The former chief executive of a British chemical company has settled allegations that he approved illegal bribes to Iraq's Oil Ministry and government officials in Indonesia in the mid-2000s, according to the Wall Street Journal.
Paul W. Jennings, former CEO of Innospec Inc., agreed to pay $229,000 to settle allegations that he violated the U.S. Foreign Corrupt Practices Act by approving bribes to win orders for the fuel additive tetraethyl lead (TEL) in mid-2004 and 2005. The lead-based fuel additive has been banned in Europe and the United States due to its link to brain damage in children.
Mr. Jennings was the company's chief financial officer until he became CEO in 2005. He left Innospec in 2009 in the wake of the bribery probe. He neither admitted nor denied the allegations against him, the U.S. Securities and Exchange Commission said. A spokesman for Innospec reportedly declined to comment on the case.
The FCPA bars companies that trade on U.S. exchanges from paying bribes to foreign officials to gain or retain business -- Innospec is listed on the Nasdaq Stock Market.
The allegations against Mr. Jennings are part of a U.S. crackdown on overseas bribery. As a deterrent, U.S. regulators have targeted individuals with criminal and civil charges of foreign bribery, rather than merely fining corporations.
Innospec was accused by the SEC and British authorities of paying bribes totaling about $6.3 million and promising an additional $2.8 million to Iraqi ministries and government officials, as well as government officials in Indonesia, in exchange for contracts valued at about $176 million.
The company pleaded guilty last year to bribing Iraqi officials, among other charges, and agreed to pay about $40 million to settle the charges in both countries.
In Iraq, Innospec allegedly used its agent to funnel payments to officials in order to sell the fuel additive to Iraqi refineries, according to the SEC. In an October 2005 email copied to Mr. Jennings, Innospec's agent wrote that Iraqi officials were demanding a 2% kickback, and that the company was sharing profits with Iraqi officials, the SEC said. "Otherwise, our business will stop and we will lose the market," the email said, according to the SEC.
The agency said Mr. Jennings later approved the kickbacks.
(Source: Wall Street Journal)