Marubeni Corp to Pay $54.6M to Resolve Alleged FCPA Violations
On January 17, 2012, the Justice Department announced that Marubeni Corporation, a Japanese trading company, has entered into a deferred prosecution agreement (DPA) with the Department and has agreed to pay a $54.6 million criminal penalty to resolve charges related to the Foreign Corrupt Practices Act (FCPA) for its participation in a scheme to bribe Nigerian government officials to obtain engineering, procurement and construction (EPC) contracts.
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4 Companies Obtained Construction Contracts from Nigerian Co. Valued at $6B
Between 1995 and 2004, a joint venture among JGC Corporation, 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. (NLNG) to build liquefied natural gas (LNG) 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.
Allegedly Hired Marubeni as Agent to Bribe Officials to Obtain Contracts
To assist in obtaining and retaining the EPC contracts, the joint venture allegedly hired two agents -- Marubeni and Jeffrey Tesler, a U.K. solicitor -- to pay bribes to a wide range of Nigerian government officials. The joint venture hired Tesler as a consultant to pay bribes to high-level Nigerian government officials, including top-level executive branch officials, and hired Marubeni to pay bribes to lower-level Nigerian government officials.
Paid Marubeni Approximately $51M Intended to be Used as Bribes
At crucial junctures preceding the award of EPC contracts, a number of co-conspirators, including on two occasions an employee of Marubeni, met with successive holders of a top-level office in the executive branch of the Nigerian government to ask the office holders to designate a representative with whom TSKJ should negotiate bribes to Nigerian government officials. TSKJ paid approximately $132 million to a Gibraltar corporation controlled by Tesler and $51 million to Marubeni during the course of the bribery scheme and intended for these payments to be used, in part, for bribes to Nigerian government officials.
DOJ Will Dismiss Case if Marubeni Abides by Terms of Its 2-Yr DPA
Under the terms of the DPA, DOJ agreed to defer prosecution of Marubeni for two years. Marubeni agreed to retain a corporate 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 DOG in ongoing investigations. If Marubeni abides by the terms of the DPA, DOJ will dismiss the criminal information when the term of the agreement expires.
4 Companies & 3 Individuals Also Charged in Related Cases
In related cases, KBR’s successor company, Kellogg Brown & Root LLC, was ordered to pay a $402 million fine, Technip agreed a $240 million criminal penalty, Snamprogetti also a $240 million criminal penalty, and JGC a $218.8 million criminal penalty.
In other related criminal cases, KBR’s former CEO, Albert Stanley, pleaded guilty in September 2008 to conspiring to violate the FCPA. In March 2011, Tesler pleaded guilty to conspiring to violate and violating the FCPA and agreed to forfeit $148.9 million. In December 2010, Wojciech Chodan, a former salesperson and consultant of a United Kingdom subsidiary of KBR, pleaded guilty and agreed to forfeit $726,885.
(See ITT's Online Archives 11040729 and 10062929 for summaries of JGC's and Technip's agreements resolve the alleged FCPA violations.
See ITT's Online Archives 10120720 for summary of Chodan's guilty plea.)