Warning: may not be suitable for young viewers.

Came across this post in China Confidential on the Foreign Corrupt Practices Act and U.S. firms doing China FDI:

Fact: It is an open secret on Wall Street and in some or many board rooms in Corporate America that powerful Communist Party officials in booming China are often illicit secret partners in and beneficiaries of many of the big deals made possible by foreign direct investment.

OK, first, "oooh, scary." Glad I got that off my chest. Second, let's deconstruct this language a bit. We have "powerful Communist Party officials," which to me sounds a lot like "government officials." We also see "Corporate America," also known as "U.S. companies." And finally we see "illicit secret partners," also known as inappropriate business dealings, conflict of interest, corruption, etc.

So we have U.S. companies engaging in FDI and sometimes making deals that include government officials. 1) Is this newsworthy? 2) Is this a China-specific phenomenon? 3) Is the Foreign Corrupt Practices Act (FCPA) being violated?

Only #3 is of interest, in my opinion, and even with that we already know the answer, which is "Sometimes yes, sometimes no." Deals are done all the time where the legal status and identity of the Chinese partner, or distributor, or supplier, or landlord, is only partially known. Due diligence investigations can uncover a lot of information over here, but they are still limited. That private Chinese company with the good connections may indeed be controlled by the local Party official, but that is not always verifiable, not always necessarily relevant, and certainly not always a violation of the FCPA which, I might add, is actually a lot narrower in scope than a lot of folks like to think. Enough said on this spooky topic.