Political Crises breaking out due to management of Business Corruption by Governments & New Ways to fight corruption globally

The serious political crisis that has recently erupted in Canada has highlighted some ethical questions that apart from all else, make it imperative to create a better framework for protecting companies without affecting the existing degree of competition at international level.

Unfortunately, it is customary in the context of the relentless competition that prevails in our days companies to engage in corruption scandals. In their efforts to protect themselves from consequences of any misunderstandings, the subsequent conduct of these companies is causing serious political crises.

These “national” champions and/or simultaneously “global” players in the industry that are active, cause serious political crises in their effort to seek the help of their governments in the countries their origin in order to protect them either from other companies or because they may be involved in illegal activities in other countries with aim to achieve by ‘illegal’ means the undertaking of projects on their behalf.

by Thanos S. Chonthrogiannis-https://www.liberalglobe.com

The political crisis created by a company in Canada

Recently saw the spotlight a serious political crisis that broke out in Canada and always as a result of complaints that saw the publicity for government intervention in favor of a construction company in order to mitigate or avoid any consequences it may face this company.

After the revelations made by the Canadian newspaper Globe and Mail, a serious political crisis broke out in Canada, following the resignation of the former justice minister, in which, and always on the basis of the reports, pressure was exerted by the Prime Minister’s office of the Canadian Prime Minister Justin Trudeau to avoid referral particular construction company (SNC-Lavalin) which is involved in a corruption scandal in Libya. The Prime Minister of Canada Justin Trudeau dismissed these allegations of pressure on his former Minister.

Briefly and on this particular scandal, and always on the basis of the information seen in the light of publicity, we mention that the Canadian Federal Police and after their investigation officially accuses the company SNC-Lavalin (a company colossus on construction industry with world presence and more than 50000 employees worldwide) that it paid bribes amounting 48m $ Canada (€32m) in Libyans officials of Muammar Gaddafi regime with aim to win public projects competitions.

The company, and if found guilty based on Canadian Law, is in danger of being forced to prohibit its activity in Canada or even to be wound up.

In this analysis, we will not deal with this scandal because it is purely a matter of Justice and State institutions of Canada. But we will seize the opportunity so that through this analysis we can put a series of concerns in our reader and suggest through our proposals a better framework at a global level that promotes competition by minimizing at the same time the emergence of such phenomena.

At the same time, we will also raise the respective concerns to distinguish whether has solid base the serious political crisis raised by the Canadian Principal opposition according to the “ethical” management of this issue by the Government of Canada. But before we get to any of our proposals we must see how and with which way use to thrive this type of business corruption. 

The Historical ‘Institutional ‘ Context in which corruption thrives

The fact that these bribes of this Canadian company (and always according to the investigations of the Canadian Federal Police which saw the publicity) were directed towards state officials of a country located in the basin of Mediterranean Sea (Libya), automatically puts us in a series of thoughts and reflections.

1. The countries located in the Mediterranean Sea basin and irrespective of which continent these countries belong to (Europe, Asia, Africa), the vast majority, with only few exceptions are renowned for the corruption that thrives in their state (public) sector.

Perhaps this common element of corruption of all these countries exists because of their millennial conquest by the Roman Empire but also for the additional one thousand four hundred and more years of their conquest initially by the Eastern Roman Empire and then from the Ottoman Empire. This conquest by the Eastern Roman Empire and the Ottoman Empire concerns only the countries of the Eastern Mediterranean and not the countries of the Western Mediterranean Sea.

It is possible that this above-mentioned element justifies as a point the remnant of corruption which has deeply rooted in the social scene and in the culture of these peoples and countries respectively in this corner of the world.

2. The era of the Roman emperor Flavius Petrus Sabbatius Iustinianus (Justinian) (482-565 AD) which marks the transition from the classical Roman Empire to the Hellenized Eastern Roman Empire in the Mediterranean Sea basin.

One of the most important works of Emperor Justinian was his general political authority: One state-one church-one legislation. Within this framework, it achieved the revision and codification of Roman law (Corpus Juris Civils) in order to support the proper functioning of its State and the above general political principle.

In this general political principle, the Roman Emperor and based on the new codified Roman law set for the first-time head of state and church the Emperor. While the Emperor was above the law. This single element was contrary to the pre-existing Roman law and was certainly contrary to Anglo-Saxon law (Common Law) formed in northern Europe at the same time. Today, the European law is based on Roman law (Corpus Juris Civils).

Perhaps this is another element of explanation because in the majorities of the Mediterranean Sea countries their political leaderships consider themselves to be above the law when these leaderships are involved in corruption scandals. Avoiding in this way the law touches them by putting on the table the fact that all citizens are not equal to the law in these countries. 

Unfortunately, in this corner of the world (Mediterranean Sea basin) it is common to see the light of publicity corruption scandals. Indeed, in some of these countries of the Mediterranean Sea, a company and independently the industry in which it operates, in order to win the undertaking in competition, if it does not pay first the amounts for bribes to the respective government country officials cannot win the contest and let the company have the best offer-folder of the world for any particular project.

The corruption business scandals and the conclusions stemming from them

One of the world’s biggest business scandals whose impact has not only been limited to the participating company but has created a serious political crisis in countries such as Greece, a member country of the Eurozone/EU which is in the Eastern Mediterranean Sea, is the scandal of the German company Siemens AG.

In summary we will mention and always based on the information that was seen in the spotlight that from 1990 to 2006, the German company Siemens AG bribed politicians and executives of public organizations in various countries with aim to secure contracts totaling €1.3b.

According to the testimonies of the company’s executives, an amount of 100m Deutsche Marks (€) was given to Greek politicians and executives of public organizations concerning mainly works of the Greek state before and after the Olympic Games of Athens 2004.

The scandal erupted when American companies competing globally with this company felt that they were losing competitions in various countries around the world. American justice has highlighted the scandal in Greece, in addition to other countries and punished the German company with heavy fines. The projects undertaken in Greece were overpriced to include in the over costs and the number of bribes paid.

The company’s employees involved in the scandal testified that both the then political officials of the Greek governments and the executives of the Greek public organizations had made it clear to the then executives of the company that if they do not receive first amounts in bribes no company will not win the tenders of the projects offered.

The then Greek Chief-Executive-Officer (CEO) of the company’s branch in Greece was the most powerful man of the company in the world because through the money he managed for the bribes he brought multi-million projects to the company in relation to the paid amounts of bribes. And in the world of businesses, the person who brings the money to the company’s cashier is also the King of the company.

The concerns created and asked for answers

The “limited liability companies” and in general terms every type of company are organizations-autonomous legal entities in which the law recognizes to them certain collective rights and corresponding type of obligations (costs of employee payroll, taxes to the state, loans, profitability and distribution of profits to shareholders, etc.).

The obvious motivation of the management of a company and its owners-shareholders for its initial recommendation and its further development is the profit. However, the profit achieved by the greatest possible return-profitability with the lowest possible degree of risk in the work they undertake to carry out is always and the preferable-as a choice-profit.

Therefore, the sale of the products and services of the companies through the undertaking of the projects and independently the industry that operate, is the “oxygen” and “food” for their unhindered existence and further development.

1. The first concern is what happens to companies when they respect the legislative framework both in their countries of origin and composition equally and in general in other countries where they are active, while at the same time being forced to adopt illegal methods and adjust their practices to the illegal “desires” and frameworks of the corresponding corrupt political systems and institutions of countries, in order next to be able to undertake projects that are their “oxygen” and “food” equally?

Knowing at the same time the companies that there is no other way for them to win the contest works in these countries if they first do pay amounts in bribes. 

2. Based on the first concern we have raised, we will put a second reflection. Is the management of a company entitled not to participate in project competitions when it knows that in order to win any project contest will have to pay bribes?

If so, i.e. if a company chooses not to pay bribes, how will the management of the company be characterized and how it will be explained publicly by the company’s management to its shareholders when the company loses in the competitions of the works?

Will the company’s management be rewarded if they follow the moral path? How does this ethical choice is translated in practical level other than moral?

If the choice of the ethical route that a company will make-not by paying amounts to bribes and thus not being involved in project-taking competitions-is repeated because of the existence of many corrupt political systems and countries respectively, will be characterized the management of the company as incompetent and will be fired because it does not bring works in the company that are translated in profits?

3. The third consideration we must put on the table concerns the size of a company and what that means (e.g. of its capitalization size, its annual turnover, the number of employees etc.).

The size of the company automatically determines both the size of its liabilities and any degree of pressure that these obligations are exercised in the company’s management.

Given this, is it possible for the management of a company to exclude by itself not participating in a competition when at the same time knowing that another company will be found that also participates in the same competition and is willing to pay bribes to get this work (the moral dilemma)?

4. How do the employees and executives of a company feel and which is their situation when they see a company’s executive and a colleague of their own with the minimum qualifications, but the maximum capacity in the bribing of foreign country state officials and the illegal transactions respectively to rapidly climb the ladder of the hierarchy and acquire corporate power in the company because through illegal practices brings the coveted works and millions in the company’s coffers?

How does this situation is translated to other employees when, currently, their families spend huge sums of money to obtain their diplomas and/or themselves as students are forced to take huge amounts of money in loans in order to finance their studies in high-profile university institutions, overcharging themselves and their future families? While then these illegal transactions put at risk not only the owners-shareholders of the company but also the work of the employees in it.

The answers to the above questions and concerns that will be given on an individual level are based on the development of the degree of moral dimension that everyone has within. I’m sure the answers are difficult.

Collectively, these answers are given by the developed legislative framework of each country and to what extent this legislative framework is applied, which is required to consider at the same time all the parameters of the under-consideration case.

A likely ‘Protective’ framework-rules for the companies that could be applied at global level

But what rules-common framework have been set globally by large countries following pressure from their companies and irrespective of the industry that these companies are operating in, so that all these companies are then protected when participate in competitions of projects abroad and generally globally?

Is it feasible all these companies and independently the industry that are active to establish some rules of corporate solidarity between them which will be in power in world-wide level? and these framework rules will be adopted by all companies in their sector and irrespective of the size of each company?

As a company participates in competitions abroad and these project competitions take place in countries with corrupt political systems and institutions equally, the company has no ways to protect itself.

Surely any company exposed to participate in such illegal transactions will be punished accordingly in its own country or in the USA and if the interests of competing US companies are affected (see scandals of Siemens AG, Volkswagen AG etc.) and since the US is the political, economic and military superpower of the planet.

But there should not be a corresponding legal framework at international level that punishes, in addition to the companies involved in such illegal transactions, and the state officials and politicians who take bribes in those countries that the project competitions are?

It must be naïve someone to believe that all these political and state officials as well as executives of public sector organizations who receive bribes from companies will be punished in their own countries as both the institutions and the system of their countries are corrupt and controlled by the political parties that these corrupted politicians are involved in.

I will give a very characteristic example. In Greece, a member-state of the Eurozone/EU, located in the eastern Mediterranean Sea, the Greek Parliament since 2003 has voted the law on Responsibility of Ministers (L.3126/2003). According to this law whatever offence do a minister of any Greek government the Greek justice does not have the right to initiate against him any legal proceedings stemming from Greek law and which are applied to all other Greek citizens.

The competent prosecutor should, after completing his investigation, send the investigation-dossier to the Greek Parliament and then the majority of Parliament will decide whether the responsible minister will be brought to justice. In other words, a closed ‘professional’ Guild-the Guild of Parliamentary members-will decide whether a colleague will be indicted and not the institution of justice!!!!

Moreover, the institution of justice is not independent from the political and executive power. All officers of justice and generally all public sector officials- (civil servants) in the public sector and according to their political beliefs belong to their respective professional unions which in turn belong to the respective parliamentary political parties.

Depending on which political party the judges and prosecutors belong, receive and their respective “good” or “bad” promotions. So how will a minister be judged when the judges belong-based on their political convictions-to the political party belonging the under-consideration minister.

Essentially for Greek politicians and only, the justice is not “blind” as it should be, and we are accustomed to saying in the liberal world. With the laws that the Greek politicians and law makers equally have voted, the Institution of Justice has become literally blind and deaf for them.

So how will a company-who is forced or not to pay bribes-be judged in a country with a highly developed sense of law, legislative process and application of laws respectively, when at the same time the other parts of illegal transactions-those who ask and receive bribes, they will be judged on, if not a corrupt surely in, a “controlled” judicial system?

These political and state officials who are seeking and receiving bribes are criminals of common criminal law and not only. Because,

1. They see politics as a means of fast and inexpensive enrichment at the expense of their country’s society and state budget.

2. The companies that will be forced to pay money in bribes will either over cost the work they earn by increasing the cost of the project equally with the amounts of bribes they will have to pay which in the final analysis will be at the expense of the state budget of the country making the competition,

3. Or the companies must reduce so much the initial budget of the project that includes the amounts of bribes that they will have paid.

However, this practice will become at the expense of the quality of the project, causing future problems in the existence of the project, making the maintenance of the projects expensive and in some cases compulsory their replacement. The state budget of the country making the competition will again be burdened by demanding higher taxation in the future.

One solution would be all these politicians, state officials and executives of public organizations who “set up” in such a way the competitions of projects in order to blackmail the result of the competition according to the amounts received as bribes and always based on solid evidences, to be classified as international criminals.

Whether they are brought in the judiciary of their country, with the designation of the international criminal, there should be an international warrant for their arrest and bringing them to an international court.

If the institutions of the countries refuse for any reason to extradite them, the international community should warn these countries of any consequences.

In the current era, state corruption destroys peoples and enslaves the debts of entire generations of citizens. If this is not a crime against humanity, which is a crime that deprives people and their countries of resources, then what is? At a time when mankind has understood that its problems and needs are interrelated and solved by cooperation between of all the countries of the world.  

Surely such practices will not eliminate the problem of corruption because it has to do with culture, civilization and more generally with human nature. However, an even stricter framework will be put in place to protect both the participating companies and the peoples of these countries from corrupt practices of this type, thereby minimizing the occurrence of such phenomena.

The political crises created as “collateral losses” of business scandals and the ethical dilemmas arising from these

Coming in the recent political crisis that broke out in Canada, we should set-up some questions for reflection and answer:

1. What should the political leadership of a country’s government do, when for some reason a  company which is a giant of its national and global business industry equally find itself either in its knowledge or not (this is a matter of purely police and judicial investigation) involved in a corruption scandal in a country located in an area of the world renowned for state corruption?

2. If a citizen of that country finds himself in a difficult situation abroad, either in his knowledge or not the state apparatus of this country and in general the Government of his country will support him? Yes or no?

If the government supports him, then why the leadership of a country’s government is not allowed to support a company in its country (and regardless of the size of the company) when it is equally embarrassed by its actions and/or by coercive acts of other? If the Government backs it up, is it immoral or not?

When we mention support (back up) we do not mean to prevent this company from facing the consequences of the law but to avoid the complete destruction and annihilation of its existence, in the same way that should be protected the human life-the existence of a Citizen of that country accordingly and independently of company’s acts which will be judged by law.

3. The law is Rex. And the law must be respected. When the laws-rules are respected by all, then democracy and its proper functioning reach its peak. The application of law and rules creates prosperity in society and minimizes the existence of any corruption.

The fact that countries such as Canada, the UK, the USA and others have created sturdy and prosperous societies and economies respectively is because the laws-rules apply to all and no one are above the law (the basis of the Anglo-Saxon liberal democratic model-the common law). 

What should a minister of a government do when it comes in his responsibility the application of the rules to be applied in the case of a company facing serious problems with the law?

He or she should not apply the rules and laws of the country by driving the situation based on the envisaged procedure? Of course, he or she will have to implement the envisaged procedure in any case and should be given praise for his adherence to procedures and rules.

4. If this minister accepts any pressure from his supervisor and President of the Government in which he or she is involved, is it wrong for this minister to insist on the implementation of the proposed procedure under the law?

No, it is not wrong because that is what he or she must do. To insist on the application of rules and procedures.

5. Is it wrong for the President of the Government to insist on a more “orderly” process of the case and to exert pressure on his minister?

If we are totally excluded any possibility to exist past, present or future benefits that may be acquired by him or by his political party by such support in the company, the pressure exerted by the President of the Government to his minister is correct and there is no moral problem in managing the case on his part.

Both the President of the Government and his ministers must apply the rules and procedures laid down by law in all cases.

But, the difference in this case is that the President of the Government thinks and acts as a true leader. The leader of a country must set an example for everyone and be an example to everyone. He must open roads where others see dead ends and support his people. But leader is not only just that.

The leader must encourage and give his support to whoever is asking him. And if necessary, he must “sacrifice” himself and even his life if it is necessary from the circumstances to defend the citizens and his people in general. This is the thin line that distinguishes the head of a government, a company, a community, an office equally and a real leader.

Thanos S. Chonthrogiannis

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