Digital News Report – Johnson & Johnson (NYSE: JNJ) released a statement regarding today’s agreement to pay $70,006,316 in fines, disgorgement and interest assessed by the Department of Justice and the US Securities and Exchange Commission (SEC).
Johnson & Johnson said in their announcement, in 2007, they had voluntarily told the DOJ and SEC about their subsidiaries that they believed were making bribe payments for medical device sales. Because they have been proactive in working with the DOJ and SEC since 2007, they could have charges filed by the DOJ against one of the subsidiary company dismissed. The way they can get the DOJ to drop charges for this one subsidiary company is that Johnson and Johnson has agreed to complete three years of enhanced FCPA compliance which will be reported to the DOJ and the SEC. This is called the Deferred Prosecution Agreement (DPA) with the DOJ, and a Consent to Final Judgment with the SEC.
The Iraq investigation was related to a Johnson and Johnson subsidiary called the United Nations Oil for Food Program. This investigation was not disclosed to the DOJ and SEC by Johnson & Johnson. The company explained that a United Nations commissioned report found that over 2,000 companies around the world paid a ten percent fee to the Iraqi government between 2001 and 2003 in order to have goods delivered into the country. Johnson and Johnson said that fees were paid for importing humanitarian goods into Iraq.
William C. Weldon, Chairman and Chief Executive Officer, said that they went to the government to report about the improper payments and he continued to explain that they are “deeply disappointed by the unacceptable conduct that led to these violations. We have undertaken significant changes since then to improve our compliance efforts, and we are committed to doing everything we can to ensure this does not occur again.”
By Victoria Brown