Last week’s bribing of Libyan officials by the British government reminded us that it’s a familiar tale.

Vehicles belonging to a company doing business in a corrupt Third World state are “impounded” by people claiming to be officials. They demand a “fine” in exchange for returning the vehicles.

It is unclear whether they have any legal right to demand such a fine. Legality in such a place is an elastic concept, and its enforcement erratic. All that matters is that the company needs the vehicles and no legitimate authority is going to lift a finger to get them back.

The sensible thing for the company to do is to shallow its corporate pride, hold its corporate nose, and buy back its own property at a discount.

In that situation, the company has no way of knowing whether it is paying protection money or a legitimate fine, or whether the cash will end up in an official treasury or the pockets of the alleged officials. It has no control over what happens before, during, or after payment.

It may still end up being charged with bribery by other officials – possibly seeking a bribe of their own. Either way, they do not care that the situation was not initiated by the company and is obviously to the company’s disadvantage – unlike a genuine case of bribery, where the company initiates the situation and seeks an advantage. Nor do they care if the officials and their fine were of – to put it politely – dubious legitimacy.

They simply put the victim of extortion on trial for being a victim.

This is what happened to Major William Shaw, who we mentioned last week, in Afghanistan. One might imagine that, since Major Shaw had served 28 years in the British Army and been honoured for his service, since that same British Army is one of those keeping the current Afghan regime in power, and since he was working for a security firm supposedly helping to rebuild the country, a telephone call from the British Embassy would have secured his release and a full apology that same afternoon.

Not a bit of it. The British Government left Major Shaw to rot in a filthy prison for months.

He has now been released, but the injustice remains. It is over a hundred years since Lord Palmerston declared that the words “I am a British citizen” should be an absolute protection to UK businessmen abroad. Now the message from the Foreign Office is “You’re on your own, mate.”

The British Government’s evacuation of its subjects from Libya was wrong on so many levels.

Some criticised it for being late and disorganised. Others question if it was even necessary, since neither side in the civil conflict is targeting foreign citizens. A third school of thought is that people who choose to work in a place like Libya do so at their own risk.

An additional layer of controversy came with the news that HM’s officials paid “fees for services” to some of their Libyan counterparts which were bribes in all but name in order to expedite matters.

Private businesses operating in places like Libya often have to do the same. The blame for this rests 100% with the officials who demand bribes, and not at all with the businesses who have to pay them. After all, no business owner wants to incur extra costs, but he may have no choice if he wants to stay in business in such places.

This does not stop government officials prosecuting businesses for being the victims of other government officials.

The same British government which has now bribed Libyan officials has in the very recent past effectively solicited a bribe from BAE Systems in return for not prosecuting them for bribery, and been guilty of gross negligence in its failure to stop British businessman Bill Shaw been jailed by the Afghan government on a particularly ridiculous charge of bribery.

The same British government would also probably have been loud in its condemnation of any British business which paid such “fees for services” to Libyan officials to expedite what it needed done, even if that was to protect its own employees.

The same British government would indeed prosecute such a business if it could.

We can be confident that no British official will face prosecution.

One law for us, another law for them ...again.

This blog is posted in conjunction with our recently released podcast #128 – The Peasants’ Revolt

The key to influence is being in the room when the big decisions are made.

Ideally, you should be physically present: few can ignore completely a person who is right in front of them. Next best, if it is impossible to be there in person, is to have someone in the room who will represent your interests faithfully and actively. At the very least you need to have someone in the room who is aware of your existence as a factor to be taken into account.

The problem for most entrepreneurs and small businesses is that we are rarely in the room. We like to think we make our own decisions and control our own lives – indeed, many of us went into business for ourselves precisely because we do not like being told what to do – but the truth remains that we do not make many of the decisions that have greatest impact on our businesses. They are made for us – without our asking – by politicians and bureaucrats.

They can decide to interfere with any aspect of how we run our affairs. They can decide to tax us or grant us access to contracts. They can decide to make economic conditions better or worse –usually the latter. We have no say in what they decide.

So we need to get someone in the room where they make their decisions. The problem is that the rooms in question are filled entirely with bureaucrats and – sometimes – politicians. Occasionally the odd representative of the banks or big business might be allowed in – but, as far as the people in the room are concerned, we do not exist, either as individuals or as a small business sector.

Here is how political influence works in the West...

Overt bribery is rare. However, wealthy individuals, corporations, or front organisations, or lobbyists acting on their behalf, can and do make very large donations to funds close to the hearts of powerful politicians. These funds may be the politicians’ own campaign chests, or their parties, or other organisations in which they take a benevolent interest. A donation to a charity which has a politician’s wife on the board of trustees can be as effective as a direct gift to the politician himself.

It is important to stress that an experienced lobbyist will never so much as hint that a deal is being made when he makes the donation. The politician would almost certainly walk away with a fine display of disgust if there was the slightest suggestion of “We are doing you a favour, and we hope you will remember it when we ask you for a favour”.

There is not so much as a nudge, a nod, or a wink.

It is enough that a channel of communication has been established. This may mean that the donor has direct access to the politician, but it may be sufficient if the donor has access to the person who runs the fund to which he donates, if that person has the politician’s ear.

A politician may pay more attention to his campaign manager whispering “We should be nice to this guy” than to the donor himself.

Either way, the important point is that the politician now knows that the donor exists. When the politician goes into the room where decisions are made, that knowledge goes in with him. The donor himself may not be present, but he is a factor to be taken into account. There will be other factors, which may turn out to be more important, but the donor has at least bought the right to be taken seriously.

For most individual entrepreneurs and small businesses, this is not an option. For one thing, as individuals, we lack the sort of money necessary to make a real impact. We could, of course, raise it collectively – there are over four million of us in the UK alone – but the whole point about entrepreneurs is that we do not like doing anything collectively.

If there are more than four million of us, then there are more than four million sets of opinions and divergent interests.

Yet most of those millions also have certain interests and opinions in common. We need to find a way of getting them across to those in power who are currently ignoring them.

We need to get into that room.