Sociedad Quimica y Minera de Chile ("SQM") was a Chilean chemicals and mining company. SQM's stocks were registered with the SEC and traded on the New York Stock Exchange as American Depositary Receipts.
From about 2008 to 2015, SQM maintained a discretionary fund for the office of the Chief Executive Officer, which was designed to provide payment for the CEO's travel, certain SQM publicity efforts, and consulting and advisory services deemed necessary by the CEO. An unidentified officer and high-level executive at SQM had control over the fund. This SQM Executive used the fund to make approximately $14.75 million in payments to various "politically exposed persons, or PEPs," including Chilean politicians, political candidates, and individuals connected to them. These payments took the form of contracts with vendors associated with the PEPs, donations to foundations favored by the PEPS, and contributions to the political campaigns of the PEPS. The payments were disguised in SQM's books and records.
On January 13, 2017, the SEC initiated a settled administrative proceeding against SQM alleging violations of the books & record and internal controls provisions of the FCPA. Under the terms of the proceeding, the SEC ordered SQM to cease and desist violations of the FCPA, to pay a civil monetary penalty of $15 million, and to hire an independent anti-corruption compliance monitor.
In a related proceeding on January 13, 2017, the DOJ filed a two count Information in the District of Columbia against SQM alleging violations of the books & records and internal controls provisions of the FCPA. On the same date, SQM entered into a Deferred Prosecution Agreement with the DOJ with a term of three years. Under the terms of the agreement, SQM admitted responsibility for the misconduct, agreed to pay a criminal fine of $15,487,50, and agreed to hire an independent monitor to report on the company's anti-corruption compliance for a term of two years. Citing SQM's cooperation and remediation, though noting that the company had not self-reported, the DOJ agreed to a 25% downward departure below the mimimum fine in the U.S. Sentencing Guidelines range.
In a related settled administrative proceeding initiated on September 25, 2018, the SEC issued a cease and desist order against Contesse Gonzalez. Under the terms of the settlement, the SEC ordered Contesse Gonzalez to cease and desist violations of the books & records and internal controls provisions of the FCPA and to pay a civil fine of $125,000.
