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Japan’s Marubeni Corp fined $88m for bribing Indonesian officials

May 2014

A leading Japanese trading company, Marubeni Corporation, has been fined $US88m after admitting bribing Indonesian government officials to secure a lucrative power project, the US Department of Justice (DOJ) says.

 A DOJ statement said Marubeni and its partner, the French conglomerate Alstom S.A., had bribed an Indonesian member of parliament and members of the country’s state-owned electricity company to secure a US$118m contract known as the Tarahan project.

Payments totalling several hundred thousand dollars were made to corrupt officials in Indonesia via bogus consultants hired specifically to distribute the bribes, the statement said.

Two officials from the US subsidiary of Alstom have already pleaded guilty to US charges in connection with the project, which began in 2002.

“Marubeni and its co-conspirators were successful in securing the Tarahan project and subsequently made payments to the consultants for the purpose of bribing the Indonesian officials,” the DOJ said.

After initially refusing to co-operate with the investigation, Marubeni eventually pleaded guilty to an eight-count indictment filed in federal court in Connecticut.

The company admitted one count of conspiracy to violate the anti-bribery provisions of the Foreign Corrupt Practices Act (FCPA) and seven counts of violating the same law.

The $US88m fine is to be ratified at a sentencing hearing on May 15.

This was the second year in a row that Marubeni has been found guilty of offences under the FCPA.

In 2012, Marubeni paid a US$54.6m criminal penalty to resolve FCPA charges for its role in helping win contracts to build liquefied natural gas facilities in Nigeria.

On that occasion, Marubeni was hired by TSKJ, a joint venture between Technip S.A., Snamprogetti Netherlands B.V., Kellogg Brown & Root Inc., and JGC Corporation. Between 1995 and 2004, the joint venture won four contracts worth more than US$6bn.

Marubeni was charged with conspiracy to violate the FCPA, aiding and abetting. It received a two-year deferred prosecution agreement that ended on February 26 this year.

Marubeni has appeared in a number of high profile bribery scandals.

In 1976, it was a key player in the Lockheed Bribery scandal in Japan. In 1986, it was found to have made illegal payments to Philippine President Marcos.

According to the DOJ, Marubeni lacked an effective compliance program.

Marubeni now says it has “undertaken extensive efforts to enhance its anti-corruption compliance program, and believes its current program is robust and effective.”
 




Asia | Corruption

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