Death penalty as deterrent for corporate corruption? The U.S. has the Foreign Corrupt Practices Act. The UK has its Anti-Bribery Act of 2010. Not surprisingly, China has its own ways of dealing with corruption. In China, the penalty you pay may well be your life.
The New York Times reported that a former China Mobile executive was sentenced to death with a 2-year reprieve. Zhang Chunjiang, the former vice chairman of China Mobile, was charged with accepting briges of more than $1.15 million over a period of 1994-2009, when he worked at various state-run telecom companies. With good behavior during the first two years, his sentence could be commuted to life in prison (and we pause here for a philosophical moment…)
If you think it is easy to commute that life sentence, consider that four years ago, the head of China’s Food and Drug Administration was, indeed, executed for corruption and failing to protect consumers. And, Chen Tonghai, the former chairman of Sinopec, the Chinese oil company, was sentenced to death with this two-year reprieve — but it seems there is no report on the outcome yet. The report is, however, that this week, two former vice mayors in Chine were executed for accepting substantial bribes.
This recalls the 10 year jail sentence applied to Stern Hu of Rio Tinto plc convicted of accept just less than $1 million in bribes.
It is reported that telecommunications is the current targeted industry for Chinese investigations into corruption.
Missing from the NY Times report is information about the penalties assessed by the numerous companies that paid off these officials, whether those penalties are incurred in China, the U.S., U.K., or elsewhere. So far, and unlike many anti-corruption laws, it seems China’s focus is on the recipient and not the briber.
It will be interesting to watch the evolution of enforcement in China. Will they begin to share or shift any of the penalties between the briber and and the one who accepts the bribe? In any event, inside counsels, lawyers and compliance officers may wish to include these actual cases in training employees doing business in China. It’s always good to know just how personal it gets.