DIFFICULT MORAL QUESTIONS

Question 141: May a company pay a bribe to obtain a third-world government contract?

I am a project manager for an Australian construction company. Last month I was sent to the capital city of a Latin American nation to bid on a major governmental project. If we get the contract, we will build six buildings during the next three years.

Bidding here is open; it amounts to an auction. According to law, nevertheless, the ministry responsible for the project may choose among the three low bidders. Our bid of just under four hundred million dollars is the lowest and objectively, I am convinced, the best. We have the experience, financing, and human resources to do the work well and on schedule, and we can offer the best price because we happen to be completing a similar project in a nearby country and will avoid certain costs that our competitors would incur.

This morning a go-between told me that, despite its merits, our bid will have no chance of being chosen unless I agree to employ a “consultant”—the husband of the niece of the minister who will make the decision. His “fee” would be one-half of one percent of all payments we receive under the contract, and his sole role would be “to assist in processing legally required paper work with the ministry.” One might view the arrangement as a sort of unofficial tax on doing business with this government, but, as far as I am concerned, it is nothing but a bribe, and our company has a strict rule against paying bribes.

If I refuse, we seem certain to lose this contract, which we need to utilize our present employees and other assets during the next four years. If I accept, I will be breaking the law here and violating company policy. However, I have left room in the bid for unexpected expenses at this level, so there still would be enough profit to make getting the job well worth our while. Should I refuse to pay the bribe or agree to it?

Analysis:

This question concerns cooperation in wrongdoing; it also calls for derivation of norms for the questioner’s action as the company’s agent. If the questioner judges it more likely that the project itself will not serve the nation’s common good than that it will, the company’s contracting to carry it out would be formal cooperation in wrongdoing, and he or she should refuse to pay the bribe. If the questioner judges that the project more likely will serve the nation’s common good than not, then he or she should neither disobey company policy by agreeing to pay the bribe without authorization nor refer the issue to his or her superiors before judging whether paying it would be morally acceptable. Paying the bribe would be wrong if it requires actions evil in themselves, such as lying, and probably would be wrong if it violates Australian law. Even if not morally excluded on any of the preceding grounds, paying the bribe might be wrong insofar as it would be material cooperation with the corrupt practices of the local leaders—practices contrary to the nation’s common good and unjust to its people. If the questioner concludes that paying the bribe would be wrong, he or she should not refer the issue to higher management but should simply refuse, thus avoiding tempting superiors to sin and forestalling the possibility of being ordered to act contrary to conscience. If the questioner concludes that paying the bribe would be morally acceptable, he or she should refer the problem to higher management.

The reply could be along the following lines:

In considering whether to pay the bribe, you need to look at the relationship between the nation’s common good and the project.³⁴⁵ Will the project serve the nation’s common good? Or will it serve only the corrupt leadership and the people they represent? If you judge it more likely that the project will not serve the nation’s common good than that it will, making the contract to carry it out, even if bribery were not an issue, would be wrong. For if the project will not serve the common good, the corrupt leaders’ decision to carry it out will be a choice to defraud the nation’s people of the resources that will be misused for the project. In contracting with the corrupt leaders, your company not only will undertake to carry out their project but will intend their wrongful contractual commitment as the necessary means for getting the work and profiting from it. But to intend another’s gravely wrongful choice is gravely wrong. Therefore, if you judge that the project will not serve the nation’s common good, you should deliberately lose the contract by refusing to pay the bribe. But assuming you judge that the project more probably will serve the nation’s common good than not, I offer the following considerations about the possible moral acceptability of paying the bribe.

One who offers a bribe to someone who neither asked for it nor is known to expect it plainly intends to motivate the person to prefer self-interest to the duties pertaining to his or her proper role. That intention constitutes a sin of scandal unless it would be immoral for that individual to fulfill his or her duties—for example, the duty of a Mafia gunman to kill people. But your question concerns a bribe solicited by another. Paying such a bribe is not always wrong, since the one who pays it neither leads the other person into sin nor does the injustice, but rather is its victim.³⁴⁶

I do not think you should immediately take at face value the message delivered by the person you call a go-between. First, make inquiries to verify that winning the contract really is contingent on paying the bribe. Two possible ways of doing this occur to me, and there may be others. Considering the amount of money at stake, you might try a direct approach—seek a private appointment with the responsible minister and, if you get it, tell him about the message you received and see how he reacts. Or you might consult people who lately have done business with the same ministry: more experienced local agents of international businesses that are not competing for the contract.

Assuming your inquiries indicate that the message is reliable, you actually have at least three options, not two. Acting on the authority you have been given, you could agree to pay the bribe, or you could refuse to pay it, or you could refer the matter to higher management in your company for their decision.

It seems to me that the first option is morally excluded. As an agent of your company, you should do your work within the framework of its policy unless you have a compelling reason to do otherwise. While the company’s interests appear to be gravely at stake in this situation, so that an exception to its official policy (assuming the action involved would be otherwise morally acceptable) might be warranted, I see no reason why you need to make this exception, and in principle it would be more appropriate that those responsible for the company as a whole make it. Moreover, if you unilaterally agree to pay the bribe, you perhaps will have to report those payments to your superiors as consultant’s fees, and that reporting would be misleading and untruthful because intended to deceive higher management about payments that violate company policy.

That seems to point to the third option: to refer the matter to higher management. In that case, you may be ordered to pay the bribe. That will be no problem if you can obey in good conscience. But if not, you will have both occasioned your superiors’ doing what you judge wrong and put yourself in an occasion of sin, since you will have to choose between refusing to carry out their decision and violating your conscience. Now, therefore, before communicating with higher management, you should consider and judge whether the company may pay the bribe or should abide by its existing policy and refuse. If you conclude that the company should stand by its policy, exercise your authority in accord with that policy and refuse to pay the bribe. If you conclude that paying the bribe would be morally acceptable, refer the matter to higher management.

To bribe someone to do something wrong always is wrong. If an honest minister would not award the contract to your company, it would be wrong to obtain it by bribery. However, you say your bid ought to be accepted. If so, you would be bribing a corrupt official to do what he ought to do anyway. Still, paying the bribe might be wrong for other reasons. First, it might be impossible without violating Australian laws your company should obey, either because they are just and applicable laws or because they call for your company’s compliance despite being unjust and/or inapplicable (see LCL, 874–83). Second, paying the bribe might involve doing something always wrong, such as lying. Third, even if governmental corruption is widespread there, it might be unjustifiable for your company to violate local laws.

Assuming the first two are not problems, why might violating local laws be unjustifiable? It should be presumed that these laws protect the society’s common good. The corrupt officials’ demand on your company might seem to be only a sort of unofficial tax, another cost of doing business. But the corrupt practices of these officials impose the burden of ongoing bad government on their own citizens. Those who cannot afford to pay bribes are deprived of their rights. Officials should carry out their duties as a service to the common good; in taking bribes, they are motivated by self-interest hardly likely to coincide with the common good. Real competition for the government’s business is undermined, and officials defraud their nation of far more than the amount of the bribes they receive. By paying the bribe, your company would sustain and contribute to that unjust structure.

Could that cooperation be justified? Perhaps. You say the company needs this contract to utilize employees and other assets during the next four years. Presumably, employees otherwise will lose their jobs, investors will be deprived of profit on their investment, and so on. Furthermore, perhaps giving the bribe will make it possible for the project to go forward on terms that will minimize its cost to the country’s people and be unlikely to worsen or prolong the government’s corruption, while refusing to give it is likely to increase the project’s cost and unlikely to improve the corrupt system, hasten its end, or mitigate the lot of citizens. If so, cooperation within the unjust structure would be morally acceptable.

If, having judged that paying the bribe would be morally acceptable, you refer the problem to higher management and they order you to pay it, you of course should try to negotiate more favorable terms, as you do with other suppliers of goods and services. Proceed carefully, too, and gather evidence of the government’s corruption. In this way, you will be prepared to resist additional extortionate demands, and perhaps will be in a position at the end of the project to expose the government’s corruption, thereby making some small contribution to ending it.

345. In discussions of foreign corrupt practices, the common good of the foreign nation and the interests of its people are usually ignored; see, e.g., Bill Shaw, “Foreign Corrupt Practices Act: A Legal and Moral Analysis,” Journal of Business Ethics, 7 (1988): 789–95.

346. The U.S. has antibribery legislation—principally the Foreign Corrupt Practices Act of 1977—that would prohibit an American company from paying the solicited bribe. Though doubtless sometimes violated, the law has significantly reduced the volume of business by U.S. companies in nations where bribery is prevalent; see James R. Hines, Jr., Forbidden Payment: Foreign Bribery and American Business after 1977, NBER Working Paper 5266 (Cambridge, Mass.: National Bureau of Economic Research, 1995). A thorough treatment of the problem as it was just before the enactment of the 1977 law: Neil H. Jacoby et al., Bribery and Extortion in World Business: A Study of Corporate Political Payments Abroad (New York: Macmillan, 1977).