NU Online News Service, Dec. 20, 2:28 p.m.EST

Aon Corp. has reached settlements with the U.S. Department ofJustice and the Securities and Exchange Commission totaling around$16.3 million to resolve violations of the Foreign CorruptPractices Act.

The DOJ says Aon's United Kingdom subsidiary, Aon Limited,administered training and education funds in connection with itsreinsurance business with Costa Rica's state-owned insurancecompany, Instituto Nacional De Seguros (INS). While the funds weresupposed to provide education and training for INS officials, theDOJ says between 1997 and 2005 Aon Limited used “a significantportion of the funds to reimburse INS officials for non-trainingrelated activity, including travel with spouses to overseas touristdestinations, or for uses that could not be determined from Aon'sbooks and records.”

As part of the agreement, the DOJ says Aon admitted that AonLimited's accounting books and records related to the funds “didnot accurately and fairly reflect the purpose for which theexpenses were incurred.”

Aon also admitted that it failed to devise and maintain anadequate system of internal accounting controls with respect toforeign-sales activities sufficient to ensure compliance with theFCPA, the DOJ adds.

The SEC says its complaint alleged that Aon's subsidiaries “madeover $3.6 million in improper payments to various parties between1983 and 2007 as a means of obtaining or retaining insurancebusiness in those countries.”

The complaint says some of the improper payments were made“directly or indirectly to foreign-government officials who couldaward business directly to Aon subsidiaries, who were in positionto influence others who could award business to Aon subsidiaries,or who could otherwise provide favorable business treatment for thecompany's interests.”

The SEC says Aon did not admit or deny these allegations as partof the settlement.

The DOJ notes that it entered into a non-prosecution agreementwith Aon “as a result of Aon's extraordinary cooperation with thedepartment and the SEC; its timely and complete disclosure ofimproper payments in Costa Rica and other countries that itdiscovered during its thorough investigation of its globaloperations; its early and extensive remedial efforts; the priorfinancial penalty of £5.25 million ($ 8.22 million atcurrent exchange rate) that Aon Limited paid to the UnitedKingdom's Financial Services Authority (FSA); and the FSA's closeand continuous supervisory oversight over AonLimited. These factors also led to a substantiallyreduced monetary penalty.”

Greg Case, president and chief executive officer of Aon, says ina statement, “Acting with integrity is Aon's core value and weembody this in our commitment to the highest professional standardsfor our clients, markets and colleagues. Aon has invested asignificant amount of time and resources in anti-corruptioncompliance and transparency to greatly enhance our controls andprocesses.”

He adds, “The FSA, DOJ and the SEC all have recognized Aon'sdetermination to set and meet the requisite high standards ofcompliance in this area. We believe that today our compliancepractices are a model of best practice for other firms toadopt.”

Aon says it expects no impact on fourth quarter results as thesettlement amounts were accrued for in prior periods.