Corporate Crime Reporter
18 Corporate Crime Reporter 28(1), July 6, 2004
ABB Units Plead Guilty to Bribery
Two subsidiaries of the Swiss giant ABB Ltd. pled guilty today to criminal violations of the Foreign Corrupt Practices Act (FCPA).
Both companies entered guilty pleas before U.S. District Court Judge Vanessa Bilmore in Houston.
Each company was fined $5.25 million.
The Justice Department brings only a handful of such criminal bribery charges against major multinational corporations every year.
A French judge investigating a parallel bribery scandal in Nigeria involving a unit of the Houston-based Halliburton has drawn international media attention to the failure of the U.S. officials to aggressively enforce the FCPA.
But the charges brought against ABB in Houston might be the opening shot in a new round of criminal prosecutions under the law.
Federal officials charged that ABB Vetco Gray, based in Houston, and ABB Vetco Gray UK Ltd. based in Aberdeen, Scotland, paid bribes to officials of NAPIMS, a Nigerian government agency that evaluates and approves potential bidders for contract work on oil exploration projects in Nigeria.
Federal officials alleged that the companies paid more than $1 million in exchange
for
obtaining confidential bid information and favorable recommendations from Nigerian
government agencies in connection with seven oil and gas construction contracts
in
Nigeria from which the companies expected to realize profits of almost $12 million.
ABB
Vetco Gray Inc., the U.S. subsidiary, is charged under 15 USC Section 78dd-2,
the FCPA section applying to "domestic concerns."
ABB
Vetco Gray UK Ltd. is charged under 15 USC Section 78dd-3, the FCPA section
that was added in 1998 to implement the OECD Convention on Combating Bribery
of Foreign Public Officials in International Business Technology.
That
section expands the law’s coverage to foreign companies that take an act
in furtherance of the bribe of a foreign official while in the United States.
The
case represents only the second time that the Justice Department has charged
a company with violation with this provision of the law.
In
a separate action, the Securities and Exchange Commission sued the parent company,
ABB Ltd.
The
SEC complaint alleges violations of anti-bribery, books and records, and internal
control provisions of the FCPA, arising from suspected payments in Nigeria,
Kazakhstan and Angola.
ABB
Ltd. has agreed to a civil settlement that includes the hiring of an outside
consultant to review its system of internal controls, disgorgement of profits
and pre-judgement interest of $5,915,405.64, and a civil penalty payment of
$10.5 million.
Under
the terms of the agreement, the SEC imposed civil payment was offset by the
payment of the criminal fine.
ABB
Ltd. voluntarily disclosed the suspicious payments to the Department of Justice
and the SEC in late 2003.
Subsequently, the company agreed to provide "real-time" disclosure of the results of a joint investigation conducted by lawyers for ABB Ltd. and lawyers representing the purchasers of ABB's Vetco Gray group of companies.
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