The Justice Department recently resolved two separate FCPA investigations under its Pilot Program. To be sure, DOJ’s resolution of these two matters reinforces the real and tangible benefits of its Pilot Program.
Linde
In the first case involving Linde North America Inc. and Linde Gas North America (“Linde”), two private New Jersey companies that are subsidiaries of a public German company, the Justice Department issued a letter dated June 16, 2017 (copy HERE), under which it declined to prosecute Linde and related companies and Linde agreed to pay approximately $11 million in disgorgement.
The offense conduct occurred from November 2006 to December 2009, when Linde, through its subsidiary, Spectra Gases, which it acquired in October 2006, made corrupt payments to Georgia officials at the National High Technology Center (“NHTC”), a state-owned entity, to purchase income-producing assets from the NHTC. Three Spectra executives agreed to share the profits earned from the sale of boron gas with high-level officials at the NHTC and a third-party intermediary in exchange for the NHTC officials’ assistance in securing approvals for the asset purchase. Spectra officials formed a company and added NHTC officials as part owners of the company. The profits generated were split 25-75 between the Spectra executives and the NHTC officials, respectively. Spectra earned approximately $7.8 million in profits from the transactions.
When Linde discovered the misconduct, it initiated an internal investigation, and withheld payments owed under the arrangement.
DOJ’s letter declining to prosecute Linde, cited the following: (1) Linde’s timely, voluntary self-disclosure; (2) Linde’s thorough and proactive investigation; (3) Linde’s full cooperation; (4) Linde’s agreement to disgorge the profits Spectra received and forfeit the corrupt proceeds to the United States; (5) Linde’s enhancement (and commitment to continue to enhance) its compliance program and its internal accounting controls; and (6) Linde’s full remediation, including terminating and/or disciplining employees involved in the misconduct).
CDM Smith
In the second case involving CDM Smith, Inc., a privately-held engineering and construction firm based in Boston, Massachusetts, the Justice Department issued a letter dated June 28, 2017 (copy HERE), in which it declined to prosecute CDM Smith, in exchange for which CDM Smith agreed to pay just over $4 million in disgorgement.
The offense conduct occurred from 2011 to 2015, during which employees of CDM Smith’s India operations and its India subsidiary paid bribes to officials at the National highways Authority of India (“NHAI”), India’s state-owned highway management agency and local officials in the state of Goa. Senior officials at CDM Smith approved and participated in the bribery scheme. CDM Smith paid approximately $1.18 million in bribes to secure contracts for highway construction supervision and design from NHAI and for a separate water project in Goa. CDM Smith funneled the bribes to NHAI using false subcontractors. CDM Smith earned approximately $4 million in profits.
DOJ’s declination letter cited: (1) CDM Smith’s timely, voluntary self-disclosure; (2) CDM Smith’s thorough and proactive investigation; (3) CDM Smith’s full cooperation; (4) CDM Smith’s agreement to disgorge the profits its companies received; (5) CDM Smith’s enhanced compliance program; and (6) CDM Smith’s full remediation, including terminating and/or disciplining employees involved in the misconduct.
