JGC Corp in US$ 219 million bribery settlement

By Helen Wright07 April 2011

Japanese construction company JGC Corp has reached a US$ 218.8 million settlement with the US Department of Justice (DoJ) over its role in a decade-long scheme bribing Nigerian government officials.

JGC was part of the TSKJ consortium, which also included construction companies Kellogg, Brown & Root (KBR), Technip, and Snaprogetti. From 1994 through June 2004, the joint venture paid out nearly US$ 200 million in bribes in order to obtain and retain construction contracts worth over US$ 6 billion for Nigeria's Bonny Island Liquefied Natural Gas (LNG) facilities.

JGC's is the last company to reach a settlement over the bribery case, and its criminal penalty brings the total fines paid by the TSKJ companies to US$ 1.5 billion. The company said in January that it expected to report third quarter losses of JPY 20.1 billion (US$ 244 million) after agreeing the preliminary settlement with the DoJ together with a US$ 28 million settlement with Nigerian authorities.

Principal deputy assistant attorney general of the DoJ's criminal division, Mythili Raman, described the systematic bribery as "a massive conspiracy".

"The approximately $1.5 billion in criminal and civil penalties that have been imposed on the members of the joint venture far exceed their profits from the scheme. Foreign bribery is a serious crime, and as this case makes clear, we are investigating and prosecuting it vigorously," Ms Raman said.

Deferred prosecution

JGC pleaded guilty to one count of conspiracy and one count of aiding and abetting violations of the US Foreign Corrupt Practices Act (FCPA), but under the terms of the agreement, the DoJ said it would defer prosecution of JGC for two years. JGC, in turn, has agreed to retain an independent compliance consultant for that period.

JGC's US$ 218.8 million fine compares to KBR's fine of US$ 579 million, Technip's US$ 338 million fine and Snamprogetti's US$ 365 million fine.

KBR also reached a £ 7 million (US$ 11.2 million) settlement with the UK Serious Fraud Office (SFO) in February over the enrichment gained by its UK subsidiary, MW Kellogg.

In addition, Jeffrey Tesler, a former consultant to KBR and its joint venture partners, was fined US$ 150 million in March after pleading guilty to his role in the bribery scheme, while Wojciech Chodan, a former salesperson and consultant of MW Kellogg, has also pleaded guilty to conspiring to violate the FCPA and agreed to forfeit US$ 730000. Both are awaiting sentencing.

KBR's former CEO, Albert "Jack" Stanley, meanwhile, pleaded guilty in September 2008 to his participation in the bribery scheme. He is also scheduled to be sentenced this year.

Latest News
What will the cities of the future look like?
The world’s biggest cities will be located in different areas than today and will also look considerably different 
New chief executive for Cimic
Pedro Vicente has been promoted to be the group’s chief executive
Construction of underwater research facility
Drass Group will partner with Proteus Ocean Group on underwater research facility project