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David Mead CNN Story

David Mead CNN Story

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Published by Mike Koehler
David Mead CNN Story
David Mead CNN Story

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Published by: Mike Koehler on Aug 26, 2014
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Page 1 7 of 17 DOCUMENTS Copyright 1999 Cable News Network All Rights Reserved CNN
 NEWSSTAND: CNN & FORTUNE 20:00 pm ET August 11, 1999; Wednesday 8:30 pm Eastern Time Transcript # 99081100V57
4247 words
Dirty Deals; Rolling in Dough
 Full Article Related Topics Overview This document contains no targeted Topics.
James Hattori, Bruce Burkhardt, Stephen Frazier
David Mead's story is a cautionary tale about doing business internationally. He facilitated the payment of a bribe from his former company, Saybolt International, to a Panamanian official and ended up in jail. Krispy Kreme does not advertise, but customers will stand in line in the cold, in the rain, even in the middle of the night to get a Krispy Kreme doughnut.
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDAT-ED. ANNOUNCER: It seemed like a good idea at the time. (BEGIN VIDEO CLIP) DONALD STERN (ph), U.S. DISTRICT ATTORNEY FOR MASSACHUSETTS: The company made a business decision that they would pay a bribe. (END VIDEO CLIP) ANNOUNCER: But it blew up in his face. (BEGIN VIDEO CLIP) DAVID MEAD, FORMER PRESIDENT & CEO, SAYBOLT INTERNATIONAL: My career has been completely destroyed.
Page 2 Dirty Deals; Rolling in Dough CNN August 11, 1999; Wednesday 8:30 pm Eastern Time (END VIDEO CLIP) ANNOUNCER: Tonight, a story of bribes and bad judgment: trying to do business overseas. (BEGIN VIDEO CLIP) UNIDENTIFIED MALE: He knew what he was doing. (END VIDEO CLIP) ANNOUNCER: James Hattori reports on the secret world of "Dirty Deals." It's Southern-fried... (BEGIN VIDEO CLIP) UNIDENTIFIED MALE: Try one. (END VIDEO CLIP) ANNOUNCER: ... sugar-coated... (BEGIN VIDEO CLIP) UNIDENTIFIED MALE: These are beautiful. (END VIDEO CLIP) ANNOUNCER: ... and melted his heart. (BEGIN VIDEO CLIP) UNIDENTIFIED MALE: It's a love story with a product. It really is. (END VIDEO CLIP) ANNOUNCER: The Yankee who convinced Krispy Kreme there were millions to be made going west. (BEGIN VIDEO CLIP) LINCOLN SPOOR (ph), KRISPY KREME STORE OWNER: And I called them, and I said, "You know, you have got to give me a franchise." (END VIDEO CLIP) ANNOUNCER: Bruce Burkhardt on a little Southern business that's "Rolling in Dough." CNN & FORTUNE, with Willow Bay and Stephen Frazier. STEPHEN FRAZIER, HOST: Welcome to CNN & FORTUNE. Willow is away this week, and I'm at Joe Muggs  Newsstand in Atlanta. We begin with a cautionary tale about doing business internationally. There are finally signs of life in some of the economies that have been troubled for most of this year: in Asia, Latin America, even Russia. That means American executives will be going over there and adapting to local customs in the way they operate. But what happens in cultures where an under-the-table payment is customary and required to close a deal? That's a  practice that could land an executive in jail back home. Here's James Hattori with one man's story. And when we first brought you this report earlier this year, jail was exactly where the executive wound up. (BEGIN VIDEOTAPE) JAMES HATTORI, CNN CORRESPONDENT (voice-over): Another day begins at the federal correctional institu-tion at Fort Dix, New Jersey. Thirty-six hundred men are serving time here: mostly drug traffickers, some illegal gun  brokers, plus a former corporate president and CEO -- David Mead. MEAD: It's hard to accept after 35 years of dedicated service to a company. My career has been completely de-stroyed. Rather than face a happy retirement I'm facing anything but a happy retirement now."
Page 3 Dirty Deals; Rolling in Dough CNN August 11, 1999; Wednesday 8:30 pm Eastern Time HATTORI: Mead faces razor wire and armed guards now because of a business decision played out thousands of miles away. The Panama Canal was a deep channel of cash for Mead's company, Saybolt International. The Dutch firm made its money testing petroleum, analyzing oil, marking octane levels as the freighters moved from port to port from seller to buyer all over the world. Mead, a British citizen, lived and worked in New Jersey and headed Saybolt operations in the Western Hemisphere. In 1995, Saybolt had the petroleum inspection business pretty much locked up in the vital Panama region. But there was one big problem. MEAD: There was need of a new location to build an office and a lab complex. HATTORI: A critical need -- Saybolt's lab space was in jeopardy. The company had no long-term lease. The Panamanians could come in and shut down the operation at any time, putting nearly a million dollars in equipment and dozens of jobs at risk. A solution arrived on Mead's computer in early 1995. (on camera): The e-mails went back and forth between you and Mr. Dunlop (ph), the man in charge of the Panama  project. MEAD: Correct. HATTORI (voice-over): At first, there was only good news. Quote -- "Note some extremely positive develop-ments taking place." Panamanian officials offered Saybolt a permanent lease to, a new lab site in the free trade zone, Dunlop wrote. Weeks later came the bad news. There was a string attached to the government's offer, a demand for money: a  bribe. Saybolt's man in Panama writes to Mead, "As always in Latin America once the palms have been greased, all is  possible." "The fee is $50,000 for the new lab site," the Panama chief writes. "If we pay, all is ours. If we don't, we get nothing. Welcome to the Third World." MARTIN WEINSTEIN, ATTORNEY: This is a classic situation. Usually what happens is that they get down the road in a transaction, they get very close to closing a deal, a request is made of them, and they make a bad judgment. HATTORI: Attorney Martin Weinstein advises multinational corporations on how to compete successfully and le-gally overseas. Of particular concern, the U.S. Foreign Corrupt Practices Act. Passed 20 years ago, the law prohibits the payment of bribes to officials in other countries. Until recently, almost all other nations looked the other way,  passing no laws to curtail international bribery. The end result, U.S. competitors could win big global contracts with  payoffs, a business advantage American companies do without. WEINSTEIN: I think it's a very difficult situation. If you are a salesperson or a project manager, and your pay salary, your pay grade, your career, your whole future with the company can be determined on how well you do, if a company places that type of pressure on you, the -- the judgments that you have to make become very, very difficult. HATTORI (on camera): Is it like in the movies? Somebody shows up in a meeting room and passes an attache case and the money is exchanged? Or does it... WEINSTEIN: No. For the most part, for the most part, that scene is reserved for the movies. Most folks these days -- most individuals and government officials have some sensitivity to the Foreign Corrupt Practices Act. So while you may have instances where people want a payment, most of the time, a government official will want an interest in the joint venture project, a business opportunity, a campaign contribution, a job for a relative. HATTORI: If you were to take a globe and spin it and -- and randomly pick a spot in the world...  NANCY BOSWELL (ph), TRANSPARENCY INTERNATIONAL: You'd find corruption alive and well.

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