I have two questions to ask connected with ABA rules and attorney client privilige. If anyone can use such rules to answer explain the two questions below, I will be very appraciated.

You are General Counsel for X-Bots, Inc., a manufacturing corporation with headquarters in Houston, Texas.. As General Counsel, you often sit in on the Board of Directors meetings of X-Bots, in order to familiarize yourself with any business issues and to offer any legal advice, if needed.

Yesterday, you attended a Board meeting. You joined in the discussions of the current financial health of the company. The Board generally discussed proposals to expand the company's facilities in other countries. A team of employees discussed plans to purchase a particular parcel of land for development of a plant in Colombia. They indicated that they were considering the purchase of the land in Colombia using the services of a facilitator from a company in Colombia, Icktel, Inc. They mentioned that Icktel's CEO, was friends with a local Colombian government official and wanted to use the official to negotiate the terms of the agreement. Icktel's's CEO suggested that X-Bots pay the government official a fee, or "gratuity" for his services. This payment would ease the zoning restrictions currently in place in the locale of the parcel of property.

You expressed some concern with the proposed arrangement, because you believe the payment of the gratuities violates the Foreign Corrupt Practices Act (FCPA). The Board did not seem concerned and directed you to work with the CFO in the Colombian division of X-Bots to finalize the deal.

After the Board meeting, you traveled to Colombia. After meeting with X-Bot employees on the ground, you conclude that the arrangement with Icktel would indeed violate the FCPA. You meet with the CFO in Colombia and discuss the matter. He states "in strictest confidence" that this was the way X-Bots had always done business in Colombia and that he knew other companies also paid this government official to negotiate deals. He asked you to review the contract with Icktel for the purchase and development of the parcel of land. You did so and noted no other concerns. The CFO then proceeded with the transaction.

1. Do you have any further obligations? (Assume the ABA Model Rules of Professional Conduct govern your actions.).

If you return to Houston and express your concerns, what will you say?

2. Assume that the CFO proceeds with purchasing the land from the Icktel, and pays the government official the gratuity. A few months later, the FBI serves a subpoena on you, asking you to meet with agents and to produce any and all records regarding the transaction and any and all records of discussions of the transaction with the Board of Directors. Must you comply? Can you claim that the records are privileged?