Panasonic to pay $280M to settle federal corruption probe

Panasonic Corp. will pay about $280 million to resolve federal charges that executives at its in-flight entertainment unit improperly hid payments to consultants overseas in violation of anti-corruption rules, officials announced Monday.

The Japanese electronics giant’s parent company will pay $143 million to the Securities and Exchange Commission, while its Southern California subsidiary, Panasonic Avionics, will pay $137 million in penalties to the U.S. Justice Department, federal prosecutors said.

The investigation concerned payments to consultants in Asia and the Middle East, at least one of which did little or no work, authorities said.

Panasonic Avionics was accused of concealing payments to third-party sales agents between 2007 and 2016, in violation of the accounting provisions of the Foreign Corrupt Practices Act.

Those payments were improperly recorded in Panasonic’s regulatory filings, officials said.

“When Panasonic Avionics Corporation caused its publicly-traded parent company to falsify its books and records, it distorted the information available to legitimate investors,” said acting Assistant Attorney General John Cronan.

In one case, Panasonic hired a foreign official as a consultant while the official was simultaneously negotiating a contract between the company and a government-owned airline.

The official was paid $875,000 over six years, despite doing “little work,” according to documents.

Email and phone messages seeking comment from Panasonic were not immediately returned.