Global Engineering Firm Agrees to Pay $240 Million FCPA Criminal Penalty
The Justice Department has announced that Technip S.A., a global engineering, construction and services company based in Paris, has agreed to pay a $240 million criminal penalty to resolve charges related to the Foreign Corrupt Practices Act for its participation in a decade-long scheme to bribe Nigerian government officials to obtain engineering, procurement and construction (EPC) contracts. The EPC contracts to build liquefied natural gas (LNG) facilities on Bonny Island, Nigeria, were valued at more than $6 billion.
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Technip, Kellogg Brown & Root Inc. (KBR), and two other companies were part of a four-company joint venture that was awarded four EPC contracts by Nigeria LNG Ltd. (NLNG) between 1995 and 2004 to build LNG facilities on Bonny Island. The government-owned Nigerian National Petroleum Corporation (NNPC) was the largest shareholder of NLNG, owning 49 percent of the company.
According to court documents, Technip authorized the joint venture to hire two agents, Jeffrey Tesler and a Japanese trading company, to pay bribes to a range of Nigerian government officials, including top-level executive branch officials, to assist Technip and the joint venture in obtaining the EPC contracts. At crucial junctures preceding the award of EPC contracts, a senior executive of Technip, KBR’s former CEO, Albert "Jack" Stanley, and others met with successive holders of a top-level office in the executive branch of the Nigerian government to ask the office holders to designate a representative with whom the joint venture should negotiate bribes to Nigerian government officials. The joint venture paid approximately $132 million to a Gibraltar corporation controlled by Tesler and more than $50 million to the Japanese trading company during the course of the bribery scheme. According to court documents, Technip intended for these payments to be used, in part, for bribes to Nigerian government officials.
Under the terms of the deferred prosecution agreement, the department agreed to defer prosecution of Technip for two years. Technip agreed, among other things, to retain an independent compliance monitor for a two-year period to review the design and implementation of Technip’s compliance program and to cooperate with the department in ongoing investigations. If Technip abides by the terms of the deferred prosecution agreement, the department will dismiss the criminal information when the term of the agreement expires.
Related Criminal and Civil Cases Bring Total in Penalties to $917 Million
In a related criminal case, Stanley pleaded guilty in September 2008 to conspiring to violate the FCPA for his participation in the bribery scheme. In another related criminal case, KBR’s successor company, Kellogg Brown & Root LLC, pleaded guilty in February 2009 to charges related to the FCPA for its participation in the scheme to bribe Nigerian government officials. Kellogg Brown & Root LLC was ordered to pay a $402 million fine and to retain an independent compliance monitor for a three-year period to review the design and implementation of its compliance program. In another related criminal case, Tesler and Wojciech Chodan, a former salesperson and consultant of a United Kingdom subsidiary of KBR, were indicted in February 2009 on charges related to the FCPA for their alleged participation in the bribery scheme. The United States has requested these defendants’ extradition from the United Kingdom.
Technip also reached a settlement of a related civil complaint filed by the Securities and Exchange Commission (SEC) charging Technip with violating the FCPA’s anti-bribery, books and records, and internal controls provisions. As part of that settlement, Technip agreed to pay $98 million in disgorgement of profits relating to those violations.
All in all, a total of $917 million in criminal and civil penalties have been obtained to date as a result of the ongoing Department of Justice and SEC investigations of the scheme to bribe Nigerian government officials in order to win the Bonny Island EPC contracts.