$5 Million Penalty Against Texas Company to Settle Charges of Bribing African Officials
The Securities and Exchange Commission announced Oct. 27 that a global water management, construction and drilling company headquartered in Texas has agreed to pay more than $5 million to settle charges that it violated the Foreign Corrupt Practices Act by making improper payments to officials in several African countries to obtain beneficial treatment and reduce its tax liability. This amount includes $3.9 million in disgorgement, $858,720 in prejudgment interest and a $375,000 penalty. In addition, the company must report to the SEC for two years on the status of its remediation and implementation of measures to comply with the FCPA. The SEC notes that these penalties reflect that the company self-reported its misconduct; cooperated with the SEC’s investigation by providing real-time reports of its investigative findings, producing English language translations of documents and making foreign witnesses available; and undertook an extensive remediation effort.
According to the SEC, the misconduct occurred from 2005 to 2010 and involved bribes typically paid through the company’s subsidiaries in Africa and Australia and in some cases falsely recorded as legal fees and commissions in the company’s books and records. The misconduct yielded approximately $3.9 million in unlawful benefits, including favorable tax treatment and obtaining customs clearance, work permits, and relief from inspections by immigration and labor officials in various African countries.