by Deb Cupples | The Justice Department has decided to defer (for three years) the prosecution of drug maker Novo Nordisk, which allegedly gave illegal kickbacks in exchange for acquiring contracts from the Iraqi government. Here's the skinny:
"Novo, an international manufacturer of insulin, medicines and other pharmaceutical supplies, has acknowledged responsibility for improper payments made by its agents to the former Iraqi government in order to obtain contracts with the Iraqi ministry of health to provide insulin and other medicines. The agreement requires the company and its subsidiaries to cooperate fully with the Justice Department’s ongoing Oil-for-Food investigation.
"According to the agreement and the information filed today, between 2001 and 2003, Novo paid approximately $1.4 million to the former Iraqi government by inflating the price of contracts by 10 percent before submitting the contracts to the United Nations for approval and concealed from the United Nations the fact that the price contained a kickback to the former Iraqi government. Novo also admitted it inaccurately recorded the kickback payments as "commissions" in its books and records." (Justice Department)
Under the deferred prosecution agreement, basically the Justice Department will refrain from prosecuting Novo Nordisk as long as Novo appears to be refraining from not breaking the law for the next three years.
Novo has also agreed to pay about $9 million in civil penalties and profit disgorgement in a related civil matter pending with the U.S. Securities and Exchange Commission.
Wouldn't it be great if other non-violent criminals (like marijuana sellers) got such deferential treatment from law enforcement agencies?
For those who are unfamiliar with the United Nations' Oil-for-Food program, the Justice Department gives a brief description:
"The Oil-for-Food Program was established by the United Nations to enable Iraq to sell its oil for humanitarian purposes, in the context of an extensive international sanctions regime. The Oil-for-Food Program mandated that the proceeds of oil sales be deposited in a United Nations bank account and that those proceeds be used by the Iraqi government only to purchase humanitarian goods and services, such a food and medicine, approved by the United Nations.
"Beginning in 2000, the former Iraqi government began requiring companies wishing to sell humanitarian goods to government ministries to pay a kickback, often mischaracterized as an "after sales services fee," to the government in order to be granted a contract. The amount of that fee was usually 10 percent of the contract price. Such payments were not permitted under the Oil-for-Food Program or other sanction regimes then in place.
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* Wages are Falling -- for Ordinary Americans, Anyway
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