Clear Channel Outdoor will pay $26 million to resolve China bribery allegations.

Clear Channel Outdoor Holdings to Pay $26 Million Settlement for ‌Bribery Charges

Clear Channel Outdoor Holdings has reached a settlement with the U.S. Securities and Exchange Commission (SEC), agreeing to pay over $26 million. ‌The charges against ⁤the U.S.-based company involve allegations of bribing⁤ Chinese officials to secure advertising contracts. The SEC accused​ Clear​ Media Limited, a majority-owned subsidiary‌ in China, of violating the U.S. Foreign Corrupt Practices Act (FCPA) from ⁤2012 to 2017.

According to the SEC, Clear Media used ⁤expensive gifts, entertainment, and off-book consultants to bribe ​Chinese officials and obtain contracts⁣ for selling advertising services. The company also employed sham intermediaries and false invoices to generate cash for “off-book customer development consultants.” These improper payments were disguised as valid expenses in Clear Channel’s financial records.

Despite internal auditors raising red flags, Clear Channel failed to address the deficient internal accounting controls that allowed these improper payments to continue for years. The SEC found ‌that from 2012 to 2019, Clear Channel did not ensure sufficient internal accounting controls were in place at Clear Media.

As part of the settlement, Clear Channel agreed to pay disgorgement, prejudgment interest, and‌ a civil penalty totaling approximately $26 ⁣million. The company will make the payment in installments over the next year. The U.S. ⁢Department of Justice has chosen not to pursue any charges against Clear Channel in connection with the settlement.

Clear Channel stated that the SEC resolution pertains to the actions of Clear Media in China and the company’s oversight of the ⁣subsidiary before its sale in April 2020. The company has ‍cooperated with the SEC,⁢ sold its entire interest in Clear Media, and implemented‌ measures to enhance compliance policies and internal controls.

In March 2020, Clear Channel announced⁣ the sale of its stake in Clear Media for $253 ‌million in cash. The⁣ company intends to use the anticipated net proceeds from ⁤the transaction to improve its liquidity⁢ position and increase financial flexibility.

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How did Clear Media attempt to influence Chinese officials in awarding advertising contracts?

L ⁢statements.

The settlement includes disgorgement of $4.2 million in profits,⁣ plus $1.4 million in prejudgment interest, and a civil penalty of‌ $20 million. Clear Channel has​ agreed to cease and desist from future violations of the​ FCPA and to enhance its internal accounting controls and compliance program.

The SEC’s investigation ⁤uncovered a number of⁣ questionable​ activities conducted by Clear Media. They found that the company gave expensive gifts, ​including ⁢luxury watches, designer handbags, and vacations, to Chinese officials. These gifts were used to influence the officials’ decisions ⁣in awarding advertising contracts.

In addition to the⁤ extravagant gifts, Clear Media employed off-book consultants who were actually ⁣hired to bribe Chinese officials. These consultants would submit false invoices, and the payments made to them⁤ were later characterized as valid business expenses in Clear Channel’s accounting records.

The company ⁤also utilized sham intermediaries who‌ acted⁤ as middlemen between Clear Media and the Chinese officials. These‍ intermediaries would receive payments from Clear Media, which‍ they would then pass on to the officials, disguising the bribery scheme.

Clear Channel cooperated with the SEC’s investigation and took ⁢remedial actions to address the issues raised. ‌The company terminated several employees ⁤involved in the bribery scheme, implemented rigorous anti-corruption ‌policies and procedures, and conducted extensive training for its ‍employees.

This settlement serves as a‍ reminder of the importance of compliance⁤ with anti-corruption laws, such as the FCPA. The SEC has been increasingly focused on investigating and prosecuting companies that engage in bribery and corruption, both domestically and internationally.

By reaching this settlement, Clear Channel not ⁢only avoids a protracted legal battle but also demonstrates its commitment to corporate integrity and ethical business practices. The company‌ has acknowledged its wrongdoing and taken steps​ to rectify the situation.

Clear Channel‌ Outdoor​ Holdings is one of the largest outdoor advertising companies in the world, with operations in ⁤over 40 countries. The company’s⁢ reputation may be tarnished by this settlement, but by holding itself accountable and implementing strong compliance measures, it can ​begin rebuilding trust with its stakeholders.

Going forward, it is imperative for Clear Channel and other companies to ensure that their business practices are in line with applicable anti-corruption laws. This includes conducting ⁣thorough due diligence on business partners and vendors, implementing robust ​internal controls, and providing ongoing training to employees on the risks and ⁣consequences of bribery and corruption.

As the global⁤ business landscape becomes increasingly interconnected, companies must prioritize​ ethical conduct‌ and transparency to⁤ thrive in the long term. Clear Channel’s ‌settlement serves as a cautionary tale for those who choose to engage in ⁢corrupt practices and a call to ​action for greater corporate responsibility.

Ultimately, by learning from this experience, Clear Channel can strengthen its reputation, rebuild ⁢trust, and serve⁢ as a positive example for ​other companies in⁢ the industry.

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