Top Menu

The First Enforcement Action To Involve CFE

[This post is part of a periodic series regarding “old” FCPA enforcement actions]

There have been several repeat offenders in the FCPA’s history (see here for a prior post involving a few examples).  What about repeat bribe recipients (at least at the entity level)?  The entities at issue in the Bonny Island Bribery cases (see here) come to mind, but those separate enforcement actions were all based on the same core set of conduct.

This post discusses the first time, but not last, the Mexican entity Comision Federal de Electricidad (“CFE”) was at the center of an FCPA enforcement action.

In 1985, Silicon Contractors, Inc. (a Texas company engaged in the manufacture, sale and installation of radiation and fire-stop penetration seals for use in nuclear power plants) was charged in a criminal information with FCPA anti-bribery violations.  According to the two-paragraph information, in June 1980 an officer of Silicon made a $132,000 payment to a person “knowing or having reason to know that said money would be offered, given or promised, directly or indirectly, to one of more officials of [CFE] to induce said officials to use their influence to affect an act of CFE, to wit, the awarding of a certain contract to manufacture and install radiation and fire-stop prevention seals for a nuclear power plant in Laguna Verde, Mexico.”  The information alleged that CFE “was an instrumentality of a foreign government, to wit, an agency of the Republic of Mexico.”  Silicon Contractors agreed to plead guilty and was ordered to pay a $150,000 criminal fine.

CFE – the entity at the center of the Silicon Contractors enforcement actions – is the same entity that was at issue in the Lindsey Manufacturing enforcement action and is at issue in the ongoing John Joseph O’Shea FCPA enforcement actions.

In addition to the criminal information, the DOJ also filed a civil injunction against Silicon, Diversified Group Inc. (a company that acquired the stock ownership of Silicon Contractors after the conduct at issue), Herbert Hughes (Chairman and President of Diversified Group), Ronald Richardson (Executive Vice President of Diversified Group), Richard Noble (former President of Silicon), and John Sherman.  Silicon, Diversified, and the named individuals consented to an injunction permanently enjoining future FCPA violations.

See here for original source documents of the Silicon Contractors enforcement actions.

Powered by WordPress. Designed by WooThemes