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susier
8th Aug 2016, 09:27
Serious Fraud Office opens Airbus corruption investigation - BBC News (http://www.bbc.co.uk/news/business-37005459?ocid=socialflow_twitter)

Reading this on the BBC and thought it might be of interest to those here who aren't aware of it being in the news.

'The UK's Serious Fraud Office (SFO) has launched an investigation into allegations of "fraud, bribery and corruption" in the civil aviation business of Airbus.
The allegations relate to irregularities concerning third party consultants.
The France-based aircraft manufacturer said it was co-operating with the probe, which was launched last month.'

Heathrow Harry
8th Aug 2016, 11:57
Who could believe such things???

G-CPTN
8th Aug 2016, 12:00
What happened to Lockheed (https://en.wikipedia.org/wiki/Lockheed_bribery_scandals)?

Lockheed executives admitted paying millions in bribes over more than a decade to the Dutch (Prince Bernhard, husband of Queen Juliana, in particular), to key Japanese and West German politicians, to Italian officials and generals, and to other highly placed figures from Hong Kong to Saudi Arabia, in order to get them to buy our airplanes.


Airbus Affair (https://en.wikipedia.org/wiki/Airbus_affair).

Scuffers
8th Aug 2016, 12:03
I can't help thinking probes like this are just stupidity.

Are they trying to shut Airbus down?

Same deal with the RR investigation, unless your going to have an international authority do the same for *ALL* the industry (ie. the Yanks too), all you are doing to shooting your own workforce in the head.

PAXboy
8th Aug 2016, 12:24
Humans always seek to gain preference by one way or another (by hook or by crrok) and it has been that way for as long as humans have existed. You can legislate against human nature - but it won't change human nature - as countless govts have found out over the years.

G-CPTN
8th Aug 2016, 12:31
Where does 'entertaining' (paying for lunches), trips to factories (with accommodation), 'holidays' (visits to see products in service), gifts (pens, folders, bottles or greater) slide into cash donations (discounts and commission on sales)?

I suppose it's all relative.

Bribery (https://en.wikipedia.org/wiki/Bribery) is the act of giving money, goods or other forms of recompense to a recipient in exchange for an alteration of their behavior (to the benefit/interest of the giver) that the recipient would otherwise not alter. Bribery is defined by Black's Law Dictionary as the offering, giving, receiving, or soliciting of any item of value to influence the actions of an official or other person in charge of a public or legal duty.

Gifts of money or other items of value which are otherwise available to everyone on an equivalent basis, and not for dishonest purposes, is not bribery. Offering a discount or a refund to all purchasers is a legal rebate and is not bribery.

It may be money, goods, rights in action, property, preferment, privilege, emolument, objects of value, advantage, or merely a promise to induce or influence the action, vote, or influence of a person in an official or public capacity.

One must be careful of differing social and cultural norms when examining bribery.
Expectations of when a monetary transaction is appropriate can differ from place to place.

G-CPTN
8th Aug 2016, 12:42
There is no (US) federal statute that by its terms expressly prohibits commercial bribery (https://en.wikipedia.org/wiki/Commercial_bribery),

Lonewolf_50
8th Aug 2016, 12:56
There is no (US) federal statute that by its terms expressly prohibits commercial bribery (https://en.wikipedia.org/wiki/Commercial_bribery),Yeah, but there are ways to get at those dealing in kickbacks.
... the federal mail and wire fraud (https://en.wikipedia.org/wiki/Mail_and_wire_fraud) statutes can be used to prosecute commercial bribery as a "scheme or artifice to defraud" if the mail or interstate wire facilities are used. In addition, use of the mails or interstate travel or communication in furtherance of a violation of state commercial bribery laws may be prosecutable in Federal court (https://en.wikipedia.org/wiki/United_States_district_courts) under the Travel Act (https://en.wikipedia.org/wiki/Travel_Act). As the penalties under the federal statutes may exceed the state penalties, and the federal investigative and enforcement agencies may have superior resources, often federal prosecution is favored.
PS thanks for the link: I hadn't realized that kickbacks were illegal in only 36 of the 50 states under various state laws. :confused:

Turbine D
8th Aug 2016, 13:09
G-CPTN,
https://en.wikipedia.org/wiki/Travel_Act
As Lonewolf indicated.

glofish
8th Aug 2016, 13:17
unless your going to have an international authority do the same for *ALL* the industry (ie. the Yanks too), all you are doing to shooting your own workforce in the head.

The eternal silly argument!
"Because you can't get all the wrongdoers, don't go after the one you can".
Very civilised indeed.

With the same argument you can shut down each and every national agency who prosecutes wrongdoers, because they obviously have no authority over other wrongdoers in other countries, they should, according to your logic, not prosecute the ones under their authority.

Would you advocate the same for doping sinners?

There has to be a start somewhere, sometime. To whine for a international agency points right at the tooth- and spineless UN.

troppo
8th Aug 2016, 14:13
United Nations Convention Against Corruption is widely accepted. One poster mentioned job losses...theoretically...the amount of jobs at risk is far less than the jobs lost through economic and social underdevelopment, which are directly related to corruption.

oldchina
8th Aug 2016, 14:14
You can't have distinctive white guys wearing an Airbus or Boeing badge walking around town trying to find out who is the real decision maker.
They need a local guy who knows who the top dog is and what will make him decide for your product. T'was always thus ...

Scuffers
8th Aug 2016, 14:33
No, not really.

the problem is define wrongdoing?

if you have ever worked in some countries, 'commissions' are a way of life, if you don't, you might aswell not bother trying to trade with them, ie, in this case, just let the Yanks take all the work.

At what point you call it a bribe is semantics.

No, I don't like working this way, but it's their country and that's how they work.

Being all goodie two shoes about it is economic suicide, and I'll let you work out how to explain to all the redundant airbus workers (and the rest of the support industries workers).

BizJetJock
8th Aug 2016, 14:41
I think you'll find the US Foreign Corrupt Practices Act goes way beyond anything the UK deems illegal. They also have a hugely better track record of actually prosecuting those they go after. So I don't think it's a case of "leave it to the Americans". More likely the French...

Heathrow Harry
8th Aug 2016, 16:00
Indeed - and it appears that various Govts will inform others & pass on evidence in order to nail the corrupt where it will do them most harm...... The UK now has similar laws as does the Netherlands, Germany, Denmark, Canada and Australia. There is NO defence in claiming "everyone does it" or " its the local way of life" I'm afraid........

https://www.justice.gov/criminal-fraud/foreign-corrupt-practices-act

An Overview
The Foreign Corrupt Practices Act of 1977, as amended, 15 U.S.C. 78dd-1, et seq. ("FCPA"), was enacted for the purpose of making it unlawful for certain classes of persons and entities to make payments to foreign government officials to assist in obtaining or retaining business. Specifically, the anti-bribery provisions of the FCPA prohibit the willful use of the mails or any means of instrumentality of interstate commerce corruptly in furtherance of any offer, payment, promise to pay, or authorization of the payment of money or anything of value to any person, while knowing that all or a portion of such money or thing of value will be offered, given or promised, directly or indirectly, to a foreign official to influence the foreign official in his or her official capacity, induce the foreign official to do or omit to do an act in violation of his or her lawful duty, or to secure any improper advantage in order to assist in obtaining or retaining business for or with, or directing business to, any person.
Since 1977, the anti-bribery provisions of the FCPA have applied to all U.S. persons and certain foreign issuers of securities. With the enactment of certain amendments in 1998, the anti-bribery provisions of the FCPA now also apply to foreign firms and persons who cause, directly or through agents, an act in furtherance of such a corrupt payment to take place within the territory of the United States.
The FCPA also requires companies whose securities are listed in the United States to meet its accounting provisions. See 15 U.S.C. 78m. These accounting provisions, which were designed to operate in tandem with the anti-bribery provisions of the FCPA, require corporations covered by the provisions to (a) make and keep books and records that accurately and fairly reflect the transactions of the corporation and (b) devise and maintain an adequate system of internal accounting controls.

Skywards747
8th Aug 2016, 16:10
My first thought was why San Francisco is investigating Airbus.

tdracer
8th Aug 2016, 16:32
I think you'll find the US Foreign Corrupt Practices Act goes way beyond anything the UK deems illegal. They also have a hugely better track record of actually prosecuting those they go after. So I don't think it's a case of "leave it to the Americans". More likely the French...
A little over 20 years ago, Boeing assigned me to a foreign country - not too long after the above noted Lockheed scandal. I was told, in no uncertain terms, that if I did anything that could be construed as 'bribery', I'd be immediately fired. Problem was, the civil servants in this particular country were not well paid, and they expected nominal 'personal fees' to do their job - such as processing my long term visa application :ugh:. It actually got to the point that I was going to have to leave the country because my temporary visa was about to expire. Finally the local Boeing manager came to my rescue. He grabbed some Boeing trinkets - key chains, tie clips, etc. - and together we walked my visa application through the local bureaucracy rewarding each individual with a trinket when they'd finished their particular task.:rolleyes: We could give away trinkets - but not cash :ugh:

Turbine D
8th Aug 2016, 18:29
Scuffers,
Don't think it goes unnoticed, it doesn't.

http://www.nytimes.com/2008/12/16/business/worldbusiness/16siemens.html?_r=0

Siemens found out the hard way both in the US and other countries. It put siemens in chaos for a period of time as the management exited and the company reorganized.

Report: Siemens pays $42 million to settle Israel bribe case - The FCPA Blog - The FCPA Blog (http://www.fcpablog.com/blog/2016/5/3/report-siemens-pays-42-million-to-settle-israel-bribe-case.html)


A number of upper management people at GE lost their jobs as a result of this, people that should have known but didn't.

COMPANY NEWS - G.E. Guilty Plea in U.S. Aid to Israel - NYTimes.com (http://www.nytimes.com/1992/07/23/business/company-news-ge-guilty-plea-in-us-aid-to-israel.html)

These are just some examples, there are lots more besides these...

oldchina
8th Aug 2016, 18:37
tdracer ...
Ah, Nigonesia, I remember it well.
Home company's employees must never be involved.
Therefore local agents are required and always will be. Simple enough?

sitigeltfel
8th Aug 2016, 19:02
There are certain countries and cultures where no transaction takes place without a measure of "lubrication". If you don't conform, your competitors get the contract. Not saying it's right, that's just the way it is.

Local Variation
8th Aug 2016, 19:26
I very much doubt they are being investigated for giving away company branded mugs and pens. Such gifts do not fall foul of bribery and are part and parcel of sales goodies.

Being a global business, I am sure they will have clear legal policies, working practices and staff training in place and that training will cite all the prime examples listed above. Been there and done it. Aside from the fines, mud and dirt sticks causing long term damage to the company and it's integrity. Key contracts will be dropped and you will be de-selected as a supplier period.

And don't for one minute believe your backside is covered in trading via an intermediary, such as a local country sales agent, who knows the score. In the UK, company fines can be unlimited and people can face upto 10 years at Her Majesty's pleasure.

ZFT
8th Aug 2016, 22:21
Today the rules are very clearly defined and every company ensures all staff are fully conversant with the various laws and company ethics pertaining to this so there is really no excuse any more for running foul of either the FCPA or the UK equivalent.

It can make operating in certain countries almost impossible due to their demands to use 'agents' for almost everything (China and Indonesia are prime examples) and often one just has to walk away.

Sorry Dog
9th Aug 2016, 02:20
Today the rules are very clearly defined and every company ensures all staff are fully conversant with the various laws and company ethics pertaining to this so there is really no excuse any more for running foul of either the FCPA or the UK equivalent.

The thing is no matter how clear the rule is or how many training videos are viewed, in practice black and white rules become gray and clear becomes muddy. In china, you can't get so much as an elevator inspection without help from a local "agent." ...and as excuses go... there are worse ones than everybody else is doing it. While that doesn't make it right, it does make it reality.
...and the irony of laws such as FCPA, that are enforced quite selectively and unevenly, is that they often encourage to corrupt behavior by enforcers of said Act.

Tech Guy
9th Aug 2016, 11:24
We could give away trinkets - but not cash :ugh:

Although some companies have better trinkets than others. :)

Chronus
9th Aug 2016, 18:41
Here is the announcement made by SFO:

"Airbus Group investigation

8 August, 2016 | News Releases

The Director of the Serious Fraud Office has opened a criminal investigation into allegations of fraud, bribery and corruption in the civil aviation business of Airbus Group. These allegations relate to irregularities concerning third party consultants. If you have any information please contact us through our secure and confidential reporting channel.

Notes to editors:

When providing information please quote ‘Airbus investigation’ on the reporting form.
The SFO opened its investigation in July 2016.
The SFO can make no further comment at this time"

The investigation is therefore in respect of suspected offences under Bribery Act 2010 and Fraud Act 2006.

In March 1974 THY flight 981, a DC10 crashed into a forest outside Paris killing all 346 souls on board. We all know what caused the crash, but why did it happen has since faded from memory. How was it that THY ended up with an aircraft that should have been sold to All Nippon and why did was the order cancelled and All Nippon bought from Lockheed instead.
In evidence given in 1975-6 to the Senate Committee on Multi -National Corporations, Lockheed admitted paying $22.5 million in bribes to foreign government officials between 1969 and 1974. Of that amount, Lockheed said, $2 million was paid to Japanese Government officials to influence, among other things, the sale of Tristars to All Nippon.
Had it not been for this then the DC10, Ship 29, would have gone to All Nippon with the baggage door modification carried out and all those lives would not have been lost.
Bakshish is simply intolerable and hopefully in the above enactments there is sufficient clout to ensure that all those who practice it are served with porridge instead of caviar and champagne for breakfast for a long time.

JammedStab
9th Aug 2016, 21:33
Hmmm, I wonder if we will discover the real reason John Leahy sells so many Airbus Aircraft?

G-CPTN
9th Aug 2016, 22:37
Khashoggi.

Aitken.

tdracer
9th Aug 2016, 23:07
Although some companies have better trinkets than others. http://cdn.pprune.org/images/smilies/smile.gif
There are actual guidelines on what "trinkets" are acceptable, as well as free meals and the like. Boeing makes everyone take an on-line course every year on 'business courtesies' as to what's acceptable and what's not (with a note that if you're not sure to contact the Ethics department). And it goes both ways - what we can give and what we can receive (I've got a small collection of golf shirts courtesy of Pratt and Whitney that I've received over the years).
It's sometimes amusing - the US military has very strict rules, their people can't even accept coffee and donuts at a meeting. When we had a design review with the USAF for the KC-46 a few years ago, there was a table of coffee, pastries, etc. outside the door. There was also a cup where the USAF types were supposed to pay for what they took (and it actually had some money in it).

GrumpyOldFart
10th Aug 2016, 21:17
G-C:

Khashoggi.

Bless you.

Sorry Dog
11th Aug 2016, 14:29
Boeing makes everyone take an on-line course every year on 'business courtesies' as to what's acceptable and what's not (with a note that if you're not sure to contact the Ethics department).

Certainly right in line with current big company HR procedures which are there not so much to prevent the behavior but for standard corporate CYA.

I may be guilty of being a cynic with respect to this subject, but 99% of the time the non ethical behavior really starts at the top and trickles all through to all levels of the company. Pick your specific situation: unrealistic goals, off the record "coaching", pervasive corporate cultures.

...and after said employee actions become public..."but we showed him the training video. He knew what he was doing was wrong. At Goodoleboy Inc. we always strive for the highest ethical standards and blah blah blah..."

JamesBird
14th Aug 2016, 08:09
As someone said here, often from the top down - Goverment providing foreign aid to a country, with the proviso key contracts are placed back with provider nation suppliers - Bribery or just good business practice?

pax britanica
14th Aug 2016, 10:06
Utter stupidity and a waste of public money-all global corporations do this kind of thing including American ones. In this case its especially stupid since with the Brexit vote Airbus could decide f--k the Uk we will make the wings in France, end of the British Aircraft industry

All countries are corrupt they just go about it in different ways-in some places its the bag of cash in others its a knighthood (wonder where that might be)

vapilot2004
14th Aug 2016, 10:12
There used to be a saying, "here (US), it is illegal, there, it is tax-deductible".

edmundronald
15th Aug 2016, 04:19
I think after Lockheed US companies got training in ways to do the same thing without cash changing hands. One of the beneficial consequences has been that major companies now even more generously fund scholarships at prestigious universities :)

Edmund

Heathrow Harry
15th Aug 2016, 09:26
"Utter stupidity and a waste of public money-all global corporations do this kind of thing including American ones"

the point is that you shouldn't - once you start bribing people overseas you soon start doing the same at home - or at least thinking about it - so much easier than delivering a decent product at a decent price

pax britanica
15th Aug 2016, 09:37
HH-I dont disagree with you but my feelings are that its more the other waya round -bribery like charity starts at home its just that in the west its rather more subtle. Someone already made the point about Government aid.


Also these laws seem to be sued rather selectively and when Airbus UK was BAe owned (a company whose name is never far from allegations like this) all seemed to be well but now its Airbus owned suddenly the same business practices get called into question.

So SFO investigation into practices in the City of London which cost the economy Billions but put a few thousand jobs in the North at risk and thats Ok