This previous post went in-depth into the net $81.9 million DOJ FCPA enforcement action against TechnipFMC and how the company joined the FCPA repeat offender list. This post continues the analysis by highlighting additional issues to consider.
Statute of Limitations
Pardon me for being “that guy” but the bulk of the conduct at issue in the enforcement action (both the Technip USA information and plea involving alleged conduct in Brazil and the TechnipFMC information and DPA involving alleged conduct in Iraq) took place between 2003 and 2010 (in other words approximately 10 – 15 years prior to the enforcement action).
Timeline
As highlighted in this prior post, the company previously disclosed:
“On March 28, 2016, FMC Technologies received an inquiry from the U.S. Department of Justice (“DOJ”) related to the DOJ’s investigation of whether certain services Unaoil S.A.M. provided to its clients, including FMC Technologies, violated the U.S. Foreign Corrupt Practices Act (“FCPA”). On March 29, 2016, Technip S.A. also received an inquiry from the DOJ related to Unaoil. We are cooperating with the DOJ’s investigations and, with regard to FMC Technologies, a related investigation by the U.S. Securities and Exchange Commission.
In late 2016, Technip S.A. was contacted by the DOJ regarding its investigation of offshore platform projects awarded between 2003 and 2007, performed in Brazil by a joint venture company in which Technip S.A. was a minority participant, and we have also raised with DOJ certain other projects performed by Technip S.A. subsidiaries in Brazil between 2002 and 2013. The DOJ has also inquired about projects in Ghana and Equatorial Guinea that were awarded to Technip S.A. subsidiaries in 2008 and 2009, respectively. We are cooperating with the DOJ in its investigation into potential violations of the FCPA in connection with these projects.”
Thus, from start to finish the company’s DOJ FCPA scrutiny lasted approximately 3 to 3.5 years. This is a shorter period of time than the median of approximately 4 years, but still a long time given that the DOJ stated:
“the Company received full credit for its cooperation including: conducting a thorough internal investigation, meeting the DOJ’s requests promptly, proactively identifying issues and facts that would likely be of interest to the DOJ, making regular factual presentations to the DOJ, voluntarily making foreign-based employees available for interviews in the U.S., producing documents to the DOJ from foreign countries in ways that did not implicate foreign data privacy laws, and collecting, analyzing and organizing voluminous evidence and information for the DOJ.”
Bifurcated Enforcement Action
But then again, TechnipFMC’s overall FCPA scrutiny is not over as the SEC enforcement action is forthcoming. As the company stated in its recent release:“TechnipFMC has reached an agreement in principle with the SEC Staff, subject to final SEC approval.”
The TechnipFMC enforcement action thus represents a rare bifurcated enforcement action by the DOJ and SEC as most FCPA enforcement actions against issuers involving a DOJ and SEC component are resolved on the same day. Another recent example of a truncated enforcement action concerned Legg Mason (see here).
Hiring Family Members of Alleged “Foreign Officials”
Although the TechnipFMC enforcement action involved some rather hard core bribery (approximately $70 million in alleged corrupt payments), like many FCPA enforcement actions the TechnipFMC action also involved so-called “add-on” allegations that did not necessarily drive the enforcement action but were nevertheless included. For instance, the TechnipFMC matter included the following:
“In furtherance of the conspiracy, Technip corruptly hired the children of certain Petrobras officials, including the children of Brazilian Official 2, Brazilian Official 3 and another Petrobras official. For example, in or about and between December 2006 and September 2008, a Technip Foreign Subsidiary Company hired the child of Brazilian Official 3 as a “favor” to Brazilian Official 3. Further, in or about and between June 2011 and May 2014, with the knowledge and approval of Technip Executive 1, a Technip Foreign Subsidiary Company hired the child of Brazilian Official 2, who was subsequently seconded to Technip USA.”
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