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FCPA Blog Daily News

Entries in Congo (14)

Monday
Sep112017

New disclosure shows spreading Eni bribery probe

An SEC filing last week by a giant Italian oil company showed how a corruption investigation has grown, starting three years ago in Nigeria but spreading now to include Algeria, Congo, Kazakhstan and Kuwait.

Click to read more ...

Thursday
Feb112016

In high-graft countries, the roads are a bloodbath

Over the years, we've looked at the correlation between corruption and personal security, air safety, environmental degradation, risks of war, national debt problems, and general personal misery. Now let's look at corruption and road safety.

Click to read more ...

Tuesday
Sep092014

Even the Commerce Department can't find the conflict minerals

Image courtesy of the Conflict Minerals ConsortiumThe U.S. Department of Commerce has finally published its long awaited list of all known facilities that process tin, tantalum, tungsten, or gold -- the so-called “conflict minerals.” Despite taking an additional year and seven months past its original deadline set in the 2010 Dodd-Frank Act, and despite using the combined resources and efforts of the Commerce Department, the OECD, and the U.S. Geological Survey, the list is inconclusive.

Click to read more ...

Tuesday
Nov132012

Young people had big role in conflict mineral regulation

By now, most people in the compliance profession know that the Dodd-Frank Act created regulations on conflict minerals.  However, fewer know the role young people played in agitating on this issue.

Click to read more ...

Wednesday
Jun272012

Air Disasters And Corruption

Is there a link between air safety and corruption? We take a look.

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Thursday
Feb092012

Africa's Oil And Gas Corruption In The Spotlight

The NGO Global Witness has published a new report that says governments in Africa are awarding concessions and productions contracts to shell companies that may have ties to government officials.

Click to read more ...

Thursday
Dec162010

America's Newest Foggy Bottom

Does it make any sense to burden issuers and the SEC with Congress' foreign policy concerns du jour? Somehow we doubt it.

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Tuesday
Aug102010

SEC Charges Second Pride Exec

The former country manager in Venezuela for Pride International, Inc. last week settled civil FCPA charges with the SEC.

Joe Summers, a U.S. citizen who lives in John Day, Oregon, agreed to pay a civil penalty of $25,000.

From 2003 to 2005, Summers arranged payments of about $384,000 to third-party companies, "believing that all or a portion of the funds would be given to an official of Venezuela's state-owned oil company in order to secure extensions of three drilling contracts." Summers also approved a $30,000 payment through an intermediary to an employee of Venezuela's state-owned oil company to obtain the payment of receivables.

Summers' former employer, Pride International, said in February this year it has set aside $56.2 million for an expected settlement with the DOJ and SEC of FCPA offenses. The Houston-based oil-rig operator first disclosed potential compliance problems in 2006.

In December last year, the SEC accused a former Pride vice president, Bobby Benton, of violating the FCPA. The civil complaint against Benton alleged among other things that he deleted references in Pride's audits to about $384,000 in payments made by “the manager of the Venezuelan branch of a French subsidiary of Pride” to third-party companies. Pride self-disclosed the payments and cover-up after it learned about them through its internal investigation. The SEC's complaint against Summers included details about the Venezuelan bribes.

Pride has also disclosed that it found evidence of illegal payments from 2001 through 2006 directly or indirectly to government officials in Saudi Arabia, Kazakhstan, Brazil, India, Nigeria, Libya, Angola, and the Republic of the Congo. The payments related to clearing rigs and equipment through customs, resolving customs disputes, immigration, tax, licensing, and merchant marine issues.

The SEC's complaint against Summers charged him with violating Sections 13(b)(5) and 30A of the Securities Exchange Act of 1934 [15 U.S.C. §§ 78m(b)(5) and 78dd-1] and Rule 13b2-1 [17 C.F.R. § 240.13b2-1], and aiding and abetting Pride's violations of Sections 13(b)(2)(A), 13(b)(2)(B), and 30A of the Securities Exchange Act of 1934 [15 U.S.C. §§ 78m(b)(2)(B), and 78dd-1].

Pride International, Inc. trades on the NYSE under the symbol PDE.

View the SEC's Litigation Release No. 21617 and Accounting and Auditing Enforcement Release No. 3169 (both dated August 5, 2010) in SEC v. Joe Summers, Civil Action No. 4:10-cv-02786 (S.D. Texas, August 5, 2010) here.

Download the SEC's civil complaint against Summers here.

Wednesday
Feb172010

Pride Discloses Possible Settlement

Pride International, Inc. said this week it has set aside $56.2 million for an expected settlement with the Justice Department and the Securities and Exchange Commission of Foreign Corrupt Practices Act offenses. The Houston-based oil-rig operator first disclosed potential FCPA compliance issues in 2006.

In December last year, the SEC accused a former Pride vice president, Bobby Benton, of violating the FCPA. He allegedly bribed Mexican officials in 2004 and altered the company's accounts to hide the payments. The SEC's December 10 civil complaint, filed in federal court in Houston, seeks a civil penalty and disgorgement from Benton, as well as an injunction against future violations.

Pride earlier disclosed that its internal investigation found evidence of illegal payments from 2001 through 2006 directly or indirectly to government officials in Saudi Arabia, Kazakhstan, Brazil, India, Nigeria, Libya, Angola and the Republic of the Congo. The payments related to clearing rigs and equipment through customs, resolving customs disputes, immigration, tax, licensing and merchant marine issues.

Pride's February 16, 2010 release said:

Pride International, Inc. (NYSE: PDE) today announced that it has accrued $56.2 million in the fourth quarter of 2009 in anticipation of a possible resolution with the U.S. Department of Justice (DOJ) and the U.S. Securities and Exchange Commission (SEC) of potential liability under the U.S. Foreign Corrupt Practices Act. As described in Pride's quarterly and annual reports, the company voluntarily disclosed in 2006 to the DOJ and the SEC information relating to initial allegations of potential improper payments to foreign government officials and has continued to cooperate with the agencies' investigations. The accrual in the fourth quarter 2009 represents the company's best estimate of potential fines, penalties and disgorgement related to settlement of the matter with the DOJ and SEC. The monetary sanctions ultimately paid by the company to resolve these issues, whether imposed on the company or agreed to by settlement, may exceed the amount of the accrual.

We talked about Pride's February 2008 disclosure of its internal investigation here.

Friday
Dec112009

SEC Charges Ex-Pride VP

The Securities and Exchange Commission accused Bobby Benton, a former vice president of offshore drill rig operator Pride International, of violating the Foreign Corrupt Practices Act. He allegedly bribed Mexican officials in 2004 and altered the company's accounts to hide the payments. The SEC's December 10 civil complaint (below) was filed in federal court in Houston.

The SEC accused Benton of authorizing a third party to pay off Mexican customs officials and concealing bribes to Mexican and Venezuelan officials between 2003 and 2005. Benton allegedly deleted references in the audits to about $384,000 in payments made by “the manager of the Venezuelan branch of a French subsidiary of Pride” to third-party companies. The SEC said the alleged bribes went to a Venezuelan state-owned oil company official to extend three drilling contracts.

Pride disclosed in SEC filings including its latest quarterly report (here) an internal investigation into the company's Latin America operations that began in February 2006. It said possible FCPA violations were found, including payments of less than $1 million to government officials in Venezuela and Mexico. 

Benton is accused of authorizing a $10,000 bribe in 2004 to ensure a Mexican customs official would overlook deficiencies in a Pride supply boat. He's also accused of redacting references to another $15,000 bribe paid by an agent of Pride's Mexican subsidiary to keep a Mexican customs official from delaying a drilling rig for customs violations, according to the complaint.

The SEC is seeking a civil penalty and disgorgement from Benton, as well as an injunction against future violations.

Pride's internal investigation also found evidence of illegal payments of less than $2.5 million from 2001 through 2006 directly or indirectly to government officials in Saudi Arabia, Kazakhstan, Brazil, India, Nigeria, Libya, Angola and the Republic of the Congo. The payments related to clearing rigs and equipment through customs, resolving customs disputes, immigration, tax, licensing and merchant marine issues. 

The company self-disclosed the results of its investigation. It said it is in talks with the DOJ and SEC "regarding a potential negotiated resolution of these matters, which could be settled during 2009 and which . . . could involve a significant payment by us." It said a settlement is likely to "include both criminal and civil sanctions." The DOJ hasn't yet announced any enforcement actions involving Benton or the company.

View the Securities and Exchange Commission's December 14, 2009 Litigation Release No. 21335 in SEC v. Bobby Benton here.

Download the civil complaint in SEC v. Bobby Benton, Civil Action No. 4:09-CV-03963 (S.D. Texas, December 11, 2009) here.

Monday
Nov302009

Paris Punts On Probe

The lawsuit examining how three African rulers and their families managed to acquire dozens of luxury homes, cars and other assets in France has been stopped. A Paris magistrate had ordered the investigation in May at the request of Transparency International. See our post here. But last month an appellate court agreed with the Justice Ministry that TI lacked standing to bring the case.

The rulers named in the suit were Teodoro Obiang Nguema Mbasogo of Equatorial Guinea, Denis Sassou Nguesso of the Congo Republic, and Omar Bongo-Ondimba of Gabon. The Congo Republic and Gabon -- recently joined by Equatorial Guinea -- are important oil exporters. According to Reuters, the French oil and gas group Total SA  is "the leading producer in Gabon and Congo Republic and many other French firms, public and private, have long-term contracts there." 

William Bourdon, one of TI's lawyers, said: "Those in France and Africa who organize and take advantage of the looting of African public money will be celebrating with champagne." TI said it will ask France's Supreme Court (the Cour de cassation) to reinstate the investigation.

Gabon's President Bongo died in June. He had ruled the country since 1967, making him Africa's longest-serving head of state. His family owns 39 properties in France, Reuters said, mostly in exclusive districts of Paris and on the Riviera. The Congo Republic's Sassou-Nguesso and his relatives own 24 French properties, including a Paris mansion worth $28 million.

TI tipped police in 2007 to the African leaders' French assets. A preliminary police review identified "dozens of bank accounts, properties in rich districts of Paris and on the Riviera, and a collection of Bugattis, Ferraris, Maybachs, Maseratis and other luxury cars." The foreign rulers have denied using embezzled public funds to buy assets in France.

*   *   *

Another time, another surge. President Lyndon Johnson, during a June 8, 1965 phone call to Senate Majority Leader Mike Mansfield, said this about U.S. troops in South Vietnam and the generals' requests for reinforcements:

I don't see exactly the medium for pulling out. . . . Our 75,000 men are going to be in great danger unless they have 75,000 more. My judgment is and I'm no military man at all, but I study it every day and every night and I read the cables, I look back over what's happened in the last two years, the last four really, and if they get 150, they'll have to have another 150. And then they'll have to have another 150. . . .

But, unless you can guard what you're doing, you can't do anything. We can't build an airport, by God . . .  it takes more people to guard us in building an airport than it does to build the airport.

From the transcript of LBJ's Path To War, Bill Moyers' Journal, November 20, 2009.

Thursday
May072009

C'est Magnifique!

Francophile kleptocrats everywhere must be shaking in their Yves Saint Laurent double monk-strap black boots today, thanks to a Paris magistrate's ruling. He accepted a case brought by Transparency International that requires French authorities to investigate how three African rulers, their family members and friends managed to acquire numerous luxury homes, cars and other assets in France.

It's unusual to hear positive news from France about fighting graft. A few months ago, for example, the government decided French law prevents the prosecution of overseas bribery (Paris Pulls The Plug On Enforcement). So this marks a dramatic turnaround. There's one problem, though -- it might end soon.

The magistrate who made the ruling, Francoise Desset, is an independent investigator. But the justice ministry, through the public prosecutor's office, is already trying to quash his decision. There's concern the case and others that could follow would upset France's foreign policy.

The rulers named in the suit are Denis Sassou Nguesso of the Congo Republic, Omar Bongo-Ondimba of Gabon, and Teodoro Obiang Nguema Mbasogo of Equatorial Guinea. Gabon and the Congo Republic are former French colonies still close to Paris, while Equatorial Guinea is becoming an important oil exporter. The French oil and gas group Total SA, according to Reuters, is "the leading producer in Gabon and Congo Republic and many other French firms, public and private, have long-term contracts there."

Gabon's President Bongo has run the country since 1967 and thinks of France as his second home, according to Reuters. The BBC said "a 2007 French police investigation found the leaders of the three countries and their relatives owned homes in upmarket areas of Paris and on the Riviera along with luxury cars, including Bugattis, Ferraris and Maseratis."

If the investigation is allowed to proceed, Transparency International says the scope will be wide:

This judge will have to determine how the assets owned in France were acquired, and where the funds in the many bank accounts uncovered during a preliminary police investigation came from. The investigation will also throw light on the various intermediaries involved in the transactions under scrutiny, namely the banks identified by the police investigation whose compliance with anti-money laundering regulations is in question.
TI said it hopes the case will eventually lead to the right of restitution for the people of the three countries under the United Nations Convention Against Corruption, ratified by France in 2005.

Our thanks to Pete from DC for sending us a link to this story.

Read Transparency International's May 6, 2009 release here.
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