevent it from happening in the first place -- with comprehensive workforce training!

EasyLlama's easy and impactful anti-bribery and corruption training will educate your employees, from top to bottom, on the moral and financial pitfalls of giving into corruption and provide them with behavioral blueprints on how to react to difficult situations without putting themselves in danger of compromising company values. Try it out: your business and peace of mind are worth it!

Written by: Maria Malyk

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