Fiat fined $7M for Oil-for-Food kickbacks
By LARA JAKES 
December 22, 2008
The Associated Press
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WASHINGTON (AP) — Italian auto company Fiat Group agreed Monday to pay $7 million in fines to settle U.S. Justice Department corruption charges that its subsidiaries bribed Iraqi officials in exchange for contracts funded by the United Nations.
In all, the three Fiat subsidiaries paid $4.4 million in kickbacks for contracts under the U.N. Oil-for-Food program, according to documents filed at U.S. District Court in Washington.
The subsidiaries — Iveco, CNH Italia and CNH France — sought contracts between 2000 and 2002 to provide Iraqi officials with industrial pumps, gears and other equipment.
As part of the scheme, the Fiat subsidiaries pumped up the cost of the U.N.-funded contracts by 10 percent, then used the money to pay off the Iraqi government, the court documents show.
The companies also covered up the kickbacks, with Iveco and CNH Italia reporting the inflated costs as commissions and service fees, the Justice Department said.
Iveco and CNH Italia were each charged with one count of conspiracy to commit wire fraud and to violate the books and records under the U.S. Foreign Corrupt Practices Act. CNH France was charged with conspiracy to commit wire fraud.
As part of the settlement, the Justice Department agreed to hold off on prosecuting Fiat for three years. The charges will be dismissed if Fiat pays the fines and agrees to assist in the department's ongoing investigation into the Oil-for-Food program.
Fiat is based in Turin, Italy. The company also settled a similar complaint by the U.S. Securities and Exchange Commission, agreeing Monday to pay $3.6 in civil penalties and $7.2 million in profits and interest it earned off the contracts.
In a statement, a Fiat Group spokesperson said the settlements close a regrettable incident which happened in the long-ago history of the Fiat Group.
In addition, it is important to note that the facts relate to a government which no longer exists, the Fiat statement said. More importantly, the Fiat Group has since put in place rigorous internal controls and compliance programs to which the Group and its subsidiaries strictly adhere.
The Justice Department says it has collected more than $24 million in fines from cases linked to Oil-for-Food contracts.