American conglomerate Honeywell International Inc. agreed Monday to pay the SEC and DOJ $160 million to resolve charges that it violated the Foreign Corrupt Practices Act stemming from conduct in Brazil and Algeria.
A U.S. unit of Honeywell (Honeywell UOP) entered into a three-year deferred prosecution agreement with the DOJ that imposed a criminal penalty of about $79 million. The DPA resolved a criminal information filed in federal court in Texas charging Honeywell UOP with conspiracy to violate the FCPA’s anti-bribery provisions.
The DOJ said it will credit up to $39.6 million of the criminal penalty for Honeywell’s payments to authorities in Brazil in related proceedings.
In an internal administrative order, the SEC charged Honeywell International with violating the FCPA’s anti-bribery, books and records, and internal accounting controls provisions. The company agreed to pay the SEC $81.5 million in disgorgement and prejudgment interest. The SEC didn’t impose a separate civil penalty.
The SEC’s order provides for an offset of up to $38.7 million for payments to Brazilian authorities.
According to the DOJ, between 2010 and 2014, Honeywell UOP conspired to offer a bribe of about $4 million to a Petrobras official to help win a $425 million contract to develop an oil refinery called Premium. The DOJ said the Petrobras official was a “downstream director.”
In a meeting in 2010, the Honeywell account manager for Petrobras offered a Brazilian lobbyist and the downstream director a portion of the contract (1-3 percent).
Internally, Honeywell’s Petrobras account manager and his supervisors referred to the Petrobras official as the “King” and the Brazilian lobbyist as the “King’s Assistant.”
In exchange for the bribes, Honeywell received inside information and secret assistance from the Petrobras official and eventually won the contract, the DOJ said.
In addition to the Brazil bribes, the SEC also charged Honeywell Belgium with hiring an intermediary in 2011 that helped bribe an official to win business from Algerian state-owned oil company Sonatrach.
The SEC didn’t name the intermediary, but in a statement late Monday, Honeywell said the intermediary was Unaoil.
According to the SEC, a “consultant” paid around $75,000 to the Algerian official, and Unaoil reimbursed the consultant.
Honeywell first disclosed the investigation in a July 2022 SEC filing, according to data from FCPA Tracker.
In that disclosure, the company said the DOJ and SEC were investigating the activity with Petrobras and a “foreign subsidiary’s prior engagement of Unaoil S.A.M. in Algeria.”
The DOJ and SEC said Monday Honeywell received credit for cooperating during the investigation and for its remediation.