German engineering firm Bilfinger said Sunday an internal investigation has found that employees of a subsidiary paid bribes to public officials in Brazil for contracts related to the 2014 World Cup.
In 2013, the company paid a $32 million fine and entered into a deferred prosecution agreement with the U.S. Justice Department for FCPA violations in Nigeria.
Bilfinger said Sunday that internal information last year showed possible compliance violations in Brazil. The payments were connected with orders to supply monitor walls for security control centers in several big cities. The orders were worth about $6.5 million.
Bilfinger hired Ernst & Young and Deloitte and a “specialty” law office in Brazil to determine if employees at affiliate Mauell bribed public officials and employees of state-owned companies.
In December 2013, Bilfinger paid a $32 million penalty to resolve charges that it violated the FCPA by bribing government officials in Nigeria. The company entered a deferred prosecution agreement with the DOJ for three years.
Bilfinger’s bribes were for contracts for Nigeria’s Eastern Gas Gathering System (EGGS) project valued at $387 million.
The DOJ said from 2003 to 2005, Bilfinger conspired with Willbros Group Inc. and others to pay more than $6 million in bribes to Nigerian government officials.
Bilfinger agreed with the DOJ to retain an independent corporate compliance monitor for at least 18 months.
The company said Sunday: “Suspicions [about the Brazil bribes] have now been substantiated.”
It said the investigation isn’t completed. Mauell didn’t deal directly with FIFA, a Bilfinger spokesperson said.
Bilfinger SE trades in the U.S. on the over the counter market under the symbol BFLBY.
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Here’s Bilfinger full statement:
Bilfinger received internal information last year indicating that there may have been violations of the Group’s compliance regulations in connection with orders for the supply of monitor walls for security control centres in several large municipalities in Brazil. The company immediately launched a comprehensive investigation. The allegation relates to suspected bribery payments from employees of a Bilfinger company in Brazil to public officials and employees of state companies.
As a first step, Bilfinger commissioned auditors Ernst & Young to conduct a comprehensive securing of data in Germany and Brazil and, subsequently, auditors Deloitte and a specialized law office in Brazil with the further clarification of the incident. Suspicions have now been substantiated; the investigation, however, is not yet complete. This also applies to the question of to whom and in what amount payments were made. Should the accuracy of the allegations be confirmed, Bilfinger will take action with regard to personnel and will initiate legal steps.
The volume for the order to equip the security centres amounted to approximately €6 million. Orders of this size are not dealt with in the Group Executive Board. Services included the delivery of monitor walls and the software required to control the screens. The software in question was developed in-house, no software was bought from IBM.
Bilfinger has a compliance system that is valid throughout the Group. It is in line with international standards and is reviewed and developed on an ongoing basis. The company pursues information on possible violations through its own investigations and notifies the relevant authorities.
Richard L. Cassin is the publisher and editor of the FCPA Blog. He can be contacted here.