The article discusses some of the “facts of life” known to cartel practitioners, but rarely discussed in print. The Antitrust Division will give often huge discounts from corporate fines totaling millions of dollars in return for a corporate plea and “complete, continuing cooperation.” That cooperation comes largely in the form of the company’s executives, some of whom are required to plead guilty and serve prison time in the US. Some highlights from the article:
- But Mr. X’s guilty plea and his time in a U.S. prison came with a special offer from the company for which he fixed prices. The story goes like this: ‘I understand you can always say no, but if you accept the request to go to jail, we’ll support you 100 percent,'” he said. “If I fight and lose, I lose everything. But if I don’t fight the company, the company … will support me for the rest of my life.”
- Today, Mr. X has done his time and is back at work with his company. But Mr. X’s rehabilitation is hardly rare. As one after another Japanese auto supplier gets snagged, it is the unwritten rule, say insiders and lawyers, that middle managers sometimes take the fall for superiors and get rewarded for not airing the company’s dirty laundry in public court.
- A review of the cases by Automotive News finds some of the execs are still in Japan, gainfully employed by the suppliers for which they are charged with rigging bids. Indicted individuals from other suppliers, …. apparently left the companies but have not yet answered the DOJ’s charges. Still others such as Mr. X did their time, insiders and lawyers say, then returned to work as tacit compensation for taking the blame.
To be clear, no one is saying that Mr. X was innocent and was a fall guy. He admits his culpability. When meeting to fix prices on auto parts, Mr. X, a Japanese supplier executive, and his fellow conspirators chose out-of-the-way spots, such as a Big Boy restaurant in a neighboring state:
- “It had to be a restaurant where other carmaker people never come,” said Mr. X, who asked not to be named. “Because if they found out I was meeting with the other sales guy, they would know what we are doing.”
When I was with the Antitrust Division and prosecuted international cartel cases, I never had any doubt that those who agreed to plead guilty were in fact guilty. I did, however, sometimes have doubts whether we had been able to go up the corporate ladder to the most culpable individuals.
This outstanding article gives a rare inside look at one individual’s decision to plead guilty and the incentives involved in making such a life changing decision. I want to thank Maurice Stucke of the Konkurrenzgroup for bringing the article to my attention.
Mr. Greimel can be reached at email@example.com and twitter: @hansgreimel.