WASHINGTON (AP) -- Specialty chemicals maker Innospec Inc. pleaded guilty Thursday to federal charges of bribery, defrauding the United Nations and violating the U.S. embargo against Cuba, U.S. authorities said.
The Justice Department said Innospec entered a guilty plea before a federal judge in Washington to charges of wire fraud in connection with kickbacks it paid to the former Iraqi government under the UN oil-for-food program and bribes to officials in the Iraqi Oil Ministry.
Innospec also admitted to selling chemicals to Cuban power plants in violation of the U.S. embargo, Justice and other law enforcement agencies said.
The company, which has manufacturing plants and sales operations around the world, offices in the U.S. and Britain and is incorporated in Delaware, also agreed to pay $40.2 million in a settlement with the Justice Department, the Treasury Department's Office of Foreign Assets Control, the Securities and Exchange Commission and Britain's Serious Fraud Office.
It marked the latest action in the government's efforts to combat overseas corruption in international business. The bribery charges were brought under the Foreign Corrupt Practices Act, which makes it unlawful to bribe foreign government officials or company executives to secure or retain business.
A number of U.S. and foreign companies have been charged with violating the law in recent years, in cases involving payments to officials in Nigeria, Ecuador, Iraq, China, Iran, Saudi Arabia, Kazakhstan and elsewhere.
Cheryl Scarboro, who heads the SEC's Foreign Corrupt Practices Act Unit, said Innospec had a "long-standing practice" of bribing foreign government officials and that company management "authorized and condoned the misconduct."
Innospec is said to be the world's only manufacturer of the anti-knock compound tetraethyl lead, used in leaded gasoline. The additive is sold to oil refineries around the world and generates a large part of the company's sales. It also makes chemicals used in personal care and photographic markets, among others.
In London Thursday, the company's British subsidiary Innospec Ltd. pleaded guilty in Southwark Crown Court to paying bribes to Indonesian officials and agreed to pay a $12.7 million criminal penalty.
Innospec's president and CEO, Patrick Williams, said in a statement the company "is hugely relieved that all of the work that it has done during this long investigation, to put right the faults of previous management, has been recognized by the courts in both England and Wales and in the U.S."
Included in the $40.2 million settlement is a $14.1 million criminal fine. Innospec will also hire an independent monitor for at least three years to oversee a new program of anti-corruption and export-control measures. The company also agreed to cooperate with the authorities in ongoing investigations into bribes by Innospec employees and agents, Justice said in a news release.
"Today's case is a win for law-abiding companies trying to compete fairly in the marketplace," Assistant Attorney General Lanny Breuer said in a statement. "Fraud and corruption cannot be viewed simply as a cost of doing business."
The SEC accused Innospec of paying or promising more than $9.2 million in illegal bribes to officials in Iraq and Indonesia to obtain or keep business. Innospec agreed to pay $11.2 million in restitution to the SEC, which is also included in Thursday's settlement. The company neither admitted nor denied the SEC's allegations but did agree to refrain from future violations of the securities laws.
According to documents filed with the court:
-- Innospec's Swiss subsidiary, Alcor, was awarded five contracts from 2000 to 2003 worth more than 40 million euros to sell tetraethyl lead to refineries run by the Iraqi Oil Ministry under the UN oil-for-food program. To secure the contracts, Alcor paid or promised to pay at least $4 million in kickbacks to the former Iraqi government.
-- Innospec admitted to paying and promising to pay more than $1.5 million in bribes, in the form of cash and travel, to officials of the Iraqi Oil Ministry to secure sales of tetraethyl lead in Iraq from 2004 to 2008. The illicit payments were recorded as "commissions" on the basis of false invoices, which were incorporated into the company's books.
-- Innospec admitted selling nearly $20 million in oil-soluble fuel additives from 2001 to 2004 to state-owned Cuban power plants without a license from Treasury's OFAC, in violation of the U.S. Trading With the Enemy Act.
-- The company acknowledged having paid about $2.9 million in bribes to Indonesian government officials.
Innospec also agreed to pay $2.2 million to resolve Treasury's Cuban embargo case.
Economic development officials in Delaware approved a $150,000 grant to the company in 2008 for expanding its operations in Newark, Del., and Gov. Jack Markell joined Williams, the Innospec CEO, in celebrating the opening of a new laboratory wing last year.
Just last week, Markell pointed to Innospec's work with alternative fuels as he unveiled a "clean energy jobs act" for the state.
"Obviously, I didn't know about the federal investigation," Markell told The Associated Press on Thursday. "If I had known, I would not have gone to that event. What we knew at the time was that they were a Delaware company putting people to work doing research on alternative fuels."
Innospec's stock rose 48 cents, or 4.4 percent, to close at $11.30 in Nasdaq trading Thursday.
Associated Press writer Randall Chase in Dover, Del., contributed to this report.