They did not provide the necessary support we needed to get the job done. IBM is hardly the first U.S. company to get embroiled in an Argentine business scandal. In addition, the 1991 sale of state-owned Aerolineas Argentinas to Spain's Iberia was clouded with corruption. Yet the IBM case is clearly more serious, not only because of the attack against journalist Pinetta but because of the potential violations of the U.S. Foreign Corrupt Practices Act. The scandal is also particularly worrisome for U.S. business interests, highlighting the unique hazards they face in operating throughout Latin America.
Bribery remains almost a necessary cost of doing business in many Latin American countries.
Multinationals based outside of the United States do not face the same home-country restrictions on bribery as their U.S. competitors, however, giving them a competitive advantage in many Latin American nations. IBM, it appears, may have allowed its competitive impulse to override its obligation to abide by the law. Others are less enthusiastic. Even so, the allegations of influence-peddling forced the resignation of three top Brazilian officials, including Aeronautics Minister Mauro Gandra. All of them said there is no reason why the program should not go forward, and gave it a clean bill of health.