Wood Group to Pay $177M to Settle US, UK, Brazilian Bribery Charges

Update: Court Approves UK Settlement

The Petrobras Building in Rio de Janeiro, Brazil in 2011. Photo: Adam Jones via Wikimedia Commons.

In a multinational case, engineering giant John Wood Group PLC and its Amec Foster Wheeler Energy Ltd. subsidiary have reached agreements with U.S., U.K. and Brazilian government agencies to pay a total of $177 million to settle bribery charges related to a contract to design a gas-to-chemicals project in Brazil, Wood Group has announced.

For its part of the coordinated multi-agency probe, the U.S. Dept. of Justice announced on June 25 that Amec Foster Wheeler had entered into a deferred prosecution agreement on that date in federal district court in Brooklyn, N.Y. and agreed to pay about $18.4 million to settle the U.S. charges of violating the Foreign Corrupt Practices Act.

The U.S. is crediting the company with a portion of the payments it is making in settlements with the U.K. and Brazilian authorities. The amount Amec Foster Wheeler will actually pay the U.S. on the DOJ charges is about $7.7 million.

In addition, in a related civil proceeding, the U.S. Securities and Exchange Commission said Amec Foster Wheeler agreed to pay $22.7 million in disgorgement and prejudgment interest for its actions in Brazil. The SEC order also includes "offsets" for payments made to the UK and Brazilian authorities. The SEC said the minimum payment it will receive from Amec Foster Wheeler is about $10.1 million.

The SEC's cease-and-desist order said Amec Foster Wheeler paid a total of $1.1 million in bribes related to the contract.

In the agreement with DOJ, Amec Foster Wheeler admits that between 2011 and 2014 it conspired with other individuals, including an unnamed Italian sales agent affiliated with an intermediary company based in Monaco, to bribe officials at energy company Petroleo Brasileiro (Petrobras) to win a $190-million contract to design a gas-to-chemicals complex in Brazil.

The document also said that Amec Foster Wheeler earned at least $12.9 million in profits from the bribery activities.

In its June 25 announcement, Wood said that the charges relate to Amec Foster Wheeler activities before Amec PLC acquired Foster Wheeler AG in November 2014 and before Wood acquired Amec Foster Wheeler in October 2017.

Settlement with U.K. Serious Fraud Office

The U.K. Serious Fraud Office (SFO) said on June 25 that it had achieved an agreement in principle on a deferred prosecution agreement with Amec Foster Wheeler.

The SFO said in a July 2 statement that Lord Justice Andrew Edis in the Royal Courts of Justice approved the agreement with Amec Foster Wheeler on July 1. The SFO said the company will pay a U.K. financial penalty and costs totaling about $142 million.

SFO Director LIsa Osofsky said in a statement that over an 18-year period, Foster Wheeler Energy Ltd. "brazenly and calculatedly paid bribes to officials around the world to cut corners and secure contracts, going to great lengths to conceal its corrupt conduct."

Osofsky added, 'In doing so, the company subverted therule of law and harmed the integrity of the economy in the U.K."

The SFO said that the agreement closes its nearly four-year investigation, "as far as the corporate entities are concerned." It added, "The investigation into the conduct of individual suspects continues."

Wood Group Chief Executive Robin Watson said in a statement after the court's ruling, "We are pleased to have resolved these historical issues, which pre-date our acqusition of the business in 2017, and can now look to the future."

Wood also said it has also entered into “leniency agreements” of 18 months with three Brazilian agencies, related to “use of third-party agents for bribery and corruption, regarding winning a contract in Brazil."

Wood, headquartered in Aberdeen, Scotland, ranked No. 1 on ENR’s 2020 Top 225 International Design Firms list, with about $6 billion in 2019 international revenue.

Story updated on 7/7/2021 with U.K. court approval of deferred prosecution agreement.

Tom Ichniowski has been writing about the federal government as ENR’s Washington Bureau Chief since the George H.W. Bush administration, and he has covered at least five major highway bills. A recognized expert on government policy on infrastructure and regulation, Tom is also a Baltimore native and Orioles fan who grew up rooting for Brooks and Frank Robinson. He is a graduate of Columbia College and Columbia’s graduate school of journalism, where he once used “unrelentless” in a headline.