Johnson & Johnson Agree To $70M Settlement Over Bribery Charges

Johnson & Johnson on Friday agreed to pay $70 million to settle U.S. charges that it paid bribes and kickbacks to win business overseas, the first big drug company to settle since the Obama administration began its scrutiny of the industry more than a year ago.

Johnson & Johnson agreed to pay a $21.4 million fine to settle Justice Department criminal charges and pay more than $48.6 million in disgorgement and interest to settle charges by the Securities and Exchange Commission, the agencies said.

The Justice Department announced in November 2009 that it would focus on prosecuting those in the pharmaceutical industry who try to bribe foreign officials for preferential treatment of their products, leading to a wide-ranging probe.

Dating back to 1998, subsidiaries of the company were accused of paying bribes to public doctors in Greece to select its surgical implants and in Romania to prescribe its medicines.

J&J units were also accused of paying bribes to public doctors and hospital administrators in Poland to win contracts and of paying kickbacks to Iraq to win 19 contracts under the U.N.'s Oil for Food Program.

Iraq had demanded that companies pay a 10 percent fee in order to do business with the Saddam Hussein government, Johnson & Johnson said in a statement.

"More than four years ago, we went to the (U.S.) government to report improper payments and have taken full responsibility for these actions," J&J Chairman and Chief Executive Officer William Weldon said in a statement.

J&J did not admit or deny the SEC's allegations but acknowledged responsibility in the Justice Department case for the actions of its units, employees and agents who made the improper payments.

Under the settlement, J&J will enter into a deferred prosecution agreement with the Justice Department.

(Reporting by Jeremy Pelofsky, editing by Lisa Von Ahn, Phil Berlowitz)

Copyright 2011 Thomson Reuters. Click for Restrictions.

Comments

[squat6971]

08:29 PM on 04/10/2011

No perp walk? Crimes with no crooks? How is that possible?

[lonbwoy]

03:40 PM on 04/10/2011

Its great to be a corporation in the USA, nobody goes to jail.

[structurequity]

01:16 PM on 04/10/2011

"deferred prosecution" means we admit nothing and pay a small fine for our exploitation of the masses, on to the next deal.

[kamact]

12:56 PM on 04/10/2011

Yes , just a slap on the wrist,...just the cost of doing business

[altohone]

01:06 AM on 04/10/2011

That hurts! Almost half of their daily petty cash will be paid in fines.

The executives will get a raise for paying out less than they had already set aside for this slap on the wrist.

[Sundialsvc4]

01:18 PM on 04/09/2011

Time and time and time again you see it: a company commits crimes that cause hundreds of millions or billions of dollars in damage, and the SEC "settles."

In effect, the SEC is demonstrating again and again that it is "The Fixer," and that "The Fix Is In."

You can literally break any law of the land that is vaguely under the Commission's control. The only thing is that your "Get Out Of Jail Free" card comes at a very small price. Crime DOES pay, as long as you remember to pay (off) the right people.

This is not law enforcement. This is not law. This is lawless.

[Drmhp]

11:16 AM on 04/09/2011

It is safe to say that it is the rule of thumb to get away with what ever you can in business. Integrity and ethics are secondary to profit. Let's not be surprised by any of this. It is the tip of the ice berg. Winning is the end game in the USA at all costs. Legality be dammed.

[iridium53]

10:38 AM on 04/09/2011

So, how much did J&J make on the deal?
The article fails to mention just how much profit was made by J&J.
It only mentions the fines.

If J&J made a billion and paid a total of $70 mill, then it was an excellent crime, right?

Oh, and it was a crime.

But, as usual, no executive was harmed by the SEC.

Shareholders pay. Executives get a bonus.

Schapiro's SEC at work.

The SEC attorneys on this case should be getting their new jobs, with double salaries, very soon.

[rukiddingmerightnow]

09:00 AM on 04/09/2011

A little off topic - Too bad the FDA doesn't pay any attention to what this company puts in its products. The image is of nice safe products for babies when in fact they are full of toxic chemicals. I would never use any of these products. Paraben free, dye free, fragrance free all the way when it comes to kids.

[Batland]

11:10 AM on 04/09/2011

Yes I understand your thinking about paraben... I use paraben free washes too but then I get into my phthalate car and place my kid in a phthalate car seat with phthalate toys. One has to be veddy rich to avoid all these chemicals. Is is necessary? Will my kids be the same with is without? I don't know.

[nixrox04]

08:11 AM on 04/09/2011

Which J&J officers have been indicted for fraud and when are their dates?

[banker67]

10:20 AM on 04/09/2011

Well, your point is key: The U.S. Supreme Court has declared corporations the equal of individual citizens when it comes to financing American elections, and certainly corporations get far better treatment than the 1040 set when it's time to pay taxes. But most important is the way the courts have exempted corporations from the criminal laws.
How can you put a piece of paper in jail? Madoff and Stanford are in the clink, but their business was paper trails. Most corporate criminals know they can't really be charged personally for anything, as long as the really bad stuff is agreed on the golf course.
And it starts to get a lot worse when 'corporate security' takes over, forever protected from civil and criminal law too.
Only when the people in charge are held personally accountable will corporate crime begin to decline.

[Batland]

11:11 AM on 04/09/2011

equal of citizens? well a different kind of equal...a separate but equal type of equal.

[ErnestineBass]

02:01 AM on 04/09/2011

Hmmm...no mention made of how much PROFIT JandJ made on these "pay to play" deals.

I'd say at least five times what the fine amounted to.

Yah gotta love Capitalism, Mrrrrrrrrrrkun-style.

[purple13]

09:09 PM on 04/08/2011

and WHY do they not have to admit to anything? that is total b.s. you're right, they bribe and if they get caught they bribe our government! it's effing appalling! J & J is one of the worst companies ever - denying contaminated products, refusing to act...and they make BABY PRODUCTS. wow. just...wow. i wouldn't use J & J baby wash on my dog, even.

[Batland]

11:13 AM on 04/09/2011

They're a family company of the greedy veddy veddy rich American kind...

They make more than washes...

[tacevad]

04:16 PM on 04/08/2011

bribery in another country is less concerning to me than the bribery in politics we have here in America.

[studmoose]

02:21 PM on 04/08/2011

So much for that Corporations are People thing...

If that was an individual - you'd be looking at 10-15 years in a Federal Pen.

[Imzadi]

02:52 PM on 04/08/2011

Precisely!!

[TAMPA M]

01:56 PM on 04/08/2011

Wait a minute, I thought corporations were individuals or persons did not the Supreme Court say that.
Put them in jail and take their wealth just like they do to regular individuals. And if they are CEOs or presidents or owners or employees put the whole damn lot in jail somebody will roll over. My grandfather always told me if more than one person knows that's one too many. People roll over

[loki]

02:22 PM on 04/08/2011

no, you misunderstand. Corporations have all the rights and privileges as a Person , but none of the responsibilities. They dont go to jail. The gov makes up a pretend fine. The corporations pretends to pay the fines, while never admitting guilt. The corporation keeps its money, a few high politicians get a few hundred grand in bribes, and the public things the gov is keeping the corporations honest.

[Imzadi]

02:53 PM on 04/08/2011

Sadly, you are 100% correct.