Johnson & Johnson, the world’s largest pharmaceutical maker, agreed to pay roughly $70 million to settle SEC charges after admitting it may have violated the Foreign Corrupt Practices Act (FCPA).
According to the SEC’s complaint, foreign subsidiaries of the New Jersey-based firm allegedly bribed public doctors in Europe, and offered kickbacks to officials in Iraq, in an effort to secure business transactions.
Under the FCPA, US companies are prohibited from paying bribes and engaging in fraudulent activity with foreign officials to win business overseas. The federal watchdog claims that the medical device company paid bribes as far back as 1998 to public doctors in Greece, who selected J&J surgical implants; public doctors and hospital administrators in Poland, who awarded contracts to J&J; and public doctors in Romania to prescribe J&J pharmaceutical products. J&J subsidiaries also paid kickbacks to Iraq to obtain 19 contracts under the United Nations Oil for Food Program.
‘J&J chose profit margins over compliance with the law by acquiring a private company for the purpose of paying bribes, and using sham contracts, offshore companies, and slush funds to cover its tracks,’ says Robert Khuzami, SEC’s director of enforcement in a statement.
The veteran pharmaceutical company is set to fork over $48.6 million in disgorgement and prejudgment interest, the SEC adds, and will pay $21.4 million to settle DoJ charges.
‘I know that these actions are not representative of J& J employees around the world who do what is honest and right every day in the conduct of our business, and in service to patients and customers worldwide,’ says William Weldon, chairman and CEO of J&J. Moving forward, the company hopes to continue embracing ‘responsible corporate behavior'.
