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On March 23, former Bechtel Corp. executive Asem Elgawhary was sentenced to 42 months in prison and ordered to forfeit $5.2 million for accepting kickbacks in connection with a scheme to manipulate the bidding process for power contracts in Egypt. Elgawhary, a dual citizen of the U.S. and Egypt, pleaded guilty in December to violations of the mail fraud, conspiracy, and tax laws in federal court in Maryland. As the general manager of a joint venture between Bechtel and Egypt's state-owned oil company, Elgawhary accepted payments from three power companies in return for favorable treatment in the contract bidding process. One of those companies was Alstom, S.A., which last December pleaded guilty to a number of FCPA violations, including paying bribes to Elgawhary. As the recipient of the bribes, Elgawhary was not charged under the FCPA, but the DOJ nevertheless pursued numerous criminal charges against him, continuing its trend of attempting to address the demand side of foreign corruption as well as the supply side. Elgawhary's case also illustrates the risks inherent in entering into certain business relationships with state-owned or controlled entities; in the Alstom plea papers, Elgawhary, an executive of a U.S. company, was explicitly characterized as an "Egyptian official."
On December 4, Asem Elgawhary, a former vice president of Bechtel Corporation, pled guilty in federal district court in Maryland to mail fraud, conspiracy to commit money laundering, and obstruction and interference with the administration of the tax laws for his role in a kickback scheme to manipulate the bidding process for state-run power contracts in Egypt. From 1996 to 2011, Elgawhary was the general manager of Power Generation Engineering and Services Company (PGESCo), a joint venture between Bechtel and Egypts state-owned electric company. PGESCo helped the Egyptian electric company select subcontractors by soliciting bids and awarding contracts for power projects. Elgawhary admitted to taking $5.2 million in kickbacks from three power companies to give them an unfair advantage in the bidding process. The power companies and their consultants paid the kickback payments into various off-shore and Swiss bank accounts under the control of Elgawhary. Elgawhary, a dual United States and Egyptian citizen, was indicted in February 2014 and is due to be sentenced on March 23, 2015. It is worth noting that this case was not brought under the FCPA. The DOJ did not allege that Elgawhary was a Egyptian government official or that PGESCo, while a joint venture between Bechtel and the Egyptian state-owned electric company, was a state-owned enterprise for FCPA purposes. The case, though, follows in the footsteps of similar prosecutions of foreign government officials who received bribes and shows the U.S. governments increasing willingness to police foreign recipients of bribes, even if those bribes are only commercial bribes.
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