Category Archives: Africa

Recent developments in anti-corruption enforcement Reply

Uncategorized, Africa, Asia, enforcement, FCPA, Indonesia, TRACE, TRACE Compendium, United Nations, US Government, voluntary disclosure, whistleblower, Investigations • Tags: , , , , , , , , , , , , , , , , , , , , , , , , , ,

Alstom subsidiaries debarred from development bank projects.  On 22 February 2012, a Negotiated Resolution Agreement was reached between Alstom and the World Bank.  This settlement includes (1) the debarment of Alstom Hydro France and Alstom Network Schweiz AG and their affiliates for a period of three years, and (2) payment of approximately USD 9.5 million in restitution by the two companies.  The period of debarment could be reduced to 21 months with enhanced oversight if all conditions are complied with.  Although the parent company, Alstom SA and its affiliates, are conditionally not to be debarred,  Alstom Hydro France and Alstom Network Schweiz are subject to cross-debarment by other development banks. The penalties are based on a finding that Alstom made an improper payment of a USD 145,000 (110,000 Euro) consultancy fee to an entity controlled by a former senior government official in Zambia in 2002.  Alstom did not admit the allegations.  The full Compendium summary for this case is accessible here.

No DOJ prosecution of Allianz.  On 22 February 2012, attorneys from the Department of Justice stated that the investigation into whether Allianz SE violated the FCPA or other bribery laws in Indonesia had been closed, and that the DOJ did not intend to take any enforcement action.  The investigation began when an employee alerted outside auditors of perceived corruption, precipitating disclosure by Allianz to the Frankfurt Prosecutor’s office.  Although the DOJ has closed its investigation, the SEC is still negotiating a settlement with Allianz  on other charges.  The full Compendium summary for this case is accessible here.

The TRACE Compendium is a compilation of summaries of international anti-bribery enforcement actions.  It is open to the public and free of charge.  Compendium  summaries are searchable by company name, year of enforcement action, location of company, enforcing authority, industry type, and other categories.  You can search the Compendium by clicking here.

Government moves to dismiss largest FCPA Sting prosecution Reply

Africa, Defense industry, enforcement, FCPA, Investigations, TRACE, TRACE Compendium, Uncategorized, US Government • Tags: , , , , , , , , , , , , ,

Recent Enforcement Developments

Government moves to dismiss largest FCPA Sting prosecution.  On 21 February 2012, the government filed a motion in the US District Court for the District of Columbia to dismiss with prejudice all remaining claims in the case, which began in January 2010 with the sensational arrest of twenty-two individuals.  The defendants were accused of participating in a scheme to bribe the defense minister of the African nation of Gabon, but in fact the arrangement, and the underlying contracts for the sale of police and military equipment, were fictitious. Three defendants reached plea agreements with the prosecution.  In order to ensure manageable trials for the remaining nineteen defendants, the judge in the case separated them into smaller groups.  The first trial, of four defendants, ended in mistrial in July 2011.  Charges were dismissed as against one defendant in April 2011, and two defendants in the second trial, which ended in January 2012, were acquitted.  A mistrial was declared with respect to three other defendants when the jury could not reach a verdict.  Now, less than one month before the third trial was scheduled to begin, the government has dropped the entire case, citing “the impact of certain evidentiary and other legal rulings in the first two trials” as well as cost, as its motives for seeking to close the case.  Recent reports in the press had brought to light some apparent professional missteps in the conduct of the Sting operation.  The Compendium summary may be accessed here.

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The TRACE Compendium is a compilation of summaries of international anti-bribery enforcement actions.  It is open to the public and free of charge.  Compendium  summaries are searchable by company name, year of enforcement action, location of company, enforcing authority, industry type, and other categories.  You can search the Compendium by clicking here.

Giordanella Receives Acquittal in FCPA Sting Case Reply

Africa, FCPA, TRACE Compendium, Uncategorized • Tags: , , , , , ,

U.S. District Judge Richard J. Leon entered judgment acquitting Stephen G. Giordanella of conspiracy to violate the Foreign Corrupt Practices Act (FCPA). The Judge found that the Government’s evidence was insufficient to sustain a conviction after a twelve week jury trial in U.S. District Court for the District of Columbia. Giordanella was one of the twenty two defendants indicted in December 2009 in the largest prosecution of individuals ever under the FCPA as part of a two-and-a-half year undercover “sting” operation. Further details of the FCPA sting operation and related cases can be found here.

Recent Enforcement Developments Reply

Africa, enforcement, FCPA, Investigations, US Government • Tags: , , , , ,

ADM.  In a securities filing on August 25, 2011, Archer-Daniels-Midland Company (“ADM”), the Illinois-based global food production company, disclosed that it was conducting an internal investigation into possible FCPA violations involving its grain and feed exports.  The company voluntarily disclosed to the DOJ, SEC and certain foreign regulators in March 2009 and the investigation is ongoing at this time.  The Compendium summary may be accessed here: https://www.traceinternational.org/compendium/view.asp?id=363

Gerald and Patricia Green.  On August 23, 2011, prosecutors dropped their appeal of the Los Angeles film producers’ FCPA sentences.  Gerald and Patricia Green were convicted in September 2009 of violating the FCPA by bribing a Thai tourism official during the mid-2000’s in order to win contracts related to the Bangkok International Film Festival.  In August 2010, the Greens were sentenced to six months in prison, followed by six months of home confinement and were each ordered to pay $250,000 in restitution.  The DOJ had sought significantly longer prison terms, thus prompting the initial appeal of the sentencing.  The Compendium summary may be accessed here: https://www.traceinternational.org/compendium/view.asp?id=14

Lahmeyer.  On August 15, 2011, the World Bank announced that it had released Lahmeyer International GmbH, the German engineering firm, from debarment two years ahead of schedule as a result of the company’s remedial compliance measures.  Lahmeyer received a seven-year debarment in 2006 following its conviction in Lesotho for bribery in connection with a Bank-financed water project.  This was the Bank’s first such determination following its establishment of an integrity compliance function in September 2010.  The Compendium summary may be accessed here: https://www.traceinternational.org/compendium/view.asp?id=249

Macmillan Reaches Settlement with UK Serious Fraud Office; £11.2M Civil Recovery Order Issued Reply

Africa, enforcement, UK Government • Tags: , , , , ,

On July 22, 2011, UK-based Macmillan Publishers Limited agreed to pay a  £11,263,852.28 civil recovery order under Part 5 of the Proceeds of Crime Act 2002 in order to conclude a Serious Fraud Office (SFO) investigation into the company’s Education Division contracts in Southern Sudan, Rwanda and Uganda between 2002-2009.  The company will also pay £27,000 to cover the SFO costs of pursuing the order and a compliance monitor was imposed for a 12-month period.  The SFO highlighted Macmillan’s cooperation and remedial efforts.

In April 2010, the World Bank debarred Macmillan for bribery identified in a donor-funded project in Southern Sudan in 2008-2009.

The Compendium summary regarding this matter may be accessed here: https://www.traceinternational.org/compendium/view.asp?id=241

Recent Domestic Bribery Enforcement Developments in Nigeria Reply

Africa, enforcement, Investigations, Nigeria • Tags: , ,

Nigeria’s Economic and Financial Crimes Commission (EFCC) has ramped up its domestic bribery enforcement over the past several months, bringing charges and negotiating settlements with large foreign multinationals who had been found by their home country governments to have engaged in bribery-related conduct in Nigeria. 

On November 22, 2010, Siemens reportedly reached a settlement agreement with the EFCC under which Siemens will pay 7 billion Nigerian Naira (approx. $46.5 million) to the Nigerian Government in exchange for the EFCC dropping charges against Siemens, Siemens Ltd. Nigeria and four of its officers.  The settlement payment was variously described as “restitution” and “disgorgement”.

In the connection with the TSKJ / Bonny Island bribery matter, on November 25, 2010, it was reported that the EFCC arrested ten Halliburton employees in Nigeria during a raid of the offices of Halliburton Energy Services Nigeria Limited in Lagos, as well as one employee each from Saipem Contracting Nigeria and Technip Offshore Nigeria.  On December 7, 2010, the EFCC reportedly filed corruption charges against Halliburton, former U.S. Vice President Dick Cheney (who was the CEO of Halliburton during the period at issue), Albert Stanley (former CEO of KBR), David Lesar (current CEO of Halliburton) and William Utt (current CEO of KBR).  Technip, Snamprogetti and JGC Corporation were reportedly also charged on the same day.  The case reference was Federal Republic of Nigeria v. Halliburton and others, CV/435/10, High Court of Justice, Abuja Judicial Division (Abuja).

On December 15, 2010, it was reported that Halliburton and the EFCC had reached a $250 million settlement agreement to resolve the charges.  Halliburton will pay $120 million in penalties and $130 million in frozen assets in Switzerland will be repatriated to Nigeria.  In exchange, Nigeria dropped the charges.  Former U.S. President George H. W. Bush and former Secretary of State James Baker reportedly assisted with the negotiations. 

On December 20, 2010, Saipem announced that Snamprogetti had entered into a settlement agreement and non-prosecution agreement with the Nigerian Government to resolve the investigation.  Snamprogetti agreed to the payment of a $30 million criminal penalty, along with $2.5 million in reimbursement for legal costs and expenses incurred by the Nigerian authorities.  Nigeria agreed to dismiss all charges against Snamprogetti and to renounce to any civil claims and criminal charges in any jurisdiction.

Settlements with Daimler, Technip and JGC Corporation may be forthcoming in 2011.

The Compendium summaries regarding these matters may be accessed here: https://secure.traceinternational.org/compendium/Default.asp?mode=1&keywords=&idCaseChk=168&idCaseChk=192&idCaseChk=15&idCaseChk=294&idCaseChk=124&idCaseChk=148&sort=name&s=Search

Crown Court approves BAE settlement with the UK Serious Fraud Office Reply

Africa, BAE, enforcement, Tanzania, UK Government • Tags: , , , , , ,

On December 21, 2010, Southwark Crown Court approved the plea agreement reached by BAE Systems plc and the UK Serious Fraud Office on February 5, 2010.  The Court sentenced BAE to pay a GBP 500,000 (USD 775,000) fine after the company pleaded guilty to failing to keep proper accounting records in connection with its retention of a marketing adviser that assisted BAE’s sale of a radar system to the Tanzanian Government in 1999.  The Court also ordered BAE to pay GBP 225,000 in costs incurred by the SFO, and BAE will make an ex gratia payment of GBP 29.5 million for the benefit of the people of Tanzania through a mechanism yet to be determined. 

During a two-day hearing, Justice David Bean criticized the SFO’s approach, reportedly calling the plea agreement “loosely and hastily drafted” and commenting that the fine levied reflected that the Court could not “sentence for an offense which the prosecution failed to charge,” such as conspiracy to corrupt.  Justice Bean also reportedly stated that the Court was under “moral pressure” to keep the fine to a minimum because the remainder of the agreed amount would go to Tanzania. 

This brings to an end the SFO’s six-year investigation into foreign bribery allegations connected to BAE’s defense contracts.  BAE settled with the US Department of Justice on February 5, 2010, pleading guilty to conspiring to make false statements to the US Government and agreeing to pay a USD 400 million fine.  While the US settlement covered misconduct in multiple countries, including BAE’s “Al Yamamah” sales to Saudi Arabia, the UK deal only addressed misconduct in Tanzania.  Notably, neither settlement agreement contained any bribery-related charges.   

The Compendium summary regarding this matter may be accessed here:  https://secure.traceinternational.org/compendium/view.asp?id=140

Layne Christensen Company Discloses FCPA Investigation Reply

Africa, FCPA, Investigations, voluntary disclosure • Tags: , , , , , , ,

In its SEC Form 10-Q filed on December 8, 2010, Kansas-based Layne Christensen Company reported that it is conducting an internal investigation into possible FCPA violations by the company in connection with the import of equipment into the Democratic Republic of Congo and other African countries.  The company, which provides drilling and construction services related to water, wastewater treatment and mineral exploration, has self-reported the matter to the DOJ and SEC. 

 The Compendium summary regarding this matter may be accessed here:  https://secure.traceinternational.org/compendium/view.asp?id=312

Extradited UK Citizen Pleads Guilty to FCPA Conspiracy Charge in Connection with TSKJ Bribery Scheme Reply

Africa, enforcement, FCPA, Nigeria, US Government • Tags: , , , , , , ,

On December 6, 2010, Wojciech Chodan, the former commercial vice president and consultant to KBR’s subsidiary in the United Kingdom, pleaded guilty in U.S. District Court in Houston to one count of conspiracy to violate the FCPA in connection with his role in the TSKJ consortium’s decade-long scheme to bribe Nigerian officials in order to secure engineering, procurement and construction (EPC) contracts to build liquefied natural gas (LNG) facilities on Bonny Island in Nigeria.  Chodan was extradited to the United States on December 3rd, initially having been indicted in February 2009.  Three of the four companies in the joint venture – KBR, Technip and Snamprogetti – previously have settled FCPA charges related to their participation in the scheme.

The Compendium summary regarding this matter may be accessed here:  https://secure.traceinternational.org/compendium/view.asp?id=15

Snamprogetti and Eni Settle FCPA Charges for Combined $365 Million in Penalties Reply

Africa, enforcement, FCPA, Nigeria, Uncategorized, US Government • Tags: , , , , , , ,

On July 7, 2010, Snamprogetti Netherlands BV and Eni SpA settled FCPA charges with the U.S. Department of Justice and U.S. Securities and Exchange Commission for a combined $365 million in penalties.  Under the terms of a two-year deferred prosecution agreement with the DOJ, Snamprogetti agreed to pay a $240 million criminal fine and Snamprogetti, Eni and Saipem SpA agreed to ensure that their compliance programs satisfied certain standards and agreed to cooperate with the DOJ’s ongoing investigations.  Snamprogetti and Eni also reached a settlement of a related civil complaint with the SEC, agreeing jointly to pay $125 million in disgorgement of profits and prejudgment interest.  A long-running investigation and prosecution by the Milan Public Prosecutor’s Office appears to be ongoing.

Snamprogetti Netherlands BV (“Snamprogetti”) was part of the four-company “TSKJ” joint venture [Technip of France; Snamprogetti; KBR of the U.S.; and JGC Corporation of Japan] that was alleged to have paid hundreds of millions in bribes to Nigerian officials between 1995 and 2004 in order to secure four engineering, procurement and construction (EPC) contracts for the development of liquefied natural gas facilities on Bonny Island in Nigeria.  In February 2009, Halliburton and KBR settled FCPA charges related to its involvement in the scheme, resulting in $579 million in combined penalties.  The DOJ and SEC have been investigating other joint venture partners since.  Recently, on June 28, 2010, Technip settled with the DOJ and SEC for $338 million in combined penalties.

During the relevant time period, Snamprogetti was a wholly-owned indirect subsidiary of Italy’s oil and gas giant, Eni SpA.  Eni became a U.S. issuer in 1995 and remains a 43% owner in Snamprogetti’s current parent company, Saipem SpA.

To access the Compendium summary regarding this matter, please click here.