NEW YORK — RTX Corporation, the defense contractor formerly known as Raytheon, has agreed to pay the U.S. government $252 million to resolve criminal charges alleging it paid bribes to secure contracts with Qatar, federal prosecutors said Wednesday.
The company entered into a deferred prosecution agreement on charges of violating the anti-bribery provision of the Foreign Corruption Practices Act and the Arms Export Control Act.
It also agreed to pay a $52.5 million civil penalty to resolve a parallel Securities and Exchange Commission investigation and must forfeit at least $37 million to satisfy both probes.
At a brief hearing in federal court in Brooklyn, lawyers for RTX waived their right to an indictment and pleaded not guilty to both counts. They did not object to any of the allegations in court documents filed in conjunction with the agreement.
Under the agreement, the company will have to demonstrate good conduct for the next 3½ years and foster a culture of ethics and compliance with anti-corruption laws.
Messages seeking comment were left for RTX Corporation and the Qatari embassy in Washington.
RTX said in a July regulatory filing that it set aside $1.24 billion to resolve pending legal and regulatory matters. The company’s president and CEO, Christopher Calio, told investors that the investigations largely involved issues that predated the Raytheon-United Technologies merger that formed the current company in 2020.
“These matters primarily arose out of legacy Raytheon Company and Rockwell Collins prior to the merger and acquisition of these companies,” Calio said. “We’ve already taken robust corrective actions to address the legacy gaps that led to these issues.”
According to court documents, Raytheon employees and agents offered and paid bribes to a foreign official between 2012 and 2016 to gain an advantage in obtaining lucrative business deals with the Qatar Emiri Air Force and Qatar Armed Forces.
The company then succeeded in securing four additions to an existing contract with the Gulf Cooperation Council — a regional union of Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates — and a $510 million sole-sourced contract to build a joint- operations center for the Qatari military, the court documents said.
Raytheon made about $36.7 million in profit from the Gulf Cooperation Council contract additions and anticipated making more than $72 million on the joint operations center, but the Qatari government ultimately did not go forward with the deal, prosecutors said.
Wednesday’s penalty is just the latest legal fallout from RTX’s business dealings.
According to court and regulatory filings, the company is expected to soon enter into another deferred prosecution agreement to resolve civil and criminal investigations in Massachusetts into defective pricing claims for Raytheon contracts dating from 2011 to 2017.
In August, the company agreed to pay $200 million to the State Department after voluntarily disclosing more than two dozen alleged violations of the Arms Export Control Act and International Traffic in Arms Regulations. Among the allegations were that the company provided classified military aircraft data to China and that employees took company-issued laptops containing information about missiles and aircraft into Iran, Lebanon and Russia.
Read the full article here
