Gifts to Foreign Officials
Grady is the president of an engineering firm. The firm is
negotiating a contract in another country, in which it has not
worked previously. A high-ranking official in this country
tells Grady that it is an established and legal custom to give
personal gifts to the officials who are authorized to award the
contracts. This official also informs Grady that while this
condition will not be included in the contract, no further work
will be awarded to Grady's firm without such gifts. If Grady
does not comply, the government will also be less cooperative
in the completion of the first contract. Grady also learns that
other firms have given such gifts to officials.
How should Grady handle this information? Under what
circumstances should the "customs" of a country be excluded or
integrated into a firms own customary behaviour. At what point
does a gift become a bribe? Should the gift be given openly or
"under the table", and how would that affect the action?
Alternate Scenarios about Gifts to Foreign Officials
Suppose that Grady's firm decides to work through an
intermediary. Grady hires a consultant in the country in
question, who is familiar with the culture, to handle the
negotiations to secure the contracts. Since Grady knows that
gifts to officials are common in their line of work in this
country, is Grady obligated to inquire into the consultant's
methods? If so, how far would Grady need to investigate?
--adapted from a scenario proposed by Arden, an Ethics
Center visitor
Suppose that lavish entertainment and
hospitality--hospitality that would be excessive and improper
by the standards of Grady's home country--are a normal business
practice in the country in question. The costs of such
hospitality, including gifts, are openly declared as part of an
engineering firm's overhead expenses in that country, although
they are not itemized in a firms contracts. Should Grady give
the consultant such an entertainment allowance? What should he
consider in making this decision?
--CW
Current NSPE Code of Ethics.
An earlier version may have been used in this case.
Original Case and BER Judgement