https://www.justice.gov/usao-ndca/pr/former-netflix-executiv...
Some fun details:
Kail did his criming through a shell LLC he set up called "Unix Mercenary".
He took between 10-15% of the total billings for each of the companies he hooked up with this scheme. None of those companies were charged (more's the pity).
They got him on mail fraud, wire fraud, honest services fraud, and money laundering. The victim of the fraud was, of course, Netflix itself.
Additional fun facts from PACER:
He's seeking to exclude his shares in Sumo Logic and Netskope from forfeiture, arguing that they were largely the result of his own hard work, which takes some serious chutzpah.
All of this apparently happened back in 2014 (the conviction is recent). If you're wondering what Netflix thought of all this, Kail apparently left Netflix for a job at Yahoo, from which he was fired after Netflix found out about his scheme and told Yahoo.
Kail's sentencing memorandum is a fun read (again: chutzpah). For instance, this gem:
Further, though Mr. Kail complained of problems with Sumologic (as one would see with any new startup), the product itself was “useful,” according to Ashi Sheth. (R.T. Vol. 8, p. 1670-71). As described below, at the time, Sumologic saved Netflix from paying for a far more expensive and inferior product called Splunk.
A lot of people here are saying this is incredibly common which is frankly pretty surprising to me. Does it really happen through shell LLCs?
I am definitely aware of execs prioritizing startups they've invested in, which is... not a great look.
But this seems to be a different thing. Kail wasn't an investor. He explicitly drafted agreements that paid him a fraction of the money flowing from Netflix. This seems almost like embezzlement to me (not a lawyer! just a guy using words he has heard!):
> Two days before Unix Mercenary was registered, Kail signed a Sales Representative Agreement to receive payments from Netenrich, Inc. amounting to 12% of the billings from Netenrich, Inc. to Netflix for its contract providing staffing and IT services to Netflix. Later in 2012, Kail began to receive 15% of all billing payments that VistaraIT, LLC, a wholly owned company of Netenrich, received from Netflix. From 2012 to 2014, Netenrich, Inc. paid Unix Mercenary approximately $269,986, and VistaraIT, LLC paid Unix Mercenary approximately $177,863. The payments stopped in mid-2014, after Kail left Netflix.
Of course that would not help a company while it is happening, we only check a very small fraction of all offerings. In a perfect world an accountant would catch this.
One case I ran into was very much like this one: a whole bunch of hardware was sold at above sticker price, on top of that much more hardware was sold than what the business could reasonably expect to be using. The a-technical management never caught on to this until we showed up, the fall out from that case was fairly spectacular.
Kail's own sentencing memorandum points out that OpenDNS rewarded a different Netflix employee with stock options. Also, presumably, super illegal.
Second hand, an acquaintance worked on a tobacco account where they were spending government-mandated anti-smoking funds on a digital marketing campaign and they were asked to deliberate overbill and churn on work without delivering. People went to jail.
Third handed story because I knew some folks who used this software, a vendor once extracted about 1000% of their contract price in kickbacks building HR software for the city of new york: https://www.nytimes.com/2014/04/29/nyregion/three-men-senten...
Thank you for your honesty and self-awareness. This framing also amused me.
But neither of those are quite right:
1) the same tax deductions are available on your normal schedule C
2) while acting on behalf of your LLC you’re still personally liable for your actions (let alone your illegal schemes).
Embezzlement: Misappropriation of funds Fraud (in the inducement): (Specifically wire/mail fraud when talking about contracts): Misrepresentation of contractual terms to induce entering into a contract. (Here the misrepresentation is the amount of money that the vendor was going to charge netflix since technically his kickback would've reduced the expenses to Netflix)
As an intern at one place I had to spend hours studying and then taking a test to ensure I complied with anti-bribery rules. I’m sure this didn’t just come up because one person did something bad.
Wow! I was evaluating SumoLogic and Splunk in Netflix back then. Neither of them was suitable for our use cases. We ended up rolling out our own solutions. As far as I recall, the eng org didn't use Splunk or SumoLogic. Kail headed the IT department, though. Maybe they used SumoLogic.
All this for 500k? Seems like a lot of trouble for the equivalent of a year as a C-Level.
It is possible that your perceptions of how easy it is to extract millions-scale dollars from the business world is skewed. Google suggests 1.7M is the median lifetime earnings in the US, 2.7 is the average. Getting that in a handful of deals could tempt all sorts of people.
I understand the sentiment that "it takes two", but I'm of the opinion that it's the one accepting bribes that is the root cause of the problem.
It is the people accepting bribes who are taking from their company, university, or government and creating a pay to play market.
I was at Yahoo around the time this was revealed, and I don't think he was fired immediately after Netflix making the claims public. He was still CISO/CIO/some shit and used to participate in mailing lists, iirc.
I wonder how much he got in severance from yahoo, to round out the list of chutzpah-s
If he was in the lower class then this post would not exist. He's be in jail and it would all be forfeit before due process.
Or maybe he was just that good about hiding it, IE only soliciting via the business entity which then took a “commission”?
With regard to kickbacks, I have no idea how it was 'sold' to the startup; for all I know it was sold as a separate entity that Netflix buys from which they have premade contracts for, etc. I wasn't there, but I wouldn't assume Sumo or Netskope are running around offering people bribes. My guess is it went the other way.
Generally, the company will have a limit (somewhere in the $25-$50 range) on gifts you could give or receive without prior authorization. So maybe I can take you to a bar or coffee shop and get you a drink or two while we talk. But not a dinner at a high end restaurant, or a sporting event or a vacation in Hawaii, because the risk of being corrupted (on the receiving end) or reputational risk from being seen as corrupt, was too great.
This is particularly potent issue for American companies because of the Foreign Corrupt Practices Act. The FCPA means that US companies (and their subsidiaries, contractors, etc.) have to draw these sorts of lines over the entire world, or be subject to heavy penalties, even in countries where it might be more common and legal.
One area that's more fuzzy is free passes to user events, i.e., a DreamForce or Oracle World. We clear these per our process and are fine to accept them because we were going to spend money on sending someone anyway. We saved the company money. Also: it was never indirect between individuals, it was company to company.
Edit: The 2021 angle is that he was sentenced today. You would know that from OP's original article, but not the newer DOJ link.
https://www.bloomberg.com/news/articles/2014-11-26/netflix-c...
Being able to detect whether a given employee has taken a bribe from a vendor might trip over SOX-relevant things incidentally but not directly. For example, you might need to certify that every employee has taken anti-bribery training every year, and that's your preventative mechanism so at least employees know what is permissible and what the consequences are.
Long ago, before Dotcom went Dotbomb, I worked for a firm where the CIO was being paid kickbacks by our hardware reseller. He was terminated for other reasons and, shortly after he left, our head of network ops got a call from the distributor asking where they should send the bonus check that was due to him. They clearly thought that with the CIO gone, the head of network ops would be down the with the deal.
Unfortunately for them, and fortunately for him, he was absolutely not down with the deal and reported the whole thing up the chain.
We were overpaying for hardware and the previous CIO had been splitting the difference with the distributor.
If it's unclear to anyone on this thread why that is both illegal and immoral... perhaps you are in the wrong business?
I think it's because a lot of "hustle" culture and stories of the early business careers of very successful founders involve a bunch of stuff that sure looks like fraud or otherwise like something that ought to be illegal (it may not be, but I mean that it feels like the kind of thing that ought to be illegal, to a normal person) that works out great for them and sure looks like it was a necessary step on their journey to hundreds of millions of dollars and being on the cover of TIME or whatever.
Add in normal corporate business practices just feeling gross as hell on a pretty regular basis, and I can kinda see why people might see this as not really that different from how you're "supposed to" do things—if you aren't a chump, anyway.
Kinda like the college admissions bribery scandal. There was a lot of "oh, so their crime was not being rich enough to bribe the correct way?" in people's reactions, because... well, the system's officially corrupt, in a lot of people's opinions, so prosecuting unofficial corruption feels more like a very fancy organized crime racket putting the screws to the (relatively) little guy to protect their own corruption, than good old feel-good justice.
The key distinction that you outline is that the CIO did something behind the company's back that the company would almost certainly not have approved of. The CIO defrauded their own company by taking kickbacks in exchange for purchasing agreements; most people can see that as being wrong.
As I'm reading this article with no familiarity or background knowledge, I did not presume that this exec, Kail, was doing something that Netflix would not have approved of and using his position for his own benefit and to defraud Netflix.
If Netflix had been okay with Kail becoming a consultant or partner of the startups that Netflix entered into an arrangement with, then there would be no issue.
Anyways, this article is written as if the reader already knows what happened and what's going on, which is fine but it shouldn't be titled "Why a former Netflix exec is facing ..." It should have instead been titled "Former head of IT Operations who defrauded Netflix will face 7 years in jail."
If, in order for it to work, everyone up the chain from you (or next to you even) has to be unaware of it, it's probably wrong. If the other bidders on a business relationship have to be unaware of it, it's probably wrong. You're basically profiting off ignorance/deception.
I mean, even if you don't understand conflict of interest, this should at least ring a bell.
Candor and integrity should be fundamental values in all people. It's not like you can't conduct a profitable business or become very successful if you prioritize those attributes.
One main reason I started my first computer consultancy was that I found out that although computer stores and Value Added Resellers advertised independent objective advice to customers, they accepted major software & hardware vendors giving bonuses "spiffs" directly to the salespeople, blatantly corrupting their 'objective advice' (vs supporting the overall organization's ability to sell and support the equipment). One of the first things that went in the employee manual, and of course had to can some salesguy who tried to collect a spiff under the radar (our actual practice was the spiff goes to the company or goes uncollected, and if collected, we generally added half to discretionary bonuses).
Pretty small step from that culture of working to directly corrupt "independent" advice to trying to collect it on the other end. I'd like to know how many startups actively offer this kind of deal to execs in order to get the bigger deal?
Even those that weren't very competent were hired since if they were part of the same Ivy League alumni network.
I have no knowledge of the business dealings but the company definitely appeared to benefit from having those connections.
Almost everything Trump did or said was in the former category, he cared only for his own benefit it would seem.
A huge number of people don't get why they should vaccinate to protect others perhaps not as immunity fortunate as themselves.
"Myself first, second, and then my fellow, if I stand to gain." (Loosely translated from the Norwegian "først meg selv, så meg selv, og så min neste, hvis det er til eget beste")
Edit: Perhaps I'm clinging on to old ideas. Everything is "obviously" personal choice these days, and who am I to say my values are "better" than theirs. That we should all strive to "do good" is not universal, because why should people be forced to or expected to look after anyone but themselves?
IMO you do a poor job clearly outlining the transgressions and the legal issues at play. You bounce around phrases like "pay-to-play"but as someone not inside the startup world, I didn't get to the end of your article and understand exactly what he did that was illegal/immoral and the context for how it's harmful to startups. In other words, I know he is accused of doing something wrong but that's as deep as my understanding goes.
"There was just one catch to landing that deal: It had to hire the streaming company’s vice president of IT operations, Michael Kail, as a consultant and an advisor, and pay him with fees and stock options."
That seems pretty clear to me.
There was just one catch to landing that deal: It (the startup hoping to do business with Netflix) had to hire the streaming company’s vice president of IT operations, Michael Kail, as a consultant and an advisor, and pay him with fees and stock options.
That's "pay-to-play"; you don't hire me as an "advisor", you don't get the Netflix contract.
And 'commonly' doesn't translate into 'every exec does it', but it does happen, in my experience about 2 to 3 percent of the businesses out there have such a thing going on. That's only in my backyard, it is very well possible that different localities or professions would have a multiple or a fraction of that, and it is possible that we're not looking hard enough and that the numbers are much higher.
Every single angel investor I have ever pitched asked for/suggested this.
If this is illegal 99% of the Valley is committing fraud.
When you talk to these angel investors, do they offer you contracts for your new company at their existing companies? Like if you sell product X as part of your new company, are they saying they'll make sure the companies they're involved with buy product X if you give them shares of the company and cash kickbacks? If not then your comparison doesn't hold.
In the primary situation, they are benefiting by getting stock in exchange for giving their company's business to the startup (illegal kickback). In the second situation, they're referring companies they have a personal financial interest in for business to enhance the value of their investment (conflict of interest).
Need more specifics.
1. It's incredibly illegal for an agent of the government to do this, and people get fired and prosecuted for this.
2. It is possible to couch this in a revolving-door sort of arrangement - once the agent stops working for the government, they get a cushy job at the vendor. In theory, the vendor has no reason to hold up their end of the bargain, once the person they are bribing is out of office. In practice, that person can then leverage their government connections to smooth out future business deals... Which in itself is not illegal, and is convenient cover for the job.
See https://www.nytimes.com/2015/12/01/nyregion/sheldon-silver-g...
i.e. executive helps Supplier X sign a at his company. The executive then leaves after a few months to get a senior job at Supplier X
The press release from the DoJ details how he structured his kickbacks without netflix's knowledge and set up a shell company to do so -- even lying directly to netflix leadership:
"When an inquiry from the Netflix CEO ensued, Kail falsely denied that he was formally working with Platfora."
Criticisms aside, thank you for helping to shine a light on corporate malfeasance.
Often, you can see their prior (or even current) job, and press releases about them selecting that software some short(ish) time before.
That may or may not be a problem, depending on policies and how it was handled.
Generally, you need to disclose any conflicts of interest. Then, its up to your company on what will be done next. You are probably going be removed from the actual decision-making process (regardless if you are ultimately going to be the one closing the deal - after your peers approved the decision).
If everything was disclosed and there was no kickbacks, it might have been ok (although the press release may overstate the role they played in the selection).
If not, you may be in hot water with your company and even the justice system.
It is perfectly legal for Netflix to ask for options or any other consideration in exchange for the contract. Companies do this sort of thing frequently. They know that merely signing a large contract with a large firm will increase the value of the contractor.
It is not legal for someone working for Netflix to ask for shares in their own personal capacity as individuals. That is what runs afoul of the law.
It can be, I think. If Netflix were properly informed of and signed off on the arrangement, it would just be an elaborate compensation mechanism. It would be a lot of paperwork. And they wouldn't approve that.
Yup, that's called a kickback, which is illegal.
So if the buying company forced an employee to give them options without the selling companies consent, that would be insider trading. But if the deal is company to company, then there shouldn't be an issue.
To quote Matt Levine: This is definitely not legal advice.
"It's not about fairness, it's about theft"
Which was also applicable to that college admissions thing. The problem is not that people were buying their way into schools. It's that they were paying someone other than the school to do so. The situation as a whole feels a bit dodgy, but the core legal problem is the guy took something that really belonged to Netflix.
Once you have that basic model then all the rest of the variations: the company can allow it etc fall out of the model.
I completely get how a startup would take this deal, however gross it is, but what I don't understand is how the exec got away with it from Netflix's side. And the fact this wasn't just 1 but 8 other startups he did this to/with as well. I can't tell from the article if Netflix was aware or unaware of this "Agreement" and if they weren't aware... how? Did no one ever mention "Oh yeah, we hired Kail like you asked/required us to"?
One point that was mentioned that was interesting was...
> "When an inquiry from the Netflix CEO ensued, Kail falsely denied that he was formally working with Platfora."
This data point suggests that Kail was pushing underwhelming or otherwise odd-shaped vendor products frequently and/or persistently enough that people at Netflix suspected he was a shill for vendors. The fact that Reed Hastings is presumably calling Kail out for this means the bad smells were pretty powerful. Kail probably does not have final boss-level skills at reading the room.
In all the companies I worked for in the last 20 years he would have been fired instantly.
There are many better articles about this story from reputable news sites. The more interesting story from this article is what is Business of Business and Thinknum? Is it another Ozy?
You're actually accusing the prosecutor of getting it wrong... which seems a bit arrogant.
Edit: I should add that while I was working at a FAANG (before doing a startup) the team I was on would constantly be blocked from building X only for a VP to buy a company that said they did X but didn’t. Because we still needed X we would buy a new company each year. We could tell the VP was setting them up to sell to us. We would joke about leaving to do a start up for the VP to not only make more money but so we could finally have a working X in the company.
Edit2: With my current start-up it's not uncommon that we are instructed to sell to a customer via a nominated 3rd party. We don't know for sure, but we strongly suspect, that the 3rd party markup is how the executives are skimming off extra money. At least it keeps us out of it.
It's also normal for companies to want to buy via a dealer because they don't want to deal with your little startups legal issues, compliance, regulatory, billing. They just want to deal with small tier of vendors.
In fact, that's kind of a startup idea: AppStore for SaaS because most corps don't want to deal with your little vendor BS. Everyone would be happy to pay an extra 10% just to have everything easy and clear.
The levels of deceit and lying are so thick.
It doesn't bother me anymore. It's just people being people. I'm enjoying the series The Expanse lately because of the way it integrates realpolitik into the storyline.
So very humble of him.
He must be living inside his own reality distortion field.
That's why he says it. He knows nothing else.
> Kail faces a maximum sentence of twenty years in prison and a fine of $250,000, or twice his gross gain or twice the gross loss to Netflix, whichever is greater, for each count of a wire or mail fraud conviction, and ten years in prison and a fine of $250,000 for each count of a money laundering conviction.
As well as
> Kail was indicted May 1, 2018, of nineteen counts of wire fraud, three counts of mail fraud, and seven counts of money laundering
> The jury returned a verdict of guilty on 28 of the 29 counts.
At max sentencing that would be over 400 years of prison for just the fraud. I have no idea how you go from that to asking for 1 year of house arrest
Even in TV episodes of Law & Order, the furthest defense attorneys go is to ask to serve house arrest before trial because their client is "a pillar of the community" aka very wealthy.
I wonder how much money he threw away assuming he had stayed 5-6 years instead. $5m? $10m?
You can form "customer advisory boards" which basically pay small percentages of common to early users to use the product.
Like, seriously, more than half of the companies funded by YC do this. I think this is the norm more than the outlier.
The benefits went to the executive directly. He asked for personal bribes to sign contracts on behalf of Netflix. He enriched himself at the expense of his employer. This is illegal.
The company would generally have no interest in that kind of setup.
When the advisory board is public, it appears to be 'above board' even though it might be a conflict of interest at least it's hiding in plain sight.
Then charge them all. That will put a halt to the practice pretty quickly.
"On rare occasions, freedom is abused. We had one senior employee who organized kickbacks on IT contracts for example. But those are the exceptions, and we avoid over-correcting. Just because a few people abuse freedom doesn’t mean that our employees are not worthy of great trust."
One thing I find extremely strange is that, I looked this guy up online, and his Twitter feed is just so, well, "tech mundane". He seems to tweet nearly daily, e.g. yesterday he tweeted "Love the new Macbook Pro features/options, but to armchair #cloud, I'd limit the local storage option and improve the performance/availablity/resiliency of #iCloud" (which to be honest seems like a rather dumb tweet to me but that's besides the point).
I mean, I don't expect the dude to go into hiding or anything, and to each their own, but if I were facing significant prison time, and I knew I was a pretty big story in the tech world because I was guilty of serious corruption, the last thing I would be doing is making random tech tweets.
When I was working at AT&T in New Jersey, my manager always hired contractors from one third party company, which is owned by the wives of his brother (then another ATT employee) and other ATT employee. Eventually, many managers colluded with this particular third party company so much so that other third party staffing companies couldn't place any people.
So, these staffing companies complained to the Ethics department. ATT Legal started investigation, and fired my manager, his brother (another employee), another guy. They couldn't do much further due to these reasons. (a) the staffing company is owned by the wives of the two employees (b) the staffing company is NOT the direct vendor of ATT. The primary vendor is another entity, who takes $1 per hour per candidate.
This kind of fraud is so common in this industry.
“he stole the opportunity to work with an industry pioneer from honest, hardworking, Silicon Valley companies.”
…I had to double-check this was coming from justice.gov, not a satire site or PR blog. That isn’t to say that there aren’t honest and/or hardworking SV companies, or that they weren’t wronged. It’s just never a phase I’ve seen before.
Instead, the startup had to do 2 deals: One with Kali directly for "advice", and then a second with Netflix that Kali, in his capacity as a VP there, would sign.
Besides being unethical; this is now a clear conflict of interest. Netflix (and shareholders of Netflix by extension) may have signed up for a crappy product from the startup only because startup had a side deal with Kali.
I do not mean people offer themselves for briving.
But did anyone ever think what would happen if politicians did not have much power to regulate? Companies would not be able to lobby.
That means there would not be nearly as much incentive to brive as there is today.
Once a regulator is in the middle, the incentive for corruption is there.
I do not think people use Netflix because of the corrupt business of this guy. They use it because it is entertaining or find it useful. The same way people will keep studying Picasso (I hate his art, but anyways) because they consider it art, and he was a misogynist.
But his art is his art, the same way Netflix is entertaining for some people.
So I think claim that "there is less political corruption in the US than people think" is going way too far. Most of the corruption is never even uncovered (just check how many government officials and congressmen became rich after they started selflessly serving the people, and how wondrously successful many of them are e.g. in stock trading), and the cases that are uncovered are rarely punished with anything but dismissal and maybe light monetary slap on the wrist. One must be exceptionally unlucky - which usually has more to do with political situation than anything - to land in jail for corruption, and unfortunately that's not because there's no corruption, but seems to be rather because there's so much of it than nobody wants to rock the boat too much. You'll need the funds for the next election campaign, won't you?
> although that too has gotten considerable scrutiny in the media.
And, that scrutiny amounted to exactly nothing.
E.g. a group with socioeconomic power is corrupting a law in order to serve their own interests.
And US is very well known for its lobbying that people are trying to limit.
This is not what I see at all. In fact, the more I researched about USA lately, the more surprised I was about all the polarization. Even more, and this one disappointed me even more: the USA I see today, the discourses I see, the principles I see being applied is like destroying the pillars that founded that nation.
I am not american, but I really, really, I mean, really admire the foundations on which that country was founded. You are destroying them IMHO.
For some (non-casual) reason USA has been prosperous, the cradle of the modern civilization (with all its downsides, I know many of them, yes) and that reason was the mindset of having opportunities and chances to improve your lives without the nose of all those bureaucrats getting into your lives.
The media you mention, the control, the politicians, the regulations. Each of those is a door to corruption. De-regulation (or minimal regulation, if that cannot exist) is by its own right the least corrupt of the systems: it does not give chances for favors and crony capitalism.
If you were caught paying bribes to a (corrupt) government official, wouldn't you be breaking the law?
A few years ago, Netflix had a reputation of paying very well to lower level senior employees (think L5 and L6), but not as competitively for higher level employees (L7+).
But it's the bigger question of whether a person of such morals has VP material written all over them, or if the position causes one's formerly-solid morals to slip a bit (or a lot).
Politicians and government agents will work toward getting legislation or contracts through and then "retire" to work privately for the same companies. This is probably not legal (i.e. bribery), but it's basically impossible to prove the crime. On a similar note, politicians can ask for contributions as part of lobbying efforts that go directly to their campaigns. That might not go right into their pocket (which somehow make it legal), but it certainly makes continuing their career easier.
I don't think either is particularly morally just, but the similarities are pretty stark. The government (and public) end up losing and becoming the victim just like Netflix was the victim of these actions.
There should be a special aggravating attachment for such abuse of employees :)
Easy to say when no one's offering, I guess.
He passed on our info of saas pass to a "competitor" onelogin (which got acquired recently). Turns out they were already using onelogin. No idea if he had shares in onelogin at the time.
Seprately there was a Google Apps (later rebranded to G Suite and now Google Workspace) conference at Fort Mason around 2013 or 2014ish. At that event a Google employee Clay Bavor said they have an internal saying for product rollouts and new features. It was WWMKD. What would Mike Kail do?
I guess don't do what Mike Kail would do.
The Supreme Court definitely left the door open for this law to be ruled unconstitutional so I’m curious whether any of the very wealthy and newly convicted-at-trial defendants will pursue the matter.
Edit: Reading the DOJ press release and the way it’s worded I’m not so sure whether Kail was convicted of honest services fraud. It seems there was one count for which the jury did not return a guilty a verdict and I’d bet it was this one.
[1]https://en.m.wikipedia.org/wiki/Honest_services_fraud
[2]https://en.m.wikipedia.org/wiki/Skilling_v._United_States
[3]https://en.m.wikipedia.org/wiki/Black_v._United_States
[4]https://en.m.wikipedia.org/wiki/Rod_Blagojevich_corruption_c...
Per the article it seems like his total take was $500k. As VP of IT Operations at Netflix he must've been making at least that much per year. Seems crazy to me to take on that level of risk for not that much upside (if you're a well-paid tech worker).
Is it possible that Netflix is _funding_ (or providing substantial material support to) the prosecution of this case, a bit like we've seen in Chevron v Donziger?
HR execs are expected to pull this stuff as a matter of routine. The other CxOs know that if they prosecute their HR director, the next one will be just the same, or it will be hard to hire one. If your HR director doesn't, why would they be in HR?
No. It would not.
"Kail approved contracts to purchase IT products and services from smaller outside vendor companies and authorized their payment." This is a commonly outsourced function. If I hire a company to manage my IT procurement and learn they're getting undisclosed kickbacks, they'd be breaking the same laws Kail did.
So the person being bribed is (usually) not stealing from the person paying the bribe. They are stealing from whoever put them in that position of trust.
So for a company, they are ripping off the shareholders if they choose a vendor not based on how competitive the vendor is, but based on a side payment. The person paying the bribe receives a benefit.
But things get tricky when the bribe-taker is employed by the government and the bribe-payer is also a taxpayer. But still, if you want the ticket to be waived or the construction plan approved, you're happy to pay the bribe.
For example in communist countries healthcare was terrible, but if you could pay a bribe, then your loved one would get better treatment -- for example their beds would be cleaned more regularly. The doctor would pay more attention to them, etc. So the family of the loved ones would be the ones to approach the doctors with incentives, hoping this would be enough to get better treatment.
That's one extreme example. Here in capitalist Miami, we went to the beach and a local hotel had beach chairs and umbrellas that could be rented by the day. It was free for guests of the hotel, but $60 for someone not in the hotel. But we were told that if we paid the guy in cash, for merely $40 we could get the chair and umbrella for the day. Just a small little side-payment to help grease the wheels. We wanted the chair, and could save $20. It was the Hotel that lost out on $60. But long term, what happens is that the Hotel sees there is a long line of people wanting to hand out beach chairs, and the salaries for those adjust down, and perhaps some money needs to change hands with whoever appoints the umbrella dispenser. Then later on, some money might change hands to get to be person who appoints the person that dispenses the umbrellas. So over time, those economic rents dissipate as people realize "hey, I am a gatekeeper to something valuable, I can take a cut for myself." That process continues until there is no surplus value left that anyone is in charge of dispensing. That means small side-payments are made everywhere, from dealing with the police to getting a decent room in a hotel, to a table in a restaurant and eventually to even getting some meat from the butcher.
In such a society, it's basically impossible to be honest, even if you wanted to, because the endemic bribery is a stable equilibrium.
People have no idea how lucky they are to live in a society that values law and order, and how impossible it is to reform the corrupt society once corruption sets in and becomes expected as opposed to newsworthy.
These casuals dismissals and mocking of people who have an innate desire to follow rules and act with integrity is really foolish once you consider people die trying to enter law-abiding societies, as it's really hard for most people to have opportunities in life when everything is dominanted by side-payments or political dealmaking rather than who can provide the best service for the lowest price.
Since nothing is signed, there is no way to actually prove it is bribery.
They impudently promote tobacco smoking to the youth, how much they receive from tobacco companies, anyone knows?
That seems pretty stiff. goes to show how while collar crimes are not punished more leniently and how being rich does not shield one from justice, hardly.
No, it goes to show that the only white collar crimes that are stiffly punished are those against other rich people.
Shawdow changing what users post is wrong.
