Business - Washington, D.C. Gov't says chemical maker pleads guilty to bribing officials Company defrauded United Nations

By Marcy Gordon

AP Business Writer

WASHINGTON (AP) -- Specialty chemicals maker Innospec Inc. pleaded guilty last week to federal charges of bribery, defrauding the United Nations and violating the U.S. embargo against Cuba, U.S. authorities said.

The Justice Department said Innospec entered a guilty plea before a federal judge in Washington to charges of wire fraud in connection with kickbacks it paid to the former Iraqi government under the UN oil-for-food program and bribes to officials in the Iraqi Oil Ministry.

Innospec also admitted to selling chemicals to Cuban power plants in violation of the U.S. embargo, Justice and other law enforcement agencies said.

The company, which has manufacturing plants and sales operations around the world, offices in the U.S. and Britain and is incorporated in Delaware, also agreed to pay $40.2 million in a settlement with the Justice Department, the Treasury Department's Office of Foreign Assets Control, the Securities and Exchange Commission and Britain's Serious Fraud Office.

It marked the latest action in the government's efforts to combat overseas corruption in international business. The bribery charges were brought under the Foreign Corrupt Practices Act, which makes it unlawful to bribe foreign government officials or company executives to secure or retain business.

A number of U.S. and foreign companies have been charged with violating the law in recent years, in cases involving payments to officials in Nigeria, Ecuador, Iraq, China, Iran, Saudi Arabia, Kazakhstan and elsewhere.

Cheryl Scarboro, who heads the SEC's Foreign Corrupt Practices Act Unit, said Innospec had a "long-standing practice" of bribing foreign government officials and that company management "authorized and condoned the misconduct."

Innospec is said to be the world's only manufacturer of the anti-knock compound tetraethyl lead, used in leaded gasoline. The additive is sold to oil refineries around the world and generates a large part of the company's sales. It also makes chemicals used in personal care and photographic markets, among others.

In London Thursday, the company's British subsidiary Innospec Ltd. pleaded guilty in Southwark Crown Court to paying bribes to Indonesian officials and agreed to pay a $12.7 million criminal penalty.

Included in the $40.2 million settlement is a $14.1 million criminal fine. Innospec will also hire an independent monitor for at least three years to oversee a new program of anti-corruption and export-control measures. The company also agreed to cooperate with the authorities in ongoing investigations into bribes by Innospec employees and agents, Justice said in a news release.

Published: Mon, Mar 22, 2010


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