Kevin is a U.S. citizen and the country manager in Freedonia for an international manufacturing firm based in California. Kevin's firm is interested in undertaking projects in Freedonia that will enhance the economic development of some areas outside the capital city that are economically depressed. Kevin locates a suitable site for a manufacturing plant the company requires to expand its operations in Freedonia. The plant construction project will create hundreds of construction jobs during the 18-month construction process. Once opened, the plant will employ over 5,000 workers on three shifts. Other local businesses would develop to service and support the facility and its workers. Kevin's firm pays salaries in its other facilities in Freedonia that are substantially higher than the prevailing local wages.

While development and construction of the new facility in Freedonia has been approved by the company management, there is one substantial obstacle that Kevin faces in getting the project underway. The site is located in an area deemed by local law to be environmentally sensitive. Kevin commissioned a detailed environmental study that determined that, while areas in the general vicinity of the site are environmentally sensitive, the site itself is not environmentally sensitive and does not meet the criteria established in the local law for designating property as environmentally sensitive.

The local governor supports the project and understands that the facility does not pose an environmental risk. He has offered to push legislation through the provincial legislature (which is controlled by the governor's political party) amending the environmental statute to remove the site from its protection. The governor has suggested to Kevin that his administration would press the legislature harder and obtain expedited approval of the statute amendment if Kevin's company would be willing to pay him a "facilitation fee" of US$50,000. The budget for the project is over $500,000,000, and Kevin easily could find a line item in the budget in which to slide this "facilitation fee" to the governor. Kevin is unsure what to do in the situation. If the project gets held up by local legal issues, the budget could increase, and the company could abandon this facility.