ENI / Snamprogetti FCPA Case: Cash for Contracts and Sham Services on the Books

ENI agreed to pay $24.5 million in a 2020 SEC settlement over alleged sham-contract payments in Algeria, following the ENI / Snamprogetti FCPA case over alleged bribes for Nigerian construction contracts. If you know what an intermediary actually did, who approved the payment or how it appeared in the parent’s accounts, you may recognize the gap between the business and its books.

The Securities and Exchange Commission’s April 17, 2020 announcement described ENI as an Italian multinational oil and gas company with securities traded on the New York Stock Exchange. The settlement resolved charges under the Foreign Corrupt Practices Act that ENI kept false books and inadequate accounting controls. This page follows the separate Nigerian and Algerian episodes; our broader collection of FCPA cases compares how payments and false records recur across companies.

The 2010 Nigerian Construction Case

The Securities and Exchange Commission charged ENI and its former Dutch subsidiary, Snamprogetti Netherlands BV, over an alleged decade-long scheme to bribe Nigerian government officials for construction contracts. The agency’s enforcement account describes deliveries of cash-filled briefcases and vehicles.

The agency’s later ENI announcement identifies Snamprogetti as a wholly owned subsidiary at the time of that scheme. It says the earlier charges against ENI concerned false books and inadequate accounting controls. That puts the parent’s accounting alongside the alleged cash deliveries: an employee’s knowledge of how a payment was approved and recorded can matter even when someone else handled its delivery. The later Algeria action concerned a different subsidiary, Saipem, and alleged sham contracts whose costs reached the parent’s accounts.

The 2020 Algeria Action Began With Sham Contracts

The Securities and Exchange Commission alleged that Saipem entered into four sham contracts with an intermediary between 2007 and 2010 to help obtain business from Algeria’s state-owned oil company. According to the agency’s account of its order, Saipem paid approximately €198 million to the intermediary, which directed a portion to Algerian government officials or their designees. ENI agreed to a $24.5 million civil settlement. The agency said Saipem received at least seven contracts from the state-owned customer.

The customer contracts were the business Saipem sought. The intermediary contracts were the arrangements the agency alleged were sham. A project employee may know what services the intermediary promised, while a finance employee may know who actually received the money.

This is the pattern behind sham consulting and marketing contracts: paperwork describing a service can give a payment an apparently ordinary business purpose. In ENI’s case, the agency alleged that the accounting failed to record the true nature of the intermediary payments. The contract supplied a description that the agency said the books should not have accepted.

ENI’s Minority Stake Came With Control

ENI held a 43% interest in Saipem, which the agency described as minority-owned and controlled by ENI at the time. Saipem’s financial statements were consolidated into ENI’s own. The agency alleged that the intermediary payments consequently appeared inaccurately in the parent’s books and records.

Here, subsidiary ownership, control and accounting tell different parts of the story. The ownership percentage describes the stake. Approval authority shows who could authorize a payment, and consolidation records show how the expense reached the parent’s accounts.

The Executive Changed Jobs and Kept Facilitating Payments

The agency’s account also placed a senior executive inside both companies’ payment story. Its announcement described the alleged continuation of his role after he moved from Saipem to ENI:

The agency alleged that the executive’s misconduct at ENI caused the company to fail its obligation to use its influence to secure adequate accounting controls at Saipem. We expect the person responsible for the books to question sham expenses. For an insider who dealt with the executive in either role, the approval history could connect decisions that separate company files make harder to see together. In the agency’s account, the title changed. The payment work did not.

What an Insider Can See in the Payment Trail

An intermediary payment connects several commercial decisions: why the business hired the intermediary, what work it expected, who authorized payment and how finance recorded it. In an engineering, procurement and construction business, those decisions can sit with different project, purchasing and finance teams. We examine the payment trail across those roles, including the customer decision the payment was meant to influence.

The 2022 paper How to Avoid Inadvertently Violating the Foreign Corrupt Business Practices Act Abroad, published in the Journal of Forensic and Investigative Accounting, identifies third-party payments as the basis of the vast majority of Foreign Corrupt Practices Act compliance proceedings. In the Algeria allegations, the same relationship joined the commercial objective, the onward payments and the false accounting.

An engagement agreement describes the work supposedly bought. Deliverables show what the consultant supplied, and accounting entries show the explanation carried into the financial statements. We connect those records with what you know about the transaction.

An audit or compliance employee may know something different: what happened when someone questioned that explanation. Diligence files, escalations and corrective-action records can show who learned of a problem and what management did afterward. That perspective is especially relevant to an allegation that a parent failed to use its influence while a senior finance executive continued facilitating the payments.

Other Cases Expose the Same Gap Between Services and Payments

In its criminal guilty plea, Alstom admitted a consultant arrangement in which the commission fell when part of the assignment moved to another consultant. For someone reviewing commissions, a change in the assignment can explain more than the percentage standing alone.

RAE Systems supplies a closer oil-project parallel. The Securities and Exchange Commission’s complaint alleged that its Chinese joint venture paid an agent under a purported technical-services agreement for a government-affiliated oil project, while the agent made improper payments to employees of a state-owned enterprise. The same complaint alleged that sales staff submitted genuine receipts issued for expenses other than the ones being claimed. The paper could be authentic while the expense story was false.

In its criminal guilty plea, Gunvor admitted using intermediary companies, service agreements and fake consulting invoices to conceal payments connected to Petroecuador business. Its admissions also described payments continuing after intermediaries repeatedly failed to supply requested documentation or attend a compliance meeting. That adds a second question to the invoice inquiry: what did the company do when its own requests went unanswered?

The Part of the Transaction You Know

A procurement employee may know why a consultant appeared in a project budget. A project manager may know whether the promised work arrived, and a finance employee may know which description management approved for the expense. We build whistleblower evidence around those connections, so the business knowledge behind an invoice stays attached to the payment and decision it explains.

The ENI actions reach both the public customer’s contract decision and the parent’s financial reporting. If you saw the intermediary arrangement from inside the business, our work begins with that account: what the company was trying to obtain, what it paid for and what the books said it bought. We assess those facts with you and bring in foreign bribery whistleblower lawyers with the project and accounting experience the case needs.

The SEC whistleblower award program rewards qualifying information that leads to successful enforcement. A whistleblower case under the separate False Claims Act can pay 15% to 30% of what the government recovers. We assess with you which program fits the conduct and information you bring.

You Know What the Intermediary Actually Did

If the consultant’s work, the payment approval and the accounting description tell different stories, speak to one of our Whistleblower Experts about what the intermediary was really paid for. We work beside you to build your strongest foreign-bribery whistleblower case, connect you with FCPA whistleblower lawyers who understand cross-border payments, and stay with you through the case.