RTX Corporation, the parent of Raytheon and one of the world's largest defence contractors, made improper payments to foreign government officials through intermediaries. The payments were recorded in the company's books as legitimate commissions and business expenses, and the internal controls over vendor and agent due diligence were insufficient to detect or prevent them.
The SEC found violations of the Foreign Corrupt Practices Act's anti-bribery provision, its books-and-records provision, and its internal-accounting-controls provision. In October 2024 RTX agreed to pay $37.4 million in disgorgement, $11.8 million in interest, and a $75 million civil penalty — $124 million in total, offset by $22.5 million in payments already made to the Department of Justice.
RTX was also required to retain an independent compliance monitor for at least 36 months — a multi-year oversight commitment that costs far more than the penalty itself.
The SEC fined RTX $124M and imposed a 36-month monitor; the real cost is the monitor, not the penalty, which is a rounding error on $70B revenue.
Defence contracts in foreign markets often require local agents, and the line between a legitimate commission and an improper payment is the line the controls are supposed to draw.
Recording bribes as commissions works until someone audits the agent's actual work product.
A $75M penalty is a rounding error on a $70B revenue company; the 36-month compliance monitor is the real cost.
The FCPA fails not because the payment is hidden but because it is recorded as something it is not — and the controls that should flag it were never built.
FOLLOW THE EVIDENCE