This previous post went long and deep as to the Bilfinger enforcement action. This post continues the analysis by highlighting additional notable issues.
Comprehensive “Core” Enforcement Action
The Bilfinger enforcement action of course was not a new action (although it is likely to be counted as such in FCPA Inc. statistics).
Rather, the enforcement action is directly related to several other previous enforcement actions and thus part of one “core” enforcement action. As alluded to in the previous post, the core conduct at issue in the Bilfinger enforcement action – involving the Eastern Gas Gathering System (EGGS) project in Nigeria – has also been the focus, in whole or in part, in the following enforcement actions: Willbros Group (2008), James Tillery and Paul Novak (2008), Jason Steph (2007), and Jim Brown (2006).
This makes the ”core” EGGS FCPA enforcement action stand out in terms of its comprehensive nature in that the action targeted two joint venture participants (Bilfinger and Willbros), Willbros employees (Tillery, Brown and Steph) and Willbros’s consultant (Novak). Another FCPA enforcement action involving conduct in connection with the Bonny Island, Nigeria project was similarly broad in its scope (see here), but few FCPA enforcement actions are.
The question remains, why did it take approximately 5.5 years from the 2008 Willbros enforcement action for the Bilfinger enforcement action to occur? After all, Bilfinger was mentioned in the Willbros enforcement action as “a German construction company, a subsidiary or affiliate of a multinational construction services company based in Mannheim, Germany.”
Repeat – FCPA Settlements Have Come a Long Way in a Short Amount of Time
This recent post highlighted how FCPA settlement amounts have come a long way in a short amount of time and posed the question – have FCPA settlement amounts increased … just because?
Consider that the Bilfinger and 2008 Willbros enforcement action involved the same EGGS project.
The DOJ’s DPA in Willbros does not set forth a detailed advisory Sentencing Guidelines calculation as is the norm in most current FCPA DPAs, including the Bilfinger DPA, but the DOJ settlement amount in Willbros was $22 million. This $22 million settlement amount was in connection with not only the EGGS project, but also DOJ allegations that ”certain Willbros employees based in South America agreed to make approximately $300,000 in corrupt payments to Ecuadoran government officials of the state-owned oil company PetroEcuador and its subsidiary, PetroComercial, to assist in obtaining the Santo Domingo project, which involved the rehabilitation of approximately sixteen kilometers of a gas pipeline in Ecuador, running from Santo Domingo to El Beaterio.”
The DOJ settlement amount in Bilfinger was $32 million and this action involved only the EGGS project.
As a foreign company, the FCPA’s anti-bribery provisions apply to Bilfinger only to the extent a “means or instrumentality of interstate commerce” is used in connection with a bribery scheme. Of note, in the Bilfinger information, the “means and instrumentality” used to support one substantive FCPA anti-bribery charge was a “flight from Houston, TX, to Boston, MA to discuss promised bribe payments.”
As a foreign non-issuer company, the most logical section of the FCPA anti-bribery provisions that Bilfinger would be subject to is dd-3 - “prohibited trade practices by persons other than issuers or domestic concerns.”
Yet, the DOJ information charges Bilfinger under dd-1 applicable to issuers and dd-2 applicable to domestic concerns.
For more on this aspect of the Bilfinger enforcement action, see here.