Several stakeholders in the oil and gas industry including anti-corruption campaigners have condemned the Security and Exchange Commission (SEC) handling of the two Noble oil executives’ bribery scandal that rocked an oil drilling contract. The two executives of Noble firm were alleged to have settled the SEC bribery suit against them.
It was alleged that SEC had filed the enforcement action against Mark Jackson, former chief executive officer of Noble Drilling (Nigeria) Ltd and James Reuchlin, a director of the company over the company’s activities in Nigeria.
In the action, SEC alleged that Noble and Noble-Nigeria authorized a customs agent to pay bribes to Nigerian government officials in order to obtain false documentation which Noble-Nigeria needed for obtaining temporary import permits. In addition, the SEC alleged that Noble and Noble-Nigeria, through a customs agent, paid bribes to Nigerian government officials for Temporary Import Permit (TIP) extensions.
It will be recalled that between January 2003 and May 2007, Noble-Nigeria had up to seven drilling rigs that operated offshore. To operate drilling rigs offshore, the laws require the owner of the rig to either pay permanent import duties or obtain temporary ones like TIP. TIPs allow drilling rigs to operate without payment of permanent import duties.
SEC had charged Jackson and Ruehlen with multiple violations of the Foreign Corrupt Practices Act (FCPA), and other securities’ laws in connection with actions they allegedly took to obtain TIPs and TIP extensions in order to avoid paying permanent import duties. These include, specifically, the approval of numerous “special handling” and “procurement” payments to government officials to obtain false paperwork necessary to secure TIPs or to obtain discretionary TIP extensions. In addition, he SEC alleges that Jackson and Ruehlen allowed these payments repeatedly to be posted on Noble’s books as legitimate operating expenses.
SEC alleges that a total of 11 illicit permits and 29 extensions were obtained and that bribes of hundreds of thousands of dollars were paid to customs officials and that both men participated in the scheme.
The matter has been rumbling on for a few years. In 2010, Noble agreed to make a payment of $8 million to resolve the FCPA related civil and criminal charges in the case. Then in 2011 Noble agreed to pay $2.5 million as part of a non-prosecution agreement with the government.
Just a few days before the beginning of their trials the case against the two executives is said to have been settled, meaning that they will not face trial in the civil suit brought by the SEC against them and that they will not pay a financial penalty either.
