Two former Rolls-Royce Holdings Plc executives pleaded guilty to U.S. charges that they orchestrated international bribes at the engine maker for more than a decade.
The cases, also involving three other individuals, focus on efforts to secure a $145 million contract to power a gas pipeline from Kazakhstan to China. The action comes about 10 months after Rolls agreed to pay $800 million to resolve probes in the U.S., U.K. and Brazil. The bribes occurred from 1999 to 2013 in Africa, the Mideast and South America, prosecutors said.
The guilty pleas were unsealed Tuesday in federal court in Ohio. James Finley, formerly responsible for energy sales at Rolls, pleaded guilty in July to two charges, including conspiring to violate the foreign corruption law. Keith Barnett, also once a senior executive, admitted a single conspiracy charge.
Rolls-Royce said it’s committed to “full ongoing co-operation” with the U.S. Department of Justice but can’t comment on actions against individuals, adding that the energy business involved was divested in 2014. The group’s shares were trading 0.7 percent lower at 969 pence as of 9:46 a.m. in London.
Aloysius Zuurhout, a former employee at a Dutch subsidiary of Rolls, also admitted a single charge, as did Andreas Kohler, a consultant to Asia Gas Pipeline LLC, a venture between China and Kazakhstan that helped facilitate bribes to at least one Kazakh official. Lawyers for the four men didn’t respond to requests for comment.
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Petros Contoguris, a Turkey-based adviser on oil and gas projects, was indicted on 19 charges including arranging corrupt payments and money laundering. Rolls made payments to his company knowing that funds would be shared with a high-ranking Kazakh official of KazMunayGas National Co., according to prosecutors. Efforts to identify counsel for Contoguris were unsuccessful.
The investigation started in 2012 after allegations of bribery at Rolls-Royce emerged in various internet postings, provoking the company to tell the U.K.’s Serious Fraud Office about them. Rolls started an internal inquiry, and in 2013 the SFO opened a formal probe which the agency said Wednesday is continuing.
Cooperation from the engine giant with the SFO was key in the decision to offer the company a deferred-prosecution agreement, lawyers for the agency told the court. The SFO reviewed more than 30 million documents.
The charges reflect the DOJ’s push to prosecute individuals for corporate misconduct, which was prioritized in the waning years of the Obama administration. This year, at least 16 people have been convicted of charges tied to violations of the U.S. Foreign Corrupt Practices Act.
The convictions are “another example of the Criminal Division’s commitment to holding individuals — and not just corporations — accountable for violating the FCPA,” said Acting Assistant Attorney General Kenneth Blanco.
By Tom Schoenberg
— With assistance by Benjamin D Katz
www.bloomberg.com, 08.11.2017
