NEW YORK (CNNMoney.com) -- General Electric said Tuesday it will pay $23.4 million to settle Securities and Exchange Commission charges that the conglomerate was involved in a $3.6 million kickback scheme with Iraqi government agencies.
The SEC said GE subsidiaries paid the Iraqi Health Ministry and the Iraqi Oil Ministry in cash, computer equipment, medical supplies and services to win valuable contracts through the United Nations' Oil for Food Program.
The kickback scheme lasted for about three years - from 2000 to 2003, the final years of Saddam Hussein's regime - according to the SEC. The Oil for Food program allowed Iraq to sell oil only for humanitarian needs in the latter years of Hussein's reign.
GE failed to take appropriate action to detect and prevent the illegal payments to Iraqi government agencies, and once the kickbacks were given, the company didn't accurately record the payments in its accounting records, the SEC alleged.
In a separate statement, GE said that while the SEC identified 18 contracts under the Oil for Food Program that weren't accounted for by GE, 14 of those contracts involved companies that GE didn't own at the time the transactions were made.
The other four transactions were made by GE Healthcare units in Europe, which gave the Iraqi Health Ministry computer equipment, medical supplies and services without properly recording the transactions.
"This conduct did not meet our standards, and we believe that it is in the best interests of GE and its shareholders to resolve this matter now, without admitting or denying the allegations, and put the matter behind us," GE said.
GE has agreed to pay a penalty of $1 million and about $22.5 million in profit and interest.
"Bribes and kickbacks are bad business, period," Robert Khuzami, director of the SEC's Division of Enforcement, said in a statement. "This case affirms that law enforcement is active across the globe - offshore does not mean off-limits."
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