Senior executives of General Telephone & Electronics Corp. directed the payment of at least $14 million in bribes, kickbacks and rebates in 28 countries, including the United States, between 1971 and the present, some of it going to government officials, according to documents filed yesterday in federal court here.
Without admitting or denying the allegations made in a complaint filed by the Securities and Exchange Commission, GT&E consented to a court-ordered permanent injunction.
In a unrelated case, uniroyal, Inc., also consented to a court order after the SEC alleged that it had paid $2.3 million to officials of several foreign governments.
GTE officials named in the complaint - but not as defendants - are Theodore F. Brophy, chairman of the board; John J. Douglas, vice chairman; and William F. Bennett, executive vice president.
The SEC complaint says that GTE sold a 28 per cent interest in Philippine Long Distance Telephone Co. to four Filipinos handpicked "at the highest level of government." Some details of the sale were spelled out earlier this month in an Sec suit against the four Filipinos.
About $4.5 million was distributed by GTE to the four to make the acquisition possible. This was done through secret commissions, credits and uncollected loans, the SEC said.
Brophy, Douglas and Bennett directed the Phillippine venture, according to the SEC.
The SEC complaint notes that the company, based in Stamford, Conn., "approved substantial commission payments to foreign agents without inquiring about the use of such commssion payments."
In 1971, when GTE was negotiating a large telecommunications project in Iran, the company's marketing representatives in that country advised management to retain an agent.
The agent, who was to get 60 per cent of the 10 per cent commission GTE was paying the marketing representative, was "necessary" because of his "close relationships with persons at the highest levels of the Iranian government," according to the SEC.
After the agent and representative presented GTE's proposal "at the highest level of the Iranian government," the company got a letter of intent for work valued at $80 million, the complaint says.
the two received commissions totaling $6 million, and some GTE employees "understood" that some of the money went "to various government officials involved in the project," the SEC says.
Both the agent and the marketing representative have denied this in writing.
When it looked as if the Iranian contract would grow to several hundred million dollars, the agent and representative's commisions were scaled downward, the SEC says.
The commissions were paid through four Shell companies, two of them in Switzerland, the SEC says.
In 1973, GTE was awarded a contract to supply telecommunications equipment to an unnamed South American country, according to the complaint.
At the last minute, the SEC says, the contract was rescinded, and GTE was told it could be revived by paying about $270.000 to two high-level government officials.
These payments and others were "disguised on the books of GTE," the SEC found.
The complaint states that GTE paid a total of about $35,000 in illegal domestic campaign contributions from 1964 through 1972.
The SEC was told by GTE employees that, between 1971 and 1973, the company made payments to unnamed officials in Mississippi and New York City in connection with negotiations for contracts.
In the Uniroyal case, the company signed a consent decree without either admitting or denying the SEC allegations.
The commission alleged that a Uniroyal subsidiary paid $420,000 to a trade association in Mexico on the promise that "the entire amount would be given to government officials" to block a planned price increase for tires.
In past complaints, the SEC, has made similar allegations of payments in Mexico by Firestone Tire and Rubber Co.
The SEC complaint says that Uniroyal and its subsidiaries paid "questionable commissions" to stimulate export sales in many countries. A number of government officials also received payments, the SEC says.