ABB to pay $39.3m FCPA violation charge to US SEC

The SEC alleged that the company’s subsidiaries made at least $2.7m (£1.7m) in illicit payments in the schemes to obtain contracts that generated more than $100m in revenues.

Without admitting or denying the allegations, ABB has agreed to pay more than $39.3m to settle the SEC’s charges.

The SEC alleged that, from 1999 to 2004, ABB Network Management (ABB NM) bribed officials in Mexico to obtain and retain business with two government owned electric utilities − Comision Federal de Electricidad (CFE) and Luz y Fuerza del Centro (LyFZ). The bribes were funnelled through ABB NM’s agent and two other companies in Mexico.

The SEC alleged that ABB improperly recorded the bribes on its books as payments for commissions and services on projects in Mexico. Illicit payments included checks and wire transfers to relatives of CFE officials, cash bribes to CFE officials and a Mediterranean cruise holiday for CFE officials and their wives. As a result of this bribery scheme, ABB NM was awarded contracts with CFE and LyFZ that generated more than $90m in revenues and $13m in profits for the company.