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 and employees of certain of its wholly owned subsidiaries in Africa and the Middle East engaged in various corrupt business transactions, which conduct earned profits of $54,486,410.
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.
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.
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, WOTME paid approximately $15,000,000 in volume discounts to the distributor.
On November 26, 2013, the DOJ filed an information against Weatherford, charging the company with violating the internal controls provisions of the FCPA. At the same time, the DOJ entered into a deferred prosecution agreement with Weatherford. Under the DPA, Weatherford agreed to pay a penalty of $87,178,256, although the penalty imposed on WSL would be deducted from the amount owed under the DPA.
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 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. 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.
