Corporations Paid $1 Trillion To Bribe; Does Firestone Bribe?

By: J. Yanqui Zaza

The Perspective
Atlanta, Georgia
June 23, 2009


Regardless, whether or not the Liberian Firestone Rubber Plantation is another cartel as Liberian Vice President Joseph N. Boakai has indicated, (Speech at Lofa Convention, 5/24/09), the 83 year-old rubber plantation has enormous influence. Not only did it oust certain government negotiators, but it is now resisting its share of the cosmetic changes President Ellen Johnson Sirleaf government has offered to some companies that signed agreements prior to 2006. Firestone, as it did in 1926, signaled its influence when it signed the 2003 agreement at the U.S. Embassy in Monrovia at the same time Liberia contracted the U.S company (DynCorp), for US $200 million, to train and re-arrange the Liberian Military Forces (i.e., the de facto power).

Exchanging kickbacks for favors started in 1926 even before Firestone began to plant rubber tree. Firestone got a favorable deal when it loaned $ 5 million to Liberia just before negotiating an agreement. President Charles D. B. King, having been assured to borrow $5 million dollar to ameliorate the effects of World War I that Liberia fought on behalf of America, was denied by the U.S. Senate. Apparently, the U.S. Senate, aware of Firestone’s interest for cheap labor and 1 million acres to be leased for 99 years, lured Liberia into the investor’s loan scheme.

Such leverage and subsequent lobbying efforts do embolden Firestone not only to pay minimal taxes or operate vocational schools that LAMCO and Bong Mines operated, but continues to pollute the environment such as the Kparnyah Town’s pollution episode. (Frontpage, Africa). Ironically, on Tuesday, June 9, 2009, Liberian organizations of civil society submitted anti-corruption petition to agents of corporations such as the World Bank (W/B). Of course, W/B is not a disinterested party because it generates income for corporations such as Firestone by lending their money to poor countries. (Economic Forum)

Also, why did civil society petition the U.S. Representative who serves on Liberian Governance Economic Management Assistance Program (GEMAP) as the co-chairperson to President Ellen Johnson Sirleaf? Is the U.S. representative unaware of GEMAP’s or Sirleaf government’s performance? With little input from Liberians, the U.S. and W/B did hire GEMAP expatriates with the responsibility to curd corruption, promote accountability, etc based on the theory that corruption was limited to government. However, in her interview with Abdoulaye Dukuly, (The perspective) President Sirleaf said that corruption is systemic and more so that chief executives of corporations are just as corrupt as government bureaucrats. Yet, she and, or her co-chair has not disciplined any key advisors or offered new idea on how Liberians can reject bribes from Firestone et al or prevent Cemenco and others from operating as cartels.

Now, an investigation indicating that corporations paid $ 1 trillion to bribes government bureaucrats has shifted attention at the role of corporations in poor countries. Currently, unlike Liberia’s civil Society’s anti-corruption petition which focuses on government bureaucrats alone, Transparency International’s efforts are targeting corrupt leaders, corporations that have offered US $ 1 trillion dollars in bribes and countries that keep the loot. (NY Times, 6/10/09). In a law suit filed in France, Transparency International seeks to prosecute multinational corporations for encouraging African leaders to amass wealth and reclaim loot that leaders have stashed abroad.

If government bureaucrats who receive kickbacks through bribery or lobbying are guilty, what are the fates of corporations that give contributions in exchange for favors? For example, is Firestone wrong if it bribes its way out of the pollution scandal, or will it be wrong when it obtains a favorable concessionary deal at the expense of Liberia? Firestone does not think so. Why? The maximization of profits usually propels chief executives to exchange bribe for policies at the expense of society. Additionally, chief executives, aware that corruption is contagious, usually do finance the election of corrupt-prone candidates.

That’s Eric Zencey’s argument. The professor of historical and political studies at Empire State College in the U.S. said bribery or corruption is not simply greed. Neither is it ignorance nor is it because of the failure of a regulatory diligence. Rather it is a systemic flaw in the market oriented system, he added. Were the U.S. regulatory agencies effective? Some experts want six of the government regulatory agencies to be reduced into one, while President Obama wants an additional agency.

Zencey say corruption will be minimized if societal interest and profit motives are the objectives of companies. For instance, chief executives will not undertake unnecessary risk if employees as well as the companies were encouraged to protect the interest of society. Zencey said, for now, companies are individualistic. In the case of Firestone, managers are using bribes to seek favorable deals from the Liberian government, while Firestone gives little back to Liberia. And that’s the big difference between individualistic economic system that Firestone Rubber Plantation operates under and China’s profit-motive and societal interest economic system.

Reporting in the NY Times, 6/3/09, Meraiah Foley stated that China has 111,500 state-owned entities, including 150 giant companies that operate mining, steel, finance, communications and others which are operating effectively. These companies generated $680 billion in profits in 2003. (Chinese News). While the Chinese government owned the entire $680 billion profits, the U.S. government, which does not own corporations, got only $16 billion out of the $700 billion profits corporations generated in the U.S. in 2004. (NY Times, 5/5/09). It is no wonder that the U.S. owes $11 trillion debt, which include $1 trillion loan from China.

In comparing China to the U.S., Nicholas Kristof of the NY Times stated that besides accumulating an enviable $1 trillion cash reserves, China’s self-sufficiency food program has contributed to a higher living standard, while obesity has increased in the U.S. More so, Beijing’s infant mortality rate of 27% is lower than New York City’s. Further, China’s children get an education comparatively better than many children get in the U.S.

The bleak picture of America is due largely to corporations paying $16 billion taxes and not the $245 billion ($700 billion multiplied by 35% Federal tax rate) because chief executives exchange bribes for weak laws. Liberia would have educated its youth, build roads, erected bridges, and constructed hospitals across 38,250 square miles had LAMCO, LMC, NIOC, BMC and Firestone among others ended bribery as we know it. But guess what, as long as Liberia celebrates the idea of the free market oriented system or extreme capitalism and not the quality of life, Firestone et al would focus on increasing profits for the shareholders. The cosmetic approach of electing new President and new lawmakers, assigning expatriates to every ministry or reshuffling cabinet members does not discourage chief executives of Firestone et al from the bribery scheme.

© 2009 by The Perspective

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