Western anti-graft push threatens democracy efforts

Robert Precht says US anti-bribery law is counterproductive in China

PUBLISHED : Thursday, 04 April, 2013, 12:00am
UPDATED : Thursday, 04 April, 2013, 3:17am


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The efforts of some Western countries to enforce their own anti-bribery laws in China are more likely to produce false accusations and hinder democratic reform than reduce corruption.

According to news reports last month, the US Department of Justice has targeted Microsoft and The Wall Street Journal for violating the Foreign Corrupt Practices Act, a 1977 law which makes it a crime for US organisations to make payments, however small, to foreign government officials in order to secure any kind of decision in their favour. The law applies to, among others, US companies, universities, foundations and non-profit organisations. Britain has a similar law that applies to British organisations working in China.

US investigators are looking into allegations from tipsters in China that Microsoft made gifts to officials in return for software contracts and that The Wall Street Journal made payments to officials to obtain information for news articles.

Bribery or giving gifts to officials is common practice in China. When I was running a human rights programme in Beijing on behalf of a New York-based non-profit, I was asked to give cash to Chinese university professors (government employees) to help my staff obtain proper visas and to officials in charge of approving company registrations.

Most frequently the machinery of bribery involves using "brokers" to get various tasks done.

My experiences were not unique. Friends and colleagues who also work in Beijing with US organisations - law firms, companies, foundations, universities - all have stories about making gifts to secure some favorable decision from a government bureaucrat.

When I complained to my Chinese friend about the pressure to make gifts, he said: "This is China. Either you … make gifts or you should leave."

One of the unintended harms of enforcing the US anti-bribery law in China is that it may actually stifle efforts to end corruption. US journalists, human rights workers and university researchers play an important role in shining light on the darker recesses of Chinese politics. Preventing Americans from making gifts to Chinese to obtain information useful to promote democratic reform will hinder the disclosure role the Americans play.

The US law also gives the Chinese government a powerful tool to discredit anonymously Americans who anger its leaders. The Wall Street Journal investigation was launched at the behest of an anonymous whistle-blower who claimed its staff in Beijing had paid officials for information. This allegation comes on the heels of hard-hitting articles last year in which the paper revealed details about the fall of corrupt politician Bo Xilai, and about the unseemly wealth of some of China's top leaders.

Anyone who has worked in China knows the power of its government to pressure, or employ individuals to make false accusations against, US organisations. Yet organisations that find themselves the targets of the anti-bribery probes are virtually powerless to challenge their accusers.

The solution is simple. The US Congress should amend the law, providing that it will only be applied in countries that meet certain minimum requirements of democracy and will not be applied in authoritarian regimes such as China.

The anti-bribery and similar laws may be useful in helping functional democracies keep free of corruption. In China it does a great disservice to foreigners and Chinese alike.

Robert Precht is director of Justice Labs Limited, a Hong Kong think tank. Previously he served as director for China for the Global Network for Public Interest Law