As reported today by Mike Koehler, two executives from oil services firm Noble Corporation filed motions to dismiss complaints brought against them in February by the Securities and Exchange Commission that alleged they bribed officials in Nigeria in exchange for illegal import permits for drilling rigs.
In his motion to dismiss the SEC's civil complaint, James J. Ruehlen, the current head of Noble’s subsidiary in Nigeria, said:
Despite the repetition of the word “bribe” fifty-three times in its Complaint, Plaintiff [SEC] fails to allege a violation of law. The FCPA distinguishes between prohibited corrupt payments made to obtain or retain business (i.e., bribes), and permissible payments to “secure the performance of a routine governmental action,” such as “obtaining permits, licenses, or other official documents” or for “processing governmental papers” (i.e., facilitation payments). The Complaint assumes that all payments to foreign officials are per se illegal bribes, never acknowledging the FCPA’s exception for facilitation payments.
Noble's former CEO Mark A. Jackson filed a separate motion to dismiss to the charges against him.
Thomas F. O’Rourke, a former controller and head of internal audit at Noble, was charged in February in a separate SEC complaint with violating the FCPA. He agreed then to settle by paying a $35,000 civil penalty.
The SEC alleged that Jackson and Ruehlen paid 'hundreds of thousands of dollars in bribes' to Nigerian customs officials. 'Jackson approved the bribe payments,' the SEC charged, 'and concealed the payments from Noble’s audit committee and auditors. Ruehlen prepared false documents, sought approval for the bribes, and processed and paid the bribes.'
Jackson and Ruehlen were charged with violating the antibribery provisions of the FCPA and its internal controls and false records provisions. The SEC also alleged that they aided and abetted Noble’s violations of the books and records and internal controls provisions.
Jackson was additionally charged with misleading auditors by signing false certifications of Noble’s financial statements. The SEC alleged that he's also liable as a 'control person' for violations of the antibribery, books and records, and internal controls provisions by Noble, Ruehlen, and O’Rourke.
Mike Koehler said this is the first time individuals have gone to court against the SEC to fight FCPA charges since 2002.
In 2010, Noble Corporation paid $8.1 million to settle FCPA offenses. It was one of seven oil and gas services companies caught in the industry sweep following revelations about Panalpina's practices in Nigeria and other countries. The DOJ and SEC said Noble paid $74,000 to a Nigerian freight forwarding agent, knowing that some of the payments would be passed on as bribes to Nigerian customs officials. Noble falsely recorded the bribes as legitimate business expenses.
Noble paid a criminal penalty of $2.6 million and entered into a non-prosecution agreement with the DOJ. In its SEC settlement, the company paid $5.5 million in disgorgement of profits and prejudgment interest.