Fiat Pays More Than US$17 Million in Connection With FCPA Charges Arising From Oil for Food Program
Italian automobile and truck manufacturer Fiat S.p.A. and several of the company's subsidiaries today agreed to pay a total of more than $17 million in connection with Foreign Corrupt Practices Act (FCPA) charges brought by the U.S. Department of Justice and U.S. Securities and Exchange Commission (SEC) in connection with the U.N. Oil for Food Program.
In the criminal case, Fiat subsidiaries Iveco S.p.A. and CNH Italia S.p.A. were each charged with one count of conspiracy to commit wire fraud and to violate the books and records provisions of the FCPA in connection with illegal kickbacks paid to officials of the former Iraqi government. Fiat agreed to pay a $7 million penalty in connection with these charges. The Justice Department agreed to enter into a deferred prosecution agreement with Fiat whereby the criminal charges would be dismissed if Fiat and its affiliates abide by the agreement.
In the civil case, the SEC filed FCPA books and records and internal controls charges against Fiat S.p.A. and CNH Global N.V. The SEC's complaint (pdf) alleged that from 2000 through 2003, certain Fiat and CNH Global subsidiaries made approximately $4.3 million in kickback payments in connection with their sales of humanitarian goods to Iraq under Oil for Food Program. The SEC alleged that Fiat and CNH Global failed to maintain adequate systems of internal controls to detect and prevent the payments and their accounting for these transactions failed properly to record the nature of the payments.
Fiat was ordered to pay $5,309,632 in disgorged profits, $1,899,510 in pre-judgment interest and a civil penalty of $3,600,000.