Oklahoma firm fined for paying bribes in Mexico, Panama

McClatchy NewspapersMarch 14, 2012 

MEXICO CITY — An Oklahoma company that provides aircraft maintenance services agreed Wednesday to pay an $11.8 million criminal penalty for bribing officials in Mexico and Panama to obtain business.

The Justice Department said that BizJet, a Tulsa firm, had bribed officials at four Mexican state and federal agencies and the Panama civil aviation authority. It said top officials at BizJet "orchestrated, authorized and approved" of the payoffs.

BizJet said in a statement that its German parent company, Lufthansa Technik AG, discovered the corruption, voluntarily notified U.S. authorities and "fully cooperated" in the U.S. investigation.

The case is the latest against U.S. companies and foreign firms with a U.S. presence that operate in Latin America and are found in violation of the far-reaching Foreign Corrupt Practices Act. Other cases in recent years have involved bribe payments in Costa Rica, Argentina and Brazil.

The Mexican attorney general's office issued a statement saying that the BizJet payoff occurred between 2004 and 2009, and that a BizJet sales manager had gone into hiding.

It said it had identified contracts by the firm amounting to $20 million and some 50 million pesos ($3.9 million) and that an intermediary received "approximately $2 million U.S. dollars" to pay off officials.

Mexico said it identified six "public servants" who may have received payoffs.

BizJet says on its website that it offers "world-class engine and airframe maintenance" as well as interior refurbishment and avionics installations for jets and helicopters.

The Justice Department said that in order to obtain contracts, BizJet employees paid bribes to officials in the Mexican states of Sonora and Sinaloa as well as the federal police and the agency that oversees President Felipe Calderon's fleet of aircraft.

It said U.S. prosecutors would defer prosecution of BizJet executives for three years, and if the company cooperates with a probe and heightens compliance efforts, the threat of criminal charges would end.

The Justice Department praised BizJet and its parent company for "extraordinary cooperation, including conducting an extensive internal investigation, voluntarily making U.S. and foreign employees available for interviews, and collecting, analyzing and organizing voluminous evidence and information for the department."

The Justice Department did not provide details of BizJets' bribes in Panama, except to say that the illegal payment had gone to the Panamanian Civil Aviation Authority.

Jay Holtmeier, an attorney at the New York City office of the WilmerHale law firm, said Lufthansa Technik "itself discovered these issues as a result of an internal audit."

Holtmeier said employees involved in the bribe-taking "are no longer with the company."

The Foreign Corrupt Practices Act, a sweeping 1977 law, has snared several major companies in recent years with operations in Mexico and further south.

Under a plea agreement in September 2010, a Swiss conglomerate, ABB Ltd., and two of its subsidiaries agreed to pay fines for bribing officials of Mexico's state-owned electric utility in order to obtain contracts worth $81 million in revenue.

Two Mexicans were indicted the same month for allegedly buying a $297,000 Ferrari sports car and a $1.8 million yacht for electric utility officials in exchange for obtaining contracts for a company based in Azusa, Calif.

Last year, two tobacco leaf merchants based in North Carolina and Virginia faced action over bribes paid in Thailand and Kyrgyzstan, in one case using a subsidiary in Brazil.

In a sign of the expansive reach of the U.S. anti-corruption act, Alcatel-Lucent, a French telecommunications giant, and three non-U.S. subsidiaries, one of which had an office in Miami, were accused of paying bribes in Costa Rica to get more than $300 million in contracts. In late 2010, Alcatel-Lucent and its subsidiaries paid $137 million in U.S. penalties.

A German conglomerate, Siemens AG, and two South American subsidiaries paid a record $800 million in U.S. penalties in 2008 for bribes on contracts in Venezuela and Argentina. The sole basis for U.S. involvement in the case were two meetings by company executives and consultants in New York City and the use of U.S. banks to make payments.

Despite the payment, the Justice Department in December brought civil and criminal charges against eight top former Siemens employees for what it described as a decade-long bribery scheme. The charges underscored the department's interest in prosecuting executives for bribe-paying as well as imposing fines on their companies.

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