By Jenna Greene, From The National Law Journal

More than two years after Goodyear Tire & Rubber Co. self-reported its wrongdoing to securities regulators, the company has agreed to pay $16 million to settle foreign-bribery charges.

According to the U.S. Securities and Exchange Commission order instituting a settled administrative proceeding, Goodyear subsidiaries paid $3.2 million in bribes to land tire sales in Kenya and Angola.

“After receiving information about the bribes, Goodyear promptly halted the improper payments and reported the matter to commission staff,” the order states. “Goodyear also provided significant cooperation with the commission’s investigation.”

Whether to self-report Foreign Corrupt Practices Act violations has long been a hot topic for the defense bar. For Goodyear, represented by Jones Day partner Joan McKown, coming clean seems to have paid off—at least compared to the penalty imposed on Avon Products Inc. in December.

Avon paid $135 million to settle civil and criminal charges after allegedly making $8 million worth of payments in cash, gifts, travel and entertainment to gain access to Chinese officials. According to the SEC’s complaint, the cosmetic company’s initial response was to instruct its audit team “not to create any electronic documents, not to send any e-mails regarding the follow-up review, and not to use the term ‘FCPA’ in any written document.”

Goodyear, by contrast, was lauded for “voluntarily producing documents and reports and other information from the company’s internal investigation, and promptly responding to commission staff’s requests for information and documents. These efforts assisted the commission in efficiently collecting evidence including information that may not have been otherwise available to the staff.”

The $16 million fine consisted of $14 million in disgorgement and $2 million in interest.

Goodyear lawyer McKown, former chief enforcement counsel at the SEC, did not immediately respond to a request for comment.

In an October 29, 2014, quarterly report, Goodyear disclosed the anticipated fine and how it uncovered the problem, explaining that in June 2011, “an anonymous source reported, through our confidential ethics hotline, that our majority-owned joint venture in Kenya may have made certain improper payments. In July 2011, an employee of our subsidiary in Angola reported that similar improper payments may have been made in Angola.”

Goodyear responded by divesting its ownership interest in its indirect Kenyan subsidiary, Treadetters, and cut off all business dealings with the company. In Angola, after halting the improper payments, its subsidiary lost its largest customer. Goodyear is now in the process of divesting the subsidiary.

Goodyear also took disciplinary actions against employees, expanded its anti-corruption training, instituted regular audits focused on corruption risks, put in place a new regional management structure and created a new senior position of vice president of compliance and ethics, among other steps.

Goodyear did not admit or deny wrongdoing.

“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,” Scott Friestad, associate director of the SEC’s Enforcement Division, said in a written statement.

Goodyear in a statement said that the company has “a comprehensive anti-corruption compliance program and continues to improve and enhance its ability to monitor, detect, investigate and address potential issues.”

Photo: Jay Lazarin/iStockphoto.com

For more on this story go to: http://www.nationallawjournal.com/id=1202718785730/For-Goodyear-SelfReporting-Yields-Lighter-FCPA-Fine#ixzz3Sm3BJmE