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Wednesday, 6 July 2011

The ostrich view (part II). Dutch Public Prosecution acts like 2nd ostrich in Dutch corporate corruption cases: ‘see no evil… hear no evil…’

Yesterday I wrote in “the ostrich view…” about the behavior of Philips Healthcare in Best, concerning the bribery case of Philips Poland: looking the other way.
This morning it became clear that Philips Healthcare Headquarters is not the only party that puts its head in the sand concerning bribery and corporate corruption.
The Dutch financial newspaper “Het Financieele Dagblad” writes its frontpage story on the lackluster approach of Dutch Public Prosecution towards corporate corruption cases of Dutch companies and multinationals. Here are the pertinent snips of this article:
In The Netherlands, there is a lack of political will to prosecute bribery and corruption cases of Dutch companies abroad. This is stated by some prominent criminal lawyers. During the last ten years, no Dutch company has been brought to trial for committing bribery and corruption abroad. And that in spite of the fact, that since 2001, Public Prosecution has the legal right to prosecute such felonies.
According to financial crime-lawyer and deputy judge Joost Italianer, the prosecution of international bribery is lagging heavily, because the government lets economic interests of companies prevail on maintaining the law. “The Netherlands is a trading nation. The government is not prioritizing prosecution in bribery cases concerning foreign authorities. Therefore Public Prosecution (PP) lacks funds and time to investigate such cases”, according to Italianer
PP confirms that it is authorized to prosecute corporate corruption, since The Netherlands signed the anti-corruption treaty in 2001. According to PP, ‘it happens in limited numbers that PP investigates foreign corruption cases’. But the cases are hard to investigate, according to a spokesman of the Justice Department. The fraud is taking place abroad and parties will remain silent.
Concerning the bribery case of Philips Healthcare in Poland, PP states that prosecution of Philips Healthcare in The Netherlands is not an issue currently, as prosecution already takes place in Poland. The fact that Healthcare headquarters was aware of this fraud and didn’t act on it, doesn’t change this decision.
At the end of May, international organizationTransparancy Internationa (TI)l published a grim report on the Dutch prosecutions of international bribery. According to TI, there should be more manpower for the Dutch PP to act more decisively on this kind of fraud.
There are also other voices in The Netherlands: Criminal lawyer Brendan Newitt is aware of the fact that these cases have no priority in The Netherlands, but asks aloud if more priority for these cases is desirable. ‘It is not the right thing to do for Dutch companies, to prosecute very strictly. It is a fact that in many countries slush money is used as a means of doing business. On top of that: before 2001, it was allowed to deduct this slush money from the taxable amount’.
“Yes daddy, I stole some apples from the grocery store; John and Cathy did it too, so I thought I couldn’t stay behind”?! “Your right, son. Keep up the good work”.
This was absolutely not a conversation at the residence of the Brendan Newitt-family and I must object strongly against people thinking so.
But isn’t it strange that this kind of fraudulent behavior is trivialized by criminal lawyers? And isn’t it strange that Dutch Public Prosecution is assuming the ostrich position in case of corporate corruption of Dutch companies? Isn’t this behavior obstructing the ‘level playing field’ that American and European officials are always pursuing?
In the first article in this series, I told the story of my father’s company in the eighties, that was only able to do business in the Middle East when enormous amounts of slush money was paid:

I remember my father – an accountant for a large, Dutch building company –  saying about doing business in the Middle East (in the 1980’s): there are two ways of doing business with the people there.
1. You make an offer for a project, worth €35 mln – f.i. building a new museum -  by charging your principal the €35 mln fair and square… and you won’t get the assignment.
2. You make an offer for the same project, but you charge your principal €70 mln and return €35 mln in bribes to your principal, his family and whoever it may concern… and you get the assigment.
My father was an honest man and I’m sure he was disgusted that his company needed to do business this way. But having high moral standards is a luxury that not every company can afford. And therefore I suspect that almost EVERY company that does business in the Middle East, needs to deal with bribing people to get assignments.
And it is my honest opinion that Dutch and international companies should do everything to avoid ‘bribery of officials’ and other corrupt behavior in order to gain contracts. Because, if Dutch companies don’t stop bribing, why should companies in other countries do so. And Dutch prosecution? They should get out of their lazy beds and start acting on this kind of criminal cases.

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