Charlotte-based Albemarle has agreed to pay $218 million to resolve federal investigations into allegations it bribed government officials in multiple foreign countries.
The U.S. Department of Justice and the Securities and Exchange Commission were investigating the publicly traded specialty chemicals manufacturing company for violations of the Foreign Corrupt Practices Act.
Albemarle self-reported the misconduct in its refining solutions business, which is part of its catalyst segment now known as Ketjen. Albemarle announced its brand launch of Ketjen in January 2023, a wholly owned subsidiary headquartered in Houston that provides catalyst solutions for the petrochemical, refining and specialty chemicals industries.
“The actions taken by a limited number of former employees and third-party sales representatives happened years ago and do not represent the nearly 8,000 Albemarle employees who abide by our comprehensive Code of Conduct every day,” the company said in a statement. “Those responsible for these past actions were held to account and separated years ago.”
Albemarle terminated 11 employees and withheld bonuses from 16 employees as part of this case, according to the U.S. Attorney’s Office.
According to the company’s admissions in connection with the Department’s resolution, between 2009 and 2017, Albemarle, through its third-party sales agents and subsidiary employees, conspired to pay bribes to government officials to obtain and retain chemical catalyst business with state-owned oil refineries in Vietnam, Indonesia, and India.
Albemarle obtained profits of approximately $98.5 million as a result of the scheme, according to a release from the U.S. Attorney’s Office. But Albemarle also benefited from reporting the scheme and cooperating with the investigation.
“Today’s resolution also demonstrates the real benefits that companies can receive if they self-disclose misconduct, substantially cooperate, and extensively remediate,” said Acting Assistant Attorney General Nicole M. Argentieri of the Justice Department’s Criminal Division, in a release.
In Vietnam, Albemarle corruptly obtained contracts at two state-owned oil refineries through an intermediary sales agent who requested increased commissions to pay bribes to Vietnam officials and to structure tender requirements to favor Albemarle.
In Indonesia, Albemarle used a third-party intermediary to corruptly obtain catalyst business with Indonesia’s state-owned oil company, even after that third-party intermediary had informed Albemarle that it was necessary to pay bribes to Indonesian officials to obtain business. In India, Albemarle used a third-party intermediary to corruptly retain catalyst business with India’s state-owned oil company by avoiding Albemarle being blacklisted.
Albemarle entered into a three-year non-prosecution agreement with the federal government and agreed to pay a penalty of approximately $98.2 million and administrative forfeiture of approximately $98.5 million. Albemarle will pay approximately $103.6 million, which represents its profit from the illegal activity and prejudgment interest as part of the resolution of the SEC’s parallel investigation. The Department has agreed to credit approximately $81.9 million of the forfeiture to be paid against what Albemarle has agreed to pay to the SEC. The penalty was also reduced by $763,453 for bonuses Albemarle withheld from qualifying employees.
Albemarle has agreed to continue cooperating with federal investigators. The company also “promptly engaged in extensive remedial measures,” according to the U.S. Attorney’s Office. Those measures include strengthening its anti-corruption compliance program and taking steps to embed compliance and ethical values at all levels of its business organization.
Albemarle also terminated hundreds of other third-party sales representatives, such as distributors and resellers, and shifted to a direct sales business model. Compensation at Albemarle is also no longer tied to sales amounts.
In light of the steps taken under the U.S. Sentencing Guidelines reflects a 45% reduction off the bottom of the applicable guidelines fine range, according to the U.S. Attorney’s Office.
Albemarle noted in its response for comment that the DOJ recognized that it had “transformed its business model and risk management process to reduce corruption risk in its operation.”
Albemarle’s “Ethics and Compliance” program is now industry recognized, according to a statement from the company.
“We maintain a robust internal controls environment designed to prevent and detect violation of anti-corruption laws. Our operations are purpose-driven and values-led. Our leadership will accept nothing less from those who conduct business with us, and our employees expect nothing less from each other,” according to a statement from the company.