A Colombian conglomerate will pay $40 million to settle Securities and Exchange Commission charges that it violated the Foreign Corrupt Practices Act with respect to conduct in Colombia. The conglomerate’s bank subsidiary will pay more than $20 million to settle related criminal charges under a deferred prosecution agreement with the Department of Justice.
According to an SEC press release, the bank subsidiary and a joint venture partner won a contract from the Colombian government for a highway infrastructure project. The SEC alleged that this entity, with the knowledge, approval, and assistance of its former president, paid at least $28 million in bribes to government officials in Colombia to win an extension of that contract. The bank subsidiary caused the conglomerate’s violations and provided it with an improper financial benefit totaling approximately $32 million.
“Lax control environments are fertile ground for mischief, as illustrated here where bribes were funded through payments made for invoices lacking supporting documentation and contracts for vaguely described services typically handled internally rather than by third parties,” said Charles Cain, the SEC’s FCPA unit chief. “This case once again highlights the importance of issuers having sufficient internal accounting controls over third-party payments.”
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