Sociedad Quimica y Minera de Chile, S.A., ("SQM") was a Chilean mining and chemical company with operations in multiple countries. SQM’s Series B shares were registered with the SEC and traded on the New York Stock Exchange.
Patricio Contesse Gonzalez was a Chilean citizen and resident who served as SQM’s Chief Executive Officer from 1990 to March 2015.
According to the documents in this case, between 2008 and 2015, Contesse Gonzalez, while acting as SQM’s CEO, participated in the payment of approximately US $14.75 million in improper payments to Chilean politicians, political candidates, and individuals and entities connected to them (collectively, “politically exposed persons” or “PEPs”). Most of the improper payments were made through third-party vendors who posed as legitimate vendors but were associated with the PEPs, and the payments were supported by falsified contractual documents submitted to SQM. Contesse Gonzales personally created and approved the false contracts, invoices, and documents, so that the improper payments were recorded improperly on SQM's books and records. As CEO, Contesse Gonzalez was responsible for SQM’s internal accounting controls, and though these controls were deficient, Contesse Gonzalez nonetheless circumvented those deficient controls to cause SQM to make the improper payments to the Chilean PEPs.
In a 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.
In a related proceeding 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.
