Snamprogetti Netherlands B.V. Agrees to Pay $240 Million Penalty in Nigeria LNG Bribery Scandal

7 Jul 2010 18:01 Africa/Lagos


Snamprogetti Netherlands B.V. Resolves Foreign Corrupt Practices Act Investigation and Agrees to Pay $240 Million Criminal Penalty

$1.28 Billion in Total Penalties Obtained to Date for Scheme to Bribe Nigerian Government Officials to Obtain Contracts

WASHINGTON, July 7 /PRNewswire-USNewswire/ -- Snamprogetti Netherlands B.V., (Snamprogetti) has agreed to pay a $240 million criminal penalty to resolve charges related to the Foreign Corrupt Practices Act (FCPA) for its participation in a decade-long scheme to bribe Nigerian government officials to obtain engineering, procurement and construction (EPC) contracts, the Department of Justice announced today. The EPC contracts to build liquefied natural gas (LNG) facilities on Bonny Island, Nigeria, were valued at more than $6 billion.


The department filed a deferred prosecution agreement and a criminal information today against Snamprogetti in U.S. District Court for the Southern District of Texas. The two-count information charges Snamprogetti with one count of conspiracy and one count of aiding and abetting violations of the FCPA. During the relevant time period, Snamprogetti, a Dutch corporation headquartered in Amsterdam, The Netherlands, was a wholly owned subsidiary of Snamprogetti S.p.A., an Italian EPC company headquartered in Milan, Italy.


Snamprogetti, Kellogg Brown & Root Inc. (KBR), Technip S.A. (Technip) and an engineering and construction company headquartered in Yokohama, Japan, were part of a four-company joint venture that was awarded four EPC contracts by Nigeria LNG Ltd. (NLNG), between 1995 and 2004 to build LNG facilities on Bonny Island. The government-owned Nigerian National Petroleum Corporation (NNPC) was the largest shareholder of NLNG, owning 49 percent of the company.


According to court documents, Snamprogetti authorized the joint venture to hire two agents, Jeffrey Tesler and a Japanese trading company, to pay bribes to a range of Nigerian government officials, including top-level executive branch officials, to assist Snamprogetti and the joint venture in obtaining the EPC contracts. At crucial junctures preceding the award of EPC contracts, Snamprogetti's co-conspirators met with successive holders of a top-level office in the executive branch of the Nigerian government to ask the office holders to designate a representative with whom the joint venture should negotiate bribes to Nigerian government officials. The joint venture paid approximately $132 million to a Gibraltar corporation controlled by Tesler and more than $50 million to the Japanese trading company during the course of the bribery scheme. According to court documents, Snamprogetti intended for these payments to be used, in part, for bribes to Nigerian government officials.


Under the terms of the deferred prosecution agreement, the department agreed to defer prosecution of Snamprogetti for two years. Snamprogetti, its current parent company, Saipem S.p.A., and its former parent company, ENI S.p.A. (ENI), agreed to ensure that their compliance programs satisfied certain standards and to cooperate with the department in ongoing investigations. If Snamprogetti and its current and former parent companies abide by the terms of the deferred prosecution agreement, the department will dismiss the criminal information when the term of the agreement expires.


In related cases, KBR's former CEO, Albert "Jack" Stanley, pleaded guilty in September 2008 to conspiring to violate the FCPA for his participation in the bribery scheme, while KBR's successor company, Kellogg Brown & Root LLC, pleaded guilty in February 2009 to charges related to the FCPA for its participation in the scheme to bribe Nigerian government officials. Kellogg Brown & Root LLC was ordered to pay a $402 million fine and to retain an independent compliance monitor for a three-year period to review the design and implementation of its compliance program. In addition, Tesler and Wojciech Chodan, a former salesperson and consultant of a United Kingdom subsidiary of KBR, were indicted in February 2009 on charges related to the FCPA for their alleged participation in the bribery scheme. The United States has requested these defendants' extradition from the United Kingdom. In another related criminal case, the department filed a deferred prosecution agreement and criminal information against Technip on June 28, 2010. According to that agreement, Technip agreed to pay a $240 million criminal penalty and to retain an independent compliance monitor for two years.


Today, Snamprogetti and ENI also reached a settlement of a related civil complaint filed by the U.S. Securities and Exchange Commission (SEC), charging Snamprogetti with violating the FCPA's anti-bribery provisions, falsifying books and records, and circumventing internal controls and charging ENI with violating the FCPA's books and records and internal controls provisions. As part of that settlement, Snamprogetti and ENI agreed jointly to pay $125 million in disgorgement of profits relating to those violations


"The resolutions in this investigation demonstrate the U.S. government's commitment to identifying and holding accountable all companies and individuals who scheme to bribe foreign government officials to win business," said Principal Deputy Assistant Attorney General Mythili Raman of the Criminal Division. "Snamprogetti and its joint-venture partners conspired to pursue lucrative contracts through a massive bribery scheme - a scheme that has led to more than $1.28 billion in criminal and civil penalties to date. The monetary penalties and enforcement actions that have resulted from this investigation should send a clear message to companies and their employees that using foreign bribery as a means of winning contracts abroad will be punished."


"Today's resolution is yet another example of the FBI's willingness to aggressively investigate individuals and businesses that engage in corrupt conduct around the globe," said Kevin L. Perkins, assistant director of the FBI's Criminal Investigative Division. "Those who elect to expand or protect their business interests through the payment of illegal bribes to foreign public officials should know that they are not beyond the reach of the FBI. Together, with our law enforcement partners around the world, we will identify these bad actors and work with the Justice Department to prosecute them under the Foreign Corrupt Practices Act and other appropriate federal statutes."


The criminal case is being prosecuted by Acting Assistant Chief William J. Stuckwisch and Deputy Chief Patrick F. Stokes of the Criminal Division's Fraud Section, with investigative assistance from the FBI-Houston Division. The Criminal Division's Office of International Affairs provided substantial assistance. Significant assistance was provided by the SEC's Division of Enforcement and by authorities in France, Italy, Switzerland and the United Kingdom.


Source: U.S. Department of Justice

CONTACT: U.S. Department of Justice, +1-202-514-2007 or +1-202-514-1888
(TDD)


Web Site: http://www.justice.gov/

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Before We Sweep the N27 Billion Halliburton Bribery Scandals Under The Carpet

Before We Sweep the N27 Billion Halliburton Bribery Scandals Under The Carpet


It is very funny how majority of people in Nigeria have deliberately developed goose pimples and slowly ignoring the most important and urgent situation, the prosecution of the 81 persons indicted by the United States law enforcement officials for partaking in the N27 billion Halliburton bribery scandals.
Even the dead among them must have survivors who must account for their shares of the bribes.

Americans, Europeans, Asians, Arabs and Australians would have been addressing this preposterous state graft until all the criminals have been punished, but typical of hypocritical Nigerians, they are mischievously turning to less important issues, because many of them, including the electorate are beneficiaries of these criminals who have been destroying Nigeria.

Acting President Goodluck Jonathan does not have the balls and guts to prosecute the criminals and in fact, he recently appointed one of them as his security adviser.

I have been watching how he has been dodging from facing the challenge of their prosecution and this only proves that he is a weakling and cannot be a competent head of state.
It would be better for him to hand over to General Muhammad Buhari (Rtd) who is not afraid to even prosecute himself if found to be complicit in the corrupt practices destroying Nigeria.

We must destory the rule of kleptocracy in Nigeria.

A Chronology of Key Events in the Halliburton Bribery Scandal in Nigeria

FOR THE RECORD

Halliburton and Nigeria:
A Chronology of Key Events in the Unfolding Bribery Scandal

1988: Dresser Industries acquires M.W. Kellogg, ten years before Dresser merges with Halliburton.

September 1994: M.W. Kellogg and three other companies form a partnership known as TSKJ, incorporated in Medeira, Portugal. Each partner owns a 25 percent equal share. Kellogg's three other partners are Technip of France, Italy's Snamprogetti, and Japan Gasoline Corp. The partnership submits a bid to Nigeria LNG to build a natural gas plant in Nigeria. Nigeria LNG is owned by the Nigerian government and Royal Dutch/Shell Group. TSKJ's $2 billion bid is not immediately accepted even though it was 5 percent lower than a bid submitted by competitor, Bechtel Group, Inc.

November 1994: As TSKJ awaits Nigeria's decision on the bid, Wojciech Chodan, an executive at Kellogg and later a consultant for Kellogg Brown & Root, meets with London lawyer Jefferey Tesler, who is known for his contacts and friendly relations with the Nigerian government, including its dictator Gen. Sani Abacha. During the meeting, they discussed channeling $40 million to Gen. Abacha through Mr. Tesler's firm Tri-Star, based in Gibralter, Spain.

March 1995: TSKJ formally hires Mr. Tesler as agent; TSKJ's bid has still not been accepted by Nigeria LNG. Mr. Tesler's employment contract is signed by an M.W. Kellogg executive on behalf of the TSKJ partnership. Mr. Tesler had been working on behalf of TSKJ prior to March 1995 and the employment contract was given to Mr. Tesler as a reward for his prodding of Nigerian officials. The employment contract provided that Mr. Tesler would be paid $60 million if Nigeria awarded the construction contract to TSKJ. Mr. Tesler's Tri-Star was contracted to receive at least $160 million in five agreements signed between 1995 and 2002, and the funds were directed to bank accounts in Switzerland and Monaco.

March 20, 1995: Dan Etete replaces Nigeria's former oil minister, who has a falling out with the dicatator, Gen. Abacha. "In an interrogation of Mr. Tesler, a French magistrate described the London lawyer's transfer of $2.5 million into Swiss bank accounts held by Mr. Etete under a false name between 1996 and 1998. Mr. Tesler confirmed making the payments but told the magistrate that the money was for an investment in offshore oil exploration leases in Nigeria and that he wasn't aware the accounts belonged to Mr. Etete, according to people familiar with the interrogation." (Wall Street Journal, Sept. 29, 2004.)

June 1995: Albert Jack Stanley is promoted to president and chief operating officer of M.W. Kellogg after serving as executive vice president since 1991 and various positions since 1975.

August 1995: Dick Cheney is hired as CEO of Halliburton, three years before he directs the merger of Halliburton with Dresser Industries and M.W. Kellogg. He serves as CEO until August of 2000.

December 1995: TSKJ is finally awarded the $2 billion contract from Nigeria LNG.

July 1996: M.W. Kellogg promotes Albert Jack Stanley to chairman, president and chief executive officer; he also becomes vice president of operations for the parent, Dresser Industries.

February 1998: Halliburton and M.W. Kellogg's parent, Dresser Industries, agree to a $7.7 billion merger directed by Dick Cheney. M.W. Kellogg is merged with Halliburton's Brown & Root subsidiary to form Kellogg, Brown & Root. Albert Jack Stanley is named as chairman of the new subsidiary. The Independent (UK) reported that "Mr Stanley had been appointed to his senior role at Halliburton by Mr Cheney when he was chief executive between 1995 and 2000." (The Independent, Oct. 3, 2004.) The Wall Street Journal confirmed that Cheney "named Mr. Stanley … to a top post at the company in 1998." (Wall Street Journal, Sept. 29, 2004.) Cheney told the Middle East Economic Digest in 1999 that, "We took Jack Stanley … to head up the organization and that has helped tremendously." (Middle East Economic Digest, April 9, 1999.)

1999: The TSKJ partners, with Kellogg Brown & Root acting as the lead partner, agree to reappoint Mr. Tesler as its agent during a meeting in London. Kellogg wanted Mr. Tesler, with whom it had a long-term relationship, to attend. But the representative from the French partner, Technip, wanted a different agent and insisted that Mr. Tesler be excluded from the meeting. William Chaudan, the Kellogg representative at TSKJ, said Mr. Tesler had been selected on Kellogg's recommendation and over Technip's "strong opposition." (Financial Times, London, Sept. 16, 2004.) Halliburton officials in Houston deny that Kellogg Brown & Root demanded Mr. Tesler's participation. Three new contracts with Mr. Tesler required TSKJ to pay his firm, Tri-Star, $32.5 million for his services in Nigeria. Richard Northmore, a sales manager for M.W. Kellogg in England, signed contracts with Mr. Tesler for TSKJ. Syed Nasser, M.W. Kellogg's legal director, acted as counsel to the TSKJ consortium, approving Mr Tesler's role. Bhaskar Patel, a sales and marketing vice-president who works in Kellogg, Brown & Root's office in England, also worked with Mr. Tesler.

March 1999: Halliburton announces the Nigerian government awarded a $1.2 billion contract to TSKJ to expand the construction of the natural gas plant from two trains to three trains in order to increase the plant's capacity by 50 percent. At the time, Stanley declared the contract award exemplifies Kellogg's "project execution skills." (Halliburton press release, March 11, 1999.)

October 1999: First shipment of liquefied natural gas is shipped from Nigeria.

October 2003: French magistrate initiates investigation of suspicious payments made by TSKJ after a former executive with one of TSKJ's partners, Technip of France, said Mr. Tesler is "directly linked to corruption in Nigeria." (Financial Times, London, Sept. 16, 2004.) Halliburton admitted that TSKJ paid $132 million in "advisory fees" to Mr. Tesler and that under Tesler's contract with the company the money was not to be used for bribery. But the French investigator said the payments to Mr. Tesler "appear completely unjustified." (Wall Street Journal, Sept. 29, 2004.) The money was paid to Mr. Tesler between 1995 and 2002, more than half of which came after 1999. Under French law, Mr. Cheney could be subject to a charge of "abuse of corporate assets" even if he knew nothing about the alleged improper payments during his tenure as Halliburton's chief executive. The U.S. antibribery law applies only to executives who are aware of illicit payments to foreign officials. (Dallas Morning News, Sept. 8, 2004.) The Wall Street Journal reported that French authorities don't have jurisdiction over Halliburton in this case but are sharing information with U.S. authorities. (Wall Street Journal, Sept. 29, 2004.) "A preliminary investigation by the Police Judiciaire of France found that LNG Servicos, a company indirectly owned by the four partners in the Nigerian joint venture, made four payments totaling at least $166 million at times that roughly coincide with the award of contracts. The payments went to a Gibraltar company owned by a London attorney to a Swiss bank account that was later closed at the request of the bank." (Dallas Morning News, Jan. 25, 2004.)

December 2003: Albert Jack Stanley retires as chairman of Kellogg Brown & Root, but retains a position as consultant for Halliburton.

June 2004: Halliburton fires Albert Jack Stanley after investigators say he received $5 million in "improper" payments from Mr. Tesler. It also fires William Chaudan, the Kellogg representative at TSKJ. Halliburton spokesperson, Wendy Hall, said that during the years he ran KBR, Mr. Stanley reported to David Lesar, Halliburton's president and chief operating officer at the time and CEO today. Mr. Lesar reported to Mr. Cheney when Cheney was chief executive. (Dallas Morning News, Sept. 8, 2004.) (Important Note: Lesar is an accountant and former Arthur Andersen partner, meaning he may have been in a position to know about the purpose of payments to Tesler when they occurred.) According to the Dallas Morning News, "Mr. Cheney ran Halliburton when one of four suspicious payments occurred." (Dallas Morning News, Sept. 8, 2004.)

June 2004: It is reported that Tesler put $1 million into an account held by William Chaudan, the Kellogg representative at TSKJ. "The company has since learned that even larger sums may have gone into the accounts of Mr. Stanley and Mr. Chaudan." (Dallas Morning News, Sept. 3, 2004.) Chaudan retired from M.W. Kellogg Co. in 1998, but had continued as a consultant. (Dallas Morning News, June 19, 2004.)

August 2004: Nigeria's parliament votes unanimously to summon Halliburton CEO, David Lesar, to answer questions over its bribery investigation. It issues a report recommending that Halliburton and TSKJ be disqualified from bidding on future government projects. It denounces what it calls Halliburton's "hide-and-seek games" to avoid questions from government investigators.

September 2004: TSKJ severs all ties to Mr. Tesler and his firm, Tri-Star.

September 2004: The Wall Street Journal reports on newly disclosed evidence by Halliburton, including notes written by M.W. Kellogg employees during the mid-1990s in which they discussed bribing Nigerian officials. The Financial Times of London said the evidence "raises questions over what Mr Cheney knew - or should have known - about one of the largest contracts awarded to a Halliburton subsidiary." (Financial Times, Sept. 16, 2004.) The written notes were discovered by Halliburton's lawyer, James Doty, a lead partner in the Houston law firm Baker Botts. The "Baker" in Baker Botts is Bush family lawyer James Baker, the same lawyer credited with winning Florida for Bush Jr. over Gore. Baker also served as President George H. Bush's Secretary of State. Doty was general counsel to the Securities and Exchange Commission (SEC) under the senior President Bush. He was SEC general counsel when the SEC investigated Bush Jr. for insider trading. Doty recused himself from the case, which was eventually closed without action. Bush Jr. was never interviewed. Although Bush's lawyers gave the "smoking gun" in that case to the SEC the day after it closed the investigation, Doty refused to reopen the case. (Washington Post, Nov. 1, 2002.)

September 2004: Nigeria's President Olusegun Obasanjo officially bans Halliburton from bidding on future government contracts because it violated safety regulations for nuclear material. The president accuses the company of negligently causing the disappearance of two highly sensitive radioactive devices used to take measurements in oil wells. The ban is apparently not related to the ongoing bribery investigations.

October 2004: Revelations about Halliburton's central role in the bribery investigation forces United Kingdom's Export Credit Guarantee Department (ECGD) to consider withdrawing its support of a 133 million (British pounds) loan made last year to Kellogg. ECGD said it originally supported the loan on the basis that Halliburton was merely a "subcontractor to the [TSKJ] consortium and financial arrangements were not their responsibility," but it was maintaining a "watching brief" on the French investigation. (The Independent, Oct. 3, 2004).

October 22, 2004: Investigators with Nigeria's parliament complain that Halliburton is not being cooperative in their investigation of the alleged bribery. The investigators say Mr. Tesler paid bribes on behalf of TSKJ to Nigerian government officials. The bribes were paid in installments: $60 million in 1995, $37.5 million in 1999, $51 million in 2001 and $23 million in 2002.

June 20, 2005: The French newspaper LeFigaro reports that a U.S. Justice Department official held "lengthy" meetings with French authorities in Paris on the issue of TSKJ bribes. It said an unnamed U.S. source asserted that the bribery scandal is "probably the most significant file of corruption" known in Washington today.

Sept. 22, 2006: A former Halliburton employee says he has evidence proving the company has embarked on a campaign to cover-up all wrongdoing, including attempts to mislead federal investigators.


Sources:

Solomon Hughes and Jason Nisse, "How Cheney's Firm Routed $132m to Nigeria via Tottenham Lawyer," The Independent (UK), Oct. 3, 2004.

Russell Gold and Charles Fleming, "Out of Africa: In Halliburton Nigeria Probe, A Search for Bribes to a Dictator," Wall Street Journal, Sept. 29, 2004, p.A1.

Michael Peel, "Nigeria gas consortium 'evasive', says probe chief," Financial Times (London), Aug. 23 2004.

Michael Peel, "Halliburton angers Nigerian MPs in 'bribes' hearing," Financial Times (London), Oct. 22, 2004.

"Halliburton 'backed' bribes probe agent," Financial Times (London), Sept. 16, 2004.

Middle East Economic Digest, April 9, 1999, p. 7.

Peter Behr, "Bush Sold Stock After Lawyers' Warning; SEC Closed Probe Before Receiving Letter From Harken's Outside Attorneys," Washington Post, Nov. 1, 2002.

Nigeria House of Representatives Petition Committee, Interim Report: The Halliburton/TSKJ/LNG Investigation, Summary of Facts, Sept. 2004.

Richard Whittle and Jim Landers, "Cheney's years at Halliburton under scrutiny," Dallas Morning News, Sept. 8, 2004.

Jim Landers and Richard Whittle, "Details emerge in bribery probe; Cheney isn't focus of French inquiry of Nigerian gas project," Dallas Morning News, Jan. 25, 2004.

Jim Landers and Richard Whittle, "Bribery case findings detailed; Halliburton says incidents predate ownership of firm," Dallas Morning News, Sept. 3, 2004.

Richard Whittle and Jim Landers, "Halliburton fires two consultants; Company says 'improper personal benefits' received in Nigerian gas deal," Dallas Morning News, June 19, 2004.

"Bush family lawyer James Doty hired to conduct internal probe of Halliburton involvement in Nigeria payments," Corporate Crime Reporter, February 16, 2004.

Ahamefula Ogbu, "$180m LNG Scam: Witnesses Stall Investigation," ThisDayOnline.com, Oct. 21, 2004.


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