UPS Warns of Bribery Violations

Shipping giant says a business it acquired in 2001 may have violated the Foreign Corrupt Practices Act.
Stephen TaubMarch 15, 2006

United Parcel Service Inc. is the latest company to run afoul of a U.S. law prohibiting bribery overseas, announcing that it is investigating possible violations within its Supply Chain Solutions subsidiary.

In a regulatory filing, the Atlanta-based shipping company disclosed that the possible violations of the United States Foreign Corrupt Practices Act began prior to its 2001 acquisition of a freight forwarding business from Fritz Companies Inc. UPS added that a small number of former employees directed the questionable conduct.

Earlier this month, DaimlerChrysler AG also disclosed that it has dismissed or suspended several employees after the company determined that “improper payments” were made in a number of jurisdictions, primarily in Africa, Asia, and Eastern Europe.

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The UPS filing did not disclose the names of the employees or the countries where violations may have taken place, reported The Atlanta Journal-Constitution.

UPS noted that earlier this month it informed the Securities and Exchange Commission and the Department of Justice of its investigation. “We have implemented numerous remediation steps,” it said, adding that it intends to cooperate fully with any review by the government.

The shipping company also stated: “We do not believe that the results of this investigation, the remediation or related penalties, if any, will have a material adverse effect on our financial condition, liquidity or results of operations, nor do we believe that these matters will have a material adverse effect on our business and prospects.”

Last March, Titan Corp. agreed to plead guilty to criminal and civil charges and pay $28.5 million in fines stemming from payments to a presidential election campaign in the West African nation of Benin. That same month, Halliburton disclosed that the DoJ and the SEC broadened their investigations into possible bribery of officials in Nigeria.