Raytheon’s comprehensive settlement included FCPA violations and failures to make required disclosures to the Defense Department concerning fees and commissions.  This portion of the settlement was filed in the Eastern District of New York.

Raytheon formed a joint venture with a French company.  Its bribery scheme involved a subsidiary of the joint venture, Integrated Defense Systems (“IDS”), which was controlled by Raytheon.

Between approximately 2012 and 2016, Raytheon, through IDS employees and agents, engaged in a scheme to bribe a high-level official at the Qatar Emiri Air Force (QEAF), a branch of Qatar’s Armed Forces (QAF) that was primarily responsible for the conduct of air warfare, in order to assist Raytheon in obtaining and retaining business from the QEAF and QAF, including (1) four supplemental additions to a 1998 contract between Raytheon and the Gulf Corporation Council (“GCC”), an intergovernmental union of six member states: Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates, two of the four contracts related solely to operations in Qatar; and (2) a sole-source contract to build a joint operations center (“JOC”) that would interface with Qatar’s several military branches.

To this end, and to pay bribes to the Qatar foreign official, Raytheon entered into and made payments on sham subcontracts for air defense operations-related studies in order to corruptly obtain the QEAF official’s assistance in securing certain air defense contracts. Raytheon paid $2 million for the defense studies that were added to the GCC contracts.   Raytheon actually prepared the studies themselves and passed them to the third party controlled by the Qatari official who then invoiced Raytheon for $2 million as a bribe payment. The air defense studies were drafted by Raytheon employees, shared among Raytheon employees by using personal email accounts, and sanitized to ensure that there were no references to Raytheon employees. 

Raytheon also entered into a teaming agreement with a Qatari entity in order to corruptly obtain the QEAF official’s assistance in directly awarding a potential contract to Raytheon to build a joint operations center that would interface with Qatar’s several military branches.  Raytheon and the Teaming entity agreed to subcontract a portion of the contract to a Qatar which would funnel payments to the Qatari government official.  The contract was ultimately cancelled for unrelated reasons. 

Raytheon earned approximately $36.7 million in profits from the four additions to the GCC Contract described above, and expected to earn over $72 million more, had the JOC Contract come to fruition.

Under the terms of the DPA, Raytheon will pay a criminal monetary penalty of $230.4 million, pay forfeiture of $36,696,068, and retain an independent compliance monitor for three years. In addition, as part of the resolution of the SEC’s parallel investigation, Raytheon will pay approximately $49.1 million in disgorgement and prejudgment interest and a civil penalty of $75 million ($22.5 million of which will be credited against the criminal monetary penalty). The Justice Department has agreed to credit approximately $7.4 million of the disgorgement Raytheon pays to the SEC against the criminal forfeiture.

In a separate settlement, Raytheon admitted to engaging in a scheme to willfully violate the AECA and ITAR Part 130 by failing to disclose to the State Department, Directorate of Defense Trade Controls, fees and commissions paid in connection with two Qatar-related contracts — specifically, the bribes Raytheon paid to the high-level QEAF official through sham subcontracts.