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Penalty for Foreign Bribe is Largest


An oil company has agreed to pay $44 million in combined fines and penalties for bribing foreign officials, the largest penalty to date, the Justice Department has announced.

Baker Hughes Services International Inc. pleaded guilty yesterday to violating anti-bribery provisions of the Foreign Corrupt Practices Act in a deal that involved a deferred prosecution agreement, according to a press release. The plea resolves criminal charges and a suit filed by the Securities and Exchange Commission.

The company admitted in the plea deal that it paid $4 million to a consulting firm understanding that the money would be used to pay Kazakhstan officials for rights to an oil drilling project.

The company made the suspect payment even though it had previously agreed to stop such practices, the New York Times reports. In 2001, the SEC had obtained a cease-and-desist order against the company after alleging it bribed an Indonesian official.

The new plea deal includes a deferred prosecution agreement in which the government agreed it would not prosecute other charges if Baker Hughes refrains from further bribes for two years. The company also agreed to institute an anti-bribery compliance program.

The ABA Journal reports in a March article that Congress expanded the foreign corrupt practices law in 1998 to reach bribes originating outside the United States.

Here is Wall Street Journal (sub. req.) coverage of the agreement.

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