Thursday, July 6, 2006

Four Former ABB Ltd. Employees Settle FCPA Civil Charges

Four former employees of a subsidiary of ABB Ltd., the international power equipment and automation company, settled an SEC civil action alleging that they violated the Foreign Corrupt Practices Act.  The defendants -- John Samson, former regional sales manager for West Africa, John Munro, former senior vice president of operations, Ian Campbell, former vice president of finance, and John Whelan, former vice president of sales -- are alleged to have paid bribes to Nigerian public officials to secure a $180 million contract to provide equipment for the Bonga Oil Field located offshore from Nigeria.  According to the SEC Litigation Release (here):

According to the complaint, as a result of the defendants' actions, during the period 1999 through 2001, ABB paid approximately $1 million in bribes to officials of National Petroleum Investment Management Services ("NAPIMS"), the Nigerian state-owned agency responsible for overseeing oil exploration and production in Nigeria. The Commission alleges that these illicit payments -- which took the form of both cash and gifts -- were intended to induce and reward NAPIMS officials for providing ABB with confidential competitor bid information, and securing favorable consideration of ABB's bid on the Bonga contract, which ultimately was awarded to ABB in early 2001.

The Commission alleges that during the tender process for the Bonga contract in 2000, Samson, the regional sales manager for West Africa, negotiated to pay six NAPIMS officials a total of $800,000 in bribes. The Commission further alleges that Samson subsequently informed Munro and Campbell of the payments promised to the NAPIMS officials. According to the complaint, at the direction of a senior officer (now deceased) of ABB's Vetco Gray U.S. subsidiary, Munro instructed Campbell and Samson to arrange payment to the NAPIMS officials using a local consultant as a conduit. The complaint alleges that Campbell arranged to funnel $800,000 in bribes to the consultant under the cover of false invoices for consulting work. The complaint also alleges that Samson personally profited from this bribery scheme by obtaining $50,000 in kickbacks from one the NAPIMS officials who received illicit payments.

In addition, the complaint alleges that between 1999 and 2001, Samson arranged for Whelan to provide cash and other gifts -- including lodging and meals -- to NAPIMS officials when they visited the United States. According to the complaint, these payments totaled more than $176,000.

As part of the settlement, Samson will pay a civil penalty of $50,000 and disgorge over $60,000, while the other three will pay civil penalties of $40,000 each.  ABB settled an SEC action in 2004 by paying $5.9 million in disgorgement and prejudgment interest, and a $10.5 million civil penalty.  (ph)

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