Engineering and construction firm PBSJ agreed today to pay $3.4 million in financial remedies to the Securities and Exchange Commission for violations of the Foreign Corrupt Practices Act by offering and authorizing bribes and employment to foreign officials to secure Qatari government contracts.
The SEC also announced a deferred prosecution agreement (DPA) with PBSJ that defers FCPA charges for a period of two years and requires the company to comply with certain undertakings. PBSJ is now known as The Atkins North America Holdings Corporation and no longer offers public stock in the United States.
Under the DPA, PBSJ agreed to pay disgorgement and interest of $3 million and a penalty of $375,000. “PBSJ took quick steps to end the misconduct after self-reporting to the SEC, and the company voluntarily made witnesses available for interviews and provided factual chronologies, timelines, internal summaries, and full forensic images to cooperate with the SEC’s investigation,” the agency stated.
The SEC also charged Walid Hatoum, a former officer of PBSJ, who has agreed to settle the SEC’s charges. An SEC investigation found that Hatoum offered to funnel funds to a local company owned and controlled by a foreign official in order to secure two multi-million Qatari government contracts for PBSJ in 2009. The foreign official subsequently provided Hatoum and PBSJ’s international subsidiary with access to confidential sealed-bid and pricing information that enabled the PBSJ subsidiary to tender winning bids for a hotel resort development project in Morocco and a light rail transit project in Qatar.
“Hatoum offered and authorized nearly $1.4 million in bribes disguised as ‘agency fees’ intended for a foreign official who used an alias to communicate confidential information that assisted PBSJ,” said Kara Brockmeyer, Chief of the SEC Enforcement Division’s FCPA Unit. “PBSJ ignored multiple red flags that should have enabled other officers and employees to uncover the bribery scheme at an earlier stage—but once discovered, the company self-reported the potential FCPA violations and cooperated substantially.”
According to the SEC’s order instituting a settled administrative proceeding against Hatoum, he also offered employment to a second foreign official in return for assistance as the bribery scheme began to unravel and PBSJ lost the hotel resort contract. Even though the bribes themselves were not consummated before the scheme was uncovered by the company, PBSJ earned approximately $2.9 million in illicit profits because it continued work on the light rail project until a replacement company could be found.
The SEC’s order against Hatoum finds that he violated the anti-bribery, internal accounting controls, books and records, and false records provisions of the Securities Exchange Act. Without admitting or denying the findings, Hatoum agreed to pay a penalty of $50,000.