Houston-based Bristow Group Inc. (formerly Offshore Logistics Inc.) settled U.S. Foreign Corrupt Practices Act charges related to improper payments in Nigeria in 2002 and 2003 to lower expatriate employment taxes there. The payments to Nigerian state government officials violated the anti-bribery provisions of the FCPA and Bristow’s under-reporting of its tax liabilities violated the books and records provisions. It consented to a September 26, 2007 administrative cease-and-desist order from the Securities and Exchange Commission. Bristow, which provides helicopter services worldwide to the offshore oil and gas industry, did not pay any financial penalties.
Bristow’s internal investigation started in late 2004 when its newly-appointed CEO heard remarks suggesting that an affiliate, Pan African Airlines Nigeria Ltd., had engaged in bribery to reduce certain tax assessments. He reported it immediately to the audit committee and contacted outside counsel. The subsequent internal investigation showed corrupt payments totaling $443,300 and resulting tax savings of $873,940. Bristow self-reported the results to the SEC, which also found that the company had mischaracterized the payments in its books and records as legitimate payroll expenses and lacked sufficient internal controls. Bristow cooperated with the SEC and has taken remedial steps. The SEC’s decision not to impose any financial penalties is an endorsement of Bristow’s handling of the matter.
Bristow first reported the bribery problems in its 2005 annual report. The SEC’s order requires it to cease and desist from violating Sections 30A, 13(a), 13(b)(2)(A) and 13(b)(2)(B) of the Securities and Exchange Act of 1934 and Rules 12b-20, 13a-1 and 13a-13.
Bribes to reduce taxes were the basis of the FCPA charges upheld in U.S. v. David Kay and Douglas Murphy (February 4, 2004), discussed in another post Here.
Bristow Group Inc. trades on the New York Stock Exchange under the symbol BRS.
View the SEC’s Press Release Here.
View the SEC’s September 26, 2007 Administrative Proceeding No. 34-56533 (Accounting and Auditing Enforcement Release No. 2727 and Administrative Proceeding File No. 3-12833) Here.