LATAM Pays $22 Million under FCPA

The largest airline in Latin America, Chile-based LATAM Airlines Group, has agreed to pay $22 million to resolve investigations by the Department of Justice and the Securities and Exchange Commission (SEC) concerning bribery of foreign officials.

LATAM is listed on the New York Stock Exchange, which is how it falls under U.S. jurisdiction for the purposes of the FCPA. The payments happened in 2006 and 2007 at LAN airlines, several years before it merged with TAM, a Brazilian airline). LAN also traded on the NYSE before the merger.

The company allegedly funneled money to union officials through a fictitious consulting agreement as part of its efforts to enter the Argentina market. In exchange, the union reportedly agreed to accept lower wages and ignore a violation of a labor rule. The consultant was supposed to study Argentine airline routes, but never did. According to the DOJ, the company profited in the amount of $6.7 million from the bribes.

The bribery was initially revealed in the Argentine press. The Justice Department noted that the company fully cooperated with the resulting government investigation, but failed to adequately discipline the employees responsible. The SEC separately pursued an enforcement action against LAN’s CEO, which was resolved in February.

To speak to one of our FCPA whistleblower lawyers about reporting bribery of a government official through the SEC whistleblower program, please contact us via our online contact form.

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