Are US Companies Violating US Law In China?

Of course they are, if you ask it like that.

The Foreign Confidential Blog asked that question in its title to a recent post on the corruption scandals engulfing Shanghai.

I e-mailed the blogger behind Foreign Confidential to see if he was aware of anything specific regarding US companies and he told me he is not. The post asks if “US bankers and investors and executives of US public companies look the other way and fail to report their suspicions, or evidence of wrongdoing, in violation of US federal law — specifically, the Foreign Corrupt Practices Act and Sarbanes-Oxley?”  It then goes on to ask if the “current, widening and intensifying crackdown on high-level official corruption in China [might] implicate foreign investors–particularly in the real estate sector?” Are US companies doing business in China systemically violating US law?

There must be US companies involved with the Shanghai scandals, but I doubt we will ever hear of any. I say “of course” because our China lawyers sometimes deal with American companies that brag about paying off government officials to gain influence. I still doubt that any US companies will get caught up in this corruption scandal because I do not see this “purge” as having much to do with corruption; I see it as having everything to do with politics, China-style. The Washington Post sees it all as just a turf war over patronage and influence and I agree. Beijing is simply flexing its muscles and showing the “Shanghai people” who is really is in charge.

If Beijing were truly interested in rooting out corruption, it would be focusing first on Shanghai (where things actually operate quite nicely) rather than on some region where corruption is causing poverty, environmental catastrophe, and political uprisings.

What are you seeing out there?

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