Italian oil giant Eni S.p.A agreed Friday to settle FCPA offenses related to its subsidiary’s use of a “wholly unequipped” intermediary to win government oil contracts in Algeria.
Rome-based Eni paid the SEC $24.5 million for the resolution. The company disgorged $19.75 million to the SEC, plus prejudgment interest of $4.75 million.
In an internal administrative order, the SEC charged Eni with violating the FCPA’s books and records and internal accounting controls provisions.
This was the second time in a decade that Eni resolved FCPA charges. In 2010, Eni and its subsidiary, Snamprogetti, paid $365 million to settle FCPA-related charges for Snamprogetti’s role in the KBR-led TSKJ-Nigeria joint venture. In that case, Snamprogetti, KBR (Kellogg Brown & Root Inc.), Technip S.A., and JGC of Japan bribed Nigeria officials in exchange for contracts to build LNG facilities on Bonny Island. The contracts were worth more than $6 billion.
The SEC said Friday that another Eni subsidiary, Saipem, entered into four sham agreements with an intermediary to obtain contracts from Sonatrach, Algeria’s state owned oil company.
In meetings with Saipem’s management, the then Algerian energy minister referred to the owner of the intermediary as his personal secretary and someone he considered like a “son.”
The intermediary was supposed to help Saipem develop new business in Algeria, but was “wholly unequipped to provide the contemplated consulting services in the technically complex energy design sector,” the SEC said.
The intermediary had no employees or offices in Algeria and only a “virtual office” in Geneva, Switzerland staffed by a single individual.
Saipem paid $215 million to the intermediary and was awarded at least seven contracts from Sonatrach. Some of the money was transferred through offshore shell companies to Algerian officials, including the energy minister at the time.
According to the SEC, Saipem’s CFO, Alessandro Bernini, helped approve the intermediary contracts and facilitated the payments to the intermediary despite being aware of a lack of due diligence by Saipem and lack of services rendered by the intermediary.
In August 2008, the same Bernini was promoted to CFO of Eni, where he continued to facilitate Saipem’s payments to the intermediary, the SEC said.
Bernini was not named in Friday’s SEC order but only referred to as “Executive A.”
Eni received notice from the DOJ in September 2019 that the agency was closing its investigation into Saipem’s business in Algeria without filing any charges, according to FCPA Tracker.
An Italian court acquitted Eni and the ex-CEO of bribery allegations in Algeria in 2018. Bernini, the former CFO, was convicted and sentenced to four years and one month in jail.