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Tuesday
Dec102013

Germany's Bilfinger in $32 million settlement for Nigeria bribes

Mannheim, Germany-based Bilfinger SE, an engineering and services company in the energy sector, agreed to pay a $32 million penalty to resolve charges that it violated the Foreign Corrupt Practices Act (FCPA) by bribing government officials in Nigeria.

The DOJ Monday filed a three-count criminal information in U.S. District Court for the Southern District of Texas charging Bilfinger with violating and conspiring to violate the FCPA’s anti-bribery provisions.

Bilfinger entered a deferred prosecution agreement with the DOJ for three years.

The corrupt payments by Bilfinger were intended to obtain and retain contracts for Nigeria's Eastern Gas Gathering System (EGGS) project valued at $387 million.

Bilfinger agreed with the DOJ to retain an independent corporate compliance monitor for at least 18 months.

From 2003 to 2005, Bilfinger conspired with Willbros Group Inc. and others to pay more than $6 million in bribes to Nigerian government officials to win and keep contracts for the EGGS project, the DOJ said.

According to the DOJ,

Bilfinger and Willbros formed a joint venture to bid on the EGGS project and inflated the price of the joint venture’s bid by three percent to cover the cost of paying bribes to Nigerian officials. As part of the conspiracy, Bilfinger employees bribed Nigerian officials with cash that Bilfinger employees sent from Germany to Nigeria. At another point in the conspiracy, when Willbros employees encountered difficulty obtaining enough money to make their share of the bribe payments, Bilfinger loaned them $1 million, with the express purpose of paying bribes to the Nigerian officials.

EGGS-related enforcement actions have  involved five other FCPA defendants.

In 2006, Jim Bob Brown, a former Willbros executive, pleaded guilty to one count of conspiracy to violate the FCPA in connection with his role in making corrupt payments to Nigerian government officials to obtain and retain the EGGS contract and for his role in making corrupt payments in Ecuador. He was sentenced in 2010 to 12 months and one day in federal prison, followed by two years of supervised release.

In 2007, Jason Steph, another former Willbros executive, pleaded guilty to one count of conspiracy to violate the FCPA for bribing Nigerian government officials to obtain and retain the EGGS contract. Steph was sentenced in 2010 to 15 months in prison and two years of supervised release.

In 2008, Kenneth Tillery, a former Willbros executive, was charged with an FCPA conspiracy and paying bribes to officials in connection with the EGGS project and pipeline projects in Ecuador, and conspiring to launder the bribe payments. He's still a fugitive.

Also in 2008, Willbros Group Inc. and its international subsidiary paid a $22 million criminal penalty to the DOJ for bribes to government officials in Nigeria and Ecuador.

In 2009, Paul Novak, a former Willbros consultant, pleaded guilty to one count of conspiracy to violate the FCPA and one substantive FCPA count for corrupt payments to Nigerian government officials to obtain and retain the EGGS contract. Novak was sentenced in May this year to 15 months in prison and a $1 million fine.

A December 9, 2013 FBI release (available here) said the ‘case was investigated by the FBI’s Washington Field Office and its team of special agents dedicated to the investigation of foreign bribery cases.’

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Richard L. Cassin is the publisher and editor of the FCPA Blog. He can be contacted here.