Oracle agreed to pay the U.S. government $23 million to settle allegations its subsidiaries in Turkey, the United Arab Emirates (UAE) and India bribed officials in those countries in exchange for business.
According to the U.S. Securities and Exchange Commission (SEC), the alleged conduct took place between 2016 and 2019 and violated the Foreign Corrupt Practices Act (FCPA). In addition to paying bribes for business, Oracle was also accused of paying for foreign officials to attend technology conferences in violation of the company’s own policies. Money for these acts allegedly came from so-called slush funds created by the subsidiaries.
Oracle did not admit wrongdoing, but inked a settlement deal to close the SEC probe. As part of that arrangement, it agreed to an $8 million disgorgement fee to repay illegal gains and a $15 million penalty.
Charles Cain, head of the SEC’s FCPA unit, said in a statement the case “highlights the critical need for effective internal accounting controls.”
“The creation of off-book slush funds inherently gives rise to the risk those funds will be used improperly, which is exactly what happened here at Oracle’s Turkey, UAE and India subsidiaries,” he stated.
In a statement sent to Fierce, Oracle's VP of Corporate Communications Michael Egbert said “The conduct outlined by the SEC is contrary to our core values and clear policies, and if we identify such behavior, we will take appropriate action.”
This is the second time in the last decade Oracle has settled a slush fund-related SEC investigation. In 2012, it agreed to pay $2 million to settle charges its subsidiary in India used a slush fund to pay fake invoices between 2005 and 2007.
Oracle posted revenue of $11.4 billion in its fiscal Q1 2023 (ended August 31, 2022), a figure which was up 18% year on year. Of that total, $2.7 billion was generated by its EMEA operations and $1.6 billion by its Asia Pacific business. The vast majority of its revenue, $7.2 billion, came from the Americas.
This story has been updated with a comment from Oracle.