JGC Corporation: Two Agents for Two Levels of Government

The JGC Corporation FCPA case concerned alleged bribes through two agents to win Nigerian liquefied natural gas construction contracts. In its April 6, 2011 announcement of the criminal charges, the Justice Department described a division of work: one consultant reached high-level officials, while a Japanese trading company reached officials further down the government. For someone who approved an agent, negotiated the engagement or processed the payments, that division matters. The person named on the invoice and the person whose influence the money was buying occupied different places in the deal.

The Justice Department’s criminal information charged JGC with conspiracy and helping others violate the Foreign Corrupt Practices Act, and the department filed a deferred prosecution agreement with the company. The announcement’s account of the criminal charges centered on JGC’s own authorization of the agents, even though the joint venture made the payments.

The Nigerian LNG Joint Venture

JGC was the Japanese engineering and construction company in a four-company joint venture called TSKJ. Its partners were Kellogg Brown & Root Inc., Technip S.A. and Snamprogetti Netherlands B.V. According to the Justice Department’s account of the criminal case, Nigeria LNG Ltd. awarded the venture four engineering, procurement and construction contracts between 1995 and 2004 to build liquefied natural gas facilities on Bonny Island, Nigeria.

These were contracts to build the facilities, with a combined value of more than $6 billion. The customer, Nigeria LNG, had a government-owned company as its largest shareholder: Nigerian National Petroleum Corporation owned 49%. Buying the officials’ decisions cheats competitors trying to win on the work itself.

The joint venture’s allocation of authority matters just as much as the name at the top of a payment request. Budgets, voting rights and approvals can show which partner supported an engagement, who could authorize its cost and who reviewed the work. In JGC’s case, the government’s account identified both the company that authorized the agents and the venture that paid them. An insider’s knowledge can connect decisions that appear in separate companies’ files.

Two Agents, Different Government Contacts

The Justice Department’s account of the criminal charges said JGC authorized the venture to hire a consultant to pay high-level Nigerian officials and a Japanese trading company to pay lower-level officials. The consultant’s assignment included top-level executive-branch officials. The arrangement divided government access between intermediaries instead of leaving it to a single agent.

According to the announcement’s account of the criminal charges, the venture paid approximately $132 million to a Gibraltar corporation controlled by the consultant. It paid more than $50 million to the Japanese trading company. According to the court documents described in the announcement, JGC intended those payments to be used in part for bribes to Nigerian officials. The sums describe money sent to the intermediaries. The intended onward payments explain why it was sent.

We want to understand what the intermediary was expected to deliver, whose decision it could influence and who inside the business approved the arrangement. A finance employee may know the payee and the payment instruction. Someone in the project team may know which official the agent was expected to reach.

A review of the agent relationship brings those accounts together. The engagement rationale, qualifications, promised services, invoices and actual work can explain why a particular intermediary was selected. The beneficiary and onward payment can explain who ultimately received the benefit.

JGC’s alleged division of government contacts makes the assignment central to understanding the fees. In its 2014 guilty plea, Alstom admitted that a consultant’s commission fell from 3% to 1% when part of the assignment moved to another consultant. The SEC’s 2019 order found that Fresenius Medical Care bypassed a prohibition on using an agent by routing payments through a transport vendor.

The Bribe Negotiations Came Before the Awards

According to the Justice Department’s description of the criminal case, JGC’s co-conspirators approached successive holders of a top-level Nigerian executive-branch office before contract awards. They asked the officeholders to choose someone with whom the venture could negotiate bribes. The announcement describes the request directly:

We see the absurdity in the request itself: the people seeking the contracts allegedly asked the top office to appoint the person who would negotiate the bribes. An official bribe negotiator, by request. The timing ties the meetings and agent arrangements to a business decision an employee might remember from the contract award.

That is why what happened before the award can matter as much as a later transfer. A commercial employee may know why an agent was brought in at a particular moment or why a meeting suddenly became essential. Read beside the engagement and payment records, that account can explain the purpose behind an otherwise ordinary-looking project expense.

What the Project Insider Can Connect

The JGC account connects authorization, government contacts, contract awards and payments across several businesses. A project employee’s contribution can be the connection between those events: the reason an agent was chosen, the person who approved the engagement, or the decision everyone was waiting for when a payment went out.

Someone in procurement may know the agent’s promised work and whether it was delivered. Someone in finance may know which entity paid, how the expense was described and which account received it. An auditor or compliance employee may know what an internal review questioned and how management responded. We use that knowledge of the transaction to understand what the documents mean together.

For fraud involving U.S. government money, a whistleblower case under the False Claims Act can pay 15% to 30% of what the government recovers. For qualifying foreign-bribery information, the SEC whistleblower program can pay eligible whistleblowers 10% to 30% of the sanctions collected. Our whistleblower experts connect your knowledge of the companies and payments to the relevant whistleblower programs and bring in FCPA whistleblower lawyers for your case.

You Know Why the Agent Was Hired

If you know the government contact behind an agent’s fee or the approval that put the payment in motion, talk with our FCPA whistleblower experts. We build the case strategy around your knowledge, bring in FCPA whistleblower lawyers who understand joint ventures and project commissions, and stay alongside you to build your strongest FCPA whistleblower case.