As IBM celebrates its 100th anniversary this year, it can point to some outstanding technological achievements and commercial accomplishments that have benefited, quite literally, billions of people. So it's a shame that the celebrations have been tarnished by, of all things, a bribery scandal.
As The Wall Street Journal reported earlier this month, IBM paid $10 million to settle a lawsuit brought by the U.S. Securities and Exchange Commission, which alleged that IBM's subsidiaries in China and South Korea had engaged in bribing government officials in those countries. According to the WSJ report, IBM didn't admit or deny the charges, but did say that it has taken "appropriate remedial action" to address the issues raised in the suit.
Here's a summary of the allegations:
I know, IBM didn't admit to the charges, and you're innocent until proven guilty. But since IBM did feel compelled to pay a $10 million penalty, and did say that it had taken appropriate remedial action to address the issues raised in the suit, let's proceed with the understanding that there were indeed issues to be remedied.
This wasn't the misdoing of a handful of rogue employees. If you read the facts of the case as laid out in the SEC complaint, you'll see that this was an institutionalized business practice that spanned more than a decade. While it's unclear how many IBM employees in South Korea were involved, we know that the number in China topped 100. We also know that $10 million is a rounding error for a company the size of IBM, so the monetary price it paid for its egregious actions is negligible.
China executes government officials who accept bribes, typically by means of a bullet in the back of the head. Under any circumstances, that IBM could have allowed itself to engage in bribing government officials for the sake of winning computer contracts would be saddening. Under these circumstances, it's sickening. IBM's centenary celebrations will no doubt hark back to the company's retired corporate motto, "Think." Perhaps it's time for IBM to revive that admonition, and take its own sage advice.