Can we prevent questionable foreign payments?

Abstract

More than 400 U.S. corporations, most of them among the top 500 in the nation, have disclosed approximately $800 million in since 1975. Although this amount includes numerous illegal U.S. political contributions and other domestic payments, an even greater amount of foreign is included. The potential risks, costs, and penalties of foreign and practices have increased substantially and will probably continue to increase for many companies. For the sake of brevity, the term questionable foreign payments (or practices) is used to include those which are illegal under either U.S. or applicable foreign laws. They may be of uncertain legal status; improper in terms of country regulations, policies, or controls; or unethical in terms of the spirit of various laws, regulations, policies, or controls. A study conducted by me in 1977-78 of sixty-five major U.S. corporations, a majority of them in industries in which a very high proportion of major firms have disclosed substantial payments, concludes that it is unwise and unsound, from both an ethical and a long-term economic standpoint, for U.S. corporations to continue to engage in foreign and practices.* The immediate economic gains that might be