Honeywell settles claims of foreign bribery scheme in Brazil and Algeria for $200 million
In 2010, employees and intermediaries working for a subsidiary of electronics manufacturing giant Honeywell offered at least $4 million in bribes to a then high-ranking Brazilian government official, federal authorities say.
They said the money was offered in connection with a bidding process at an oil and gas company for a $425 million contract to design and build an oil refinery. UOP, the Honeywell subsidiary, had won the contract at Petrobras. Honeywell was based in New Jersey at the time and now is headquartered in Charlotte.
There was another similar payment in 2011, this time in Algeria, authorities said.
Agents and employees of Honeywell’s Belgian subsidiary paid more than $75,000 in bribes to an Algerian government official to get business with the state-owned entity Sonatrach, according to the U.S. Department of Justice and U.S. Securities and Exchange Commission.
Honeywell, the departments announced Monday, has agreed to pay more than $160 million to settle violations of the Foreign Corrupt Practices Act in relation to the bribery schemes. Honeywell will pay more than $81 million to settle SEC charges. Honeywell also agreed to pay about $79 million to settle criminal charges brought by the DOJ.
For its part, Honeywell said it is paying a total of $202.7 million to the SEC, DOJ and Brazilian authorities in connection with the cases.
“Money is the center of the criminal world, and this company became a part of that world when it failed to adhere to national and international laws,” Special Agent in Charge Ramsey Covington, of the IRS Criminal Investigation Houston Field Office, said in a statement. “It did not live up to the trust placed on it by both the public and its shareholders.”
Honeywell glad to put issue behind it
In response to questions from The Charlotte Observer, a Honeywell spokeswoman referred the Observer to a news release. The company stated it had not been criminally charged and it had made changes as a result of the investigations.
Honeywell will be required to provide reports on its anti-corruption compliance program to the Brazilian authorities for one year and the U.S. Justice Department for three years, according to Honeywell.
As a result of the investigations, the company said it strengthened its ethics and compliance organization as well as its anti-corruption compliance program.
The company, ranked 105 on the latest Fortune 500 list, also fired and disciplined some employees involved in the misconduct, according to the Department of Justice. Honeywell did not immediately respond Monday afternoon to an Observer question about how many people were fired or disciplined.
“We are pleased to have this legacy matter behind us, as these events in no way reflect the current leadership, culture and values that Honeywell has come to establish over a decade since this activity occurred,” said Darius Adamczyk, Honeywell chairman and CEO, according to the company’s news release.
Honeywell has been cooperating in the investigations, according to both the DOJ and Honeywell.
A case of ‘corporate misconduct’
In Brazil, Honeywell’s bribe appeared to pay off, according to the Department of Justice. After winning the contract to build the oil refinery, UOP earned about $105.5 million in profits, the Justice Department said in a news release.
“This case exemplifies corporate misconduct on a global level,” said U.S. Attorney Alamdar Hamdani for the Southern District of Texas, according to the release.
The DOJ said Honeywell proactively disclosed evidence to the department that it wasn’t aware of and helped facilitate interviews with employees, among other things.
About Honeywell
Honeywell has products ranging from airplane equipment to home security systems. While it has much of its business in the aerospace sector, it also has been involved in such varying markets as industrial warehouses, commercial buildings and oil refineries.
In late 2018, Honeywell announced it would move its global headquarters from New Jersey to Charlotte, thanks in part to $87 million worth of state and local incentives. The company pledged to bring 750 jobs to the area by 2024.
During the grand opening of its 23-story uptown headquarters on S. Mint Street last December, Adamczyk said the company had nearly 1,000 employees at its headquarters, including many local hires, part of approximately 110,000 employees worldwide.
N.C. Gov. Roy Cooper and Charlotte Mayor Vi Lyles were among the state and local politicians praising Honeywell at that event. Adamczyk called the relocation to Charlotte “probably one of the best decisions we ever made.”
On its website, in a section about integrity and compliance, the 137-year-old company said, “At Honeywell, we have a responsibility to conduct ourselves with the highest levels of integrity in everything we do.
“This helps us sustain the credibility of our brand, maintain our strong reputation, and build on our track record of growth and performance.”
Observer editor Adam Bell contributed to this report
