When in China, Do as the Chinese Do: JPM Bribery Charges

Whether bribery is correct or ethical is a realm I really do not intend to enter with this short post. However, I do want to share a rather simple and yet complex thought that has enraptured me.

JP Morgan has made headlines in the media world recently due to allegations that it has unfairly used its hiring policy as a form of bribery in China. The charges state that the company has hired children of high-ranked government officials and corporate leaders in return for profitable deals and contracts.

If convicted by the SEC, JP Morgan will be faced with yet another smudge on their name after the "London Whale" debauchery. However, what if bribery was rather a more commonly accepted form of payment and viewed in a different light?

The degree of how much bribery can be accepted definitely varies amongst countries. In many schools in Asia, teachers receive general payments by parents before the start of the school year so that the instructors can better "take care of" the students. This widely twisted practice is considered dirty, but commonly acknowledged by the general public.

What if JP Morgan was doing exactly the same thing? It has indeed created unfairness in a competitive system of trying to outrun and outsmart other major banks in the lucrative Chinese market by practicing a hiring policy that even may be viewed as commonplace in China or other countries. It may just have not been smart enough to not get caught compared to other banks.

On a more personal level, I feel like we can find the exact same unfairness in networking/connections. We emphasize the importance of networking and creating connections in the corporate world whether it may be during recruiting or during the actual professional life. We hope that one day, one of these connections can be leveraged to generate a return that other competitors cannot achieve. For example, in a pool of ten applicants for a single spot at a major BB, if a connection ends up pulling you in for the position when someone else may be more talented, unfairness in the system has been already created. In return for the favor provided by the connection, you are now in debt to that person, and this reciprocal relationship will continue as long as one party does not fail the other.

I completely understand that my argument has flaws and points that must be recognized, but I just thought that considering there is no universal system of bribery standards, to what extent will JPM face public shame due to its actions that may very well be practiced by other firms right at this present moment?

Comments (26)

Aug 18, 2013

I agree.

It shouldn't be how things are but that's the way the world works. People are always going to be doing favors for each other.

Before the SEC gets their panties in a bunch, they should consider that the largest legal bribery system in the world is run by the U.S government in the form of Super PAC's.

Aug 18, 2013

I'll guarantee you that JPM isn't the only bank that's doing this. And if others don't follow, they are at a disadvantage.

While unfair, some of these offcial's kids are actually quite smart. JPM would not be stupid to hire someone that is not profitable. These kids will have better connections than regular college kids and can lead to more deals getting done.

Also, in the school system, offcial's kids gets preference to get into the "Ivy Leagues" of China. These schools would save spots or guarantee enrollment spots for these kids, so if you are born rich or powerful, it will do a lot of good in your life. But for the kids that just party and don't add any value, they will be flushed out eventually.

I think networking or having connections is totally fair. Truth is, many of the jobs out there can be done by you or me. It is easier for employers to select a person that they are familiar with since anybody can do the job. It's like saying, hey there are 1000 candidates that can do the same job, let's pick the ones we know.

Aug 18, 2013

As you mentioned, bribery is just a high stakes version of networking.

Aug 29, 2013
Mach 10:

As you mentioned, bribery is just a high stakes version of networking.

According to records reviewed by The Times, the Zhang family owned a $1 million home in Walnut in Southern California, even though Chinese government officials rarely earn more than $15,000 a year.

-
http://dealbook.nytimes.com/2013/08/20/many-wall-s...

In China, I believe bribery is considered a form of higher purpose networking. It is not for the layman.

Aug 18, 2013

Hence why I don't network.

Rather than justifying bribery by saying its like networking, we should choose to avoid a system of networking because it's a form of bribery.

Aug 18, 2013

1. like machineman mentioned, Super PACs are far worse. the only reason they escape constant scrutiny is because they line the pockets of the very lawmakers that might otherwise outlaw them.
2. there's some evidence one girl jpm hired was smart enough to be hired by the bank anyway. and if she wasn't that bright, how'd she get into stanford?
3. it's no secret china is riddled with corruption. if you want to succeed in business there, you can't be as naive as the suddenly uber righteous US gov't. open your eyes, uncle sam. if you can't take the heat...

Aug 18, 2013

MDs in NYC pull for children of influential business leaders all the time...although the deals may not be worked out beforehand, they definitely do it with hopes of establishing good enough rapport with the kid's dad for possible deals down the line, which IMO isn't all that different.

Array

Aug 18, 2013
IlliniProgrammer:

Hence why I don't network.

LOL studying at an institution with a built in, high profile network sort of makes that a viable option if you're not going off the reservation, yes?

Aug 18, 2013

I'm not sure the SEC can really prove this beyond a few painfully obvious cases. How can Washington talk about the corrosive effect of money on politics at this point while they're drowning in special interest money? I'm not going to condone JPM's actions at all....building our businesses on the strength of our products is definitely the better way to go. Indeed, the US gov'ts very policy of importing massive amounts of Chinese students with preferance to other nations sets the very tone of "one hand washes the other", so how can they expect business to have a clear indicator of what constitutes a bribe vs a necessary cultural exchange? Not answering an ethical question such as this while adhering to wrote law puts the US gov't in a pretty bad position to try to dictate terms from a moral high ground.....least of all to its own citizens, to whom it is ultimately beholden.

The simpler truth is that as soon as your leave the confines of the US and some parts of the EU, global commerce is almost a total free for all where people do whatever they can get away with. That's the reality of things, and it's not likely to change. There currently is no higher authority to appeal to, so in matters of survival, foreign affairs can be very dirty...and you can't afford to lose. I do agree it's important to hold ourselves as Americans to a higher ethical standard, and that JPM's program of pay to play (I hire your kid or give you an equity stake in return for cooperation) is falling short of that. I'd also extend this to a HUGE amount of business we do, and our own gov's unstated but very real support of our industry via the military and intelligence advantage we enjoy. It's kind of hard to preach open and fair competition when me make deals by virtue of parking a nuclear sub off the coast of a country we're "negotiating with". One must do as they say to be taken at face value.

Given the staggering level of hypocrisy emanating from Washington with this type of thing (see: interest groups), and the far more staggering level of other businesses doing exactly the same thing, I don't think they're really demonstrating much more than a witch hunt here. For many decades, this was the ONLY way to get anything done over there, and our gov't is complicit at every step in these developments. Keep on top of ethics as much as possible, but realize we're dealing with a dictatorial kleptocracy and by the very virtue of doing business with them in their current form they will be corrosive to our values as Americans. Unless there is some long term shift in overall American foreign policy coordinated with other agencies and the support of the federal gov't, or a major shift in China's workings......and there currently isn't.......the SEC would do better to focus on fixing things at home first.

To me, this is a classic case of casting attention to distant problems to distract from homegrown ones: namely, the SEC's inability to perform its stated function of keeping US securities markets running well. This administration has much, much bigger problems and would do well to focus their attention there (see: deficit+employment, deteriorating MENA position, cultural stagnation). And when I say "this administration", I think everyone here is smart enough to understand that overall SEC (or any agency) direction is set by political appointees who operate in accordance with the administration that appoints them.

Lead by example, not by decree.

    • 1
Aug 21, 2013
UFOinsider:

I'm not sure the SEC can really prove this beyond a few painfully obvious cases. How can Washington talk about the corrosive effect of money on politics at this point while they're drowning in special interest money? I'm not going to condone JPM's actions at all....building our businesses on the strength of our products is definitely the better way to go. Indeed, the US gov'ts very policy of importing massive amounts of Chinese students with preferance to other nations sets the very tone of "one hand washes the other", so how can they expect business to have a clear indicator of what constitutes a bribe vs a necessary cultural exchange? Not answering an ethical question such as this while adhering to wrote law puts the US gov't in a pretty bad position to try to dictate terms from a moral high ground.....least of all to its own citizens, to whom it is ultimately beholden.

The simpler truth is that as soon as your leave the confines of the US and some parts of the EU, global commerce is almost a total free for all where people do whatever they can get away with. That's the reality of things, and it's not likely to change. There currently is no higher authority to appeal to, so in matters of survival, foreign affairs can be very dirty...and you can't afford to lose. I do agree it's important to hold ourselves as Americans to a higher ethical standard, and that JPM's program of pay to play (I hire your kid or give you an equity stake in return for cooperation) is falling short of that. I'd also extend this to a HUGE amount of business we do, and our own gov's unstated but very real support of our industry via the military and intelligence advantage we enjoy. It's kind of hard to preach open and fair competition when me make deals by virtue of parking a nuclear sub off the coast of a country we're "negotiating with". One must do as they say to be taken at face value.

Given the staggering level of hypocrisy emanating from Washington with this type of thing (see: interest groups), and the far more staggering level of other businesses doing exactly the same thing, I don't think they're really demonstrating much more than a witch hunt here. For many decades, this was the ONLY way to get anything done over there, and our gov't is complicit at every step in these developments. Keep on top of ethics as much as possible, but realize we're dealing with a dictatorial kleptocracy and by the very virtue of doing business with them in their current form they will be corrosive to our values as Americans. Unless there is some long term shift in overall American foreign policy coordinated with other agencies and the support of the federal gov't, or a major shift in China's workings......and there currently isn't.......the SEC would do better to focus on fixing things at home first.

To me, this is a classic case of casting attention to distant problems to distract from homegrown ones: namely, the SEC's inability to perform its stated function of keeping US securities markets running well. This administration has much, much bigger problems and would do well to focus their attention there (see: deficit+employment, deteriorating MENA position, cultural stagnation). And when I say "this administration", I think everyone here is smart enough to understand that overall SEC (or any agency) direction is set by political appointees who operate in accordance with the administration that appoints them.

Lead by example, not by decree.

I would agree. Being a native Shanghainese myself I understand very well that there're no way for foreign banks to compete with state monopolies if they don't hire powerful people's kids. However I do believe banking industry, just the same as any other industry, should hire people base on merit instead of who their parents are. That's the foundation of a meritocracy society. Sure there's corruption wherever there's human business interaction, but does that mean we're just not gonna care about what is right? What would you think if you were one of those people growing up in the bottom class of Chinese society, have no way of moving up, and then heard about some people saying that's just the way of life? The reason why these powerful people's kids can live a comfortable and prestigious life is because those "unqualified" people did all the dirty work in the first place.

Aug 21, 2013
ywu86:

I would agree. Being a native Shanghainese myself I understand very well that there're no way for foreign banks to compete with state monopolies if they don't hire powerful people's kids. However I do believe banking industry, just the same as any other industry, should hire people base on merit instead of who their parents are. That's the foundation of a meritocracy society. Sure there's corruption wherever there's human business interaction, but does that mean we're just not gonna care about what is right? What would you think if you were one of those people growing up in the bottom class of Chinese society, have no way of moving up, and then heard about some people saying that's just the way of life? The reason why these powerful people's kids can live a comfortable and prestigious life is because those "unqualified" people did all the dirty work in the first place.

Banks are in the business of making money (legally), and the actions they take reflect that. If hiring connected kids is the way to achieve this, they will take this course of action.

If you think hiring hungry kids, instead of connected kids, would allow a bank a great competitive advantage, you should start a bank and hire those kids, to arbitrage the opportunity. That few are doing this is telling enough.

I am not just speculating or speaking theoretically. Since we are a tech company here in Singapore, we are in the business of building viable products, not dealmaking. I saw an opportunity when I saw that most managers were hired thanks to connections and/or great brand (when someone drives a car worth half a million dollar when they are on a 2k/month salary, you wonder). These managers subsequently got nothing done. I hired competent hungry kids from third world countries and got a lot done. But I don't think this can work in a deal making context where trust is everything. There are dedicated positions in US companies present in South East Asia where your only job is to network with the local team, take them out, keep them happy, make them trust you, so that they will then execute the US instructions when they arrive.

Different world.

Aug 18, 2013
UFOinsider:
IlliniProgrammer:

Hence why I don't network.

LOL studying at an institution with a built in, high profile network sort of makes that a viable option if you're not going off the reservation, yes?

Well, I originally broke in out of a state school, pretty much mostly from my resume and my interviews.

Aug 18, 2013
IlliniProgrammer:

Hence why I don't network.

You sure you worked in finance?

Aug 18, 2013

How is this even news?

Aug 18, 2013

I don't quite see how this hiring of the "princelings" (sons of someone up high in China) could really count as a bribe.

When I was reading the WSJ' article on this, the banks emphasized again and again that they really didn't do anything wrong. And I feel that they are right in saying that. It isn't a wrong for the banks to realize that companies would prefer to work with banks that they have personal connections with, it's common sense. Then people could surely point fingers saying that if the banks intent was to win businesses through hiring these "princelings" that surely must be considered a bribe. But what is so wrong with trying to get a little edge through networking and building up connections through personal connections? In a country of population of 1.3 billion, wouldn't these companies feel safer and more assured if they deal with banks to which they have personal connections?

I am not Chinese but from what I understand, in a country where "screwing the other guy over" is commonplace and rampant, personal connections are everything. Like Italy and elsewhere, familial connections are really important. I really don't see anything wrong with these banks picking up on this culture. It makes sense to me.

Aug 18, 2013
UFOinsider:

You sure you worked in finance?

Got the first job through a campus hire. Did a good job, developed a good reputation, made it to the trading floor through a posted internal transfer and ~15 interviews.

No networking anywhere (Some minor marketing). I HATE networking.

It's good to help your friends and get advice from your friends. If they're friends you've had for a long time from an unrelated area, I'm not sure that's networking.

Aug 19, 2013
IlliniProgrammer:
UFOinsider:

You sure you worked in finance?

Got the first job through a campus hire. Did a good job, developed a good reputation, made it to the trading floor through a posted internal transfer and ~15 interviews.

No networking anywhere (Some minor marketing). I HATE networking.

It's good to help your friends and get advice from your friends. If they're friends you've had for a long time from an unrelated area, I'm not sure that's networking.

15 interviews is a network feeling you out...if it were only about credentials, you'd have been hired after one round. I could make this case given my relocation within the company happend without any interview whatsoever: the person I answered to was left and I assumed their role. My work spoke for itself, but without recognition of that work by my current professional environment, a replacement would have been hired instead. I suppose we could play around with the definition of the word, it depends on how literal one would be: in your case your credentials smooth over the need to bother with much contact with others in the initiation phase of a job hunt. This still does not make you completely isolated from the effects of a network, however. In your own words, you "developed a reputation". That's a form of subtle networking, if these people didn't know you, they wouldn't matter, nor would their reputation among them....the network already exists even if you aren't actively shaping it, you are benefitting from it. It's easy to think "I don't network" if your interactions with others are merely presenting your efforts, but that is perhaps the most effective networking of all?

Again, few people have credentials and work as exemplary as yours, but they are not the only reason you have moved along. I'm just pointing this out so that you aren't mistaken. Your network of associations matters perhaps more than you think, and writing that influence off only works against you.

Just because you're not hitting the phones asking for a job doesn't mean you're not operating off a network of people, it's just less visible, and more seamless. The professors who write letters of recommendation, the boss who guides you, the other people in your area you talk to every day, everyone in your space that enables you to do your job....that's a network. ESPECIALLY at an ivy league school, the network already exists and is in the background, with OCR mostly set up by professors and alums beforehand, it's very easy to lose sight of the fact that there's very little at any non-PHD degree program that isn't being taught somewhere else...and that the network is a major factor, either directly or indirectly. Without a network, it is impossible to move very far in a company: there are plenty of people generating money and crunching numbers, those who get ahead have one form of a relationship or another with the other people in the company.

The only people in finance that can function completely network free are the guys trading their own money from home. Like Eddie. Ironically, he's probably one of the most heavily networked persons here, to the point where he doesn't even have to ask for certain things, people just know what he wants....but it is still a network.

You can look at networking like sales: one method is to call people up and 'network' or 'sell' them something. In a more established setting, however, these people already talk to each other and exchanges are made based on the current need as discussed as a matter of routine, so it's easy to think that there's no networking/selling going on. You just take it for granted because it's largely maintained by someone else. But it's still there, whether or not you want to acknowledge it or think of it that way.

The Chinese understand this far better than Americans because their civilization operates on a timeline of thousands of years, so they are acutely aware of the effect of long term and passive associations that can be exploited. Much of this flies over the heads of Americans, and did for me as well, until I spent years living among Chinese here: 6 generations in America and they still spoke fluent Chinese and were in touch with the mainland...and they were not an outlier. How many Americans or European descent would bother? It's completely taken for granted that the clique of people running things in China is the same one Nixon chatted up decades ago, and it will not change for the forseeable future. We're dealing with a system where the 'monarch' we call a prime minister is selected from the ruling elite families, and their power relationships are woven into the nation's history. JPMorgan is perhaps easy to target in this type of SEC investigation because it looks suspicious and is very obvious, but there was no other way in China until very recently considering that any American bank was competing against a state monopoly.

That the larger context is being taken for granted and the law being applied in an overly literal way, coupled with the fact that the people running this are hypocritically swimming in interest group money and influence, suggests to me that this is political witch hunting. If this were standard proceedure removed from politics, then why now, with new politically appointed administrators, is the SEC making issue out of what the US has been doing as SOP for decades? Why is not some other company like Bechtel being investigated for the generations long relationship with customers around the world? And who even cares? Aren't there far worse corporate criminals to harass for deeds resulting in much more severe long and short term damages? (see: Halliburton v BP litigation regarding oil well explosion)

From what I can tell based on the information available, this is just another easy "gotcha" that the gov't is playing politics with instead of doing what they're really supposed to: get ahead of the next major breakdown.

Sorry for the long post, it's late and I didn't bother to summarize my thoughts. Not trying to give you a hard time, just pointing out something I think you're missing. Never take for granted the people you interact with along the way, or that you're interacting with them in the first place: you may not be calling on them for a favor directly, but they're there and they have influence that even they may not recognize.

Aug 19, 2013
swagsian:

I don't quite see how this hiring of the "princelings" (sons of someone up high in China) could really count as a bribe.

When I was reading the WSJ' article on this, the banks emphasized again and again that they really didn't do anything wrong. And I feel that they are right in saying that. It isn't a wrong for the banks to realize that companies would prefer to work with banks that they have personal connections with, it's common sense. Then people could surely point fingers saying that if the banks intent was to win businesses through hiring these "princelings" that surely must be considered a bribe. But what is so wrong with trying to get a little edge through networking and building up connections through personal connections? In a country of population of 1.3 billion, wouldn't these companies feel safer and more assured if they deal with banks to which they have personal connections?

I am not Chinese but from what I understand, in a country where "screwing the other guy over" is commonplace and rampant, personal connections are everything. Like Italy and elsewhere, familial connections are really important. I really don't see anything wrong with these banks picking up on this culture. It makes sense to me.

It might even be simpler than all that: the best educated and most influential business folks are relatives/family of politicians in China. If JPM used only computers to select resumes for jobs, they'd likely have the same outcome. Just because a candidate doesn't fast talk their way into the door doesn't mean they aren't already heavily connected to the right people in the first place, and thost connections and support enabled them to succeed above the rest. It doesn't make it right, and it the source of much unrest in China, but that's the way it currently is. China has a built in caste system, but in contrast to the Indian version, it's invisible to foreigners and given the static political structure.....far less likely to see changes.

I'm thinking the SEC is going to catch a few instances of "hire that moron because his uncle is a minister and we want to underwrite bonds or whatever" and the rest of this is going to get tossed out. This would have to be parsed out to individual hiring decisions, and at that point the gov't will just get mired in endless litigation. This is not like businesses operating on the African subcontinent that, a few years ago, were doling out huge lumps of cash and equity stakes in order to push deals through, this is very subtle and will be too much of a waste of time to get anywhere.

Besides, what is the SEC trying to do? Damage the relationship between the US and China? It's not like we're on the best of terms in the first place, why not focus on instead on the reverse merger crap and actually get somewhere?

I don't get it. This is stupid.

Aug 19, 2013

Agreed.

Interesting to think how, if these princelings were left to compete with the other Chinese applicants in fair terms, they might be chosen anyway, since, as you've said, the best educated Chinese applicants are likely to be from a prominent or at least above average family.

What I don't get is, SEC may catch a few instances of "hire that moron" because he has connections, but, wouldn't that also be the case in the US or any other country in the world?

Again, agreed. This is very stupid.

Aug 19, 2013
swagsian:

Agreed.

Interesting to think how, if these princelings were left to compete with the other Chinese applicants in fair terms, they might be chosen anyway, since, as you've said, the best educated Chinese applicants are likely to be from a prominent or at least above average family.

What I don't get is, SEC may catch a few instances of "hire that moron" because he has connections, but, wouldn't that also be the case in the US or any other country in the world?

I'm assuming so LOL half of finance is based on influence peddling of one form or another. I can't tell if this is Obama's SEC appointees piling on after the London Whale thing, or if it's part of a broader pressure from the administration to effect change in China. The next year or two of foreign policy should answer that.

For now, I'm guessing that JPM's competitors are enjoying having more opportunities, and that JPM is going to upgrade their China business model. How? I dunno.

You have any insight / guesses?

Aug 19, 2013

I am not quite sure if JP's competitors are going to have more opportunities. Maybe for a very short period, you might be right but I am guessing that they are watching this probe closely too since almost all of these banks based in Hong Kong are doing the same thing. They are probably on edge as to whether they are next. It (the hiring of sons) really is a culture in China (perhaps in banking in general in regards to networking and connections), to forge personal connections with different companies and banks by having their sons work their or daughters marry the sons of the CEOs, so I am guessing almost all the banks have been doing exactly what JP has been.

I'd have to say that I view this probe not as a SEC trying to tackle China, but more of it as SEC trying to look tough on banks again. As you mentioned, with the London Whale thing, and JP not being as cooperative and as nice to the regulators as it used to be, it is probably trying to clamp down on JP and investment banking in general.

And as you've mentioned in your first comment, I really can't see how they can prove that this hiring of princelings was an act of bribery (unless they uncover e-mails which explicitly state "HIRE HIM BECAUSE HIS FATHER IS SO AND SO). This really is a grey line when these sons and daughters were very qualified candidates to begin with.

Aug 19, 2013
UFOinsider:
IlliniProgrammer:
UFOinsider:

You sure you worked in finance?

Got the first job through a campus hire. Did a good job, developed a good reputation, made it to the trading floor through a posted internal transfer and ~15 interviews.

No networking anywhere (Some minor marketing). I HATE networking.

It's good to help your friends and get advice from your friends. If they're friends you've had for a long time from an unrelated area, I'm not sure that's networking.

15 interviews is a network feeling you out...if it were only about credentials, you'd have been hired after one round. I could make this case given my relocation within the company happend without any interview whatsoever: the person I answered to was left and I assumed their role. My work spoke for itself, but without recognition of that work by my current professional environment, a replacement would have been hired instead. I suppose we could play around with the definition of the word, it depends on how literal one would be: in your case your credentials smooth over the need to bother with much contact with others in the initiation phase of a job hunt. This still does not make you completely isolated from the effects of a network, however. In your own words, you "developed a reputation". That's a form of subtle networking, if these people didn't know you, they wouldn't matter, nor would their reputation among them....the network already exists even if you aren't actively shaping it, you are benefitting from it. It's easy to think "I don't network" if your interactions with others are merely presenting your efforts, but that is perhaps the most effective networking of all?

Again, few people have credentials and work as exemplary as yours, but they are not the only reason you have moved along. I'm just pointing this out so that you aren't mistaken. Your network of associations matters perhaps more than you think, and writing that influence off only works against you.

Just because you're not hitting the phones asking for a job doesn't mean you're not operating off a network of people, it's just less visible, and more seamless. The professors who write letters of recommendation, the boss who guides you, the other people in your area you talk to every day, everyone in your space that enables you to do your job....that's a network. ESPECIALLY at an ivy league school, the network already exists and is in the background, with OCR mostly set up by professors and alums beforehand, it's very easy to lose sight of the fact that there's very little at any non-PHD degree program that isn't being taught somewhere else...and that the network is a major factor, either directly or indirectly. Without a network, it is impossible to move very far in a company: there are plenty of people generating money and crunching numbers, those who get ahead have one form of a relationship or another with the other people in the company.

The only people in finance that can function completely network free are the guys trading their own money from home. Like Eddie. Ironically, he's probably one of the most heavily networked persons here, to the point where he doesn't even have to ask for certain things, people just know what he wants....but it is still a network.

You can look at networking like sales: one method is to call people up and 'network' or 'sell' them something. In a more established setting, however, these people already talk to each other and exchanges are made based on the current need as discussed as a matter of routine, so it's easy to think that there's no networking/selling going on. You just take it for granted because it's largely maintained by someone else. But it's still there, whether or not you want to acknowledge it or think of it that way.

The Chinese understand this far better than Americans because their civilization operates on a timeline of thousands of years, so they are acutely aware of the effect of long term and passive associations that can be exploited. Much of this flies over the heads of Americans, and did for me as well, until I spent years living among Chinese here: 6 generations in America and they still spoke fluent Chinese and were in touch with the mainland...and they were not an outlier. How many Americans or European descent would bother? It's completely taken for granted that the clique of people running things in China is the same one Nixon chatted up decades ago, and it will not change for the forseeable future. We're dealing with a system where the 'monarch' we call a prime minister is selected from the ruling elite families, and their power relationships are woven into the nation's history. JPMorgan is perhaps easy to target in this type of SEC investigation because it looks suspicious and is very obvious, but there was no other way in China until very recently considering that any American bank was competing against a state monopoly.

That the larger context is being taken for granted and the law being applied in an overly literal way, coupled with the fact that the people running this are hypocritically swimming in interest group money and influence, suggests to me that this is political witch hunting. If this were standard proceedure removed from politics, then why now, with new politically appointed administrators, is the SEC making issue out of what the US has been doing as SOP for decades? Why is not some other company like Bechtel being investigated for the generations long relationship with customers around the world? And who even cares? Aren't there far worse corporate criminals to harass for deeds resulting in much more severe long and short term damages? (see: Halliburton v BP litigation regarding oil well explosion)

From what I can tell based on the information available, this is just another easy "gotcha" that the gov't is playing politics with instead of doing what they're really supposed to: get ahead of the next major breakdown.

Sorry for the long post, it's late and I didn't bother to summarize my thoughts. Not trying to give you a hard time, just pointing out something I think you're missing. Never take for granted the people you interact with along the way, or that you're interacting with them in the first place: you may not be calling on them for a favor directly, but they're there and they have influence that even they may not recognize.

I'm pretty sure the 15 interviews were mostly technical questions. The ones that weren't were probably more about not hiring someone that was a pain to work with than anything else. Not hiring an asshole isn't networking; it's business.

I think in one case it's hiring people you know; in the other case it's hiring the best person for the job. Maybe they have to feel you out in the process, but they also felt 40 other people out using largely technical interviews. Also, the longer you've known the people, the less quid pro quo is going on.

Yes, networking can look like bribery. Just try and stay above that/ away from that. Also, even if you operate off of a network unknowingly, it's still not the same as more explicit networking because its less likely to turn into or appear to be quid pro quo.

I didn't really network that much to get where I am. Or at the very least my getting here was a little more about luck and trying to do a good job than networking. I think it's that way for many people.

Hiring someone because they have a reputation for doing a good job, or because they are not an asshole isn't really networking. It's just good business. How we use not hiring an asshole to say it's ok to pay bribes is beyond me.

Aug 21, 2013

Agreed that hiring someone who has a good reputation is not 'networking'. But, how do you find that person? Generally, through your network. Having a network is a good thing as it reduces your transaction costs. For instance, I might need someone who has X and Y skills. I can call up 5-10 people I know and respect and have them give me names of people that fit the bill. That's networking.

Aug 20, 2013

At the OP: A preferable title to this post would be "Ru Xiang Sui Su" - which is the Chinese version of saying "do as the Romans do".

#internationalpymp #mandarinmonkeys #getonmylevel

Aug 20, 2013
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Aug 20, 2013

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