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FCPA Blog Daily News

« The Victims Of Corruption | Main | From The Mailbag »
Wednesday
May142008

Willbros Resolves FCPA Offenses

Willbros Group Inc. has confirmed that it will pay $32.3 million and enter into a deferred prosecution agreement to settle civil and criminal Foreign Corrupt Practices Act charges with the Justice Department and the Securities and Exchange Commission.

As first detailed in Willbros third quarter 2007 earnings release reported on October 31, 2007 here, the FCPA violations involved former operations in Bolivia, Ecuador and Nigeria. The company will pay $22 million to settle the DOJ's criminal case and $10.3 million relating to the SEC's civil enforcement action. Its three-year deferred prosecution agreement with the DOJ requires appointment of a compliance monitor, the first announcement of such an appointment in an FCPA case in nearly three months. (The White Collar Crime Prof Blog has an interesting discussion here about the deferred prosecution agreement and selection of the monitor.)

The DOJ's twelve-count information included substantive violations of the FCPA's antibribery provisions and violations of the books and records provisions. All twelve counts relate to operations in Nigeria, Ecuador and Bolivia during the period from 1996 to 2005. The SEC's complaint alleged civil violations of the antifraud provisions of the Securities Exchange Act, the antibribery provisions, and the reporting, books and records and internal controls provisions.

Willbros is headquartered in Panama City, Panama and has its administrative offices in Houston, Texas. It provides construction and engineering services to industry and government entities worldwide, specializing in pipelines and associated facilities in onshore, coastal and offshore locations.

In November 2007, Willbros' former employee Jason Edward Steph, 37, entered into a plea agreement with the DOJ. He admitted violating the FCPA by conspiring to bribe officials of the government of Nigeria with more than $6 million. Steph is awaiting sentencing and faces five years in prison and a $250,000 fine. Steph said that in February and March 2005, he, former Willbros executive Jim Bob Brown, and others arranged for payment of approximately $1.8 million in cash to government officials in Nigeria. Brown pleaded guilty to a similar charge on Sept. 14, 2006 and is also awaiting sentencing. Both he and Steph have been cooperating with the government’s investigation.

Also named in the SEC's complaint were Gerald Jansen, a former administrative supervisor in Nigeria; Lloyd Biggers, a former employee in Nigeria; and Carlos Galvez, a former accounting employee in Bolivia. The allegations included a scheme to pay $300,000 to officials of an Ecuadorean state-owned oil and gas company and to avoid paying taxes in Bolivia.

The DOJ said, "In recognition of Willbros' [and its subsidiary's] thorough review of the improper payments, the companies’ exemplary cooperation, the companies’ implementation of enhanced compliance policies and procedures, and the companies’ engagement of an independent corporate monitor, the Department has agreed to defer prosecution of these companies for three years. If Willbros Group and Willbros International abide by the terms of the agreement, the Department will dismiss the criminal information when the term of the agreement ends."

Willbros Group, Inc. trades on the New York Stock Exchange under the symbol WG.

View prior posts about Willbros here.

View the DOJ's May 14, 2008 news release here.

View the SEC's Litigation Release No. 20571 / May 14, 2008 in Securities and Exchange Commission v. Willbros Group, Inc., et al., Civil Action No. 4:08-CV-01494 U.S.D.C./Southern District of Texas (Houston Division) here.

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