Sunday, August 8, 2010

Not everything goes -- U.S. tobacco companies to pay $30 million for bribing officials

News that two U.S. tobacco companies had agreed to settle charges that they bribed their way into overseas sales contracts is a timely reminder that laws against excessive avarice are an unfortunate necessity of a capitalist economic system. Competition works -- the best products and the best companies will prevail over lesser competitors -- but only when everybody is playing by the same rules. The two companies, Universal Corp. of Richmond, Va., and Alliance One International of Morrisville, N.C., are going to be paying nearly $30 million for violating this most-basic of capitalist principles, according to the New York Times. The two companies, which supply tobacco leaves to cigarette and cigar makers, agreed to pay to avoid a civil trial and criminal charges that they bribed officials in eight countries. Universal was accused of bribing government officials in Thailand, Malawi and Mozambique, and Alliance One with bribing officials in Thailand, China, Greece, Indonesia and Kyrgyzstan. Universal issued a statement saying that it had reported the misconduct to authorities and had cooperated with the investigation, the Times said. “We have absolutely no tolerance for this type of activity,” the chief executive, George C. Freeman III, said in the statement, the Times said. Universal said the U.S. Justice Department agreed not to prosecute the company any further if it follows the terms of the agreement for the next three years. Alliance One could not be reached for comment, the Times said.

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