“Get The Business, I Don’t Want To Know How”

“Get The Business, I Don’t Want To Know How”

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 Professor.

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