A former country manager in Iraq for a GE subsidiary claims he was fired for telling supervisors and an ombudsman about potential FCPA problems.
Khaled Asadi, a dual citizen of the United States and Iraq, was based in Amman, Jordan.
He served as country executive in Iraq for G.E. Energy (USA) LLC from 2006 until June 2011. He claims he was fired after raising FCPA compliance concerns when GE was pursuing a seven-year $250 million contract with Iraq’s Ministry of Electricity.
G.E. Energy, a Texas company, is a subsidiary of the General Electric Company. The Anti-Whistleblower Retaliation provisions of the Securities Exchange Act protect employees of public companies who were fired or discriminated against for reporting illegal behavior by the company. Asadi brought his suit in federal court in Houston. He’s asking for reinstatement, two times his back pay, and litigation costs and attorney fees.
General Electric Company settled an FCPA enforcement action with the SEC in July 2010. It paid $23.4 million in disgorgement, interest, and a civil penalty for violations of the FCPA’s books and records and internal controls provisions. From 2000 to 2003, the SEC said, four GE subsidiaries paid $3.6 million in kickbacks to the prior Iraqi regime for medical supply and water purification contracts. The kickbacks violated the United Nation’s oil-for-food program and weren’t properly accounted for.
The GE subsidiaries named by the SEC were Marquette-Hellige and OEC-Medical Systems (Europa) AG, Ionics Italba S.r.L. (a then-subsidiary of Ionics), and Nycomed Imaging AS (a then-subsidiary of Amersham). Those subsidiaries are now known as GE Healthcare Ltd. and GE Ionics Inc. and aren’t mentioned in the new civil suit.
Asadi’s allegations in his complaint are:
In June 2010, he was alerted by a source in the Iraqi government that G.E. had hired a woman closely associated with the Senior Deputy Minister of Electricity (Iraq) to curry favor with the Ministry while in negotiation for a Sole Source Joint Venture Contract with the Ministry of Electricity.
Concerned that the hiring of this ‘female associate’ could be damaging to GE’s reputation and potentially violate the Foreign Corrupt Practice Act, Asadi immediately objected to the hiring and raised this issue with his supervisor.
He, along with a colleague from GE’s oil and gas division, took the concern a step further by raising the issue with the Ombudsperson for G.E.
In direct response to his actions, Asadi’s immediate supervisor began pressuring him to step down from his position with G.E. He was offered several alternatives including the possibility of a new assignment within the region.
Shortly after his discussion with the Ombudsperson, Asadi received an extremely negative and troubling performance review. While no significant employment issues were identified in the review, the company began aggressive negotiations for Asadi’s departure.
The negotiations continued until GE abruptly ended discussions and terminated Asadi’s employment on June 24, 2011.
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Asadi said the seven-year, $250 million contract between GE and the Ministry of Electricity was signed in Baghdad in December 2010.