BHP Paid $25 Million to Settle SEC Charges Over Olympic Hospitality for Government Officials

Summary

In May 2015, the U.S. Securities and Exchange Commission charged BHP Billiton, now BHP Group, with violations of the Foreign Corrupt Practices Act's books-and-records and internal-controls provisions arising from its hospitality programme for the 2008 Beijing Olympic Games. BHP agreed to pay a $25 million civil penalty to settle the SEC proceeding. The SEC found that BHP invited approximately 176 government officials and employees of state-owned enterprises to attend the Olympics at company expense. Ultimately, BHP paid for 60 of those guests, as well as some spouses and other accompanying guests. Hospitality packages included Olympic tickets, luxury hotel accommodation and sightseeing, and were valued at approximately $12,000–$16,000 per package. According to the SEC, some invited officials were directly involved in, or able to influence, pending contract negotiations, regulatory matters, access rights or other business dealings affecting BHP. The SEC concluded that BHP's controls surrounding the hospitality programme were insufficient and that certain internal hospitality applications did not accurately reflect relevant pending negotiations or business relationships. Importantly, the SEC order did not find that BHP engaged in bribery or acted with corrupt intent. BHP settled without admitting or denying the SEC's findings. The U.S. Department of Justice separately completed its investigation without taking action. BHP also highlighted its cooperation and subsequent compliance improvements. Sources: SEC — Charges BHP Billiton With Violating FCPA at Olympic Games https://www.sec.gov/newsroom/press-releases/2015-93 SEC — Administrative Order https://www.sec.gov/files/litigation/admin/2015/34-74998.pdf BHP — End of U.S. Investigations https://www.bhp.com/news/media-centre/releases/2015/05/bhp-billiton-announces-end-of-us-investigations