Snamprogetti Netherlands B.V. and its parent company ENI S.p.A of Italy will pay $365 million to resolve FCPA-related charges for Snamprogetti’s role in the TSKJ-Nigeria joint venture.
Dutch-based Snamprogetti was charged by the DOJ in a criminal information with one count of conspiracy and one count of aiding and abetting violations of the FCPA. It will pay a $240 million criminal penalty.
Snamprogetti and ENI also entered into a two-year deferred prosecution agreement with the DOJ. The agreement doesn’t require appointment of a compliance monitor.
To resolve the SEC’s charges that Snamprogetti and ENI violated the anti-bribery and recordkeeping and internal controls provisions in Sections 30A and 13(b)(5) of the Securities Exchange Act of 1934 and Rule 13b2-1, the companies are jointly and severally liable to pay $125 million in disgorgement.
Snamprogetti, Kellogg Brown & Root Inc. (KBR), Technip S.A., and JGC of Japan were part of a four-company joint venture called TSKJ. It won four contracts from Nigeria LNG Ltd. between 1995 and 2004 to build LNG facilities on Bonny Island. The contracts were worth more than $6 billion.
Snamprogetti authorized the joint venture to hire two agents, London-lawyer Jeffrey Tesler and a Japanese trading company, to pay bribes to Nigerian government officials, including “top-level executive branch officials,” to help win the Bonny Island contracts. The DOJ charged that TSKJ paid about $132 million to a Gibraltar corporation controlled by Tesler and more than $50 million to the Japanese trading company. Some of the money, prosecutors alleged, was intended to be used as bribes.
Ten days ago, Paris-based Technip resolved FCPA-related charges with the DOJ and SEC for $338 million — a $240 million criminal penalty and $98 million in disgorgement.
In February 2009, KBR and its former parent Halliburton paid $579 million to settle FCPA-related charges, including a $402 million criminal penalty and $177 million in disgorgement.
KBR’s former boss Jack Stanley pleaded guilty in September 2008 to conspiring to violate the FCPA. He was sentenced to seven years in prison. His sentence is subject to court review based on his cooperation in the related prosecutions.
Jeffrey Tesler and Wojciech Chodan, both U.K. citizens, were indicted in February 2009 by a federal grand jury in Houston. They were charged with helping KBR and its partners arrange the bribes to the Nigerian officials. Earlier this year, judges in London ruled that both should be extradited to the U.S. to face trial. Their appeals could take up to a year.
In March this year, ENI disclosed a provision for €250 million, “reflecting the estimated cost of resolution” with U.S. prosecutors for the Nigeria bribe case.
With today’s settlement, the DOJ and SEC said $1.28 billion has been assessed in penalties for the TSKJ bribery.
View the DOJ’s July 7, 2010 release here.
Download the July 7, 2010 criminal information in U.S. v. Snamprogetti Netherlands B.V. here.
Download Snamprogetti’s July 7, 2010 deferred prosecution agreement here.
View SEC Litigation Release No. 21588 and Accounting and Auditing Enforcement Release No. 3149 (both dated July 7, 2010) in Securities and Exchange Commission v. ENI, S.p.A. and Snamprogetti Netherlands, B.V., Case No. 4:10-cv-02424, S.D. Tex (Houston) here.
Snamprogetti is the same company that secured contracts for building almost ALL of India's fertiliser plants in the 1980s…they had an agent in one Quattorachi, a very close friend of Sonia Gandhi's family. It would be interesting to review the Indian contracts…is there any way to expand the scope of the current case/investigation?
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