BHP Billiton under US corruption probe over spending during Beijing Olympics

The world's largest mining company, BHP Billiton, has been told by the US regulators that it could face corruption charges for having showered gifts to top ranking Chinese officials during the 2008 Beijing Olympics.

The four-year investigation by the US Securities Exchange Commission (SEC) and the US Department of Justice (DoJ) is related to BHP Billiton's sponsorship of the 2008 Beijing Olympics.

BHP Billiton was the sponsor for the gold, silver and bronze medals used in the Beijing Olympics, and is alleged to have spent millions of dollars in hosting and showering gifts on more than 170 VIPs, including top government officials and executives of Chinese steel companies in the lead-up and during the Games.

The Australian Federal Police is also conducting a separate investigation into these allegations.

BHP Billiton's biggest market for iron ore is China where nearly all the top steel companies in the country are state-owned.

Its role as a sponsor did not focus on media campaign to promote the company but on spending lavishly on its customers and government officials connected to the steel and mining industry.

Maria McCarthy, head of BHP Billiton's Olympic sponsorship team, told Reuters in March 2008 that most sponsors focus on media and advertising, but we have almost none, and instead focused on government and customers.

The company was trying to woo executives of Chinese steel companies since BHP Billiton, the world's third-largest iron ore exporter, was at time being critisied for aggressively pushing for high iron ore prices to its Asian customers, and also paving the way for China to approve its then proposed merger with mining giant Rio Tinto Plc, which the company later abandoned.

"As a part of the US process, the SEC and DoJ have recently notified the group of the issues they consider could form the basis of enforcement actions and discussions are continuing," BHP Billiton said in a statement.

The miner had earlier said that it has a world class anti-corruption compliance programme and believed it had complied with all applicable laws regarding its Olympics sponsorship.

"BHP Billiton is fully committed to operating with integrity and the group's policies specifically prohibit engaging in unethical conduct," the company added in the statement.

The SEC and the DoJ are investigating BHP Billiton under the Foreign Corrupt Practices Act since the company is listed at the New York Stock Exchange.

But most of these cases end up with the company agreeing to pay fines without admitting to any wrongdoing.

Recently French energy giant Total SA agreed to pay $398 million to settle criminal charges with the SEC and DoJ over bribes paid to Iranian government officials to bag a contract with the National Iranian Oil Company for developing oil and gas fields.

In 2008, German engineering giant Siemens also agreed to pay $800 million to the DOJ and the SEC for bribing foreign officials in numerous countries for bagging projects in infrastructure, telecommunications, installation of electricity lines, construction of power plants and  municipal transit systems and sale of medical devices.