Business ethics on global scale. After the fall of the Soviet Union, the new government of Azerbajan began converting certain state-controlled industries to private ownership. Ownership in these companies could be purchased through a voucher program. Frederic Bourke, Jr. and Viktor Koseny wanted to purchase the Azerbajani oil company, SOCAR, but it was unclear whether the Azerbajani president would allow SOCAR to be put up for sale. Kozeny met with one of the president of SOCAR (who was also the son of the president of Azerbajani) and other Azerbajani leaders to discuss the sale of SOCAR. To obtain their corporation, Kozeny set up a series of parent and subsidiary companies though which the Azerbajani leaders would eventually receive two-thirds of the SOCAR profit without ever investing in their own funds. In return, the Azerbajani leaders would attempt to use their influence to convince the president to put SOCAR up for sale. Assume that Bourke and Kozey are operating out of U.S. Company.
Discuss the ethics of this scheme, both in terms of the Foreign Corrupt Practice Act (FCPA) and the general ethical issue.
What duties did Kozeny have under the FCPA? (see making ethical business decisions)
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