Asian companies negotiating contracts with Apple allegedly paid more than $1m in kickbacks to an Apple manager in exchange for confidential information about what Cupertino would be buying. That's according to a suit filed by Apple against Paul Shin Devine, until now a global supply manager at Apple. The suit follows his …
Sounds like this guy
was a bad Apple
Well, he certainly doesn't sound 'Devine'...
Although he can be said to have helped suppliers, in divining the future of the Jesus phone....
Business as usual for the Far East
'Tea' money is common in the Far.Southeast Asian economies, called bribes, kickbacks, etc. in the West.
If this guy was Singapore based, as some reports would have it, he will likely be in deep do-do as Singapore likes to be known as a squeaky clean, corruption free society which, of course, is not true.
People might remember the Siemens, Pirelli, BICC, Tomen and Marubeni scandal where they kicked back USD$9-million+ to CHOY, Hon-Tim the deputy chair of the Public Utility Board.
No doubt this will rumble on for some time and presents Apple with a problem since only a few companies are capable of meeting their, and others, exacting requirements for smart-phone production.
That apple's looking more rotten and corrupt with every article on the reg
Can't blame the chinese fella though, they're used to bribery, slave labour etc
Apple is corrupt? what you are on about? this was a guy who was passing on information that would disadvantage Apple. It would result in Apple possibly paying more for components than they normally would!
Why would they want that?
You sir are an idiot.
Read the article before posting. It helps.
If you work for Apple (or anyone)
and invent something cool - they own it.
If you work for Apple and do something bad - they disown you and sue you.
Corporations are good, are they not!?
Terms of employment.
If you are employed buy anyone and "invent something cool", of course they own it! That's what they are paying you for! You may even get credit for it too.
"If you work for Apple and do something bad - they disown you and sue you." Of course they do! You've not only committed fraud, you've more than likely breached the term of your contract and brought your employer's name into disrepute! They are entirely justified in seeking damages.
@terms of employment
they pay you to work certain hours but they still own anything you invent in your own time, I'd guess that was what the OP was referring to. Sorry forgot the !
Not just the Far East
I didn't have the privileged position or purchasing power that this Apple guy had, but I was offered a kickback by an Irish sub-contractor. Not millions, just the use of a nice holiday cottage. There's a lot of it about, especially with win-at-any-price corporate cultures.
It's relatively mild compared to the really bad stuff that goes on, such as a customer buyer and a vendor rep working together to create fraudulent transactions for products that were never delivered and then splitting the proceeds.
Not much money
Comparinging the size of apple and my former company, he didn't get much. One of the buying people in my last place allegedly got £4M in kick-backs from suppliers before he was found out...
The rest of us had to put all "corporate gifts" into a lottery for all staff.
I really don't have problems with this kind of activity. If his contract said he can't give out such information, then you have grounds to fire him and pursue whatever is stated in the contract. I don't like the law getting involved with this kind of thing, business is business.
Then again, I'm assuming the charges are related to making sure he didn't have to pay taxes on the money.
Then again, again, if it was paid by companies from Singapore, China and Korea to an American citizen based out of the country, I do see why any taxes should be paid anyway.
So many missed points (Bullseyed)
First off, an American pays taxes on income regardless of where they are located. When it gets truly entertaining is when multiple countries want to levy taxes because you are a citizen one place, and residing in another... and I promise you that the kickbacks received are not a 'gift', the company paying is expensing them just like compensation.
With regards to the highly unethical activity of supplying a vendor with insider information, the Apple employee had a clear fiduciary duty to act in the best interests of Apple in dealing with Vendors and competitors. Given that he willfully failed that responsibility, Apple would be able to pursue him for all kickbacks received (especially since there was likely a dual employment clause in his employment contract), and may even be able to persue compensation for salary paid when he was no longer acting as an agent of Apple.
'business is business' is something you say when you are in the mafia. double faced employees working against their employer for personal gain is not business, it is fraud.
I'm not saying it is necessarily ethical, but I don't think "legal" should be coming into the picture.
I know they can charge income tax for it. I don't think that is right, but that is between me and the sixteenth amendment. I would assume he was trying to get the payments under the table, hand to hand transactions in the East. Since that kind of stuff happens there every day, I'm sure they know their ways around it. I would think this is the area "legal" would come into the picture. Evading income taxes. Since these taxes are supposed to be used for things like defense at the national level and services at the state level, if he is living in Singapore and not the USA, I fail to see why he should be paying for services he is essentially not receiving. The government has no problem stealing from people, but like I said, that is another issue entirely.
On to the Apple versus employee issue. In all my classes on ethics, this is by far the lowest level I've ever seen fiduciary duty extended to. I've rarely seen anyone apply it below C level management (outside of certain financial industry positions). Not to say that it can't be... just that the further you go with it the more people will reject the idea of it.
It sounded like he was giving information to suppliers, not vendors or competitors. Apple is well known for exploiting the supply market. For example, they would buy lots of flash memory and force their suppliers to open more fabrication facilities to meet demand. When they were planning a new iPod, they would suddenly stop buying memory so that the prices would plummet due to excess supply. Once the price got low enough, they would buy a ton of it again in order to reduce their costs and boost their profit margins. If this employee was blowing in Apple to prevent Apple from using that tactic, ethically I have no problem with his actions.
Either way, Apple found out, they fired him. His name is in the press now and it should essentially make him unable to get hired by anyone. That's where, in my opinion, this should end. Business is business, the market will sort it out by keeping him unemployed. He sold his job and reputation for $1M. So what now, Apple is going to sue him for all the money and he'll end up being supported by the American taxpayer for the rest of his life? How is that a more ethical or better situation?
Then again, we know nothing of his contract. There is probably some section that covers this. If he agreed to a contract then it becomes his fault for being immensely stupid. But still, we'll all end up supporting him when he goes broke and is unemployed... all so Stevey J has more cash to roll around in.