Off-Shore Drilling Company Executive Charged
On December 11, 2009, the SEC charged Bobby Benton, a former vice president of Western Hemisphere Operations for Pride International, Inc. (“Pride”) with violating – and aiding and abetting violations of – the Foreign Corrupt Practices Act (“FCPA”). Pride is one of the world’s largest offshore drilling companies. The FCPA violations arose out of improper payments allegedly made by Pride subsidiaries to Venezuelan and Mexican government officials between 2003 and 2005.
According to the SEC’s complaint, between 2003 and 2005, the country manager of Pride’s French subsidiary authorized payments totaling $384,000, through third party agents, to officials at Petróleos de Venezuela S.A. (“PDVSA”), Venezuela’s state-owned oil company. These payments helped secure extensions on existing drilling contracts. In February 2005, a new country manager prepared a draft action plan addressing internal control weaknesses that contained information about the payments made to the PDVSA officials. Benton is alleged to have tried to conceal these payments by deleting all references to the bribes in the action plan.
In December 2004, Benton is also alleged to have authorized the payment of $10,000, through a third party, to a Mexican customs official in order to secure favorable treatment relating to a customs violation. Pride’s books and records falsely documented the improper payment as an electricity maintenance expense. Benton was also allegedly aware of $15,000 in improper payments, through a customs agent, made to a different Mexican customs official in order to avoid delays in the export of a drilling rig. The payments were falsely recorded as expenses for customs agency services.
Despite his knowledge of various improper payments made to Venezuelan and Mexican officials, Benton signed false certifications denying any knowledge of bribery in March 2005 and May 2006. These certifications were made in connection with Pride’s annual reports. The SEC’s complaint states that absent these false statements, Pride’s management and auditors would have discovered the bribery schemes.
The SEC is seeking a civil penalty and disgorgement from Benton, as well as an injunction against future violations.
Pride discovered these violations during the course of an internal audit and investigation. Pride voluntarily disclosed the results of its ongoing internal investigation to the DOJ and SEC and is cooperating with the authorities. Pride has, thus far, identified possible improper payments totaling approximately $2.5 million made in: Venezuela, Mexico, India, Saudi Arabia, Kazakhstan, Brazil, Nigeria, Libya, Angola and the Republic of Congo.