Civil engineering company Dannenbaum Engineering and its parent company, Engineering Holding Corp., have agreed to pay a $1.6 million criminal fine for a scheme involving illegal campaign contributions. While the fine might not be significant, the compliance lessons are.

The companies entered a three-year deferred prosecution agreement (DPA) with the Department of Justice. According to their admissions under the DPA, from 2015 through 2017, Dannenbaum and Engineering Holding violated the Federal Election Campaign Act by making $323,300 in illegal conduit contributions through various employees and their family members to federal candidates and their committees. Dannenbaum’s corporate funds were used to advance or reimburse employee monies for these contributions.

“The Federal Election Campaign Act is designed to limit financial influence in the election of candidates for federal office,” said Special-Agent-in-Charge Perrye Turner of the FBI’s Houston Field Office. “Through our Public Corruption Unit, the FBI will continue to do its part in making sure there are fair and free elections.”

The object of the scheme was for the company, its CEO James Dannenbaum, and a former employee “to gain access to and potentially influence various candidates for federal office, including candidates for the presidency as well as the Senate and House of Representatives,” the Justice Department said. James Dannenbaum has been charged separately.

The Department said it reached its resolution based on numerous factors, including the company’s cooperation with the investigation, the internal investigation conducted, and the significant remedial measures taken.

For compliance officers and corporate counsel seeking lessons from the compliance missteps of Dannenbaum Engineering as it pertains to campaign contributions, consider what the company did right: Altered its board structure to ensure the former CEO does not control the board; stopped all politically related payments to its employees; and hired and/or designated a full-time chief governance and compliance officer.