GlobalSantaFe: Export Charges for Rigs That Never Left

In the GlobalSantaFe FCPA case, the offshore drilling company agreed to pay $3,758,165 and a $2.1 million civil penalty to settle SEC allegations of customs bribery, inaccurate books and failed payment controls. The alleged bargain kept drilling rigs working in Nigerian waters while customs paperwork showed they had left. An employee who knew where the rig was could see what the official stamps concealed.

The Securities and Exchange Commission announced the settlement on November 4, 2010, as part of a coordinated investigation into oil-services companies and freight forwarding. Its civil complaint alleged violations of the Foreign Corrupt Practices Act from 2002 to 2007. The case sits within a recurring pattern in FCPA cases and settlements: a payment bought an official decision, and the business records disguised what the company bought.

What the GlobalSantaFe FCPA Case Was About

The Commission alleged that GlobalSantaFe paid Nigerian Customs Service officials through customs brokers to obtain false documents and preferential customs treatment. GlobalSantaFe provided offshore oil and gas drilling services to exploration companies. Its business depended on keeping expensive equipment available for those customers, and a rig’s temporary import permit determined how long it could remain in Nigerian waters.

The complaint’s account of the permit process explains the commercial pressure. At the time, a temporary import permit lasted one year, with two six-month extensions allowed. GlobalSantaFe also had to maintain a Nigerian bank bond for the value of the rig and equipment.

After the permitted extensions ran out, the rig had to leave Nigerian waters and the company had to restart the import process. Moving a working rig meant paying to move it and interrupting drilling revenue. According to the complaint, GlobalSantaFe used payments through customs brokers to obtain a departure and return on paper while the rig stayed in place.

Export Paperwork for a Rig Still at Work

The Adriatic VIII shows how the alleged paper move worked. The Commission said GlobalSantaFe obtained documents bearing Nigerian Customs Service insignia, official stamps and signatures that showed the rig leaving Nigeria on September 29, 2004. The complaint alleged that managers in Nigeria knew the rig had never actually left Nigerian waters.

GlobalSantaFe paid its customs broker $87,500 to obtain the new permit, according to the complaint. That bill included $3,500 described as additional charges for export. The company paid the broker by wire transfer from its bank account in the United States.

The Commission alleged that the managers knew, or knew there was a high probability, that the export charge disguised a bribe. That is the point where an invoice stops being an isolated accounting entry: the people handling the expense also knew the supposed export had not happened. We see the absurdity in paying an export charge to keep a rig exactly where it was.

The complaint also alleged paper moves for the Adriatic I and Baltic I. In each account, the permit history called for the rig to leave, and customs documents purported to show a departure that had not occurred. For an operations employee, the rig’s location was a fact of the working day. For someone processing the broker’s bill, the same event arrived as an export expense.

Noble Corporation faced a similar allegation in the same SEC announcement: payments through a customs agent bought false documentation showing the export and re-import of drilling rigs. The parallel is the manufactured movement of an operating asset. GlobalSantaFe’s complaint adds its own company-side connection, alleging that managers understood the mismatch when they authorized the charges.

The Broker’s Invoice Reached the Company’s Books

The Securities and Exchange Commission’s complaint connected the customs payments to inaccurate accounting and inadequate controls over spending. It alleged that improper payments were recorded as ordinary transaction costs, including export charges, intervention and authorities fees. It also alleged that the company paid invoices without enough supporting documentation and failed to investigate descriptions that should have prompted questions.

The complaint put the failure at the payment decision itself:

Descriptions included customs overtime and customs vacation. The Commission alleged that GlobalSantaFe paid such charges without further inquiry. An invoice can look complete enough to process while leaving the important question unanswered: what did the official actually do for the money?

The distinction matters to the books and payment controls as well as to the person who dealt with the broker. An accounts-payable employee may see the description, a manager may know the decision it purchased, and an operations employee may know whether the claimed service occurred.

A 2022 case study in the Journal of Forensic and Investigative Accounting traces a similar disguise at Fresenius Medical Care. Drawing on the company’s criminal non-prosecution agreement, the study describes employees of a Saudi distributor routing payments to customs officials through a freight company, with the payments mischaracterized as handling charges or miscellaneous expenses. The comparison is the gap between the service named in the accounts and the official favor the money purchased.

Customs Payments Beyond Nigeria

The Commission also alleged payments through GlobalSantaFe’s customs brokers to government officials in Gabon, Angola and Equatorial Guinea to obtain preferential customs treatment. Its complaint identified an Angola payment described as official dues and payments in Gabon described as customs escort.

The accounting allegation connected the countries. The complaint said improper payments across those operations appeared in GlobalSantaFe’s books as legitimate transaction costs, while weak payment controls allowed them through. A finance employee might see an ordinary customs expense where the broker knew an official had been paid for preferential treatment.

What the Paper Moves Were Worth

The Securities and Exchange Commission alleged that avoiding physical rig moves saved GlobalSantaFe approximately $1.5 million in costs and produced approximately $619,000 in revenue from uninterrupted operations. Customs documentation treated the move as complete while the alleged financial benefit came from never making it. A competitor that actually moved its rigs had to absorb the disruption the paper move avoided.

The civil penalty alone was close to those alleged benefits. We see a familiar bargain here: a company agrees to pay, yet owns up to nothing.

What an Insider Could See in the Records

The useful whistleblower evidence connects the rig, the permit, the payment and the approval. GlobalSantaFe’s complaint describes customs paperwork, broker invoices, transfers from U.S. bank accounts and managers’ knowledge of the rigs’ locations. Someone who knows one of those parts may be able to explain why another part of the company’s account does not fit.

An offshore operations employee may know the rig kept working through the supposed departure. A broker’s employee may know what the payment secured from customs officials, while a finance employee may know who authorized the charge and how it was recorded. We work with you to connect that firsthand knowledge to the company’s decisions and the benefit it obtained.

A whistleblower case under the False Claims Act can pay 15% to 30% of what the government recovers. For information about a company’s foreign-bribery payments, we assess the separate SEC whistleblower award rules with you. The starting point is your account of the transaction and why the company’s explanation fails to describe it.

You Know Whether the Rig Left

If you handled a permit, approved a broker’s bill or worked on a rig that never made its supposed departure, speak to our whistleblower experts about the rig that never left. We build your strongest case around the rig’s actual movements and the payment decisions, bring in FCPA whistleblower lawyers who understand customs bribery, and stay beside you throughout the case.