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Lawyer is defending client Business Supply in a civil action brought by the State Attorney General under the state Corrupt Practices Act of 1931. That statute makes it a civil offense for any person or business entity to briber or give a kickback to a state official. The statute authorizes fines of up to $100,000 per transaction for any violation. Business Supply has a strict corporate policy that prohibits its employees from bribing or giving kickbacks to anyone. Employees who violate the policy are immediately subject to discharge and are required to indemnify Business Supply for any loss it suffers as a consequence of the violation.
The Attorney General has noticed the deposition of dozens of Business Supply employees, including one John Smith. Prior to his retirement, Smith was the sales manager of Business Supply. Lawyer met with Smith to prepare him for his deposition. At the outset of the interview, Lawyer agreed to represent Smith without charge, and Lawyer told Smith that anything said between them would be confidential. During the interview, Lawyer asked Smith whether he had ever bribed any state officials. Smith responded, “Certainly. All our competitors were doing it too, and I had to do it to sell anything to the state.”