Textron Inc.

Washington, DC: (Aug-23-07) The US Securities and Exchange Commission filed charges against Textron Inc., which makes products like Bell helicopters and Cessna corporate jets, accusing them of engaging in oil-for-food kickback practices. The SEC alleged that from 2001 to 2003, two of Textron's French units paid $650,539 in kickbacks in connection with the sale of humanitarian goods to Iraq under the UN program. According to a court document filed by the SEC, the kickbacks paid by Textron's units bypassed the UN escrow account and were instead paid by third parties to Iraqi-controlled accounts. The contracts submitted to the UN did not disclose that the cost of the illicit payments were included in the inflated contract price. Textron's subsidiaries also made illicit payments of $114,995 to secure 36 contracts in Bangladesh, Egypt, India, Indonesia and the United Arab Emirates from 2001 to 2005.

In a settlement reached, the company agreed to pay more than $3.5 million to settle charges with the US Securities and Exchange Commission. It also agreed to pay a $1.15 million fine as part of the Department of Justice's investigation into the United Nations oil-for-food program. The justice department said it agreed not to file criminal charges against the Providence, Rhode Island-based company in recognition of Textron's early discovery and reporting of the improper activities. [REUTERS: OIL FOR FOOD]

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Published on Aug-26-07