Basic Instinct: Where Corruption Is a Way of Life

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Leading the Willard Roundtable on the eve of the Ukrainian revolutmion

By Michael Willard

In risky markets, corruption is like catnip, and dancing with the devil is hardly a mortal sin but more often an expected negotiation among parties, sort of like dancing the tango.

It represents a smothering blanket over business, skewing the meaning of success while phonily defining corruption as a necessary function of commerce.

It is not, and if you believe it is, you are already too far gone.

The Academy Award winner for East European corruption is none other than Paul Manafort, the President’s former campaign manager now locked behind bars. Manafort was a brush by acquaintance.

I was asked to brief him on the Moscow landscape in the mid-90s as part of my role with a large PR company. Evidently, I fell short when it came to conveying the ethics portion of my talk.

Having owned businesses in Russia, Ukraine and Turkey, I was rather proud of being thought of — sometimes derisively by some competitors — as “the clean company”. They meant clean as in foolish.

Being honest in emerging markets is sometimes thought of as being naive. It seems everyone — the government, competitors, sometimes clients — journeyed on occasion to the dark side.

Corruption is often the ugly norm with exceptions rare, though the loud protestations of “who me?” are as common as sunflowers on the expansive steppes.

But corruption is not limited to what some folks call “the Wild East,” a common but acceptable exaggeration. It is a festering malady in most developing markets around the world.

This was brought home recently when Walmart, that emporium of “everyday low prices,” was accused of violating US law and required to cough up $282 million in fines.

It was a one day story, a news blip, a flea on the back of a great big dog. They will pay the fine and move on, though hopefully have learned a lesson.

Walmart’s transgressions spanned the globe from Mexico, to China, and from Brazil to India. The company violated the Foreign Corrupt Practices Act (FCPA) which is not the equivalent of a hangnail but a heart attack.

When I first journeyed to Eastern Europe to represent an international company, Young & Rubicam in 1994, the FCPA paperwork was put in front of me to read and to sign before getting on the plane.

I find it disturbing that the company Sam Walton started long ago — inspired by his humble dime store beginnings in Arkansas — could be a common but big-time scofflaw. Cheating, many feel, is a common denominator for success in emerging markets.

So, I asked myself:

How can one survive and, at times, thrive like we did where bribing is considered a parlor game and the penalty for getting caught is often a slap on the wrist with the soggiest of noodles.

My excuses — and that is the way I characterize them — for adhering to the straight and narrow for those two decades I admit border on the feeble and feckless.

№1: Hell, I had been rather honest my entire life so why would I do an about face at the mid century mark. The rewards were meager compared to selling my soul to Beelzebub.

№2: Let’s face it. I’m sort of like Mr. Peepers. If I were to ever give or take a bribe, I am certain the klaxons would wail and the klieg lights would shine brightly as the cops swooped in.

In other words, I would be the one person in Eastern Europe who actually got caught.

I realize being timid or older are not great debating points at the Pearly Gates if I should otherwise be able to pass face control at that particular venue, but it is not something that concerns me.

In reality, we did do well with our goody two-shoes attitude, building a company that hired up to 100 professionals in three countries, paid decently and won our share of business.

Okay, I admit to having rather sharp elbows in the business game. But, we always played fair.

That’s why, when the supposedly button down company of Mr. Sam took a wayward turn, I scratch my head, and wondered what in Sam Hill were they thinking.

I was also reminded of the words of a fellow I admire, Warren Buffett, the famous investor:

“If you lose business for our company, I can be understanding. But if you lose reputation, I will be ruthless.”

I hope Walmart was ruthless.

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Willard after returning to the US after 22 years managing companies in risky markets

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I am a novelist, painter, songwriter and essayist but my day job is elevating the profile of authors, entertainers and business executives.

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