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U.S. v. Baker Hughes Inc.

 
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Baker Hughes - Baker Hughes Inc.
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DOJ Criminal
:
April 6, 2007
:
U.S. v. Baker Hughes Inc.
:
U.S. v. Baker Hughes Inc., No. 4:07-cr-00130-1 (S.D. Tex. 2007)
:
At the time this proceeding was filed, it contemplated the largest aggregate penalty in an FCPA proceeding. The combined penalty of $44 million included disgorgement of over $23 million. One factor in the severe penalty was Baker Hughes's violation of its 2001 cease and desist order with the SEC.
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Energy (Non-Utility)-Oil & Gas-Other/Multi
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Kazakhstan
:
2001; 2002; 2003
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State oil company (Kazakhoil)
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In February 2000, Baker Hughes Inc., through its U.S. subsidiary, Baker Hughes Services International ("BHSI"), submitted a bid for a services contract relating to the development of Karachaganak, a large gas and oil field in northwestern Kazakhstan.

In September 2000, the company received unofficial notification that it would win the contract. However, later that month Kazakhoil officials demanded that BHSI retain an unidentified consulting firm and related agent to secure approval of the Karachaganak contract and pay the firm a commission based on BHSI’s revenues from the contract. Shortly thereafter BHSI entered into a contract with the consulting firm, and in October 2003 Baker Hughes was formally notified that it had been awarded the Karachaganak contract.

On an approximately monthly basis from May 2001 to November 2003, Baker Hughes and BHSI made commission payments totaling approximately $4.1 million to the consulting firm as a reward for securing the contract. Employees of BHSI understood that all or part of these commissions would be transferred to officials of Kazakhoil as bribes.

On April 11, 2007, the United States agreed to defer any prosecution of Baker Hughes on the charges contained in the Information in exchange for Baker Hughes's continued cooperation and implementation of a remedial compliance and ethics program. This Deferred Prosecution Agreement expired on April 26, 2009 and the court dismissed the Information on April 28, 2009.
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Aiding and abetting books and records, Anti-bribery (Issuer)
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Deferred-prosecution Agreement
:
Not stated.
:
0
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Issuer
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U.S.
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Contract Procurement/Retention
:
189,000,000
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Wire/check
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Sales Agent/Consultant
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4,100,163
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United Kingdom
:
United Kingdom, United States
:
No