ABB Ltd. ("ABB"), headquarters in Zurich, Switzerland, was a global provider of power and automation technologies. ABB Inc., was an indirect subsidiary of ABB and was incorporated under the laws of the State of Delaware.
From 1997 to 2004, one of ABB Inc.'s business units based in Sugar Land, Texas, ABB Network Management ("ABB NM"), paid bribes that totaled approximately $1.9 million to officials at Comisión Federal de Electricidad (CFE), a Mexican state-owned utility company. In exchange for the bribe payments, ABB NM allegedly received contracts worth more than $81 million in revenue.
On September 29, 2010, the DOJ filed an information against ABB Inc., charging the company with conspiracy to violate the anti-bribery provisions, violating the anti-bribery provisions, and aiding and abetting violations of the anti-bribery provisions of the FCPA. At the same time, ABB Inc. entered into a plea agreement with the DOJ under which it agreed to pay a criminal penalty of $28.5 million.
Although not criminally charged, ABB Ltd. entered into a three-year Deferred Prosecution Agreement with the DOJ on the same day. Under the terms of the DPA, ABB Ltd. agreed to pay a total monetary penalty in the amount of $30,420,000, or the bottom of the applicable combined Sentencing Guidelines fine range for ABB Inc. and ABB Ltd - Jordan. ABB Ltd would pay $28,500,000 on behalf of ABB Inc. in connection with ABB Inc.'s guilty plea and $1,920,000 on behalf of ABB Ltd - Jordan in connection with the Deferred Prosecution Agreement. This fine represented an upward adjustment in the applicable culpability score based on ABB Ltd.’s alleged status as a repeat offender.
At sentencing, however, Judge Lynn Hughes refused to rubber stamp the parties' settlement. Judge Hughes declared that ABB Ltd. was not a recidivist because the entire corporation could not be held responsible for the rogue actions of a few individuals. Judge Hughes then discounted the proposed increased culpability score for repeat offenses and reduced the size of the fine by roughly $13,000,000 to $17,100,000 – a fine at the lowest end of the applicable range for non-recidivists. Accordingly, ABB Ltd. was sanctioned a total of approximately $19 million - $17.1 million for ABB Inc. and $1.92 million for ABB Ltd - Jordan. ABB Inc. was ordered to pay a fine of $17.1 million, which was deducted from the penalty imposed on ABB Ltd.
