General Cable Corporation, a Kentucky-based wire and cable maker, is paying $6.5 million in penalties to settle accounting violations with the Securities and Exchange Commission, on top of over $75 million to resolve allegations by the SEC and the Justice Department that the company violated the Foreign Corrupt Practices Act.

General Cable’s overseas subsidiaries made improper payments to officials from foreign governments for 12 years to get business in Angola, Bangladesh, China, Egypt, Indonesia and Thailand, according to the SEC. The Highland Heights, Ky.-based company’s weak internal controls also failed to detect improper inventory accounting at its Brazilian subsidiary, leading GCC to materially misstate its financial statements from 2008 until the second quarter of 2012.

In October 2007, after acquiring Phelps Dodge International Corp., GCC created the ROW reporting segment, whose management was based in Doral, Fla. GCC Brazil, as part of ROW’s Latin America operations, was one of the largest and most significant operations that were reported in ROW’s financial statements. During that same period, GCC Brazil had two manufacturing facilities. From at least 2008 until mid-2012, GCC Brazil materially understated the cost of sales and overstated its copper inventory balances on its books and records, which were consolidated into GCC’s financial statements. The inventory overstatement, leading to material financial reporting errors, came from both missing inventory and accounting errors within GCC Brazil’s enterprise resource planning system and its implementation.

In covering up the missing inventory, some of the company’s cost accounting personnel, who controlled entries in GCC Brazil’s general ledger and also controlled the accounting for inventory, manipulated the ERP system to reflect inventory that did not in fact exist. After performing an internal investigation, GCC found the inventory accounting errors at GCC Brazil were material and would require a restatement of some previously issued financial statements. For the years ended Dec. 31, 2011, 2010, 2009, and 2008, and for the three months ended March 30, 2012 and six months ended June 29, 2012, the company understated cost of sales by $17.9 million, $8.3 million, $5.6 million, $7.1 million, $2.7 million and $6.2 million, respectively. As of Dec. 31, 2011, 2010, 2009 and 2008, March 30, 2012 and June 29, 2012 inventory balances were overstated by $40.0 million, $27.0 million, $17.4 million, $8.7 million, $43.7 million, and $43.5 million, respectively.

On top of that, thanks to accounting errors at one of the Brazilian facilities that occurred before GCC’s acquisition of PDIC in 2007, GCC also overstated inventory in its allocation of the purchase price among assets acquired, resulting in an understatement of goodwill. The understated goodwill and overstated inventory associated with the acquisition of PDIC in the fourth quarter of 2007 was $3.4 million. The inventory accounting errors at GCC Brazil caused GCC to overstate its net income available to common shareholders by 21.6 percent, 11.3 percent and 29.8 percent for annual periods ended Dec. 31, 2011, 2010, and 2009, and 8.8 percent and 13.8 percent for quarterly periods ended June 30 and March 31, 2012, respectively.

“General Cable operated globally without the effective compliance programs and internal controls necessary to proactively address corruption risks and accounting errors,” said SEC Enforcement Division acting director Stephanie Avakian in a statement.

GCC acknowledged Thursday that its resolution with the SEC encompasses both the FCPA issues and the separate accounting and disclosure issues that were the subject of its previous financial restatements. General Cable will disgorge profits of around $51.2 million and pay pre-judgment interest of approximately $4.1 million in connection with the Foreign Corrupt Practices Act violation, and pay a civil penalty in connection with the restatement-related matters of $6.5 million.

As part of the DOJ resolution, the company will also pay a penalty of approximately $20.5 million. It has entered into a non-prosecution agreement with the DOJ, which will be in effect for three years. No criminal charges will be brought against General Cable, as long as it complies with its obligations under the agreement. To satisfy its financial obligations, General Cable will remit a total of approximately $82.3 million to the DOJ and SEC.

“We are pleased to have reached an agreement with the DOJ and SEC regarding these matters,” said General Cable president and CEO Michael T. McDonnell in a statement. “General Cable is committed to conducting our business ethically and with the utmost integrity, and over the past two years, we have invested significant time and resources to implement a world-class compliance program. At the same time, we have transformed our business strategy under an entirely refreshed strategic leadership team committed to maintaining a strong performance and compliance culture. We are a different and better company today as a result of these actions.”

Michael Cohn, editor-in-chief of AccountingToday.com, has been covering business and technology for a variety of publications since 1985.