A&O Shearman FCPA Digest | SEC v. ABB Ltd. (D.D.C. 2004)

Source Documents

Foreign Official
Officials of the National Petroleum Investment Management Service, the state-owned agency which oversees investment in petroleum (Nigeria); engineers at state-owned oil company (Angola); government official employed in state oil and gas companies (Kazakhstan).

Nature of Business
Provision of power and automation technologies, including oil and gas projects by ABB, Ltd. (“ABB”), a Swiss corporation, which has a number of direct and indirect subsidiaries that do business in the United States and in 100 foreign countries. Among its subsidiaries is ABB Vetco Gray, Inc., a Texas corporation, and ABB Vetco Gray U.K., Ltd., a British corporation (the “Subsidiaries”).

Influence to be Obtained
To assist ABB’s subsidiaries in obtaining and retaining business in Nigeria, Angola, and Kazakhstan. From 1998 through 2003, ABB’s U.S. and foreign‑based subsidiaries doing business in Nigeria, Angola, and Kazakhstan, offered and made illicit payments totaling over $1.1 million to government officials in those countries. In Nigeria, ABB’s subsidiary made improper payments (directly and through an intermediary) to officials of the National Petroleum Investment Management Service, the state‑owned agency which oversees investment in petroleum, to secure oil and gas projects in Nigeria. In Angola, ABB’s subsidiary made improper payments in the form of three training trips to Sonangol (state‑owned oil company) engineers to secure contracts. Finally, in Kazakhstan, an ABB subsidiary made payments to companies owned by a former employee of the subsidiary who was a government official to secure Kazakhstan government business for the ABB subsidiary.

Enforcement
In July 2004, without admitting or denying the allegations in the SEC’s complaint, ABB agreed to pay $5.9 million in disgorgement and prejudgment interest, $10.5 million civil penalty (which was deemed to be satisfied by the SEC as a result of two of ABB’s affiliates’ payments of criminal fines totaling the same amount in a parallel DOJ proceeding), and to retain an outside FCPA compliance consultant. In the DOJ proceeding, the ABB subsidiaries, ABB Vetco Gray, Inc. and ABB Vetco Gray U.K., Ltd., pled guilty to two felony counts of violating the FCPA and agreed to pay a $10.5 million fine.