JGC Corp., a Tokyo-based construction and engineering company, agreed to pay a $218.8 million criminal penalty to avoid prosecution on charges it bribed Nigerian officials for contracts on natural gas projects.
The U.S. Justice Department today charged JGC in Houston with one count of conspiracy and one count of aiding and abetting violations of the Foreign Corrupt Practices Act in what it called a decade-long bribery scheme. The department agreed to defer prosecution for two years and dismiss the charges if JGC improves its programs to comply with the law.
JGC’s agreement to pay the fine brings to $1.5 billion the total penalties in a case against a joint venture known as TSKJ that included Houston-based Kellogg Brown & Root LLC, Paris-based Technip SA and Dutch engineering firm Snamprogetti Netherlands BV, according to a Justice Department statement.
The joint venture’s prosecution represents one of the biggest foreign bribery cases undertaken by the Justice Department since it stepped up pursuit of such cases starting in 2008 when Munich-based Siemens, Germany’s largest engineering company, paid $1.6 billion to settle U.S. and German probes.
“Each of the four companies in the TSKJ joint venture, the former chairman of the U.S. joint venture partner, and several other individuals have now been held accountable for a massive conspiracy to bribe Nigerian government officials to obtain lucrative construction contracts,” Deputy Assistant Attorney General Mythili Raman said in the statement.
JGC Chairman Keisuke Takeuchi, in a document attached to the company’s deferred prosecution agreement, said the board of directors unanimously approved the deal at a meeting today at the company’s headquarters.
He said the directors had been aware of the negotiations with the U.S. Justice Department and sought to resolve “certain illegal payments to foreign officials” the company had made in order to win contracts.
JGC’s lawyer, Manny Abascal of Latham & Watkins in Los Angeles, declined to comment on the deal in an e-mail.
The bribes were paid to obtain $6 billion in contracts to build pipelines and processing facilities at Nigeria’s Bonny Island liquefied natural gas project, according to the charges.
In July, Snamprogetti agreed to pay $365 million with the help of former parent company Eni SpA to settle criminal and civil charges. In June, Technip, Europe’s second-largest oilfield-services provider, agreed to pay $338 million to avoid prosecution and resolve Securities and Exchange Commission claims. Kellogg Brown & Root, a former unit of Halliburton Co., and Halliburton agreed in February 2009 to pay a total of $579 million to resolve criminal and SEC allegations.
In 2006, Milan-based Saipem SpA, Europe’s largest oilfield-services provider, bought Snamprogetti from ENI.
JGC pushed the joint venture to hire two agents who over time paid $182 million in bribes to Nigerian government officials, according to court documents.
One of those intermediaries, U.K. lawyer Jeffrey Tesler, was hired as a consultant to pay bribes to high-level Nigerian government officials, including top-level executive branch officials, court documents said.
JGC also hired a Japanese trading company to bribe lower-level Nigerian officials as part of the scheme, according to the court documents.
The joint venture paid $132 million to a Gibraltar corporation controlled by Tesler and $50 million to the Japanese trading company, money ultimately intended to be used as bribes, the court documents said.
Tesler pleaded guilty in March to one count of conspiracy and one count of violating the FCPA. He agreed to forfeit almost $149 million.
KBR’s former CEO, Albert Stanley, pleaded guilty in September 2008 to conspiracy to violate the FCPA in a charge related to the case.
Under the terms of the agreement, the JGC will strengthen its internal anti-bribery compliance program and hire a monitor to review those efforts, according to the Justice Department statement.
The case is USA v. JGC Corp., 11-cr-00260, U.S. District Court, Southern District of Texas (Houston).