Investigating Public Companies

A little over a month ago the Wall Street Journal reported on a Chinese official who's kickbacks under the U.N. oil-for-food program in Iraq may have involved illicit contacts with the Chinese weapons industry. Today we can read (A3) about the SEC's investigation of U.S. companies (Tyco International, Wyeth, and El Paso among others) who also participated in the program. Under the Foreign Corrupt Practices Act, the U.S. government can request information from publicly traded companies, without specifically targeting that company for investigation or alleging wrongdoing.

Issues broadly to do with (a) freedom of information from large for-profit bureaucracies and (b) the proper relationship between government and large public corporations and so complicated and multifarious that it is little wonder that they get little attention and are not at all understood by the public. Should I be surprised that the U.S. government has to request information from these companies about what they traded with Iraq and how? Would I have been naive to have assumed that there would be automatic public oversight and corresponding info gathering, in a trade program that was specifically engineered by the U.S. (with the U.N.)? Does the Chinese government know considerably more about what business Chinese companies do with non-nationals? Should I be more worried about my government's knowing or not knowing?

The Journal tells us little about what info the U.N. collected and what provisions existed for Security Council members to access the records. What it does point out, however, is how small U.S. trade with Iraq ($240 million in goods supplied) under the program was compared to trade between Iraq and Russia ($3.32 billion) and France ($2.91 billion).