On January 22, 2013, Griffiths Energy International Inc. (GEI), a privately held oil and gas company based in Calgary, plead guilty to bribery charges under the Corruption of Foreign Public Officials Act (CFPOA). GEI had admitted to paying $2 million to officials in Chad to secure a contract for oil exploration blocks.
The bribe was paid in the form of consulting contracts between GEI and a company owned by the Chadian ambassador’s wife. GEI’s new management team discovered the irregular payment in 2011 when preparing to take the company public and conducting due diligence. Management launched an internal investigation headed by outside counsel, which lasted 5 months and cost $5 million. The IPO was also cancelled, costing an additional $1.8 million.
GEI reported the results of the internal investigation to the RCMP, U.S. Department of Justice and federal and provincial prosecutors. The company agreed to pay a fine $9 million plus a victim surcharge of 15% for a total of $10.35 million. According to the Crown, the fine would have been substantially higher had GEI not investigated itself and cooperated with the authorities. Justice Brooker, the presiding judge, is expected to confirm the final sentence on January 25.
This is the fourth time a company has been charged under the Corruption of Foreign Public Officials Act. It is the largest fine ever imposed under the Act. There is no indication that the illegal payments resulted in any business advantages for the company, which is not a requirement to secure a conviction under the Act.
There is an active investigation of Griffiths for the same conduct under the American Foreign Corrupt Practices Act. The Globe and Mail reports that the Crown prosecutor in Calgary indicated that he did not expect the American authorities to proceed with the investigation now that the matter has been dealt with in Canadian courts. This may be based on information available to the Crown. Certainly, in the past, American authorities have not hesitated to prosecute violations of their Foreign Corrupt Practices Act simply because a foreign country has already prosecuted a party for the same conduct. In 2010, the Fifth Circuit Court of Appeal affirmed the conviction of Gi-Hwan Jeong for bribing American officials at military bases in South Korea. Mr. Jeong had already been convicted of the same crime by a South Korean court.