The U.S. Embassy and corruption<\/p>\n
By Donna K. Woodward<\/p>\n
MEDAN, North Sumatra (JP): A reader recently asked in the
\n\"Letters\" column of Dec. 28 why the United States Embassy has not
\nreferred any possible violations of the Foreign Corrupt Practices
\nAct to the U.S. Department of Justice. One possible reason: lack
\nof evidence. While admitting privately what payments they make,
\npeople rarely complain officially about corruption because of
\ntheir fears of bureaucratic retaliation. This may seem hard to
\nimagine for those who think Americans believe we're all-powerful.
\nBut when it comes to taking action against corrupt officials,
\nAmerican business executives tend to be no braver than the simple
\nkampong tukangs or vendors who dare not repel a police officer's
\npressure for cigarette money...<\/p>\n
As reader Collin Sinclair noted, American businesses are
\nprohibited by the Foreign Corrupt Practices Act from paying
\nbribes -- a prohibition some say would sorely hinder their
\ncompetitiveness overseas, were it not so often honored in the
\nbreach. For some executives illegal payments are an inherent part
\nof their modus operandi and success; they have little interest in
\nterminating the mutually beneficial arrangements they have co-
\nengineered with accommodating officials. Others feel coerced to
\nmake payments to survive within the system but would prefer not
\nto. Yet they will not report the facts to Embassy officials. Why?
\nBecause Embassy officials do not want to hear about it and do not
\nencourage people to report corruption.<\/p>\n
Diplomats' accomplishments, their performance evaluations,
\ntheir promotions and future assignments, depend in large part on
\ntheir effectiveness with local government officials. Diplomats do
\nnot like having to confront or challenge their hosts; witness
\nSoeharto's 32 years of praise from the diplomatic community,
\ndespite the universal awareness of his corruption and human
\nrights violations. They chose to \"See no Evil.\"<\/p>\n
Diplomats do not like the distasteful business of going to a
\nTrade and Industry Minister or a Minister of Mines or a Pertamina
\nDirector to say, \"By the way, the American head of Company X is
\ncomplaining that he cannot get the permit he needs; he says
\nsomeone is waiting for his payment.\"<\/p>\n
I know this because I myself have reported problems to my
\nEmbassy -- albeit small and low level problems -- without result.
\nTwo years ago a few Medan-based Americans reported problems to
\nU.S. Embassy officers, but there was no follow up. Would anyone
\ncare to guess how likely those people will be to report other
\ncorruption to the Embassy? (This diplomatic neglect happened
\nunder the previous Ambassador. The current Deputy Chief of
\nMission has given his assurance that future complaints about
\ndemands for illegal payments would not be ignored by the
\nEmbassy.)<\/p>\n
Some time ago former USAID consultant Jeffrey A. Winters
\nturned the spotlight on corruption at the World Bank. Professor
\nWinters also cited the U.S. multinational Freeport McMoran of
\nIrian Jaya, in connection with alleged corrupt practices.
\nFreeports' American CEO vehemently denied corruption in their
\nIndonesian operations, with the disingenuous explanation that
\nthere couldn't possibly be corruption by an American corporation
\nbecause corruption is against the law.<\/p>\n
Last year Acehnese human rights workers accused Mobil Oil of
\nproviding bulldozers to the Indonesian Army -- bulldozers that
\nwere reportedly used to prepare mass graves for victims of
\nmilitary torture. No one is accusing Mobil Oil of having any
\ncriminal involvement in the deaths in Aceh. What the Mobil Oils
\nand the Freeports and the international lenders do have is an
\ninterest in the smooth operations of their enterprises.<\/p>\n
In the old Indonesia the way to ensure smooth operations was
\nto maintain smooth relations with civilian and military
\nauthorities -- at all costs. When subtle solicitations were made
\nfor financial and material assistance, assistance was given.
\nSometimes the assistance was humanitarian, maybe a village
\nmedical clinic. Some requests seem questionable. A bulldozer for
\na military operation? From a private foreign corporation? Yet few
\nquestions were ever asked, and few requests, however
\nquestionable, were denied.<\/p>\n
Business executives and officials of international
\norganizations close their eyes to these and other more direct
\nforms of corrupt practices in their operations, citing the cost-
\neffectiveness of cooperation.<\/p>\n
Corporate executives and international aid officials would be
\nin a far better position to withstand unethical pressure if there
\nwere visible support from their Embassies. But anyone suggesting
\nto a business executive that he\/she look to the Embassy for help
\nwill be laughed out of the room. Where are our Embassy officials
\nwhen we need support in refusing demands for illegal payments? No
\ndoubt we would be told that Embassy officials are working behind
\nthe scenes, quietly and indirectly, to make their consternation
\nknown where it counts. That, after all, is diplomacy. But if this
\nis what is being done, it is not enough.<\/p>\n
Can our Embassies continue to justify public silence in the
\nface of the rampant corruption which still affects corporations,
\ninternational aid organizations, and private individuals? True,
\nour Embassies have many interests at stake in dealing with the
\nGovernment of Indonesia; yes, they must maintain cordial
\nrelations; and yes, at times certain issues must take second
\nplace to other priorities.<\/p>\n
Corruption, though, is an issue whose timeliness is
\nindisputable. Some diplomats would hide behind the facade of
\n\"cultural sensitivity.\" But tolerance of corruption is not a sign
\nof respect for Indonesian culture. Neither should speaking
\nagainst corruption be confused with interfering in Indonesia's
\nsovereignty. Objecting to corruption is not an improper intrusion
\nupon another government's authority. Official corruption violates
\nnot only American law but also the laws of Indonesia.<\/p>\n
Protecting overseas nationals from abuse of power by foreign
\ngovernment officials is traditionally among the most basic and
\nimportant functions of all consular services. But when we face
\nextortionist demands for payoffs, our Embassies seem to be in a
\nHear No Evil, See No Evil mode.<\/p>\n
Until Embassies encourage citizens to report corruption, and
\naggressively follow up allegations of retaliation with high level
\nIndonesian officials, there is little hope that individuals will
\nprevail against corruption. If the U.S. Embassy is serious about
\nfostering American corporate compliance with the Foreign Corrupt
\nPractices Act, now is the time for the Ambassador to act.<\/p>\n
If Ambassador Robert Gelbart is serious, he will appoint
\nsomeone to handle complaints of violations of the Foreign Corrupt
\nPractices Act (FCPA) just as Foreign Service Officers are
\nassigned to handle other citizen services. The Embassy will
\nencourage people to report the problems, detail by dirty little
\ndetail. Then, Mr. Sinclair, the U.S. Embassy might see those
\nthings that should be brought to the attention of the Department
\nof Justice.<\/p>\n
It may be reassuring to Mr. Sinclair to know that although
\nIndonesia chose to safeguard the stability of its investment
\nclimate by honoring the Paiton power contract, this does not mean
\nthat American corporations cannot be investigated for their
\nalleged violations of American laws.<\/p>\n
The U.S. government might independently decide to look into
\nthe actions of the American members of the independent power
\nproducers bidding consortium. And President Abdurrahman Wahid
\nmight want to discuss with law experts the possibility under the
\nFCPA of requiring the investigation by U.S. authorities of
\ncompanies suspected of making illegal payments to procure
\ncontracts with Indonesian companies, if sufficient evidence can
\nbe gathered in Indonesia. Those who offered illegal payments
\nshould stand alongside those who demanded them, in the overall
\nscheme to bring those guilty of corruption to justice.<\/p>\n
The writer is an attorney and former American diplomat at the
\nU.S. Consulate General in Medan, and president director of PT Far
\nHorizons.<\/p>",
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