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NEGOTIATING WITH EXTORTIONIST GOVERNMENT

FUNCTIONARIES

By

Bruce Horowitz


In 1850, during his career in the law, Abraham Lincoln advised a younger colleague:

Resolve to be honest at all events: and if in your own
judgment you cannot be an honest lawyer, resolve to be
honest without being a lawyer. Choose some other
occupation, rather than one in the choosing of which you
do, in advance, consent to be a knave.
1


Seven score and a dozen years later, at a Harvard Business School symposium on how
to handle extortion demands made by foreign public functionaries, the only
alternatives suggested were to:

1. Walk away and lose the deal
2. Find a local partner to solve the situation
3. Be pragmatic in the present situation, but work to improve government
ethics in the future
2


If only these three alternatives are available when a public functionary demands a
bribe, then no one but Lincolns knave would attempt to secure government
contracts, services, permits, or timely payment for services rendered. If there are no
other alternatives, then Lincolns best alternative to a negotiated agreement (BATNA)
would be either to stop all work that requires government approval, or to choose
some other occupation in which one can act honestly.

While leading Negotiation theorists and practitioners have repeatedly declared, and

1
Carta de Abraham Lincoln, [1 de julio de 1850(?)]. ANGLE, P.E., and MIERS, E.S., eds.
THE LIVING LINCOLN. Barnes & Noble (New York, 1955, ed. 1992), p. 143.
2
In Silverthorne, Sean, Editor. Wrap-up: Careers, Corruption, and Intellectual Capital. HBS
WORKING KNOWLEDGE. 25 Feb 2002, published 6 Sept 2005.
www.library.hbs.edu/bakerbooks/faculty/lwells.html
Ira Belkin, former China Legal Exchange Officer for the U.S. Department of Justice, took a hard
stand, saying there is never any justification for breaking the law. He said that even if bribes are a standard
way of doing business, you don't want to be the one person caught and prosecuted.
.
But David Kang, professor of political science at Dartmouth, took a softer stance. While not
advocating bribery, he suggested that the best way around the question is to find a joint venture partner in
the country who can solve the situation.
.
A third view came from an audience member, who encouraged a "pragmatic" approach. If you
quit doing business with corrupt countries, the only victims are the people who live in that country and rely
on foreign commerce. Instead, he said, the best way is bring about reform slowly and from within, by
working with country officials over time.

sometimes demonstrated, that you can negotiate with anyone, including kidnappers,
terrorists, rampaging rebel leaders, Hitler, Satan, and three-year-old children, there
has been little or nothing written on negotiating a government functionary who
demands a bribe.
3
Negotiating with government functionaries who have just
demanded a bribe has its own combination of ground rules.

Some of the reasons for this lack of reference material include the recentness of open
and honest discussion about public corruption, the extremely negative religious,
medical, apocalyptic and scatological images and metaphors attached to public
corruption and the resulting fear and, yes, loathing about direct dealings with
corrupt government functionaries. Furthermore, the common wisdom is that, in
many societies, corrupt public functionaries are omnipresent, omnipotent, omniscient,
and perhaps to coin a word omnefarious (i.e., just plain all-around bad); that if you
want to play you have to pay, and that if you are a player, then you obviously have
paid the bribe and are one of them.

Moreover, questions immediately arise about the applicability of fundamental
Negotiation concepts and principles in relation to government functionary extortion
situations, such as

Principled negotiation: How do you have a negotiation based on principles
with an unprincipled government official?
Whats to negotiate? How can you negotiate a bribe which, by its very nature,
is unlawful and unethical? How can you negotiate what is rightfully yours in
the first place. The theatre seat dispute.
Anchoring and Bracketing: How can you negotiate a bribe bracketed between
monetary values of 1 and 1+x, when you cannot offer more than 0?
Win-win I? How (practically) can you increase the size of the pie for a
corrupt person? How (morally) can you even consider benefiting a corrupt
person?
Win-win II: When the extortionist is willing and very able to increase the size
of the governments pie for you.
Leveraging: When the other party has absolute and arbitrary control over
what you want, and usually has other buyers waiting in line behind you,
where is your leverage?
Preparation I: Extortion demands are not announced in advance, so how can
you prepare for them?
Preparation II: Dealing with your own personal needs and desires.
Preparation III: Dealing with pressure from your support team (family
friends, colleagues and supervisors)
Preparation IV: Winning over hearts and minds at government bureaucracies

3
See, Bridge Ogres and Little Fishes, article presented by Bruce Horowitz at the
International Section of the American Bar Association (ABA) Program, Running the Ethical Gauntlet:
U.S. Lawyers Overseas, November 2005, New York City (article available upon request from the
author). Also, GANAR-GANAR CON EL OGRO DEL PUENTE: La aplicabilidad, para los
abogados, de la teora y tcnica de las negociaciones en situaciones de extorsin pblica (trans.,
WIN-WIN with the Bridge Ogre: The Applicability, for lawyers, of Negotiation Theory and
Technique in Public Extortion Situations), 2005 Bruce Horowitz, Diplomate Thesis, Catholic
University, Quito, Ecuador. (Copy in Spanish available upon request from the author)

Preparation V: Attitude and reputation.
Timing: Extortion is a rapid-fire negotiation. How can you slow it down?
Fundamental legal/moral duty: Is it not your obligation to immediately stop a
negotiating session and denounce a bribe demand to the criminal and
administrative authorities?
BATNA and Risk Aversion Theory. How to avoid getting lost when the
immediate monetary rewards can be great, while the probability of legal
sanctions is normally below 5%.
Ethical limits: Is there any information from the extortionist that you may not
pass back to your client?
Understanding the culture of the other party in a public extortion situation.

These are the issues that will be analyzed over the next parts of this study.


PART 2: LEGAL, LOGICAL MORAL AND EMOTIONAL
BARRIERS


In the previous section I proposed that negotiation theory and techniques provide a
worthwhile alternative to (1) walking away from, (2) paying a bribe to, or (3) getting
someone else to pay the bribe to an extortionist government functionary. This second
installment in the series will deal with certain real or apparent legal, logical,
emotional and moral barriers that have stopped people from entering into negotiations
with someone who has just demanded a bribe.

Do you have a legal or moral duty to denounce a bribe demand? Law
enforcement officers and other government workers may have such a duty. Lawyers
in the USA have such an obligation with regard to illegal acts committed by other
lawyers. However, in most countries, a private citizen has no legal obligation to
immediately stop a negotiating session and denounce a bribe demand to the criminal
or administrative authorities.

They are all around us Even if you have no legal obligation to denounce a bribe
demand, the next question is whether you have a moral duty, or ethical obligation to
denounce it. This is a personal question for each of us. My own response is that, as
long as you do not submit to the bribe demand, then one has such a moral duty if the
denunciation would do some immediate good, and as long as it would not threaten the
life or physical integrity of oneself, or of ones family, friends, employees or
associates. In my workshops, I sometimes throw on the screen an image from the
1950s movie, Invasion of the Body Snatchers, where the entire snatched population
of a small town is chasing after the remaining two unsnatched human beings.
Sometimes, it can actually feel that useless and that threatening to make a formal
denunciation in public extortion situations. It is better if a negotiated agreement can
be worked out that does not result in any corrupt act being committed by either party.

While we might imagine that extortion by government functionaries occurs only in
second and third world countries, in reality it occurs in all countries in situations
where the extortionist government functionary (EGF for short) feels sufficiently
protected from prosecution and punishment. An EGFs sense of sufficient
protection may be totally mistaken. On the other hand, it may be due to (1) laws,
regulations and government practices that intentionally complicate the enforcement of
laws against extortionate acts or, (2) as is normally the case, when power elites and
hierarchies that transcend government bureaucracies have sufficient control of law
enforcement and the judiciary to successfully hinder capture and/or punishment of
EGFs.
4


The Old Walk-Away Technique In 2006, during lunch at the end of a training
course in which I was one of the trainees, I asked my co-students what they do when
an EGF demands a bribe. The first person to react was a lawyer, who responded to
my question with dignified anger, saying that whenever a government official asks
her for a bribe, she will immediately get up, berate the corrupt official, and walk out.
Others at the lunch table nodded and murmured in agreement with her response.
5

This type of walk away response is generally considered to be an appropriate
ethical response to a bribery demand. Interestingly enough, this particular luncheon
conversation took place at the end of an excellent refresher course on How to Use
Principled Negotiation Without Giving In.

It is probably a good thing that we have this visceral reaction to any invitation to
participate in acts of corruption. However, this initial walk away reaction can stop
us from getting what is rightfully our or our clients and from deterring a corrupt act
in each individual confrontation/negotiating with EGFs or other people who are
attempting to engage us in acts of corruption.
6


How can I even remain in the presence of a corrupt government functionary?
The point here, however, is that what we consider to be corrupt, we also normally
consider to be filthy, diabolical, unhealthy and contagious on contact. As in: a
rotten apple spoils the barrel; or when you lie down with dogs you wake up with
fleas. And so on. When you think about it, most references to public corruption
use medical, religious, military, sanitary, and even scatological images. And almost
all of the proposed responses to public corruption refer to crusades against, battles
with, campaigns against, resistance to, cleaning out of, inoculation against,
eradication of, sweeping away, the fight against and the extermination, and
destruction of corruption. Given those images, it is not likely that you would want to

4
A very recent example of this kind of power-elite protection may be the BAE case. See,
BBC News. Tuesday, 26 June 2007, 08:44 GMT 09:44 UK
http://news.bbc.co.uk/1/hi/business/6182137.stm. The furore over the SFO's decision to
drop a corruption probe into a 6bn arms deal with Saudi Arabia is the latest twist in a 20-year
saga.
5
Given that our conversation occurred in a place where most people consider corruption to be
hierarchical and law enforcement to be lax or counter-productive in extortion/bribery situations, no one
at the Negotiation lunch table raised the possibility of complaining to an XGFs supervisor or to the
police.

6
For those who study public sector corruption, the legal term corruption, itself, becomes
difficult to pin down, and it may includes some activities (like bank fraud, and providing opinions on
the outcome of an administrative case, before the case is decided), which many of us would consider to
be bad, but do not consider to be public corruption. On the other hand, the legal definition of
corruption may exclude such crimes of moral turpitude, such as the slave trade and the use minor
children in pornography.
hang out with, or come close enough to negotiate with a corrupt government
functionary; unless, of course you have crossed over to the dark side, yourself.

Although we will discuss the statistics in a later article, suffice it to say that there are
now trustworthy statistics that show a small but significant percent of private citizens,
in supposedly corrupt cultures, are able to resist EGF demands, and still gain the
public good or service to which they are entitled.

These images of corruption ignore that high-spirited rubric found throughout
Negotiation literature that you can negotiate with anybody.

The vomit factor You have probably heard yourself or someone else say with a
particular look on their face, That person turns my stomach. This is often the
response of a sincere and ethical person to someone else who has just asked them for
a bribe. However, many are the masters of Negotiation theory and practice who tell
us to negotiate the issues, not the people.
7
Dont let the vomit factor get in the way of
your negotiation with extortionist government functionaries. Enough said about that.

How can you hold principled negotiations with people who have no principles?
Here we come to the definition of Principled Negotiation. There is a syllogism that
goes like this:

Major premise: Principled Negotiation can only occur if both negotiators have some
ethical principles.
Double Minor premise: extortionist government functionaries are corrupt, and
corrupt people have no ethical principles
Conclusion: You cannot have Principled Negotiations with any extortionist
government functionary.

The conclusion is invalid for at least three reasons. The first error is in the major
premise where Principled Negotiation is identified solely with ethical or moral
principle, rather than with ground rules upon which the negotiating parties can
reach agreement.
8
The next two errors are in the Minor Premise, based on the
assumptions that all extortionist government functionary are corrupt and that
corrupt people have no ethical principles (both of which assumptions are
questionable). Even totally corrupt people tend to think logically and react
emotionally in their own self-interest; and they are, therefore, interested in using and
keeping ground rules in a negotiation.
9
In other words, extortionist government

7
Separate the People from the Problem. Fisher, Ury and Patton, GETTING TO YES
(Second Edition), Penguin Books, 1991, p. 15.
8
This distinction may be confusing at times, as in, More often success is achieved by finding
a solution that is arguably consistent with each sides principles. (Fisher, Ury and Patton, p. 164)
versus the same authors at page 86, Objective criteria should apply, at least in theory, to both sides.
Objective criteria and ethical principles are not necessarily identical, and even two corrupt people can
and do successfully negotiate outcomes, upon objective criteria, but without moral sustenance.
9
Some extortionist government functionaries, mainly at the higher levels of government, may
be logical, but at the same time they may have an addiction to corruption, which appears to be very
similar to an addiction to gambling in terms of high risk acceptance and the sacredness and
untouchability or insubstantiality of the money won or corruptly taken. See the description of
gambling addiction at http://www.gam-anon.org/compgamb.htm
functionaries are still human beings with the same basic psychological needs as the
rest of us, and (heres the secret) those needs can be satisfied by things other than
bribes. What those other things are will be discussed in a later installment.

So, the first ground rule on negotiating with EGFs, whom almost everyone considers
to be corrupt, is to realize that a EGF is not the devil; a EGF does not spread disease
to nor rub up against you and leave a deposit of filth. An EGF is actually a cross
between a salesperson with a hard or soft sell and a premeditated hostage-taker of a
public good or service or contract to which you or your client are entitled, and for
which you usually have a great need. When you negotiate with a kidnapper the law
will generally not prosecute you for negotiating a large payment for the return of the
kidnap victim. When you negotiate with an EGF for what rightfully belongs to you or
your client, then the law, with just a few life-threatening exceptions, will prosecute
you for submitting to the extortion demand in order to get what is rightfully yours.

The theatre seat dispute How can you negotiate over something that is
rightfully yours in the first place
It is Friday night time to relax and go to the theatre to enjoy that musical which has
been sold out for months. You walk down the aisle and hand your $150 ticket to the
usher, who politely informs you that you may take your seat if you pay her just $20
for the privilege. Do you negotiate? Do you think about anchoring and bracketing
issues? Do you give her a fiver just to avoid the nuisance? No, probably not.
Probably not, because you bought the ticket, and you have all the right in the world to
sit in seat 5M, straight behind center stage. Now you know how it feels to a company
representative who has properly won a government contract, and who is watching the
lips of a government representative who is saying that your company can start to work
as soon as you hire a particular consulting firm to oversee the contract, and that you
must pay that firm 15% of the contract value. Now you know how it feels to be an
indigent parent who is being told by the orderly at the free public hospital that the
doctor can perform the urgent surgery on your child as soon as you come up with
$200, plus six Type O+ volunteer blood donors and seven rolls of gauze.

How can you negotiate over something that is rightfully yours in the first place? Of
course, this is a rhetorical question, rather than an inquiry into counter-anchoring
techniques. And the answer is that you have to if you want to get what is rightfully
yours in an obscure system where your need is deep, where the other party has a
monopoly on what you want and an arbitrary authority over deciding who gets it, and
there appears to be no one in the hierarchy or in law enforcement who will help you.
10


So, yes, sometimes you do have to negotiate for something that already belongs to
you.

How can you negotiate over something that is illegal? In his book, BARGAINING
FOR ADVANTAGE, G. Richard Shell, the Director of the Wharton Executive
Negotiation Workshop, says that The Minimum Standard [is] Obey the Law.


10
However unsavory the other side, unless you have a better BATNA, the question you face is
not whether to negotiate, but how. Fisher, Ury and Patton, GETTING TO YES (Second Edition),
Penguin Books, 1991, p.161.
Regardless of how you feel about ethics, everyone
has a duty to obey the laws that regulate the
negotiation process.
11


What Richard Shell is referring to here basically has to do with an issue that law
school professors call fraud in the inducement, which includes certain types or
degrees of lying and withholding information. This is an area we will discuss in
another installment dealing with whether you really need to mistrust extortionists
anymore than you do other negotiators. However, Prof. Shells statement does
highlight the issue of how you negotiate something, in this case a bribe, which is
illegal from the start. Here you do not have the kidnap negotiators rationale that you
may ethically submit to an illegal extortion demand in order to save a life; or the
international negotiators interest in dealing with a rogue head of state, in order to
protect sovereign interests and accept the lesser public evil.

I have never been a hostage negotiator, but I joined the International Association of
Hostage Negotiators, just to keep reminding myself that hostage negotiators have it
right when they say that you have to be very sincere and very clear in letting the
hostage-taker know up front what is negotiable and what is not. In the public
extortion situation, you also have to be very sincere and clear from the beginning that
the bribe itself will not be a part of the negotiation; or in economic terms, that the
bribe amount will be $zero.

In conclusion As in all negotiation settings, negotiating with an extortionist
government functionary requires preparation, a willingness to listen to the other,
and an understanding of the real needs of both parties. The apparent legal, logical,
and moral barriers to negotiating with EGFs can be overcome, as long as you
remember your BATNA of $zero in bribes. In the end, you still have to know when
to walk away.


PART 3: PREPARING YOURSELF


Deal with your own personal needs and desires before you deal with a
bribery situation.

The second installment of this series covered certain logical, emotional and moral
roadblocks that stop people from entering into negotiations with someone who has
just demanded a bribe from them. Lets assume that you have gotten over those
hurdles and are now willing to risk negotiating in a public extortion situation. It is
time for some attitude preparation.

Personal Attitude Preparation: You did not walk out in a huff and rattle of papers.
You are still sitting at the table where the bribe demand has just swooped in for a
smooth landing; and, as you listen, it sounds so like a regular commercial offer, with
some impressive advantages for your company, and for you, too. You remember the
training sessions about the importance of understanding other cultures. You remember

11
Shell, G. Richard, BARGAINING FOR ADVANTAGE, Penguin Books, 1999, p. 206.
the Negotiations trainer saying that if you dont understand how the other party could
even think of making a particular demand, then it may be a cultural difference or you
need to draw on your empathy reserves. The government functionary is pleasant, has
already set up a friendly rapport with you, and seems interested in you, your
company, and in sharing a profitable long-term relationship. You have heard all
about his family, and he knows where you live, and where your children go to high
school and college. And, now, he is creatively enlarging the win-win pie with
improved payment terms, counter-guarantees, interesting bookkeeping and payment
techniques, protection against detection and prosecution, and even against
importation, labor and tax problems. You know that the representatives for three of
your nastiest competitors are sitting in the waiting room, ready for their turns. You
know that your product or your plan will serve the public better than theirs. You
suspect that the government functionary is more interested in personal gain than in
public good, and you know that he has arbitrary power, monopoly control, and little
likelihood of getting caught or punished. Are you about to adjust your personal
attitudes on the spot and turn toward the wrong moral compass bearing?
12
Even long-
time negotiators who know the sanctions imposed by local anti-bribery legislations or
the FCPA
13
, and who claim to understand the likelihood of an upcoming bribe
demand, stumble at the last minute; at the last second.

Is the negotiation over a bribe-demand so different from other type of negotiation?
Actually, with small but significant variations, negotiating with a high-level
extortionist government functionary, contains most of the elements that you see in the
most representative books on the subject.
14
On the other hand, the bribe negotiation
can seem so much like a commercial negotiation, and the negotiator on the other side
can be so forthright, understanding, respectful and creative, that you forget that this is
also a type of hostage negotiation, where you must reject the hostage-takers main
demand at the same time that you are trying to create rapport. However, unlike in a
hostage or barricade situation, this hostage-taker is not threatening anyones life (not
yet, anyway). To the contrary, he is offering benefits and security to you and your
company, and merely wants to negotiate the terms and conditions. In other words,
here is a hostage-taker who is willing and able to satisfy your economic interests.
15


Honesty: The Semantic Problem honor and truth-telling among thieves Can
two corrupt negotiators use Negotiation principles to reach a win-win result? Yes.
Can two corrupt parties negotiate to reach a mutually-satisfying result based on
shared objective standards? Yes. Can two corrupt negotiators be completely
honest with each other? Yes, it happens all the time (e.g., in private commercial
negotiations between sales reps who offer kick-backs, and the corporate purchasing
agents who accept them; or in a public bribery situation where the government
functionary and the private sector negotiator create a long-term relationship that will
satisfy the private negotiators and the private companys interests in both the short

12
In Spanish, this would be called, losing your north.
13
U.S. Foreign Corrupt Practices Act, 15 U.S.C. 78dd-1, et seq. For further information for the lay-
person, see, http://www.usdoj.gov/criminal/fraud/docs/dojdocb.html
14
The table of contents of GETTING TO YES, Second Edition, highlights most of these elements and
considerations. Roger Fisher, William Ury and Bruce Patton, Penguin Books (1991)
15
In addition to using hostage as well as general negotiation principles, and putting your own needs in
order, you may find certain negotiation principles and techniques specific to suicide prevention to be useful in
government extortion situations. We will discuss these in a later installment.
and long run, and also satisfy the interests of the functionary and the corrupt hierarchy
that is standing behind and protecting the functionary). Many corrupt negotiations,
based on objective standards, deal with real economic and psychological interests
rather than with unhelpful positions, and result in bigger pies. Many of these
negotiations are honest (in the sense of the parties telling each other the truth about
their respective interests and needs), and create strong long-lasting personal
relationships. Alas, Principled Negotiation Theory also works when you cross over
to the dark side.
16
That is probably why Mr. Lincoln made the distinction between
being an honest lawyer and being a knave. Knaves can be honest with each other
in order to reach and carry out one or a series of illegal agreements that violate the
public trust. Within this narrow focus, the only apparent difference between an
honest negotiated agreement and a corrupt negotiated agreement is that the first is
sometimes kept secret from some of the stake-holders, while the second is always
kept secret.
17


Why personal preparation is so important prior to negotiating with extortionist
functionaries. When you expect a bribe demand, then you will need a BATNA (Best
Alternative To a Negotiated Agreement) at the point in the negotiation when you
recognize that you cannot knock the other partys ONLY important demand off the
negotiating table, or negotiate its value down to zero.

As so many books on Negotiation tell us, your own need is your opponents leverage.
In almost any commercial investment or bidding process, you are likely to spend
between tens of thousands and a million or more dollars in valid preparation costs
even before you sign a government contract. If you walk away from the bribe
demand at this point, you will probably not recuperate those sunk costs.
18
Extortionist
government functionaries know by heart or smell the apparent needs of private
enterprise and of private business negotiators. Especially at the middle and high
ranges of government, extortionist functionaries are actively looking to establish long-
term mutually-satisfying corrupt
19
business relationships with their private-sector
secret partners. Successful extortionist government functionaries are masters at
making the private negotiator comfortable with the idea of paying the bribe; in
tending to the negotiators personal and psychological needs and interests, in clearly

16
The only author I have found on the theme of dark side win-win negotiations is Carlos
Altschul, in his DINAMICA DE LA NEGOCIACION ESTRATEGICA, Ediciones Granica S.A.,
Buenos Aires (2
nd
edition, 2003, footnote p. 36. he is faithful to his principles: he knows the codes
among delinquents (above all in emerging countries, in those where the legal system is weak, operates
in a hardly predictable manner and extends the meaning of the word negotiation to illicit operations) . .
. . One must accept feeling contaminated.
17
An interesting example of this second type of negotiated relationship is found in the chapter
on corruption in Sumo wrestling in Steven Leavitt and Stephen Dubners popular book,
FREAKONOMICS, HarperCollins, New York (2005), chapter 1.
18
In order to provide a realistic BATNA in this situation, we are researching, with TRACE
INTERNATIONAL <http://www.traceinternational.org>, the feasibility of a type of public or private insurance
policy against government functionary extortion, as an extension to political risk insurance (PRI), but which would
insure the recovery of sunk costs if the insured party is unable to negotiate the bribe demand off the table. Political
Risk Insurance typically covers only losses from war and civil strife, currency transfer limitations, expropriations
and contract violations by governments. <http://www.miga.org>. In many situations, PRI would not cover losses
due to extortionist bribe demands.
19
It is important to remember that the mid and high-level extortionist government functionary is trying to
lower overall personal exposure to sanctions and lessen the amount of time invested by creating long-term loyal
corrupt business relationships that are tangential to the business-in-chief that, for them, is superficially occurring
between the private enterprise and the State.
explaining the overwhelming amount of leverage held by the functionary, and in
convincing the negotiator that it is best for all concerned, even for the people of the
country, to pay the bribe.

In later installments, we will discuss a number of techniques that you can use to
counter and overcome public extortion demands; but the first technique is to respond
immediately and unwaveringly to the other partys initial position of bribe = 1 + x,
with a clear and final counter-offer of bribe = 0. The success of this first technique
starts with your personal preparation.

Preparing Yourself for Negotiating with an Extortionist Public Functionary
In the spring of 2005, at a conference on the investigation that led to the conviction
and imprisonment of Vladimiro Montesinos
20
for corruption on a grand scale, one of
the Peruvian attorneys who had run the investigation said that the most important
thing she did to keep the right attitude during the long and at times dangerous
investigation was to carry a signed letter of resignation with her at all times.
21
Like
Abraham Lincoln before her, this attorney from another land, time and culture, had
decided at the beginning of the investigation that if in your own judgment you
cannot be an honest lawyer . . . choose some other occupation, rather than one in the
choosing of which you do, in advance, consent to be a knave.
22


Like that Peruvian attorney in the Montesinos case, negotiators should carry a real or
at least a mental letter of resignation whenever they face a public extortion situation.
Those government bottle-neck moments, when extortion demands tend to swoop in,
are not the time to consider the risks and benefits of bribing, or how to hide the bribe
on the books, or the terms and conditions of the pay-out. Like that Peruvian attorney,
you will need to reconsider your life and your REAL needs before you sign that letter.
Then, when the bribe demand lands on the table, just remember to pat that resignation
letter in your pocket, do a reality check and remember that you and your family will
not starve if you lose this particular contract, or all your contracts with this
government, or with any government, or, for that matter, with all the governments in
the world.

Your personal preparation may be similar to the suicide negotiators need to pump up
on the importance of life, before making introductions with the person out on the
ledge. If you are not convinced beforehand about the importance of life, then you
may get lost in a suicide negotiation. In the case of bribe demand,, you can get lost in
the niceness of the other party and the respect they show you, the circumstantial
reasonableness of their requirements and your apparent lack of bargaining leverage
in a situation in which the other party has arbitrary decision-making power, monopoly
control over what you want, the ability to make you wealthier, the apparent ability to
protect you, a long waiting list of competitors who are willing to take your place, no
apparent risk of sanction against the functionary, no personal investment on his side,

20
Head of the Peruvian Intelligence Service during the Presidency of Alberto Fujimori, who, in just a few
years, set up a massive hierarchy of corruption at the highest levels of the legislative, judicial and executive
branches as well as the military and the mass media. During those few years, he personally amassed a corrupt
fortune of at least US$ 80 million, which may be a record for someone who was not the titular head of a State.
21
Anti-corruption Conference sponsored by the S Se Puede organization in Quito, Ecuador, 2005.
22
Letter from Abraham Lincoln to a novice lawyer, "[1 July 1850(?)]". ANGLE, P.E., and MIERS, E.S.,
eds. THE LIVING LINCOLN. Barnes & Noble (New York, 1955, ed. 1992), p. 143
and the functionarys power to harm your company and perhaps you personally if you
do not agree to pay the bribe. If you are still sitting at the table a couple of minutes
after a bribe demand has been presented, then this kind of leverage is hard to resist,
unless you have prepared your own attitude in advance. The lack of personal attitude
preparation leads so many (who a moment before saw themselves as honest people) to
fall into the trap and crawl out the other side, defensively saying to themselves
when in Rome, or its going to help the people of this country in the end, or
nobody is really hurt by this, or that is just how business is done here, or lets
face it, life is crud, or I really dont understand what just happened, but since I am a
good person, maybe it really wasnt a bribe.


PART 4: MESMERIZING THE ENTIRE AUDIENCE

When the other party is an entire government office


Making the elephant reappear in the balcony after disappearing from the stage may be
the magicians most impressive trick. In another arena, a theatrical Svengali will start
off hypnotizing one subject, then move on to three volunteers, and finally (if the show
is being televised) end up by mesmerizing the entire studio audience. The biggest
feats often appear to be the hardest, but they may be relatively easy, and simply
require more mounting time and organization. Such is the case when dealing with
extortionist government offices. In the previous articles in this series of article, we
have dealt with the theoretical basis for using negotiation principles when dealing
with extortionist government functionaries, the barriers to entering into this kind of
negotiation, and the personal preparation needed prior to confronting government-side
extortion. Now, we move on to actual contact, not yet with the individual
extortionist, but rather with an entire extortionist village the government office.

The Government Office as a Cultural Unit
I do not know who first recognized the link between difficult negotiations and cultural
differences, but I turn to Herb Cohen who wrote that if the other party is strongly
defending a totally incomprehensible position, then you may be facing a cultural
barrier
23
rather than just laziness, craziness, craftiness, stupidity or evil. Remember
this as you wander from one bureaucratic counter to the next, and then the next, trying
to rescue a shipment out of the customs house, or secure a visa-extension stamp on
your passport. When the person behind the little window, surrounded by stacks of
documents identical to yours, seems to have allocated a higher priority to nail care or
the sports section than to your needs, please consider culture. To paraphrase the
authors of INFLUENCER
24
, the problem you are now facing was perfected by the
world in its present state. So, setting aside the possibility of laziness, let us assume
that these bureaucrats are not crazy, stupid or evil, and that slow-downs and denials of
things to which you have a right, right now, are this cultures least confrontational
tactic for getting you to pay a bribe; and that the individuals in this culture have been

23
Cohen, Herb. Negocie y Gane! . . . pero sin involucrarse tanto que pierda de vista su
objetivo original, p. 63. Botog, Grupo Editorial Norma (2004), trad. Beatriz Vejarano.

24
Kerry Patterson, Joseph Grenny, David Maxfield, Ron McMillan, Al Switzler.
INFLUENCER: The Power to Change Anything (2007-2008)
able to morally justify their inaction, dehumanize the public, minimize the effect of
their extortions, and/or displace onto others their own responsibility, all in order to
maintain their own sense of self-esteem.
25


As a member of this culture, you may be encouraged to force outsiders to pay bribes
before timely giving them what is rightfully theirs. For us, the key term in the last
sentence is not bribes, but outsiders. We imagine that extortionist government
functionaries are omnivorous, that they do not distinguish between potential
victims; but even the first year law students in our extortion deterrence workshops
immediately recognize that extortionist functionaries do not extort their mothers.
Then, we realize that, with few exceptions in this culture, extortionists do not demand
bribes from their sisters, their friends, their co-workers, their next-door neighbors,
their soccer teammates, certain classmates from grade school, their religion
instructors, AND friends and relatives of any these people who call at the request of
these people.
26


Joining without Joining
As you can see, this non-extortable group is rather large
27
. More importantly, it is
permeable and expandable.
28
Thus, your goal is to stop being an outsider, and to
enter into a trust relationship with this non-self-extorting socio-cultural group. This
goal may be anathema to the modernization movement that is trying to lessen
government corruption by eliminating personal contact between the government
functionaries and the private citizen.
29
They are right, of course if you eliminate
personal contact, you eliminate the bribery situation but, at the moment when you
are standing in front of a government functionary rather than a touch screen, you
need to create a relationship other than that of outsider.

The fastest way to do this is to hire an agent who is already a member. What did I
just say?! Yes, the red flags have just unfurled with a snap and the sirens have gone
off, as they should; but, just as there are always honest workers within an extortionist
culture, there are also honest intermediaries who have created non-bribery trust
relationships and who can help you get what is rightfully yours from the government
without submitting to extortion.
30
They may not be easy to locate, and each one

25
In reference to the work of Dr. Alfredo Bandura on strategies that people use to convince
themselves that they are good people despite the bad things that they do. INFLUENCER, p. 97.
26
Hunt, Jennifer. Trust and Bribery: The Role of the Quid Pro Quo and the link with Crime,
University of Montreal, Montreal, Qubec, Canada, (Draft, October 2003.
www.scholar.google.com using search elements,Jennifer Hunt and corruption). Hunt
describes these extended family and other friendship, compadre and other types of trust
relationships between bureaucracies and the private sector.
27
I cannot guarantee that this kind of non-extortion network exists in all societies, and it may be
less expansive in some countries or urban areas of some countries. A comparative study of the subject
could be worth a graduate students effort.
28
Of course, at the other end of the obligations scale, it is this expandability and permeability of
the bureaucratic relationship system in lesser-developed countries that create buffers to change, since
change impinges on the interests of minor players, and these trust relationships permit these minor
players to slow or stop such changes.
29
See, USAID, USAID Handbook for Fighting Corruption, found at the Anti-Corruption
Gateway for Europe and Eurasia, Anti-Corruption Strategies, www.nobribes.org
30
MORENO OCAMPO,
LUIS. EN DEFENSA PROPIA, Editorial Sudamericana, Buenos Aires, 1993, p. 174, In fact, it is not
might only have a non-bribing trust relationship with just one or a few government
offices, but look for them, hire them, and the ask for detailed receipts. Do the due
diligence on them. Never instruct them to do whatever it takes to get the job done.
Always let them know that in the end, they must walk away from any negotiation in
which the only negotiable agreement contains a bribe. Do everything you should do
to minimize the risk of a bribe payment as you continue to work with your
trustworthy agent.
31


Whether or not you hire an agent (trusted from both sided) to deal with specific
government offices, you and your firm or company must also do the following to
create and maintain the trust relationship with the government office:

4. Never offer a bribe
5. Never submit to extortion

If you follow the two rules, above, entire government offices will soon identify you
and your company as not worth the effort or the risk. More to the psychological
point, they will consider you not worth the embarrassment that even hardened
extortionists feel when they behold the presence of an active non-briber. Even more
interesting, they will trust you more than their own co-workers.

6. Make sure your paperwork is correct
7. File your documents on time


Extortionist functionaries look for flaws in order to gain leverage in the negotiation
over bribes. By doing things correctly and on time, you maintain your leverage in any
negotiation.

The next five suggestions come straight from the books on Humanistic Psychology
and Negotiation

8. Treat government functionaries respectfully, and if possible, cordially.

easy to measure the way that corruption . . . discourages honest functionaries who exist in any
organization. . . . His bare statement is supported by the personal experience of many people in the
fields of anti-corruption and of positive deviance, and even in the statistical results of Peruvian
household censuses (Hunt, Jennifer. Trust and Bribery: The Role of the Quid Pro Quo and the link with
Crime, University of Montreal, Montreal, Qubec, Canada, (Draft October 2003.
www.scholar.google.com using search elements, Jennifer Hunt and Corruption); Jennifer Hunt
and Sonia Laszlo. Bribery: Who Pays, Who Refuses, What are the Payoffs? McGill University,
Toronto. 31 January 2005)


31
There are several good manuals and guides on what to look for in a trustworthy intermediary
agent. One good place to start is at the TRACE International website,
www.traceinternational.org. TRACEs Executive Director, Alexandra Addison Wrage, recently
published BRIBERY AND EXTORTION: Undermining Business, Governments, and Security (Praeger
Security International, 2007), which will quickly bring you up to speed on the commercial and personal
issues surrounding government bribery. A good in-depth review of the compliance requirements
stemming from U.S., foreign and international anti.bribery laws, conventions and agreements, see
Stuart H. Demings THE FOREIGN CORRUPT PRACTICES ACT AND THE NEW
INTERNATATIONAL NORMS, American Bar Association (2005)
9. Friendly relationships with government functionaries are not unethical, as long
as you respect their positions. Human friendship is not a bribe.
10. Be absolutely clear, but not abusive, when rejecting an extortion demand.
32

11. Give the government functionary extortionist the information necessary to
understand what makes you or your company different from the normal line of
bribe-paying companies.
12. Be honest with them just as you would be honest with any other party to a
negotiation
33


Lunch is an Option

Taking someone to lunch when you are about to say No to them can be a good
negotiation tool.
34
When you will effectively be saying No to an entire office that is
accustomed to receiving bribes, then lunch, either real or symbolically, is
something to consider, seriously.

Here we are stepping into the tricky and riskier landscape of gifts and hospitality and
how to distinguish between corrupt bribes, morally acceptable bribes, and non-
bribes. The obvious gift and hospitality bribes, are, well, obvious. Other gifts and
hospitality that are not obvious bribes, may also be bribes, depending on host-country
laws or home-country law enforcement interpretations.
35
Over the last two years we
have been polling law students, police officers, anti-corruption workers, lawyers and
accountants on where they would place a series of acts, all the way from offers of
treats to toddlers, to apples for teachers, to lunches for government functionaries, to
money for guards to free an innocent person before execution. The results are
interesting because of their lack of uniformity, and because they show that a corrupt
bribe depends on many factors, including, among other things, the intentions of each
of the parties, the relative positions and comparative powers of both parties, the
extrinsic and intrinsic values and appropriateness of the gift or hospitality, the secrecy
involved, the timing of the offer and of the giving, and the ends to be accomplished.
In any case, our conclusion is that people disagree in almost every example,
especially when they believe that the intentions of both the giver and receiver are
pure. Furthermore, almost everyone seems to accept morally acceptable bribes as a
useful category, but they differ on which transactions are corrupt bribes and which are
morally acceptable ones.

Therefore, to help guide you through this gilded but dangerous landscape, in addition
to considering the intangible intentions and valuations of the parties, make sure that:

32
As William Ury writes in THE POWER OF A POSITIVE NO (Latin American Edition,
Editorial Norma S.A., 2007), a positive No works because it implies standing on your own two feet
without stepping on the other person. The key to a positive No is respect. (As retranslated into
English from the Spanish translation.)
33
Feigning the ignorance as to the meaning of an obvious bribe-demand gesture or phrase by a
customs or immigration office, may work when you will never see that functionary again, but up-front
honesty and clarity are of greater importance when you may need to work with the same functionary or
that persons office mate in the future, because it establishes you in a trust relationship.
34
Ury, EL PODER DE UN NO POSITIVO.
35
For examples, see Wrage, Chapter 3.
The monetary value of the gift, favor or hospitality is spread out evenly or at
least randomly, and that no particular functionaries receive special favors or
direct special favors to others
The program is public
The costs, purpose, recipient, and date are recorded and made public
The intended end result is to help the general public as well as the gift-giver.

WARNING: DO NOT NEGOTIATE OR GIVE GIFTS, FAVORS OR
HOSPITALITY TO OR THROUGH GOVERNMENT FUNCTIONARIES
UNLESS YOU HAVE CLEARED THEM WITH LEGAL COUNSEL
EXPERIENCED IN THE ANTI-BRIBERY COMPLIANCE LAWS OF YOUR
COUNTRY AND OF THE HOST COUNTRY


I do not know how things presently stand at the Mexican Immigration Office, but at
one point a few years ago, that office went off the Bribe Standard, after the national
anti-corruption chief worked together with the director of the Immigration Office and
with a number of foreign companies who had constant visa needs and problems in
Mexico. They negotiated a plan for those companies to pool their resources to update
the office equipment and to buy very valuable year-end raffle prizes and across-the-
board gifts for the employees, on the understanding that the employees would process
all visas promptly and without bribes. According to the national anti-corruption chief,
the immigration office employers agreed to the new arrangement, their productivity
and their morale improved tremendously, and under-the-table bribes were no longer
needed to speed the visa process for these companies and for the general public.

Poor office morale supports the Bribe Standard, and if you or you and your colleagues
from other companies can agree to work together on this larger scale with government
offices to improve the productivity and self-esteem of their workers, the results may
be faster and better services for all the users of the government office. Also, special
over-the-counter payments for urgent needs can be negotiated, to pay for the
additional expediting work. For example, the U.S. Government provides a fast-track
passport service for an additional fee. When you directly pay a government
functionary to expedite your request that is bribery. If you pay it into the
government coffer, the U.S. Government does not consider it a bribe. It is unclear
whether this type of added-cost expediting service slows down the rest of the passport
services for everyone else who has not paid the extra fee.

The Information Advantage
A less tricky option for expanding the pie for the extortionist government office is
giving an entire office the information that it needs, and that you can provide at little
or no cost to yourself. In government offices, honest, real and useful information can
be more valuable than the standard bribe, especially in combination with the value of
being a new trusted advisor and the new sense of self-esteem that you can give to
them.
36
Make real, honest and useful information your key to a non-bribe trust
relationship with the government office.
37


36
Hunt, p. 5.
37
. . . an agreement does not necessarily imply a monetary amount or a point, but rather a
spectrum of tolerable terms. In this search, there arise non-accounting factors, subjective benefits that

We must distinguish between licit and illicit information. Just as in the private sector,
access to important information is asynchronous (that is, not everyone receives the
same information in the same form, or at the same time). The disclosure of private
confidential information may be sanctionable. However, much private sector
information is not confidential, and all public information is may be shared without
sanction. The asymmetry for non-confidential information stems from the overload of
information and the ability of some people, like you, to timely put the appropriate
information in a form that can be understood by the people who need it. That is
where you can help the government office workers. This is the real and honest
information referred to by Jennifer Hunt, and it is the information that you provide to
an otherwise extortionate government office in exchange for a bribe demand of
$0.00.
38
The scope of this information is nearly boundless, and can range anywhere
from skin care to which local banks (not offshore accounts) provide the best services
at the lowest price, to office-wide trainings on the technical aspects of their jobs, to
trainings and personal advice on the dangers and drawbacks of maintaining an
extortionist work style in an increasingly anti-bribery world.

In most countries, some government offices are more extortionate than others, and
some office seem to be free of extortionate behavior. However, creating a trust
relationship with any office, whether it is completely transparent or totally corrupt, is
a good thing to do. As I wrote at the beginning, creating a trust relationship with an
entire government office, may seem like big magic, but it can be a simpler and less
time-consuming task than taking on the major players one-by-one. And, as in the case
of mesmerizing the entire audience, your chances improve if your reputation precedes
your entrance onto the stage. It requires a lot of patience, some internalized
knowledge of the socializing parts of Negotiation Theory; but, more than anything
else, it calls upon you to treat others as you would wish to be treated in their situation.















carry for each party a value according to their own appreciations. What we call a value is that which can
improve, satisfy or create potential for the interests of the other party. These yield types of utility, deeds,
gestures or things that hold value for their non-objective significance. Altshul, Carlos. Dinmica de la
Negociacin Estratgica. Ediciones Granica S.A., Buenos Aires, 1999, ed. ampliada 2003. p. 68.
38
In one sense, the extortion situation is similar to the hostage negotiation situation, when the
extortionist offers to liberate the hostage (in this case, the public service, good or contract to which you are
entitled in exchange for something which you must refuse to provide from the beginning of the
negotiation). That is why it is important to remember the words of Carlos Altschul, When you hold
information, you stop being a hostage. Altschul, p. 37.

About the Author:


Bruce Horowitz, bhorowitz@pazhorowitz.com is a founder and Managing Partner of the Quito,
Ecuador law firm of PAZ HOROWITZ, Abogados. He has been studying Negotiations and Public
Corruption issues since 1985, and has advised international corporate and individual clients on how to
comply with Foreign Corrupt Practices legislation since 1989. Bruce has a post-graduate degree in
Prevention of Public Corruption, and has taught at the law school and post-graduate university levels
and given presentations and workshops for lawyers, paralegals, law students, clients and others on how
to use Negotiation principles and techniques when facing extortionist government functionaries. PAZ
HOROWITZ, Abogados is the Trace International representative in Ecuador
www.traceinternational.org. Bruce was born and raised in Galion, Ohio, USA. He graduated from
Brandeis University (BA 1970) and New York University Law School (JD 1976). Admitted in Alaska
1976 (ret. 1990), and Ohio 1985, not admitted in Ecuador. He is a former Co-chairperson and present
Senior Advisor to the ABA International Section's Committee on U.S. Lawyers Working Abroad,
Vice-chair of the Latin America and Caribbean Committee, and is an active member of the ABA
International Section anti-corruption committee. You can reach Bruce at PAZ HOROWITZ Abogados,
Whymper 1105 y Almagro, Quito, Ecuador. Tel. 593-2-222-2057, Fax 593-2-250-1902. Email:
bhorowitz@pazhorowitz.com Web: www.pazhorowitz.com

Copyright Bruce Horowitz, December 28, 2007

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