Innospec Pleads Guilty To Bribery Charges; To Pay $40.2 Million

Chemicals company Innospec Inc. (IOSP) pleaded guilty Thursday to bribing Iraqi officials to win and retain business under the United Nations Oil-for-Food Program, and to violating the U.S. embargo against Cuba, the U.S. Justice Department said.

Innospec's guilty plea came as part of a $40.2 million global settlement announced Thursday that resolves criminal and civil charges in the U.S. and related charges in the United Kingdom.

In addition to the Justice Department's criminal allegations, the U.S. Securities and Exchange Commission brought related civil charges, which added allegations that Innospec bribed officials in Indonesia.

Prosecutors alleged an Innospec subsidiary paid the former Iraqi government more than $4 million in kickbacks from 2000 to 2003 to obtain contracts for the company to sell Iraqi refineries a chemical compound used in leaded gasoline.

Prosecutors said Innospec paid another $1.5 million in bribes to Iraqi officials from 2004 to 2008 to secure additional sales of the compound.

The department also said an Innospec subsidiary sold nearly $20 million in fuel additives to state-owned power plants in Cuba, in violation of the U.S. embargo there.

The SEC said its investigation exposed more than $9.2 million in bribes that Innospec paid or promised to pay to officials in Iraq and Indonesia.

The contracts Innospec received in exchange were worth $176 million, the SEC said.

Innospec did not immediately respond to a request for comment.

The company previously disclosed the bribery investigation and said in a February filing with the SEC that a settlement could cost the company as much as $40 million.

-By Brent Kendall, Dow Jones Newswires; 202-862-9222; [e-mail]