A&O Shearman FCPA Digest | SEC v. Jim Bob Brown (S.D. Tex. 2010)

Source Documents

Foreign Official
Officials of Nigerian Petroleum Corporation and its subsidiaries and joint ventures, Nigerian tax officials, Nigerian tax and court officials, officials of PetroEcuador.

Nature of Business
Procurement of contracts for oil and gas pipeline construction projects by Willbros International Inc. (“Willbros International”), a wholly-owned subsidiary of Willbros Group, Inc. (“Willbros Group”). Willbros is a Panamanian corporation listed on the New York Stock Exchange. Jim Bob Brown, a former employee of Willbros International, was a managing director of Nigerian and South American subsidiary operations of Willbros International from 2000 until his termination in 2005.

Influence to be Obtained
The SEC alleged that Brown and others, as employees on behalf of Willbros International, paid consultants to promise and make corrupt payments to foreign officials at the Nigerian and Ecuadorian government‑owned oil companies to obtain oil and gas pipeline construction business. The payments in Nigeria were part of a larger multi‑million dollar bribery scheme involving a former senior Willbros Group executive, a U.S. national acting as a purported “consultant,” and Nigeria‑based employees of a major German construction and engineering firm with whom Willbros participated in a consortium. The SEC also alleged that Willbros staff made payments dating back to 1996 to Nigerian tax and court officials to obtain favorable treatment for tax assessments and litigation.

Enforcement
On September 14, 2006, Brown pleaded guilty in a related criminal proceeding to violating the FCPA by conspiring with others to bribe Nigerian and Ecuadorian officials. Brown settled the civil action without admitting or denying the SEC’s allegations. The district court entered an interlocutory judgment on September 19, 2006, enjoining Brown from further violations, but stayed the proceedings with respect to issuing a civil penalty, pending sentencing in Brown’s related criminal proceeding. On January 28, 2010, Brown was sentenced in the criminal proceeding to 12 months and 1 day of imprisonment, supervised release of 2 years, a criminal fine of $17,500, and an assessment of $100. On May 10, 2010, the court terminated the action brought by the SEC, converting the interlocutory judgment to a final judgment without imposing any civil penalty.