MORE FCPA CHARGES FROM THE TSKJ JOINT VENTURE
The TSKJ joint venture is the gift that just keeps on giving, at least for FCPA prosecutors. The most recent involves Marubeni Corporation which admitted to being an agent of the venture and agreed to settle FCPA charges. The company entered into a two year deferred prosecution agreement with the Department of Justice and agreed to pay a criminal fine of $54.6 million. Marubeni also agreed to retain a corporate compliance consultant, to install new procedures and improve others and to cooperate with the DOJâ€™s on-going investigation. The underlying information charges the company with one count of conspiracy and one count of aiding and abetting FCPA violations. At the end of the two year term the information will be dismissed if the company complies with its obligations. U.S. v. Marubeni Corporation, (S.D.Tx.).
The TSKJ joint venture was formed in 1990 by Technip S.A., Snamprogetti Netherlands B.V, Kellogg Brown & Root, Inc. and JGC Corporation. The purpose of the venture was to secure contracts from Nigeria LNG, Ltd., a company created by the Nigerian government to capture and sell natural gas associated with oil production in that country. The government retained a 49% interest in Nigeria LNG.
The joint venture determined that bribes had to be paid to secure business. As part of its efforts, the venture retained two agents, according to the court documents. One was Jeffrey Tesler, a U.K. solicitor. The other was Marubeni, a Japanese trading company headquartered in Tokyo. Mr. Tesler served as a consultant to the venture and paid bribes to high-level Nigerian government officials. Those included top level executive branch officials. Marubeni was retained to pay bribes to lower level government officials. At key points, a number of the co-conspirators, including employees of Marubeni, met with senior executive level government officials to determine with whom they should meet to negotiate bribes in connection with the awarding of contacts, according to the court papers. The joint venture is alleged to have paid about $132 million to a Gibraltar corporation controlled by Mr. Tesler and $51 million to Marubeni during the course of the scheme. The payments were intended to be used at least in part to bribe Nigerian government officials.
Previously, each member of the TSKG joint venture resolved FCPA charges with the DOJ:
- Technip entered into a deferred prosecution agreement in 2010. As part of that agreement the company paid a $240 million criminal fine and retained an independent compliance monitor for two years. Technip also settled with the SEC. The company paid a total of $338 million to settle criminal and civil FCPA related charges.
- Snamprogetti also entered into a deferred prosecution agreement with the DOJ in 2010. The company agreed to pay a criminal fine of $210 million. Snamprogetti also settled with the SEC, along with its former parent ENI, S.p.A., despite the fact that neither an issuer or a domestic concern. In total, $365 million was paid to resolve the inquiries.
- KBR pleading guilty to FCPA related charges and agreed to pay a criminal fine of $402 million and to retain an independent compliance monitor for a period of three years in 2009. The company, along with its parent Halliburton Company, also settled with the SEC. In total it paid $579 million to resolve the criminal and civil inquiry.
- JGC Corporation also entered into a deferred prosecution agreement to resolve the DOJ criminal inquiry. In 2011 the company agreed to pay $218.8 million in connection with that agreement.
The settlements with the four members of the TSKJ joint venture are among the largest in FCPA history. Indeed, each is part of the current â€œtop tenâ€ largest FCPA settlements.
Finally, three individuals have pleaded guilty in connection with the activities of the venture. Mr. Tesler was extradited from the UK. Subsequently, he pleaded guilty to conspiring to, and violating, the FCPA. As part of that plea agreement he agreed to forfeit $148,964,568. Wojeiech J. Chodan, a former sales person and consultant of the UK subsidiary of KBR, was also extradited and pleaded guilty to conspiring to violate the FCPA. He agreed to forfeit $726,885. Albert Stanley, the former head of KBR, pleaded guilty to conspiracy to violate the FCPA and a count of wire fraud.