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12 December 2010

Posted by DMC on 12 December 2010 in Diary |

A bad night last night. My shoulder and hip were very painful   and it kept me awake, so the new combination of painkillers is not really working. I’m off to Papworth hospital tomorrow for my six weekly assessment so will take it up with them.

 In the early hours of the morning, a couple of nights ago, once the effect of the sleeping tablets had worn off, I was listening to the programme on the BBC World Service about corruption and bribery. Most of the people interviewed, who were involved in multi-million pound deals overseas, had admitted that, in some way or another, they had been involved in transactions which were clearly not entirely legal. Although one senior executive, of a major oil company, said he would have absolutely nothing to do with any company that demanded a bribe but,  the other people who were interviewed  appeared were honest enough to say that they observed  the old saying ‘When in Rome do as the Romans do‘. The point being that unless you do, you are unlikely get any business.

This then is a moral dilemma for companies which rely upon export business. At the lower end of the scale there are a number of countries in Europe where the public servants or administrative staff are paid so little that they rely upon what might be called ‘ fees’, paid to oil the wheels, to supplement their income.

Should you steadfastly refuse to be involved in such practices and deny yourself whatever it was you were seeking permission for or should you metaphorically shrug your shoulders and say to yourself, when in Rome? and it’s no good complaining to someone superior, as they are all at it. We experienced this, a few years ago, when my dear wife was trying to find the grave of her great, Great aunt, who had been one of the grand old English ladies who had settled down in Sienna at the turn of the 20th century. .

On the far more serious side are the amounts paid to procure some multi-million, or today  billion pound contracts. In effect, it works like this. Your company proves to have the lowest tender and you meet up with the executives on the other side to be given this good news. You are then informed that your tender needs to be inflated by X million in order to meet various fees and to ensure that the right people give permission etc etc. Of course, at the end of the day this extra money would be paid to you and then returned via interim certificates or whatever. In any event, your company would end up  financially neutral on the deal. Should you involve yourself in this situation?, and most people would say no, but then, in that case, forget doing business overseas

Listening to this in the middle of the night, I then asked myself had I ever been involved in what could be called corruption or bribery. After all I had worked overseas for a number of years including almost 5 years in Arabia. Looking back I have to admit that there had been two or three occasions with which I had not been entirely happy..

The first occurred when I was the sole resident partner in Southern Arabia running a practice involving building works throughout the Persian Gulf as well as Somalia and Ethiopia. I was only 25 at the time.

On my first Christmas there,  one of the contractors, with whom I was dealing, sent me a very expensive present, from  Aspreys, in London,’”to celebrate the birth of Christ” . (As it was, it was a rather ostentatious jade and gold pen set and stand which was not entirely to my taste, in any event). What to do? Was this a bribe? , as my firm was responsible for valuing and paying millions of pounds to this particular contractor. Or, was he genuinely religious and really did, wish me well and want me to celebrate the birth of Christ. It just happened that his brother was the Minister of Immigration, responsible for issuing my work permit, which was shortly to come up for renewal. Had I returned this present peremptorily, on the assumption it was an attempted bribe, I could well have given great offence and I might well have found that my work permit was not renewed and I would have to return to the UK.

I. thought about this long and hard and decided to wait until, Id, the end of Ramadan at which point I sent this contractor a present, equally as flamboyant as his own, of similar value, to celebrate his holy holiday. At the same time I returned his present explaining that it was a rule of my particular firm that no partner or employee was permitted to accept gifts beyond a nominal cost. I went on to say I hoped he would understand and would not be offended etc. If it had been a bribe I was never ever approached again during the 4 ½. years that I spent there.

The second occasion was in connection with a school, for which I was responsible, that was being built in Somalia using World Bank money. We had been out to tender and  had accepted the lowest but for some reason the contractor delayed moving onto site and starting the job. When I got impatient with the member of staff dealing with this project and asked the reason for the delay I was told that there was a telegraph pole in the middle of the site and that until it was removed the contractor could not take possession. Then remove it, I said. It’s not as simple, I was told.  Apparently the problem was that it was a custom in that country that a senior official in the Ministry of Telecommunications had to be paid the equivalent of £50 per telegraph pole which had to be moved. This was certainly not an official fee and could well be said to be a bribe.

I had no hesitation in saying, on that occasion, for goodness sake pay it and get on and build the school. That school has now been running for over 50 years and accounted for the education of 10,000 local children. Surely that was worth £50

The third incident I can recall involved a six acre development site in an ancient city in a European country which I shall decline from naming. Not only was this an enormous site but it was in a prime position in the city. Rather like being given Piccadilly Circus and Trafalgar Square to redevelop. At that stage, in the late 60’s, I was a director of an international property company and inherited this site from one of the other directors. When I took over I soon discovered that we only owned 89.3% of the land. This was a country in which it was possible to have a flying freehold. For example, one old lady had a flat on the third floor, a lavatory on the first floor and owned part of the backyard. It was my job to increase our holding to 100% before we could start work. I was to be the project director for the development.

I used to go across to Europe every three weeks or so to check on progress and the meetings were attended by half a dozen or so lawyers. Early on I was told, by the lawyer retained by us, that there were ‘certain fees’ that needed to be paid in order to obtain the necessary permissions. I gathered privately that these were to be paid to the church; the Mafia!; the mayor; the Minister of planning and so on, and without payment of these ‘fees’, I was told, we were unlikely to be able to progress with the scheme. We had already invested some millions in this project, perhaps naïvely, but nevertheless we were committed unless we were prepared to walk away and lose our investment..

 I consulted with my senior directors and agreed that provided the bottom line made sense after payment of these fees, then we should proceed  . We  added a figure at the end of the   feasibility study called ‘ special fees’ which would be given to our lawyer, who enjoyed a good reputation, and told him that we did not  wish to know any further details as to whom these fees were paid and in what amounts.. Who is to say whether these were genuine fees or bribes? In any event, the key issue was that nothing ever stuck to my hands. In other words ‘my hands were clean’ and so was my conscience, but did I get involved in bribery and corruption?, quite possibly.

Some 20 odd years ago I was invited to write and deliver a three-day course to the entire judicature of an African country. Some 200 odd judges from the Supreme Court down to the magistrates turned up and I recall being hustled by protesters, one of whom handed me a badge, which I still have today, and on which was written Why Hire a Lawyer When You Can Buy a Judge?  I was meant to believe that this was the way of things in this African country, although, I can honestly say I never personally became aware of any such perversion of the course of justice.

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