Murphy's Law: Bribes and Weapons Contracts

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January30, 2007: One reason modern weapons are so expensive is because so many countries require that large bribes be paid before they are purchased. This is, of course, illegal, and few government officials will speak of it openly. Until rather recently, many European countries did not believe, in a legal sense, that such bribes were even illegal. Just a cost of doing business.

But one of the reasons the West is so wealthy is because they have discovered that economies function so much more efficiently when you eliminate the corruption. In the last few decades, this has led most Western nations to outlaw the payment of these bribes. This has been a big boost to Russia, which is content to play by whatever local rules that apply. France is also known to say one thing, and pay the bribe anyway.

Sometimes, otherwise upright players will just admit that they are paying the bribes for the good of the country. Britain has had two incidents of this recently. In one case, police were investigating allegations that over $100 million in bribes had been paid to Saudi officials to facilitate a $40 billion warplane contract. The British government finally called off the investigation, because the Saudis were threatening to cancel the contract otherwise. Apparently, well connected members of Saudis society had received the bribes, and were about to be indicted for it. The second case, for a contract worth less than a billion dollars, is, in some ways, more embarrassing. A contract to sell jet trainers to South Africa apparently had bribes attached. The South African government is trying to get British investigators to go away, but the British government is not taking the hint. The South Africans see this as discrimination, while the British see it as another effort to clean up the massive corruption that cripples African economies.

The media in Western nations is always on the lookout for a juicy scandal. Bribes are a favorite, especially if they are connected to arms sales. In both the South African and Saudi case, the company involved was BAE, the largest company in the United Kingdom. It was the need to keep those aircraft workers employed that caused the British government to call off the investigators. But BAE is still under suspicion in several other bribery cases.

The changing attitudes in the West have driven the bribery underground, but have not driven it away.

 


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