Running a business is not the same as being a community organizer. A good judge would throw this out.
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CEO Bust: Video Reveals FBI Tactics in Bribery Probe
Prosecutors Use Tougher Methods to Police Overseas Business Dealings; They Are Looking Into S in Colombia
When Joseph Sigelman invited Gregory Weisman into his Miami condo he didnt know exactly what his longtime general counsel had to tell him, but he knew it was something badsomething the attorney insisted on telling him in person.
As they settled down to talk on his balcony, what Mr. Sigelman also didnt know was that Mr. Weisman had become a Federal Bureau of Investigation informant and was secretly recording the December 2012 conversation with a tiny camera worn on his body, in a video made part of the court record in federal district court in Camden, N.J.
Do you want to start out with work or do you want to start with the big secret? asked Mr. Sigelman in the video. Mr. Sigelman was previously chief executive of PetroTiger Ltd., an oil-services firm operating in Colombia, Ecuador and Panama. For eight years, Mr. Weisman had worked as a general counsel for Mr. Sigelmans business ventures and sometimes also served as his personal lawyer.
We have issues, we have big issues, said Mr. Weisman. I get a knock on my door. Its the FBI....They are looking into s in Colombia... They were asking about these payments you had me make to Johanna Navarro.
The secret recording, excerpted here, captures a rare inside look at two embattled executives grappling with the weight of a federal investigation into alleged bribery. In recent years, the U.S. Department of Justice has ramped up enforcement against companies that bribe overseas officials, but has settled most cases with companies out of court, leaving the human element of corporate corruption cases hidden from view. The video reveals some of the ambiguities executives can face when doing business in countries where corruption is rife. When is a payment to a well-connected consultant really a bribe? Who is to blame for a shared decision to make a payment when no one person understands the entire nature of the transaction?
Mr. Sigelman, who maintains his innocence, will go to trial in April on charges that he violated the Foreign Corrupt Practices Act, which makes it a crime to bribe foreign officials. The video is evidence in the case and illustrates the tougher tactics that prosecutors are taking to pursue white-collar crime. Secret videos and undercover informantsonce the stuff of drug bustsare taking an increasingly important role in cases against corporate executives.
Prosecutors say the $333,500 in payments discussed by the two men were really bribes for Ms. Navarros husband David Duran, a Colombian official at the state-run oil company Ecopetrol and helped the company win a contract worth $39.6 million. In the recording, Mr. Sigelman said the payments didnt result in any business gained and that the deals obtained from Ecopetrol were unrelated.
Mr. Weisman and Knut Hammarskjold, the companys former co-chief executive, have pleaded guilty to FCPA offenses. As soon as the government approached Mr. Weisman he accepted complete responsibility on the matter, said Michael Schwartz, an attorney for Mr. Weisman. As part of his acceptance of responsibility he agreed to cooperate in any way the government deemed appropriate.
Kevin Walsh, an attorney for Mr. Hammarskjold, declined to comment.
David Duran and Johanna Navarro, residents of Colombia, havent been charged with any crime, according to court documents. An assistant to Darlene Calzon Barror, Mr. Durans last known U.S.-based attorney, said the firm had lost contact with him more than a year ago.
In the recording, after Mr. Weisman revealed the unsettling news, Mr. Sigelman began to offer an explanation and then paused. Do me one favor, just lift your shirt, Mr. Sigelman said quietly, apparently looking for a secret recording device. Mr. Weisman asked him to do the same. The recording is briefly obscured as Mr. Weisman pulled his shirt up and blocked the cameras view, but Mr. Sigelman didnt spot the tiny device. Youre hairy, man, Mr. Weisman said.
Mr. Sigelman looked out over the seaside view and said he was struggling to recall the alleged payment to Ms. Navarro. Im trying to remember the deal...and I swear to God I dont think I remember which one it was, Mr. Sigelman said. Knut found this guy and Ive literally forgotten his name. His first name was David or something. He was supposed to be an adviser to us for looking at this sale, this potential sale, Mr. Sigelman said. The sale never happened. There was no gain. It was nothing, we never won anything. We never got to second base...We never even submitted even a bid.
It was a consulting payment pure and simple, Mr. Sigelman insisted, leaning back in his chair. I dont understand how this is a bad thing.
Mr. Weisman pushed the issue, sounding incredulous. A payment of a large sum of money to someone at Ecopetrol in connection with the deal?
Mr. Sigelman appeared puzzled. I dont think he worked at Ecopetrol. Did he work at Ecopetrol?
Thats what he told me, yeah, Mr. Weisman said.
And in any case, Mr. Weisman said, sounding increasingly shaken, why was the payment made to the mans wife, Ms. Navarro? The secrecy, Mr. Sigelman explained, was that the guy just didnt want to pay the tax.
Throughout the conversation Mr. Sigelman sought to blame his former co-chief executive Mr. Hammarskjold who he said understood the technical side of the business and managed relationships with Colombians. Knut is the one you should throw under the bus for that, 100%. I dont know any of these guys, Mr. Sigelman said. How many Colombians do I fing speak to? I cant even speak to them. This was Knut.
An attorney for Mr. Hammarskjold declined to comment on the contents of the video.
This wasnt how Mr. Weisman remembered events, he said in the video, and he didnt know how he could explain away this incident to authorities. If I have to answer questions, I dont know what Im going to say, Mr. Weisman said.
Mr. Sigelman bowed his head for a moment scratching his scalp. He raised his head and spoke quietly. As long as were like this, he said, holding up two fingers pressed tightly together, Ill 100% never let you down. Promise. Have you ever seen me break a promise? Ill never break a promise.
The most important thing, Mr. Sigelman said, was for his colleague to calm down. You have to stop fking panicking, seriously, Mr. Sigelman said. Panic could cause Mr. Weisman to do something stupid in dealing with authorities.
Look, I never wanted to be involved in this kind of s. And now I have FBI agents coming to visit me, Mr. Weisman said. Im really scared.
Messrs. Sigelman and Hammarskjold created the company in 2009 in Colombia, with Mr. Weisman serving as general counsel. But the three soon came into conflict with their Colombian board, representing PetroTigers investors, over the direction of the company. The three men were ousted by March 2011. The law firm Sidley Austin LLP, which counseled the board in its dispute with the founders, conducted an internal investigation and by July 2011 turned over evidence of alleged misconduct to U.S. authorities.
In the recording, Mr. Sigelman said he believes that conflict with the board is what put the two in hot water. This is the Colombians signing a deal with us and then deciding to be vengeful, Mr. Sigelman said. At the end of the day the most important thing and I mean this...you and I are victims here.
Sara Schaefer Muñoz in Bogota contributed to this article.
Write to Joel Schectman at joel.schectman@dowjones.com
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