Fiat pays out $18m to settle Iraq charges
Tuesday 23 December 2008
Fiat, the Italian car maker, is paying almost $18m to settle claims that it paid bribes to officials in Saddam Hussein's regime in Iraq under the United Nations oil-for-food program at the start of the decade.
Several of the company's subsidiaries are accused of inflating the cost of tractors, construction equipment, commercial vehicles and parts, which they sold to Iraq under the humanitarian relief program meant to ease the burden of sanctions on ordinary Iraqis.
Documents subpoenaed by the US Securities and Exchange Commission referred to “famous 10” - meaning the additional 10 per cent that agents added to the cost of the UN-monitored contracts and which was then funnelled back to officials in the regime.
The formal charges and their settlement was announced yesterday under the Foreign Corrupt Practices Act, which allows the US authorities to tackle bribery overseas. The SEC said that Fiat pay a $3.6m fine, disgorge $5.4m in profits and pay $1.9m in interest, while the company has also agreed to pay a further $7m fine to the US Justice Department.
The UN's oil-for-food program was set up in 1995 to allow Saddam Hussein's regime to trade oil for humanitarian supplies, but reports after the invasion of Iraq in 2003 found it had been plagued with corruption. The SEC first subpoenaed Fiat almost three years ago.
The charges against the company and its subsidiary relate to a total of $4.3m in alleged kickbacks paid in 2000 and 2001.
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