SEC Charges BHP Billiton With Violating FCPA at Olympic Games
BHP Billiton violated the FCPA by sponsoring 60 foreign government officials with luxury Olympic hospitality packages worth $12,000–$16,000 each during the 2008 Beijing Games, failing to implement adequate internal controls or training, and agreed to pay a $25 million penalty without admitting or denying wrongdoing.
BHP Billiton agreed to pay a $25 million penalty to settle SEC charges for violating the Foreign Corrupt Practices Act by sponsoring 60 foreign government officials and others to attend the 2008 Beijing Olympics with hospitality packages valued at $12,000–$16,000 each. The SEC found that the company failed to maintain sufficient internal controls, provided no meaningful training on bribery risks, and relied on a superficial 'check the box' approval process despite knowing the heightened corruption risks associated with officials involved in pending business matters. BHP Billiton violated Sections 13(b)(2)(A) and 13(b)(2)(B) of the Securities Exchange Act and must report to the SEC on its FCPA compliance program for one year as part of the settlement, which reflects its cooperation and remedial efforts.
BHP Billiton violated the Foreign Corrupt Practices Act by sponsoring 176 government officials and employees of state-owned enterprises to attend the 2008 Beijing Summer Olympics, ultimately paying for 60 such guests along with some spouses and others, providing luxury hospitality packages valued at $12,000 to $16,000 each. Many of these officials were connected to pending contract negotiations or regulatory matters, including efforts to secure access rights, creating a clear risk of bribery that the company recognized but failed to adequately mitigate. The SEC found that BHP Billiton’s internal controls were deficient: employees were not clearly informed that applications would be reviewed beyond their business unit, no specific training was provided on completing forms or evaluating corruption risks, and many applications were inaccurate or incomplete. The company’s compliance program was deemed a 'check the box' approach—focused on form over substance—and violated Sections 13(b)(2)(A) and 13(b)(2)(B) of the Securities Exchange Act. BHP Billiton agreed to pay a $25 million penalty to settle the charges without admitting or denying wrongdoing, and as part of the resolution, it must report to the SEC on the operation of its FCPA and anti-corruption compliance program for one year. The SEC acknowledged the company’s cooperation and remedial efforts during the investigation, which was conducted with assistance from the Department of Justice, the FBI, and the Australian Federal Police.
Exhibits & Attached Documents (1)
Extracted insights
- $25.00M $25 million $10M–$100M
- $16K $16,000 $10K–$100K
- $12K $12,000 $10K–$100K
- person alec koch
- person bhp billiton
- agency bhp billiton to report to the sec on its fcpa compliance program for one year
- agency department of justice fraud section, fbi, and australian federal police
- agency sec investigation
- agency sec order
- agency Securities and Exchange Commission
- Securities And Exchange Commission charged BHP Billiton with violating the FCPA
- BHP Billiton agreed to pay $25 million penalty
- SEC Investigation found BHP Billiton failed to devise and maintain sufficient internal controls
- BHP Billiton invited 176 government officials and employees of state‑owned enterprises to attend the Games
- BHP Billiton paid for 60 guests, spouses and others attending the Games
- BHP Billiton footed the bill for foreign government officials to attend the Olympics
- BHP Billiton required business managers to complete a hospitality application form for invitees
- BHP Billiton did not clearly communicate to employees that no one outside the business unit would review and approve each invitation
- BHP Billiton failed to provide employees with specific training on completing forms and evaluating bribery risks
- SEC Order finds BHP Billiton violated Sections 13(b)(2)(A) and 13(b)(2)(B) of the Securities Exchange Act of 1934
- Settlement requires BHP Billiton to report to the SEC on its FCPA compliance program for one year
- SEC Investigation was conducted by Dmitry Lukovsky and Devon Leppink Staren
- Case was supervised by Alec Koch
- SEC appreciates assistance of Department Of Justice Fraud Section, FBI, and Australian Federal Police
The Securities and Exchange Commission today charged global resources company BHP Billiton with violating the Foreign Corrupt Practices Act (FCPA) when it sponsored the attendance of foreign government officials at the Summer Olympics. BHP Billiton agreed to pay a $25 million penalty to settle the SEC’s charges. An SEC investigation found that BHP Billiton failed to devise and maintain sufficient internal controls over its global hospitality program connected to the company’s sponsorship of the 2008 Summer Olympic Games in Beijing. BHP Billiton invited 176 government officials and employees of state-owned enterprises to attend the Games at the company’s expense, and ultimately paid for 60 such guests as well as some spouses and others who attended along with them. Sponsored guests were primarily from countries in Africa and Asia, and they enjoyed three- and four-day hospitality packages that included event tickets, luxury hotel accommodations, and sightseeing excursions valued at $12,000 to $16,000 per package. “BHP Billiton footed the bill for foreign government officials to attend the Olympics while they were in a position to help the company with its business or regulatory endeavors,” said Andrew Ceresney, Director of the SEC’s Division of Enforcement. “BHP Billiton recognized that inviting government officials to the Olympics created a heightened risk of violating anti-corruption laws, yet the company failed to implement sufficient internal controls to address that heightened risk. According to the SEC’s order instituting a settled administrative proceeding, BHP Billiton required business managers to complete a hospitality application form for any individuals they sought to invite to the Olympics, including government officials. However, the company did not clearly communicate to employees that no one outside the business unit submitting the application would review and approve each invitation. BHP Billiton failed to provide employees with any specific training on how to complete forms or evaluate bribery risks of the invitations. Due to these and other failures, a number of the hospitality applications were inaccurate or incomplete, and BHP Billiton extended Olympic invitations to government officials connected to pending contract negotiations or regulatory dealings such as the company’s efforts to obtain access rights. “A ‘check the box’ compliance approach of forms over substance is not enough to comply with the FCPA,” said Antonia Chion, Associate Director of the SEC’s Division of Enforcement. “Although BHP Billiton put some internal controls in place around its Olympic hospitality program, the company failed to provide adequate training to its employees and did not implement procedures to ensure meaningful preparation, review, and approval of the invitations.” The SEC’s order finds that BHP Billiton violated Sections 13(b)(2)(A) and 13(b)(2)(B) of the Securities Exchange Act of 1934. The settlement, in which the company neither admits nor denies the SEC’s findings, reflects BHP Billiton’s remedial efforts and cooperation with the SEC’s investigation and requires the company to report to the SEC on the operation of its FCPA and anti-corruption compliance program for a one-year period. The SEC’s investigation was conducted by Dmitry Lukovsky and Devon Leppink Staren, and the case was supervised by Alec Koch. The SEC appreciates the assistance of the Department of Justice’s Fraud Section, the Federal Bureau of Investigation, and the Australian Federal Police.
The Securities and Exchange Commission today charged global resources company BHP Billiton with violating the Foreign Corrupt Practices Act (FCPA) when it sponsored the attendance of foreign government officials at the Summer Olympics. BHP Billiton agreed to pay a $25 million penalty to settle the SEC’s charges. An SEC investigation found that BHP Billiton failed to devise and maintain sufficient internal controls over its global hospitality program connected to the company’s sponsorship of the 2008 Summer Olympic Games in Beijing. BHP Billiton invited 176 government officials and employees of state-owned enterprises to attend the Games at the company’s expense, and ultimately paid for 60 such guests as well as some spouses and others who attended along with them. Sponsored guests were primarily from countries in Africa and Asia, and they enjoyed three- and four-day hospitality packages that included event tickets, luxury hotel accommodations, and sightseeing excursions valued at $12,000 to $16,000 per package. “BHP Billiton footed the bill for foreign government officials to attend the Olympics while they were in a position to help the company with its business or regulatory endeavors,” said Andrew Ceresney, Director of the SEC’s Division of Enforcement. “BHP Billiton recognized that inviting government officials to the Olympics created a heightened risk of violating anti-corruption laws, yet the company failed to implement sufficient internal controls to address that heightened risk. According to the SEC’s order instituting a settled administrative proceeding, BHP Billiton required business managers to complete a hospitality application form for any individuals they sought to invite to the Olympics, including government officials. However, the company did not clearly communicate to employees that no one outside the business unit submitting the application would review and approve each invitation. BHP Billiton failed to provide employees with any specific training on how to complete forms or evaluate bribery risks of the invitations. Due to these and other failures, a number of the hospitality applications were inaccurate or incomplete, and BHP Billiton extended Olympic invitations to government officials connected to pending contract negotiations or regulatory dealings such as the company’s efforts to obtain access rights. “A ‘check the box’ compliance approach of forms over substance is not enough to comply with the FCPA,” said Antonia Chion, Associate Director of the SEC’s Division of Enforcement. “Although BHP Billiton put some internal controls in place around its Olympic hospitality program, the company failed to provide adequate training to its employees and did not implement procedures to ensure meaningful preparation, review, and approval of the invitations.” The SEC’s order finds that BHP Billiton violated Sections 13(b)(2)(A) and 13(b)(2)(B) of the Securities Exchange Act of 1934. The settlement, in which the company neither admits nor denies the SEC’s findings, reflects BHP Billiton’s remedial efforts and cooperation with the SEC’s investigation and requires the company to report to the SEC on the operation of its FCPA and anti-corruption compliance program for a one-year period. The SEC’s investigation was conducted by Dmitry Lukovsky and Devon Leppink Staren, and the case was supervised by Alec Koch. The SEC appreciates the assistance of the Department of Justice’s Fraud Section, the Federal Bureau of Investigation, and the Australian Federal Police.