In the DOJ’s recent announcement of the Marubeni Corporation enforcement action (see here), Mythili Raman (Principal Deputy Assistant Attorney General) stated as follows. “With today’s resolution, the department has held accountable all five of the corporations that participated in the massive, decade-long scheme to bribe Nigerian government officials in connection with the so-called Bonny Island project.” This statement suggests that the Bonny Island enforcement actions may be over save for the sentencing of Albert Stanley (Feb. 23rd), Jeffrey Tesler (Feb. 23rd), and Wojciech Chodan (Feb. 22nd) before Judge Keith Ellison (S.D.Tex.).
If so, the final Bonny Island Bribery statistics are set forth below. In terms of enforcement agency recoveries the statistics are as follows: DOJ ($1.3 billion), SEC (400 million), U.K. SFO (11 million). In addition, the Stanley plea agreement contemplates a $10.8 million in restitution to his former employer.
Some observations. Of the four TSKJ joint venture partners (KBR, Technip, Samprogetti, and JGC Corp.) only KBR plead guilty to actual criminal charges. The other three entities (all foreign) resolved alleged FCPA exposure via deferred prosecution agreements. Of the four joint venture partners, only two (KBR and Technip) were required to engage a compliance monitor. The two Japanese entities (JGC Corp. and Marubeni Corp.) did not receive a Sentencing Guidelines reduction for cooperation, the other entities did. Of the five corporate enforcement actions, only two (KBR and Marubeni) involved criminal fine amounts within the guidelines range, the other three corporate enforcement actions involved criminal fines below even the minimum amount suggested by the Guidelines with a range of (30% below the Guidelines range to 20% below the Guidelines range). Interestingly, JGC Corp., an entity that did not receive cooperation credit, received the “highest” reduction (30%) from the minimum guidelines range.
Because the DOJ’s resolution documents included specific figures for “value of benefit received from improper payments” it is possible to calculate a ratio between the value of benefit received based on improper conduct and the criminal fine amount. The ratios are as follows.
KBR: 1 to 1.7
Technip: 1 to 1.2
Snamprogetti: 1 to 1.2
JGC Corp. 1 to 1.1
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Kellogg Brown & Root LLC / Halliburton Company / KBR Inc. (Feb. 2009)
Attorneys: Paul, Hastings, Janofsky & Walker LLP
DOJ
Entity: Kellogg Brown & Root LLC
Charges: Conspiracy to Violate the FCPA (1 Count), Substantive FCPA Anti-Bribery Violation (4 Counts)
Resolution Vehicle: Criminal Information and Plea Agreement
Benefit Received From Improper Payments: $235.5 Million
Sentencing Guidelines Range: $376.8 Million – $753.6 Million
Amount of Fine: $402 Million
Monitor: Yes – Three Years
SEC
Entity: Halliburton Company, KBR Inc.
Charges: FCPA Books and Records and Internal Controls Violation (Halliburton Company), Substantive FCPA Anti-Bribery Violation, Aiding and Abetting Halliburton’s FCPA Books and Records and Internal Controls Violation, Knowingly Falsifying Books and Records and Knowingly Circumventing Internal Controls (KBR Inc.),
Disgorgement Amount: $177 Million
Technip S.A. (June 2010)
Attorneys: Patton Boggs LLP; Wachtell, Lipton, Rosen & Katz
DOJ
Charges: Conspiracy to Violate the FCPA (1 Count), Substantive FCPA Anti-Bribery Violation (1 Count)
Resolution Vehicle: Criminal Information and Deferred Prosecution Agreement (Term – 2 Years)
Value of Benefit Received From Improper Payments: $199 Million
Sentencing Guidelines Range: $318.4 Million – $636.8 Million
Amount of Fine: $240 Million (25% Below Minimum Guidelines Range)
Monitor: Yes – Two Years
SEC
Charges: Substantive FCPA Anti-Bribery Violation, FCPA Books and Records and Internal Controls Violation
Disgorgement Amount: $98 Million
Snamprogetti Netherlands BV, ENI S.p.A (July 2010)
Attorneys: Sullivan & Cromwell LLP
DOJ
Entity: Snamprogetti Netherlands BV
Charges: Conspiracy to Violate the FCPA (1 Count), Aiding and Abetting FCPA Anti-Bribery Violation (1 Count)
Resolution Vehicle: Criminal Information and Deferred Prosecution Agreement (Term 2 Years)
Value of Benefit Received From Improper Payments: $214.3 Million
Sentencing Guidelines Range: $300 Million – $600 Million
Amount of Fine: $240 Million (20% Below Minimum Guidelines Range)
Monitor: No
SEC
Entity: Snamprogetti Netherlands BV, ENI S.p.A.
Charges: Substantive FCPA Anti-Bribery Violation, Knowingly Falsifying Books and Records and Knowingly Circumventing Internal Controls (Snamprogetti Netherlands BV), FCPA Books and Records and Internal Controls Violation (ENI S.p.A.)
Disgorgement Amount: $125 Million
JGC Corporation of Japan (April 2011)
Attorneys: Latham & Watkins
DOJ
Charges: Conspiracy to Violate the FCPA (1 Count), Aiding and Abetting FCPA Anti-Bribery Violation (1 Count)
Resolution Vehicle: Criminal Information and Deferred Prosecution Agreement (Term 2 Years)
Value of Benefit Received From Improper Payments: $195.4 Million.
Sentencing Guidelines Range: $312.6 – $625.2
Amount of Fine: $218.8 Million (30% Below Minimum Guidelines Range)
Monitor: Yes
Marubeni Corporation (January 2012)
Attorneys: Hughes Hubbard & Reed
DOJ
Charges: Conspiracy to Violate the FCPA (1 Count), Aiding and Abetting FCPA Anti-Bribery Violation (1 Count)
Resolution Vehicle: Criminal Information and Deferred Prosecution Agreement (Term 2 Years)
Value of Benefit Received From Improper Payments: $20 Million – $50 Million
Sentencing Guidelines Range: $54.6 Million – $109.2 Million
Amount of Fine: $54.6 Million
Monitor: Yes.
Albert Jackson Stanley (August 2008)
Attorney: Larry Veselka (Smyser, Kaplan & Veselka LLP)
DOJ
Charges: Conspiracy to Violate the FCPA (1 Count), Conspiracy to Commit Mail and Wire Fraud (1 Count)
Resolution Vehicle: Criminal Information and Plea Agreement
Plea Agreement Contemplates a $10.8 Million Restitution Order (the amount Stanley agreed the victim – his former employer – incurred as a monetary loss because of his conduct)
Plea Agreement Contemplates a Sentence of 84 months (subject to a downward departure for cooperation)
SEC
Charges: Substantive FCPA Anti-Bribery Violation, Knowingly Falsifying Books and Records and Knowingly Circumventing Internal Controls
Permanent Injunction
Jeffrey Tesler (March 2009)
Attorney: Bradley Simon (Simon & Partners LLP)
Charges: Conspiracy to Violate the FCPA (1 Count), Substantive FCPA Anti-Bribery Violations (10 Counts)
Resolution Vehicle: Plea Agreement as to the Conspiracy Charge and One Substantive FCPA Anti-Bribery Violation.
Plea Agreement contemplates a $149 million forfeiture.
Plea Agreement Contemplates a Sentencing Guidelines Range of 10 Years.
Wojciech Chodan (March 2009)
Attorneys: Kobre Kim LLP
Charges: Conspiracy to Violate the FCPA (1 Count), Substantive FCPA Anti-Bribery Violations (10 Counts)
Resolution Vehicle: Plea Agreement as to the Conspiracy Charge.
Plea Agreement Contemplates a $726,885 forfeiture.
Plea Agreement Contemplates a Sentencing Guidelines Range of 5 Years.
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In addition to the above U.S. enforcement actions, in February 2011, the U.K. Serious Fraud Office brought an enforcement action against M.W. Kellogg Limited (“MKWL”), the entity that originally formed the TSKJ consortium, in which it paid “just over £7 million [approximately $11.2 million] in recognition of sums it is due to receive which were generated through the criminal activity of third parties.” MKWL is currently a wholly-owned subsidiary of KBR.
