MBA524 Business Law and Ethics Homework Unit 3

A Philip Morris subsidiary, C. A. Tabacalera National, and a B.A.T Industries subsidiary known as C. A. Cigarrera Bigott entered into a contract with La Fundacion del Nino (the Children’s Foundation) of Caracas, Venezuela. The agreement was signed on behalf of the foundation by the foundation’s president, who also was the wife of the then–president of Venezuela. Under the terms of the agreement, these two tobacco firms were to make periodic donations to the Children’s Foundation totaling $12.5 million. In exchange, the two firms would receive price controls on Venezuelan tobacco, elimination of controls on retail cigarette prices in Venezuela, tax deductions for donations, and assurances that the existing tax rates applicable to tobacco companies would not be increased. 

Is the donation to the charity a violation of the FCPA? [Lamb v Philip Morris, Inc., 915 F.2d 1024 (6th Cir. 1990; cert. denied, 498 U.S. 1086 (1995))