AGCO Corp., a Duluth-based agricultural equipment firm, has agreed to pay more than $20 million to settle allegations that its subsidiaries made kickbacks to win business in Iraq.
The U.S. Securities and Exchange Commission, which announced the settlement Wednesday, alleged that AGCO made $5.9 million in kickback payments to the Iraqi government to win contracts under the United Nations Oil for Food Program from 2000 to 2003.
AGCO did not admit or deny the allegations but consented to an $18.3 million settlement with the SEC. It also agreed to pay $1.6 million to the U.S. Department of Justice and more than $600,000 to the Danish authorities in related cases.
AGCO cooperated with authorities and had already reserved the full amount of the settlements, it said in a statement.
“The company looks forward to putting this episode behind it,” said Nathan Muyskens, an attorney with Shook Hardy & Bacon, a Washington, D.C, firm that represented AGCO. “AGCO is truly committed to being a global leader in corporate ethics and corporate standards.”
The Oil for Food Program, which ran from 1995 to 2003, has been the source of numerous investigations into corruption. The SEC has brought 12 Oil for Food-related cases with more than $150 million in monetary relief obtained.
In December 2000, according to the SEC, a business manager for AGCO’s U.K. subsidiary learned through a Jordanian agent for the firm that the Iraqi Ministry of Agriculture was demanding a 10 percent kickback to win awards from the Oil for Food program.
The manager, allowed the agent to funnel payments to Iraqi-controlled accounts so AGCO could win awards, the SEC alleged.
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