* Company admits bribing Iraqi and Indonesian officials
* Company also admits violating U.S. embargo against Cuba (Recasts with settlement amount, guilty plea)
By Dan Margolies
WASHINGTON, March 18 Specialty chemical company Innospec Inc (IOSP.O) agreed to pay $40.2 million to settle allegations it paid bribes to Iraqi and Indonesian government officials, and violated the U.S. embargo against Cuba.
The settlement resolves charges by the U.S. Department of Justice, the U.S. Securities and Exchange Commission, the U.S. Department of the Treasury's Office of Foreign Assets Control and Britain's Serious Fraud Office.
The Securities and Exchange Commission said Innospec had routinely paid millions of dollars in bribes to maintain its sales of tetraethyl lead, an anti-knock compound used in leaded gasoline, to state-owned refineries and oil companies in Iraq and Indonesia.
"This investigation exposed more than $9.2 million in illegal bribes paid or promised to officials in Iraq and Indonesia," Robert Khuzami, director of the SEC's enforcement division, said in a statement.
As part of the settlement, Innospec pleaded guilty to a 12-count criminal information filed by U.S. prosecutors in federal court in Washington D.C. The information charged it with wire fraud for paying kickbacks to the former Iraqi government under the United Nations Oil for Food Program and paying bribes to officials in the Iraqi oil ministry.
Innospec also admitted that it sold chemicals to Cuban power plants, in violation of the U.S. embargo against Cuba.
Efforts to reach Innospec for comment on the plea were not immediately successful.
The SEC notified Innospec three years ago that it was looking into possible violations of the Foreign Corrupt Practices Act and other laws in connection with Innospec's involvement with the Oil for Food Program in Iraq.
The U.S. Department of Justice later notified the company that it too was investigating.
Last July, the Justice Department disclosed it charged Ousama Naaman, a Canadian citizen who was Innospec's former agent in Iraq, for his alleged participation in an eight-year conspiracy to defraud the Oil for Food Program and to bribe Iraqi government officials.
The Justice Department said Naaman allegedly offered and paid 10 percent kickbacks to the Iraqi government in exchange for five contracts awarded to Innospec's Swiss subsidiary, Alcor, under the Oil for Food Program. In return, Naaman allegedly received 2 percent of the contracts' value and a 2 percent commission for securing the contracts.
The case against Naaman, who was arrested in Germany last year, is still pending.
In February, the Serious Fraud Office charged Innospec's British unit with conspiracy to make corrupt payments in return for Indonesian government contracts to supply tetraethyl lead between February 2002 and December 2006.
On its website, Innospec describes itself as an international specialty chemicals company with almost 1,000 employees in 23 countries and a turnover of $600 million. (Reporting by Dan Margolies; additional reporting by Jeremy Pelofsky in Washington, D.C.; Editing by Andre Grenon and Tim Dobbyn)