ABB agreed to pay more than $58m to settle criminal and civil charges in relation to alleged payment of bribes and kickbacks in Mexico and Iraq.
The Swiss-Swedish engineering group was charged by the US with conspiracy and violating the Foreign Corrupt Practices Act. Prosecutors alleged that ABB and its subsidiaries and agents made “concealed, corrupt payments” to officials at a state-owned Mexican electric utility to gain contracts. ABB was also charged with paying more than $300,000 in kickbacks to the former Iraqi government to win orders under the United Nations oil-for-food programme.
The US anti-bribery laws ban companies from paying foreign officials to gain a business advantage.
ABB agreed to pay $19m in criminal penalties. It also agreed to pay $39.3m to settle a parallel civil probe by the Securities and Exchange Commission into the alleged corruption. The company did not admit or deny wrongdoing in settling the action.
The SEC alleged that ABB’s subsidiaries made at least $2.7m in illicit payments to obtain contracts that generated more than $100m in revenues for the Swiss parent. In the Mexican case, it alleged that from 1999 to 2004, a business unit within ABB’s US subsidiary offered bribes that included cash, cheques, wire transfers and a Mediterranean cruise for officials and their wives. ABB and its lawyer did not return calls seeking comment on Wednesday night.
“ABB’s violations involved conduct at a US subsidiary and six foreign-based subsidiaries,” Cheryl Scarboro, head of the SEC’s foreign corrupt practices act unit, said. “Multinational companies that make illicit payments through layers of subsidiaries will be held accountable.”
ABB has faced other allegations of improper payments in recent years, including over dealings in the Middle East.
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