ENGR 340 University of North Dakota Construction Kickbacks in Maryland Discussion

User Generated

gnaarexnvfre

Engineering

Engr 340

University of North Dakota

ENGR

Description

The attached file shows more information about the questions and the topic it's about.

Questions:

  • (5 pts) Does the fact that paying government officials for receiving contracts seemed to be a common-place business practice in Maryland at the time make this practice ethically acceptable?
  • (5 pts) What should an engineer do in the face of competition from others who are willing to resort to bribery?
  • (5 pts) What is the ethical status of a campaign contribution given to a politician to secure future business? Is this a bribe? Is this extortion? Perhaps line drawing (Chapter 2) would help answer this question.

Unformatted Attachment Preview

Chapter 8 Homework – Vice President Spiro Agnew and Construction Kickbacks in Maryland Due: November 8, 2020, at 11:59 p.m. US Central Time Directions: Please submit your assignment as a PDF on Blackboard. You can use this word document as a template for answering the homework questions. Use concepts and definitions discussed in the text to answer the questions. Vice President Spiro Agnew and Construction Kickbacks in Maryland In January of 1973, architects and consulting engineers all over Baltimore, Maryland, were seeking out any available defense attorneys with experience in criminal law. This activity was brought on by subpoenas issued by the U.S. Attorney for Maryland, George Beall, who was looking into charges of bribes and kickbacks given to elected officials by engineers working in the construction industry. The subpoenas required these engineers to submit the records of their firms to the U.S. attorney. One of these engineers was Lester Matz, a partner in Matz, Childs and Associates, a Baltimore engineering firm. The subsequent events described by Richard Cohen and Jules Witcover in their book A Heartbeat Away eventually led to the disgrace and resignation of Spiro Agnew, then the Vice President of the United States. Matz was an engineer trained at Johns Hopkins University in Baltimore. Although his firm was doing well, it always seemed to lose out to other firms on big public-works contracts. In Maryland, engineering and architectural services for government projects were not put out for bid, but rather were awarded to individual firms using various criteria, including the firm’s ability to do the work, its performance on past contracts, etc. Interestingly, unlike the situation for engineering services, the contractor for government projects was chosen through a competitive bidding process. It became clear to Matz that in acquiring government contracts, his talents and those of his firm were unimportant. What was required to get the contracts for public works was contacts in government and the requisite bribes and kickbacks. In 1961, Matz began courting Spiro T. Agnew, an ambitious and rising politician. In 1962, Matz donated $500 to Agnew’s campaign for Baltimore county executive, a post that is roughly equivalent to mayor for the areas of the county outside the city limits of Baltimore. The county executive wielded great power in determining who received contracts for the engineering services required for the numerous public-works projects undertaken by the county. The campaign contribution was given by Matz and his partner in the hopes of receiving some of the county engineering contracts that they had been locked out of. After Agnew won the election, the contribution made by Matz’s engineering firm was rewarded with contracts for county engineering work. In return, the firm paid Agnew 5% of their fees from the county work, which apparently was the kickback paid by other engineering firms at the time. With this arrangement, Matz, Childs and Associates prospered and Matz became relatively wealthy. At its peak, the firm employed nearly 350 people. Matz was able to rent an apartment in Aspen for his winter ski vacations and also had a beach condo at St. Croix in the Virgin Islands. Matz’s St. Croix condo was near a condo owned by his friend, Spiro Agnew. The “business” arrangement between Agnew and Matz continued when Agnew was elected governor of Maryland, only now Matz, Childs and Associates received contracts for state work. The financial arrangement remained the same: Agnew received a payment for every contract awarded. These payments continued even after Agnew was elected vice president on the Republican ticket with Richard Nixon in 1968. Matz testified that he met with Agnew in his office in the White House and had given him an envelope containing $10,000 in cash. Indeed, Matz also indicated that he had given $2,500 dollars to Agnew for a federal contract that a subsidiary of Matz, Childs and Associates had received. All told, Matz described payments that he had given Agnew over the years totaling over $100,000. As a brief aside, it is interesting to describe how the money paid to Agnew was generated. Clearly, these payments had to be made in cash in order to avoid leaving records of the transactions. However, engineering firms are not paid in cash for their services and thus don’t typically have large amounts of cash on hand. One method of generating cash was to give cash “bonuses” to key employees. After retaining a sufficient amount to pay the income taxes on the bonus, the employee returned the cash to the firm, where it was placed in a safe until needed. Of course, this practice is a violation of the tax code: The company books record the transaction as a bonus, yet much of the money is retained by the fi rm. This practice subjected Matz, Childs and Associates to prosecution under the federal tax code. This method didn’t always generate the required amount of cash, so other means were also used. For example, large “loans” were made to colleagues, who cashed the money and returned it to the firm. These loans were then “repaid” slowly over a long period of time to make the books appear right. With federal prosecutors threatening to indict Matz and Childs for income-tax evasion and other charges, they decided to provide evidence to the government of the wrongdoing of Agnew and his successor as county executive. Agnew’s lawyers and the prosecutors reached an agreement whereby Agnew would resign as vice president and plead nolo contendere (no contest) to a single count of income-tax evasion, a felony, for payments received in 1967. This plea is the legal equivalent of a plea of guilty; the defendant doesn’t admit to the crime, but does acknowledge that there is enough evidence to convict him. On October 10, 1973, Agnew resigned as vice president, the first vice president to have resigned in disgrace. Later that day, in a dramatic appearance in a Maryland courtroom, he entered his plea. The judge fined him $10,000 and honored the plea agreement whereby Agnew received no jail term, but only three years of unsupervised probation. For agreeing to cooperate with the prosecution, Matz and Childs were not prosecuted. These events took place against the backdrop of one of the most intense government crises in U.S. history. Although Nixon and Agnew had been reelected in a landslide in the 1972 election, the Watergate scandal hung over the administration. Shortly after the events of this case, the Watergate scandal intensified, culminating in the resignation of Richard Nixon from the presidency. Questions: 1. (5 pts) Does the fact that paying government officials for receiving contracts seemed to be a common-place business practice in Maryland at the time make this practice ethically acceptable? 2. (5 pts) What should an engineer do in the face of competition from others who are willing to resort to bribery? 3. (5 pts) What is the ethical status of a campaign contribution given to a politician to secure future business? Is this a bribe? Is this extortion? Perhaps line drawing (Chapter 2) would help answer this question.
Purchase answer to see full attachment
User generated content is uploaded by users for the purposes of learning and should be used following Studypool's honor code & terms of service.

Explanation & Answer

Attached. Please let me know if you have any questions or need revisions.

SURNAME: 1
Student's name:
Course code:
Institutional affiliation:
Date of submission:
Chapter 8 Homework – Vice President Spiro Agnew and Construction Kickbacks in
Maryland

Does the fact that paying government officials for receiving contracts seemed to be a
commonplace business practice in Maryland at the time makes this practice ethically
acceptable?
Paying government officials for receiving contracts seemed like a common practice in
Maryland at that time. However, that does not make the practice ethically acceptable. Mainly,
this practice cannot be justified because it is quite common for every businessperson. Giving
bribes adversely affects society, mostly the economy, because it establishes an imbalance in
the society whereby the wealthy individuals get richer, and the poor get poorer. This will lead
to unequal distribution of resources. Additionally, in most cases, bribery is normally paid in
cash, and the methods used to raise funds are questionable. For instance, in this case, the
company had to involve themselves in tax fraud to raise the kickback cash since engineering
contracts are not paid in cash. As a result, they violated tax codes. Taking cash from the
company also affects the firm. Most importantly, Rights Ethics defines individuals'
fundamental rights and the collective society sharing the same interest in a professional
competitive environment. According to rights ethics, obstructing rights either directly or
indirectly creates a working environment where individuals' rights are not adhered to for all
competitive ...


Anonymous
Goes above and beyond expectations!

Studypool
4.7
Trustpilot
4.5
Sitejabber
4.4

Similar Content

Related Tags