Chile-based commercial airline LATAM Airlines Group S.A. (TAM) agreed to pay a $12.75 million criminal penalty in connection with a scheme to pay bribes to Argentine union officials via a false consulting contract with a third-party intermediary in violation of the accounting provisions of the Foreign Corrupt Practices Act (FCPA). According to the company’s admissions, executives at LATAM’s predecessor-in-interest, LAN Airlines S.A. (LAN), executed a fictitious $1.15 million consulting agreement with an advisor to the Secretary of Argentina’s Ministry of Transportation. Although the agreement purportedly required the consultant to undertake a study of Argentine airline routes, the consultant never provided any such services and instead funneled the monies to Argentine labor union officials in exchange for the union agreeing to accept lower wages and not enforce what would have been a costly labor rule. DOJ
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