In early 1978, an employee (the Employee) of the Middle East regional export manager for Goodyear International Corp. (GIC), met with officials of the Iraqi state-owned trading organization, Iraqi Trading Company (ITC), which purchases virtually all of the tires for sale in Iraq. In a private meeting with the Employee, one of the ITC officials, Mohammed Jassem, informed the Employee that GIC's competitors in France, Korea, and Japan had been willing to pay cash commissions to ensure "good relationships" with ITC and that it would only get a limited amount of business with ITC without such payments. The Employee initially declined but, after getting pressured from his superiors to get the business despite ITC's request, later negotiated a 7% cash commission for the ITC officials. Following this agreement, GIC received over $19 million worth of business from ITC through three transactions.
The Employee and other GIC officials used advertising agencies to cover the cash commissions to be paid to the ITC officials. In one instance, they engaged a Greek company to conduct "marketing studies," who provided a very superficial report. The invoiced amount was deposited into the Greek company's bank account in the Union Bank of Switzerland (UBS). The Employee opened an account under his name in the same bank, and a substantial portion of the invoiced amount was then transferred to the Employee's account. The Employee withdrew money from this account to pay the ITC officials. In another instance, the Employee and other GIC officials had false invoices prepared on the letterhead of a defunct advertising agency for purportedly placing Arabic advertisements in Baghdad newspapers. The invoiced amounts were deposited into an account in UBS which was opened under the name of the defunct advertising agency for this specific purpose. The Employee then transferred the money into his account at UBS.
