Political Risk Latin America Blog @PolRiskLatam

Can Bribes paid by Private Firms Cause “Social Damage”?

Posted in News and Articles, Political Risk by politicalrisklatam on January 27, 2010

by A. Hernandez, for Space for Transparency, January 26, 2010.

Yes! It is possible that firm pays for the damages caused to a society at large when caught bribing governmental officials – even Presidents! This is the case now in Costa Rica where Alcatel-Lucent, the French-American communications company, agreed to pay US $10 million to the Costa Rican State as a compensation for the “social damage” provoked to the Costa Rican society after a scandal that involved US $2.5 million in bribes to ensure a cell-phones contract under President Miguel Angel Rodriguez term (1998-2002).

The concept of “social damage” implies that a financial retribution should be made by those found guilty of a corruption crime to repair the damage caused to a society. It is a quite innovative concept introduced in 1998 in Costa Rica – unique in Latin America – that has been used by the Office of the Public Ethics Prosecutor in their investigations against two former Costa Rican Presidents and European firms, including Rodríguez and Alcatel-Lucent, involved in major corruption cases…(continue reading)

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