Category Archives: Uncategorized

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.

Alstom Reaches Settlement with Swiss Government Reply

enforcement, France, Uncategorized • Tags: ,

On November 22, 2011, the Swiss Office of Attorney General (OAG) and Alstom SA, the French global power and transportation infrastructure group, announced that a settlement had been reached closing the OAG’s four-year investigation into Alstom entities for alleged bribery of foreign government officials in various countries. An Alstom subsidiary was sanctioned for “corporate negligence” in connection with improper payments in Latvia, Malaysia and Tunisia, agreeing to pay a fine of CHF 2.5 million (around EUR 2 million), as well as CHF 36 million (around EUR 29 million) corresponding to the estimated profits earned from the wrongdoing. The OAG noted the company’s cooperation and remedial compliance measures. The Compendium summary may be accessed here: https://www.traceinternational2.org/compendium/view.asp?id=109

TRACE Releases 2011 Global Enforcement Report on Bribery Reply

enforcement, FCPA, Investigations, TRACE, TRACE Compendium, Uncategorized • Tags: , , ,

The United States enforced its foreign anti-bribery laws at a stepped up pace in 2010, while other countries around the world stepped back from enforcement activities, according to a report released today by TRACE International.

The organization’s Global Enforcement Report (GER) 2011, its second annual compilation of worldwide anti-bribery activity, summarizes 34 years of reported enforcement activity by nations around the world.

“It is good news that the U.S. continued its aggressive enforcement of bribery, but disappointing that the pace of most other countries slowed – or stalled – last year,” said Alexandra Wrage, President of TRACE.  “The U.S. has amassed 14 times as many anti-bribery enforcement actions as the next most active country.  It sends a particularly unfortunate message when most countries worldwide have not yet pursued a single enforcement action.”

The GER 2011 cites as new developments:

  • The U.S. doubled its foreign bribery enforcement rate from 2009 to 2010;
  • Foreign bribery enforcement actions by countries other than the U.S. declined from 2009 levels;
  • Nigeria joined South Korea and Italy in the lead for domestic bribery enforcement against foreign companies, recording 11 new actions in 2010-2011;
  • Domestic bribery investigations against foreign companies or individuals were initiated for the first time in 2010-2011 in six countries – Croatia, Cuba, Georgia, Israel, Latvia and Poland; and,
  • The financial services sector experienced the most rapid increase in bribery enforcement actions, with known cases or investigations increasing from 11 in 2009-2010 to 26 in 2010-2011.

The annual TRACE GER is based on data collected in the TRACE Compendium, a compilation of information about reported international anti-bribery investigations, formal cases and legal decisions the organization maintains as a public, online tracking tool. Enforcement activities in the Compendium date to 1977, when the United States passed and began to enforce the Foreign Corrupt Practices Act (FCPA).

GER 2011 shows the U.S.’s position as first mover in bribery enforcement combined with the strong showing in 2010 gives it a commanding lead in terms of the number of total enforcement actions to date for “outbound” bribery, which are cases and investigations brought against companies and individuals for bribing government officials of other countries.  Of the 632 outbound, or foreign, enforcement actions in the TRACE Compendium to date, 74% — representing 468 bribery enforcement actions — are being pursued by U.S. authorities.  The remaining 26% represent the combined efforts of 23 other nations, with the United Kingdom ranking a distant second to the U.S., with 32 total recorded enforcements.

This year’s report includes aggregated information from 1977 through July 2011 on numerous measures of country-level anti-bribery activity by the U.S. and other nations, including both inbound and outbound enforcement.

The full report may be accessed here: https://secure.traceinternational.org/news/documents/GlobalEnforcementReport2011.pdf

DOJ Issues Opinion Procedure Release 10-03 Reply

FCPA, Opinion Release Procedure, TRACE Compendium, Uncategorized • Tags: , ,

The Department of Justice published its third Opinion Procedure Release of the year on September 1, 2010. The release discusses the retention of a consultant who is a registered agent of the foreign government the U.S. limited partnership seeks to contract with.  According to the facts presented in the release, the consultant, a U.S. citizen, performs marketing services on behalf of the Ministry of Finance and assists the foreign government with lobbying efforts in the United States. Although the DOJ says it does not intend to take enforcement action with respect to payments made to the consultant, if certain conditions are met, the opinion clearly states the DOJ’s position that an individual or entity that contracts to provide consulting and lobbying services to a foreign government could, in certain circumstances, be considered a foreign official for purposes of the FCPA. The Compendium entry for the release may be accessed here:
https://secure.traceinternational.org/compendium/search.asp?mode=1&keywords=&idOPRChk=60&sort=name&s=Search.

Compensating the Victims of Corruption? Reply

TRACE, Uncategorized • Tags: ,

Increasingly, the enforcement updates and compliance best practices on this blog are contributed by others.  In recognition of that, we are changing the name from Wrageblog to TRACEblog.  We’ll continue to feature breaking news, compliance tips and other information of interest to the anti-bribery community.

On broader policy issues, I will be guest blogging on the Huffington Post.  Today’s entry can be found at:

 http://www.huffingtonpost.com/alexandra-wrage/paying-the-fox-to-buy-new_b_647837.html

 Please continue to send in comments and suggested topics, for either blog.  Thank you!

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.

Technip Settles FCPA Charges for Combined $338 Million in Penalties Reply

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

On June 28, 2010, Technip SA, the Paris-based engineering, construction and services company, settled FCPA charges with the U.S. Department of Justice and U.S. Securities and Exchange Commission for a combined $338 million in penalties.  Under the terms of a two-year deferred prosecution agreement with the DOJ, Technip agreed to pay a $240 million criminal fine, to retain an independent compliance monitor for a two-year period and to cooperate with the DOJ in its ongoing investigations.  Technip also reached a settlement of a related civil complaint with the SEC, agreeing to pay $98 million in disgorgement of profits and pre-judgment interest.  The French government’s investigation of the company appears to be ongoing.

Technip was part of the four-company “TSKJ” joint venture [Technip of France; Snamprogetti Netherlands B.V. (a subsidiary of Saipem SpA of Italy); 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 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.  

Technip’s American Depository Receipts (“ADRs”) were traded on the New York Stock Exchange from 2001 until 2007.

The Compendium summary regarding this matter may be accessed here:  https://secure.traceinternational.org/compendium/view.asp?id=148

Ousama Naaman Pleads Guilty Reply

enforcement, FCPA, Indonesia, Iraq, UK Government, Uncategorized, United Nations, US Government • Tags: , , , , , , ,

On June 25, 2010, Ousama Naaman, a Lebanese and Canadian citizen and Innospec’s middleman in Iraq during the United Nations Oil-for-Food Program, pleaded guilty in U.S. District Court for the District of Columbia.  He pleaded guilty to a two-count superseding information charging him with one count of conspiracy to commit wire fraud, violate the FCPA and falsify the books and records of a U.S. issuer; and one count of violating the FCPA.  Naaman, initially indicted on August 7, 2008, was arrested in Frankfurt, Germany on July 30, 2009 and later extradited to the United States.  He had initially entered a plea of not guilty on May 3, 2010.

Naaman admitted to orchestrating an arrangement whereby Innospec paid a 10% kickback to the Iraqi government between 2001 and 2003 to obtain five contracts under the Oil-for-Food program to supply an anti-knock fuel additive (tetraethyl lead) to Iraq’s oil refineries.  According to the DOJ press release, Naaman also paid or promised to pay over $3 million in bribes (in the form of cash, travel, gifts and entertainment) between 2004 and 2008 to officials of the Iraqi Ministry of Oil and the Trade Bank of Iraq on Innospec’s behalf in order to secure sales of tetraethyl lead and to secure more favorable exchange rates, respectively. 

Naaman’s sentencing has not yet been scheduled.  He faces up to 10 years in prison. 

On March 18, 2010, Innospec pleaded guilty to a twelve-count information charging, agreeing to a $14.1 million criminal fine and three-year compliance monitorship.  The company also settled with the SEC, agreeing to disgorge $11.2 million, and with the Treasury Department’s Office of Foreign Assets Control (OFAC) for $2.2 million.  On the same day, Innospec’s UK subsidiary pleaded guilty to paying bribes in Indonesia, receiving a $12.7 million criminal fine.  The Corruption Eradication Commission (KPK) in Indonesia appears to be conducting an ongoing investigation into the company’s activities in the country.

Today’s DOJ press release can be accessed here:  http://www.justice.gov/opa/pr/2010/June/10-ag-747.html