The US Securities and Exchange Commission has accused a Brazilian airline of bribery

On the 15th, the US Securities and Exchange Commission (SEC) charged GOL Linhas Aéreas Inteligentes, Brazil’s second largest airline, with violating the Foreign Corrupt Practices Act (FCPA). The São Paulo-based company agreed to pay $70 million to settle the allegations.

According to the SEC order, Cole paid bribes to key Brazilian government officials in exchange for certain favorable payroll tax and jet fuel tax reductions. The scheme took place against the backdrop of internal accounting controls, and the bribes were classified as legitimate business expenses in Cole’s records.

“This case highlights the need for effective internal accounting controls for transactions initiated at all levels of a company,” said Charles Cain, head of the SEC’s FCPA Division. “Here, Cole’s internal accounting controls were particularly ineffective for transactions initiated by people at its highest levels,” he added.

Cole agreed to a cease and desist order violating the FCPA’s anti-bribery provisions, books and records and internal accounting controls. The company agreed to enter a deferred prosecution agreement with the U.S. Department of Justice and pay more than $87 million to settle criminal charges. Due to Cole’s proven financial condition and inability to pay the fine in full, the SEC and DOJ waived all but $24.5 million and $17 million of the obligations, respectively.

Cole will pay about US$3.4 million in additional fines or restitution to Brazilian authorities.

In deciding whether to accept the offer, the SEC considered Gol’s cooperation and corrective actions, including disciplining the Gol director who orchestrated the scheme and improving internal accounting controls and anti-corruption policies and procedures.

The SEC investigation was led by Ernesto Palacios, Shahriar Massoud, and Thierry Olivier Desmet of the SEC’s FCPA Division, which authorizes assistance from the Fraud Unit of the Department of Justice’s Criminal Division, the FBI, the Comptroller General of the Union of Brazil, the Office of the Federal Attorney General, and the Federal Public Ministry.