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While insider trading has been dominating the news, the
Foreign Corrupt Practices Act remains a key focus of securities regulators. The
Department of Justice continued to unwind a years long conspiracy to violate
the FCPA with the guilty plea yesterday of Wojciech J. Chodan, a former
commercial vice president and consultant to the U.K. subsidiary of Kellogg,
Brown & Root, Inc., now a subsidiary of Halliburton Company. Mr. Chodan
pleaded guilty to conspiring to violate the FCPA. The date for sentencing has
not been set.
The conduct on which Mr. Chaodan's plea is based traces
to 1990 and continued over the next fourteen years. At that time KBR,
Snamprogetti Netherlands B.V., Technip S.A. and another company formed a joint
venture to secure contracts from Nigeria LNG, Ltd., a company formed by the
Nigerian government which held a 49% interest. The government created the
company to capture and sell natural gas associated with oil production in the
country. The joint venture partners determined that bribes had to be paid to
From 1995 through 2004 the joint venture was awarded four
EPC contracts by Nigeria LNG Ltd. to build facilities on Bonny Island. KBR CEO
Albert Stanley and others met with a designated representative of the
government and negotiated the agreements and bribes. Mr. Chodan recommended
that the joint venture hire two agents to pay the bribes. One was a Gibraltar
corporation controlled by Jeffrey Tesler. The other was a Japanese trading
company. About $132 million was paid to the Gibraltar company. Another $50
million was paid to the Japanese trading company. At various points during the
venture Messrs. Stanley, Chodan and others met with government officials to
secure the appointment of a representative with whom they could deal.
Previously, KBR, Snamprogetti, Technip and Mr. Stanley
resolved their cases:
For more cutting edge commentary on
developing securities issues, visit SEC Actions, a
blog by Thomas Gorman.