$6 million bribery scandal rocks politicians
Former consultant for Willbros International Inc. (WII), a subsidiary of Houston-based Willbros Group Inc. (Willbros), Paul G. Novak, yesterday admitted to engaging in a conspiracy to pay more than $6 million in bribes to Nigerian government officials as well as officials from a Nigerian political party.
It would be recalled that two Willbros employees had earlier pleaded guilty for their roles in the Eastern Gas Gathering System (EGGS) Project bribery scheme and Willbros had entered into a deferred prosecution agreement.
Assistant Attorney General Lanny A. Breuer of the Criminal Division and Assistant Director Joseph Persichini Jr., of the Federal Bureau of Investigation (FBI)'s Washington Field Office said Novak, 43, pleaded guilty before U.S. District Judge Simeon T. Lake III in Houston to one count of conspiracy to violate the Foreign Corrupt Practices Act (FCPA), and one substantive count of violating the FCPA. He is due to be sentenced on February 19, 2010.
According to PRNewswire-USNewswire, quoting sources from the U.S. Department of Justice, Novak in his plea admitted that from approximately late-2003 to March 2005, he conspired with others to make a series of corrupt payments totaling more than $6 million to various Nigerian government officials and officials from a Nigerian political party to assist Willbros in obtaining and retaining the EGGS project, which was valued at approximately $387 million. The EGGS project was a natural gas pipeline system in the Niger Delta designed to relieve existing pipeline capacity constraints.
According to information contained in plea documents, Novak, along with Kenneth Tillery, Jason Steph, Jim Bob Brown, three employees from a German construction company based in Mannheim, Germany agreed to make the payments to, among others, government officials from the Nigerian National Petroleum Corporation (NNPC), the National Petroleum Investment Manage-ment Services (NAPIMS), a senior official in the executive branch of the Federal Government of Nigeria, members of a Nigerian political party and officials from the Shell Petroleum Development Company of Nigeria Ltd. (SPDC). According to court documents, the bribes were paid to assist in obtaining and retaining the EGGS project and additional optional scopes of work.
"The use of intermediaries to pay bribes will not escape prosecution under the FCPA," said Assistant Attorney General Lanny A. Breuer. "The Department will continue to hold accountable all the players in an FCPA scheme - from the companies and their executives who hatch the scheme, to the consultant they retain to carry it out."
"The FBI is committed to investigating and weeding out corruption that inhibits honest business practices around the globe," said Assistant Director Persichini.
According to information contained in plea documents, to secure the funds for those corrupt payments, Steph and others caused Willbros West Africa Inc. (WWA), a subsidiary of Willbros, to enter into so-called "consultancy agreements" with two consulting companies Novak represented in exchange for purportedly legitimate consultancy services. In reality, those consulting companies were used to facilitate the payment of bribes. Specifically, the consulting companies would invoice WWA for purported consulting services and would receive payment from WII's bank account in Houston to the consulting companies' bank accounts in Lebanon. Novak would then use money from the Lebanese bank accounts to pay bribes to the various Nigerian officials.
: It would be recalled that two Willbros employees had earlier pleaded guilty for their roles in the Eastern Gas Gathering System (EGGS) Project bribery scheme and Willbros had entered into a deferred prosecution agreement.