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Nike Is at the Center of a Kenyan Corruption Probe

Mar 06, 2016

This story was updated to reflect a comment from Nike.

A contract between Nike and Athletics Kenya from 2011 has caused some people to question the company.

Under its terms, the athletics company would pay the Kenyan athletics federation $100,000 in honorariums each year and a one-time payment of $500,000, which was referred to as a "commitment bonus." The New York Times reports that the bonus was immediately withdrawn by Kenyan officials and kept off the books.

Nike (nke) maintains that it hasn't done anything illicit, but a former federation employee claims that it was a bribe. The company isn't currently being investigated by U.S. authorities, but Kenya's Directorate of Criminal Investigations is looking into the matter. "Why was such a huge sum of money paid as commitment?” an anonymous detective told the Times. "It's only Nike who can tell us." The organization has requested more information from Nike, but the company has supposedly refused to oblige.

This incident comes as Western countries are threatening sanctions against Kenya for corruption and the White House released a 29- point plan to fight it. John Githongo, a leading voice against corruption in Kenya, urges the U.S. to look into Nike, saying it would be "hypocritical" if it doesn't. He added that language like "commitment fees" and "commitment bonuses" are "used to dress up bribes traditionally."

" Nike conducts its business with integrity and expects that our partners do the same," Nike told Fortune in a statement. " Nike's expectation and understanding of our sponsorship agreement with Athletics Kenya has always been that funds are to be used to support and service the teams and athletes. We have cooperated with the local authorities."

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