MercoPress. South Atlantic News Agency

US company pays heavy fined for bribing in several countries, including Argentina

Stryker bribes in Argentina totalled almost a million dollars and were billed as professional fees of doctors

The United States company Stryker Corp., the second-largest seller of orthopaedic devices, will pay more than 13.2 million dollars to settle U.S. regulatory claims that subsidiaries paid bribes in five countries to gain or retain business.

Subsidiaries of Stryker in Argentina, Greece, Mexico, Poland and Romania made a total of 2.2 million of “illicit payments” as far back as 2003 that were booked as legitimate expenses, the Securities and Exchange Commission said on Thursday in a statement announcing settlement of its administrative case.

“Stryker’s misconduct involved hundreds of improper payments over a number of years during which the company’s internal controls were fatally flawed,” Andrew M. Calamari, director of the SEC’s New York office, said in the statement.

In the case of Argentina, between 2005 and 2008 the Argentine affiliate of Stryker made 392 illicit payments to staff from the country's healthcare system to retain contracts in government managed hospitals.

The 20% to 25% bribes on sales to hospitals were billed in checks paid directly to Argentine doctors or as payment for conferences or for training staff. In Argentina the declared bribes totalled 966.000 dollars and were mostly registered as professional fees.

The company’s actions, which the SEC said violated the Foreign Corrupt Practices Act, included a Greek subsidiary’s 200,000 dollars payment to a doctor that was disguised as a donation to a local university, according to the statement. Stryker was also accused of paying travel expenses of foreign officials for trips that lacked any legitimate business purpose, the SEC said.

Stryker, which reaped 7.5 million dollars in illicit profits, will pay about that amount in disgorgement, plus 2.28 million in interest and a 3.5 million fine, the SEC said. The Kalamazoo, Michigan-based company resolved the agency’s claims without admitting or denying wrongdoing.

Regarding Argentina there have been similar previous cases involving other US companies. Biomet, US manufacturer of prosthesis paid a SEC fine for having bribed Argentine Customs to allow imports in. Likewise Ralph Lauren, last April, had to address a fine of 1.6 million dollars after admitting bribing Customs officers.