Former Willbros International Consultant Pleads Guilty to $6 Million Foreign Bribery Scheme

A former consultant for Willbros International Inc., a subsidiary of Houston-based Willbros Group Inc., pleaded guilty on November 12, 2009, to engaging in a conspiracy to pay more than $6 million in bribes to government officials of the Federal Republic of Nigeria and officials from a Nigerian political party. Paul G. Novak, 43, pleaded guilty in federal court in Houston to one count of conspiracy to violate the Foreign Corrupt Practices Act and one substantive count of violating the FCPA. Sentencing has been scheduled for February 19, 2010.

In his plea, Novak admitted that from approximately late 2003 to March 2005, he conspired with others to make a series of corrupt payments totaling more than $6 million to various Nigerian government officials and party officials. The purpose of these payments was to assist Willbros in obtaining and retaining the Eastern Gas Gathering System Project, which was valued at approximately $387 million.

Novak, along with alleged co-conspirators James Kenneth Tillery, Jason Steph, Jim Bob Brown and three employees from a German construction company based in Mannheim, Germany, agreed to make the corrupt payments to, among others, government officials from the Nigerian National Petroleum Corporation, the National Petroleum Investment Management Services, a senior official in the executive branch of the federal government of Nigeria, members of a Nigerian political party and officials from the Shell Petroleum Development Company of Nigeria Ltd.

To fund the bribes, Steph and others used a Willbros subsidiary, Willbros West Africa Inc. (WWA), to enter into agreements with two consulting companies Novak represented. Without providing any services, the consulting companies would invoice WWA and be paid from Willbros’s bank account in Houston to accounts in Lebanon. Novak then used money from the Lebanese accounts to pay bribes to various Nigerian officials.

In addition to Novak, two Willbros employees have pleaded guilty in the case and Willbros has entered into a deferred prosecution agreement. The Novak plea is only the most recent activity in the Willbros investigation. Previous charges and pleas include:

• On September 14, 2006, Jim Bob Brown, a former Willbros executive, pleaded guilty to one count of conspiracy to violate the FCPA, for his role in making corrupt payments to Nigerian government officials to obtain and retain the EGGS contract and for making corrupt payments in Ecuador. Brown was sentenced on January 28, 2010. He was sentenced to 12 months and one day in prison and ordered to serve two years of supervised release following his prison term. Brown was also ordered to pay a fine of $1,000 per month while he is on supervised release. The court acknowledged at the sentencing hearing the assistance Brown provided in the ongoing investigation.
• On November 5, 2007, Jason Steph, also a former Willbros executive, pleaded guilty to one count of conspiracy to violate the FCPA, for making corrupt payments to Nigerian government officials to obtain and retain the EGGS contract. Steph was sentenced on January 28, 2010. He was sentenced to 15 months in prison and ordered to serve two years of supervised release following his prison term and to pay a $2,000 fine. The court acknowledged at the sentencing hearing the assistance Steph provided in ongoing investigations. For more information, see our posting at: http://fcpaenforcement.com/documents/document_detail.asp?ID=4592&PAGE=2.
• On May 14, 2008, Willbros Group Inc. and Willbros International Inc. entered into a deferred prosecution agreement and agreed to pay a $22 million criminal penalty, for the illegal payments to government officials in Nigeria and Ecuador. For more information, see our posting at: http://fcpaenforcement.com/documents/document_detail.asp?ID=5055&PAGE=2.

James K. Tillery was charged, along with Novak, for his alleged role in the bribery scheme in an indictment unsealed on December 19, 2008. According to the indictment, Tillery was a Willbros employee and executive from the 1980s through January 2005. He remains a fugitive. For more information, see our posting at: http://fcpaenforcement.com/documents/document_detail.asp?ID=5540&PAGE=2.