Chinese authorities engaged in vigorous campaigns against corruption by foreign companies and freshly wary of dangerous Western ideas might well react with wonder at the new investigation of hiring practices at JP Morgan China. Doesn’t anyone at the SEC watch Mad Men?
After all, Pete Campbell, one of the leading characters in the much-lauded television series, is proffered as a sterling example of material success in the West. Pete is of course a fictional character, while the scores of politically connected children sitting within the ranks of elite foreign banks are very real indeed. But the truth of Pete’s portrayal and the continuing presence of the well-connected in the financial elite in the United States might cause one to wonder what the big fuss is when the same thing is done abroad.
Pete brought much-valued social pedigree to the Sterling Cooper agency. While his own fortune was depleted by a spendthrift father, his blueblood background brought him country club and alumni access that delivered high-value contacts and accounts to the agency. When Don Draper wanted to fire Pete he was reminded that every agency had someone like Pete -- a doorway to the world of privilege.
If Pete were plying his trade in Hong Kong today he would be an FCPA train wreck waiting to happen. He brought the agency a large account from his father in law, and leveraged those ties for additional business advantage. He plied business contacts with liquor, food and prostitutes. He lied to federal investigators and aided a continuing fraud (albeit to help Don Draper). And those are the nicer parts of Pete’s behavior.
The SEC may indeed have a tough time proving a direct link between hiring of a particular person and award of a particular piece of business. They might have an even tougher challenge convincing a jury that there was anything inherently wrong with that. This might be another occasion of the government tacking on theories to see what sticks.
Certainly, Chinese authorities who are on guard against dangerous Western ideas should certainly add Mad Men to the list of dangerous propaganda. Even if the SEC is not bothered by such activity on its home turf.
Russell Stamets is a Contributing Editor of the FCPA Blog. He was the first non-Indian general counsel of a publicly traded Indian company and was general counsel for a satellite broadcasting joint venture of a large Indian business house. Russ can be contacted here.