Illegal Methods of Bigtown to Attract Business

You work for the city of Bigtown's legal department. Bigtown has been trying for years to attract more convention business, 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 convention 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 Washington Post article titled "The Big Business of the Olympics and Bribery" (1999) reads:

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).

Part A - Research the Salt Lake City Olympics scandal and address specific issues that link to Bigtown's situation.

Part B - 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.

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 lobbying and bribery?

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 explain your answer.

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?

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.