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S.E.C. v. Eric L. Mattson, and James W. Harris

 
:
Baker Hughes - Mattson, Eric
:
SEC Civil
:
September 11, 2001
:
S.E.C. v. Eric L. Mattson, and James W. Harris
:
S.E.C. v. Mattson and Harris, No. 4:01-cv-03106 (S.D. Tex 2001)
:
Energy (Non-Utility)-Oil & Gas-Other/Multi
:
Indonesia
:
1999
:
Indonesian tax official representing the Directorate General
:
On March 9, 1999, James W. Harris, a former Controller of Baker Hughes Incorporated ("Baker Hughes"), allegedly learned that an Indonesian tax official would reduce a tax assessment for PT Eastman Christensen ("PTEC"), an Indonesian company beneficially owned by Baker Hughes, from $3.2 million to $270,000 in exchange for payment of $75,000. KPMG Siddharta Siddharta & Harsono ("KPMG-SSH"), Baker Hughes's accountant in Indonesia, offered to make the payment using PTEC's funds and then issue an inflated invoice that would conceal the payment.

On March 10, 1999, Harris allegedly told Baker Hughes's General Counsel and Eric L. Mattson, former CFO of Baker Hughes, of the Indonesian tax official's demand. On March 10, 1999, Harris and Mattson allegedly authorized payment of the bribe despite the General Counsel's warning that such conduct would violate the FCPA. After receiving the invoice, PTEC allegedly paid KPMG-SSH $143,000 and improperly recorded the transaction as payment for professional services rendered. On March 23, 1999, PTEC received a tax assessment of approximately $270,000 from the Indonesian government, almost $3 million lower than the original assessment.

After Baker Hughes's General Counsel and FCPA Advisor discovered the subject payment, Baker Hughes: (a) attempted to stop the payment to KPMG-SSH; (b) voluntarily and promptly disclosed the alleged misconduct to the S.E.C. and D.O.J.; and (c) instructed KPMG-SSH not to make the payment to the Indonesian tax official and to return the entire amount paid to KPMG-SSH.

On September 9, 2002, the district court dismissed the Commission's antibribery claim. On January 28, 2003, the court dismissed the remaining books and records and internal controls claims with prejudice and rendered its "final judgment." The Commission appealed dismissal of the antibribery claim. On July 14, 2008, the Fifth Circuit Court of Appeals dismissed the Commission's appeal and litigation in this matter concluded.
:
Aiding and abetting books and records, Aiding and abetting internal controls, Anti-bribery (Issuer), Books and records (Issuer), Internal controls (Issuer)
:
Dismissal
:
Not stated.
:
0
:
Agent of Issuer
:
CFO
:
U.S.
:
Tax
:
Not stated.
:
Wire/check
:
Customs Broker or Agent/Consultant
:
75,000
:
Indonesia
:
No