Salt Lake City Olympics scandal and the link to Bigtown's Situation

Deliverable Length: 4-6 slides with notes

You work for the city of Bigtown's legal department. Bigtown has been
trying for years to attract more conventional businesses, but it has
been unsuccessful to date. The new mayor was voted in on the tagline,
"I'll make Bigtown the place to see and be seen."

It's been six months since the mayor's inauguration, but tourism is, if
anything, worse than before. The mayor is desperate and talking about
offering contracts for city work in exchange for conventional business.
Your boss (the city's counsel) needs to convince the mayor that this
strategy is unethical and possibly illegal. She asks you to research the
Salt Lake City Olympics scandal and address specific issues that link to
Bigtown's situation.

The Big Business of the Olympics and Bribery

LEAD STORY-DATELINE: The Washington Post, January 15, 1999.

Salt Lake City and the state of Utah are considered synonymous with the
Mormon Church and the morality that flows from religious pursuits. A
recent bribery scandal relating to Salt Lake City's successful bid to
host the 2002 Winter Olympics casts a cloud over the city and state.

The Salt Lake Organizing Committee (SLOC) had assigned individual
members to lobby members of the International Olympics Committee (IOC)
to select Salt Lake City as the 2002 Winter Olympics' site. Since
November 1998, there have been allegations that the members of the SLOC
lobbied by making gifts to certain influential IOC members and their
families. The allegations are that the SLOC members gave scholarships,
free medical care, guns and other expensive gifts valued at hundreds of
thousands of dollars to visiting IOC members. IOC rules limit members to
gifts with a maximum value of $150. One influential IOC member is
alleged to have received free medical treatment for hepatitis and
financed land investment deals for one SLOC member.

The scandal has resulted in investigations by a several agencies,
including the federal Department of Justice, the International Olympics
Committee, the U.S. Olympic Committee, and an ethics panel for Salt Lake
Organizing Committee (SLOC). The Utah legislature had created a
committee to oversee the Olympics because of the approximately $1.4
billion initial costs to be incurred by Utah and the State's obligation
to pay any shortfall. That committee has entered the fray and demanded
financial accounting from the SLOC. The state of Utah projected receipt
of three billion dollars in revenues from hosting the games.

IOC members investigating the scandal have said that punishment may
range from requiring an apology to censure to expulsion depending on the
results of its investigation. Several SLOC members including president
Frank Joklik and vice president Dave Johnson, resigned (during the
investigation process).

Prepare a 4-6 slide presentation for your boss to give to the mayor
answering the questions below. Your main points should be listed on the
slides and the specific information to support each point must be
explained in the notes section of the PowerPoint slide.

1. Lobbying is defined as "the act of trying to directly shape or
influence a government official's understanding and position on a public
policy issue." (Post, Business and Society 7th ed.) What is the
difference between lobby ingandbribery?

2. Whether bribery should be considered unethical or illegal has been
debated extensively. Many scholars and businesspeople take the position
that bribery should not be treated as unethical. Why is it that the
general public considers bribery to be immoral? Use ethical theories or
philosophies to explainyouranswer.

3. The Foreign Corrupt Practices Act (15 U.S.C. sec. 78) makes it
illegal for US companies to pay bribes even if they are in foreign
countries. Assuming that this is a case where the FCPA would apply, it
helps to look at its definition of a bribe. The FCPA defines a payment
that is "meant to influence an official to award or maintain business
activity" as illegal. Payments that assist the payer to obtain
ministerial actions are not prohibited. What argument could the SLOC
members make that the payments made do not fit the definition of an
illegal bribe under the

FCPA?

4. What is the appropriate punishment for violation of ethical and legal
principles? Should the remedies be limited to expulsion of the members
who violated those principles or should the entire community be held
responsible? Use ethical principles or theories to answer this question.


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