TechnipFMC: Approval First, Justification Later

The TechnipFMC FCPA case included an agreement to return $4,327,194 in profits to the Securities and Exchange Commission over alleged bribery for Iraqi oil-metering contracts. The SEC’s account of Foreign Corrupt Practices Act violations described payments without evidence of services, subagents without adequate checks and false descriptions in the books. If you approved a commission, questioned an invoice or knew what the agent actually did, you may recognize the decisions behind these allegations.

TechnipFMC combined Technip and FMC Technologies in a merger in 2017. The Justice Department’s criminal information separated the predecessor companies’ alleged schemes: Technip’s offshore projects in Brazil and FMC Technologies’ metering business in Iraq. Both accounts concern intermediaries paid to influence public customers, but the projects, payment routes and people approving them were different.

Brazil Offshore Contracts and Political Payments

The criminal information charged that Technip used consultant commissions and political payments to obtain business with Petrobras between 2003 and 2014. Petrobras produced, refined and distributed petroleum, and the Brazilian government controlled it through a majority of its voting common shares. The alleged recipients included employees responsible for bidding decisions and Brazil’s Workers’ Party.

The commercial vehicle was a Brazil-based joint venture formed by Technip USA and a subsidiary of Keppel Offshore & Marine. According to the charges, they created the venture to bid for large offshore oil and gas projects. Technip USA owned a quarter of it, while the Keppel subsidiary owned the rest. That structure put the bidding team, the project money and the consultant relationship across several companies.

Prosecutors alleged that the consultant told executives the P-51 and P-52 offshore platform projects could be won by bribing Petrobras officials. Executives then authorized payments tied to the contracts’ value. In an email described in the information, the consultant relayed an official’s instructions to change the P-51 bid so the official could arrange the award. The allegedly purchased advantage reached into the negotiation itself, before the contract was signed.

Political payments also reached the project accounts. The information alleged that a Workers’ Party employee supplied bank details, the consultant passed them to a Keppel subsidiary executive, and Technip executives authorized the joint venture’s payment to a party candidate. Technip allegedly billed that payment to the P-51 project. A project accountant could therefore see a charge against an oil platform that began as a political-payment request.

The criminal information put Technip’s direct corrupt payments to the consultant’s companies at $20.9 million. It alleged that Technip and its subsidiaries earned approximately $135.7 million in profits from the corruptly obtained business. We see the business incentive in those allegations: the profits dwarfed Technip’s direct payments.

A New Payment Route to Avoid Due Diligence

The Brazil charges described executives changing the payment route to conceal the consultant from the company’s due diligence. Initially, the joint venture sent a share of the Petrobras project money into a Technip subsidiary’s New York bank account. That subsidiary then transferred money to Swiss accounts belonging to the consultant’s companies.

According to the criminal information, the arrangement changed in 2009. A Keppel subsidiary would make the payments to the consultant and invoice the joint venture for Technip’s portion. The alleged beneficiary remained the consultant, but the invoice reaching the venture came from a different company.

We see the absurdity in that alleged response to due diligence: the payment acquired another middleman so the original middleman would be harder to see. For an insider, the changed invoice is part of the story. The question is who was ultimately paid and why the route changed, not just whether the new invoice carried an approved supplier’s name.

Petrobras’s own case shows why project accounting matters at the customer’s end, too. In its separate criminal non-prosecution agreement, Petrobras admitted capitalizing inflated contract costs as assets. The kickback could sit inside the recorded cost of a project, so looking only for a suspicious expense description would miss part of the mechanism.

Iraq Metering Contracts and the Monaco Intermediary

The Iraq portion of the criminal information charged that FMC Technologies used a Monaco-based intermediary to bribe officials for seven contracts between 2008 and 2013. FMC Technologies was based in Houston and supplied equipment and oilfield services, including technologies for measuring oil and gas production. Its customers in the alleged scheme were public oil-sector buyers.

The information identified Iraq’s Ministry of Oil and the South Oil Company and Missan Oil Company, both owned and controlled by the ministry. These were state-owned customers whose officials could influence a sale. The alleged payments reached both oil-company personnel and ministry officials involved in approving business.

Prosecutors charged that FMC Technologies executives used agency agreements to facilitate the payments and conceal their purpose. The intermediary allegedly paid some officials directly and reached others through Iraqi subagents. An agreement naming the Monaco company therefore showed only the first recipient in the chain.

The timing also matters. According to the criminal information, the intermediary made bribe payments before it received commissions from FMC Technologies. The parties agreed that FMC Technologies would pay those commissions after receiving payments from the Iraqi government on the contracts won through the alleged scheme. An apparently ordinary commission paid after a sale could reimburse an earlier payment that helped secure it.

The information traced approximately $795,000 from FMC Technologies’ Texas bank account, through New York, to the intermediary’s Monaco account. That payment trail connects the company’s commission to the overseas intermediary. The agency agreements and communications about subagents explain the alleged purpose of the next part of the route.

The Explanation Came After the Agreement

Emails quoted in the criminal information described managers seeking justification for a commission increase already accepted in principle. The information charged that the increase would cover bribe costs. The intermediary’s partner explained the approval discussion this way:

Another email quoted in the information described a manager favoring one contract over split contracts with the same party because auditors would question the split. We read those alleged exchanges as a search for paperwork that would get the payment through. The justification came after agreement on the commission, while the emails discussed what the board and auditors might see.

What the SEC Said About the Iraq Payments

In its September 2019 settlement account, the SEC alleged that FMC Technologies paid the intermediary without evidence that it had performed services. It also alleged that the company allowed subagents and success-based fees without adequate diligence, falsely described payments in its books and devoted insufficient compliance resources to its Iraq business. The agency addressed bribery, inaccurate records and weak accounting controls together.

Those accounting allegations matter to people outside the sales team. An accounts-payable employee may know that the work supporting an invoice never arrived, while a controller may know the description used to book it. The SEC’s account puts the records and the payment controls inside the case, alongside the alleged bribes.

What an Insider Can See in the File

The useful business record connects the official’s decision, the intermediary’s assignment and the money authorized inside the company. In Brazil, that means the bid instructions, project charges and changed invoicing route. In Iraq, it means the agency agreement, commission justification, evidence of services and bank transfer. Our work with whistleblower evidence connects those records with what the person inside the business knows they meant.

A 2022 study of Fresenius Medical Care described payments continuing after an internal audit flagged a warehouse relationship. The Journal of Forensic and Investigative Accounting published Fresenius Medical Care: A Case Study on the FCPA, examining the dialysis company’s payments and controls. It also described payments in Serbia moving from an agent prohibited by compliance to a transport vendor.

The study gives an insider a useful comparison: what changed after somebody questioned the transaction? Did the payments stop, or did the company change the recipient or the paperwork? That is the same practical question raised by the alleged Brazil rerouting in TechnipFMC’s case. A warning and the transactions that followed it can tell more than an approval form viewed alone.

Whistleblower Rewards and the Information You Hold

SEC whistleblower rewards can range from 10% to 30% of qualifying monetary sanctions actually collected. The information connecting an agent, official and payment is what our whistleblower experts evaluate with you, including how it fits the applicable reward program.

For fraud against the U.S. government, a separate whistleblower case under the False Claims Act can pay 15% to 30% of what the government recovers. Our whistleblower experts work with you to build the strongest case your information supports.

You Know Why the Commission Changed

If you know who requested an agent’s payment, what work was missing or why a project absorbed a political expense, speak with our whistleblower experts. We work beside you to build the case from those decisions and bring in Foreign Corrupt Practices Act whistleblower lawyers who understand oilfield contracts, intermediaries and cross-border payments. We stay with you through the pursuit of the case, starting with the part of the transaction you understand best.