Monday December 22, 08:58 PM
Fiat to pay 17.8 million dlrs penalty in oil-for-food scandal
WASHINGTON (AFP) - Italian auto giant Fiat (Milan: F.MI - news) has agreed to pay 17.8 million dollars in penalties for giving illegal kickbacks to the previous Iraqi government under the UN oil-for-food scandal, US officials said Monday.
Fiat agreed to pay the civil and criminal penalties after reaching settlements with US authorities, the Justice Department said.
It would pay seven million dollars in fines as part of a "deferred prosecution agreement" with the department, and 3.6 million dollars in civil penalties and 7.2 million dollars in "disgorgement" of profits following a settlement with the US Securities and Exchange Commission.
The Justice Department said Fiat had acknowledged that three of its subsidiaries -- Iveco, CNH Italia and CNH France -- made "improper payments" to the Iraqi government of former Iraqi president Saddam Hussein in order to obtain contracts.
The contracts were with Iraqi ministries to provide industrial pumps, gears and other equipment.
Criminal complaints were filed on Monday against the three Fiat subsidiaries in a US district court, the Justice Department said.
They were each charged with one count of conspiracy to commit wire fraud and to violate the books and records provisions of the Foreign Corrupt Practices Act (FCPA).
The oil-for-food program was set up by the UN Security Council to let sanctions-hit Iraq export a limited amount of oil to purchase food and medicine under UN supervision.
But the 67-billion-dollar program, which ran from 1996 to 2003, was manipulated by Saddam and an overwhelmed UN headquarters failed to assert administrative control, an independent inquiry had concluded earlier.
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