CDM Smith to Pay $4 Million in FCPA Declination

CDM Smith, a privately held engineering and construction firm headquartered in Boston, will pay $4 million to settle allegations that it violated the Foreign Corrupt Practices Act (FCPA).

The Justice Department said it decided not to prosecute the company because of the company’s self-disclosure and cooperation.

The company was represented in the matter by Nathaniel Edmonds of Paul Hastings in Washington.

It was the second FCPA matter brought under the Trump administration – both declinations.  Last month the Department entered into a similar declination agreement with Linde North America.

A Department of Justice investigation found that CDM Smith paid $1.18 million in bribes to government officials in India in exchange for highway construction supervision and design contracts and a water project contract resulting in approximately $4 million in net profits.

The Department said that CDM India illegally paid bribes to officials in the National Highways Authority of India, India’s state-owned highway management agency, in order to receive contracts from the agency.

The bribes generally were two percent to four percent of the contract price and paid through subcontractors, who provided no actual services and understood that payments were meant to solely benefit the officials.

In addition, CDM India paid $25,000 to local officials in the Indian state of Goa in relation to a water project contract.

All senior management at CDM India were aware of the bribes for CDM Smith and CDM India contracts, and approved or participated in the misconduct, the Department said.

CDM Smith agreed that it wouldn’t seek a tax deduction for the $4 million it was required to disgorge.

In a parallel enforcement matter with the World Bank, CDM Smith will be conditionally non-debarred.

“CDM Smith has a clear Code of Ethics and core values that drive our behavior every day,” said CDM Smith CEO Stephen J. Hickox. “Any breach of these values or improper business activities is counter to our culture and will not be tolerated.”

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