WPP Pays $ 19.2 Million to Address Global FCPA Violations “Despite Red Flags”
The world’s largest advertising group, WPP plc, on Friday agreed to pay the SEC $ 19.2 million in penalties and restitution to resolve FCPA violations in India, China, Brazil and Peru.
In an internal administrative order, the SEC accused the dual-headquarters London and New York advertising group of violating the FCPA’s anti-corruption controls, books and records, and internal accounting controls.
As part of the SEC settlement, WPP agreed to pay $ 11.2 million and pay a civil fine of $ 8 million.
The SEC said the bribery took place at a majority-owned subsidiary of WPP in India that used intermediaries to bribe Indian officials.
According to the SEC, the bribes totaled more than $ 1 million and enabled WPP to earn more than $ 5 million in profit from the program between 2015 and 2017.
During this period, about half of WPP India’s revenue was attributable to the information and public relations departments of the Indian states of Telangana and Andhra Pradesh, which were responsible for retaining media agencies to conduct publicity campaigns. advertising and public relations for state governments, the SEC said.
According to the ordinance, the subsidiary in India continued to pay bribes even though WPP had received seven anonymous complaints regarding this conduct. In August 2017, WPP asked its legal team to investigate the reported behavior.
In China, in 2018, the WPP subsidiary avoided paying $ 3.2 million in taxes by paying $ 107,000 to a seller identified by the tax authorities and by offering $ 2,000 in gifts and entertainment to the tax authorities .
“Despite the presence of red flags which, had they been properly investigated, could have led to the prevention or detection of inappropriate payments from the Chinese subsidiary, WPP did not find out about the program. that in early 2019 during an independent review, âthe SEC said.
In Brazil, the WPP subsidiary made inappropriate payments in 2016 to suppliers to secure government contracts, despite policies that prohibited the activity. WPP Brazil falsified its books and records to indicate that the suppliers were providing real services, such as marketing or IT. WPP Brazil made a profit of $ 891,000 from the program.
In Peru, the WPP affiliate has served as a âconduitâ for corruption. WPP Peru disguised a bribe from a construction company to the political campaigns of the mayor of Lima in exchange for work by “channeling payments from the construction company to the Peruvian branch through WPP branches into Colombia and Chile, âthe SEC said.
According to the SEC, WPP’s subsidiaries in Colombia and Chile falsely recorded that they received money in exchange for services rendered to the construction company. The Peruvian subsidiary did not keep any documents indicating that the construction company had paid for part of the political campaigns of the mayor of Lima.
WPP employs approximately 107,000 people worldwide.