SEC Charges 3 Oil Execs with Bribing Customs Officials in Nigeria
On February 24, 2012, the Securities and Exchange Commission charged three oil services executives with violating the Foreign Corrupt Practices Act (FCPA) by participating in a bribery scheme to obtain illicit permits for oil rigs in Nigeria in order to retain business under lucrative drilling contracts, thus violating the anti-bribery, internal controls, and false records provisions of the Securities Exchange Act.
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2 Execs Allegedly Bribed Nigerian Officials to Process False Paperwork
The SEC alleges that former Noble Corporation CEO Mark Jackson along with James Ruehlen, current Director and Division Manager of Noble’s subsidiary in Nigeria, bribed Nigerian customs officials to process false paperwork purporting to show the export and re-import of oil rigs, when in fact the rigs never moved. The scheme was designed to save Noble Corporation from losing business and incurring significant costs associated with exporting rigs from Nigeria and then re-importing them under new permits. Bribes were paid through a customs agent for Noble’s Nigerian subsidiary with Jackson and Ruehlen’s approval.
Another Exec Allegedly Approved Bribes & Allowed Bribes to Be Improperly Booked
The SEC separately charged Thomas O’Rourke, a former controller and head of internal audit at Noble, with approving the bribe payments and allowing the bribes to be booked improperly as legitimate operating expenses for the company. Without admitting or denying the SEC’s allegations, O’Rourke consented to entry of a court order requiring him to pay a $35,000 penalty and permanently enjoining him from further violations.
Bribes Were Allegedly Paid to Gain Illicit Permits and Permit Extensions
According to the SEC’s complaint against Jackson and Ruehlen, the executives who perpetrated the scheme worked at Noble Corporation and its Nigerian subsidiary Noble Drilling (Nigeria) Ltd, whose rigs operated in Nigeria on the basis of temporary import permits granted by the Nigeria Customs Service (NCS). These temporary permits allowed the rigs to be in the country for a one-year period. NCS had the discretion to grant up to three extensions lasting six months each, after which the rigs were required to be exported and re-imported under a new temporary permit or be permanently imported with the payment of sizable duties.
Together, Jackson and Ruehlen are accused of paying hundreds of thousands of dollars in bribes to obtain about 11 illicit permits and 29 permit extensions. Jackson approved the bribe payments and concealed the payments from Noble’s audit committee and auditors. Ruehlen prepared false documents, sought approval for the bribes, and processed and paid the bribes.
Corporation Agreed to Pay Over $8M to Settle FCPA Violations
Noble Corporation was charged with FCPA violations as part of a sweep of the oil services industry in late 2010. The company cooperated with investigators and agreed to pay more than $8 million to settle civil and criminal cases.
(See ITT's Online Archives 10110504 for summary of the Justice Department charging Noble Corporation for violating the FCPA in November 2010.)