Starnes-Brenner Machine Tool Company

1
Starnes-Brenner Machine Tool Company

• To Bribe or Not to Bribe
• Keith Brickley
• Kyle Hahn
• Lindsey Johnson

2
Introduction

• Case Summary
• Ethics
• Legality
• Similar Cases
• Real World
• Lessons Learned

3
Case Summary

• Starnes-Brenner Machine Tools Company
• Wants more international presence
• Latino Fictional South American Country
• Frank 10 years of success
• Retiring
• Bill Young, motivated, rising star
• Replacing Frank

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Case Summary Cont.

• Conflict between Frank Bill
• Frank plays by Latino rules
• Frank pays mordidas (Bribe money) to get
  equipment passed by government officials
• States business will fail without the payment of
  mordidas
• Bill follows a more strict sales style
• Bill absolutely opposes the idea of mordidas
• States business will be successful without paying
  mordidas

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Ethics

• Bill believes its unethical
• own personal beliefs as well as refusing to break
  US laws
• Frank sees nothing wrong with it
• Believes they are not encouraging bribery to
  spread but rather just accepting the Latinos ways
  of doing business

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Legality

• Foreign Corrupt Practices Act (FCPA)
• US law prohibits any types of payments to a
  foreign official that will influence an act or
  decision to obtain an unfair advantage

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Similar Cases Halliburton/Nigeria

• Halliburtons Kellogg Brown Root subsidiary, as
  well as 3 other companies are suspected of having
  paid a 180 million bribe to the former
  government of Nigeria in order to build a
  liquefied-natural-gas plant
• Valued at 4 billion to 6 billion
• Other companies are from France, Italy, and Japan

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Halliburton/Nigeria Cont.

• Vice President Dick Cheney was the former CEO of
  Halliburton from 1995-2000
• Case spans 1995 through 2002 starting the year VP
  Cheney took over as CEO
• The alleged bribe has been under investigation
  since last year by a French judge. The Judge has
  gone so far as to suggest that he may summon
  Cheney to France to be questioned about what, if
  anything, he knew about the payments possibly
  even to face legal charges

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Halliburton/Nigeria Cont.
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Similar Cases 2002 Olympic Bid

• Salt Lake City Organizing Committee accused of
  bribing the International Olympic Committee
• Dinners
• Paid tuition
• Help or Aid?
• The way the IOC works
• These payments are needed
• Swedish have different view

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Real World

• Bribery occurs all the time
• Most goes unnoticed
• 3rd world countries are most taken advantage of
• Usually have easily corrupted governments
• Bribery takes different forms, why are some
  accepted and some not
• Political Action Committees (PACs)

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Lessons Learned

• Success under Franks vision
• The only one that works
• Success under Bills vision
• Better used elsewhere
• Are all ethics the same?
• Know how different markets react to different
  style selling techniques
• Know the dos and don'ts

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• Questions?