Former GM Executive Indicted on Federal Bribery Charge

Instructions

Read the provided article “Former GM Executive Indicted on Federal Bribery Charge.” Once you have read the article, answer the assigned questions. Include a detailed response to each of the questions. Do not define terminology or definitions. Share your personal thoughts and ideas. Number your responses according to the assigned questions. Do not retype the questions. If you do not follow the requirements, your grade will be reduced by 50 percent. Post your assignment to the provided link. You can use your textbook to provide supporting information when answering the questions for this assignment.

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Word Count Requirement: 300 words

Questions

1. Discuss the wrongdoing and unethical behavior that took place at General Motors (GM).
2. Describe the primary and secondary stakeholders that were impacted by the unethical actions by a key individual at GM.
3. How can the unethical bribery and actions be eliminated at GM?
4. Who is ultimately accountable for the bribery that took place at GM?
5. What major federal legislation did Brian So violate?

Article

Former GM Executive Indicted on Federal Bribery Charge

A former General Motors manager was arrested Thursday in Los Angeles on a charge that he took more than $3 million in bribes from a South Korean parts supplier in return for a major contract with the Detroit automaker.

Hyoung Nam So, 46, who now lives in Irvine, took $3.45 million in cash from the parts supplier in late 2015, a payoff for rigging the bids on a contract to supply GM with auto painting, window film and molding, according to a federal grand jury indictment issued Wednesday.

At the time, So, who goes by Brian, was a manager in GM’s Global Purchasing and Supply Chain organization in Michigan, where he oversaw the supply of parts used to build automobile interiors.

In January 2020, So was hired as global purchasing chief at Karma Automotive (Links to an external site.), a luxury car company in Irvine, according to his online resume (Links to an external site.). So left Karma Automotive in December 2021, according to the company.

So’s attorney, H. Dean Steward, declined to comment.

GM released a statement saying it was cooperating with federal investigators.

“General Motors does not tolerate or condone corruption or bribery of any kind,” a company spokesperson said. “The illegal conduct alleged here is entirely inconsistent with our code of conduct and corporate policies.”

The indictment charged So with one count of conspiracy to commit bribery. Prosecutors say the amount of the alleged kickback was unusually high for a purchasing agent at one of America’s biggest corporations.

“The bribe amount is very significant,” Assistant U.S. Atty. Jeff Mitchell said. “It’s larger than most bribe amounts that people see in corporate prosecutions.”

Agents from U.S. Homeland Security Investigations seized $3.19 million in cash from a private vault in Los Altos in 2017, and they believe that was part of the bribe proceeds, authorities said. The money was returned to South Korean authorities, they said.

The plot began at an October 2015 meeting in South Korea, where So told the owner of the parts supply company that he could ensure it won a large GM contract in return for $5 million in cash, according to the indictment.

The supplier — listed in the indictment as an unnamed co-conspirator — and another unnamed accomplice arranged for money brokers in South Korea and Los Angeles to transfer $1 million in cash to the United States, the indictment says. The accomplice rented a car in L.A. and drove the cash to Detroit, where the supplier picked it up and gave it to So at a hotel in Troy, Mich., it says.

After a competitor submitted a lower bid, the supplier who paid the bribe revised its proposal, and So then recommended that GM executives award the contract to the company that paid the kickback, according to the indictment.

A week later, it says, the supplier’s accomplice collected another $2.45 million in cash from Los Angeles money brokers and drove it to Detroit, where the supplier again picked up the money and delivered it to So, this time outside a restaurant in Detroit.

The supplier was prosecuted in South Korea, according to the U.S. Attorney’s Office in Los Angeles.

Kookje Shinmun, a newspaper in Busan, South Korea, reported that an unnamed auto parts supplier was arrested and indicted (Links to an external site.) in 2017 on charges of paying a $3.45-million “rebate” on a $35-million sale of car equipment to GM, but the final outcome of the case was unclear.