While writing Corruption defined I thought about bananas. The creation of the Foreign Corrupt Practices Act (FCPA) is directly tied to the United Fruit Company’s behavior in Central and South America during an eighty year period. (United Fruit Company is now known as Chiquita.)
The company created a banana monopoly throughout much of Central America. They ran postal systems, railroads and bribed politicians in countries such as Honduras, Costa Rica, and Guatemala.
United Fruit Company became the government in several countries. The company’s nickname was “the octopus” because their fingers were in everything.
In 1909 the US Supreme Court heard the anti-trust case between American Banana Co and the United Fruit Company. Costa Rican soldiers seized American Banana’s plantation, supplies and railroad. It was thought that United Fruit Company had requested this action. It was one way to get rid of the competition.
In 1910, Sam Zemurray, who 22 years later would take over United Fruit in a hostile bid, hired a gang of armed toughs from New Orleans to help stage a coup in Honduras in order to obtain beneficial treatment from the new government for his own banana-trading company, Cuyamel Fruit.
All of this came to an end in 1975. Eli Black, President of United Fruit Company, killed himself. He jumped out his office window and fell 44 stories. The company had lost over $70 million the prior year. And the company’s history of bribing was publicly exposed.
FCPA was passed by Congress in 1977 (revised in 1988). It made it illegal for an American company OR an individual to bribe foreign government officials for the purpose of obtaining or retaining business.
Grease payments (also called facilitating payments) were specifically excluded from FCPA. This covers payments to expedite routine government tasks; permits, clearing customs, passports, visas, birth certificates, scheduling court dates.
The differentiation that I made between bribe and expedite fee is based on FCPA. If you are paying a clerk to process a passport in 2 hours rather then 5 days, this can be seen as a grease payment.
If you steal a baby from a woman and pay a government official for a fake birth certificate … This is a crime.