World Lags Behind New York's Corruptive Ways

Quarter of Companies Asked to Pay Bribes, Ernst & Young Reports
Bloomberg News by James Lumley

May 14 (Bloomberg) -- Almost a quarter of businesses have been asked to pay bribes over the last two years in spite of increased efforts to combat the problem by law-enforcement agencies, an Ernst & Young LLP survey published today said. A total of 23 percent of respondents said they had been approached for bribes to gain or keep customers and 18 percent said they had lost business to a competitor that paid a kick- back. The New York-based accounting firm interviewed 1,186 senior executives in 33 countries to calculate the statistics.

The figures give "reason to be concerned,'' said David Stulb, Ernst & Young's global head of fraud investigations, in a telephone interview. Law-enforcement agencies are increasingly viewing bribery as a serious offense, increasing the risk that companies that pay bribes will find their executives facing charges, he said.

The report comes as bribery cases are unfolding on several continents. In Germany, Siemens AG is facing an investigation over possible bribery. A U.K. court last month told the U.K. government to consider re-opening a probe into allegations BAE Systems Plc gave kick-backs to Saudi officials to win business. In South Korea last month, prosecutors questioned Samsung Group Chairman Lee Kun Hee over bribery claims.

In the U.K., 13 percent of respondents had experienced at least one incident of bribery or corruption in the last two years, compared with six percent of French respondents and six percent of German companies that answered the survey. The global average was 24 percent, showing an ``increased risk of doing business outside Western Europe,'' the report said. "To be able to get 1,200 respondents talking about bribery and corruption would have been difficult five years ago,'' Stulb said. It is "encouraging'' that businesses are increasingly open to discussing and addressing the issue, he added. To contact the reporter on this story: James Lumley in London at jlumley1@bloomberg.net