Third Settlement In Nigerian Bribery Investigation
By Aruna Viswanatha | July 7, 2010 1:15 pm

Italian energy firm ENI, S.p.A. and its former Dutch subsidiary Snamprogetti Netherlands B.V agreed to pay $365 million to settle charges that Snamprogetti participated in a decade-long scheme to bribe Nigerian officials for construction contracts, the Justice Department and the Securities and Exchange Commission said Wednesday.

The announcement comes on the heels of a $338 million settlement the agencies announced last week with French engineering firm Technip S.A., and a $579 settlement with KBR, Inc. and Halliburton Co. the SEC and DOJ entered into last year.

Prosecutors have accused the firms, which ran a joint venture along with a Japanese company, JGC, of giving Nigerian government officials briefcases stuffed with cash to obtain $6 billion worth of contracts to build liquefied natural gas facilities on Bonny Island, Nigeria.

The DOJ charged Snamprogetti with one count of conspiring to violate the Foreign Corrupt Practices Act and one count of aiding and abetting violations of the anti-bribery provisions of the FCPA.  Like Technip, the company entered into a deferred prosecution agreement and agreed to pay a criminal penalty of $240 million.

Including today’s fine, the government has netted more than $1.28 billion from companies involved in the scheme. The SEC’s portion of the settlements include around $400 million in disgorgements — the largest combined disgorgement from an FCPA violation to date.

Today’s complaints, filed in federal court in Houston, paint a picture of the massive scheme that spanned continents and included cars filled with cash.

Senior executives at the joint venture companies even created a “cultural committee” to consider how to implement and hide the bribery scheme through consulting and services contracts, the SEC said.

“This elaborate bribery scheme featured sham intermediaries, Swiss bank accounts, and carloads of cash as everyone involved made a concerted effort to cover their tracks,” said Robert Khuzami, who heads the agency’s enforcement division.

According to the SEC’s complaint, senior Snamprogetti executives hired two agents — a U.K. solicitor and a Japanese trading company — who funneled more than $180 million in bribes to officials at a state-controlled firm that was awarding the contracts, Nigeria LNG Ltd.

The joint venture won a $2.2 billion contract in 1995 and sent $60 million to the U.K. agent’s Swiss bank account over the next five years, according to the SEC. The agent then transferred the money to the accounts of the Nigerian officials, the SEC said.

A new administration took over in Nigeria in 1999 but continued the scheme, awarding a $1.2 billion contract to the joint venture and receiving $32.5 million through the British agent in return, according to the SEC.

In 2002 and 2003, the agent used a subcontractor who hand-delivered U.S. cash in briefcases to the Nigerian official in a hotel room in Abuja, Nigeria.  The subcontractor also sent Nigerian currency. The packages were too bulky to transport by hand, so they were loaded into a vehicle for delivery, according to the SEC.

The criminal case is being handled by acting Assistant Chief William J. Stuckwisch and Deputy Chief Patrick F. Stokes of the Criminal Division’s Fraud Section with help from the FBI’s Houston division.

SEC attorneys Kara Brockmeyer, Robert Wilson, Ansu Banerjee and Stanley Cichinski worked on the investigation.

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