Handling Shady Dealers

By on / Business Negotiations

Adapted from “Coping with Corruption,” first published in the Negotiation newsletter.

In 2004, U.S. Air Force procurement officer Darleen Druyun was sentenced to nine months in prison on corruption charges after it was discovered that she had favored Boeing in her negotiations for aircraft purchases to win jobs at Boeing for herself, her daughter, and her son-in-law. Druyun had unfettered control over the air force’s annual $30 billion budget for aircraft purchases.

Most public officials across the globe work diligently and honestly for their governments. Yet corruption can be a risk in negotiation with government agencies, including those in the United States, particularly when an official has great discretion to decide on a deal, has monopoly power over you, and has little accountability for her actions, as was true of Druyun.

Government corruption can disrupt your negotiations in two ways, writes Jeswald Salacuse in his book Seven Secrets for Negotiating with Government (Amacom, 2008). First, it can put you in the position of having to choose between walking away from the deal and paying a bribe. Second, if the government negotiator is favoring one of your competitors because of a corrupt payment, you may lose a deal without knowing why.

Salacuse offers the following five suggestions for protecting yourself from the demands of corrupt officials:

  1. Research the laws regarding corrupt payments in the country or region where you will be negotiating. Educate your team, and discuss in advance how to respond to a bribery demand.
  2. If your company has a code of business ethics, offer it to your counterpart as part of your introductory material prior to or at the start of talks.
  3. When faced with a demand for a bribe, explain that you respect your counterpart but that you would risk prosecution under the Foreign Corrupt Practices Act if you were to make illegal payments.
  4. Try to deflect a demand for a bribe by making a donation to a local charity—as long as you can be sure that the payment reaches the intended destination.
  5. If corruption is pervasive within an organization, you may need to walk away from the deal. If it is not pervasive, try to involve more honest individuals in the negotiation process.

Discover step-by-step techniques for avoiding common business negotiation pitfalls when you download a copy of the FREE special report, Business Negotiation Strategies: How to Negotiate Better Business Deals, from the Program on Negotiation at Harvard Law School.


Related Article: Defend Yourself Against Deception

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    Comments

    One Response to “Handling Shady Dealers”

    • Joanne D.

      This is my response to your article of Handling Shady Dealers. I was employed for 21 years for a corporate electronic company. I was dismissed by constructive dismissal after one of my customers admitted to fraud in a credit of $10,000.00 dollars issued by my boss. The product indicated was stock gone for 3 years and did not amount to the credit issued. I have a Police background and made several attempts to contact the President of the company. All my correspndence was sent to Human Resources and they forwarded it to their Lawyers. I received a ceast and desist order from them. They stated to cease and desist or they were going to and will take such steps as necessary to vigorously defend its rights. I have all the proof that I shows the fraud and they won’t listen. the customer in question also tried to bribe me.I had discussion with a police officer, a criminal lawyer and Revenue Canada for advice. Their solicitor told me I was in breach of my release agreement. I know fraud was committed and having a police background they still didn’t listen. The person in question is still working there and I am unemployed.
      This shows you even though you stand up for your rights, they still don’t listen.

      Reply

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