Mr Wojciech J. Chodan, a former commercial Vice President and consultant to a United Kingdom subsidiary of Kellogg, Brown & Root Inc. (“KBR”), pleaded guilty this month to conspiring to violate the Foreign Corrupt Practices Act (“FCPA”) for his participation in a decade-long scheme to bribe Nigerian government officials to obtain engineering, procurement and construction (“EPC”) contracts, according to the Department of Justice. The EPC contracts to build liquefied natural gas (“LNG”) facilities on Bonny Island, Nigeria, were valued at more than $6 billion.
Mr Chodan, a U.K. citizen, was extradited from the United Kingdom to the United States on Dec. 3, 2010, and pleaded guilty in the U.S. District Court in Houston before U.S. District Judge Keith P. Ellison to one count of conspiracy to violate the FCPA. Mr Chodan was originally charged on Feb. 17, 2009. Sentencing has been scheduled for Feb. 22, 2011. Mr Chodan faces a maximum penalty of 60 months in prison on the conspiracy charge. As part of his plea agreement, Mr Chodan agreed to forfeit $726,885.
Mr Chodan admitted that from approximately 1994 to June 2004, he and his co-conspirators agreed to pay bribes to Nigerian government officials, including top-level executive branch officials, in order to obtain and retain the EPC contracts. Mr Chodan recommended and agreed to the joint venture’s hiring of two agents, Mr Jeffrey Tesler and a Japanese trading company, to pay the bribes. During the course of the bribery scheme, the joint venture paid approximately $132 million to a Gibraltar corporation controlled by Mr Tesler and more than $50 million to the Japanese trading company. At crucial junctures preceding the award of EPC contracts, Mr Chodan and his co-conspirators met with successive holders of a top-level office in the executive branch of the Nigerian government to ask the office holders to designate a representative with whom the joint venture should negotiate the bribes to Nigerian government officials.
In related cases, KBR’s former CEO, Mr Albert Stanley, pleaded guilty in September 2008 to conspiring to violate the FCPA for his participation in the bribery scheme, while KBR’s successor company, Kellogg Brown & Root LLC, pleaded guilty in February 2009 to FCPA-related charges for its participation in the scheme to bribe Nigerian government officials. Kellogg Brown & Root LLC was ordered to pay a $402 million fine and to retain an independent compliance monitor for a three-year period to review the design and implementation of its compliance program. In addition, Mr Tesler was indicted in February 2009 on FCPA-related charges for his alleged participation in the bribery scheme, and the United States has requested his extradition from the United Kingdom.