FCPA Compliance and Ethics Blog

January 20, 2012

Another Nigerian Bribery Scandal Settlement and the NL MVP Award

Tomorrow Ryan Braun will accept the National League MVP Award. He will accept this award for having a superlative 2012 season; which, as reported by MLB.com, included a “Batting Average of .332 with 33 home runs and 111 RBIs while leading the Brewers to the NL Central title.” He will also accept this MVP Award while “facing a 50-game suspension after testing positive for elevated levels of testosterone late last season.”  Braun has appealed this suspension and the matter is currently in the appeals process.

The above came to mind as I read recent blog posts by the FCPA Professor and the FCPA Blog, that there is a new entry into the Nigerian-Bonney Island Bribery Scandal. That entrant is the Japanese trading company, Marubeni Corporation, which the Department of Justice announced it had settled an enforcement action with this past week. As reported by the FCPA Professor, Marubeni was retained by the joint venture, TSKJ, “to help it obtain and retain business in Nigeria, including by offering to pay and paying bribes to Nigerian government officials.”

Pursuant to the Deferred Prosecution Agreement, Marubeni agreed to pay a penalty of $54.6 million.  Marubeni was paid over $51 million for its services by TSJK so its overall penalty is assessed at slightly more than it received for services it rendered. As noted by the FCPA Professor, “ the advisory Sentencing Guidelines range for the charges at issue was $54.6 million – $109.2 million– a rare instance in which the fine amount is within the guidelines range.”

With this recent enforcement action we present the following updated Nigerian Bribery Scandal Box Score, new and improved with both Corporate and Individual Divisions:

                       SETTLEMENT BOX SCORE

Entity or Person Division Fine, Penalty and Disgorgement of Profits
Halliburton + KBR Corporate $579 Million
Snamprogetti & ENI Corporate $365 Million
Technip Corporate $338 Million
JGC Corporate $244 Million
Marubeni Corporate $54.6 Million
Corporate SubTotal $1.58 Billion
Jeffery Tessler Individual $147 Million
Wojciech Chodan Individual $700,000
Jack Stanley Individual (not yet determined)
Individual SubTotal $147.7 Million
Total (to-date) $1.72 Billion

So for those of you keeping score at home, there have been fines, penalties and profit disgorgement of over $1.72 billion. All of this for bribes paid on, by, or on behalf of TSJK. This JV won four contracts, worth more than $6 billion, from the Nigeria government between 1995 and 2004 to build LNG facilities on Bonny Island.

This total settlement figure does not include any potential costs going forward such as reduction of credit ratings, the payment of legal fees and any forensic accounting fees during the pendency of the DPA. The costs listed above do not include the total cost paid by Marubeni for its internal company investigation into this matter. However, based upon the reported fees to date paid by the other defendants, these investigation fees will surely be in the tens of millions of US$. Additionally the above Box Score does not take into account any fines or penalties paid by the defendants to the Nigerian government.

So what is the difference between Marubeni and Ryan Braun? It appears he can accept his MVP Award. Stay tuned for the results of his appeal and whether he can keep his MVP Award. Or as the English might say, “watch this space.” Good Friday to all.

This publication contains general information only and is based on the experiences and research of the author. The author is not, by means of this publication, rendering business, legal advice, or other professional advice or services. This publication is not a substitute for such legal advice or services, nor should it be used as a basis for any decision or action that may affect your business. Before making any decision or taking any action that may affect your business, you should consult a qualified legal advisor. The author, his affiliates, and related entities shall not be responsible for any loss sustained by any person or entity that relies on this publication. The Author gives his permission to link, post, distribute, or reference this article for any lawful purpose, provided attribution is made to the author. The author can be reached at tfox@tfoxlaw.com.

 © Thomas R. Fox, 2012

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