Global Anti-Corruption Insights - Arnold & Porter LLP

46 Pages·2014·15.32 MB·English

Global
Anti-Corruption
Insights
Update on Recent Enforcement, Litigation, and Compliance Developments
arnoldporter.com
Table of contents
EXECUTIVE SUMMARY: RECENT DEVELOPMENTS
AND TRENDS ________________________________________3
KEY US ENFORCEMENT AND INVESTIGATIVE
DEVELOPMENTS _____________________________________7
Notable Corporate FCPA Enforcement Actions
Resolved by the Justice Department and/or SEC ___________7
Justice Department and SEC Enforcement Actions against
Individuals for Violations of the FCPA __________________12
Top US Enforcement Officials Comment on FCPA _________17
DOJ Releases Opinion on Lawyer’s Payment of Medical
Expenses for a Foreign Official’s Daughter _______________18
Update on Industry-Wide Investigations _________________18
Rounding Out the Enforcement Docket __________________19
Court Vacates SEC Rule Requiring Oil Companies to Disclose
Foreign Payments ___________________________________22
FCPA-Related Civil Litigation _________________________23
US House of Representatives Establishes a Task Force to
Review Over-Criminalization _________________________24
GLOBAL ANTI-CORRUPTION UPDATE ________________25
Developments in the United Kingdom ___________________26
Canada Takes Steps to Increase Anti-Corruption Enforcement _29
Japan Launches Investigation of Deutsche Securities Inc. ___31
BRIC Countries Enhance Anti-Corruption Efforts _________31
G20 Leaders Adopt New Anti-Bribery Principles __________32
Transparency International Releases Its 2013 Corruption
Perceptions Index and Its Annual Progress Report _________33
CONCLUSION ________________________________________34
arnoldporter.com
EXECUTIVE SUMMARY: RECENT DEVELOPMENTS AND TRENDS
Following a first quarter in which neither the United States Department of Justice (DOJ or Justice Department) nor the
Securities and Exchange Commission (SEC or Commission) brought a Foreign Corrupt Practices Act (FCPA) enforcement
action, in 2013 the DOJ and the SEC combined to bring enforcement actions against nine companies (and certain of
their subsidiaries), collecting US$720 million in criminal fines, civil monetary penalties, and disgorgement—including
approximately US$300 million from five companies in the second half of 2013, after the publication of our summer
newsletter. These enforcement actions and other anti-corruption developments in the US, the UK, and around the rest
of the world highlighted ten significant trends:
DOJ And SEC Obtain US$720 Million in FCPA-Related Sanctions in 2013
The US$720 million in criminal fines, civil monetary penalties, and disgorgement obtained by the Justice Department
and the Commission through FCPA enforcement actions amounts to almost three times the US$260 million obtained
in 2012 and is the third highest yearly total ever, trailing only 2010 and 2008.
2000 1804.2
1800 25
1600
1400 20 5
1200
901.5 15
1000
5
645.8 657 720.6
800 3 14
10 4
600 2
260.6 5 8
400 141 5 6 5
200 1 4 2 3 2
0 0
2007 2008 2009 2010 2011 2012 2013 2009 2010 2011 2012 2013
DOJ Only DOJ + SEC SEC Only
Two actions resolved in 2013 resulted in sanctions that ranked among the top 10 in the history of FCPA enforcement:
Total S.A.’s US$398 million settlement now ranks fourth all time and Weatherford International’s US$152.6 million
now ranks tenth all time. At the other end of the range, Ralph Lauren Corp. resolved DOJ and SEC enforcement actions
through non-prosecution agreements (NPAs) for a combined US$1.6 million in sanctions.
In terms of the year ahead, 2014 opened with a third top 10 FCPA settlement—Alcoa’s US$384 million settlement now ranks fifth
all time. Furthermore, senior DOJ and SEC officials have stated publicly that a number of FCPA enforcement actions are working
their way through the enforcement “pipeline,” which may result in 2014 being another significant year for FCPA enforcement.
Cooperation Continues to Yield Reduced Sanctions
As in past years, voluntary disclosure of FCPA violations, cooperation with government investigations, and remediation
reportedly resulted in NPAs or deferred prosecution agreements (DPAs) and credit in determining fines and penalties.
For example, the DOJ accepted criminal fines discounted by approximately 30% from the bottom of the United States
Sentencing Guidelines range from three cooperating companies, and it agreed to fines at or close to the bottom of the
Sentencing Guidelines for three other cooperating companies, though what, exactly, differentiates these companies and
the outcomes they received is not entirely clear.
Global Anti-Corruption Insights | 3
Furthermore, Ralph Lauren’s cooperation with the authorities led to the first ever SEC NPA in an FCPA matter. As discussed
in our Summer 2013 newsletter, Ralph Lauren’s cooperation included (1) an amended anticorruption policy and translation
of the policy into eight languages, (2) enhanced due diligence procedures for third parties, (3) an enhanced commissions
policy, (4) an amended gift policy, and (5) in-person anti-corruption training for certain employees. By contrast, the SEC
penalized Weatherford International US$1.875 million for its lack of cooperation early in the SEC’s investigation. The
underlying misconduct cited in support of the penalty included informing the SEC staff that an employee was missing
or dead when he remained employed by Weatherford, allowing employees to delete emails prior to the imaging of their
computers, and permitting potentially complicit employees to collect documents subpoenaed by the SEC staff.
Hybrid Monitoring Emerges as a Condition of Settlement
In the second half of 2013, the DOJ required compliance monitors in three of the last four FCPA enforcement actions
that it resolved. In each case—Diebold, Inc.; Weatherford International; and Bilfinger SE—the DOJ acknowledged the
company’s cooperation and agreed to a hybrid arrangement—an independent compliance monitor for half the term of
the companies’ DPAs, followed by self-reporting for the other half. The DOJ also imposed hybrid monitoring in two
of the three enforcement actions resolved in 2012 that included monitoring requirements.
In other enforcement actions concluded in 2013, Total agreed to retain a compliance monitor for the full term of its three-
year DPA. The DOJ did not require compliance monitors in the other three enforcement actions (Parker Drilling Co., Ralph
Lauren Corp., and Archer Daniels Midland), noting the voluntary remediation undertaken by the companies involved.
The emergence of hybrid monitors, as well as cases in which independent monitoring was not required at all, reflects
the DOJ’s credit for companies’ efforts to enhance their compliance programs as part of their remediation.
The DOJ Continues Its Pursuit of Individuals
In addition to pursuing enforcement actions against companies, the DOJ continued its efforts to hold individuals accountable
for violations of the FCPA. The DOJ charged 14 individuals for FCPA and related violations in 2013, obtaining guilty
pleas from eight to date. Charges against the other six defendants are pending, with two cases—one alleging substantive
FCPA violations and money laundering against af ormer executive of Alstom, S.A. (which has not been the subject of an
FCPA enforcement action) and one alleging obstruction of a grand jury investigation engaged in by a French national—
scheduled for trial in 2014. These prosecutions demonstrate the DOJ’s willingness to pursue, among others, individuals
whose companies are not the subject of enforcement action, foreign citizens, and foreign government officials to whom
the FCPA does not apply but who have been targeted for FCPA-related violations, including money laundering.
Certain Industries Remain a Focus of Enforcement Efforts
While the enforcement actions brought by the DOJ and the SEC in 2013 reached companies in diverse lines of business,
specific industries remain well represented in year-end tallies. Energy companies Parker Drilling, Total, and Weatherford
International and medical device company Stryker joined other members of their industries that have been the subject
of FCPA enforcement. Given the success the DOJ and the SEC have had in targeting specific industries, this industry-
specific focus is unlikely to wane any time soon. Indeed, investigations into a number of pharmaceutical companies
and into financial institutions reportedly remain ongoing.
China Remains a Focus of Enforcement Efforts
The world’s second largest economy continues to be both a source of great opportunity and great risk, with several
companies being sanctioned for their conduct in China in 2013. The DOJ’s and SEC’s parallel enforcement action
against Diebold, and the DOJ’s prosecution of former Maxwell Technologies and former Alstom employees, all
involve conduct that occurred in China. Moreover, the industry-wide investigations into pharmaceutical companies
and financial institutions noted previously all reportedly involve particular business practices prevalent in China. With
Global Anti-Corruption Insights | 4
foreign investment in China growing rapidly year after year, and with China itself beginning to take a greater role in
investigating and prosecuting bribery by foreign corporations, this trend is expected to continue.
US Authorities Team with Foreign Enforcement Officials to Conduct
Multijurisdictional Investigations
Consistent with public pronouncements by senior Justice Department and Commission officials, the DOJ and the SEC
continue to work with their counterparts abroad to investigate potential violations of the FCPA. The DOJ, for example,
received assistance from British, French, and German authorities in connection with its investigations of Parker Drilling,
Total, and Archer Daniels Midland, respectively. This trend continued in early 2014, as the DOJ acknowledged the
cooperation of Swiss, Guernsey, Australian, and British authorities in the DOJ’s investigation of Alcoa.
The SEC Plans to Bring More Enforcement Actions in Administrative Proceedings
At a conference held in November, Kara Brockmeyer, Chief of the SEC Division of Enforcement’s FCPA Unit, stated that
the SEC plans to bring more of their FCPA enforcement actions in SEC administrative proceedings, rather than in federal
court. The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (Dodd-Frank) expanded the SEC’s ability
to obtain civil monetary penalties in SEC administrative proceedings, including in actions taken to enforce the FCPA, and
unlike actions filed in federal court, the settlements of SEC administrative proceedings do not require judicial approval.
While the SEC plans to use administrative proceedings more frequently in the future, to date no clear trend has emerged.
Of the corporate enforcement actions taken by the SEC in 2013 that involved charges being filed (excluding the SEC’s
NPA with Ralph Lauren), four—Parker Drilling, Diebold, Weatherford, and Archer Daniels Midland—were brought
in federal court, the latter two in December. This compares to three actions—Philips Electronics, Total, and Stryker
—brought in SEC administrative proceedings. In 2012, only one of eight corporate SEC enforcement actions was
brought administratively; in 2011, four of thirteen corporate SEC enforcement actions were brought administratively.
UK’s Serious Fraud Office Brings First Bribery Act Prosecution
In the United Kingdom, the Serious Fraud Office (SFO) brought its first bribery case under the Bribery Act and another
case under its predecessor, the Prevention of Corruption Act. Senior SFO officials continued to emphasize in public
statements the agency’s commitment to prosecuting bribery. 2013 ended with a disappointing development for the SFO,
however, when it was forced to dismiss its prosecution of Victor Dahdaleh, an alleged middleman who funneled bribes
in Bahrain, because it was unable to present witnesses to prove its charges.
Anti-Corruption Enforcement Efforts Continue around the World
One of the most significant developments in recent years may well be the evolution of anti-corruption efforts by countries
other than the US and UK. While still in their nascent stages, these efforts indicate a growing seriousness by countries
to hold companies and individuals accountable for corruption and bribery. Germany and Switzerland, for example,
have both become key players and are likely to remain so.
Of particular note, new anti-corruption efforts are being undertaken by emerging market countries that are considered
especially prone to corruption. The BRIC countries—Brazil, Russia, India, and China—have all recently enacted
more stringent anti-corruption laws and have begun taking tentative steps to enforce them. Xi Jinping, the president of
China, for example, vowed at the beginning of 2013 to crack down on what he termed “tigers” and “flies”—the most
and least powerful—in a nationwide anti-corruption drive. It remains to be seen just how vigorously these countries
actually investigate and prosecute corruption.
We analyze these trends, focusing on developments from the second half of 2013, and more in this edition of Arnold
& Porter’s Global Anti-Corruption Insights.
Global Anti-Corruption Insights | 5
KEY ENFORCEMENT AND INVESTIGATIVE DEVELOPMENTS
Global Anti-Corruption Insights | 6
KEY ENFORCEMENT AND INVESTIGATIVE DEVELOPMENTS
Notable Corporate FCPA Enforcement information for the DOJ; and remedial efforts undertaken
Actions Resolved by the Justice by Alcoa, including hiring new legal and ethics
compliance officers and implementing enhanced due
Department and/or SEC
diligence reviews of third-party consultants.3 The total
settlement amount of US$384 million is the fifth largest
FCPA settlement of all time.
US authorities have been investigating Alcoa’s business
dealings with Aluminum Bahrain B.S.C. (Alba), a state-
controlled aluminum smelting company, since at least
2008. The investigation came on the heels of a private
lawsuit that Alba filed against Alcoa in Pennsylvania
federal court seeking US$1 billion in damages from
Alba’s overpayment for raw materials as a result of
Alcoa’s alleged bribery—which, Alba asserted, violated
the Racketeer Influenced and Corrupt Organizations Act
(RICO). In October 2012, after four years of litigation,
Alcoa paid US$85 million to settle this suit.4
According to the DOJ and the SEC, Alcoa subsidiaries
agreed to use a London-based middleman with “close
Alcoa Resolves Charges of Criminal and ties” to certain members of Bahrain’s royal family in
order to obtain long-term alumina supply agreements
Civil FCPA Violations
with Alba. Through this middleman, his shell companies,
On January 8, 2014, Alcoa World Alumina LLC
and his offshore bank accounts, the subsidiaries funneled
(Alcoa World), which is controlled by US-based
kickbacks to government officials with influence over
aluminum producer Alcoa, Inc. (Alcoa), pled guilty
Alba’s contracting decisions. As part of its guilty plea,
in a Pennsylvania federal court to violating the FCPA’s
Alcoa World admitted to securing long-term supply
anti-bribery provision. Alcoa World agreed to pay the
agreements by causing Alcoa’s Australian subsidiary
DOJ US$209 million in criminal fines and to forfeit
to enter into a sham distributorship with various shell
US$14 million to resolve charges that it paid millions
companies owned by the middleman, who, from 2005 to
of dollars in illicit payments to officials in the Kingdom
2009, marked up the price of alumina by approximately
of Bahrain through a middleman in London.1 Alcoa
US$188 million. In its court filings, the DOJ alleged that
agreed to pay the SEC an additional US$161 million in
the middleman used this money to make tens of millions
disgorgement—US$175 million less the US$14 million
of dollars in illicit payments. In its administrative cease-
forfeiture to the DOJ—to resolve civil violations of the
and-desist order, the SEC made findings that Alcoa failed
FCPA’s anti-bribery, books and records, and internal
to conduct due diligence to determine whether there was
controls provisions.2 a legitimate business purpose for using the middleman.5
Alcoa World’s criminal fine is less than half of the
Although neither the DOJ nor the SEC named the
bottom of the fine range calculated under the Sentencing
middleman, he is reported to be billionaire Victor
Guidelines (US$446 million). The DOJ agreed that this
Dahdaleh, whom British authorities charged with paying
reduced fine was appropriate in light of such factors as
bribes to former Alba managers in connection with supply
the financial condition of Alcoa; the remedies imposed agreements.6 As we discuss in Section III.A.1 below, the
on Alcoa by the SEC; Alcoa’s substantial cooperation
SFO’s prosecution of Dahdaleh ended in dismissal in
with the DOJ, including making employees available
December 2013 after one witness changed his testimony
for interviews and collecting, analyzing, and organizing
and two other witnesses declined to appear.
Global Anti-Corruption Insights | 7
The DOJ acknowledged the assistance of foreign subsidiaries in their books and records as insurance
enforcement authorities including the SFO, the Office premiums and other business expenses.14 The SEC’s
of the Attorney General of Switzerland, the Guernsey Complaint alleges that the subsidiaries’ misconduct
Financial Intelligence Service, and the Australian went unchecked by ADM for several years because of its
Federal Police.7 The SEC also acknowledged the “insufficient” system of FCPA oversight.15 According to
assistance of the Office of the Attorney General of the DOJ, “concerns were expressed to ADM executives,
Switzerland and the Australian Federal Police, as well including an email calling into question potentially illegal
as the assistance of foreign authorities including the ‘donations’ by ACTI Ukraine and ACTI Hamburg to
Ontario Securities Commission, the Guernsey Financial recover the VAT refunds, yet [ADM] nonetheless failed
Services Commission, and the United Kingdom to implement sufficient anti-bribery compliance policies
Financial Control Authority.8 and procedures.”16
To settle the DOJ’s charges, ACTI Ukraine pleaded guilty
Archer Daniels Midland Pays More than
to one count of conspiracy to violate the anti-bribery
US$54 Million to Resolve Parallel DOJ
provisions of the FCPA and agreed to pay a US$17.8
and SEC Enforcement Actions
million criminal fine.17 The criminal fine amount reflects
On December 20, 2013, the DOJ and the SEC announced an approximately 30% reduction from the bottom of the
the resolution of parallel enforcement actions against fine range calculated under the Sentencing Guidelines as
Archer Daniels Midland Company (ADM), a global well as a US$1.3 million deduction commensurate with the
food processor based in Decatur, Illinois, and a subsidiary fine imposed by German authorities on ACTI Hamburg,
involving allegations of FCPA violations.9 The DOJ and in recognition of ACTI Ukraine’s “timely, voluntary,
the SEC alleged in actions filed in the US District Court and thorough disclosure of the conduct,” its cooperation
for the Central District of Illinois that ADM subsidiaries with the DOJ, and its “early, extensive, and unsolicited
paid roughly US$22 million to two vendors to pass on remedial efforts.”18
bribes to Ukrainian government officials between 2002
ADM entered into an NPA with the DOJ “in connection
and 2008 as part of a scheme to obtain over US$100
with the company’s failure to implement an adequate
million in value-added tax (VAT) refunds, and that ADM
system of internal financial controls to address the making
failed to implement policies and procedures sufficient to
of improper payments both in Ukraine and by an ADM
prevent these bribes.
joint venture in Venezuela.”19 In its press release, the
According to the SEC’s Complaint, Ukraine imposed DOJ acknowledges ADM’s voluntary disclosure of the
a 20 percent VAT on goods purchased in country, but conduct at issue and its extensive cooperation with the
exporters could apply for a refund of the VAT already paid DOJ, “including conducting a world-wide risk assessment
on exported goods.10 At times, however, the Ukrainian and corresponding global internal investigation, making
government delayed paying VAT refunds it owed or did numerous presentations to the department on the status
not make any refund payments at all.11 The SEC alleged and findings of the internal investigation, voluntarily
that in order to receive VAT refunds, between 2002 and making current and former employees available for
2008, two subsidiaries of ADM, Alfred C. Toepfer interviews, and compiling relevant documents by category
International Ukraine Limited (ACTI Ukraine) and for the department; and ADM’s early and extensive
Alfred C. Toepfer, International G.m.b.H. (ACTI remedial efforts.”20
Hamburg), “made improper payments, which were
To settle the SEC’s charges, ADM consented to the
generally 18-20% of the corresponding VAT refunds, to
entry of a final judgment ordering the company to pay
two third-party vendors so that they could pass on nearly
disgorgement of approximately US$33.3 million plus
all of the money to Ukrainian government officials … .”12
prejudgment interest of US$3.1 million.21 The final
In total, the two subsidiaries paid approximately US$22
judgment, which is subject to court approval, also requires
million to obtain over US$100 million in VAT refunds,
ADM to report on its FCPA compliance efforts for a three-
resulting in a benefit to the subsidiaries of approximately
year period. Like the DOJ, the SEC took into account
US$33 million.13 These payments were recorded by the
Global Anti-Corruption Insights | 8
ADM’s cooperation and significant remedial measures, government alleged that Bilfinger and Willbros formed
“including self-reporting the matter, implementing a a joint venture consortium and agreed to inflate the
comprehensive new compliance program throughout its price of their bid on the EGGS project by three percent
operations, and terminating employees involved in the to cover the cost of paying bribes to Nigerian officials.27
misconduct.”22 The conspirators referred to the bribes paid to Nigerian
officials as “landscaping” payments or “commitments,”
The DOJ’s Press Release acknowledged the cooperation
and Bilfinger employees used money that was mailed
and assistance of German law enforcement authorities,
or flown from Germany to Nigeria to pay the bribes.28
who reached a separate resolution with ACTI Hamburg
“When Willbros employees encountered difficulty
regarding its role in the scheme.23
Bilfinger Resolves Criminal FCPA obtaining enough money to make their share of promised
bribe payments, Bilfinger loaned Willbros US$1 million”
Enforcement Action by Paying
to pay some of the promised bribes.29
US$32 Million Fine
Bilfinger’s US$32 million fine falls within the US$28 -
On December 9 and 11, 2013, the FBI and the DOJ
US$56 million fine range calculated under the Sentencing
announced the resolution of their investigation into
Guidelines and takes into account the company’s
Bilfinger SE (Bilfinger), an international engineering
cooperation and remediation. Under the terms of the
firm based in Mannheim, Germany, through a three-year
DPA, Bilfinger also agreed to continue cooperating fully
DPA.24 Bilfinger agreed to pay a US$32 million penalty
with the Justice Department, continue to implement a
to resolve charges that it violated the FCPA by bribing
compliance and ethics program, implement rigorous
government officials in Nigeria to obtain and retain
internal controls, and retain an independent compliance
contracts related to the Eastern Gas Gathering System
monitor for at least 18 months.30
(EGGS) project, which was valued at approximately
US$387 million.25 The Bilfinger enforcement action is the latest in a series
of actions the DOJ has filed in connection with the
According to the three-count criminal information
EGGS project. In May 2008, Willbros and its subsidiary
filed by the DOJ in the US District Court for the
Willbros International Inc. entered into a DPA related
Southern District of Texas, from late 2003 through June
to the EGGS Project (as well as a separate issue in
2005, Bilfinger conspired with Willbros Group Inc.
Ecuador) that required them to pay a US$22 million
(Willbros) and others to pay more than US$6 million
criminal penalty.31 The terms of the Willbros DPA were
in bribes to Nigerian government officials to obtain
satisfied in 2012.
and retain contracts related to the EGGS project.26 The
Global Anti-Corruption Insights | 9
In addition, three former Willbros executives and a former The DOJ alleged that Weatherford “knowingly failed to
Willbros consultant were charged for their participation establish effective corruption-related internal accounting
in the conspiracy: controls designed to detect and prevent corruption-related
violations, including FCPA violations.”40 For example, due
„ In September 2006, former Willbros executive Jim
to Weatherford’s failure to implement effective internal
Bob Brown pleaded guilty to one count of conspiracy
controls, subsidiary Weatherford Services Limited
to violate the FCPA in connection with the EGGS
(Weatherford Services) allegedly retained a freight-
project.32 He was sentenced on January 28, 2010,
forwarding and logistics services company in 2006 to pay
to one year and one day in prison, two years of
bribes to an official in Africa to approve the renewal of an
supervised release, and a US$17,500 fine.33
oil services contract with a non-governmental entity, and it
„ In November 2007, former Willbros executive Jason
set up a joint venture with two local entities controlled by
Steph pleaded guilty to one count of conspiracy
foreign officials and their relatives for the “sole purpose”
to violate the FCPA in connection with the EGGS
of “funnel[ing] hundreds of thousands of dollars to the
project.34 He was sentenced on January 28, 2010, to
foreign officials.”41 Further, from 2005 through 2011,
15 months in prison, two years of supervised release,
employees of the Weatherford Oil Tools Middle East
and a US$2,000 fine.35
Limited subsidiary gave improper “volume discounts” to
„ In January 2008, former Willbros executive Kenneth a distributor, believing the distributor was creating a more
Tillery and Willbros consultant Paul Novak were than US$11.8 million “slush fund” for bribe payments.42
charged with conspiring to violate the FCPA anti- Weatherford allegedly realized over US$50 million in
bribery provisions, violating the FCPA anti-bribery profits from business obtained through the use of illicit
provisions, and conspiring to launder the payments payments in Africa and the Middle East.43
used to violate the FCPA’s anti-bribery provisions, in
To settle the FCPA charges, Weatherford Services pleaded
connection with the EGGS project.36 Novak pleaded
guilty to violating the anti-bribery provisions of the
guilty to one count of conspiracy to violate the FCPA
FCPA.44 In addition, Weatherford agreed to pay US$152.8
and one substantive count of violating the FCPA and
million to the US government—(1) US$87.2 million in
was sentenced to serve 15 months in prison, two
criminal fines to the DOJ pursuant to a DPA involving one
years of supervised release, and a US$1 million fine.37
count of violating the accounting provisions of the FCPA,
Tillery remains a fugitive.38
which is the bottom of the fine range calculated under
It remains to be seen whether the DOJ (or the SEC) will
the Sentencing Guidelines and (2) US$65.6 million in
pursue charges against individual Bilfinger employees.
disgorgement, prejudgment interest, and civil penalties to
the SEC, which includes “a $1.875 million penalty assessed
Weatherford International Pays Over
in part for lack of cooperation early in the investigation.”45
US$150 Million to Resolve Parallel DOJ
Weatherford’s combined monetary settlement ranks as
and SEC Enforcement Actions
the ninth highest in the history of FCPA enforcement. As
On November 26, 2013, Weatherford International part of the settlement, Weatherford also agreed to cease
(Weatherford), a Swiss-based oilfield services company and desist from violating the anti-bribery and accounting
with significant operations in Houston, Texas, and its provisions of the FCPA, to retain an independent corporate
subsidiaries resolved parallel enforcement actions compliance monitor for a period of 18 months, and to self-
brought by the DOJ and the SEC based on allegations report to the SEC for an additional 18 months.
that the company failed to implement an effective
At the same time the DOJ resolved the FCPA charges,
system of controls to prevent officials at Weatherford
Weatherford also resolved an investigation conducted
subsidiaries from providing “bribes and improper
by the DOJ, the Department of Commerce’s Bureau of
travel and entertainment for foreign officials in the
Industry and Security, and the Department of Treasury’s
Middle East and Africa to win business, including
Office of Foreign Assets Control. Pursuant to that
kickbacks in Iraq to obtain United Nations Oil-for-
settlement, Weatherford and four of its subsidiaries
Food contracts.”39
also agreed to pay a combined US$100 million to
Global Anti-Corruption Insights | 10