McDonnell Douglas Corp. paid an unnamed Korean trading company commisions of $8.3 million, some of which may have gone to government officials, in connection with a $76 million sale to a Korean airline.
McDonnell disclosed the payment yesterday as part of the settlement of a suit by the Securities and Exchange Commission.
The SEC filed the suit Thursday in U.S. District Court here charging the company with making secret payments of $8.3 million to foreign airline and government officials since 1969.
The SEC also accused McDonnell of paying another $7.3 million in commissions without knowing "such payments were actually made for the purpose indicated."
While neither admitting nor denying the allegations in the SEC suit, McDnnell agreed to appoint a special committee to review the disclosures made public yesterday by the company. The company will report its findings to the commission and the court.
In its report McDonnell disclosed very few details about the foreign payments.
The company said: "There were no slush funds, no unrecorded asset accounts, no illegal political transactions, and no questionable domestic payments of any kind whatsoever, and neither the SEC nor any other governmental agency, commission or department has claimed otherwise."
McDonnell said it made payments to spur sales in more than a dozen countries.
The company made $44.1 million in sales to a Philippines airline, and paid $200,000 each in commissions to two agencies designated by two airline officers. These agencies apparently were controlled by the officers, McDonnell said.
A McDonnell representative who helped on sales of $12.8 million to an African airline jointly owned by Kenya, Uganda and Tanzania had to share his $1.3 million commission with airline and government officials of those countries, the company said.
A Mexican airline official collected a $150,000 commission on $47.4 million in airline sales to an airline in his country.
A government and an airline official in Zaire got commissions of $450,000 for sales of $25.2 million to that country's airline.
The year after a European consortium of airlines decided to buy McDonnell aircraft, the company said it began making quarterly payments of $25,000 to a Swiss bank account of an official of one of the airlines located in the Netherlands. On sales of $65.2 million to an airline in Pakistan, McDonnell said it paid $1.19 million to its representative and $10,000 to a then senior government officials.
McDonnell said the special committee will be asked to review $1.8 million paid in connection to aircraft sales to Japan "even though management believes such payments were entirely proper."