Don’t Call Bribes ‘Chickens’

If you are bribing government officials to give your firm lucrative construction contracts, an important question is: When do you pay the bribes? I am not an expert on bribes, but I had vaguely thought that the answer would be “before you are awarded the contracts.” It just seems like the government officials have more leverage than you do: They can award very large contracts, while you can only pay them somewhat smaller bribes; lots of people are competing to bribe them for the contracts, while there are relatively few corruptible governments that will give out lucrative contracts in exchange for bribes. Also of course this is, in different form, the normal approach in the gift economy of investment banking and big business generally: If you are a service provider trying to get a lucrative mandate from a company, you curry favor with the company by doing free work, taking executives out to dinner, etc., before they give you the mandate. Companies don’t hire investment bankers to do big deals in the hopes that the bankers will buy them steak dinners afterwards; the bankers buy the steak dinners in the hopes that the companies will hire them to do big deals.

But the problem with bribes is that, if you pay a corrupt government official a large bribe before he awards you a lucrative contract, he can always not award you the contract. (Or he can hold out for more bribes.) It is hard to rely on his honesty and integrity, you know? And if he stiffs you it is not like you can sue. Plus, you might not have the money: You might need to get the contract payment first, so you can use some of it to pay the bribes. So here is an email that Jean Boustani, a salesman for Abu Dhabi-based shipbuilding company Privinvest Group, allegedly sent to an unnamed official of the government of Mozambique about the timing of alleged bribes (uh, “success fees”) connected to a contract that Mozambique awarded Privinvest to help build a “coastal monitoring system” to fight pirates: