FCPA Compliance and Ethics Blog

January 3, 2014

The FCPA Year in Reivew-the eBook

I am pleased to announce the release of my eBook, “2013-the FCPA Year in Review” available through amazon.com. The past year saw the highest number of U.S. prosecutions of corporate bribery overseas since the banner year of 2010.  Some of the key corporate cases were Parker Drilling, Total and Weatherford. 2013 also saw 13 individuals prosecuted for FCPA or related criminal or civil violations. This jump in prosecutions illustrates the government’s commitment to aggressively pursuing these cases.

In this book, I review the underlying facts which led to the FCPA enforcement actions and the key lessons to be learned by the compliance practitioner going forward. I am certain that you will find this book useful in assessing your compliance program for 2014 and beyond.

It is a great value at $4.99. You can purchase a copy of the eBook, “2013-the FCPA Year in Review” by clicking here.

May 6, 2013

And Then There Was One – Willbros Related FCPA Enforcement Continues

Last week, the US Department of Justice (DOJ) announced the sentencing of Paul G. Novak, a former consultant of Willbros International, Inc., a subsidiary of the Houston based Willbros Group, for his role in a conspiracy to pay more than $6 million in bribes to government officials of the Federal Republic of Nigeria and officials from a Nigerian political party. According to the DOJ Press Release announcing the sentencing, “Novak pleaded guilty to one count of conspiracy to violate the Foreign Corrupt Practices Act (FCPA) and one substantive count of violating the FCPA. Novak admitted that from approximately late-2003 to March 2005, he conspired with others to make a series of corrupt payments”. Novak was sentenced to serve 15 months in a federal prison.

The sentencing continues the long running saga of the company over efforts by Willbros, Novak, certain employees and others to make a series of corrupt payments totaling more than $6 million to various Nigerian government officials and officials from a Nigerian political party to assist Willbros and its joint venture partner, a construction company based in Mannheim, Germany, in obtaining and retaining the Eastern Gas Gathering System (EGGS) Project, which was valued at approximately $387 million. The EGGS project was a natural gas pipeline system in the Niger Delta designed to relieve existing pipeline capacity constraints.

The company itself paid $32.3 million and entered into a Deferred Prosecution Agreement (DPA) to settle civil and criminal FCPA charges with the DOJ and Securities and Exchange Commission (SEC). According to the FCPA Blog, in a post entitled “Willbros Resolves FCPA Offenses”, “the FCPA violations involved former operations in Bolivia, Ecuador and Nigeria.” The DOJ’s “information included substantive violations of the FCPA’s antibribery provisions and violations of the books and records provisions. All twelve counts relate to operations in Nigeria, Ecuador and Bolivia during the period from 1996 to 2005. The SEC’s complaint alleged civil violations of the antifraud provisions of the Securities Exchange Act, the antibribery provisions, and the reporting, books and records and internal controls provisions.” The company paid $22 million to settle the DOJ’s criminal case and $10.3 million relating to the SEC’s civil enforcement action. The company agreed to a three-year DPA with the DOJ and had a corporate monitor.  The company successfully completed its DPA, which was discharged in 2012.

In addition to the charges against the company and Novak, three former Willbros employees were also indicted over the FCPA violations. According another post by the FCPA Blog, entitled “Prison for Ex-Willbros Execs”, two of these former Willbros executives received and successfully served prison time. “Jim Bob Brown, 48, was sentenced in federal court in Houston to one year and one day in prison and fined $17,500; Jason Edward Steph, 40, was sentenced to 15 months and fined $2,000. Steph, who once served as general manager of on-shore operations for Willbros International, pleaded guilty in November 2007. He said in his plea that in 2005 he, Brown, and others arranged to pay about $1.8 million in cash to Nigerian officials. Brown pleaded guilty in September 2006 to conspiracy to violate the FCPA.” This brings the sentencing for Willbros related FCPA violations up to date as the following:

Sentencing Box Score

Entity or Person Fine DPA Time and Resolution Jail Time
Willbros Group, Inc. and Willbros International Inc. $22MM to DOJ$10.30MM to SEC 3 year DPA with Monitor. Successfully completed.
Jim Bob Brown $17,500.00 12 months and one day in prison, 2 years supervised release.
Jason Steph $2,000.00 15 months in prison, 2 years supervised release
Paul Novak $1MM 15 months in prison, 2 years of supervised release

A third former company executive, James Tillery, had been previously charged with conspiring to bribe Nigerian and Ecuadorian government officials to obtain and retain gas pipeline construction and rehabilitation business from state-owned oil companies in those countries. Tillery was indicted for one count of conspiracy to violate the FCPA, two counts of violating the FCPA in connection with the authorization of specific corrupt payments to officials in Nigeria and Ecuador. Tillery was alleged to be a Willbros International employee and executive from the 1980s through January 2005. From 2002 until January 2005, he served as executive vice president and later as president of the company. Novak was an employee in the mid-1990s and later worked as an oil and gas consultant in Nigeria, purporting to provide consulting services to companies in that field.

Interestingly, in 2010, Tillery was arrested in Lagos, Nigeria. As reported by the FCPA Blog, in a post entitled “Tillery’s Extraction”, he was “seized by the Federal Bureau of Investigation (FBI) in Lagos and is being held by American authorities.” However, at some point later, the process was ceased due to intervention by the “Nigerian high court had halted the extradition at least until the end of the month because due process wasn’t followed.” In yet another twist to the saga, Tillery had apparently renounced his US citizenship and “had since naturalized as a Nigerian.” The FCPA Blog quoted a report from a Nigerian press source who said “normal extradition procedures weren’t followed and characterized Tillery’s arrest as an “extraction” and a “forceful extradition.””

So, now there is one left from the Willbros FCPA enforcement action, that being James Tillery. The Willbros bribery scheme was one of the most comprehensive and certainly one of the early cases in the post-2004 increase in growth regarding enforcement actions. It will be interesting to see if Tillery ever has to answer the charges brought against him in connection with this matter.

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, 2013

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