Abstract

This article discusses the involvement of some U.S. multinational corporations in the practice of paying bribes overseas in order to obtain or engage in business, or to procure favorable tax and other administrative decisions from foreign governments. An investigation begun in 1974 by the Securities and Exchange Commission into illegal corporate contributions to the former U.S. President Richard Nixon's 1972 reelection produced a serendipity effect: the revelation that a number of prominent American corporations engage in overseas payoffs. The disclosure that U.S. corporations operating abroad pay-or are solicited to pay-bribes in order to obtain or engage in business, or to procure favorable tax and other administrative decisions from foreign governments, has opened a Pandora's box of complex and troublesome issues, which affect U.S. foreign relations, national security, and the investment and marketing policies of American international companies. Though there may be official tolerance in Washington for the lubrication bribe, there is a definite reluctance to condone the whitemail variety. The reason is not hard to find. The latter type of payoff generally involves an elaborate system for concealing the use of large sums of corporate cash.