LATAM Airlines to pay $22 million over Argentine bribes case

[Eugene]

Source: Reuters

World | Mon Jul 25, 2016 12:37pm EDT

LATAM Airlines to pay $22 million over Argentine bribes case

LATAM Airlines Group SA , Latin America's largest airline, has agreed to pay more than $22 million in civil and criminal fines relating to a decade-old Argentine bribery case, U.S. authorities said Monday.

The U.S. Securities and Exchange Commission said the fine of LATAM unit LAN related to "improper payments it authorized during a dispute between the airline and its union employees in Argentina".

The payments date back to 2006 to 2007, the company said in a separate statement, predating Chile-based LAN's 2012 merger with Brazil's TAM.

LAN had used an Argentine consultant to negotiate with unions on the company's behalf and paid the consultant via a sham contract that channeled funds to corrupt union officials, the SEC said.

The scheme had violated the accounting provisions of the Foreign Corrupt Practices Act, the U.S. Justice Department said, and the airline agreed to pay a $12.75 million criminal penalty.

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Read more: http://www.reuters.com/article/us-latam-airlines-corruption-idUSKCN1051TL

[forest444]

1. They should leave Argentina altogether.

Keep in mind that LAN flies domestically in Argentina only because the Menem administration caved and gave them the permits to do so. Access to the Argentine market made a huge difference for LAN (and for the larcenous Sebastián Piñera's bank accounts).

It was always rumored that these plum permits - plus a choice hangar at Buenos Aires' municipal airport - had been ceded to LAN by way of bribes. I think it's now safe to say they were.

Their presence is completely superfluous since Argentina's domestic flight market is relatively small (18 million passengers) and could have easily been covered by Aerolíneas Argentinas and its domestic carrier, Austral (plus a handful of private, regional airlines).

The same thing can be said now about Avianca, which Macri is granting numerous domestic routes after they bailed out his family small, failing airline MacAir.

Thanks, Eugene, for this interesting update.