The defendant Weatherford International Ltd. ("Weatherford") was a multinational corporation that provided equipment and services to the oil industry. Weatherford Services, Ltd. ("WSL"), was a wholly owned subsidiary of Weatherford, and managed most of Weatherford's activities in Angola. Weatherford Oil Tool Middle East Limited ('WOTME") was also a wholly owned subsidiary of Weatherford and was incorporated in the British Virgin Islands and headquartered in Dubai. Weatherford Mediterranean S.p.A. ("WEMESPA"), a third wholly owned subsidiary of Weatherford is based in Ortona, Italy.
The first bribery scheme centered around a joint venture which WSL and other Weatherford employees established with two local Angolan entities, Angolan Company A and Angolan Company B. WSL sought a way to increase its share of the well screens market in Angola, and Sonangol was encouraging oil services companies to establish well screens manufacturing operations in Angola with a local partner. An Angolan Official advised WSL that Sonangol had selected local partners for WSL and that Sonangol would support the joint venture. Under the terms of the agreement, an Angolan-based Weatherford entity and Angolan Company A each owned forty-five percent (45%) of the joint venture, while Angolan Company B owned the remaining ten percent (10%). The purpose of the joint venture was to serve as a conduit to funnel illicit payments to officials in order for WSL to win contracts, in part by receiving leaked information about competitor pricing.
In late 2005, the Angola Cabinda project was put out for public bid. During the bid process, the Sonangol Drilling Manager demanded a bribe from a Weatherford area manager. In late 2005 or early 2006, the Sonangol Drilling Manager met with a WSL regional manager and another WSL employee and repeated his demand for a bribe payment. The employees agreed to pay the Sonangol Drilling Manager $250,000 in installments in exchange for his approval of the Cabinda contract, as well as additional payments in order to maintain a good general relationship with Sonangol.
In the Congo, WSL used the freight forwarding agent to pay over $500,000 in commercial bribes to employees of a commercial customer. The bribes were mischaracterized as legitimate expenses on WSL's books and records.
In the Middle East, Weatherford subsidiary WOTME, awarded improper "volume discounts" to a distributor who supplied Weatherford products to a government-owned national oil company. Those discounts were believed to be used to create a slush fund in order to make bribe payments to decisionmakers at the national oil company. From 2005 to 2011, Weatherford granted the distributor $11,800,000 in volume discounts intended to influence national oil company officials to obtain and retain sales contracts.
From May 2005 to November 2008, Weatherford provided improper travel and entertainment to officials of Sonatrach, an Algerian state-owned company, that were not justified by a legitimate business purpose. The improper travel an entertainment include a June 2006 trip by two Sonatrach officials to the FIFA World Cup soccer tournament in Hanover, Germany; a July 2006 honeymoon trip of the daughter of a Sonatrach official; and an October 2005 trip by a Sonatrach employee and his family to Jeddah, Saudi Arabia, for religious reasons that were improperly booked as a donation.
Beginning around August 2000, the Iraqi government demanded that suppliers of humanitarian goods pay a kickback, usually valued at 10% of the contract price, to the Iraqi government in order to be awarded a contract by the government. From February 2002 to July 2002, WOTME paid approximately $1,470,128 in kickbacks to the government of Iraq on nine contracts with Iraq's Ministry of Oil, as well as other ministries, to provide oil drilling and refining equipment.
From at least 1998 to 2007, Weatherford and its subsidiaries employed various schemes to conceal transactions with Cuba, Iran, Syria and Sudan ("sanctioned countries") that violated U.S. sanctions and export control laws. Generally, these laws prohibit business transactions with sanctioned countries that involve U.S. persons, companies or goods. Employees of Weatherford and its subsidiaries falsified books and records to hide sanctioned countries transactions, and Weatherford failed to have adequate internal accounting controls to prevent or detect the conduct.
On November 26, 2013, the SEC filed a complaint against Weatherford, charging the company with violating the anti-bribery, books and records, and internal controls provisions of the FCPA. At the same time, Weatherford consented to the entry of final judgment permanently enjoining the company from future violations. Weatherford agreed to pay $59,337,937 in disgorgement, a $1,875,000 civil penalty, and $4,399,423 in prejudgment interest.
In a separate matter, between 1998 and 2007, Weatherford International and some of its subsidiaries engaged in conduct that violated various U.S. export control and sanctions laws. Weatherford and its subsidiaries agreed to pay a $50,000,000 civil penalty, and the DOJ also imposed a $48,000,000 monetary penalty on Weatherford pursuant to a deferred prosecution agreement. The DOJ is also imposing a criminal fine of $2,000,000 pursuant to guilty pleas by two of Weatherford’s subsidiaries, for a combined total penalty of $100,000,000 from the U.S. government.
