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
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
Canadian engineering and construction giant SNC-Lavalin has been charged by the RCMP with paying bribes of nearly $48 million to Libyan government officials and defrauding Libya of nearly $130 million.
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