Wolfgang Wiebach's Light Musings on Heavy Subjects

    What's Wrong With A Dandy Kickback?

     The venerable German company of Siemens reaches back to the frail roots of the electrical industry - the first humble electrical machines and the ponderous kernels of a German telephone network. Over 160 years, it has steadily grown to a giant and successful manufacturing conglomerate; lately, it even rewarded its shareholders with a modest appreciation of their investment.
     It now appears as if the recent commerical prosperity may have partially been achieved by the payment of small tokens of appreciation to the people who awarded contracts to the company. In western, so-called "free countries", such payments are called derogatively "bribes"; and although such payments, like all other provisions of their contractual relationship, are matters freely agreed upon by two private entities, said states have arrogantly outlawed them.
      Now it is one thing if the German state, in a procurement action with a German company, will not permit its bureaucrats to accept payments back from the contractor; but to prohibit such payments to the employees of private, moreover possibly foreign companies, exceeds by far the power that a democratic government should be permitted to wield. Another example of an obtrusive state trespassing upon private matters.
      Because, where is the harm? The company receives orders and pays taxes. People have jobs, make a good living and pay taxes. The shareholders obtain dividends and pay taxes. Society and the state are winning in every respect. Why kill the goose that lays the golden eggs?
     Any procurement for a major technical acquisition is the result of lenthy and difficult negotiations between the partners. Contractor's management may want to reward its employees for a successful contract award with a bonus or with stock options in addition to their straight salaries, the funds of which come out of the earnings from the contract. Buyer's management may want to do likewise with its employees for securing an advantageous contract with a reputable company. Although both of these payments effectively increase buyer's personnel expenses for this procurement, they are considered proper and entirely legal.
     Bonuses are always a delicate matter - how much and to whom? Management can easily create bad feelings and antagonize some of its own employees. Buyer's management finds itself in the enviable position to play it smart and leave these awkward decisions to the contrary party.
     In many countries, this indirect method is the preferred one with an age-old tradition. Does not the new political correctness, in addition to common sense, require to respect foreign customs and cultures?
     What will happen when Siemens obeys the commandments handed down by the German government from their moralistic perch? Said government will see a drop of tax revenue and possibly a rise of unemployment; some foreign governments and companies in the market for major electrical equipment or installations will pay almost the same price without the benefit of Siemens quality. Because one must realize that there are nowadays other industrialized countries in the world whose products may not be quite up to German standards, but who know how to look out for themselves. Actually, there may be some countries with some products meeting German standards, which countries nevertheless find it wise to respect traditional trading practices.
     Now, if Siemens would not pay any bribes to the buyers involved in the actual procument, but instead spring for a charitable contribution to an entity in the buyer's vicinity, a contribution which would of course be accepted and disbursed by the local political henchmen; or even better, if Siemens gave a campaign contribution to said politicos - would this be illegal too?
     What a silly question! Where in the world would politicians pass laws that might impede the money flow into their own coffers?