Bribery and Corruption

"Which of the following scenarios is an example of a kickback scheme? A. A politician threatens to shut down a business if it does not pay a bribe B. A government official demands money in exchange for making a business decision C. An employee receives a payment for directing excess business to a vendor D. A vendor inflates the amount of an invoice submitted to the company for payment

" "Kickbacks are improper, undisclosed payments made to obtain favorable treatment. Thus, an employee who receives a payment for directing excess business to a vendor is an example of a kickback scheme. In such cases, there might not be any overbilling involved; the vendor simply pays the kickbacks to ensure a steady stream of business from the purchasing company. Extortion is defined as the obtaining of property from another, with the other party's consent induced by wrongful use of actual or threatened force or fear. Economic extortion is present when an employee or official, through the wrongful use of actual or threatened force or fear, demands money or some other consideration to make a particular business decision. Thus, an example of an economic extortion is if a government official demands money in exchange for making a business decision. Similarly, if a politician threatens to shut down a business if it does not pay a bribe, this is also an example of an economic extortion scheme.

"Which of the following is NOT a type of loan that frequently turns up in corruption cases? A. A legitimate loan in which a third party makes the loan payments B. A legitimate loan made at market rates C. An outright payment falsely described as an innocent loan D. A legitimate loan made on favorable terms

" A legitimate loan made at market rates

"Bruce is a purchaser for Acme Widgets. Bruce's brother-in-law is a salesperson for Olson Electronics, one of Acme's largest suppliers. Bruce told his supervisor about the relationship, and she approved his ordering of supplies from his brother-in-law as long as the purchases were reviewed by a senior manager. Bruce did not receive any favors or money from his brother-in-law in return for the sales. A year after Bruce discussed the situation with his supervisor, Acme's management discovers that another supplier offers the same parts as Olson Electronics but at a cheaper price. Acme Widgets is considering suing Bruce for conflict of interest. Which of the following is the MOST ACCURATE statement about Acme's chances of success? A. Acme's chances are poor because Bruce did not actually receive any money from his brother-in-law for sending him business. B. Acme's chances are good because it is clear that Bruce had a conflict of interest in dealing with his brother-in-law. C. Acme's chances are poor because the company was aware of the situation and it allowed Bruce to do business with his brother-in-law's company despite the relationship. D. Acme's chances are good because it could have gotten the supplies at a lower price.

" Acme's chances are poor because the company was aware of the situation and it allowed Bruce to do business with his brother-in-law's company despite the relationship.

" "Which of the following is a typical method used to make corrupt payments in bribery and corruption schemes? A. Payment of credit card bills B. Checks and other financial instruments C. Gifts, travel, and entertainment D. All of the above

" All of the above

"Which of the following is TRUE regarding the methods typically used for making corrupt payments in bribery and corruption schemes? A. Payers often make corrupt payments by paying off the recipient's credit card debt B. Payers often make corrupt payments by offering recipients loans on extremely favorable terms C. Payers often make corrupt payments by selling property to recipients at prices lower than the property's market value D. All of the above

" All of the above

"Which of the following is a basic method used to prove corrupt payments in bribery and corruption schemes? A. Secretly infiltrating ongoing transactions B. Turning an inside witness C. Identifying and tracing payments through audit steps D. All of the above

" All of the above

"Which of the following scenarios is an example of a conflict of interest? A. An employee for a pharmaceutical company has an economic interest in a company that does business with his employer and discloses it to his employer. B. An employee is related to a party that works for one of his company's vendors and informs his employer of the relationship. C. An employee has an undisclosed personal relationship with a company that does business with his employer. D. An employee for a phone installation company works as a fishing guide on weekends, but he does not tell the phone company about his other job.

" An employee has an undisclosed personal relationship with a company that does business with his employer.

"When an employee or official uses force or fear to demand money in exchange for making a particular business decision, that individual is engaging in: A. An illegal gratuity scheme B. Bribery C. Economic extortion D. A kickback scheme

" Economic extortion

"Daniel, a plant manager for a utility company, has his own commercial cleaning business on the side. Daniel threatened to withhold business from any vendors of the utility company that did not hire his cleaning business for their office cleaning needs. Which of the following best describes the type of corruption scheme in which Daniel engaged? A. Kickback scheme B. Collusion scheme C. Illegal gratuity scheme D. Economic extortion scheme

" Economic extortion scheme

"James is a purchaser for a large government entity. ABC Inc. tells James that if he will award ABC at least $5 million in contracts over the next two years, ABC will hire James at the end of the two years at twice his current salary. Because no actual money changes hands, this could not be considered a bribery or corruption scheme. A. True B. False

" FALSE

"Ed Smith, a city commissioner, negotiated a land development deal with a group of private investors. After the deal was approved, the investors rewarded Smith with an all-expenses-paid trip, even though giving such rewards to government officials is prohibited by law. Which of the following is the most appropriate term to describe what has taken place? A. Economic extortion B. Collusion C. Need recognition D. Illegal gratuity

" Illegal gratuity

"Which of the following statements about the methods used to make corrupt payments in bribery and corruption schemes is INCORRECT? A. Payers often make corrupt payments by using their credit cards to pay recipients' transportation, vacation, and entertainment expenses. B. Payers often make corrupt payments by making outright payments falsely described as innocent loans. C. Payers often make corrupt payments by buying assets from recipients and allowing the recipients to retain title or use of the items. D. Payers often make corrupt payments by selling property to recipients at prices higher than the property's market value. Submit Answer

" Payers often make corrupt payments by selling property to recipients at prices higher than the property's market value.

"Corruption is the wrongful use of influence to procure a benefit for the actor or another person, contrary to the duty or the rights of others. A. True B. False

" TRUE

"Kickbacks are improper, undisclosed payments made to obtain favorable treatment. A. True B. False

" TRUE

"Payers can make corrupt payments by giving recipients hidden interests in profit-making enterprises. A. True B. False

" TRUE