On Tuesday, January 17, 2012, the U.S. Department of Justice ("DOJ") filed a deferred prosecution agreement requiring Marubeni Corporation ("Marubeni") to pay $54.6 million in criminal penalties for its participation in a conspiracy to bribe Nigerian officials in violation of the U.S. Foreign Corrupt Practices Act ("FCPA").1 The deferred prosecution agreement requires Marubeni to retain a corporate compliance consultant for two years and to cooperate with the DOJ's ongoing investigations. The criminal charges against Marubeni will be dropped after two years so long as Marubeni abides by the terms of the deferred prosecution agreement. Marubeni is the fourth non-U.S. company, and the second Japanese company, to face criminal charges in this matter. The charges against Marubeni are yet another stark reminder of the DOJ's interpretation of the FCPA's expansive jurisdictional reach.
THE BONNY ISLAND CONSPIRACY
The Marubeni case stems from a scheme by a four-company, multinational joint venture to bribe Nigerian officials in exchange for contracts to build liquefied natural gas facilities on Bonny Island, Nigeria.2 The criminal information filed by the DOJ accuses Marubeni of being an agent through which bribes were paid. The members of the joint venture were Technip S.A.; Snamprogetti Netherlands, B.V.; Kellogg Brown & Root Inc. ("KBR") (a Halliburton subsidiary); and JGC Corporation.
The joint venture, TSKJ, was formed in 1991 in order to bid on and complete the Bonny Island project. Between 1995 and 2004, TSKJ was awarded four contracts by Nigeria LNG Limited, a corporation formed by the Nigerian government to develop the Bonny Island project. Interestingly, only 49% of Nigeria LNG was owned (indirectly) by the Nigerian government. The remaining 51% was held by multinational oil companies. Nevertheless, officers and employees of Nigeria LNG were considered "foreign officials" for purposes of the FCPA.
In order to secure these contracts, a "Steering Committee" comprised of executives from each of the joint venture owners agreed to hire Jeffrey Tesler, a U.K. citizen, to arrange and pay bribes to high-level Nigerian officials. The Steering Committee agreed to hire Marubeni, a Japanese company headquartered in Tokyo, to arrange and pay bribes to lower-level Nigerian officials. TSKJ ultimately paid Marubeni $51 million to use to bribe the officials. The contracts awarded to TSKJ were valued at over $6 billion.
Marubeni is only...