FCPA Scorecard Blog
Filter
Subscribe to our FinCrimes Update for news about the Foreign Corrupt Practices Act and related prosecutions and enforcement actions.
FORMER UNAOIL EMPLOYEE ADMITS TO PAYING BRIBE FOR LIBYAN GOVERNMENT CONTRACT
As a follow up to its March 2016 reporting about the Unaoil bribery scandal, the Huffington Post recently published an interview with a former Unaoil employee who has admitted to paying bribes to a manager in Libya’s state-owned oil company in order to win a government contract. Lindsey Mitchell, a former Unaoil manager, told the Huffington Post and the Australian newspaper The Age that in the summer of 2009 he was summoned to a meeting with a production manager at Waha, a subsidiary of the Libyan National Oil Company. At the meeting, the production manager provided Mitchell with details relating to an upcoming bid for a $45 million Libyan government contract. Huffington Post reports that “[t]he next morning, Mitchell called Ata, Cyrus and Saman Ahsani, the father and two sons who ran Unaoil. They were pleased. That afternoon, Martin Abram, a Unaoil manager, met Mitchell at the Unaoil staffhouse to deliver an envelope full of cash” which Mitchell delivered to the Waha manager. A few days later, Mitchell resigned. It is unclear whether Unaoil ever won the contract though the manager told Mitchell that “he expected a 5-10 percent kickback ― about $2-4 million ― if Unaoil won the contract.” According to the interview, Mitchell has recently been cooperating with U.S., U.K., Australian, and Canadian law enforcement authorities. Unaoil has denied Mitchells’ allegations and denies paying bribes to foreign officials in order to win deals for its multinational clients. Previous Scorecard coverage on the Unaoil investigations can be found here.
Unaoil Alleges Extortion Following Media Reports of Mass Bribery; Third Company Announces Government Inquiry Related to Relationship with Unaoil
On May 16, Unaoil released a statement denying claims made in a media report that linked the company to allegations of bribing foreign government officials to secure contracts within the oil and gas industry. The company stated it has "been the victim of a four-month extortion attempt by criminals," and that it is currently engaged with UK authorities. Separately, Core Labs, an Amsterdam-based oil services company, disclosed in a May 11 S-3 filing that the DOJ has questioned the company in relation to the Unaoil investigation. The company stated that it is cooperating with the DOJ's inquiries. Core Labs is the third company to disclose DOJ inquires as a result of the Huffington Post's investigation surrounding Unaoil and the companies that used its services. Previous Scorecard coverage on the Unaoil investigations can be found here.
FCPA Fallout from Huffington Posts Reporting About Unaoil
The Huffington Post's recently-published multi-part investigation centering on Monaco-based Unaoil and allegations of bribing foreign government officials to secure contracts within the oil and gas industry is starting to generate FCPA repercussions. Two companies that used Unaoil's consulting services and were identified in the investigative pieces, KBR and FMC Technologies, announced in late April U.S. securities filings that they each have received inquiries from the DOJ in connection with an FCPA investigation into Unaoil's activities. Both KBR and FMC Technologies also stated that they are cooperating with the DOJ's inquiries. In late March, the Huffington Post reported that "[h]undreds of major international corporations," including KBR, FMC Technologies, Rolls-Royce, Halliburton, Samsung, and Hyundai, among many others, utilized Unaoil's services to win contracts in the Middle East, Africa, and the former Soviet Union. The Huffington Post alleged that Unaoil engaged in widespread foreign bribery to achieve results for its clients: "The Monaco-based company specialises in paying bribes for multinational clients on the basis that it can deliver a valuable edge in bidding for oil and gas contracts worth hundreds of millions of dollars." Unaoil has said that it is "shocked" by the "unfounded" allegations and has said that it will defend itself and its management "vigorously." Houston-based KBR is no stranger to FCPA investigations. In 2009, KBR and its former parent Halliburton paid a then-record $579 million to resolve charges that KBR participated in a decade-long scheme to bribe Nigerian government officials to obtain engineering, procurement, and construction contracts. This time around, the Huffington Post alleged that KBR utilized Unaoil "to help it win oil and gas contracts in Kazakhstan." The alleged activity in Kazakhastan was occurring while the DOJ was investigating KBR's activities in Nigeria, according to the Huffington Post.