SEC Orders Goodyear to Pay Hefty Fine for FCPA Violations
The U.S. Securities and Exchange Commission (SEC) recently sanctioned Goodyear Tire & Rubber Co. for violations of the Foreign Corrupt Practices Act (FCPA), imposing a penalty of $16.2 million on the company as a result of bribes paid to foreign officials by Goodyear subsidiaries in Kenya and Angola. According to the SEC’s order, the Goodyear subsidiaries “routinely paid bribes to employees of government-owned entities and private companies to obtain tire sales,” which totaled over $3.2 million in bribes paid between 2007 and 2011. The Goodyear subsidiaries then falsely recorded these payments as legitimate business expenses, and Goodyear did not uncover those bribes when consolidating its subsidiaries’ books and records “because it failed to implement adequate FCPA compliance controls at its subsidiaries in sub-Saharan Africa.”
This news is important for FCPA whistleblowers for multiple reasons. First, it illustrates that the size of a whistleblower’s reward is determined by the total monies recovered, not merely the size of the bribes paid by a company to foreign officials. In this case, the sanction levied by the SEC – and therefore the amount to be recovered by the government – was over five times the value of the underlying bribes. If the SEC learned of Goodyear’s bribery of foreign officials as a result of a whistleblower tip, that whistleblower could be entitled to up to 30 percent of the government’s recovery. Second, this news further demonstrates the SEC’s commitment to ensuring companies comply with the FCPA. This is important to whistleblowers because company insiders and employees are particularly well-positioned to detect FCPA violations, which can occur at any company doing business overseas, either directly or through its affiliates.