By Dylan Tokar
Eni SpA has settled allegations in the U.S. that a subsidiary
used sham contracts with an intermediary to improperly win
contracts from an Algerian state-owned oil company.
The Italian oil-and-gas giant agreed to pay $24.5 million to
resolve alleged violations of the Foreign Corrupt Practices Act,
according to the U.S. Securities and Exchange Commission.
The company neither admitted nor denied wrongdoing in the
settlement reached Friday. A spokesperson for Eni confirmed the
The contracts at the center of the SEC's bribery allegations
were arranged by subsidiary Saipem SpA, in which Eni then held a
43% controlling stake, between 2007 and 2010, according to the SEC.
The contracts were drawn up with the knowledge and participation of
Saipem's former chief financial officer who in 2008 was hired as
Eni's chief financial officer, the regulator said.
Alessandro Bernini served as Saipem's CFO from 1996 to 2008. He
later served as CFO of Eni until departing the company in 2012.
Reached by email for comment, Mr. Bernini -- who wasn't referred
to by name in the SEC order -- said an appeals court in Milan had
cleared him of wrongdoing after finding that no illegal payments
had been made.
After this article was published, Mr. Bernini said in an email
that he was not the decision maker at Saipem. "I was not
responsible for the commercial activities, I never had any
involvement in the Algerian operations," he said. He added that he
didn't promote the contract of any commercial agent.
The SEC doesn't typically name individuals or entities in
settlements whom it hasn't charged with wrongdoing.
Saipem and Mr. Bernini were found guilty of international
corruption charges in 2018, but a Milan appeals court in January
reversed the convictions. Italian prosecutors may ask the Supreme
Court of Italy to review the acquittals, the SEC said.
The U.S. Justice Department also investigated Eni's Algeria
activities, but federal prosecutors in October told the company
that they were closing the probe without bringing criminal
Saipem paid about EUR198 million ($215 million) to the unnamed
intermediary between 2007 and 2010, according to the SEC. The
intermediary directed at least a portion of that money, through
offshore shell entities, to Algerian officials, including the
country's minister of energy, the regulator alleged. The company
deducted the payments from its taxable income in Italy, the SEC
The alleged scheme violated provisions of the FCPA that require
companies with shares listed on a U.S. stock exchange to keep
accurate books and records and maintain internal accounting
controls, according to the SEC.
Eni required Saipem to maintain its own internal controls and to
adopt Eni's directives on anti-corruption compliance. But Mr.
Bernini and others at Saipem bypassed its contracting and
procurement controls, including by falsifying and backdating
contracts, the SEC said.
Mr. Bernini allegedly communicated directly with the
intermediary, including its owner and associates, involved himself
in payments to the entity and worked to conceal the contracts from
Eni. The owner of the intermediary was a well-connected Algerian
whom the country's energy minister at the time considered like a
"son," the SEC said.
In his email to The Wall Street Journal, Mr. Bernini said his
involvement in the approval process of the contracts was limited to
the collection of certain documents, and that nothing was falsified
Mr. Bernini said he also had limited involvement with the
intermediary after transitioning from his role as Saipem's CFO. He
had received a few invoices from the intermediary by mistake, which
he simply forwarded to Saipem's new CFO, he said.
"I have represented those contracts in the financial statements
of the legal entities, as well as in the consolidated financial
statements, in the most proper way by using a specific account and
disclosing clearly the costs in the footnotes of the financial
report," Mr. Bernini said in an email following the initial
publication of this article.
"Internal and external auditors have scrutinized every year
those contracts in detail thanks to my transparent approach on the
subject and they never raised any comment or observation," he
The Algerian state-owned oil company, Sonatrach, did not
immediately return a request for comment.
Eni in March said it had successfully completed a gas pipeline
in southeastern Algeria with Sonatrach.
Authorities in the U.S. and Italy have also scrutinized Eni's
acquisition in 2011 of rights to an offshore oil block in
With Friday's settlement, the SEC informed Eni that it has now
closed its investigation into the company, including with respect
to the Nigeria allegations, the Eni spokesperson said.
Write to Dylan Tokar at email@example.com
(END) Dow Jones Newswires
April 21, 2020 12:31 ET (16:31 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.
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