DOJ, Brazilian Authorities Resolve FCPA Investigations
Just when you thought it might be safe to go back in the water . . . well there is a well known film about a large ocean creature based on this theme. In the context of the Foreign Corrupt Practices Act however, there have been some who suggested that enforcement may be waning. Not so. Last week the DOJ and SEC announced settlements with Walmart regarding FCPA charges. This week an FCPA recidivist that merged and became TechnipFMC plc, resolved corruption charges with the Department of Justice and Brazilian authorities.
TechnipFMC plc, or TFMC, is the product of a 2017 merger of Technip S.A. and FMC Technologies, Inc. The charges involving TFMC and its wholly owned U.S. subsidiary, Technip USA, Inc., stem from two separate schemes. One focused on Technip. The second involved FMC.
The Technip scheme traces to as early as 2003. At that time the company conspired with Singapore-based Keppel Offshore & Marine Ltd or KOM, an attorney for that firm and Zwi Shornicki, a consultant to each company, to pay $69 million in bribes to firms associated with the agent. Portions of the payments were funneled by Mr. Shornicki to officials at Brazilian state-owned oil company Petrobras to obtain lucrative contracts. Technip also payed $5 million directly to the Workers’ Party in Brazil and Workers’ Party officials to aid the scheme.
FCM engaged in a separate scheme in Iraq. Over a five year period, beginning in 2008, according to admissions in the court papers, the firm paid bribes to at least seven government officials. Those officials were at the Ministry of Oil, the South Oil Company and the Missan Oil Company. Payments were channeled through a Monaco based intermediary company. The focus was to secure lucrative projects in Iraq.
To resolve the charges with the DOJ, TFMC entered into a deferred prosecution agreement tied to a criminal information. U.S. v. TechnipFMC, plc (E.D.N.Y. Filed June 25, 2019). In connection with that agreement Technip USA pleaded guilty to a one-count information. U.S. v. Technip USA (E.D.N.Y. Filed June 25, 2019). TFMC will pay a criminal fine of $296 million.
Mr. Shornicki pleaded guilty to a one-count criminal information charging him with conspiracy to violate the FCPA. He is awaiting sentencing. U.S. v. Sharnocki (E.D.N.Y. Guilty plea June 25, 2019).
TFMC also settled with the Advogado-Geral da Uniao or AUG, the Controladoria-Genal da Uniao or CGU and the Ministerio Publico Federal or MPF in Brazil regarding the bribes paid in that country. The DOJ will credit the amount the company pays to the Brazilian authorities which is about $214 million in penalties.
The company was given credit for its extensive cooperation and remedial measures in resolving the matter. Those efforts include disciplinary action against former and current employees, changes to its business operations in Brazil, additional compliance training for certain employees and specific internal control enhancements. The firm received a 25% reduction from the applicable U.S. Sentencing Guidelines fine.
In 2010 Technip resolved FCPA charges with the DOJ tied to bribes in Nigeria by paying a $240 million fine.