A&O Shearman FCPA Digest | SEC v. Parker Drilling Company (E.D. Va. 2013)

Source Documents

Foreign Official
Officials and employees of the Nigerian Minister of Finance, Nigeria State Security Service, Nigeria Customs Service; Nigerian President—appointed “Panel of Inquiry for the Investigation of All Cases of Temporary Import Permits.”

Nature of Business
Parker Drilling Company is a publicly-listed drilling-services company headquartered in Houston, Texas, with subsidiaries operating throughout the world, including Parker Drilling (Nigeria) Limited, a wholly owned subsidiary incorporated in the Cayman Islands.

Influence to be Obtained
According to the complaint filed by the SEC, in 2001 and 2002 Parker Drilling failed to pay certain tariffs and duties associated with Nigeria’s Customs & Excise Management Act of 1958. When the Nigerian government formed a panel to investigate companies’ compliance with the Act, it found that Parker Drilling had violated Nigeria’s laws, and it assessed a fine of $3.8 million against the company. During these proceedings, Parker Drilling allegedly retained a Nigerian agent to help resolve the customs issues. Parker Drilling authorized payments to this Nigerian agent totaling $1.25 million, most of which were paid through Parker Drilling’s U.S. law firm. The Nigerian agent used those funds, in part, to entertain Nigerian government officials involved with the customs issues. Subsequently, Parker Drilling’s fine was reduced to $750,000—a reduction of $3.05 million, or approximately 80%.

Enforcement
On April 16, 2013, the SEC filed a complaint against Parker Drilling, alleging violations of the anti-bribery, books-and-records, and internal controls provisions of the FCPA. Parker Drilling consented to a final judgment permanently enjoining the company from future violations of the FCPA and agreed to pay $4,090,818 in disgorgement and prejudgment interest.

In a related criminal action, Parker Drilling entered into a three-year deferred prosecution agreement with the DOJ under which the company agreed to pay a monetary penalty of $11.76 million.