Amec Foster Wheeler: The British Settlement – ‘Deplorable’ Conduct | Thomas Renard



During several blog posts last week, I reviewed the Amec Foster Wheeler Foreign Corrupt Practices Act (FCPA) resolution, primarily in light of the Deferred Prosecution Agreement (DPA) and the Cessation Order and forbearance (order) entered into with the Securities and Exchange Commission. (SECOND). The facts listed in both the DPA and the ordinance made for a fairly damning read on early Forster Wheeler and later Amec Foster Wheeler actions and culture. Now the UK resolution has been released and one can only marvel at the gravity of the facts listed in the UK resolution documents regarding Foster Wheeler’s corrupt conduct.

Perhaps not too surprisingly, much of Foster Wheeler’s business model was based on bribery and corruption. It turns out that this business model has been used by Foster Wheeler across the world, not just in Brazil. In the indictment, as set out by the Serious Fraud Office (SFO), Foster Wheeler engaged in acts of corruption in Saudi Arabia, Malaysia, Nigeria and India. This business model based on bribery and corruption dates back at least until 1996 and continued until the acquisition of Foster Wheeler by Amec. Given the pervasive nature of Foster Wheeler’s bribery and corruption as a business model, this makes the failures of Amec and later John Wood Group PLC in their pre-acquisition due diligence further more remarkable.

Lord Justice Edis, in his Judgment, also identified what he called a “clean-up” by Foster Wheeler’s board of directors after receiving a report on bribery and corruption in Saudi Arabia from the law firm Baker Botts LLP. This cleanup was an effort by Foster Wheeler’s board of directors to hide the facts underlying the report, not self-disclose and, equally important, not fix it, but to continue its program of corruption relentlessly. worldwide. Indeed, it now appears that if Foster Wheeler’s behavior in Brazil had not been uncovered via Lava Jato, none of Foster Wheeler’s conduct could have been revealed.

Nigeria

According to the indictment, from March 1996 until June 2004, Foster Wheeler employees conspired with others to make corrupt payments to officials of the Nigerian National Petroleum Company, Eleme Petrochemical Company Limited and the Central Bank of Nigeria, as an incentive to secure transactions for the benefit of Foster Wheeler. Later, between November 2003 and May 2004, Foster Wheeler employees conspired with others to make corrupt payments to Nigerian police and tax officials as an incentive and to settle a tax evasion allegation against Foster Wheeler (Nigeria) Limited.

Saudi Arabia

According to the indictment, between June 2004 and 2007, Foster Wheeler employees conspired with others to make corrupt payments, namely 403,000 Saudi Riyals, to “officials in the offices of the Saudi Ministry of Labor, as incentives and / or rewards to guarantee this blocking. visas were granted and / or processed more quickly for the FOSTER WHEELER ENERGY LIMITED and / or Foster Wheeler Arabia, Ltd. ”projects in Saudi Arabia. In another corruption scheme, between April 2007 and May 2007, in addition to the corruption scheme described above, Foster Wheeler employees conspired with “other people to make corrupt payments, namely 400,000 Saudi Riyals. to officials in the offices of the Saudi Ministry of Labor, as an incentive and / or reward to ensure that bulk visas have been granted for FOSTER WHEELER ENERGY LIMITED and / or Foster Wheeler Arabia, Ltd. ”.

Malaysia

According to the indictment, between March 1997 and January 2005, Foster Wheeler employees conspired with “others to make corrupt payments to one or more officials of the Malaysian state oil company Petronas, as incentives and / or rewards to ensure that Petronas would reward Foster Wheeler (Malaysia) Sdn. Bhd. a service contract within the framework of the Central Utility Facility project. In another bribery scheme in Malaysia, between September 2002 and March 2005, Foster Wheeler employees conspired with “other people to make a corrupt payment, namely GBP 819,338, to one or more officials of the oil company. of Malaysian State Petronas, as a reward for awarding Petronas to Foster Wheeler (Malaysia) Sdn. Bhd. a service contract within the framework of the MLNG Tiga Plant project. In a latest bribery program in Malaysia, between 2002 and 2010, Foster Wheeler employees and others made corrupt payments “to one or more officials of the Malaysian state oil company Petronas, as inducements. and / or awards to ensure that Petronas awards Foster Wheeler (Malaysia) Sdn. Bhd. a service contract within the framework of the Melaka Co-Generation project. “

India

Corruption has also spread to India. According to the indictment, between 2005 and 2012, Foster Wheeler employees conspired with “other people, to make corrupt payments to officials of the Indian Oil Corporation Limited as inducements and / or rewards. for Indian Oil Corporation Limited to award, and assist in maintaining, FOSTER WHEELER ENERGY LIMITED a contract for the provision of front-end engineering and design services on the Paradip Refinery Project. “

Cleaning

Judge Edis left his most damning language for the actions of Foster Wheeler’s board after being made aware of the corruption allegations in Brazil. He wrote about a Foster Wheeler board minute of November 5, 2007, during which the Foster Wheeler directors received and discussed Baker Botts’ report on the bribe system and Saudi corruption. Apparently five of Foster Wheeler’s staff were named as participants or with knowledge of the program and, as the Court noted, they were “very superior”. The court went on to say: “The offense is extremely serious and its persistence despite what the Council discovered in 2007-2009 makes it all the more so.”

Judge Edis went on to say: “This document suggests to me that the main board of FWL was primarily concerned with minimizing the adverse consequences of the breach for the group. In my opinion, the correct course to take, not out of legal obligation, but out of concern for ethical corporate governance, was to report known facts to the SFO. Baker Botts made another report in July 2008, regarding “potential corruption in four other countries. Baker Botts’ report on the Malaysian infringement is dated October 2008. The fact that no report was made on any of his discoveries at the time by the company means that it may be more difficult to investigate and prosecute individual offenders now. I recognize that there was no legal obligation to report suspected crimes to the authorities, but there is a moral duty to all citizens in this regard which extends at least to businesses as well. This failure of the FWL board of directors is deplorable. It is made worse by the fact that their efforts to fight corruption, even within their own organization, have been unsuccessful.. ” [emphasis supplied]

Join us tomorrow as we continue to explore the John Wood Group PLC settlement with the SFO.

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