The Securities and Exchange Commission Wednesday charged global resources company BHP Billiton with violating the Foreign Corrupt Practices Act when it sponsored foreign government officials as guests at the 2008 Summer Olympics in Beijing.
BHP Billiton agreed to pay a $25 million penalty to settle the SEC’s charges.
The SEC didn’t go to court and settled the case through an internal administrative action.
BHP invited 176 government officials and employees of state-owned enterprises to the Games at the company’s expense, and ultimately paid for 60 guests and some spouses and others who joined them.
Sponsored guests came mainly from Africa and Asia, the SEC said. The guests enjoyed three- and four-day hospitality packages worth between $12,000 to $16,000. The packages included event tickets, luxury hotel accommodations, and sightseeing excursions.
An SEC investigation found that BHP Billiton, the world’s biggest miner, “failed to devise and maintain sufficient internal controls over its global hospitality program connected to the company’s sponsorship of the 2008 Summer Olympic Games in Beijing.”
SEC enforcement director Andrew Ceresney said, “BHP Billiton footed the bill for foreign government officials to attend the Olympics while they were in a position to help the company with its business or regulatory endeavors.”
BHP Billiton required business managers to complete a hospitality application form for any individuals they wanted to invite to the Olympics, including government officials, the SEC said. But the company failed to give employees with any specific training on how to complete forms or evaluate bribery risks of the invitations.
“Due to these and other failures, a number of the hospitality applications were inaccurate or incomplete, and BHP Billiton extended Olympic invitations to government officials connected to pending contract negotiations or regulatory dealings such as the company’s efforts to obtain access rights,” the SEC said.
BHP didn’t admit or deny the SEC’s findings.
The SEC said the administrative settlement “reflects BHP Billiton’s remedial efforts and cooperation with the SEC’s investigation and requires the company to report to the SEC on the operation of its FCPA and anti-corruption compliance program for a one-year period.”
BHP Billiton is headquartered in both England and Australia. Its ADRs trade on the New York Stock Exchange under the symbol BHP.
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The SEC’s Securities Exchange Act of 1934 Release No. 74998 and Administrative Proceeding File No. 3-16546 In the Matter of BHP Billiton Ltd. and BHP Billiton Plc dated May 20, 2015 is here (pdf).
Richard L. Cassin is the publisher and editor of the FCPA Blog. He can be contacted here.