On May 20, BHP Billiton, an Australian-based metal resources company, paid $25 million tosettle claims brought by the SEC alleging that the company violated the FCPA’s internal controls and books and records provisions by sponsoring the attendance of foreign government officials at the 2008 Beijing Olympics. According to the SEC’s cease-and-desist order, in which the company neither admitted nor denied the SEC’s findings, BHP Billiton invited 176 government officials to attend the Olympics at BHP Billiton’s expense, 98 of whom were representatives of state-owned enterprises that were BHP Billiton customers. The flight and hospitality packages the officials received were worth between $12,000 and $16,000 per package.
Of note, the SEC did not allege any specific quid pro quo in exchange for the trips (and did not allege that BHP Billiton violated the anti-bribery provisions of the FCPA), but noted that the foreign officials came from African and Asian countries with well-known histories of corruption and were in a position to influence pending contract negotiations, efforts to obtain access right, and other regulatory and business dealings affecting BHP Billiton. The SEC settlement order found that BHP Billiton’s Olympic hospitality applications did not accurately reflect pending negotiations or business dealings between BHP Billiton and government officials invited to the Olympics, and also found that the company failed “to design and maintain sufficient internal controls over the Olympic global hospitality program.”
Continuing recent efforts to highlight the nature of certain companies’ cooperation efforts, the SEC called out BHP Billiton’s “significant cooperation” with the government’s investigation by, among other things, “voluntarily producing large volumes of business, financial, and accounting documents from around the world in response to the staff’s requests, and by voluntarily producing translations of key documents.” The SEC also noted the remedial efforts undertaken by the company to improve its compliance programs, including the creation of a compliance group within its legal department that reports directly to BHP Billiton’s general counsel and audit committee. According to the order, BHP Billiton also enhanced its financial and auditing controls, including its policies for conducting business in high-risk markets, and conducted extensive employee training on anti-corruption issues. The settlement requires the company to report to the SEC on the operation of its FCPA and anti-corruption compliance program for a one-year period, although no independent monitor was required.