JGC to Pay $300K for Bribing Nigerian Officials in Violation of FCPA
On April 6, 2011, the Justice Department announced that it has filed a deferred prosecution agreement and criminal information against JGC Corporation, a Japanese engineering and construction company, which has agreed to pay a $218.8 million criminal penalty for participating in a scheme to bribe Nigerian government officials to obtain engineering, procurement and construction (EPC) contracts, in violation of the Foreign Corrupt Practices Act (FCPA).
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4 Companies Obtained Construction Contracts from Nigerian Co. Valued at $6B
Between 1995 and 2004, a joint venture among JGC, Kellogg Brown & Root Inc. (KBR), Technip S.A., and Snamprogetti Netherlands B.V., (the so-called TSKJ joint venture), was allegedly awarded four EPC contracts by Nigeria LNG Ltd. to build liquefied natural gas facilities on Bonny Island, Nigeria, valued at more than $6 billion. The government-owned Nigerian National Petroleum Corporation (NNPC) was the largest shareholder of NLNG, owning 49% of the company.
JGC & Co-Conspirators Negotiated Bribes to be Paid to Nigerian Gov't Officials
According to court documents, JGC authorized the joint venture to hire Jeffrey Tesler as a consultant to pay bribes to high-level Nigerian government officials, including top-level executive branch officials, and to hire a Japanese trading company to pay bribes to lower-level Nigerian government officials.
At crucial junctures preceding the award of EPC contracts, JGC’s co-conspirators met with successive holders of a top-level office in the executive branch of the Nigerian government, asking them to designate a representative with whom the TSKJ joint venture should negotiate bribes for Nigerian government officials. The TSKJ joint venture paid approximately $132 million to a Gibraltar corporation controlled by Tesler and more than $50 million to the Japanese trading company during the course of the bribery scheme, to allegedly be used, in part, for bribes to Nigerian government officials.
DOJ Will Dismiss Criminal Info If JGC Abides by the Terms of its 2-Yr DPA
Under the terms of the deferred prosecution agreement (DPA), DOJ agreed to defer prosecution of JGC for two years. JGC agreed to retain an independent compliance consultant for a term of two years to review the design and implementation of its compliance program, to enhance its compliance program to ensure that it satisfies certain standards, and to cooperate with the department in ongoing investigations. If JGC abides by the terms of the DPA, DOJ will dismiss the criminal information when the term of the agreement expires.
3 Other Companies and Execs Were Charged Earlier for Related Violations
In a related criminal case, KBR’s successor company, Kellogg Brown & Root LLC, pleaded guilty in February 2009 to charges related to the FCPA for its participation in the scheme to bribe Nigerian government officials, and was ordered to pay a $402 million fine. KBR’s former CEO, Albert Stanley, pleaded guilty in September 2008 to conspiring to violate the FCPA for his participation in the bribery scheme. In other related criminal cases, the DOJ filed a DPA and criminal information against Technip in June 2010, which agreed to pay a $240 million criminal penalty, and in July 2010, against Snamprogetti, which also agreed to pay a $240 million criminal penalty. (See ITT's Online Archives or 02/13/09 news, 10121720, for BP summary.)
In other related cases, Tesler and Wojciech J. Chodan, a former salesperson and consultant of a UK subsidiary of KBR, were indicted in February 2009 on FCPA-related charges. In March 2011, Tesler was extradited from the UK and subsequently pleaded guilty to conspiring to violate and violating the FCPA and agreed to forfeit $148,964,568. In December 2010, Chodan was extradited from the UK and subsequently pleaded guilty to conspiring to violate the FCPA and agreed to forfeit $726,885. (See ITT's Online Archives or 06/29/10 and 12/07/10 news, 10062929 and 09021399, for BP summaries.)