RTX, formerly Raytheon Technologies, has allocated $1.24 billion to resolve various government investigations into its business practices.
The allegations include a bribery probe linked to allegations involving a member of Qatar’s royal family.
The sum will cover $384 million in penalties for a settlement with the Justice Department and the Securities and Exchange Commission (SEC) over allegations.
These claims came from a lawsuit in California, which claimed RTX funneled roughly $1.9 million through a consulting firm partly owned by the brother of Qatar’s emir.
This lawsuit was eventually dismissed due to jurisdictional issues.
This figure represents a considerable increase from RTX’s earlier cost estimates of around $300 million.
“While the financial impact of these items is above what we had previously reserved, we believe the provisions we have taken put these issues behind us financially, and we will continue to cooperate with the government and external monitors as we move forward”
Previously, RTX had set aside funds for a separate DOJ investigation into claims of misleading pricing on certain government contracts.
RTX said it had allocated $575 million for these contract pricing claims.
It said an additional $285 million will settle violations of US export control regulations with the State Department’s defense trade arm.
The company expects to finalize all three settlements in the latter half of 2024.
RTX’s Chief Financial Officer, Neil Mitchill Jr., said: “While the financial impact of these items is above what we had previously reserved, we believe the provisions we have taken put these issues behind us financially, and we will continue to cooperate with the government and external monitors as we move forward.”
Need Career Advice? Get employment skills advice at all levels of your career
RTX has characterized these matters as legacy issues since its rebranding from Raytheon following its merger with United Technologies in 2020.
The company declined further comment on the financial provisions.
RTX is preparing to enter deferred prosecution agreements with the DOJ regarding bribery and pricing disputes.
It also plans for civil settlements with the SEC and the State Department’s Office of Defense Trade Controls Compliance.
The company has been a major recipient of US military aid to Ukraine, Israel, and other allies.
The settlements will require RTX to hire an independent monitor to oversee compliance and improve its internal practices.
