Q&A Hero

Question

Robert J. Stein was hired as the CFO for the American occupation effort in Iraq. As someone who had the authority to award lucrative contracts to companies seeking portions of the reconstruction efforts there, Mr. Stein wielded a great deal of power. Mr. Stein had served time for felony fraud in the 1990s, but either the background check was not completed or his criminal activity was deemed irrelevant for this position of power.
Mr. Stein and his wife have been accused of being involved in the following transactions:
  • Philip H. Bloom, the owner of several U.S.-based construction companies seeking Iraqi business wired $140,000 to allow Mr. Stein to purchase real estate in North Carolina.
  • Other contractors spent $65,762.63 to purchase cars for Mr. Stein and his wife (a Chevrolet and a Toyota).
  • One contractor gave $44,471 for home improvements for the Steins' home.
  • $48,073 for jewelry paid for from funds totaling $258,000 that had been transferred into the Bragg Mutual Federal Credit Union account begun by the Steins.
  • A donation of $7,151.58 to the Steins that was used by Mr. Stein's wife to purchase a "towing service".
  • Ironically, $200 of the credit union fund was transferred to the clerk of a Federal District court for restitution payment for his earlier conviction.

Mr. Bloom was awarded a significant number of contracts in Iraq. Which of the following best describes the conduct of Mr. Bloom and Mr. and Mrs. Stein?
a. The conduct is not a violation of the FCPA because Mr. Stein is a U.S. government official and Mr. Bloom owns a U.S. company, but the two may have violated U.S. laws that prohibit bribery
b. The conduct is a violation of the FCPA because the money and gifts were given with the idea of being awarded contracts
c. The conduct is a violation of the FCPA because the money and gifts related to transactions in international operations
d. The conduct, while ethically dubious, is perfectly legal

Answer

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