22 Apr 2020
Eni SpA has settled allegations in the U.S. that a subsidiary used sham contracts with an intermediary to improperly win contracts from an Algerian state-owned oil company.
The Italian oil-and-gas giant agreed to pay $24.5 million to resolve alleged violations of the Foreign Corrupt Practices Act, according to the U.S. Securities and Exchange Commission.
The company neither admitted nor denied wrongdoing in the settlement reached Friday. A spokesperson for Eni confirmed the settlement.
The contracts at the center of the SEC’s bribery allegations were arranged by subsidiary Saipem SpA, in which Eni then held a 43% controlling stake, between 2007 and 2010, according to the SEC. The contracts were drawn up with the knowledge and participation of Saipem’s former chief financial officer who in 2008 was hired as Eni’s chief financial officer, the regulator said.
Alessandro Bernini served as Saipem’s CFO from 1996 to 2008. He later served as CFO of Eni until departing the company in 2012.
Reached by email for comment, Mr. Bernini—who wasn’t referred to by name in the SEC order—said an appeals court in Milan had cleared him of wrongdoing after finding that no illegal payments had been made.
After this article was published, Mr. Bernini said in an email that he was not the decision maker at Saipem. “I was not responsible for the commercial activities, I never had any involvement in the Algerian operations,” he said. He added that he didn’t promote the contract of any commercial agent.
The SEC doesn’t typically name individuals or entities in settlements whom it hasn’t charged with wrongdoing.
Saipem and Mr. Bernini were found guilty of international corruption charges in 2018, but a Milan appeals court in January reversed the convictions. Italian prosecutors may ask the Supreme Court of Italy to review the acquittals, the SEC said.
The U.S. Justice Department also investigated Eni’s Algeria activities, but federal prosecutors in October told the company that they were closing the probe without bringing criminal charges.
Saipem paid about €198 million ($215 million) to the unnamed intermediary between 2007 and 2010, according to the SEC. The intermediary directed at least a portion of that money, through offshore shell entities, to Algerian officials, including the country’s minister of energy, the regulator alleged. The company deducted the payments from its taxable income in Italy, the SEC said.
The alleged scheme violated provisions of the FCPA that require companies with shares listed on a U.S. stock exchange to keep accurate books and records and maintain internal accounting controls, according to the SEC.
Eni required Saipem to maintain its own internal controls and to adopt Eni’s directives on anti-corruption compliance. But Mr. Bernini and others at Saipem bypassed its contracting and procurement controls, including by falsifying and backdating contracts, the SEC said.
Mr. Bernini allegedly communicated directly with the intermediary, including its owner and associates, involved himself in payments to the entity and worked to conceal the contracts from Eni. The owner of the intermediary was a well-connected Algerian whom the country’s energy minister at the time considered like a “son,” the SEC said.
In his email to The Wall Street Journal, Mr. Bernini said his involvement in the approval process of the contracts was limited to the collection of certain documents, and that nothing was falsified or backdated.
By Dylan Tokar, The Wall Street Journal, 21 April 2020
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