RTX Corp to Pay Over $950M in Settlement Over Fraud, Bribery in U.S., Qatar Contracts

RTX Corporation, formerly known as Raytheon, has agreed to pay over $950 million to settle allegations of fraud and bribery, including inflated costs on contracts for Patriot missile systems and illegal payments to secure defense deals with Qatar.

The allegations include inflated billing practices and illegal payments made to secure contracts with Qatar's military. The company will pay penalties, civil fines, and restitution, with cases being handled in federal courts in Brooklyn and Massachusetts.

The settlement includes a $428 million civil penalty for fraudulent billing practices, such as inflating labor and material costs on no-bid contracts with the U.S. Department of Defense. Criminal penalties totaling nearly $400 million have also been imposed, including $252 million related to bribery cases in Brooklyn and $147 million for cost inflation in Massachusetts. The company also faces a $52.5 million civil penalty from a Securities and Exchange Commission investigation linked to bribery.

From 2012 to 2016, RTX allegedly paid bribes to a high-ranking Qatari military official to secure defense contracts. The company secured four contract extensions with the Gulf Cooperation Council (GCC) and a $510 million contract for a joint-operations center for the Qatari military. Raytheon made $36.7 million from GCC contract additions which involved air-defense system upgrades, and expected $72 million from the joint-operations center, but Qatar did not proceed with the deal. The official, involved in the GCC deal and Qatari procurement, was bribed with $2 million in sham contracts.

Raytheon also allegedly inflated costs for a $619 million U.S. Army contract for three Patriot missile units, leading to a $100 million overpayment, and misled the U.S. Air Force about costs in a radar system contract, inflating it by $11 million. RTX recently faced penalties, including a $200 million payment to the State Department for violations related to exporting classified data to China and taking sensitive materials to Iran, Lebanon, and Russia.