General Cable Wire Company Agrees to Pay More Than $80 Million To Close Bribery Case
Based in Highland Heights, KY, General Cable manufactures and distributes cable and fiber-optic wire. This week, the company has agreed to pay more than $75 million in a settlement regarding allegations that it had paid bribes throughout Africa and Asia as well as an additional $6.5 million in penalties to settle accounting violations.
The charges allege that subsidiaries of the company paid approximately $13 million over roughly 12 years to third-party agents and distributors, and some of these payments were then used unlawfully to acquire more business opportunities. The agents in the case had, thus, paid these bribes to government officials in Thailand, China, Indonesia, Bangladesh, and Angola in ways which violate the Foreign Corrupt Practices Act.
It has also been indicated that employees at both the parent level and the subsidiary level—which includes executives—knowingly participated in this corruption. As a result, then, the company had received about $51 million profits, according to prosecutors.
With this admission, then, no charges will be brought against General Cable but they must adhere to a non-prosecution agreement set forth with the US Department of Justice. Part of this agreement requires General Cable to pay $20.5 million in penalties. The company must also cooperate with the ongoing investigation which can include probing of several in-house individuals. Furthermore, the company must enhance its compliance program and also report on its progress towards implementing the new compliance program to the US Government.
Accordingly, General Cable President and CEO, Michael T. McDonnell, remarks, “We are pleased to have reached an agreement with the DOJ and SEC regarding these matters. General Cable is committed to conducting our business ethically and with the utmost integrity, and over the past two years, we have invested significant time and resources to implement a world-class compliance program. At the same time, we have transformed our business strategy under an entirely refreshed strategic leadership team committed to maintaining a strong performance and compliance culture. We are a different and better company today as a result of these actions.”
The non-prosecution agreement will remain in effect for the next three years so long as the company continues to comply.