In a follow-on prosecution and end to a twisted investigation and enforcement path, SBM Offshore agreed to settle an FCPA enforcement matter for $238 million (including a $500,000 criminal fine and $13.2 million forfeiture). Under the agreement, SBM offshore entered into a three-year deferred prosecution agreement (DPA, copy here), and a US subsidiary entered a guilty plea to one count of FCPA conspiracy. The Justice Department declined to require a corporate monitor.
SBM Offshore’s settlement was expected given the recent unsealing of two criminal guilty pleas by Anthony Mace, a former CEO, and Robert Zubiate, a sales and marketing director. Shortly after the Justice Department’s announcement, the UK’s Serious Fraud Office charged two former SBM Offshore executives, Paul Bond, a Senior Sales Manager, and Stephen Whiteley, a former Vice President, for paying bribes to foreign officials in Iraq, using the infamous intermediary Unaoil. Two weeks ago, the SFO charged two other individuals with conspiracy to pay bribes to Iraqi officials. A third individual, Unaoil’s commercial director is the subject of an extradition request from Monaco.
SBM Offshore was the subject of an enforcement action in 2014 when US prosecutors declined to bring an enforcement matter based on lack of jurisdiction. Netherlands prosecutors reached a $240 million settlement with SBM Offshore for the foreign bribery violations.
In early 2016, the Justice Department re-opened the case based on information it learned as part of the Unaoil investigation. The new information implicated Robert Zubiate, a US citizen, who committed various acts in furtherance of the conspiracy in the United States. This new information established the Justice Department’s jurisdiction to prosecute the case in the United States. SBM Offshore did not earn credit for a voluntary disclosure but fully cooperated with the Justice Department’s investigation.
SBM Offshore’s corrupt conduct spread to numerous countries, including Brazil, Angola, Equatorial Guinea, Kazakhstan and Iraq. The factual statement outlining SBM Offshore’s conduct reads like a laundry list of every conceivable corrupt scheme.
From 1996 to 2012, SBM Offshore paid more than $180 million in commissions to intermediaries knowing that those commissions would be used to finance bribes to foreign officials in Brazil, Angola, Equatorial Guinea, Kazakhstan, and Iraq. SBM acknowledged that it gained at least $2.8 billion from projects in the five countries.
SBM Offshore executives oversaw the global bribery scheme. The CEOs maintained a detailed spreadsheet tracking bribery payments and projects earned. The spreadsheet was maintained in a safe and access to the safe was restricted to the CEOs and an administrative assistant. The CEOs used personal email accounts and faxes to avoid leaving a trail of communications related to bribery schemes.
Bribes were paid regularly through intermediaries through inflated commissions. The intermediaries maintained business accounts and related shell company accounts in Switzerland through which bribery payments were made to foreign officials at various state-owned oil and mining officials. The bribes were given in exchange for awards of contracts and inside information used to challenge bids or respond to government inquiries. In some cases, SBM offshore made payments through intermediaries to foreign officials in Sonangol, Angola’s state-owned oil and gas company, for services that were never provided.
SBM Offshore’s bribery strategy included payments of cash, gifts, hospitality, vehicles, travel for vacations and sporting events, tuition and financial support, employment of non-qualified relatives and other benefits to foreign officials and relatives. SBM Offshore employees used specific codes for bribery payments and benefits to disguise the payments and avoid detection.