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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 acquire business.
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.