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Harry Cassin
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Andy Spalding
Senior Editor

Jessica Tillipman
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Julie DiMauro
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Thomas Fox
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Marc Alain Bohn
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Bill Waite
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Shruti J. Shah
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Russell A. Stamets
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Richard Bistrong
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Eric Carlson
Contributing Editor

Airline pays reduced $41.5 million to settle FCPA offenses

Brazil airline GOL Linhas Aéreas Inteligentes S.A. agreed to pay the DOJ and SEC $41.5 million Thursday to resolve charges that it violated the Foreign Corrupt Practices Act by providing improper payments to officials in Brazil to pass legislation benefitting the company.

Pursuant to a three-year DPA with the DOJ, GOL agreed to pay a criminal penalty of $17 million. The DOJ charged the São Paulo-based company in federal court in Maryland with conspiracy to violate the FCPA’s anti-bribery and books and records provisions.

In an internal administrative order, the SEC charged the company with violating the FCPA’s anti-bribery, books and records, and internal accounting controls provisions.

Without admitting or denying the civil charges, GOL agreed to pay the SEC $24.5 million.

The DOJ and SEC said GOL’s total criminal and civil penalties could have been about $157 million. However, due to GOL’s “demonstrated financial condition and inability to pay the fines in full, the SEC and the DOJ waived payment of all but $24.5 million and $17 million of GOL’s payment obligations, respectively,” the SEC said.

The DOJ and SEC each said they will credit up to $1.7 million of GOL’s penalties against a $3.4 million fine the company agreed to pay to authorities in Brazil to resolve related investigations.

According to the SEC, between 2012 and 2013, GOL, through a director and a subsidiary, paid bribes of around $1.14 million to a Brazilian official to influence legislation that would be favorable to the company in Brazil. The payments were characterized as legitimate advertisement expenses, including reimbursements for online advertisement.

The legislation — related to payroll tax and aviation fuel tax reductions — saved the company around $39.7 million in 2013, the SEC said.

According to the SEC, the GOL director discussed the bribe scheme with a close associate of a Brazilian official, who then transmitted the information in person, by phone, and through ephemeral messaging apps that use “end-to-end encrypted and content-expiring messages with servers exclusively located in the U.S.”

GOL first disclosed the investigation in December 2016, according to data from FCPA Tracker.

The DPA didn’t require GOL to appoint an independent compliance monitor.

The DOJ said GOL received full credit for its cooperation, which included “reviewing voluminous documents, interviewing witnesses, conducting background checks, and testing over two thousand transactions.” The company also redesigned “its entire anti-corruption program,” the DOJ said.

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