Defense contractor FLIR Systems Inc. is paying the U.S. government more than $9.5 million to settle charges it violated Foreign Corrupt Practices Act.

The U.S. Securities and Exchange Commission said FLIR Systems had earned more than $7 million in profits from sales that were influenced by improper travel and gifts to Saudi Arabian government officials.

"FLIR's deficient financial controls failed to identify and stop the activities of employees who served as de facto travel agents for influential foreign officials to travel around the world on the company's dime," said Kara Brockmeyer, chief of the SEC Enforcement Division's FCPA Unit.

The two FLIR employees involved in the improper activity were based at the company's facility in Dubai, United Arab Emirates. The SEC said they provided expensive watches to government officials with the Saudi Arabia Ministry of Interior in 2009, and they arranged for the company to pay for a 20-night excursion by Saudi officials that included stops in Casablanca, Paris, Dubai, Beirut, and New York City.

"The value of the gifts and the extent and nature of the travel were falsely recorded in FLIR's books and records as legitimate business expenses, and the company's internal controls failed to catch the improper payments despite documentation suggesting that extravagant gifts and travel were being provided," the commission said.

"FLIR also accepted cursory invoices from a FLIR company partner without any supporting documentation to pay extended travel of Egyptian officials in mid-2011."

The SEC said FLIR self-reported the misconduct and cooperated with the SEC's investigation. FLIR consented to the order without admitting or denying the findings and agreed to pay disgorgement of $7,534,000, prejudgment interest of $970,584 and a penalty of $1 million for a total of $9,504,584.

The company must also report its FCPA compliance efforts to the agency for the next two years.

FLIR Systems Inc., a developer of infrared technology, is headquartered in Oregon.