Doing Business in a Connected Society: The GSK Bribery Scandal in China

Abstract

Personal connections have always mattered greatly both in so- cieties and businesses throughout the world. What a connection is and how that connection is used, however, is subject to interpretation as well as abuse. This Article examines Chinese reforms to combat connection-based in multinational corporations through a series of recent scandals involving the global healthcare giant, Glax- oSmithKline LLC (GSK). In 2012, GSK plead guilty and paid the largest combined federal and state healthcare fraud recovery in a sin- gle case in the history of the United Sates to resolve criminal and civil liabilities related to bribery. Only a year later GSK was involved in another large-scale bribery scandal in China that resulted in the larg- est corporate fine ever imposed in the country as well as multiple con- victions of GSK managers. The GSK China scandal created a ripple effect that led to bribery investigations of GSK operations in the Mid- dle East and Europe, a joint investigation of the Chinese operations of French pharmaceutical company Sanofi, and possible charges from the U.S. Department of Justice and Britain's Serious Fraud Office. In light of these scandals, this Article analyzes the complicated harms triggered by the alleged corrupt practices of GSK and other multinational corporations in the context of Chinese culture in order