Oracle to pay over US$23m for bribing foreign officials

Oracle has been fined more than US$23 million by the US Securities and Exchange Commission (SEC) for violating the Foreign Corrupt Practices Act (FCPA) for the second time. According to the SEC, Oracle's subsidiaries in Turkey, the UAE, and India created and used slush funds to bribe foreign officials in return for business between 2016 and 2019.

Oracle subsidiaries in Turkey and UAE also used the slush funds to pay for foreign officials to attend technology conferences in violation of Oracle policies and procedures. SEC's order found that in some instances, employees of the Turkey subsidiary used these funds for the officials’ families to accompany them on international conferences or take side trips to California.

Without admitting or denying the SEC’s findings, Oracle agreed to cease and desist from committing violations of the anti-bribery, books and records, and internal accounting controls provisions of the FCPA and to pay approximately US$8 million in disgorgement and a US$15 million penalty.

Meanwhile, Oracle's spokesperson told MARKETING-INTERACTIVE: "The conduct outlined by the SEC is contrary to our core values and clear policies, and if we identify such behaviour, we will take appropriate action."

Charles Cain, the SEC’s FCPA unit chief, said the creation of off-book slush funds inherently gives rise to the risk those funds will be used improperly, which is exactly what happened here at Oracle’s Turkey, UAE, and India subsidiaries. "This matter highlights the critical need for effective internal accounting controls throughout the entirety of a company’s operations," Cain added.

Oracle was also charged in 2012 for violating the FCPA by failing to prevent a subsidiary from secretly setting aside money off the company's books that was eventually used to make unauthorised payments to phony vendors in India. The tech giant eventually paid a US$2 million penalty.

The SEC previously alleged that certain employees of Oracle's India subsidiary structured transactions with India's government on more than a dozen occasions in a way that enabled Oracle India's distributors to hold approximately US$2.2 million of the proceeds in unauthorized side funds. Those Oracle India employees then directed the distributors to make payments out of these side funds to purported local vendors, several of which were merely storefronts that did not provide any services to Oracle. Oracle's subsidiary also documented certain payments with fake invoices.

Related articles:
Analysis: Will the Oracle partnership offer a leg up or be the death knell for Tiktok?
TikTok to spend 'billions of dollars' on SG, reportedly sells US ops to Oracle
Oracle hunts for media agency to take on global duties