White-Collar Crime - Bribery

Some U.S. companies often feel they operate at a disadvantage in other countries because American law prohibits U.S.-based companies from using bribes to get foreign contracts, while some forms of bribery are allowed in most other industrialized countries. Until recently, the United States was the only major national economy with such laws. In fact, many foreign companies often deducted bribes as business expenses. In many countries, especially in Asia, the unwritten rule is that a senior official will get 5 percent of a $200,000 contract and a head of state requires 5 percent of a $200 million contract. The percentage increased in the 1990s, as some officials were demanding 10 to 15 percent before a bid for services or goods could be accepted.

Many businesses and diplomats from several European countries believe that changes in their tax laws would reduce the amount of bribery; others believe that because of stiff competition, businesses would find loopholes. Some American businesses hire middlemen to conduct the bribery of foreign officials; others invite prospective clients on junkets to the United States.