The TSKJ joint venture is the gift that just keeps on
giving, at least for FCPA prosecutors. The most recent involves Marubeni
Corporation which admitted to being an agent of the venture and agreed to
settle FCPA charges. The company entered into a two year deferred prosecution
agreement with the Department of Justice and agreed to pay a criminal fine of
$54.6 million. Marubeni also agreed to retain a corporate compliance
consultant, to install new procedures and improve others and to cooperate with
the DOJ's on-going investigation. The underlying information charges the
company with one count of conspiracy and one count of aiding and abetting FCPA
violations. At the end of the two year term the information will be dismissed
if the company complies with its obligations. U.S. v. Marubeni Corporation, (S.D.Tx.).
The TSKJ joint venture was formed in 1990 by Technip
S.A., Snamprogetti Netherlands B.V, Kellogg Brown & Root, Inc. and JGC
Corporation. The purpose of the venture was to secure contracts from Nigeria
LNG, Ltd., a company created by the Nigerian government to capture and sell
natural gas associated with oil production in that country. The government
retained a 49% interest in Nigeria LNG.
The joint venture determined that bribes had to be paid
to secure business. As part of its efforts, the venture retained two agents,
according to the court documents. One was Jeffrey Tesler, a U.K. solicitor. The
other was Marubeni, a Japanese trading company headquartered in Tokyo. Mr.
Tesler served as a consultant to the venture and paid bribes to high-level Nigerian
government officials. Those included top level executive branch officials.
Marubeni was retained to pay bribes to lower level government officials. At key
points, a number of the co-conspirators, including employees of Marubeni, met
with senior executive level government officials to determine with whom they
should meet to negotiate bribes in connection with the awarding of contacts,
according to the court papers. The joint venture is alleged to have paid about
$132 million to a Gibraltar corporation controlled by Mr. Tesler and $51
million to Marubeni during the course of the scheme. The payments were intended
to be used at least in part to bribe Nigerian government officials.
Previously, each member of the TSKG joint venture
resolved FCPA charges with the DOJ:
The settlements with the four members of the TSKJ joint
venture are among the largest in FCPA history. Indeed, each is part of the
current "top ten" largest FCPA settlements.
Finally, three individuals have pleaded guilty in
connection with the activities of the venture. Mr. Tesler was extradited from
the UK. Subsequently, he pleaded guilty to conspiring to, and violating, the
FCPA. As part of that plea agreement he agreed to forfeit $148,964,568.
Wojeiech J. Chodan, a former sales person and consultant of the UK subsidiary
of KBR, was also extradited and pleaded guilty to conspiring to violate the
FCPA. He agreed to forfeit $726,885. Albert Stanley, the former head of KBR,
pleaded guilty to conspiracy to violate the FCPA and a count of wire fraud.
For more cutting edge commentary on
developing securities issues, visit SEC Actions, a
blog by Thomas Gorman.
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