Principles of Finance: Unit 9, When Is a Bribe a Bribe?

The US doesn't "do bribes" as part of its normal way of doing business. Bad corporate cultures give rise to unethical employees - who eventually get caught. Karma.. lives.

CoursesFinance Concepts
Principles of Finance
FinanceFinancial Responsibility
Personal Finance
Finance and EconomicsPrinciples of Finance
LanguageEnglish Language
Life SkillsPersonal Finance
SubjectsFinance and Economics

Transcript

00:25

don't do business like that in the us Payments must

00:28

be made above board audited tracked exposed and taxed And

00:33

if that doesn't happen well usually it's a felony sometimes

00:37

a misdemeanor but well either way the perpetrator's work on

00:39

They're putting in short game for a few years here

00:42

when they get caught let's pull back the curtain a

00:44

bit on how a bribe is born lives and then

00:47

dies We start with a highly aggressive sales person working

00:50

for a company whose corporate culture is largely success at

00:54

any price History books are written by the winners baby

00:57

So the computer router salesman is given the southeast as

01:01

his territory right down here Meaning you know florida georgia

01:04

sweet home alabama and a few other states The computer

01:07

router companiesnew only three years old it has venture capital

01:10

funding and the router it makes is mildly somewhat better

01:14

Than much of its competition It does however have a

01:17

cool name The router rooter And yes the company is

01:20

flush with cash today Well the router rooter was able

01:23

to attract top salespeople I'ii they were aggressive and had

01:26

a role a text by promising a solid base salary

01:30

and a huge bonus structure So the sales guy knocks

01:33

on some doors and learns quickly that his product that

01:36

miles largely undistinguished from all the others and that a

01:39

body at rest well tends to stay at rest So

01:42

nobody wants to switch overto his platform We'll face with

01:45

a company pushing him to close deals or get fired

01:48

quickly He has to figure out a way to get

01:50

sales toe happen and the bribe start in a small

01:54

way With lots of rationalization going on there The sales

01:57

guy gets thirty percent sales commission on one hundred thousand

02:00

dollars sale and he notions well what if i get

02:03

someone on the inside to really help me navigate the

02:07

enormous bureaucracy of selling into banks governments schools and energy

02:12

companies Can't i split some of my commission with them

02:16

Perfectly legal right No it's not And so it starts

02:19

The first sale was made to a small regional bank

02:22

The thirty thousand dollar commission gets paid to the sales

02:24

guy from router rooter and a series of quiet thousand

02:28

dollar payments in cash start monthly to the inside employees

02:31

of the bank who helped close the deal Why cash

02:34

Well harder to trace and bitcoin wasn't really around when

02:38

we wrote this video it's found money that cash to

02:41

the bribe taker anyway so he doesn't mind being paid

02:44

about every two weeks or thirty weeks as he continues

02:47

to make introductions to his buddies and other banks who

02:49

in turn have buddies in government and schools and energy

02:52

companies Well the sales person rationalizes well this is how

02:56

lobbyists work right And eventually everyone is a you know

03:00

consultant who gets small envelopes of cash in return for

03:04

helping router rooter sell a router that there company will

03:07

really doesn't need at a special price that is full

03:10

price Well this vague phrase as a consultant gets thrown

03:14

around a lot largely because well it really isn't defined

03:17

a consultant consults but that's really not a clear term

03:21

vastly different from geometry teacher hemorrhoid removal surgeon yeah you

03:26

know exactly what those people do and it ain't consulting

03:29

So lather rinse repeat in the subtle small thousand dollar

03:32

bribes of cash in an envelope turned into millions of

03:35

dollars which comprise the whole sub economy where nobody has

03:38

a vested interest in being caught not the router company

03:42

not the sales person not the buyers of the routers

03:45

who really don't know the difference between one or the

03:47

other Nobody has harmed except the honest by the rules

03:51

playing competitors Think about it like this guy and this

03:54

guy and the hungry low on moral self awareness sales

03:58

person further rationalizes well this how they do things in

04:01

russia I'd sell zero into russia if i had to

04:04

play by american rules answer waiting waiting will give you

04:08

multiple guess here a well then moved to russia and

04:11

be you know russian b cell nothing into russia Yeah

04:15

you fail honestly see all of the above so the

04:18

little envelopes of cash and the weekend free trips to

04:21

hawaii and the mysterious bitcoin units that just show up

04:24

in offshore counts later on a few years from now

04:28

when we re make this video and it has been

04:30

going in it well they become the new ah driver

04:32

of the industry and honest joe forth leaves it and

04:36

really regrets not finishing law school So why did all

04:39

this happen Well bad corporate culture batter undistinguished product that

04:44

really shouldn't have existed in the first place Overaggressive sales

04:47

commission structure poor oversight poor audit well them's all the

04:51

seeds for really furtive grounds for bribery And before that

04:54

sales guy ever started down this track while he probably

04:57

should have tried to find a mirror stand in front

05:00

of it and ask himself whether or not he'd look

05:02

good in stripes at the end of the day or

05:04

prison term the onus is on you the transacting fiduciary

05:08

party to know where the double yellow line is into

05:11

st far enough away from it so that crossing it

05:14

even in a big wind isn't even remotely a risk

05:17

If it smells like a duck and walks like a

05:19

duck and even if it isn't a bribe you should

05:22

assume it's a duck and run run run run run 00:05:25.409 --> [endTime] like you know you have a fear of ducks