Honeywell International Inc. Charged in Bribery Scandals
The Securities and Exchange Commission (SEC) has just announced that it will be bringing charges against Honeywell International Inc. for allegedly violating the Foreign Corrupt Practices Act (FCPA) in connection with bribery schemes that were carried out in both Brazil and Algeria. As part of the agreement to settle the SEC’s charges, the company has committed to paying more than 81 million dollars.
Honeywell, a U.S.-based global manufacturer of aerospace, building technologies, and automation products, is found to have engaged in a bribery scheme to obtain business from the Brazil state-owned entity Petrobras, according to the order issued by the SEC. The scheme involved intermediaries as well as employees of Honeywell’s U.S. subsidiary. The scheme involved intermediaries as well as employees of Honeywell’s U.S. subsidiary.
According to the findings of the order, Honeywell specifically offered at least $4 million in bribes to a high-ranking official in the Brazilian government in 2010 in connection with the bidding process at Petrobras. According to the order issued by the SEC, employees and agents of Honeywell‘s Belgian subsidiary paid more than $75,000 in bribes to an Algerian government official in 2011. The purpose of these payments was to obtain and maintain business with Sonatrach, which is owned by the Algerian state.
Charles Cain, Chief of the FCPA Unit for the SEC Enforcement Division, stated that Honeywell “neglected for years to implement sufficient internal accounting controls to mitigate against known corruption risks in countries like Brazil and Algeria.” “As a result of this failure, Honeywell employees and agents were exposed to a setting in which they were able to accept bribes and did so.
Honeywell agreed to comply with the order issued by the SEC, which stated that the company had violated the provisions of the Securities Exchange Act of 1934 pertaining to anti-bribery, books and records, and internal accounting controls.
Any payments that are made to Brazilian authorities may have up to approximately $38.7 million of that amount offset by the SEC in accordance with the order. As a result, the absolute minimum amount that the company would have to pay to the SEC is approximately $42.4 million.
Honeywell entered into a deferred prosecution agreement and agreed to pay more than $78 million to settle criminal charges brought by the United States Department of Justice in a separate but related case. Additionally, Honeywell reached an agreement with the Brazilian government to settle additional charges that had been brought against it.
Catherine W. Brilliant and Maria F. Boodoo of the FCPA Unit were in charge of the investigation that was carried out by the SEC, and Ansu N. Banerjee was in charge of supervising the investigation. The Securities and Exchange Commission is grateful to the Department of Justice’s Fraud Section, the Federal Bureau of Investigation, the Controladoria-Geral da Unia/Advocacia-Geral da Unia, and the Ministério Pblico Federal in Brazil for their assistance in this matter.
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