The US Foreign Corrupt Practices Act

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Reference no: EM132137154

The US Foreign Corrupt Practices Act, which prohibits American businesses from bribing foreign government officials, often place American firms at a disadvantage when competing with foreign firms. However, facilitative payments are allowed.

You are the Vice President of Sales of a US hi-tech company negotiating an $800 million contract with a foreign government.

During negotiations, you have been told by the ranking foreign government official that if your company pays that official $80 million, he will guarantee that your company win the contract. Furthermore, the $80 million does not have to come from company profit, as the value of the contract will be increased by $80 million. The subject official has a son, who would like to attend a prestigious college in the U.S. His grades and SAT results prevents him from being admitted by his preferred college. Incidentally, your company’s CEO is on the board of this college.

The CEO and Board of Directors have “plausible deniability” so that if the US Government discovers the bribe, you will be the only “scapegoat.” If you do not offer the bribe, you will lose the contract and be terminated. If you offer the bribe and win the contract, you will be promoted to CEO within 6 months, as the current CEO is retiring. There is a 50% chance that the US

Government would prosecute you for the bribe.

What should you do

1) Refuse to pay the bribe, lose the contract and be terminated.

2) Pay the bribe and face a 50% chance of being prosecuted by the US government.

3) Be creative and work with your company’s legal team and develop a creative way to pay the official a facilitative payment. But, you must give the details of the facilitative payment.

You must choose one of the above 3 options. Please choose and explain thourougly your choice.

Reference no: EM132137154

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