Goodyear agrees to $16M bribery settlement

Goodyear Tire & Rubber (GT) is paying $16 million to settle allegations that two of its Africa-based subsidiaries paid bribes to win tire sales in Kenya and Angola.

An order disclosed Tuesday by the Securities and Exchange Commission said Goodyear failed to prevent or detect more than $3.2 million in bribes during a four-year period as the result of inadequate compliance controls at the sub-Saharan affiliates.

Many of the bribes were paid in cash to employees of private companies or government-owned entities, along with other local authorities, the SEC said. The Goodyear subsidiaries allegedly recorded the payments as legitimate business expenses.

The SEC said the transactions violated by the U.S. Foreign Corrupt Practices Act, which bars U.S. companies from making payments to foreign government officials in efforts to win or keep business.

Goodyear shares closed down fractionally at $27.13 in Tuesday trading.

"This settlement ensures that Goodyear must forfeit all of the illicit profits from business obtained through bribes to foreign officials as well as employees at commercial companies in Angola and Kenya," said Scott Friestad, associate director of the SEC's enforcement division.

Goodyear said it launched an internal investigation in 2011 after receiving information via a confidential ethics hotline about alleged improper payments in Angola and Kenya. The company voluntarily disclosed the investigation results to the SEC and U.S. Department of Justice, and cooperated with subsequent government reviews, Goodyear said.

"As a result of its review, the company has implemented, and is continuing to implement, appropriate remedial measures. Goodyear divested its ownership interest in the Kenyan business in 2013 and the company is in the process of selling the Angolan business," said Goodyear. "The settlement with the SEC fully resolves all outstanding issues related to these investigations."

According to the SEC order, Treadsetters, a former Goodyear retail tire distributor in Kenya, paid more than $1.5 million in bribes to Kenyan officials between 2007 and 2011.

Trentyre, a Goodyear subsidiary engaged in selling new tires for mining equipment, paid more than $1.6 million in bribes to Angolan officials from 2007 through 2011, according to the SEC order.