The Lockheed Foreign Payments Case 10 Years Later: Bribery or Extortion?

Abstract

Abstract In 1976, Lockheed Corporation was charged with making secret payments of at least $25 million to Japanese officials during the early 1970s. It was alleged that these payments were made in order to secure aircraft sales contracts with several Japanese airlines. At that time, Lockheed executives claimed that Japanese officials insisted that consideration of Lockheed as a contractor would require advance payments to several government officials. In spite of this claim, Congress passed the Foreign Corrupt Practices Act in 1977 which treats these payments as bribery, rather than extortion, and prohibits them with the threat of criminal penalties. During the last 10 years, Japan has tried and convicted 15 former government officials of bribery and other crimes in the Lockheed affair. This paper assesses the effects of the Foreign Corrupt Practices Act in regulating business conduct, and the validity of the claims by Lockheed and the Japanese officials 10 years later, now that the trials are over.