Friday, November 2, 2007

Willbros Set to Settle FCPA Investigations

Energy services firm Willbros Group Inc. disclosed in its third quarter 10-Q (here) that it has reached a tentative settlement with the Department of Justice and the SEC over violations of the Foreign Corrupt Practices Act.  The bribes involved former subsidiaries operating in Nigeria, Bolivia and Ecuador, and the company will enter into a three-year deferred prosecution agreement requiring it to pay over $40 million in criminal and civil penalties, disgorgement, and prejudgment interest.  According to the company's disclosure -- buried in the footnotes to its financial statements -- the settlement with DOJ will involve:

  • A twelve-count criminal information will be filed against WGI and WII as part of the execution of the DPAs between the DOJ and each of WGI and WII. The twelve counts include substantive violations of the anti-bribery provisions of the FCPA, and violations of the FCPA’s books-and-records provisions. All twelve counts relate to operations in Nigeria, Ecuador and Bolivia during the period from 1996 to 2005.
  • Provided that WGI and WII fully comply with the DPAs for a period of approximately three years, the DOJ will agree not to continue the criminal prosecution and, at the conclusion of that time, will move to dismiss the criminal information.
  • The DPAs will require, for each of their three year terms, among other things, full cooperation with the government; compliance with all federal criminal law, including but not limited to the FCPA; and a three year monitor for WGI and its subsidiary companies, primarily focused on international operations outside of North America, the costs of which are payable by WGI.
  • The Company will be subject to $22,000 in fines related to FCPA violations. The fines are payable in four equal installments of $5,500, first on signing, and annually for approximately three years thereafter, with no interest payable on the unpaid amounts.

This is another example of the growing trend to use deferred prosecution agreements in FCPA cases rather than full guilty pleas by companies. (ph)

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