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.
Entries in Willbros (27)
A former consultant for pipeline contractor Willbros International Inc. was sentenced Friday for his role in a scheme to pay more than $6 million in bribes to government and political party officials in Nigeria.
Willbros Group, Inc. said in an SEC filing that the FCPA charges against it were formally dismissed this month.
The penalty for paying bribes in Nigeria may increase following demands from a Nigerian NGO that the Nigerian government seek its share of the recent anti-graft bounty. Maybe…
ABB joins the list of top ten FCPA settlements of all time, and Titan Corporation drops to number eleven. Here's the latest list, with a few candidates that may join soon.
If the DOJ and SEC are prosecuting corporations instead of individuals for FCPA violations -- an idea raised in another post -- the numbers should show it. So let's take a look.
After Gerald and Patricia Green were convicted last year of one count of conspiring to violate the Foreign Corrupt Practices Act, nine counts of violating the FCPA, and seven counts of money laundering, prosecutors asked for ten-year jail terms. The Greens' lawyers argued for no time behind bars.
In August, and after much delay, Judge George Wu sentenced the husband-and-wife Hollywood movie producers to just six months in jail and six months home confinement. The sentences were among the most lenient for individuals convicted of FCPA and related offenses.
We don't know Judge Wu's reasons for imposing the light jail terms. But here's a fascinating excerpt from a sentencing memo filed by the Greens' lawyers. Regular readers will see familiar arguments from posts here and here (and we continued the discussion in a more recent post here).
Defense counsel said:
The ten highest FCPA settlements ever have occurred within the last five years. . . . Most involve some combination of criminal fines and SEC disgorgement of profits.
These ten cases have monetary penalties totaling approximately $2.8 billion. Of the ten, the six highest occurred within last 20 months and total approximately $2.67 billion.
This trend has begged the question among pundits whether the government’s goal relating to FCPA cases is actually enforcement, or simply putting a price tag on noncompliance. Do these giant financial penalties actually punish and deter the giants or, simply establish a cost of doing business and shield top executives culpable in the most egregious FCPA violations from punishment?
Despite the government’s repeated assertions regarding increased criminal prosecution of individuals and the sentences those individuals receive, such examples are glaringly absent . . . . In fact, of the ten cases listed, only Titan, Willbros, and KBR have resulted in criminal prosecution of individuals potentially resulting in a term of incarceration.
The prosecutors said in a reply brief:
[T]his Court must decline defendants' remarkable invitation to join the wholesale speculation of FCPA "pundits" as to whether corporate settlements are "shielding" top corporate executives from punishment. Aside from being pure conjecture, such a question has no bearing on "the need to avoid unwarranted sentence disparities among defendants with similar records who have been found guilty of similar conduct." . . . . (citations omitted)
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Our Top Ten post was also cited and linked in the D & O Diary's much anticipated annual event, What to Watch Now in the World of D&O.
Kevin LaCroix wrote:
Indeed, the top ten FCPA settlements collectively total $2.8 billion, but the top six, all of which took place just in the last 20 months, represent 95% of the total. Four of the top six settlements were reached just in 2010. Because of the massive scale of the settlements that the SEC has been achieving in this area, the potential rewards for whistleblowers are enormous.
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Many thanks to all readers, inside the courtroom and elsewhere.
If anyone knows what it means to be called a "pundit" with quotation marks, please let us know. But only if it's flattering, which we somehow doubt.
Eva Joly, a Norwegian-born former French magistrate, is running for the French presidency under the Green Party banner.
She became famous across Europe for being a fearless anti-corruption campaigner, even taking on former minister Bernard Tapie and Crédit Lyonnais bank.
Her best-known case involved French oil giant Elf Aquitaine. She uncovered fraud leading to criminal convictions of Elf’s top two executives and to the resignation of Roland Dumas, president of France’s Constitutional Court. She received death threats during the eight-year investigation.
She moved from Norway to France at 18. After working her way through night law school and then practicing law, in 1990 she became an investigating magistrate in Paris.
She's also worked for the Icelandic government, helping it uncover white collar crime that contributed to the country's financial collapse.
Last year, Joly, 66, was elected as a French member of the European Parliament. Now she wants to run for president of France in the 2012 elections.
She told the France24 news site: “I am going into politics because I recognise the limitations of voluntary action … I have a strong desire to improve relations between the developed and developing world. I want to change power structures within society. I am desperate to see a more just and more united society.
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Why say it? It's fashionable these days for critics -- we won't name them -- to say there's no evidence the FCPA has reduced bribery. But saying there's no evidence of crimes not committed isn't exactly, you know, conclusive of anything.
Then again, there's plenty of evidence of less bribery because of the FCPA at companies like Siemens, BAE, Daimler, KBR, ABB, Baker Hughes, Willbros, Chevron, and so on. For us, that's the evidence that counts.
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In whose interests? Great post today from Kevin LaCroix at the D&O Diary -- Do Defendant Companies Financially Underperform Following Securities Lawsuit Settlements?
A report this week from Nigeria said FCPA fugitive James "Ken" Tillery has been seized by the FBI in Lagos and is being held by American authorities. But another report on Wednesday said the Nigerian high court had halted the extradition at least until the end of the month because due process wasn't followed.
Tillery, 51, was the managing director of Willbros in Nigeria. He was indicted in 2008 along with Willbros' consultant Paul G. Novak. They were charged with one count of conspiracy to violate the FCPA, two counts of violating the FCPA in connection with the authorization of specific corrupt payments to officials in Nigeria and Ecuador, and one count of conspiring to launder the bribe payments through companies controlled by Novak.
Novak, 43, pleaded guilty in November 2009 to paying $6 million in bribes to officials who worked in the Nigerian government, in government-owned companies, and in a political party there. He hasn't been sentenced.
Tillery has been at large since his indictment. If convicted of all charges, he faces up to 35 years in prison.
One report from Nigeria said the next hearing on Tillery's extradition will be on August 30.
In May 2008, Willbros Group Inc. and Willbros International Inc. entered into a deferred prosecution agreement and agreed to pay a $22 million criminal penalty for the illegal payments to government officials in Nigeria and Ecuador.
In January this year, two former Willbros executives were jailed for bribery. Jim Bob Brown, 48, was sentenced in federal court in Houston to one year and one day in prison and fined $17,500; Jason Edward Steph, 40, was sentenced to 15 months and fined $2,000. Brown had pleaded guilty in 2006 and Steph in 2007.
An African press report said Tillery is "an American by birth, who had since naturalized as a Nigerian." It said normal extradition procedures weren't followed and characterized Tillery's arrest as an "extraction" and a "forceful extradition."
The U.S. Justice Department hasn't publicly commented.
The authors say it's both a quick desk reference and -- at 241 pages -- an authoritative collection of FCPA resources. They're right.
There's exhaustive enforcement-related information -- DOJ and SEC actions, DOJ opinion procedure releases, civil suits and related litigation, and domestic and foreign investigations. There's also plenty of high-level analysis of what's going on with enforcement and compliance. (The "Lessons Learned" section is particularly strong.)
Kevin Abikoff, one of the partners responsible for the Alert, said: "We developed it originally as a comprehensive internal resource for our lawyers and clients. On reflection, we decided to open-source it to the compliance community and beyond. We hope people will find it useful. And we're happy to be able to make a contribution."
Here, for example, is what it says about a subject we've never covered -- management changes:
In certain circumstances, regulators may use enforcement actions as a tool to force a change in management where the regulators believe management is insufficiently attuned to FCPA concerns. Regulators may also reward companies that change management in response to findings of misconduct or seek lesser penalties where management changed before the misconduct came to light. For example, the DOJ praised Siemens for its remedial efforts, including that it “replaced nearly all of its top leadership.” Similarly, in the case of Bristow, the misconduct was discovered by the company’s newly-appointed CEO, and the SEC imposed no monetary penalty on the company. (See, e.g., Technip, Siemens, Schnitzer, Bristow)
On the puzzle of FCPA jurisdiction, it says:
As the Siemens settlement (among others) confirms, U.S. regulators continue to take an expansive jurisdictional view as to the applicability of the FCPA. The charging documents applicable to Siemens Venezuela, Siemens Bangladesh, and Siemens Argentina detail connections, but not particularly close or ongoing connections, between the alleged improper conduct and the United States. Similarly, the United States government has continued to seek the extradition of Jeffrey Tesler and Wojciech Chodan, both United Kingdom citizens who were indicted for their involvement in the Bonny Island, Nigeria bribery scheme and who are described in the charging documents as “agents” of a domestic concern. Clearly, regulators in what they deem to be appropriate circumstances, will look carefully for hooks to establish U.S. jurisdiction over perceived violations of anti-corruption legislation.
And on parent-company liability for foreign subsidiaries, it says:
The U.S. Government will prosecute parent companies based on the conduct of even far-removed foreign subsidiaries and even in the absence of alleged knowledge or direct participation of the parent company in the improper conduct. As a result, as the Willbros Group and several Oil-for-Food settlements make clear, companies must ensure that their anti-corruption compliance policies and procedures are implemented throughout the corporate structure and are extended quickly to newly acquired subsidiaries. (See, e.g., Fiat, Faro, Willbros Group, AB Volvo, Flowserve, Westinghouse, Akzo Nobel, Ingersoll-Rand, York, Bristow, Paradigm, Textron, Delta & Pine, Dow).