This article was reprinted with permission
from FCPA Professor
[This post is part of a periodic series
regarding "old" FCPA enforcement actions]
In 1989 the DOJ charged (see here)
Goodyear International Corp., a subsidiary of Goodyear Tire & Rubber Co.,
with FCPA anti-bribery violations. The two-paragraph information states,
in pertinent part, as follows.
"[In 1984] Goodyear International corruptly used the U.S.
mails to convey a check, in payment of an invoice for bogus advertising
expenses in the amount of $167,429, in furtherance of an offer, payment and promise
to pay money in the aggregate amount of $981,124, to an official of the
Government of Iraq, to induce said official to use his influence to affect and
influence an act of the Government of Iraq, to wit, the purchase of truck tires
manufactured by the defendant, in order to obtain and retain business with the
Government of Iraq."
Goodyear International pleaded guilty (see here
for the plea agreement) to the information and was ordered to pay a fine
of $250,000 (see here).
The "Statement of Facts Supporting the Guilty Plea" (see here)
makes for an interesting read.
The conduct at issue focused on David Janasik (a
regional export manager for Goodyear International) and his relationships with
certain alleged Iraqi officials. According to the statement of
facts, an Iraqi official told Janasik that Goodyear
International's competitors "had been willing to pay cash 'commissions' to the
official in order to ensure a 'good relationship' between those companies and
the Iraqi government's purchasing organization. The same official
then "explained to Janasik that absent such payments Goodyear
International could hope for only very limited business from" the
government. The statement of facts indicate, however, that "Janasik
told [the official] that such payments were against [company] policy and that
he did not feel that he could do business on those terms."
Thereafter, according to the statement of facts,
Janasik told Goodyear International's Assistant Director for Export
Operations of the payment demand and the Assistant Director for Export
Operations, in turn, discussed the payment demand with Goodyear
International's Regional Director for Europe / Vice President who
stated, with respect to Janasik's contact in Iraq, "get the business, I don't
want to know how."
According to the statement of facts, Janasik then carried
out the scheme by using Goodyear International's advertising manager for Greece
- who has once operated an advertising agency in Iraq - to arrange for false
invoices to be prepared billing Goodyear for Arab language advertising
purportedly placed in Baghdad newspapers.
According to this
New York Times article, "Goodyear auditors uncovered the scheme in 1985 and
immediately reported it to the Justice Department for
prosecution." Interestingly, according to other media reports, Charles
F.C. Ruff, a lawyer for Goodyear, said "I don't think by any measure the
company blesses everything that was said in the statement of facts."
According to media reports, Janasik pleaded guilty
to federal income tax charges in connection with the bribery scheme,
cooperated in the DOJ's investigation, and was sentenced to two years'
probation and a $10,000 fine.
Read more articles on the FCPA by Mike
Koehler at FCPA
For more information about LexisNexis
products and solutions connect with us through our corporate site.