WASHINGTON, DC: Goodyear Tire & Rubber has been fined US$16 million by the U.S. Securities and Exchange Commission (SEC) for violating the Foreign Corrupt Practices Act after employees at its subsidiaries in Kenya and Angola paid bribes to sell tires. The company has neither admitted nor denied the charge.
According to the SEC, Goodyear failed to prevent or detect more than US$3.2 million in bribes during a four-year period. Cash was paid to workers at private companies, government-owned entities as well as police and city council officials, and then recorded as "business expenses".
The SEC says Goodyear's Kenya subsidiary bribed employees of the Kenya Ports Authority, Armed Forces Canteen Organization, Nzoia Sugar Company, Kenyan Air Force, Ministry of Roads, Ministry of State for Defense, East African Portland Cement Co., and Telkom Kenya Ltd.
Meanwhile, the company's subsidiary in Angola bribed workers of the Catoca Diamond Mine, which is owned by a consortium including Angola's national mining company Endiama E.P. and Russian mining company ALROSA, as well as other employees of UNICARGAS, Engevia Construction and Public Works, the Electric Company of Luanda, National Service of Alfadega, and Sonangol.
Noting the settlement reflects the company's self-reporting, prompt remedial acts and significant cooperation with the investigation, Scott Friestad, associate director of the SEC's Enforcement Division commented: "Public companies must keep accurate accounting records, and Goodyear's lax compliance controls enabled a routine of corrupt payments by African subsidiaries that were hidden in their books."
Friestad added the fine would ensure Goodyear forfeits its "illicit profits" from the tire sales in Kenya and Angola.