Former Rolls-Royce Managers Plead Guilty to U.S. Bribery Charges

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.

Foreign Corruption Is a Moral Outrage. But It’s Efficient: QuickTake Q&A

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

Former Rolls-Royce Managers Plead Guilty to U.S. Bribery Charges

Related Posts