Blog: Dave LeggettCorruption

Dave Leggett | 31 March 2006

Corruption is hard to define exactly and even harder to monitor. Kautilya, a statesman and scholar in ancient India, thought it impossible to see corrupt practices, “just as fish moving under water cannot possibly be found out either as drinking or not drinking water”.

But sometimes what is corrupt and what is part and parcel of a 'different business culture' or a historical anomaly of some sort is certainly hard to distinguish. In surveys of corruption though, the Koreans tend to figure quite prominently. I recall dealing with a middle man in Korea many years ago who tried to get the company I was working for to pay his bills for expenses incurred on a business trip to London. It was a trip he decided to make unilaterally and the bills were pretty impressive: top hotels, restaurants, escort agencies - he'd had a whale of a time. He must have thought he would get away with it. The bills were sent in in a very matter-of-fact way.

The middle managers we were dealing with at Hyundai seemed complicit in reinforcing this guy's middleman role. It was deal with him or they no talk with us. Our Hyundai interview schedule disintegrated when we refused to play ball.

And then there was the time in Beijing when I paid a government official a few hundred dollars for the honour of an interview (no fee, no interview). Where would we meet? A plush hotel, naturally. And meeting time coincided with dinner time. He brought half a dozen colleagues along and demanded that we sit down to eat. It was quite a jolly gathering and I seem to remember that everyone was extremely hungry and thirsty, the rich Westerner picking up the tab. My 'middleman' had done me up like a kipper and getting much sense out of the interviewee was, well, a losing battle. There was much laughter and exciteable Mandarin chatter around the table (probably all joking about the foreigner they had stung: 'look, the overfed long-nose is interrupting yet again to ask about the future of the auto industry; he doesn't give up - but my, this duck is good!').

I'm sure things are a little bit different now that places like Korea are becoming more a part of the global economy and subject to global corporate influences, although I do wonder how different. A business culture that embraces skimming, middlemen, backhanders, gifts and bribery of all sorts doesn't disappear overnight.

And I'm not being sanctimonious here. If everyone's at it, then you would perhaps be foolish not to be part of it. That policeman who takes a few dollars off you at a checkpoint somewhere in the Third World may actually need that cash to feed his family in a country where civil servants are badly paid, or maybe not paid at all because the government is bankrupt. At the other end of the scale, if you don't pay off the right people when doing business in Russia, for example, you may invite unwelcome complications. Not making that donation of cars to the local powerbroker might mean that your employees get a visit from guys in cheap leather jackets with guns.

As with 'supernormal profits' defining corrupt practices isn't easy when seen through the prism of our own business culture. But that's not to say that some people don't take the mickey and overstep the mark. Greed takes many forms.

SOUTH KOREA: Net closes in on top Hyundai execs in bribery investigation


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