The US Justice Department on November 7 unveiled charges against five individuals who allegedly participated in a scheme to pay bribes to foreign government officials—including some in Kazakhstan and Azerbaijan—to benefit an American subsidiary of Rolls-Royce Holdings.
Officials at state-run energy companies from the two CIS countries as well as Thailand, Brazil, Angola and Iraq supposedly received a total of $35mn from the British multinational public limited engineering company, the second largest maker of aircraft engines, between 1999 and 2013. Four of the five people who were charged have since pleaded guilty.
The individuals charged by the justice department are Petros Contoguris, 70, who served as the founder and chief executive of a Turkish oil and gas company advisory firm called Gravitas & Cie. International; Keith Barnett, a former Rolls-Royce regional energy director in the US; James Finley, a former senior executive in Rolls-Royce's energy sales division; Aloysius Johannes Jozef Zuurhout, an ex-employee for a Dutch subsidiary of Rolls-Royce; and Andreas Kohler, an employee in the German office of an unnamed engineering and consulting firm.
The individuals charged were allegedly involved in a scheme to pay kickbacks and disguise those payments to Contoguris' company Gravitas in exchange for help enabling Rolls-Royce to win contracts on equipment and services to power a pipeline stretching from Central Asia to China, Reuters reported on November 8.
In November 2009, the pipeline project awarded Rolls-Royce a contract for $145mn, and, after receiving the sum, the company made payments to Gravitas, according to the American prosecutors.
Rolls-Royce "has committed to full ongoing co-operation with the Department of Justice and cannot comment on action against individuals,” a company spokesman said in a statement.
The US Justice Department said it worked closely with the UK’s Serious Fraud Office in the investigation.
Though not mentioned in the department’s allegations, Rolls-Royce also won a $175mn deal in 2013 to supply equipment and related services to power the flow of natural gas through Line C of Central Asia-China gas pipeline. The 2009 contract possibly involved Rolls-Royce services for lines A and B of the same pipeline.
Line-C connects Turkmenistan, Uzbekistan and Kazakhstan, allowing them to jointly supply gas to China. Once it reaches full capacity, the 1,300km-long pipeline will carry 10bn cm of gas from Turkmenistan, 10bn cm from Uzbekistan and 5bn cm from Kazakhstan. Shipments via Line-C have reached 194.5bn cm metres of gas to date—mostly from Turkmenistan. Uzbekistan has also contributed to these volumes.
Turkmen gas is also exported to China through Line A and Line B. The country delivered 35bn cm to China in 2016, head of state run Turkmengas, Myrat Archayev, said in May.