By Staff writer
Former Dubai executive of Louis Berger Int'l also pleads guilty to conspiracy relating to bribery violations
Louis Berger International, a US-based construction management company active in the Gulf region, has agreed to pay a $17.1 million criminal penalty to resolve charges that it bribed foreign officials in India, Indonesia, Vietnam and Kuwait to secure government construction management contracts.
The company, which recently won a contract to project manage a major revamp of transport systems in Saudi Arabia's holy city of Madinah, admitted to violations of the Foreign Corrupt Practices Act (FCPA).
Two of the company’s former executives, including one based in Dubai, also pleaded guilty to conspiracy and FCPA charges in connection with the scheme.
Assistant Attorney General Leslie R Caldwell of the Justice Department’s Criminal Division, US Attorney Paul J Fishman of the District of New Jersey and Special Agent in Charge Richard M Frankel of the FBI’s Newark Division made the announcement.
A statement said Louis Berger entered into a deferred prosecution agreement (DPA) and admitted its criminal conduct, including its conspiracy to violate the anti-bribery provisions of the FCPA.
Richard Hirsch, 61, of Makaati, Philippines, and James McClung, 59, of Dubai, each pleaded guilty to one count of conspiracy to violate the FCPA and one substantive count of violating the FCPA.
McClung previously served as the senior vice president responsible for the company’s operations in India and, subsequent to Hirsch, in Vietnam. The sentencing hearings for Hirsch and McClung are scheduled for November 5, the statement said.
According to admissions in the DPA and statements in the charging documents, from 1998 through 2010, the company and its employees, including Hirsch and McClung, orchestrated $3.9 million in bribe payments to foreign officials in various countries in order to secure government contracts.
To conceal the payments, the co-conspirators made payments under the guise of “commitment fees,” “counterpart per diems,” and other payments to third-party vendors.
In reality, the payments were intended to fund bribes to foreign officials who had awarded contracts to Louis Berger or who supervised the company’s work on contracts, the statement added.
In April, Louis Berger was hired to project manage a major revamp of transport systems in Madinah.
Prince Faisal bin Salman bin Abdulaziz Al Saud, chairman of Al Madinah Al Munawwarah Development Authority (MMDA), signed a contract with Louis Berger for the transportation infrastructure initiative worth SR375 million ($100 million).