Connecticut-based technological research and consulting firm Gartner, Inc. has agreed to pay $2.45 million over allegations that it violated the Foreign Corrupt Practices Act’s (FCPA) anti-bribery, books and records, and internal accounting controls provisions by bribing officials of the South African Revenue Service (SARS). The payment resolved administrative proceedings initiated by the Securities and Exchange Commission (SEC).
Without admitting or denying the SEC’s findings, Gartner agreed to pay $1.6 million in civil penalties and $857,000 in disgorgement and pre-judgment interest.
According to the SEC’s order, from approximately December 2014 through August 2015, “Gartner entered into a corrupt arrangement with a private South African company with close ties to South African government officials, knowing or consciously disregarding that all or part of the money paid to the private company would be used to bribe government officials to influence the award of consulting contracts to Gartner.”
The regulator contended that a manager from Gartner’s consulting business authorized the firm to subcontract with a private South African consulting company.
“At the time of the sub-contracts, the manager knew or consciously disregarded the possibility that all or part of the money paid to the private company would be offered, given, or promised, directly or indirectly, to those SARS officials, to induce the officials, in violation of their lawful duty, to award multi-million dollar sole-source contracts to Gartner,” the SEC stated in the proceedings.
The regulator said that during the same period, the firm’s internal FCPA risk assessments identified the intermediary’s relationships with public-sector clients as a potential bribery red flag.
The SEC claimed that when Gartner entered into the engagement with the SARS, it did not have adequate risk-based screening procedures for hiring third-party contractors. The firm also lacked anti-corruption related vendor onboarding procedures and had inadequate monitoring procedures.
In determining the amount to be paid by Gartner, the SEC said it took into account the firm’s self-disclosure following news reports in South Africa. It also considered the firm’s cooperation and remedial efforts.