InVision Settles Bribery Claims

General Electric Co.’s InVision unit, the biggest U.S. maker of bomb-detection machines, agreed Monday to pay about $1.12 million to settle allegations that it made illegal payments to foreign government officials before GE bought the company.

Under the settlement with the Securities and Exchange Commission, Newark, Calif.-based InVision neither admits nor denies wrongdoing, the regulatory agency said in a statement. The agreement, which covers the period from June 2002 to June 2004, follows a similar $800,000 settlement with the Justice Department. GE bought InVision in December for about $900 million.

“We are pleased to have reached closure on this issue, which involves activities that occurred prior to GE’s purchase of InVision,” GE spokesman Jeff Demarrais said.

The SEC had said that InVision over those two years was “aware of a high probability” that foreign sales agents or distributors offered “improper payments” to government officials to get or keep business in China, the Philippines and Thailand, according to the SEC’s statement.

“InVision had an internal controls problem,” said Robert Tashjian, an SEC enforcement lawyer in San Francisco who worked on the case. “InVision was skating on thin ice. They were competing vigorously for overseas market share but they lacked even basic internal controls to make sure the company complied” with U.S. laws prohibiting corporate bribery.

The settlement required InVision to forfeit $589,000 in illegal profits, as well as interest of about $28,700, and a $500,000 civil penalty, according to the SEC.

Fairfield, Conn.-based GE, the world’s largest company by market value, agreed last March to buy InVision for $50 a share to build its security-systems business. It delayed the purchase in July after InVision told U.S. regulators an internal investigation uncovered possible wrongdoing. The companies on Nov. 1 extended the purchase-agreement deadline until Dec. 27 to allow more time for InVision to resolve the issue.

As part of that agreement, InVision and GE agreed to cooperate with the continuing investigations by the SEC and the Justice Department.

Shares of GE rose 9 cents Monday to $36.32 on the New York Stock Exchange.