On June 25, the U.S. Securities and Exchange Commission (SEC) and Department of Justice (DOJ) separately announced settled charges against Amec Foster Wheeler, a British multinational consultancy, engineering, and project management company, for violations of the anti-bribery provisions of Foreign Corrupt Practices Act (FCPA).
The charges stem from a scheme in which Amec Foster Wheeler paid bribes to Brazilian officials in exchange for an approximately $190 million contract to design a gas-to-chemicals complex. According to the agencies’ press releases, Amec Foster Wheeler agreed to pay over $43 million to settle charges connected to the scheme.
According to the SEC and DOJ, from 2012 to 2014, Amec Foster Wheeler engaged in the bribery scheme in an attempt to gain a contract, known as the UFN-IV project, from the Brazilian state-owned oil company Petroleo Brasileiro S.A. The SEC states that “[t]he bribes were paid through third party agents, including one agent who failed Foster Wheeler’s due diligence process, but was allowed to continue working ‘unofficially’ on the UFN-IV project.” Amec Foster Wheeler paid approximately $1.1 million in bribes and earned at least $12.9 million in profits from the corruptly obtained business.
“Amec Foster Wheeler has now admitted to paying bribes in Brazil to win a lucrative contract,” said Acting Assistant Attorney General Nicholas L. McQuaid of the Justice Department’s Criminal Division. “In the pursuit of profits, the company resorted to corruption, which distorts markets and undermines the rule of law. Today’s resolution, including the financial penalty and agreement to enhance compliance, underscores the Department of Justice’s commitment to holding companies accountable when they break the law and to rooting out criminal misconduct.”
“Continuing to use an agent who presented a significant corruption risk so that Foster Wheeler could expand its business and win a contract in Brazil demonstrates a fundamental flaw in the corporate compliance program,” said Tracy Price, Deputy Chief of the SEC Enforcement Division’s FCPA Unit.
The FCPA, passed by Congress in 1977, is a U.S. anti-corruption law that prohibits the payment of anything of value to foreign government officials in order to obtain a business advantage. It also contains accounting provisions which require publicly traded corporations to make and keep books and records that accurately reflect the transactions of the corporation. In 2010, the Dodd-Frank Act (DFA), which established the SEC Whistleblower Program, added whistleblower provisions to the FCPA. Individuals can disclose information relevant to potential FCPA violations to either the SEC or the Commodity Futures Trading Commission (CFTC).
Through the SEC and CFTC Whistleblower Programs, qualified whistleblowers, individuals who voluntarily provide the SEC or CFTC with original information that leads to a successful enforcement action, are entitled to a monetary award of 10-30% of funds recovered by the government. Additionally, under the DFA’s related action provisions, when a whistleblower’s disclosure to the SEC also leads to a successful enforcement action by another agency, the whistleblower is entitled to an award of 10-30% of funds recovered in that action. For example, a whistleblower whose disclosure leads to FCPA charges by both the SEC and the DOJ could be eligible for awards based on the sanctions collected by both agencies.
Whistleblowers do not need to be U.S. citizens in order to be eligible for SEC and CFTC whistleblower awards. According to the SEC Whistleblower Program’s 2020 Annual Report to Congress, in fiscal year 2020 the program received whistleblower tips from individuals in 78 foreign countries.
In May, the SEC issued a $28 million whistleblower award to an individual who blew the whistle on FCPA violations by Panasonic. According to the SEC, “Panasonic’s U.S. subsidiary, Panasonic Avionics Corp. (PAC), a provider of in-flight entertainment and communication systems, offered a lucrative consulting position to a government official at a state-owned airline to induce the official to help PAC in obtaining and retaining business from the airline.”
That award is part of a record fiscal year for the SEC Whistleblower Program. Since the 2021 fiscal year began on October 1, 2020, the SEC has awarded approximately $376 million to 73 individuals – both fiscal year records. Overall, the SEC has awarded more than $938 million to 179 individuals since issuing its first award in 2012.