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Understanding transnational bribery: a corporate crime framework

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Abstract

Despite calls for utilizing white-collar and corporate crime frameworks to study corruption, the role of corporations in supplying bribes to foreign government officials is not well understood. In the current study, we draw upon a recent framework designed to examine the transnational corporate bribery process from an opportunity theory perspective. We apply the framework to a sample of individuals and organizations with enforcement actions levied against them by the United States Department of Justice’s Fraud Section for violations of the Foreign Corrupt Practices Act of 1977 between 2011 and 2016. Using an exploratory mixed methods approach, we assess the prevalence and qualitative nature of multiple components of the framework. Our goal is to develop a systematic way to apply it to different sets of bribery data and to move toward a fuller theoretical account of transnational corporate bribery. Our findings demonstrate the significance of the corporate role in foreign bribery, the utility of the bribery process framework, and some areas of refinement and future theoretical development.

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Data availability

The data file used to construct the quantitative estimates is available from the authors upon request. Sensitive (identifying) information is excluded.

Notes

  1. An investigation by the Securities Exchange Commission revealed that over 400 corporations have voluntarily admitted to paying over $300 million of bribe payments to foreign officials (House Report No. 95–640, 1977).

  2. U.S. persons and entities include foreign issuers of securities. The amendment in 1998 further applied the provisions to foreign firms and persons who indirectly or directly caused or facilitated corrupt payments that took place in the U.S.

  3. Note that the sampling period does not reflect the actual period when the bribery occurred. Oftentimes, there is a rather lengthy gap between bribery commission and the enforcement action by either agency.

  4. SEC data is not included in this sample as they represent civil enforcements against only publicly traded corporations with financial statement misrepresentations.

  5. Cases do not move through the enforcement process at the same speed. Therefore, some series do not contain all of the related cases (i.e., when the enforcement outcome of a related case was determined before or after our sample time period).

  6. We coded individuals with “Vice President,” “President,” “Executive,” “Director,” “Senior Regional Manager,” and “Senior Manager” in their job titles as high ranking employees in our sample. We also included individuals described as “controlling” a company.

  7. This case provides an example of the lack of information on how bribery schemes were initiated in our data. The case files only stated that the co-conspirators had a “discussion” with the (double-crossing) intermediary about his supposed relationship with a foreign official. It does not state anything further about how contact was made or how the scheme emerged.

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Acknowledgements

The authors would like to thank Alaina De Biasi for her help in generating the map of bribee countries.

Funding

The authors did not receive support from any organization for the submitted work.

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Authors and Affiliations

  1. Michigan State University, School of Criminal Justice, East Lansing, MI, USA

    Fiona Chan, Carole Gibbs, Rachel Boratto & Mark Speers

Authors
  1. Fiona Chan
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  2. Carole Gibbs
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  3. Rachel Boratto
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  4. Mark Speers
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Contributions

All authors were engaged in all components of the project and construction of the manuscript. The first author led the conceptualization, data management and quantitative analysis.

Corresponding author

Correspondence to Fiona Chan.

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Conflict of interest

The authors have no financial or proprietary interests in any material discussed in this article.

Code availability (software application or custom code)

Code used to generate quantitative results are performed using the Python scripting language. Python code is available upon request.

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Chan, F., Gibbs, C., Boratto, R. et al. Understanding transnational bribery: a corporate crime framework. Crime Law Soc Change 75, 221–245 (2021). https://doi.org/10.1007/s10611-020-09924-z

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