Yesterday, I began a consideration of the guilty pleas of the former Unaoil Chief Executive Officer (CEO), Cyrus Ahsani, and former Chief Operations Officer (COO), Saman Ahsani, and what they might mean for Foreign Corrupt Practices Act (FCPA) enforcement and compliance practitioners going forward. The breadth and scope of the corruption is simply stunning. Today I want to consider the twenty-five companies which were identified but not named in the Information.

In honor of the recently conclude baseball season, I return to the rarely used but clear fan favorite, the Corruption Box Score. It is long but if your organization is on it, you need to stay tuned and read to the end of this blog post. Equally importantly, even if your company is not on this Corruption Box Score you need to read through to the end as this information may well have important implications for your company going forward.

Company Number Industry Location of Headquarters FCPA Status Nationality
1 Engineering Houston Public, Issuer US
2 Engineering New Jersey Public, Issuer US
3 Energy Houston Public, Issuer US
4 Energy Houston Public, Issuer US
5 Energy Massachusetts Public, Issuer Italy
6 Energy Houston Public, Issuer US
7 Energy UK Person UK
8 Energy Australia Person Australia
9 Energy Italy Person Italy
10 Energy Malaysia Person Malaysia
11 Energy South Korea Person South Korea
12 Energy South Korea Person South Korea
13 Energy Norway Person Norway
14 Energy (JV) Turkey Person Turkey
15 Energy South Korea Person South Korea
16 Energy South Korea Person South Korea
17 Energy Spain Person Spain
18 Energy Germany Person Germany
19 Energy Singapore Person Singapore
20 Energy Italy Person Italy
21 Energy Switzerland ADR, Issuer Switzerland
22 Chemical and Engineering Houston Private, Domestic Concern US
23 Engineering New York Private, Domestic Concern US
24 Energy Missouri Public, Issuer US
25 Maintenance Monaco Person Monaco

The breadth and scope of the international bribery and corruption perpetrated by Unaoil was stunning as it was audacious. Unaoil was literally the ‘go-to’ fixer to engage in bribery and corruption for this extremely wide variety of companies. The countries where Unaoil engaged in bribery and corruption included bribe payments to government officials in “Algeria, Angola, Azerbaijan, the Democratic Republic of Congo, Iran, Iraq, Kazakhstan, Libya and Syria.”

As these companies have been identified in the Ahsani’s Information that means that the Department of Justice (DOJ) knows about them. Additionally, as the Ahsanis’ guilty pleas were made back in March 2019, but they will not be sentenced until March 2020, it clearly means they were cooperating with the DOJ and their own personal sentences will depend on continued cooperation going forward.

If you read the above list and recognized either your organization or where you might be doing business you need to immediately assess if your company has self-investigated the matter. If you have done so, I hope you self-disclosed as that is factor Number 1 under the FCPA Corporate Enforcement Policy announced back in November 2017. If you have not performed an internal investigation you had better begin so ASAP because it will not be long before the DOJ and/or Securities and Exchange Commission (SEC) comes knocking. You need to try and get ahead of this situation as much as you can, even at this late stage in the game.

What if your company does not appear on the list but you have done business in any of the countries identified in the Information; those being, Algeria, Angola, Azerbaijan, the Democratic Republic of Congo, Iran, Iraq, Kazakhstan, Libya and Syria? The first thing you need to do is rescrub your transactions in these countries to see if there are any indicia of bribery and corruption. In Syria, you also need to consider the trade sanctions perspective. This review would include whether you did business with Unaoil directly or indirectly.

By this I mean, did you do business with any of those companies identified in the Information? (It is not hard to determine who those companies are.) For instance are you in any local joint ventures (JVs) in those countries with the identified companies who used Unaoil? Are you in other types of business relationships such as Teaming Agreements, Farm Out Agreements, Production Sharing Agreements or simply sub-contractors to any of those companies? Conversely, are any of those companies sub-contractors to your company?

Now consider another angle. What if your organization lost out on contracts to any of these companies in any of the countries listed in the Information? Do you now have a claim for restitution under the Mandatory Victims Restitution Act, (MVRA) which affords restitution to victims in a variety of cases and most ominously, applies to conspiracies to violate the FCPA. As reported in a Davis Polk Client Memorandum this is the situation that Och-Ziff finds itself under in a court in New York “where investors in the Canadian mining company Africo Resources Ltd. (“Africo”) sought restitution under the MVRA, arguing that they are entitled to up to $1.8 billion because of OZ Africa’s bribery scheme.”  The District Court’s Order found that the Och-Ziff bribery scheme involved the use of state instrumentalities to “expropriate Africo’s mining rights without Africo’s knowledge,” which was an “offense against property” that was “committed by fraud or deceit, within the scope of the MVRA.” The Court also ruled that the Africo investors qualify as “victims under the MVRA”.

Recognizing there is a unique fact pattern under the Och-Ziff matter, it still may serve as a bellwether for aggrieved companies bringing federal claims for restitution. Even if your company does not fall under MVRA restitution, there is still a civil tort claim for unfair competition against any company that wins business through bribery and corruption. Further, as such claims are tort claims, most generally punitive damages are available and if there is anything to get a jury excited to award punitive damages on, it is one company defrauding the market by engaging in bribery and corruption.

In short, you need to take a detailed look at the 25 identified companies in the Ahsanis’ Information. If you are on the list, you need to mobilize immediately, if you have not yet done so. Even if you are not on the list, you need to see if your organization has any exposure from doing business with the identified companies or in the named countries where Unaoil engaged in bribery and corruption. Finally, you should see if your company lost any business in the named countries and do you have any potential claims for restitution or unfair competition?

Tomorrow, I will consider the bribery schemes used by the Ahsanis’ as identified in the Criminal Information.