PEMEX Files Suit to Recover $160 Million in Bribery Case

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Explore:  Bribery FCPA

Mexican state oil company Pemex has filed a lawsuit in New York seeking to recover nearly $160 million from Germany's Siemens and South Korea's SK Engineering & Construction Co. Ltd. in a global bribery case, a law firm representing Pemex said Wednesday.

Attorneys at Miami-based Diaz Reus filed an amended lawsuit in a U.S. District Court last week claiming Siemens and SKEC submitted an "unrealistically low bid" in 1996 to win a public contract for modernizing a Pemex refinery in Cadereyta, Mexico. Michael Diaz, Jr., the firm's global managing partner, alleged Siemens and SKEC then paid bribes to several officials at Pemex in exchange for processing fraudulent "cost overrun" invoices. Those invoices were apparently intended to fill the shortfall from the original underbid, according to Diaz.

In 2008, Siemens pleaded guilty to conspiring to commit violations of the U.S. Foreign Corrupt Practices Act and agreed to pay a $1.6 billion penalty to U.S. and European authorities to settle charges that it routinely used bribes and slush funds to secure massive public works contracts around the world, including refinery modernization projects in Mexico.

César Nava, the former chairman of Mexico's conservative National Action Party and Pemex's legal director at the time of the alleged fraud is named in the suit, EFE reported this week citing a report in Mexico's Reforma newspaper. Nava allegedly intervened to stop the company from collecting $102.8 million from Siemens and SKEC to compensate for contract violations in the overhaul of the Cadereyta refinery, the report states.

Inter-American Dialogue’s Latin America Energy Advisor
May 17, 2013

Topics:  Bribery, FCPA

Published In: Civil Remedies Updates, Criminal Law Updates, Energy & Utilities Updates, Government Contracting Updates, International Trade Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Michael Diaz Jr. - Diaz Reus International Law Firm | Attorney Advertising

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