SEC Reveals Johnson's Global Bribery &Nbsp; Oil For Food Corruption.

How long do people use bandages? How long is the global time of Johnson & Johnson, the US pharmaceutical giant Johnson?

Now, the white bandage is being tested.

On April 8th, the securities and Exchange Commission (SEC) and the US Department of Justice accused Johnson of bribing foreign doctors and obtaining business contracts through payment of rebates.

The SEC 21 page allegation document obtained by reporters detailing the fact that Johnson has obtained business contracts from bribing doctors and paying kickbacks around the world since 1998.

Over the past 15 months, Johnson has also released more than 50 product recalls, which has severely hit its reputation.

According to US media reports, first class soldier in the air force base of the Marine Corps suffered multiple fractures in his thigh during his service in Iraq.

A military surgeon told him that his best choice was to use metal to metal metal-on-metal prosthetic hip produced by a strong son DePuy plastic product company.

In December 13, 2006, he was accepted at the Santiago Naval Medical Center.

But after surgery, he felt uncomfortable.

The new chief physician told him that the pain was due to the replacement of the hip joint.

As a result, he had to join more than 1000 DePuy ASR joints against Johnson.

DePuy plastic products company announced in August 26th last year that it voluntarily limited the recall of two products, including the ASR hip joint installed in the company.

In fact, since last year, Johnson has voluntarily announced the recall of over 50 products, from non prescription cold medicine Tylenol to acid Rolaids chewable tablets.

According to the US Food and Drug Administration (FDA) report, Johnson has recalled 11 major product recalls in the fiscal year ended March 8th, almost two times that of Pfizer, the world's largest healthcare company, or P & G, the world's largest consumer product company.

At that time, a colleague commented that the root cause of the tragedy is probably not only in terms of product quality, but also in Johnson's management and operation system.

"This is not a systemic problem, nor is it a universal problem for Johnson."

Johnson CEO Weldon said at the time that some people suggested that the company had bigger problems, but that was "after the event Zhu Geliang".

On the 8 day of the United States, a commercial bribe petition by SEC made Weldon disgrace.

SEC, as a plaintiff, cited 21 pages of prosecution, including the fact that Johnson has obtained business contracts from bribes abroad and paid kickbacks since 1998.

According to the SEC indictment, in 2000 ~2003, the strong parent company paid a kickback to Iraq in order to get a business contract under the oil for food program.

Since Iraq launched the Gulf War in August 1990, Iraq has faced severe international trade sanctions.

The oil for food program is a project aimed at providing humanitarian relief to Iraqis. The plan allows the Iraqi government to sell crude oil (108.41, -1.51, -1.37%) in the international market, and use the funds to purchase food, medical supplies and important infrastructural facilities.

About 60% of Iraqis depend on the rationing of the plan to survive.

According to SEC's indictment, in 2000, there was a lot of corruption within the scheme. The senior Iraqi government officials began to formulate a policy requiring humanitarian suppliers to pay 10% rebates for each contract, and euphemistically referred kickbacks to "after-sales service charges".

But in fact, no services were provided.

In order to get the contract, suppliers compete to add 10% of the cost to their target.

According to a joint report released by the US audit office, the relevant UN departments and an independent investigation agency, as of October 27, 2005, the Iraqi government has obtained an illegal income of $1 billion 700 million from the plan.

Johnson passed two subsidiary companies, Cilag AG International and Janssen Pharmaceutica N.V.

(hereinafter referred to as "Janssen-Cilag") took part in the kickback plan.

In the project, Janssen-Cilag sold medical supplies to Iraq's State Pharmaceutical and medical supplies Import Corporation (Kimadia), which was carried out through a Lebanese agency.

Before the Iraqi government began to request kickbacks, the Lebanese agency accepted Johnson's 12% Commission in the Iraqi market.

In February 2001, a few months after the start of the Kimadia rebate, Janssen-Cilag signed a subsidiary agreement with the Lebanese agency to increase the sales commission in the Iraqi market to 22%.

The reason for the increase in commissions was that the agency could carry out "promotional activities" in Iraq.

SEC said that the increase in the Commission allowed the agency to pay 10% rebates to the Iraqi government department on behalf of Janssen-Cilag and to disguise the expenditure as a legitimate agency commission on the company's account records.

SEC emphasized in the indictment that it is noteworthy that the foregoing agency could not provide detailed evidence and explanation for its "promotional activities", and Janssen-Cilag did not ask the agency to provide such documents.

As the US army launched the Iraq war in March 2003, Kimadia no longer required kickbacks, and Janssen-Cilag did not need to continue to pay additional commission to the aforementioned agencies.

Therefore, after negotiation, Janssen-Cilag reduced the agency's commission by 10 percentage points.

The contract between the agency and Janssen-Cilag was terminated immediately after being disclosed.

SEC's indictment shows that 19 of Janssen-Cilag's business contracts under the oil for food program in Iraq are related to secret kickbacks, amounting to around $857 thousand and 387.

Kickbacks are paid through Lebanese intermediaries to avoid being detected by the United Nations.

SEC said that these costs have actually become bribes to Iraq's relevant departments and are wrongly identified as legitimate agency commissions in Johnson's account records.

In order to eliminate the cost of payment while paying bribes, Janssen-Cilag and its agencies increased at least 10% of the contract value. Johnson made a total profit of 6 million 106 thousand and 255 dollars in these contracts.

In addition to Iraq, SEC has revealed that Johnson's bribery network involves many European countries.

According to the indictment, at least since 1998, Johnson's subsidiaries, employees and agencies have bribed European public hospitals doctors and administrators to seek business interests, all of which violate the United States' overseas anti corruption act.

Bribery is similar to the case in Iraq.

At least from 1998 to early 2006, Johnson's subsidiary, DePuy Inc.

It is illegal to bribe doctors in Greek public hospitals to use surgical implants, such as artificial knees and artificial legs.

Bribes are also paid in the form of a commission to a local distributor in Greece. The agency pays bribes by false Commission.

In addition, in 2000 ~2006 and 2002~2007, Johnson was found to bribe doctors and hospital administrators in Poland and Romania respectively. In Poland, the amount of bribe amounted to 775 thousand US dollars. In order to eliminate this expenditure, fake contracts and counterfeit travel expenses were adopted.

"Johnson is above the law and bribes through Private Companies."

Huzami, director of the SEC law enforcement department of the United States, said: "at the same time, we also use false contracts, Off Shore Company and bribery funds to cover up illegal activities."

Johnson has not denied the allegations. Johnson has agreed to pay a total of 70 million dollars in the morning of 9 hours in Beijing, and reached a settlement with SEC and the Federal Ministry of justice.

It pays $48 million 600 thousand in SEC and interest before judgment, and fines $21 million 400 thousand for criminal charges of the US Department of justice.

Meanwhile, according to the press release released by SEC, the Serious Fraud Office is also investigating the allegations.

Johnson said it hoped to reach a compromise with the British Fraud Office.

Founded in 1886, Johnson began to enter the overseas market in 20s of last century.

In 1932, Robert Wood Johnsons took over the company and made Johnson a global enterprise.

In 2010, Johnson's sales amounted to $61 billion 600 million.

"We are very disappointed with the illegal and unacceptable behavior."

Johnson CEO Weldon said in a statement, "from that moment on, we have made very important amendments to work hard to regulate our behavior and promise to do everything we can to ensure that it will never happen again."