From the Desk of Mike ‘The Hammer’ Garvin

Volvo agrees to $7 million penalty over Iraq Oil-for-Food

WASHINGTON (Reuters) — Swedish truck and vehicle maker Volvo AB (VOLVb.ST: Quote, Profile, Research) has agreed to pay a $7 million penalty as part of an agreement with the U.S. Justice Department in connection with a probe of the U.N. Oil for Food program for Iraq, the Justice Department said recently.

Under the agreement, Volvo acknowledges responsibilities for the actions of its subsidiaries, Renault Trucks SAS and Volvo Construction Equipment AB, who are accused of violating the Foreign Corrupt Practices act.

The Justice Department said the subsidiaries paid kickbacks to the Iraqi government under Saddam Hussein to obtain contracts for the sale of trucks and heavy construction equipment.

(Reporting by Randall Mikkelsen, editing by Phil Berlowitz)