I rented several documentaries from the library over the weekend. One of which was a PBS Frontline episode on the BAE systems corruption scandal. The documentary detailed how lucrative contracts between the government of Saudi Arabia and Great Britain arranged for the barter of oil for fighter aircraft. The Saudi’s preferred to purchase from the United States, however export regulations and the Foreign Corrupt Practices Act prevented the business going to an American company. The British were willing to make special arrangements with the Saudi royal family and arrange for sovereign slush funds to be set up for members of the Saudi Royal family that were brokering the deal. These funds were held in Swiss bank accounts and after several years the arrangements became known to the public. Investigations then spread to other dealings with not only British companies but American as well. Committees were established, investigative bodies were put into action and regulators looked into the dealings between the various trading partners. Former FBI Dir. Louis Freeh then acting as a private attorney representing Saudi interests in the United States was involved in defending the contract arrangements.
Very insightful commentator once said that when buying and selling is legislated, the first thing to be bought and sold is legislate towards. It is the revolving door of government and business in the arms industry that forms the military-industrial complex. Of course, those with the greatest knowledge of the laws and regulations will be sought by companies seeking to do business despite the constraints of these regulations. The cost of regulators, commissions and inquiry panels only adds to the expenses of the arms industry. Government involvement does not add value or quality to the arms produced, but only added costs. The question should not be whether companies offered incentives to certain decision-makers in order to earn their business, the question should be why is government meddling in the affairs of those involved in free and voluntary trade.
Further, why should the Swiss have to compromise their customer service practices, namely bank secrecy and privacy traditions, in order to satisfy these unnecessary inquiries? One of the principal tenants of social cooperation is to not make one person’s problem everyone’s problem. This is why doctors take an oath to first do no harm. Facilitating trade is a virtue and a means of increasing societal well-being. Swiss banks have developed a reputation of excellence because of their skill at facilitation. Diminishing customer satisfaction on account of a third party’s malfeasance creates conditions opposite of this effect. This is why the first American coinage was stamped with the words “mind your business”.