By STEPHANIE OSTROWSKI
WASHINGTON (Legal Newsline) – Charges made under the Foreign Corrupt Practices Act have been settled by Parker Drilling Co. for an $11.76 million penalty.
Parker Drilling, of Houston, allegedly knew if it authorized a payment to an intermediary party, the money would be used to corruptly influence the decision of a Nigerian government panel reviewing Parker Drilling’s adherence to Nigerian customers and tax laws.
The investigation of Parker Drilling stemmed from the Justice Department’s Panalpina investigations, which previously resulted in criminal resolutions between Panalpina and five oil and gas service companies and subsidiaries, ultimately causing more than $156 million in criminal penalties.
On April 16, the Justice Department filed a deferred prosecution agreement, charging Parker Drilling with violating the FCPA’s anti-bribery requirements.
During 2001 and 2002, Panalpina World Transport (Nigeria) Ltd. was working on behalf of Parker Drilling. Panalpina allegedly avoided certain costs that comply with Nigeria’s customs laws by fraudulently claiming the Parker Drilling rigs were exported and then re-imported into Nigeria.
According to the claim, in late 2002, Nigeria formed a government commission, the Temporary Import Panel, to investigate whether Nigeria’s Customs Service had collected certain duties and tariffs that Nigeria was due.
In December 2002, the TI commenced proceedings and later determined that Parker Drilling violated Nigeria’s customs laws and assessed a $3.8 million fine.
Rather than pay the fine, Parker Drilling contracted indirectly with an intermediary agent to resolve customs issues, according to court documents. The agent received $1.25 million from Parker Drilling from January to May 2004 and allegedly used it to fund entertainment for government officials.
The agent was able to reduce Parker Drilling’s TI Panel fines from $3.8 million to just $750,000, the DOJ says.
According to the terms of the agreement, the Justice Department has deferred prosecution of Parker Drilling for three years. After three years, if Parker Drilling abides by the terms agreed upon, the department will dismiss the charges.
Parker Drilling has agreed to implement an enhanced compliance program and internal controls capable of preventing and detecting FCPA violations, report at random to the department regarding compliance efforts, and to cooperate with the department in ongoing investigations.
The charges were announced by acting Assistant Attorney General Mythili Raman of the Criminal Division and U.S. Attorney Neil H. MacBride for the Eastern District of Virginia.
A settlement was also reached with Parker Drilling and the U.S. Securities and Exchange Commission for allegedly violating the FCPA’s anti-bribery, books and records, and internal controls provisions. Parker Drilling has agreed to pay $3.05 million in disgorgement and $1.04 million in prejudgment interest.