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Julie DiMauro Contributing Editor

Thomas Fox Contributing Editor

Marc Alain Bohn Contributing Editor

Bill Waite Contributing Editor

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Russell A. Stamets Contributing Editor

Richard Bistrong Contributing Editor 

Eric Carlson Contributing Editor

Bill Steinman Contributing Editor

FCPA Blog Daily News

Entries in ENI (28)

Wednesday
Apr212010

U.K. Court Approves Chodan Extradition

A judge in London said today that KBR's one-time sales manager accused by the U.S. of helping bribe Nigerian officials should be extradited to Texas to face trial.

Wojciech Chodan, 71, of Maidenhead, England, who's a U.K. citizen, was indicted in February 2009 by a federal grand jury in Houston. His fellow countryman Jeffery Tesler, a London lawyer indicted at the same time, also lost his extradition hearing last month in London. Telser said he plans to appeal.

They were charged with one count of conspiracy to violate and ten counts of violating the FCPA. They face up to 55 years in prison if convicted on all counts. The indictment also seeks forfeiture from them of more than $132 million, the amount of the bribes U.S. prosecutors say they arranged to pay on behalf of KBR and its partners to Nigerian officials.

KBR pleaded guilty in February 2009 to violating the Foreign Corrupt Practices Act. It paid a $402 million criminal fine and, with its former parent company Halliburton, $177 million in disgorgement. KBR's former CEO, Albert "Jack" Stanley, pleaded guilty in September 2008 to conspiring to violate the FCPA and to mail and wire fraud charges. He's been cooperating with prosecutors and hasn't been finally sentenced.

In March, two of KBR's partners in Nigeria disclosed huge financial reserves for potential FCPA settlements with U.S. authorities. French company Technip said it has a €245 million provision for its role in the TSKJ Nigeria joint venture. And Italian energy giant ENI SpA said it has set aside €250 million.

Download the federal grand jury's February 17, 2009 indictment of Jeffrey Tesler and Wojciech Chodan here.

Thursday
Mar252010

Tesler Loses Extradition Hearing

A judge in London said Thursday the U.K. lawyer accused of being a middleman in KBR's bribery of Nigerian officials should be extradited to the U.S. to face trial.

Jeffrey Tesler, 61, a U.K. citizen, was indicted in February 2009 by a federal grand jury in Houston. He was charged with one count of conspiring to violate the Foreign Corrupt Practices Act and ten substantive FCPA offenses. If convicted on all counts, he faces up to 55 years in prison. U.K. police, acting at the request of U.S. authorities, arrested Tesler in March 2009.

The Guardian newspaper's Rob Evans said the judge "rejected Tesler's argument that it would be 'unjust and oppressive' to send him to America as prosecutors had taken a long time to charge him. He argued that he would no longer be able to get a fair trial in the US. However the judge pointed out that he was responsible for part of this delay, as he had hired lawyers to block prosecutors obtaining evidence from Switzerland. Prosecutors, who have been investigating the allegations for at least seven years, say that the corrupt payments were laundered via bank accounts there and in Monaco."

The U.S. indictment charged Tesler with using his Gibraltar company, Tri-Star Investments, to funnel about $132 million in bribes to Nigerian officials. The payments were intended to secure contracts worth more than $6 billion to build liquefied natural gas facilities on Nigeria's Bonny Island. The DOJ said Tesler was acting for a joint venture known as TSKJ, equally owned by KBR, Technip of France, Snamprogetti of Italy, and JGC of Japan.

A year ago, Houston-based KBR pleaded guilty to one conspiracy count and four substantive counts of violating the Foreign Corrupt Practices Act through its role in TSKJ. It also settled civil charges with the SEC. KBR's criminal fine was $402 million and, with its former parent Halliburton, it agreed to pay the SEC $177 million in disgorgement.

French company Technip said last month it has reserved €245 million for a potential settlement of FCPA offenses with the Justice Department and SEC for its role in the TSKJ Nigeria joint venture. A few weeks later, Italian energy giant ENI, Snamprogetti's former owner, said it had reserved €250 million for a possible FCPA settlement.

Tesler has argued that the case against him has no connection to the U.S. because the bribery didn't originate or happen there. But lawyers for the U.K. and U.S. governments argued that U.S.-based companies were involved and money had been channelled through U.S. bank accounts.

In his indictment, the U.S. also said Tesler was subject to the FCPA as an "agent" of an "issuer," of a "domestic concern," and of a "person," all within the meaning of the FCPA (Title 15, U.S.C. §§78dd- 1, 78dd-2, and 78dd-3). 

The Guardian said Tesler's lawyers plan to appeal and that the review process would be "lengthy."

Tuesday
Mar162010

Two Sentencing Delays, Two Reasons

Photo by walknbostonSentencing for Gerald and Patricia Green was delayed again. Their next hearing is scheduled for April 1, 2010 at 8:00 am.

And Albert "Jack" Stanley's sentencing was rescheduled until May 26, 2010.

The reasons for the delays?

In the Greens' case, Judge George H. Wu in Los Angeles may be reluctant to adopt the government's view that Gerald Green, 76, should spend 20 or more years in prison. The judge has asked for memoranda analyzing sentences in prior cases. The Greens were convicted by a jury of FCPA and related offenses in September 2009.

After Jack Stanley's guilty plea in September 2008, the former KBR CEO was sentenced to seven years in prison. But the sentence is subject to review based on his cooperation with the government. His plea agreement is here.

Stanley's ex-company, KBR, resolved FCPA offenses in February 2009. And as reported, two other companies involved in the case are now discussing settlement with the DOJ -- Technip and ENI. Stanley's testimony about their roles could be important, so his sentencing isn't likely to happen until their enforcement actions are resolved. 

Stanley admitted he helped the four-party TSKJ consortium bribe Nigerian officials. In addition to KBR, Technip, and ENI, the fourth member was Japan's JGC Corporation (once known as Japan Gasoline Co., Ltd.). It hasn't disclosed any FCPA-related investigation or potential enforcement action resulting from its role in the consortium.

Monday
Mar152010

ENI Reserves €250 Million For FCPA Settlement

A category in our post Where The Money Is listed big-dollar FCPA enforcement actions in the pipeline. One was French company Technip, which had just disclosed a €245 million ($330 million) provision for its role in the TSKJ Nigeria joint venture. That's the same case KBR and Halliburton settled last year for $579 million.

We weren't the only ones reading Technip's news. So was Italian energy giant ENI SpA. It was also part of the TSKJ joint venture through a subsidiary it later sold.

ENI's 2009 Annual Report (released March 11, 2010) said:

In a press release of February 12, 2010, the French company Technip announced, as a result of the circumstances that its discussions with U.S. authorities have intensified over the last weeks, the recognition of a provision for an amount of €245 million reflecting the estimated cost of resolution with such Authorities. The decision was made according to the status of ongoing discussions with DOJ and SEC that allowed Technip to estimate a global resolution of all potential claims against the company arising from the investigation.

As to ENIi, the contacts with the U.S. authorities have been intensified recently. Based on the ongoing status of the discussions, the Company has been able to estimate the cost of a global resolution of all potential claims arising from the investigation with the U.S. authorities, similarly to Technip. As a result of this, a provision of €250,000,000 has been accrued, also considering the contractual obligations assumed by ENI to indemnify Saipem as part of the divestment of Snamprogetti.

Discussions with the U.S. authorities are underway.

If Technip and ENI resolve their FCPA cases for around $300 million each, that means TSKJ's $180 million bribery in Nigeria will have resulted in U.S. financial penalties of more than $1.1 billion. Some in Nigeria will no doubt ask why the penalty money should end up in the U.S. Treasury and not their country.

ENI's ADRs trade on the New York Stock Exchange under the symbol E.

Download a copy of ENI's 2009 Annual Report released March 11, 2010 here.

Our thanks to a friend for sending the link to ENI's disclosure.

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