You are the owner of a real estate development firm that has a significant federal practice. You employ a senior executive whose only job is to troll the various federal agencies to pick up intelligence on where new business opportunities may be coming. He hears from a golfing buddy (who happens to be a senior policy-maker) that the Veterans Administration will be looking for new space for one of its agencies, and your firm has the perfect location. However, the VA will only accept bids from Women-Owned, Minority-Owned, or Service-Disabled Veteran-Owned businesses (collectively known as "socio-economic preferences").

The current ownership structure of your firm does not meet the definition of any of the socio-economic preferences. However, your marketing executive suggests that you "sell" 51% of your stock to your spouse, who qualifies as a Service-Disabled Veteran. By completing a paper transaction the company will qualify for the socio-economic preference. However, your spouse has had no dealings with the company, nor does he want to get involved in the day-to-day operation of the business.

Discuss the ethical implications of making a paper transaction solely to qualify for the socio-economic preference. Do you make the change? Why or why not?