Defense contractor settles bribery charges for $9.5 million

AP News
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Posted: Apr 08, 2015 5:54 PM

PORTLAND, Ore. (AP) — Oregon-based defense contractor FLIR Systems Inc. has agreed to pay $9.5 million to settle bribery charges filed by the Securities and Exchange Commission that involved expensive trips and gifts given to Middle Eastern government officials.

The Securities and Exchange Commission announced the deal Wednesday, saying the thermal-imaging company earned more than $7 million in profits from sales influenced by the gifts.

The commission said two employees in FLIR's Dubai office gave luxury watches to five officials with the Saudi Arabia Ministry of Interior in 2009. The company also arranged travel for Saudi officials, including a 20-night trip with stops in Beirut, Casablanca, Dubai, New York and Paris.

"FLIR's deficient financial controls failed to identify and stop the activities of employees who served as de facto travel agents for influential foreign officials to travel around the world on the company's dime," said Kara Brockmeyer, chief of the SEC enforcement division's Foreign Corrupt Practices Act unit.

The SEC said in a news release that FLIR reported the misconduct and cooperated with the investigation.

Officials with the Wilsonville-based company echoed those remarks.

"The actions of the former employees involved do not reflect the values of FLIR or the high standards to which we hold ourselves accountable," FLIR CEO Andy Teich said in a statement.

The two former sales employees, Stephen Timms and Yasser Ramahi, agreed in November to settle SEC charges against them and pay financial penalties.

FLIR got a multimillion-dollar contract to provide thermal binoculars to the Saudi government in November 2008. Timms and Ramahi were responsible for the contract. They also negotiated sales of FLIR's security cameras to the same government officials.

The SEC said Timms and Ramahi had Foreign Corrupt Practices Act training and were specifically told that luxury watches and vacations were prohibited gifts. The men falsified records in an attempt to conceal their behavior, the SEC found.

Besides paying $9.5 million, FLIR must report to the SEC on its efforts to comply with the corrupt practices law for two years.

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