One of the most striking business news stories in 2013 exposed secret connection between JPMorgan and multiple top Chinese officials, who allegedly helped JPMorgan gain influence and secure contracts in China. While United States’ Foreign Corrupt Practices Act condemns open bribery, JPMorgan’s practice of hiring officials’ offspring and paying for their consultancy are not legally such.

A basic concept in business ethics is avoidance of dishonest behavior, but the question comes when we try to define it: Should we employ common sense, or examine with existing laws? The United States believes in rule of law-it chose the latter. It is, however, unreasonable that JPMorgan could have invested so much resources for no promise of payback. Perhaps no covet contract exists on paper, but verbal promise is equally powerful from influential figures.

I recall Milton Friedman’s arguments: A firm should prioritize its immediate stakeholders and operate within laws’ boundaries. The only losers in JPMorgan’s game may be other firms that have weaker connection with officials. After all, private relationship weighs much in China’s business arena, and JPMorgan simply tried to follow suit. What do JPMorgan and the US stand to lose when they court Chinese officials? If they lose nothing, why should they punish themselves at all, when no law is obviously violated?

Logically speaking, I believe that where there is no law, a firm should operate for maximized interest.

Article:  JPMorgan’s Fruitful Ties to A Member of China’s Elite

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