General Electric to pay $23.4m over 'oil-for-food' corruption charges

The reckoning for rampant corruption under the United Nation's "oil-for-food" programme in Iraq under Saddam Hussein reached the icon of American capitalism, General Electric, which agreed to pay $23.4m to settle charges – without admitting or denying them – under US bribery laws.

The scandal, in which the SEC says some $3.6m was paid in kickbacks to win medical equipment contracts with the Iraqi health and oil ministries, involved not just divisions of GE but also two healthcare companies it has since acquired, including the British company Amersham. According to charges laid by the Securities and Exchange Commission yesterday, Amersham made $5m in wrongful profits from nine Iraqi government contracts, for which it paid $750,000 in bribes between 2000 and 2002, when it was a FTSE 100-listed company. GE acquired the company for £5.7bn in 2004.

Ionics, which was also acquired by GE, won contracts to supply water purification equipment in Iraq thanks to bribery, the SEC charged. And two of GE's European subsidiaries, Marquette-Hellige and OEC-Medical Systems, were also involved in the scheme.

The revelation of widespread corruption under the oil-for-food programme, which had been designed to ease the humanitarian burden of sanctions on the Saddam Hussein regime, severely tarnished the United Nations. An inquiry into the scheme by Paul Volcker, former chairman of the Federal Reserve, in 2005 listed 2,253 companies believed to have paid kickbacks to secure contracts in Iraq.

The SEC has now taken 15 enforcement actions under the US Foreign Corrupt Practices Act against companies involved in Iraq, recovering more than $204m. Even while unveiling the charges against GE, it promised more. "Bribes and kickbacks are bad business, period," said Robert Khuzami, a director of the SEC's enforcement division. "This case affirms that law enforcement is active across the globe. Offshore does not mean off-limits."

The company did not admit the allegations. It will pay $18.4m in disgorgement of profits, $4.1m in interest, and a penalty of $1m.

GE said last night that it had been told a criminal investigation by the US Department of Justice had been closed and that the SEC settlement resolves "the oil-for-food matter" once and for all. It said: "The SEC has identified 18 contracts that it alleges were not accounted for or controlled properly. Fourteen of these transactions involve businesses that were not owned by GE at the time of the transactions."

Start your day with The Independent, sign up for daily news emails
ebooks
ebooksA special investigation by Andy McSmith
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Claims Administrator

£16000 - £18000 per annum: Recruitment Genius: A position has arisen within th...

Ashdown Group: Development Manager - Rickmansworth - £55k +15% bonus

£50000 - £63000 per annum + excellent benefits : Ashdown Group: IT Manager / D...

Recruitment Genius: Security Officer

£16500 per annum: Recruitment Genius: Applicants must hold a valid SIA Door Su...

Ashdown Group: Business Analyst - City, London

£50000 per annum: Ashdown Group: Business Analyst - Financial Services - The C...

Day In a Page

Inside the Kansas greenhouses where Monsanto is 'playing God' with the future of the planet

The future of GM

The greenhouses where Monsanto 'plays God' with the future of the planet
Britain's mild winters could be numbered: why global warming is leaving UK chillier

Britain's mild winters could be numbered

Gulf Stream is slowing down faster than ever, scientists say
Government gives £250,000 to Independent appeal

Government gives £250,000 to Independent appeal

Donation brings total raised by Homeless Veterans campaign to at least £1.25m
Oh dear, the most borrowed book at Bank of England library doesn't inspire confidence

The most borrowed book at Bank of England library? Oh dear

The book's fifth edition is used for Edexcel exams
Cowslips vs honeysuckle: The hunt for the UK’s favourite wildflower

Cowslips vs honeysuckle

It's the hunt for UK’s favourite wildflower
Child abuse scandal: Did a botched blackmail attempt by South African intelligence help Cyril Smith escape justice?

Did a botched blackmail attempt help Cyril Smith escape justice?

A fresh twist reveals the Liberal MP was targeted by the notorious South African intelligence agency Boss
Tony Blair joins a strange and exclusive club of political leaders whose careers have been blighted by the Middle East

Blair has joined a strange and exclusive club

A new tomb has just gone up in the Middle East's graveyard of US and British political reputations, says Patrick Cockburn
Election 2015: Meet the top 12 wacky candidates seeking your vote in May

Election 2015

Meet the top 12 wacky candidates seeking your vote in May
Countdown to the election: Operation Save Danny Alexander shifts into high gear as the SNP target his Commons seat

Operation Save Danny Alexander shifts into high gear

The Chief Secretary to the Treasury didn’t forget his Highland roots in the Budget. But the SNP is after his Commons seat
The US economy is under threat because of its neglected infrastructure

The US is getting frayed at the edges

Public spending on infrastructure is only half of Europe’s, and some say the nation’s very prosperity is threatened, says Rupert Cornwell
Mad Men final episodes: Museum exhibition just part of the hoopla greeting end of 1960s-set TV hit

New Yorkers raise a glass to Mad Men

A museum exhibition is just part of the hoopla greeting the final run of the 1960s-set TV hit
Land speed record: British-built hybrid rocket car aims to be the fastest on Earth

British-built hybrid rocket car aims to be the fastest on Earth

Bloodhound SSC will attempt to set a new standard in South Africa's Kalahari desert
Housebuilders go back to basics by using traditional methods and materials

Housebuilders go back to basics - throwing mud at the wall until it sticks

Traditional materials are ticking all the construction boxes: they are cheap, green – and anyone can use them
Daniel Brühl: 'When you have success abroad, you become a traitor. Envy is very German'

Daniel Brühl: 'Envy is very German'

He's got stick for his golden acting career and for his beloved restaurant - but Daniel Brühl is staying put in Berlin (where at least the grannies love him)
How Leica transformed photography for ever: Celebrating 100 years of the famous camera

Celebrating 100 years of Leica

A new book reveals how this elegant, lightweight box of tricks would transform the way we saw life on the street and in fashion, on the battlefield and across the world