Paris-based Technip S.A., an engineering and construction firm that's part of the oil and gas services industry, has resolved FCPA-related charges with the DOJ. It agreed to pay a $240 million criminal penalty and enter into a deferred prosecution agreement. It also settled a civil complaint filed by the SEC by paying $98 million in disgorgement of profits.
Technip, Kellogg Brown & Root (KBR), ENI of Italy, and JGC of Japan were equal partners in the TSKJ joint venture. The JV operated through three special purpose corporations formed and based in Madeira, Portugal. Between 1995 and 2004, the joint venture won contracts worth $6 billion to build massive LNG facilities on Nigeria's Bonny Island.
The DOJ said Technip authorized the joint venture to hire two agents -- London lawyer Jeffrey Tesler and a Japanese trading company -- to pay bribes to a range of Nigerian government officials. A senior executive of Technip, with KBR’s former CEO Albert "Jack" Stanley and others, met with top-level Nigerian officials "in the executive branch" to work out the logistics of the bribery. The joint venture, according to the U.S. agencies, paid about "$132 million to a Gibraltar corporation controlled by Tesler and more than $50 million to the Japanese trading company.
Technip was charged in a two-count criminal information with one count of conspiracy and one count of violating the FCPA. The case was filed in the U.S. District Court for the Southern District of Texas.
The two-year deferred prosecution agreement requires Technip to retain an independent compliance monitor and cooperate in ongoing investigations.
In February 2009, Houston-based global engineering firm KBR pleaded guilty to a five-count criminal information, with one conspiracy count and four substantive counts of violating the Foreign Corrupt Practices Act, for its role in the TSKJ joint venture. And with its former parent, Halliburton, it settled civil charges with the SEC. KBR's criminal fine was $402 million and with Halliburton it agreed to pay the SEC $177 million in disgorgement.
KBR's former boss Jack Stanley pleaded guilty in September 2008 to conspiring to violate the FCPA. He was sentenced to seven years in prison. His sentence is subject to court review based on his cooperation in the related prosecutions.
Jeffrey Tesler and Wojciech Chodan, both U.K. citizens, were indicted in February 2009 by a federal grand jury in Houston. They were charged with helping KBR and its partners arrange the bribes to the Nigerian officials. Earlier this year, judges in London ruled that both should be extradited to the U.S. to face trial. Their appeals could take up to a year.
Technip said in February this year it had reserved €245 million for an exceptional charge related to a potential settlement of Foreign Corrupt Practices Act offenses with the Justice Department and Securities and Exchange Commission for its role in the TSKJ joint venture. A month later, Italy's ENI disclosed a provision for €250 million, "reflecting the estimated cost of resolution" with U.S. prosecutors for the Nigeria bribe case. ENI's settlement is still pending.
Technip’s American Depository Shares traded on the New York Stock Exchange from 2001 until 2007.
The DOJ said that with Technip's settlement, "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 contracts.
View the DOJ's June 28, 2010 release here.
View the SEC's Litigation Release No. 21578 and Accounting and Auditing Enforcement Release No. 3147 (both dated June 28, 2010) in Securities and Exchange Commission v. Technip, Case No. 4:10-cv-02289, S.D. Tex. (Houston) here.
Download a copy of the SEC's civil complaint against Technip here.