The Department of Justice this week said it was closing its investigation into industrial-gas supplier Linde for alleged violations of the Foreign Corrupt Practices Act and would not be bringing any enforcement action. It is the first public declination issued by the Department of Justice under the Trump Administration.
The Fraud Section of the Justice Department’s Criminal Division said, “consistent with the FCPA Pilot Program,” that it was closing its investigation into Linde North America, Linde Gas North America and certain of their subsidiaries and affiliates concerning the alleged FCPA violations. As part of the settlement, Linde has agreed to disgorge and forfeit a total of $11.2 million ($7.8 million in disgorgement and forfeit $3.4 million forfeiture).
The Justice Department’s investigation found that from November 2006 to December 2009 a Linde unit, Spectra Gases, made corrupt payments to high-level officials at the National High Technology Center (NHTC) of the Republic of Georgia, a state-owned and state-controlled entity. In total, Spectra Gases received $6.4 million from the corrupt conduct, while Linde received $1.43 million.
Upon discovering the corrupt arrangements, Linde withheld $10 million of the “Earn-Out” payment purportedly due to Spectra executives and deposited that payment in a segregated account pending the results of its investigation. It additionally withheld further payments to companies owned or controlled by the NHTC officials.
In a June 16 letter to Lucinda Low and Thomas Best of law firm Steptoe & Johnson, who represented Linde, the Justice Department said it declined prosecution based on numerous factors, including:
Linde’s timely, voluntary self-disclosure of the matter;
Linde’s thorough, comprehensive, and proactive investigation;
Linde’s full cooperation, “including its provision of all known relevant facts about the individuals involved or responsible for the misconduct,” and its agreement to continue to cooperate in any ongoing investigation;
Linde’s agreement to disgorge the profits received from the improper conduct;
Enhancements Linde made to its compliance program and internal controls; and
Full remediation, including terminating or taking disciplinary action against employees involved in the misconduct.
Including Linde, the Department of Justice, to date, has issued six declination letters under its Pilot Program. The five other companies that have received declinations are Nortek; Akamai Technologies; Johnson Controls; and private companies HMT and NCH. The resolution with Linde is the latest in a new classification of FCPA enforcement actions, in which the Justice Department has started to issue both a declination with disgorgement.