Settlements

ST-55
Baker Hughes Incorporated / Baker Hughes Services International, Inc.
Baker Hughes Incorporated
United States
Department of Justice
Indonesia, Kazakhstan
2007
04/11
Unknown
Legal Person
Criminal
Guilty Plea (BHSI), Deferred Prosecution Agreement (Baker Hughes)
Criminal Fine
$11,000,000.00
$11,000,000
$0
Art.16, Art.23, Art.26
Art. 1, Art. 2, Art. 7, Art. 8
Conspiracy to bribe foreign officials (Baker Hughes, BHSI), Conspiracy to falsify books and records (Baker Hughes, BHSI), Bribery of foreign officials (BHSI), Falsification of books and records (BHSI)
Conspiracy to bribe foreign officials (Baker Hughes, BHSI), Conspiracy to falsify books and records (Baker Hughes, BHSI), Bribery of foreign officials (BHSI), Falsification of books and records (BHSI)
Yes
According to the US Department of Justice press release, as part of the plea and deferred prosecution agreements, it was agreed that Baker Hughes Services international (BHSI) would pay a criminal fine of $11 million, serve a three-year term of organizational probation and adopt a comprehensive anti-bribery compliance program. In a related matter, Baker Hughes reached a settlement of a complaint filed by the Securities and Exchange Commission under which it agreed to pay $10 million in civil penalties and more than $24 million in disgorgement of all profits it earned in connection with the Karachaganak project, including prejudgment interest. The $44 million in combined fines and penalties is the largest monetary sanction ever imposed in an FCPA case." (Source: US Department of Justice Press Release, "Baker Hughes Subsidiary Pleads Guilty to Bribing Kazakh Official and Agrees to Pay $11 Million Criminal Fine as Part of Largest Combined Sanction Ever Imposed in FCPA Case," April 26, 2007). As summarized in the US Department of Justice Report to Congress, Appendix C "Summaries of Foreign Corrupt Practices Act Enforcement Actions by the United States, January 1, 1998 - September 30, 2010," Baker Hughes Incorporated, at 92-94, "According to the plea agreements, Baker Hughes and BHSI violated the FCPA by paying approximately $4.1 million in bribes to an intermediary, knowing that the intermediary would transfer all or part of the corrupt payments to an official of Kazakhoil, the state-owned oil company," and in 2007, the SEC filed civil complaints against Baker Hughes and BHSI's Business Development Manager, Roy Fearnley with FCPA violations in the same bribery scheme. In 2001, the SEC had filed civil complaints against two former employees of Baker Hughes, a partner in an Indonesian accounting firm, and a partner of the accounting firm KPMG Siddarharta Siddharta & Harsono. (Source: US Department of Justice Report to Congress, Appendix C "Summaries of Foreign Corrupt Practices Act Enforcement Actions by the United States, January 1, 1998 - September 30, 2010," Baker Hughes Incorporated, at 92-94, accessed at www.justice.gov/criminal/fraud/fcpa/docs/response3-appx-c.pdf