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Titan Pays $28.5 Million After Pleading Guilty to Three Felonies
Titan Pays $28.5 Million After
Pleading Guilty to Three Felonies
by Matthew T. Clarke
On March 1, 2005, Titan Corp., the largest private supplier of translators for the U.S. military, pleaded guilty to three felony charges and agreed to pay $13 million in criminal fines and settle a Security and Exchange Commission civil suit for $15.5 million without admitting or denying guilt in that suit. The felony charges arose from Titan's attempt to influence elections in Benin, a country in West Africa. The guilty plea was to one charge under the Foreign Corrupt Practices Act, one charge of falsify accounting records, and one charge of filing a falsified income tax return.
The corruption came to light when Lockheed Martin Corp., a large military contractor, was reviewing Titan's books in preparation for a planned corporate take-over of Titan in early 2004. Titan had paid $2 million to the 2001 presidential election campaign of Mathieu Kerekou, who won the election. The bribery was covered up as consulting fees. At that time, Titan was involved in development of a cellular telephone network in Benin. In exchange for the bribery, Titan's management fees were quadrupled from 5% to 20%. Titan received $9.1 million in management fees. Thus, the $2 million bribe earned Titan a net profit of $4.8 million. It is believed that Kerekou was unaware of the bribery.
The $28.5 million settlement eclipses the previous largest settlement ironically paid by Lockheed in 1995 after it admitted to bribing an Egyptian politician to get a transport plane order. The large settlement demonstrates both the severity and scope of the misconduct in this case," according to U.S. Attorney Carol C. Lann.
Wall Street promptly rewarded Titan for copping out to the felonies by raising the price of its stocks. The rising valuation of Titan stock is driven by the military's need for translators. Titan employees have been implicated in the torture and abuse of prisoners in Iraq. [PLN, Nov. 2004, p.36]. Apparently, the U.S. Army doesn't mind employing felon corporations, it extended Titan's contracts for translators through September, bringing another $400 million into Titan's coffers.
Source: Los Angeles Times.
Pleading Guilty to Three Felonies
by Matthew T. Clarke
On March 1, 2005, Titan Corp., the largest private supplier of translators for the U.S. military, pleaded guilty to three felony charges and agreed to pay $13 million in criminal fines and settle a Security and Exchange Commission civil suit for $15.5 million without admitting or denying guilt in that suit. The felony charges arose from Titan's attempt to influence elections in Benin, a country in West Africa. The guilty plea was to one charge under the Foreign Corrupt Practices Act, one charge of falsify accounting records, and one charge of filing a falsified income tax return.
The corruption came to light when Lockheed Martin Corp., a large military contractor, was reviewing Titan's books in preparation for a planned corporate take-over of Titan in early 2004. Titan had paid $2 million to the 2001 presidential election campaign of Mathieu Kerekou, who won the election. The bribery was covered up as consulting fees. At that time, Titan was involved in development of a cellular telephone network in Benin. In exchange for the bribery, Titan's management fees were quadrupled from 5% to 20%. Titan received $9.1 million in management fees. Thus, the $2 million bribe earned Titan a net profit of $4.8 million. It is believed that Kerekou was unaware of the bribery.
The $28.5 million settlement eclipses the previous largest settlement ironically paid by Lockheed in 1995 after it admitted to bribing an Egyptian politician to get a transport plane order. The large settlement demonstrates both the severity and scope of the misconduct in this case," according to U.S. Attorney Carol C. Lann.
Wall Street promptly rewarded Titan for copping out to the felonies by raising the price of its stocks. The rising valuation of Titan stock is driven by the military's need for translators. Titan employees have been implicated in the torture and abuse of prisoners in Iraq. [PLN, Nov. 2004, p.36]. Apparently, the U.S. Army doesn't mind employing felon corporations, it extended Titan's contracts for translators through September, bringing another $400 million into Titan's coffers.
Source: Los Angeles Times.
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