The Securities and Exchange Commission on Wednesday charged Virginia-based RTX Corporation with violating the Foreign Corrupt Practices Act (FCPA) in connection with payments the company made to obtain contracts with the Qatar military.
RTX was formed in 2023 when Raytheon Company merged with United Technologies Corp. Prior to 2023, the company was known as Raytheon Technologies Corp. According to the SEC, between 2011 and 2017 Raytheon used sham subcontracts with a supplier to bribe Qatari military officials and others in order to obtain about 42 million in Qatari military defense contracts. Additionally, from the early 2000s to 2020, Raytheon paid more than $30 million to a Qatari agent related to a Qatari Emir as a representative of the company despite having no prior background in military defense contacting.
The SEC said Raytheon acquired additional defense contracts through the agent under circumstances with significant corruption risks. The SEC’s order found that the company continued working with the agent even after numerous Raytheon employees raised corruption concerns.
“The penalty in this case reflects the significant misconduct by Raytheon and the need for global companies to implement meaningful internal accounting controls that ensure that payments to intermediaries are not used to circumvent the restrictions of the FCPA,” said Charles E. Cain, Chief of the SEC Enforcement Division’s FCPA Unit.
Raytheon agreed to pay disgorgement and prejudgment interest of approximately $49 million and a civil penalty of $75 million, $22.5 million of which will be offset by a criminal fine in a parallel action by the U.S. Department of Justice.