Fiber and copper cable manufacturer General Cable has agreed to pay a $20 million civil penalty to avoid Justice Department prosecution on the charge that it paid government officials in Angola, Bangladesh, China, Indonesia and Thailand to secure business, another $55 million in disgorgement to the Securities and Exchange Commission, plus another $6.5 million civil penalty.
That comes to a grand total of $82.3 million.
General Cable signaled it has turned over a new management leaf.
“General Cable paid bribes to officials in multiple countries in a scheme that involved a high-level executive of the company and resulted in profits of more than $50 million worldwide,” said assistant attorney general Leslie Caldwell in announcing the settlement. But the company also came clean and cleaned up, he added. "General Cable also voluntarily self-disclosed this misconduct to the government, fully cooperated and remediated," he said.
DOJ said General Cable conceded the payments were openly discussed in emails. DOJ said General Cable paid $13 million to third-party agents and distributors, some of which went to the payoffs and all of which generated $51 million in profits.
The $20 million, actually $20,469,694.80, is a 50% discount from the bottom end of the recommended civil penalty for the alleged conduct, which DOJ said was because of how thoroughly the company cooperated, including: "conducting a thorough internal investigation; making regular factual presentations and proactively providing updates to the Fraud Section; voluntarily making foreign-based employees available for interviews in the United States; producing documents, including translations, to the Fraud Section from foreign countries in ways that did not implicate foreign data privacy laws; collecting, analyzing and organizing voluminous evidence and information for the Fraud Section; identifying, investigating and disclosing conduct to the Fraud Section that was outside the scope of its initial voluntary self-disclosure; and, by the conclusion of the investigation, providing to the Fraud Section all relevant facts known to it, including information about individuals and third parties involved in the misconduct."
DOJ also cited the company's remedial actions, including "taking employment action against 13 employees who participated in the misconduct, resulting in their departure from the company, and terminating its relationships with 47 third-party agents and distributors who participated in the misconduct."
DOJ suggested the discounted penalty demonstrated "the very real upside to coming in and cooperating with federal prosecutors and investigators."
The SEC was looking into violations of the U.S. Foreign Corrupt Practices Act (FCPA). The company said it paid $51.2 million plus 4.1 million in interest, and a restatement-related penalty of $6.5 million, to the SEC to settle that investigation.
Neither DOJ nor the SEC are requiring an independent compliance monitor; instead, General Cable pledged to self-report over the next three years.
“We are pleased to have reached an agreement with the DOJ and SEC regarding these matters," said General Cable CEO Michael McDonnell. "General Cable is committed to conducting our business ethically and with the utmost integrity, and over the past two years, we have invested significant time and resources to implement a world-class compliance program. At the same time, we have transformed our business strategy under an entirely refreshed strategic leadership team committed to maintaining a strong performance and compliance culture. We are a different and better company today as a result of these actions.”
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